Photo Credit: JP Valery via Unsplash
If you were to ask people just a few years ago what they thought about universal basic income (UBI), you likely would have heard a lot of confusion and pessimism about the idea, myself included. The first time I heard about UBI was in 2017 and I was initially very dismissive of the concept.
Jump to today and thanks to growing exposure to the idea, on top of the economic impact of the pandemic, the idea of a UBI has become a lot less foreign and a lot less scary to people.
In fact, it’s become so much more accepted that UBI is even set to take centre stage as one of the major policy proposals to be debated at the Liberal Party’s convention in early April, according to CBC News. In just a few short years, UBI has gone from relative obscurity to a potential national policy proposal, a remarkable feat to be sure.
In the United States, one of the leading proponents of a UBI has been Andrew Yang, an American entrepreneur who gained widespread notoriety after running for president in 2020 on a platform largely centered around a UBI proposal. Yang, who came into the race with no name recognition, went on to garner a pretty impressive following. He has parlayed his presidential campaign into a run for mayor of New York City, which he seems well positioned to win based on recent polling.
One thing that has certainly bolstered the idea in recent times has been the COVID-19 pandemic. With the economy shut down, direct payments to individuals who were out of work was one of, if not the only, major way our service-based economy could keep chugging along. As we all know, in Canada this took the form of the Canadian Emergency Response Benefit (CERB), wherein the government provided $2,000 a month for four months to those who qualified.
CERB was wildly popular and was seen by all as a major tool that helped save our economy from complete collapse (as I wrote about last year). It was so popular, infact, that it garnered 86 per cent approval amongst Canadians in a poll conducted by Ipsos.
It’s easy to see why a UBI program would be popular. After all, who doesn’t want free money? But it goes beyond that, because providing people with consistent supplementary income that they can rely on has been proven in pilot program studies to be a great way to improve quality of life and to lift people out of poverty.
There was a UBI pilot program that recently ended in Stockton, California. The pilot saw 125 of the city’s poorest residents receive $500 each month on a debit card, no questions asked. They were free to spend the money how they wished.
The results of the pilot were quite remarkable. As per an article at the Insider, the payments allowed workers to take time off if they contracted COVID-19, to save money to cover unexpected expenses, to pay off debts and even to find jobs. There were also decreases in self-reported feelings of anxiety, depression, stress and other mental health issues associated with financial insecurity.
For many, paid sick leave is a luxury not afforded to them. Even here in Ontario, paid sick leave is not guaranteed to all workers. That has complicated things in the face of the pandemic, as those who contract COVID-19 are expected to self-isolate for 14 days. In many places, this has been ignored out of economic necessity, which is dangerous from a public health perspective, but for many it’s their only option. Recipients of the basic income in Stockton who didn’t have paid sick leave noted that they were able to take time off when they contracted COVID-19 because of the UBI.
At the start of the pilot project, only 25 per cent of respondents said that they had money saved to cover unexpected expenses. That number doubled by the end of the pilot program. Additionally, more individuals said that they were able to pay off debts that they had accrued, thanks to the UBI.
The increase in employment that they saw in Stockton is interesting, because this contradicts a major talking point people say against UBI. Namely, that it will disincentivize work. It was noted in the study that the $500 a month provided enough of a cushion for those working in part-time, precarious positions, as well as those working multiple jobs to take the time to find and apply for full-time positions.
For those who were unemployed, the UBI helped them to afford rent, providing them a permanent address, which is a critical aspect of gaining employment. It also was used to help cover transportation costs to get to interviews and to afford professional clothes for the interviews.
The Stockton, California pilot program has inspired other cities in the United States to begin similar programs. Here in Ontario, we had a UBI pilot program under the Wynne government that showed similarly promising results. Of course, as with most good things, that came to an end when Ford and the PC’s came to power in 2018.
Regardless of your thoughts on a UBI program, it’s clear that in tests it is showing positive results and, thanks in part to the pandemic, support for the idea is growing. So long as the positive results continue, I say bring it on.