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The biggest North American minimum income experiment

Stashed in: Libertarian, Canada, Awesome, Compassion, economics, Poverty, Vice, Basic Income

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In the 1970s a whole town in Canada was given a guaranteed basic income in straight cash, homie. TL;DR: no one stopped working, except mothers of small children and high school kids. Healthcare costs went down. No apocalyptic civic collapse occurred.

I knew it! Basic income doesn't make all people lazy. It makes some people more entrepreneurial!

It's telling that the basic effects of poverty melted away:

The motto of Dauphin, Manitoba, a small farming town in the middle of Canada, is “everything you deserve.” What a citizen deserves, and what effects those deserts have, was a question at the heart of a 40-year-old experiment that has lately become a focal point in a debate over social welfare that's raging from Switzerland to Silicon Valley. 

Between 1974 and 1979, the Canadian government tested the idea of a basic income guarantee (BIG) across an entire town, giving people enough money to survive in a way that no other place in North America has before or since. For those four years—until the project was cancelled and its findings packed away—the town's poorest residents were given monthly checks that supplemented what modest earnings they had and rewarded them for working more. And for that time, it seemed that the effects of poverty began to melt away. Doctor and hospital visits declined, mental health appeared to improve, and more teenagers completed high school. 

“Do we have to behave in particular ways to justify compassion and support?” Evelyn Forget, a Canadian social scientist who unearthed ​some of the findings of the Dauphin experiment, asked me rhetorically when I reached her by phone. “Or is simply human dignity enough?”

The benefits are security, predictability, stability:

Some recipients used the money to pay for essentials; others used it as supplementary income to purchase things that could help them increase their earning potential, like new vehicles. One major benefit of the program was a sense of security, potentially counteracting the sort of worrying that can ​weigh heavily on the minds ​of the poor

"Most important for an agriculturally dependent town with a lot of self-employment," writes Forget ​in her pap​er, "MINCOME offered stability and predictability; families knew they could count on at least some support, no matter what happened to agricultural prices or the weather. They knew that sudden illness, disability or unpredictable economic events would not be financially devastating."

The concept of Basic Income is gaining momentum:

The recovered data from “Mincome,” as the Dauphin experiment was known, has given more impetus to a growing call for some sort of guaranteed income. This year, the Swis​s Parliament will vote on whether to extend a monthly stipend to all residents, and the Indian government has already begun replacing aid programs with direct cash transfers. Former US Labor Secretary Robert Reich has called a BIG “alm​ost inevitable.” In the US, Canada, and much of Western Europe, where the conversation around radically adapting social security remains mostly hypothetical, the lessons of Dauphin might be especially relevant in helping these ideas materialize sooner rather than later.

There are other compelling arguments for a guaranteed income now. Despite record corporate earnings, most people are not benefitting. Wages are stagnant, unemployment is high, ​student debt and health care costs are soaring, and the job market is not rewarding those who are already employed with enough money for a decent way of life. The so-called ​Uberization of the workforce, in which workers are paid by the task rather than on a salary or under an established hourly rate—is increasing the precariousness of work. (And that's not to mention ​robots and artificial intelligence taking away jobs.) As the concept of universal healthcare spreads and minimum wage is debated, conversations around reconsidering or expanding social security are growing. 

"Originally the interest was primarily prompted by the concern that the welfare system was discouraging people from working," Ron Hikel, who coordinated the Mincome program, ​told Dutch television last y​ear. Today, he says, the motivation for guaranteed income is an increase in inequality. "At some point, the income inequality begins to interfere with people's ability to have education, and also to take care of their own health. To the extent that that effects the relations in society, it begins to accentuate divisions and differences, and you get an increase in social pathologies, alcohol addiction, the use of drugs, an increase in mental illness, a decrease in provision of educational courses and an increase in the crime rate."  

Even many libertarians like me think that having a minimum income is a good thing, as long as it replaces all existing government welfare systems. The idea is that the current system is so inefficient, that it would be less manipulated and more efficient to give everyone an income, than the current costs to administer the programs we have in place today. is a nice summary from that perspective.

Dylan, thanks for sharing this. Makes sense as a way to get rid of more wasteful programs. 

Yeah.  It also ties into research I've seen that means-tested programs actually create "speed bumps" for people to get out of poverty.

It sounds like the key to making this work, though, is to have a strong, diverse culture that rewards personal investment.  Has it been tried in [our] America yet?  I can imagine places in the U.S. where the most likely outcome would be that higher prices and loan sharks quickly soak up the excess cash going into the community...

Utah is doing a variation on this theme to end homelessness by the end of 2015:

Other states are taking note of Utah's efforts and may roll out similar programs soon.

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