Jodi Dean was looking forward to back-to-school season this year. For the first time in a long time, she and her husband had some money to spend. Usually, their eleven-year-old daughter wore hand-me-down clothes from her older siblings. “This year, we were hoping to buy her her own shirts,” says Dean, who lives in Hamilton, Ontario. “No faded shirts. Just crispy clean new shirts.”
The difference was that Dean had a few hundred extra dollars in her pocket each month — $325 Canadian dollars ($250 USD), to be exact. It was a relatively small amount but it had made a big difference for the better part of the past year. Although Dean’s husband is employed at a large retail chain, “we are very much working poor,” she says.
Most of the extra money was going towards her daughter, Madisen, who has multiple health issues, including “brittle bone disease” which causes her bones to break easily. Dean says they used the money to buy parking passes for the hospital in bulk, to save money on the typically twice-weekly trips. She was also able to buy “little things” that were unnecessary but nice, like a smoothie for Madisen after a physio appointment.
She and her husband had even been considering dropping $140 on a new pair of shoes they found on a site for kids with special needs. They were made to fit over leg braces, and could replace the “big, clunky, stupid standout” shoes that Dean didn’t want Madisen to enter sixth grade wearing. “We were excited,” she says.
But then the money came to an end. The extra cash was part of Ontario’s basic income project, which the Deans and 4,000 other low-income individuals and families had been enrolled in across three cities. It set them up with modest monthly payments, adjusted for income, that were scheduled to last for the next three years. But last month, the newly elected premier of the province, Progressive Conservative Party leader Doug Ford, abruptly ended the pilot program, despite a campaign promise that he’d leave it be.
“It’s such an emotional thing,” says Dean. “Basic income gave me the security I needed to relieve some of the stress of everyday life.”
Participants are reeling after the announcement, which gave no details about how the program will be wrapped up or when they can expect their final checks. Personal hopes, dreams, and financial goals evaporated. There’s also a sense of loss of an opportunity to prove something bigger: the radical notion that poverty, long viewed as an intractable policy problem, can be solved by putting money in the pockets of those who have the least.
BBasic income is predicated on the idea that poor people, not governments or nonprofits, know what they need best. Rather than enrolling them in complicated social assistance programs that presume the kind of help they need, basic income trusts people to make their own financial decisions, no strings attached.
It’s attractive to governments because it strips the complicated bureaucracy of programs like welfare, and it’s attractive to people enrolled because they have the freedom and dignity to decide how to spend their own money.
Ontario isn’t alone. Programs that give poor people cash are proliferating around the world — especially with growing concerns that job automation will cause unemployment to rise. Finland will soon wrap up a two-year basic income pilot that gave 2,000 unemployed Finns roughly $670 a month. Barcelona, Spain launched a basic income program in 2017. Stockton, California will soon deliver $500 a month to 100 low-income households in the city. A non-profit called Give Directly launched a program in Kenya last year that will give 6,000 residents in more than 40 villages a basic income for 12 years.
Ontario’s is an income-tested model, which means it only applies to people below a certain threshold: for individuals, less than $32,978 (about $25,000 USD). The poverty line in Canada is generally considered to be less than $21,845 for one person (about $16,700 USD).
A Liberal government under then-premier Kathleen Wynne officially launched the $150 million pilot ($114 million USD) last spring in three towns: Lindsay, a small rural town with a large elderly population; Thunder Bay, a northern city with one of the highest non-reserve indigenous populations in the provinces; and Hamilton, a historically working class but rapidly gentrifying city on the U.S. border.
Dean heard about the pilot on the news, but it was a member of a local organization she sometimes worked with, Tom Cooper, director of the Hamilton Roundtable for Poverty Reduction, who convinced her to apply. She was skeptical because of her husband’s job. “I said, I don’t think we’d be eligible, we’re working,” she says. “He said, ‘You’re still struggling when you’re working. Just try.’”
So she did, and was accepted. Dean was surprised by the difference the money made.
“When you have to worry every day about how you’re going to pay the bills, come up with extra things, it drains a lot of your energy,” says Dean. “Basic income made me a better mom. Some of my energy can be focused on family rather than worrying about the everyday stuff.”
DDean is a member of a group of basic income participants who spoke on a panel at the 17th Annual North American Basic Income Congress, hosted at McMaster University in Hamilton at the end of May.
The group, who met each other at a media training in February, call themselves Living Proof. They all gave specific examples of what the extra money meant in their day-to-day lives — a gym membership, fruit smoothies in the morning, a name-brand deodorant, tuition for part-time classes, a savings account, a good pair of winter boots — essentially, more choice and less stress.
Participants in the program have had to get good at telling their story. When the program began, and again when it suddenly ended, reporters from around the world descended on Ontario to report on the basic income experiment. Living Proof members have been interviewed by the Wall Street Journal, PBS Newshour, and Japanese Public television.
Each member of Living Proof traces his or her path to poverty from a singular life event — a health setback, a divorce, a job loss. All but one had come to the pilot from existing Canadian social service programs like disability and welfare.
One of the goals of the pilot was to test replacing these programs, Ontario Works and the Ontario Disability Support Program, which were drastically cut in the mid-90s (under the last Conservative government) and never recovered. These programs are widely recognized as being inadequate, but also self-defeating, since people tend to go on them, and get stuck.
This was the case for many Living Proof members, including Jane Cardno, who went on disability benefits after a bad injury. The programs didn’t offer enough money to get by; she says she expended most of her energy while she was recovering trying to obtain food and transportation, rather than heal.
Since she lived in subsidized housing, Cardno says she felt like she didn’t have rights as a renter. “I learned how social assistance was built on the austerity of blame and shame,” she says. “Poverty is a lack of resources which limits choice. It’s that simple.”
Some proponents argue that basic income can save money by replacing these types of government programs. “There is an economic argument to be made for creating a poverty-free Ontario,” David Cherkewski says, who ended up on social assistance after struggling with mental health issues. “Whether you can get past the ideology or not.”
The ideology Cherkewski is referring to is one of the things that stands in the way of basic income: the concern that giving people “free money” will make them lazy.
The disincentive to work is at the heart of many conservative arguments against basic income. The Fraser Institute, a right-wing think tank, released an opinion piece saying the pilot would “increase dependency.” When the Conservative minister of social services Lisa MacLeod defended the government’s move to cancel the program, she said the program wasn’t helping people become “independent contributors to the economy.”
These are the assumptions that Living Proof members want to counter — especially the lazy part.
Cherkewski helped run a successful campaign to save a low-income housing fund in Hamilton, and he once walked 17 miles to attend a meeting in Toronto on housing affordability. Dean cares full-time for her disabled daughter. Another Living Proof member, Lance Dingman, has been a mental health peer support worker with the local hospital for 15 years.
TThe closest similar experiment to the one in Ontario was a 1970s program in Manitoba, Canada called Mincome, which was also eventually scrapped by a Conservative government. But during its life, researchers collected a mountain of data showing higher high school completion rates, fewer hospitalizations for injuries and accidents, and fewer mental health complaints. In questionnaires, people wrote about a general feeling of relief, of how basic income made things “just a bit easier.”
“It allowed families close to the edge to indulge in the small, everyday luxuries that make life tolerable,” wrote Evelyn Forget, the researcher who analyzed the data.
There haven’t been many basic income programs on the scale of Mincome (data from Finland’s basic income program are expected the end of 2019). The international aid community, however, has been experimenting in the past decade with cash transfers, small injections of money that differ slightly from basic income programs. In Malawi, a cash transfer program for girls found correlations with higher school enrollment and a decrease in teen marriage and pregnancy. Research from a GiveDirectly cash transfer program in Kenya shows that for every $1000 distributed, there was a $270 increase in earnings.
TThe success of basic income programs, even if limited in scope, is promising. The bigger question may be whether anyone is willing to pick up the tab.
Economist Kourtney Koebel says that the most glaring issue with basic income is that it’s really expensive. Koebel is part of a team at the University of Toronto that analyzed what it would cost to expand the existing basic income pilot across Ontario. Based on their calculations, she says, about half the province’s population would come away with more disposable income.
But — “and this is a very big but,” says Koebel — wealthier people would end up paying significantly more in taxes to support the program.
“Some people are obviously going to object to this, saying they’re not willing to pay anything to reduce poverty, and in this case, the strategy is really limited,” says Koebel. “But the idea is to really have people think about how much they’re willing to invest to get the society they want to live in.”
Potential recipients of the basic income program have other concerns. Elizabeth Richler, director of social assistance services for the North Shore Tribal Council, which represents seven first nations communities, says that in more remote communities, people didn’t necessarily want a basic income. “They wondered, ‘Will [the cost of] small business services go up? Will a loaf of bread go up?’” says Richler.
Beyond artificially inflating local prices, Richler says there was a sense that “money isn’t the solution” in communities that struggle with access to health care and basic services. As an example, First Nations’ populations experience illness from unsafe drinking water at a rate 26 times higher than the national average. A basic income will not fix this.
AA week after the conference, Ford was elected. And less than two months after that, he cancelled the pilot. Perhaps it shouldn’t have come as a surprise to anyone, given the fact that Ford campaigned on a platform that was low on specifics and high on Trump-style rhetoric about cutting taxes and shrinking government.
At campaign stops, he promised to “stop the gravy train,” and “put money back in peoples’ pockets.”
But he also promised to let the pilot run its course. The Ford government has now promised a “lengthy and compassionate runway,” rather than an abrupt end, but so far participants only know that they will receive their August check.
When she heard that the pilot was being cancelled, “I felt sick to my stomach,” says Dana Bowman, a basic income participant in Hamilton, Ontario. She had gone from living on approximately $900 a month on the Ontario Disability Support program to nearly $1,900 on the pilot. “I had some dignity back,” she says. “I didn’t feel like a welfare case.”
Practically, it meant she didn’t have to worry so much about what she spent on groceries. It meant she could pay for gas to visit her grandchildren, who live an hour away. She got caught up on bills. She replaced her bras and sheets. She went to a fundraiser dinner in town. She saved a modest sum of money, which was going to go towards replacing her dental plate.
Then she was angry. “He [Doug Ford] brought out buck-a-beer,” she says, in reference to his plan to lower the minimum price at which beer can be sold in the province. “I thought, isn’t that ironic: I can’t afford to buy milk, but I can buy beer.”
News of its sudden cancellation hit the town of Lindsay, a Conservative stronghold, particularly hard. Lindsay was known as a ‘saturation site.’ Two-thousand people there were given a basic income, more than twice as many as Hamilton or Thunder Bay, and in a place significantly smaller. The population of Lindsay is around 20,000 people, which means approximately ten per cent are enrolled.
Since the pilot was cancelled, the Lindsay Advocate, a local newspaper that launched last year and had been covering basic income extensively, has been “inundated” with letters from people writing in to say how devastated they were with the decision, says Roderick Benns, the paper’s founder and publisher. “It’s just completely upended them” he says. “A sizeable chunk who wrote in to us had voted for Doug Ford. They did so with the understanding that he was for this.”
In Hamilton, Jodi Dean says the “not knowing” is the worst part. Since they were enrolled in the basic income program, her husband has had to go off work because of a foot injury. Their basic income would have jumped from $325 to $1,100 a month. “I had nothing to lose,” says Dean of when she signed up for the program. “Now, with him not working, it’s really, really scary. I don’t know how we’re going to get through the next… well, I just don’t know.”
