Basic Income in Canada – The story of Manitoba’s Mincome trial (from 1975 to 1979)

Manitoba’s Mincome trial, which ran from 1975 to 1979, is being spoken of respectfully now because guaranteed income has so rarely been tested in a thoughtful way. Mincome was designed consciously as an experiment, applied in two theatres. In the city of Winnipeg, 1,187 households were randomly chosen to receive a “negative income tax,” and each was paired with a similar household elsewhere in the city to serve as a control. The guaranteed income was also given to everybody in the town of Dauphin, Man., and the surrounding rural municipality, in order to check the effects of “saturating” an area with money for merely existing.

This seems like a broadly sensible design for a social policy experiment. Different households in the Winnipeg part of the program were given different clawback rates on the income they earned, in order to provide what one might call dose-response details of the labour-market effects. The Dauphin side of the project did not come with an explicit control group, but, after all, every other similar town in Canada was there to provide an implicit one.

But what are we to conclude if we take the botched, almost shameful implementation of Mincome itself as a lesson in what becomes of ambitious big-government ventures? Gulp.

Scientifically, however, the whole thing ended in disaster. The original budget for the experiment was set at $17 million, but, in the words of Evelyn Forget, a University of Manitoba health economist who did a sort of historical autopsy on Mincome in 2011, this “was never more than a wild guess.” Most of the budget was to be covered by the federal government, which was, at the time of the program’s founding in 1973, under pressure to rethink (and streamline) Canada’s social safety net.

Unfortunately, the budget was not inflation-indexed, but the payments to the experimental subjects were. If you remember the year 1973, you will immediately see the problem. Inflation smashed upward through double digits almost as soon as things got underway.

This meant there was no money left to do anything with the actual information being gathered by the researchers. Within a couple years, well before the end of the handouts, they were unable even to go on gathering. “Virtually no analysis” was ever performed on the Mincome data. It was socked away, on thousands of reams of paper, in the federal archives.

Mincome staff economists did eventually use the data from Winnipeg to estimate whether a minimum income made people more work-shy. Their guess was that, if anything, it seemed to make them less so. But the dropout rate of participants in the Winnipeg household surveys was a frightening 36 per cent, making it difficult to trust that inference — especially given that people entering the program knew perfectly well it would only be temporary.

Source: Colby Cosh: What the poverty advocates forget about Canada’s flirtation with a basic income | National Post

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