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.
Many are now calling for a “universal basic income” (UBI)—where the state gives everyone enough to live on. This would put a floor under the class of people we’re calling the “precariat,” people for whom work doesn’t lead to increased financial security. It would free us from the bullshit, allowing everyone to benefit from automation, … Continue reading
A Basic income or Guaranteed Income for Canada – Would cost the treasury more than $500-billion a year
The Finnish example is typical of the fiscal folly. The Finns propose a monthly transfer of €800 ($1,200) a person, which sounds nice until you do the math and figure out this would require a doubling of existing taxes to fund the program. This transfer would barely replace what low-income Finns already get under their … Continue reading
Buried away in Ontario’s 2016 budget documents are unspecific plans for the Canadian government to start giving a guaranteed, unconditional salary away to a few people just for being alive. “The pilot project will test a growing view at home and abroad that a basic income could build on the success of minimum wage policies and increases in … Continue reading
Universal Basic Income gets all this attention and popularity, but I haven’t seen one model that’s even on the planet of financial feasibility. These things are utopian. Finland is conducting an experiment in giving every adult a check for €800 a month, which would require spending far more than what the government raises in taxes. Whatever … Continue reading
So let’s run some numbers. Paying all 322 million Americans $10,000 a year would cost $3.22 trillion. Proponents claim this can be paid by redirecting existing welfare programs, but a quick review reveals this as nonsense. All state and local government social welfare programs are around $500 billion, and programs such as food stamps (SNAP) … Continue reading
Guaranteed Income in Finland – Paying 800 euros ($1,165) each month and scraping all other government benefits
Finland’s government is drawing up plans to pay every citizen a basic income of euros 800 ($1,165) each month, scrapping benefits altogether. Under proposals drafted by the Finnish Social Insurance Institution (Kela), the tax-free payments would replace all other benefit payments, and would be paid to all adults regardless of whether or not they receive … Continue reading
En Europe, la Finlande sera en 2017, le premier État membre de l’UE à instaurer un revenu minimum universel. Aux Pays-Bas, la ville d’Utrecht expérimente également cette nouvelle approche qui a également ses thuriféraires en Suisse. Les défenseurs de ce qu’on appelle chez nos voisins le revenu de base inconditionnel ont d’ailleurs obtenu une petite … Continue reading
Universal Basic Income – GiveDirectly, a charity that gives 6,000 Kenyans enough money to escape poverty for a decade
GiveDirectly, a charity that gives money directly to poor people in Kenya and Uganda, is launching a big new project: a basic income. A basic income — also called a universal basic income (UBI), guaranteed minimum income, citizens’ dividend, demogrant, etc. — is a regular payment to a group of people just for being alive. Normally, … Continue reading
Frans Kerver was working 12-hour days before the money started coming in. For nine years, the 53-year-old freelance copywriter living in Groningen, the Netherlands, would rise at 7 a.m. and fall asleep at 1 a.m. His wife and three kids rarely saw him.When Kerver began receiving a basic income last July, everything changed. Universal basic income … Continue reading