Politics & Policies, Report

Universal Basic Income (UBI) in British Columbia – Should be the central element of its transfer system experts panel says

2. Report summary

Through this report,we endeavour to present comprehensive, consistent, and evidence­ based advice to the B.C. government in response to the tasks set out in the terms of reference. We do this in six parts, which:
• introduce our task and provide a summary of the report (Part 1)
• present a justice-based framework within which we can analyze the alternatives (Part 2)
• provide background information used throughout the report (Part 3)
• describe and analyze the current system (Part 4)
• describe and analyze potential basic income programs (Part 5)
• present our vision for the future and a set of recommendations that will move
B.C. on the path toward that vision (Part 6)

We use the insights of human needs to fonn a list of characteristics that a policy would have to exhibit to fit with our notion of justice based in self- and social respect. We can divide that list of characteristics into groupings based on the three psychological needs: autonomy, efficacy, and social connection.

Autonomy

1. Adequacy. True autonomy means that a person’s resources must be adequate to raise them above destitution, which would instead require them to adopt positions of subservience in order to survive. The term “resources” is used here advisedly because, as will be seen throughout the report, access to both cash and services respectfully provided can support autonomy.

2. Accessibility. Supports that are adequate on paper provide no support at all if they are not accessible in practice. To be accessible, policies must be simple and understandable from the user’s perspective, supporting rather than challenging people’s notions of dignity.

3. Security. To be effective, and to promote dignity, policies should aim to provide people with a clear and reliable sense of being supported through difficulties. The ability to plan for the future and to play a full role in your community is only possible if you don’t feel it could all be taken away in an instant. In part, this is a component of building strong communities-communities that engender people’s capacity to support each other in hard times.

4. Responsiveness. Policies must be responsive both to differences in needs between different people and to changes in circumstances for individuals, households, and communities. Responsiveness requires flexible programs, allowing evolution in directions needed to address changing circumstances at the community level, with input from and influence of both those who need support and those who will pay for the support to be provided. Responsiveness also means that those using the program have some sense of autonomy-the ability to make decisions rather than simply being directed to particular outcomes.

Efficacy

5. Opportunity.A lack of genuine opportunity means that the person cannot truly exercise their autonomy and competence, even if the right to do so exists in a formal,on-paper sense. A movement toward a more just society means providing more people with the opportunity to pursue what they value-in their family, mental, physical, emotional,and work lives. This is not a guarantee of success in their endeavours but support for the central human desire to try. Opportunity links directly with breaking the cycle of poverty and preventing poverty, and with the goal of ending systemic racism and gender-based inequities.

Social connection

6. Social connection. Policies should provide the material basis for making supporting and loving attachments, but they should also take into account impacts on building and supporting communities.

Public trust

In addition to these characteristics of just policies that are grounded in an attempt to support self- and social respect, we also set out two characteristics that fit with the idea of justice set out by being an equilibrium construct inwhich the policies themselves engender public trust and support.

7. Policy stability. By this we mean that the policies have sufficiently broad support that they will not simply be undone in the next political cycle and that they are economically sustainable. It incorporates giving due consideration to economic and fiscal impacts. The economic impacts of policies and their finance relate directly to the incentives they create for paid employment, training, and investment, as well as for caregiving, volunteering, and community building. Transparency of costs and expenditures is a key feature of building public trust and, therefore, policy stability.

8. Reciprocity. By this we mean that the policies have the quality of generating a society of mutual respect. For those who need support, this is respect for their needs and for the contributions they make. For those who are mainly paying to fund supports, it is the respect shown by not treating the funds as coming from some nameless source that can be drawn from at will.

These eight characteristics are often in conflict with each other, requiring policy decisions that balance the considerations and acknowledge their inherent trade-offs.

Where that happens, we point it out in our deliberations. We do not view this list as providing a checklist of answers but rather as a basis for discussion about the justness of policies and for comparing alternatives-discussions that are part of the process of creating a more just society and that will never end.

By applying this approach, we are able to show that when examined in the context of the whole tax and benefit system, basic incomes have disincentive effects due to income testing that are similar to those of the current Income Assistance program. A basic income would also newly impose disincentives on larger numbers of workers earning above poverty levels. Those outcomes contradict one of the claims of basic income advocates-that basic income would be a significant improvement on traditional welfare programs in this respect-which falls apart when considered in the broader context.

Specific conclusions and recommendations

1. The first question put to the panel was whether British Columbia should adopt a basic income as the central element of its transfer system. Our answer is no. Moving to a system constructed around a basic income is not the most just policy change we can consider. The needs of people in this society are too diverse to be effectively answered simply with a cheque from the government.

Effectiveness, in fact, is key to our conclusions. Questions of effectiveness are reflected in the fact that a basic income is a very costly approach to addressing any specific goal, such as poverty reduction. Further, in our assessment of claims made for the benefits of a basic income, we found that for many of the claims there are other policies that would provide more effective approaches . Other claims, such as that a basic income would be easy to implement through the tax system, or that a basic income is needed because we are facing the end of work as we know it, or that a basic income would pay for itself through reduced health-care costs, appear to us not to be true.

We are also concerned about the implications of a basic income for the society we will share in the future. A basic income emphasizes individual autonomy-an important characteristic of a just society. However, in doing so it de-emphasizes other crucial characteristics of justice that must be, in our view, balanced: community, social interactions, reciprocity, and dignity. The basic income approach seems to us to be more individualistic than the way we believe British Columbians see themselves.

2. We propose, instead, a mixed system that applies different approaches in different circumstances:

• basic services, such as extended health supplements and a new, extensive rental assistance benefit, both addressing needs common to all low-income households
• targeted supports for groups like youth aging out of care and women fleeing violence, who have more specific needs
• targeted basic incomes where they are most helpful, such as for people with disabilities
• an overhaul of the Disability Assistance system, including for those with mental health and addiction issues, that emphasizes dignity and support for work for those who want it
• a reformed Temporary Assistance program, providing monetary benefits with more dignity
• an improved earnings supplement for low-income earners
• a more just labour market, to improve wages and job conditions for low-skill, low­ income workers, changes that will be particularly beneficial for people whose often precarious situations have been highlighted by COVID-19: women, people with limited education and work skills, and Indigenous and racialized people

We see our recommended policy changes as a complete system that would help move B.C. toward being a morejust society.

Our recommendations are closely aligned with the government’s poverty reduction targets, though our goals extend beyond simply reducing the poverty rate. One important issue that we do not address directly is food insecurity. This is clearly a serious and important issue, but we believe it is best addressed by relieving people of the other pressures that lead them to have to cut back on food-housing, health, and income being among the most central.

3. While we do not see a system centred on a basic income as a good approach for B.C.,we recognize that others-including this or future governments-might. We believe that many of the reforms we propose would be needed even if a basic income were adopted. As many proponents of a basic income recognize, true autonomy is found only partly in monetary resources. It is built on a base of supportive communities and families, on a fair labour market, and on specific services such as health care and education. In the most extreme versions of a basic income, those services are expected to be bought in the market using, in part, the money distributed through the basic income. We see this as misguided.
A prime example is youth aging out of government care-perhaps the strongest example of a longstanding failure of the existing system to meet the standards of justice. For these young adults, financial security is part of the way forward, but providing cash transfers without also helping them form supportive attachments is simply not enough. Some steps have been taken to address the needs of this group with significant recent improvements to existing programs, but there is much more to be done.
Another example is labour market reform. Labour regulation changes aimed at finding a better balance between the interests of workers and finns could provide the underpinning for a basic income or other cash-transfer programs, since people are more likely to choose work over receiving cash when the jobs on offer are good jobs.

4. Building the basis for a basic income would also involve a major overhaul of the tax and transfer system-another reform that we recommend as an important part of increasing the effectiveness of, and improving access to, the current system. Of course, this is something that needs to be implemented primarily at the federal government level,and we recommend that B.C. add its voice to calls for refonn.

5. Work incentives and disincentives are an important theme running throughout this report. We believe that the dignity and self-respect that comes from voluntarily chosen work (not the forced work of “workfare”) is important. That means that addressing the disincentive effects cash transfers can have on work would be justified by reasons related to dignity alone. But beyond that, there are economic and fiscal consequences of reduced labour force attachment that further support the need for reform. Minimizing these effects is an important consideration for us.

The redesigned system we are suggesting provides support for work in several forms. Our proposed Income Assistance reforms and a generally available extended health benefits program for those with low incomes will reduce the welfare wall to reduce work disincentives. Intense work assistance will lower barriers to employment and bring people the hope of accessing new work opportunities. Labour regulatory reform will improve wages and working conditions for low-wage, low-skill jobs, improving the attractiveness of work relative to receiving benefit. Enhanced earnings supplement benefits will provide direct benefits to an important group, low­ income earners, which consists predominantly of women and Indigenous and racialized people, whose importance and vulnerability have been revealed by the COVID-19 pandemic.

6. We were also asked whether there should be a basic income pilot. To this, too, our answer is no. Many of the proposed benefits of a basic income are associated with changes people might make because they have a long-term, stable income source-changes such as investing in an education or starting a business. A pilot will not allow us to assess these claims. Even the longest basic income pilots lastonly five years, and that is not a long enough commitment for people to make substantial changes. We already have evidence on shorter-term impacts from other research and pilots.

However, we do believe strongly in the need for policy evaluation to guide effective policy-making. Our preferred approach is to implement new policies incrementally, assessing them carefully and, very importantly, consulting thoroughly with affected groups, then making adjustments. A just policy change process does not involve one policy proposal, tested then implemented. It is a never-ending quest.
Our specific recommendations are listed below. We provide more detail on each of them in Part 6, where we also provide cost estimates and an indication of how the recommendations would be implemented-both developed with the help of staff in the relevant ministries.

The total of the estimated annual costs for all the proposals combined is $3.3 to $5.0 billion, a substantial portion of which could be offset by eliminating the home owner grant, with a current annual cost of over $800 million. We divide the recommendations between those we believe could be implemented in the short term (the total cost of which is about $1.4 billion) and those that would take longer to develop (with a total cost of $1.9 to $3.6 billion).

In comparison, according to simulations presented in Part 5, an income-tested basic income with a similar budget would have a maximum benefit amount of less than $10,000 if applied to family income, with a benefit reduction rate of 30%. Such a basic income would reduce the poverty rate by nearly two percentage points, a tangible amount. However, the recommended targeted basic income approaches and targeted basic services, together with significant improvements to existing programs that we are recommending, would direct those tax dollars much more effectively to address unmet basic needs.

We see these recommendations as a cohesive whole that embodies a vision of a province that continually strives to use the power of government and the full set of tools at its disposal to balance citizens’ desires for individual autonomy and their need for community. It is a place where evidence, outcomes, and the lived experiences of those most affected drive changes. It is a place where no one is left behind. And it is a place where the reciprocity needed to build and maintain public trust is at the core of public discourse. In short, it is a vision of a society that always seeks the elusive balance inherent in a just society, knowing that is a never-ending quest.

 

Chosen excerpts by Job Market Monitor. Read the whole story @  Covering All the Basics: Reforms for a More Just Society – Final Report of the British Columbia Expert Panel on Basic Income

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