Senator Hugh Segal on fighting poverty in Canada, a TVOBigIdeas video:
In a lecture entitled “Fighting Poverty”, Senator Hugh Segal explains why we need a new national approach to tackling poverty arguing that the costs and consequences of poverty are much larger than direct spending on social programs. Segal has been a long-time proponent of establishing a Guaranteed Annual Income. This lecture was produced in collaboration with the Literary Review of Canada.
A short answer to hunger and the need for food banks is to increase government support payments for food. In The Stop, author Nick Saul suggests providing social assistance recipients with a food allowance of several hundred dollars a month. But a food supplement doesn’t get at the root cause of hunger. Although poverty may have many faces, the basic cause is not hard to understand: too little money.
The simplest solution to poverty is to give the poorest members of society more money, top up their incomes to a minimum living standard. In short, institute a Guaranteed Annual Income.
Suggesting such a plan in polite company generally provokes a few predictable reactions:
But that’s a communist/socialist/fascist/bleedingheartliberal/etc idea! We can’t do that!
Actually, it is not. The idea of a Guaranteed Annual Income has been around since the 1970s. It has proponents across the political spectrum. These have included economist Milton Friedman, Winston Churchill and Richard Nixon. In a 1968 speech, Progressive Conservative Party Leader Robert Stanfield stated that he would consider a Guaranteed Annual Income.
A Guaranteed Annual Income is a good fit with avowed Conservative goals. A GAI reduces government bureaucracy. A GAI is tough on crime, as the poor are disproportionately represented in prisons. And a GAI reduces strain on the health care system. And raising the income of our poorest citizens allows them to participate as consumers in the market economy beloved by Conservatives.
But why should hard-working tax-payers look after people who don’t work?
We’re already paying a heavy price for poverty. In fact, poverty is hugely expensive. There is a major network of programs designed to address poverty and its implications, from welfare programs to those designed to reduce school dropout rates, curb substance abuse, provide safe houses for victims of family violence, divert young people who have run-ins with the law, subsidise housing, and more. Poverty is closely linked to poor health and an increased incidence of chronic disease, which in turn strains health care resources. And none of these programs end poverty. When you get right down to it, we really can’t afford poverty.
But people would just sit around drinking beer and watching TV all day!
This speaks to the stereotype of poor people as lazy and undeserving and child-like, with no facility for handling their own money or making life decisions. In fact, evidence suggests that the working poor continue to work and improve their lives when their income is supplemented.
From 1974 to 1978, the town of Dauphin, Manitoba was the site of an experiment called Mincome. Over those years, every family in the rural town was eligible to participate. After this period, the program was discontinued and the data that had been collected was filed away as new governments with new priorities let the experiment lapse. The data languished until a University of Winnipeg professor in the department of Community Health Sciences, Evelyn Forget, set about examining the results of the study. Forget concludes in a paper linked here:
We see a larger impact of a GAI on Dauphin than expected, because even though not all families qualified for a supplement, the impacts of the GAI extended beyond qualifying families. This is due to social interaction: changes in behaviour of those who receive the supplement influence those who do not, reinforcing the direct effects of the GAI. A good example of this effect is the influence of grade 11 students on their peers to continue education.
The most suggestive result of this study is the fall of hospitalization rates by 8.5 percent in Dauphin relative to the comparison group, specifically, a reduction in hospitalization rates for accidents, injuries, and mental health problems. Considering that in 2010, Canada spent $55 billion on hospital costs–8.5 percent of which is about $4.6 billion– these potentially immense savings make a GAI worthy of policy consideration.
Below is a youtube link to a CBC interview with Evelyn Forget. A transcript of the interview is available here.
A Guaranteed Annual Income offers the potential to allow a diverse range of human endeavours to bloom and enrich society, from starving artists and struggling writers to creative entrepreneurs. These days, not only artists are at risk. As Harper Conservatives close down environmental protection and scientific research, intrepid scientists and naturalists are cast adrift to fill the void just when the need to study the effects of climate change and biodiversity loss is escalating.
There is no more eloquent speaker on behalf of a Guaranteed Annual Income than Senator Hugh Segal. This hour long presentation is well worth listening to in full. Segal addresses the Mincome experiment at the 14 minute mark.
For decades, neoliberal policies have promoted a ‘trickle down’ approach to government budgeting. It’s time to turn neoliberal politics on its head and employ a ‘bottom up’ strategy to end poverty in Canada.
Willow House Chronicles 
I think they’re afraid that with a guaranteed annual income, scholars, artists, and activists would be able to do what their vocation calls them to do, and what needs to be done to advance society. It’s not “not working” that’s the fear – it’s the nature of the work that would be done. We’ve found that “what most needs to be done” is, not surprisingly, those things for which there’s no financial support to do. Mudpuppies, for example, are “keystone predators” in many water bodies, but since they don’t have any official status, there’s NO support for their study.
Yes, I agree. There is certainly a desire among developers NOT to discover any endangered species on the land they want to destroy. You don’t want any impediments to ‘progress’! Better not to know.
Society in general has a very narrow definition of work, measuring everything in dollars and marble countertops! If you are doing unpaid research, it must not be worth doing, or it’s just a quaint hobby you should do in your spare time. Not like, say, serving hamburgers at McDonalds. Now that’s a proper job.
Nice post- very eloquent. It’s one of those things that is so clear you wonder how it is that people deny that it would work. How to end poverty? give the poor more money- simple.
Don’t get me started on people’s ideas of ‘real work’. I always have to say un-employed because I’m a stay at home and that’s apparently not an option (and I refuse to be classified as a homemaker- or worse-housewife)- we just don’t have the language to accurately describe someone who doesn’t do paid work- and make what they’re doing seem valuable. Maybe I’ll have to make up my own job title…
Angela, I know that dilemma of homemaker/housewife. It’s even worse once your kids are in school. If you still choose to stay home you are REALLY wasting your time.
Isn’t it sad that our society thinks so little of raising children? I see young women all the time, working at mundane boring jobs that must barely pay for child care, but apparently they are ‘fullfilling’ themselves. I think they have bought into a myth.
It is politically incorrect to say so, but the wide employment of young women has had broad consequences for society, contributing to childhood obesity, over-processed food products, hyper-consumerism and more.
If you come up with a good job title, let me know…
I think the politically incorrect part is just to say that it’s young *women* specifically – I think it’s pretty widely speculated the general increase in working hours in the population has had damaging effects on society. Presumably some day in the future if we trend back to single-income households, the stay-at-home partners will be an even mix of men and women.
Today, I expect that a lot of the young women working mundane boring jobs are not there to ‘fulfill themselves’, but because they need the money, possibly because they’re the only earner in the household, and that’s the only job they can get. But, of course, many people enjoy their jobs, however mundane, or simply don’t want to stay home with the kids. Or choose not to have kids, increasingly.
What has changed in society over the last few decades is the widespread employment of women outside the home. I suggest that has had consequences for society which are often not acknowledged because it is not PC to “blame” women. My point is that a lot of women are NOT in fact working to make ends meet, that by the time they pay for daycare, and added expenses assoicated with working outside the home, they are not really any further ahead. But there is now a big expectation that women will work and staying at home is a ‘renegade’ position. Obviously, I am not talking about women in single-income homes who don’t have much choice.
It took me a moment to think this through. Why is it wrong/demeaning to accept handouts from concerned fellow-citizens (food banks) but okay to accept handouts from the government? But then I considered the fact that Canadians have no moral dilemma over accepting universal healthcare coverage; from what Evelyn Forget has to say, the GAI would be a form of extended coverage, preventing much mental and physical harm borne of frustration.
A GAI is not a handout from Haves to Havenots. It is part of the wealth redistribution program we call income tax. It is in effect a negative income tax. Everyone participates in the income tax program. The government uses this wealth redistribution instrument to fund projects for the common good. Further, the government uses this system to encourage particular actions such as RRSP contributions to encourage people to save for retirement (RRSPs benefit higher income earners because low income earners have no spare money to sock away in an RRSP). And a GAI would be part of this system because it serves the common good of not having a section of the population experiencing the ills related with poverty that society eventually pays for, one way or another.
It’s like that commercial for car care: You can pay the mechanic now (and maintain your car/ alleviate poverty) or you can pay the mechanic later when your car breaks down (or your citizens experience poor health, etc.). Prevention is better than cure.
of course, you can work at home and homeschool rather than sending your kids into the system. We both worked at home (not really a choice since we were doing what needed to be done, as per my first comment), and the daughter has now assertively made homemaker her vocation, though extensively mixed up with gardening, heritage breeds, and human health advocacy, and while it’s not objective for grandparents to comment on such things, the results seem pretty impressive so far.
It’s an interesting concept. It would put me in a bit of an odd situation, depending what the income level was set at. If it were based on current minimum wage, it would be about $22,000/year, or $44,000/year for a couple (unless there was a lower combined amount for couples). We’re planning for our future expenses to be about $15,000/year, so that would leave us a pretty significant excess. Investing in stocks with an average return of 7%, we’d be millionaires in 20 years, adjusting for inflation. Would you return an unused portion to the government or keep it?
I plan to be working but likely making less than $22,000/year, which would still be enough to cover my expenses and then some. With a GAI I would probably always receive a top-up, even though I wouldn’t need it. Essentially, I would not need to get paid for my work, since the government would cover it anyway – I could choose not to charge people, or charge people just enough to cover materials. For things like teaching essentially the government would be paying for free courses/lessons for people. That might not be a bad thing. But it would also mean I’d have no reason to do any particular amount of work. I could do as much or as little as I wanted with no bearing on my income.
Yes. You and your partner are university educated, your partner is middle aged and well-established, you have both had good jobs that have allowed you to save extensively, you own property, and you do not plan on having a family. So…not exactly your average family living on the edge, and certainly not people raised or accustomed to living in poverty, nor to having your options limited.
We’re talking about lifting people out of poverty. Do you have a problem with that?
No, I don’t have a problem with lifting people out of poverty. 😉 Just wondering about the implementation. Is it geared to need? I, obviously, would not need it, but would I receive it anyway? How would they decide who needs it? If the goal is to reduce administrative burden, it seems like there may still be a fair bit. But if you simply give it to everyone with an income below a certain line, you would probably see a huge increase in the number of people receiving benefits. Obviously I’m not a typical case because I’m setting up my life such that I won’t need a lot of money. But there would be more cases like me. Is it acceptable for people to become millionaires without working, on the taxpayers’ dime? It would certainly give some ammunition to opponents. Still, while that might be rare, the case of people doing work for free would probably be quite common, e.g. anyone who works part-time. Would people choose not to charge people for work, instead having government pay for their services, or just not work, if their income was not going to increase as a result of their work? How would that ultimately effect the economic system we’re used to? Goods and services produced by people who often don’t make more than the min-wage threshold might become much cheaper, such as artwork. (Would people charge minimal amounts – material costs only – for their work? Would original artwork become a cheap commodity? would that mean that artists normally above the line would have to lower their prices to compete, and possibly bring them back into poverty? Would society value artwork less if its price were lower?) I’m not saying the idea doesn’t have merit. I’m saying it’s interesting and there’s a lot to think about from a policy perspective. The article says that there are incentives for people to keep working, and that you would only “claw-back” 50 cents on the dollar for each dollar you earned toward the minimum income, so that would be a big one, but it doesn’t get into details other than that, or at what point your income stops being supplemented.
Did you watch Hugh Segal’s talk through to the end? He explains things quite well. It would work through the income tax system and be automatic in a manner similar to old age supplements already do. I’m sure if, should all this come about, and you received money you didn’t feel entitled to, you could do good in the world by passing it on to your favorite charity.
There are a number of pieces about the Dauphin experiment online. Try googling for more details.