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Now is not the time for universal basic income

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Image: KMR Photography/Flickr

Governments across the globe are scrambling to provide financial assistance for workers unable to earn money during the coronavirus pandemic. But it's a difficult task determining how to get funds to those most in need -- those who often fall off the employment radar thanks to the expanded gig economy.

Jessie Golem knows the pandemic "exposed the deep flaws of the capitalist system we live in, that thrives on people working for pennies, with no protections or health benefits. It's actually inhumane how the capitalist system treats people. And now we're in a place where all of those vulnerable people have been laid off en masse."

Fortunately, Ron Hikel has the answer. Hikel was the executive director of the original Mincome project in Dauphin, Manitoba, from 1974 to 1978 and he's been advocating for a universal basic income (BI) ever since. However, Hikel recommends against a hurriedly thrown together form of BI to meet the immediate financial needs of people thrown out of work because of COVID-19. Implementing a serious basic income program should wait until the COVID-19 crisis has passed.

During a phone interview, Hikel maintained no person should ever have to pay for the appropriate test to determine whether they have COVID-19 or not. If the test is positive, the full cost of the required clinical treatment for the virus should be covered. And, no one should have to shoulder the entire cost of staying home from work either because they are ill or to avoid the risk of passage of or risk exposure to COVID-19. Government and employers should work together to carry these costs.

Many would say that this is an opportune time to implement some form of basic income to compensate for lost income. However, Hikel thinks otherwise. "I would make a basic and fundamental distinction between compensation dealing with the virus and basic income. The requirements and the appropriate public policy responses are quite distinct; and in the present circumstances should not be confused. The only way any recognizable form of basic income could be mobilized to respond to a virus comes if a government had already developed a workable version of BI and had it ready to go in response to the present or a future crisis. Sadly, though I have been calling for this for years, it has not happened."

Hikel says implementing a BI at this time would be a knee jerk reaction that would be grossly expensive, poorly provided and, "may poison the well for future BI payments." Instead, government emphasis should focus on widespread testing to establish the extent of the virus and its impact. Then, government can respond rationally and provide income replacement while Canadians shelter at home.

Ideally this would be a collaboration between the provinces and the federal government. Income replacement payments for companies with less then 500 employees would be covered by the provinces while the federal government pays for companies with more than 500 employees. 

After the coronavirus pandemic has been played out, the Canadian government should develop a detailed operational BI that could be implemented universally in any emergency that causes widespread financial havoc. Hikel says a trial of the plan need only last a couple of months.

Hikel observes that had this emergency BI plan been put into place after SARS then Canadians would have been covered. Since SARS, there have been an additional five pandemics, including H1N1, Ebola, COVID-19, HIV/AIDS and MERS.

Looking to the future and establishing an ongoing BI, Hikel prefers a plan that is geared-to-need rather than paying everyone a universal standard amount only to claw it back from the ultra-rich. Geared-to-need is less expensive to implement and it neither underpays or overpays people since it's adjusted to the fluctuations in income common among those with lower incomes. Geared-to-need puts an end to the financial insecurity that causes so much psychological damage and inflicts harm on lower-income individuals and families. 

According to Hikel, "The answer is to have a system that can, as with Mincome, adjust the periodic payments by a significant amount, to earned income for that same period so it is neither an under nor over-payment. Each would be damaging to low-income families, though in different ways."

Golem is living proof that BI works. She participated in the Hamilton pilot that was prematurely cancelled by the Ford government in March 2019. Before joining the pilot, Golem worked four jobs that were contract work and gig economy. All paid minimum wage, had no benefits or protections and all could be cancelled at any time. 

One of those jobs was Golem's photography business. The plan was to supplement her income working side jobs until the business was up and running. But according to Golem, "I was barely making enough to live, let alone invest in a business. Having BI enabled me to quit the extra jobs and focus entirely on the photography business. I still had to work, but I had a floor that would cover me while I grew my business. It was working. I was actually making more money than I was before BI, because I had the time to focus entirely on my business. I had a plan, and would have been a full-time photographer by now if BI hadn't been cancelled."

Golem and her friends feel that, "we're past a point of no return." They believe this pandemic will fundamentally change the way society looks. But they believe there's the potential to look at the societal weaknesses exposed during COVID-19 and to take action to ensure the most vulnerable are not at risk the next time.

Golem believes, "If we had measures such as a basic income in place, adequate rights for workers, paid sick leave, and benefits for the most vulnerable, we would have been far more equipped to handle this crisis. The price for this negligence is death. We should absolutely have a basic income, not even just for emergencies such as these, but as a measure to provide every Canadian with an equal opportunity to live and thrive in this society."

Hikel was also consulted by the Ontario Liberal government a couple of times when they were putting together Ontario's BI pilot -- a program that was by all accounts achieving successful results. With the knowledge, proposals and experience Hikel has for short-term emergency contingencies as well as long-term implementation, it's a wonder not a single level of government is knocking on his door.

During this time of financial crisis, Hikel recommends, "an enlightened government start now to develop an operational model of basic annual income and the next time an income crisis hits, use it to help minimize the damage; and also tests out a form of basic income to learn from real application how well it works. Then fix it and put it into practice. Is anybody listening?"

Doreen Nicoll is a freelance writer, teacher, social activist and member of several community organizations working diligently to end poverty, hunger and gendered violence.

Image: KMR Photography/Flickr

Editor's note, March 24, 2020: A previous version of this story described Ron Hikel as being "part of the team that put together Ontario's BI pilot." In fact, Hikel was consulted by the Ontario government when they were putting together the basic income pilot, but played no role in the design or conduct of the pilot under either the Liberal or the Conservative government​s. The story has been corrected. 

Editor's note, March 24, 2020: This story has been updated to clarify that Hikel "recommends against a hurriedly thrown together form of BI to meet the immediate financial needs of people thrown out of work because of COVID-19."

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