What does Universal Basic Income mean for a Young Feminist Economy?
INTRODUCTION
Fora believes that the economic empowerment of young leaders is essential to the progress of Canadian society. One fiscal policy that purports to enhance the financial agency of young people and is gaining traction in societal discourse is that of Universal Basic Income (UBI). In fact, the Liberal Party of Canada in early May 2023 passed it in its official party policies at its national convention (Liberal Party of Canada, 2023). This topical policy solution is one that requires exploring to determine its benefits for young leaders. Specifically, this brief will explore the contours of what UBI is, how it has manifested in Canada previously, and what it may mean for building a young feminist economy.
WHAT IS UNIVERSAL BASIC INCOME (UBI)
UBI can be defined as “an income support mechanism typically intended to reach all” unconditionally (Francese & Prady 2018, 38). It is often envisioned to be “regular, stable in size, and lifelong” although there may be variations for children or seniors (Widerquist 2018). These qualifiers of for whom and how money is provided for are at the centre of much debate and the nuances between varying iterations of Basic Income (BI) schemes. Fundamentally, however, UBI is composed of (i) a grant of money and (ii) financing of the grant via taxes (which can be through taxing wealth, property, etc.) (Widerquist 2018).
Such a guaranteed income can manifest in several ways. Proposals often differ between “transfer level and frequency, age of eligibility, and whether citizens or all residents are covered” (Gentilini et al 2019, 21). These differing policies include those such as a Guaranteed Annual Income (GAI), Negative Income Tax (NIT) a Basic Income Guarantee (BIG), and a Guaranteed Liveable Basic Income (GLBI) among others (Gentilini et al 2019; Simpson et al 2022). This brief focuses on the most unrestricted policy proposal – UBI. Although the aforementioned basic income policies are used interchangeably, UBI is often specifically employed to address universality and lack of preconditions (such as annual income thresholds) for supplying Canadians with a guaranteed amount of money to use as they please.
The intention and impacts of UBI is also debated. Often falling under the umbrella discourse of a Guaranteed Livable Income, UBI is frequently proposed as a policy-driven solution to universal accessibility of resources by reducing financial barriers to opportunities and services such as health and employment while also seeking to achieve substantive equality (Office of Senator Kim Pate 2020). Substantive equality entails “addressing and redressing harms caused by discrimination and inequality rather than merely reacting to the situations that result” (2020, 1). UBI proposals have nonetheless been critiqued when proposed at the expense of the services they often purport to make more accessible. Some programs have been besmirched as “neo-liberal or libertarian” in nature “aiming at replacing the welfare state with a minimalistic safety net” (Ortiz et al 2018, ix). It is critical to discern for whom and how proposed policies manifest to ensure equity and sustainability when programs are carried out.
UBI: DIGGING DEEPER
METRICS
To be effective, it is assumed that the government-provided guaranteed income amount would be sufficient for individuals to use to live with dignity and access resources they perhaps could not as safely or accessibly prior to receiving the benefit. The metrics used to assess poverty and need, and consequently BI grant amounts is thus critical to furnish Canadians with adequate funds to maintain this dignity and access.
The Office of the Parliamentary Budget Officer, in its assessment of the cost projections for a UBI scheme utilized the Market Basket Measure (MBM), Canada’s official poverty line. This is measured based on the “cost of a basket of goods and services that individuals and families require to meet their basic needs and achieve a modest standard of living” (Yves Giroux 2021, 11). However, this measure has been critiqued. Some argue that this catch-all poverty line “does not account for those in rural and remote communities, including many Indigenous communities, and is not updated quickly enough to reflect costs of living” (Office of Senator Kim Pate 2020, 2).
An alternative measure of poverty is that of the Low-Income-Cut-Off (LICO) which “is the income threshold below which a family must devote 20 per cent more of its income than the average family spends on the necessities of food, shelter and cloth. Statistics Canada provides LICOs that vary by seven family sizes and five community populations” (Yves Giroux 2021, 11).
Another often proposed is the Low-Income Measure (LIM) which is simply “50 per cent of the median household income” in a country. This is often used for macro comparisons between states and may not reflect regional variations within a diversely populated country (Yves Giroux 2021, 11).
Further research is required with greater rigorous testing and community consultation to determine scales and analyses of identifying thresholds for poverty across Canada and determining UBI grant amounts on this basis. A metric that is responsive to regional variations is crucial to the Canadian context.
FEARS & CRITICISMS
UBI is not without its criticisms. Two key counterarguments emerge when addressing the benefits of UBI. The first is that of a work disincentive. This entails the notion that because individuals will have increased incomes, they will be less inclined to work as many hours or produce as much labour as they currently are, creating a disruption in the economy. Further research is required to determine a sound response to this conclusion. Indeed, without having implemented a nation-wide program, small pilot projects cannot speak to macro labour force trends. It is to be noted, however, that in a feasibility report conducted by the Parliamentary Budget Office in 2021 of a possible country wide UBI program, the impact on labour supply was considered miniscule (Yves Giroux 2021).
The second argument that is often outlined against UBI is that of inflation. Antagonists of UBI argue that fundamentally, increasing the money in circulation in an economy and increasing the spending capacity of consumers will lead to artificial price hikes causing inflation and further lack of affordability of dignified living. This is specifically found when there is not accompanying supply increases to match demand. This was found to be the case in Iran with a universal cash transfer program implemented there (Ortiz et al 2018). The type of economy, however, has to be assessed as well, as Iran is a closed economy and perhaps an exceptional case. Some counterargue that because UBI is fundamentally a redistribution of money supply in existing income through taxes, there is no resulting inflation (Office of Senator Kim Pate 2020). Others argue that UBI effects must be addressed in relation to real growth in an economy to be able to assess if it can create inflationary pressures or not (Miller 2021). Without a large-scale implementation of UBI, however, conjecture will remain the field of analysis for UBI.
UBI IN PRACTICE: CANADIAN CASES
UBI is not a foreign concept. In fact, it has been implemented in pilot projects across the country over several decades. In 1979, ‘Mincome’ was implemented in Manitoba with trial and control groups providing three levels of annual income support ($3500, $4500, or $5500) (Forget 2011).1 Poverty was assessed using the LICO. The program was not assessed at the time, but researchers decades later re-examined the evidence. They identified multiple trends including findings of little work disincentive, that women were able to take more time to return to the workforce after having children, young adults sought to finish secondary education before pursuing employment, and they also found that positive health outcomes were correlated with Mincome (Pasma 2014). These benefits cannot be understated when considering the current economic climate which has Canadians and young leaders strapped for financial leverage to make critical choices in their lives such as parenting time off and completing higher education. Indeed, these concerns were addressed in the most recent federal budget which proposed paid parental leave and the permanent freezing of federal student loan interest rates (Department of Finance Canada, 2023).
More recently in 2018, Ontario implemented a basic income pilot project. Over 4000 participants aged 18-64 were intended to be provided basic monthly income payments up to a three-year period (Ontario, 2018). Specifically, participants were to be granted “$16,989 per year for a single person, less 50% of any earned income”, and “$24,027 per year for a couple, less 50% of any earned income” (2018). This was calculated based off the above-mentioned LIM (Mendelson 2019). A control group was also implemented for this pilot to compare and contrast results. The pilot was cut short due to a change in governments and consequently government priorities, but studies examining the project have concluded the results for some were fundamentally “transformational” and exceeded the benefits of current social assistance schemes (McDowell & Ferdosi 2020, 685). Benefits were found for recipients “on a variety of variables… including mental and physical health, food and housing security, financial security, social and family relationships, and ability to access transit, while improving feelings of self-confidence and self-worth” (2020, 682). There have nonetheless been criticisms of this program, including the eligibility thresholds which were fundamentally not universal and the opportunity to enrol was deemed limited in approach and scale (Mendelson 2019). Many lessons can be drawn from Ontario’s experiment for future basic income programming. It still stands as a program that has been studied globally and addresses key concerns of young leaders in today’s Canadian economy.
British Columbia also recently sought an assessment for the costs and feasibility of a basic income pilot project in its province. A special task force ultimately concluded however, that the province could not afford to run such a scheme on its own and was better equipped to campaign on anti-poverty issues through more micro programming (Green 2020).
The BC finding lends to a greater question of the role of the federal government in nationalising a country-wide UBI. The Office of the Parliamentary Budget Officer was tasked with researching and projecting the costs and feasibility of such a program in 2021 (using both federal and provincial revenue sources to finance the project). Modeled after the 2018 Ontario pilot, the PBO found that such a national BI program would “cut poverty rates by almost half in 2022” per the MBM (Yves Giroux 2021, 4) (See Figure 1). The benefits are found at the lowest income levels in Canada, while losses were also projected for those making higher incomes who would otherwise save more money because of tax benefits had they not received a UBI grant (2021, 5). Noteworthy, is that the PBO found women would benefit more than men from such a program because they “are more likely than men to be living with low income in Canada” (2021, 10). Ultimately, UBI is projected to create a significant difference if it were to be implemented in shaping the lives of Canadians.
Figure 1: Poverty Rates in Canada with UBI Declinations
WHAT DOES UBI MEAN FOR A YOUNG FEMINIST ECONOMY?
With all this being assessed, what does a UBI entail for young women and those marginalized by their gender? Fundamentally, the issues that are most important to young leaders can be addressed through UBI. In current economic circumstances where the cost of living, inflation, and housing affordability are incredibly precarious while young people feel that their careers and finances have been stunted since the COVID-19 lockdown (Prece 2022), financial agency is of the utmost concern. Providing grants of money for young leaders to choose how best to live their lives and assert their dignity can be critical to shaping a diverse and thriving economy.
This section examines a few further key areas where UBI directly impacts young leaders’ agency.
SAFETY & LABOUR
This agency must be read intersectionally. Basic income provides increased autonomy for those who are unduly subjugated to decision-making constraints as a result of their gender. UBI can generally provide greater autonomy, but for women for example, this can provide more routes out of poverty or safer housing opportunities outside of circumstances of intimate partner violence (Carrier & Halpenny 2020). When income helps determine health outcomes, this means improved neonatal health conditions and the future prospects of mothers and children can be ameliorated simply because of UBI (2020). For those experiencing discrimination as a result of their gender, guaranteed income provides “more bargaining power in employment” and “recognition for their unpaid labour” – feats recognized as disproportionately faced by women and gender minorities (2020, 5). Indeed, the recognition of care work, unpaid gendered labour, and employment safety has repeatedly been called upon by many national Canadian organisations working towards gender equity and promoting a feminist recovery for Canada post-COVID-19 lockdown (Sultana A & Ravanera C, 2020; Cee Strauss, 2021). These structural concerns of how to promote equity in work and labour can be directly addressed with UBI.
MENTAL HEALTH
Studies have found, as have the pilot projects listed above, that there are significant gains to be made in mental health as a result of UBI initiatives. In a long-term study watching the lifespan of many young children become adults and receiving UBI in rural North Carolina on the Eastern Band of the Cherokee Indians (EBCI) reserve, a downward trend of behavioural disorders, emotional disorders, and a lower likelihood of living with psychiatric disorders as adults was identified (Green 2020, 10). In analysing, “Mincome”, a significant reduction in admissions related to “mental health diagnoses” was also discerned, contributing to a significant statistical finding of overall reduced hospital admissions correlating with the BI program (2020, 11). Overarchingly, many studies of UBI find that mental health improves due to increased feelings of autonomy and dignity for recipients of the grants to work and carry out their lives more closely to their desired outcomes (2020). In a recent study of young leaders, more than half of respondents outlined “mental health as a staple of a feminist economic recovery” as the current conceptions of labour and productivity can have adverse impacts on young mental health (Prece 2022, 33).
LEADERSHIP OPPORTUNITIES
Repeatedly, youth have also explained the trade-offs required to begin to seek participation in decision-making and community-organizing spaces. The opportunity cost for many to pursue paid labour as opposed to unpaid internships and volunteer positions to pursue their passions to promote safer and more just communities has been a barrier for many facing financial hardship (Canadian Heritage 2021; Prece 2022). UBI provides another income source to even this playing field, so that those systematically excluded from community discourse now have a route to not only pursue such opportunities, but share their voices in spaces that would highly benefit from their insights. This specifically encourages those facing socioeconomic disadvantage to participate in leadership spaces.
ENVIRONMENT
Young leaders also state repeated concerns about the environment and climate justice. The Canadian ‘State of Youth’ Report raises concerns regarding sustainability, Canada’s lack of promise in achieving the Paris Agreement goals including ascertaining net zero carbon emissions by 2030 (Canadian Heritage 2021). The environment and its decline directly affect the futures and livelihood of today’s young leaders. Although very little research has been conducted at this nexus and more is required for robust conclusions, some have found promise in UBI and its impact on mitigating harms to the environment. This includes the compensation of “unpaid, but socially valuable, work such as civic engagement, care work, or environmental stewardship and that it would provide an egalitarian base that .. is essential to a green economy” (MacNeill & Vibert 2019, 3). There is concern however of increased consumption due to increased income and that this may afflict the environment and promote neoliberal consumption and spending practices that diverge from community care necessary for promoting collectivist climate stewardship (2019, 5). For example, some Indigenous leaders interviewed for a study stated that dependence on certain income benefits had created vicious cycles of undermining Indigenous cultures and communities (2019, 5). Moreover, local food systems can go awry if increased consumption entails the “increased import of expensive and environmentally damaging canned foods” (2019, 6).
Scholars argue that UBI must thus be paired with complementary policies to ensure the climate is not compromised in such efforts; examples include vouchers for locally produced sustainable food or subsidies for consumption of local products (MacNeill & Vibert 2019). In a study co-conducted by FORA of young leaders, over 30% of respondents relayed the importance of advancing a sustainable environment in economic recovery including decolonizing climate discourse and building on existing Indigenous knowledge-systems of stewardship (Prece 2022). Creating ethical UBI standards that consider not just increased income but how this can be ethically carried out for the benefit of all and the planet is critical to a young feminist economy.
CONCLUSION
This brief has given a prompt overview of what UBI is, how it has appeared in Canada, and how it might support the futures of young leaders. But much is to be said about the political will and data required to make this program a reality.
The priority areas explored in this brief are just a few among many ways in how young leaders’ financial agency can shape the creation of a young feminist economy. Other benefits of a UBI can be found in helping repay loans, helping access formerly out-of-reach rent prices, ability to access better transportation including paying for gas or public transit etc. Young leaders’ options increase when their income does. UBI provides a platform from which young people can make decisions that allow them to pursue the lives that bring them the most meaning – all while contributing and building a Canadian economy reflective of their strengths and values.
BIBLIOGRAPHY:
Canadian Heritage. 2021. Canada’s First State of Youth Report. Government of Canada.
Department of Finance Canada. 2023. Budget 2023 A Made-in-Canada Plan. Government of Canada.
Forget E. 2011. The Town with No Poverty: The Health Effects of a Canadian Guaranteed Annual Income Field Experiment. Canadian Public Policy, Vol 37, No 3.
Francese, M & Prady, D. (December 2018). What is Universal Basic Income? International Monetary Fund.
Gentilini, U., Grosh, M., Rigolini, J., & Yemtsov, R. (Eds.). (2019). Exploring universal basic income : A guide to navigating concepts, evidence, and practices. World Bank Publications.
Green, D. A. (2020). Labour Supply Issues Related to Basic Income and Income Assistance. Research paper commissioned by the Expert Panel on Basic Income, British Columbia. Retrieved from https://bcbasicincomepanel.ca/.
Liberal Party of Canada. (May 2023). 2023 Policy Resolutions. Liberal Party of Canada. Retrieved from https://2023.liberal.ca/wp-content/uploads/sites/565/2023/05/Policy-Resolutions-2023-National-Convention.pdf
MacNeill T & Vibert A. 2019. Universal Basic Income and the Natural Environment: Theory and Policy. Basic Income Studies.
McDowell T. & Ferdosi M. 2020. The Experiences of Social Assistance Recipients on the Ontario Basic Income Pilot. Canadian Sociological Association Vol 57 Is 4.
Mendelson M. October 2019. Lessons from Ontario’s Basic Income Pilot. Maytree.
Miller J Z. (2021). Universal Basic Income and Inflation: Reviewing Theory and Evidence. UBI Center.
Office of Kim Pate. (2020). Why a Guaranteed Livable Income? Senate of Canada.
Ontario. 2018. Ontario Basic Income Pilot. Poverty Reduction.
Ortiz, I. et al. (2018). Universal Basic Income proposals in light of ILO standards: Key issues and global costing. Extension of Social Security, International Labour Office Working Paper no. 62.
Pasma, C. 2014. Basic Income Programs and Pilots. Basic Income Canada Network.
Simpson W et al. (June 2022). A GUARANTEED BASIC INCOME FOR CANADIANS: OFF THE TABLE OR WITHIN REACH? University of Calgary School of Public Policy Publications Vol 15 Is 20.
Smith-Carrier T & Halpenny C. October 2020. Basic Income: Making the Case for Women and Gender Equity. Case for Basic Income for Women.
Strauss C. (2021). Basic Income & The Care Economy. Women’s Legal Education Action Fund. Retrieved from Leaf.ca
Sultana, A. & Ravanera, C. (July 2020). A Feminist Economic Recovery Plan
for Canada: Making the Economy Work for Everyone. The Institute for Gender
and the Economy (GATE) and YWCA Canada. Retrieved from: www.feministre-
covery.caTedds, L., Crisan, D, & Petit G. (2020). Basic Income in Canada: Principles and Design Features. School of Public Policy, University of Calgary.
Widerquist, K. (2018). A Critical Analysis of Basic Income Experiments for Researchers, Policymakers, and Citizens. Palgrave Macmillan.
Yves Giroux. (2021). Distribution and Fiscal Analysis of a National Guaranteed Basic Income. Office of the Parliamentary Budget Officer.