More Thinking About a Guaranteed Annual Income, Lower Annual Returns
Marlene Dumas (2011) from Amy Winehouse (‘Amy-Blue’), National Portrait Gallery
What I’m listening to.
The debate over a guaranteed annual income is nicely analyzed here.
‘Though the idea of a basic income is far from mainstream, it has had astonishingly broad support’.
A couple of years ago, I was told of two young mothers who were studying for a qualification in nursing care. Towards the end of their studies a local Job Centre Plus insisted that they make themselves available for work or face sanction. They left their course and failed to qualify. They lost out and their time had been wasted. They were locked in the same oscillation between benefits and poor quality work. And society lost too - we need nursing care workers.
One of the issues that so many people get caught up on is whether a guaranteed annual income will encourage people to ‘stop working’. We wrote about this in 2010 (The Canadian Citizenship Wage) , the relevant sentences are below, but this is always the risk of a public good that it will be taken advantage of whether it is education, health, the courts, parks or transit. The argument of course is that ‘on the whole’ the benefit from a public good like a guaranteed annual income more than outweighs the risk of moral hazard.
Quote: “The standard objection to this type of programme is that it provides a disincentive to work. There is truth in this. There will always be a subset of people that do not want to work and are prepared to live their lives at the poverty line. Yet we know that these citizens can among other things be a social nuisance, tend to spend more time in jail, and develop chronic health problems that ultimately are very expensive to the taxpayer without providing the means or motivation to improving their lives. The conversation and moral imperative with a squeegee kid is different when they have an annual income from the state.
It has never made much sense to me to refuse citizens the means of the most primitive life on the premise that they should take of themselves but then extend access to the most expensive health treatments for problems bred by poverty that were preventable in the first place.
It may also be true that the Canadian Citizenship Wage may encourage people that are working today to leave the workforce and live at the poverty line. There will always be a subset of citizens like this mostly ill of mind, lazy or incompetent. Not to mention struggling writers and artists. But by focusing on this subset of people the unintended consequence is to make it difficult for people who do want to improve their lives to do so. Poverty is not always a choice.
There are four classes of people that live in poverty: first, people that can not work for physical often mental reasons; second, people that want to work do work but are still poor; third, people that want to work but are unemployed; and fourth, people that can work but do not want to. Currently, our social income policies are so complicated that they deal ineffectively with all four classes and ultimately compound the costs to our society in terms of economic and social health in part because we are so caught up in the moral hazard of letting those that do not want to work off the hook but make it difficult for the other three classes to hope for a better life.”
The mood of the markets has changed.
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