Zi-Ann Lum at Huffington Post looks at a poverty program that eliminated poverty - and was then buried and forgotten.
Between 1974 and 1979, residents of a small Manitoba city were selected to be subjects in a project that ensured basic annual incomes for everyone. For five years, monthly checks were delivered to the poorest residents of Dauphin, Manitoba –- no strings attached.
And for five years, poverty was completely eliminated.
The program was dubbed “Mincome” -- a neologism of “minimum income” -- and it was the first of its kind in North America. It stood out from similar American projects at the time because it didn’t shut out seniors and the disabled from qualification.
The project’s original intent was to evaluate if giving checks to the working poor, enough to top-up their incomes to a living wage, would kill people’s motivation to work. It didn’t.
More below the
Orange Omnilepticon.
A Few Introductory Remarks
Inequality in America is at record levels - but there seems to be little official urgency about addressing it. Never mind that it has been demonstrated that inequality seems to make a whole plethora of quality of life problems worse:
The truth is that human beings have deep-seated psychological responses to inequality and social hierarchy. The tendency to equate outward wealth with inner worth means that inequality colours our social perceptions. It invokes feelings of superiority and inferiority, dominance and subordination – which affect the way we relate to and treat each other.
As we looked at the data, it became clear that, as well as health and violence, almost all the problems that are more common at the bottom of the social ladder are more common in more unequal societies – including mental illness, drug addiction, obesity, loss of community life, imprisonment, unequal opportunities and poorer wellbeing for children. The effects of inequality are not confined to the poor. A growing body of research shows that inequality damages the social fabric of the whole society. When he found how far up the income scale the health effects of inequality went, Harvard professor Ichiro Kawachi, one of the foremost researchers in this field, described inequality as a social pollutant. The health and social problems we looked at are between twice and 10 times as common in more unequal societies. The differences are so large because inequality affects such a large proportion of the population.
emphasis added
There are a lot of partial answers, but the problem with attacking the effects of inequality rather than getting at the problem of inequality itself is that it's inefficient, uncoordinated, and of limited effectiveness. Safety net programs can help, but they're the first thing to go when times get tight (which is when they're most needed), and are under constant attack by conservatives.
Plus, the defenders of inequality have chosen to demonize those in need, painting a picture of drug abusing, loose-morals, criminally inclined lay-abouts who do not want to work. And racism is a big part of that as well, as racist policies have locked generations into poverty; blaming the victims is a way to avoid guilt. The politics of resentment is a deliberate strategy to direct anger at those most in need, while diverting it away from those who profit from imposing that inequality for their personal benefit. Meanwhile, not just the poor but those above them into the middle class are being drained by policies that take the productivity of the economy and funnel it to the .1%.
There are stock arguments, such as "Why do you want to punish success", "These are people who have made bad life-style decisions", "The best social policy is a job" and so on. They're simply more marketable versions of the old canards: the rich are richer than you and me because they've worked harder/smarter (meaning you're lazy/stupid); these people are inferior (racism); and the old classic: work or starve (Puritan work ethic - you'll be rewarded in Heaven and on Earth if God really likes you).
The Canadian Experiment
Zi-Ann Lum takes at look at what happened in the town of Dauphin, Manitoba, Canada when a progressive government tried an experiment. They simply gave people enough money to bring their household income up to just above the poverty level.
In 1973, Manitoba and the federal government signed a cost-sharing agreement: 75 per cent of the $17-million budget would be paid for by the feds; the rest by the province.
The project rolled out the next year.
All Dauphinites were automatically considered for benefits. One-third of residents qualified for Mincome checks.
How Mincome checks were calculated:
1. Everyone was given the same base amount: 60 per cent of Statistics Canada’s low-income cut-off. The cut-off varied, depending on family size and where they lived. But in 1975, a single Canadian who was considered low-income earned $3,386 on average.
1975 2014 dollars
Individual $3,386 $16,094
Family of two $4,907 $20,443
2. Base amount was modified: 50 cents was subtracted from every dollar earned from other income sources
The money wasn't restricted; the recipients could use it any way they chose. In
one example:
...One woman called to say she remembered the Mincome project. In the early 1970s, she was a single mother raising two girls on welfare – then called Mothers’ Allowance. She said she had always been treated respectfully, but there was one thing case workers said that bothered her.
“She said she wanted to get some job training. They told her to go home and take care of her kids and they would take care of her,” explained Forget. [Dr. Evelyn Forget, researcher at University of Manitoba]
When the opportunity to transfer from Mothers’ Allowance to Mincome came along, the woman took it. With no restrictions on how she could spend the money she was given, she signed up for training and got a part-time job at the local library which eventually became a full-time career.
“So when I talked to her, she was incredibly proud of having modelled a different kind of life for her daughters,” Forget said. The retired librarian invited Forget to visit her home. Inside, she was shown pictures from her two girls’ graduations, mother beaming with pride.
And....
In 2011, Forget released a paper distilling how Mincome affected people’s health using census data. She found overall hospitalization rates (for accidents, injuries, and mental health diagnoses) dropped in the group who received basic income supplements.
As Lum's article points out, conventional welfare programs pretty well demand recipients be totally destitute before they can receive benefits - but once they are in that state, escaping becomes very difficult. The Mincome model has several advantages. It's a lot simpler/cheaper to administer, it gives recipients a lot more flexibility in how they use it, and if
Pickett and Wilkinson's work tells us anything, it helps address a lot of different problems simultaneously. (The health effects noted by Forget seem to support them - and there may have been more.) It should not only be cheaper, it should be more effective - and there's the rub.
Why isn't this experiment better known? According to Lum's account the experiment ended after 5 years when a conservative government came into power and had absolutely no interest in continuing the program - or finding out how effective it was.
...the Conservative government that took power provincially in 1977 -- and federally in 1979 -- had no interest in implementing the project more widely. Researchers were told to pack up the project’s records into 1,800 boxes and place them in storage.
A final report was never released.
emphasis added
Fortunately, interest in the project has been rekindled - and not too soon; all the records were on the verge of being thrown out before Dr. Forget tracked them down. While of limited usefulness, what has been learned so far seems to suggest the Mincome experiment is well worth following up. Call it a basic guaranteed income, or a negative income tax (something Milton Friedman urged), it would address the inability of the conservative obsession with jobs to translate into effective policy.
Yes, people who are working are generating income for themselves, but...
• It ignores the reality that wages have not kept up with the growth in the economy, or the elimination of job benefits.
• It ignores the reality that jobs are not the answer for those with disabilities, illness or are retired.
• It ignores the reality that too many jobs do not come with a living wage - thus the working poor, who may be holding down several jobs but still can't make ends meet.
• It ignores the reality that the goal of corporations is to employ as few people as possible, and pay them as little as possible - and there doesn't seem to be much countering that.
• It ignores the reality that working for a living is not as effective at wealth creation as is having enough wealth that can be used to make more wealth - the rich get richer faster.
• It ignores the reality that attacking this as "redistribution" conveniently ignores redistribution already baked into the system, in the form of trade agreements, tax incentives, business credits, corporate subsidies, etc.
• Tying inequality to work ignores the reality that compensation for work (and taxation) is wildly skewed against the majority of people in the economy.
• Despite the 'moral hazard' argument, it appears people who receive income assistance do not stop working - because of the social status aspect.
Refusing to address the problem of inequality by tying it to work is routinely taken to extremes that are naive at best and invidious at worst. The Puritan work ethic that ties how virtuous you are to how hard you work may provide some grounds for feeling morally superior (that is, if you tell yourself you have lots of money because you've worked so hard to get it), but it's increasingly out of touch with a world where work for the sake of working can be increasingly pointless, and wealth is more about rigging the system than actually behaving virtuously.
Kevin Drum over at Mother Jones has some thoughts on this that seem relevant. Among his long term predictions:
1. AI and robotics will continue to improve rapidly. We'll have useful AI by 2025 and full AI by 2045. This will either transform the world or destroy it. Flip a coin. However, regardless of how the end point turns out, the transition period is going to be pretty brutal for the 90 percent of the population that occupies the middle classes and below. Note that this prediction is #1 on my list for a reason. The rest are randomly placed.
And...
Economics will undergo a sea change for the same reason it's gone through sea changes before: the underlying world of trade and money will fundamentally change. It's not clear if the political class will pay much attention to this, but at some point I suppose they won't have much choice.
It's A Different World
There are a lot fewer people involved in raising food in America these days because technology has made it possible to get by with a lot fewer farmers. (Not to mention government policies and trying to compete with giant Agribusiness.) Those jobs are gone, didn't pay all that well, and are not coming back (barring an economic/environmental collapse.) Clerical jobs have greatly diminished, thanks to word processors, data base programs, Excel, etc. (Typing pools are a thing of the past.) Knowledge workers are increasingly going to find themselves going up against expert systems that are growing more powerful - and we're not just talking lawyers and doctors here. Music schools have a hard time judging applicants because while they may have music to submit for evaluation, it's getting harder to spot real talent because the software for creating music keeps getting better.
The Twenty First Century is uncharted territory for the human race. There are more people alive today than ever before, we have more wealth, knowledge and technology at our disposal than ever before - and we are creating problems for ourselves on a global scale as never before. Quite simply, the answers that served to order a smaller, less complex world are no longer necessarily applicable. World leaders are beginning to acknowledge that there may be things that need to be rethought. Pope Francis has a concise summary:
In recent months, the pope has argued for a radical new financial and economic system to avoid human inequality and ecological devastation. In October he told a meeting of Latin American and Asian landless peasants and other social movements: “An economic system centred on the god of money needs to plunder nature to sustain the frenetic rhythm of consumption that is inherent to it.
“The system continues unchanged, since what dominates are the dynamics of an economy and a finance that are lacking in ethics. It is no longer man who commands, but money. Cash commands.
“The monopolising of lands, deforestation, the appropriation of water, inadequate agro-toxics are some of the evils that tear man from the land of his birth. Climate change, the loss of biodiversity and deforestation are already showing their devastating effects in the great cataclysms we witness,” he said.
It looks like it might be a really good idea to revisit that experiment that ended 36 years ago in Canada. We have a lot of problems. Inequality is one we can address now, and one we need to address ASAP. We don't need any scientific breakthroughs - just the willingness to look at the data we have and follow where it leads. The other challenges facing us are going to take everything we've got; policies that leave a good chunk of the population behind are going to turn them into the anchor that could well sink us.