Lets talk about Mincome
15 May 2022While I was going through our new policy points of the Pirate Party of Canada one by one. One policy in particular caught my eye and intrigued me. This was a policy that made so much sense that the only thing that does not make sense is why the government isnt already doing it! That policy that caught my eye was Mincome (a portmanteau of Minimum Income). Of course it goes by many other names Guarnteed Annual Income, Negative Income Tax, Basic Income, Basic Income Guarentee, but no matter what name it goes by the premise is simple. People are entitled, yes I used the word entitled, to a reasonable standard of living and in order to achieve a reasonable standard of living one needs to earn a certain minimum income.
The name Mincome comes from the social experiment done in rural Manitoba in the 1970’s. What they did was set about ensuring that everyone in two towns that this was tested in were given money up to a minimum amount if they did not make enough money to surpass that point for that month. Now people who are right-wing in their political affiliation may start going on about it being a commie ideology, how people will sit around and blow all their money on booze and smokes, etc… But the experiment showed that for the most part people continued to work hard and those who did drop out of the work force were usually mothers with young children and teenagers who continued their educational pursuits through highschool. Keeping in mind that in the 1970’s getting a high school diploma was a pretty big deal. Likewise, hard working farmers did not have to agonize over failed crops knowing there was a support structure in place that ensured that they would not lose the farm because of one bad seasons. There is one Conservative Senator Hugh Segal who actually advocates for the very same thing that we as a party hope to push forward and while his own reasonings may differ slightly from our own they all still make sense. There is a very good youtube video ( http://youtu.be/tI-LDQCmW5E{.extern} )
Now you might think that poor people are the only ones who benefit from Mincome. You would be wrong. Criminal activity as a whole went down under Mincome in these places. When people dont have to lie, cheat and steal to make ends meet criminal activity becomes less lucrative. As well during the study hospital visits were down 8-9% and hospitalizations for work accidents were also down. Just imagine how much money we as a community would save if we suddenly had like 10% less people going to hospital. The hospitalizations reduction was theorized to be a benefit from the reduced stress of having to worry about things.
Mincome is such a simple and elegant solution. Keeping in mind that I did my math that Mincome should be equal to full time minimum wage job and used the highest minimum wage value in the country (Ontario) for my calculations ($10.25 * 40 Hours * 52 Weeks = $21,320/yr or $1,752/mo or $410/wk)
Under a federal Mincome system you would not need to deal with provincial welfare systems. In ontario alone there are nearly 300,000-400,000 people on social assistance and Ontario spends $1.9 Billion a year (2012) on Ontario Works and eliminating the bureaucracy to dispense Ontario Works alone would free up enough money to pay 89,118 under Mincome. Health Care costs across the country were $192 Billion dollars in 2010. Now lets assume we would have a cost of 10% less under mincome (since hospital stays are more expensive than just visiting a doctor by quite a bit, this is an over simplification) that is $19 billion dollars saved right there. The savings there would account for enough to pay 890,000 people Mincome.
Also lets not forget the number of people who would open up businesses. Given a safety net the number of people who would engage in the creation of businesses and entrepeneurship would increase because the risk associated with it is diminished while rewards remain there for the taking.
In short the number of programs a Mincome system makes obsolete is amazing. We would not need Welfare and the bureaucracy associated with it with a national Mincome system. Likewise we may no longer need Employment Insurance (EI) because if you lose your job you would get the equivalent income to a minimum wage job automatically. You would not need a Canada Pension Plan (CPP) or Old Age Security (OAS) either because those are basically programs which combined implment a lesser form of Mincome.
Now you ask how would you handle this so that there is no huge sprawling bureaucracy with thousands of rules involved to decide who gets Mincome and who doesnt? The answer is simple. Everyone who files a tax return gets a mincome cheque whether they need it or not so the person who makes nothing and the person who makes millions a year both receive a mincome cheque. Money received from Mincome would be treated as untaxable income or alternatively it would be treated as taxable income with a tax rate of 0% up to the Mincome level. Either way when people acquire jobs there would not be any real clawbacks on mincome, which will improve their position and may make coping mechanisms like GST/HST Rebate Cheques obsolete as well leading to even more savings.
We can solve poverty. All it takes is treating people are human beings and not just numbers on a spreadsheet.