Why UBI does, in fact, work

by Matt Smith

I am writing to respond to the op-ed titled “Why a Universal Basic Income Won’t Work,” written by the Editor and published in the October 26th edition of this paper. The author presents zero evidence to support their claims and demonstrates a lamentable misunderstanding of the historical and contemporary examples of just how effective Universal Basic Income is at addressing the dire inequalities baked into our current economic system.

Universal Basic Income (UBI) is not a new concept, it has been part of global political discussions for decades. UBI programs have been introduced numerous times around the world to overwhelmingly positive results. Its detractors normally have one line of reasoning to counter its implementation, namely that it will de-incentivize work and create a nation of leeches draining taxes from the other, hard-working folks. They claim that UBI will lead to the dreaded ‘C’ word: communism. These arguments are misinformed, boring and utterly juvenile. Thankfully, they can be very easily debunked.

The state of Alaska has issued a basic income to every one of its citizens since 1982, something that lifted 25,000 Alaskans out of poverty in 2015 alone. A joint study published in 2020 by economists at the Universities of Chicago and Pennsylvania titled “the Labor Market Impacts of Universal and Permanent Cash Transfers” demonstrated that “the dividend had no effect on full time employment, and increased work part-time by 1.8 percentage points (17%).” The same is true in Germany where, in 2014, the Mein Grundeiknommen (My Basic Income) project was introduced, and studies found that the majority of recipients saw not only a dramatic improvement in mental health, but actually felt able to further their education and find more meaningful work. A current project in Denver, Colorado is demonstrating major success in helping low-income people find permanent housing.

These are just a handful of many examples of how a basic income can actually boost the economy, make housing more accessible, and connect people to meaningful employment, not to mention, dramatically lowering crime rates and rates of addiction. The studies are there – the impacts of these projects are no secret. These are clearly not, as the author writes, “magical remedies.” The demonstrated success of UBI is precisely why politicians are continually interested in it– it creates waves of positive social change.

Giving people a baseline of economic safety doesn’t immediately turn them into scheming parasites who drain the system of its resources – why would anyone ever advocate for such a thing? To assume that people are fundamentally opposed to doing something valuable with their lives is deeply cynical and troubling. Universal Basic Income alleviates the psychological and physical pressures of income inequality, allowing people the time to find a job that is truly meaningful to them. Unfettered by the extrinsic forces of living paycheque to paycheque, people can feel intrinsically motivated (and financially able) to further their education and commit to valuable, personally satisfying work. By lifting some of the ever-growing financial burden of contemporary life, Universal Basic Income can help people realize their full potential without the dangers of being forced into precarious, demeaning, or unsafe work.

The fact is that people need help. A majority of Canadians are utterly priced out of housing. Minimum wage in Ontario is $16.55 while the living wage, the calculated amount required to attain the basic necessities in today’s economy, is between $19-20. With the rising cost of living and lack of political response, people are struggling to make ends meet; food banks and other social services are at a breaking point trying to keep up. The author cites Ontario’s (laughably inadequate) Trillium benefit and a vague host of other “benefits and credits,” that they, graciously, “have no problem with,” as examples of, I presume, the Province’s unbreakable safety net when in fact both federal and provincial governments are failing to meet our basic human needs.

Unfortunately, many UBI projects are hobbled by reactionary ideologies that fundamentally oppose social change – and with good reason: if you benefit from the status quo, as the author proudly states they do – why would you ever want it to change? These ideologies are united by prioritizing one’s personal wellbeing over that of your neighbour’s. This is precisely where the predictably embarrassing rhetoric of “communism” comes into play, as anything that gestures towards collective responsibility is always quickly designated.

But this shouldn’t be a concept that falls along political lines. We are taught as children the importance of sharing, of working together. Why is it that when economic policies are introduced that draw from these profoundly human traits, so many turn away from each other to the lonely comfort of individualism? Are we not social animals?

Our species is in crisis, basic human needs are not being met in our community and around the world. People are dying, succumbing to addiction, being rapidly swallowed by homelessness. Food bank usage in Ontario is at record levels. Provincial disability support payments are so low that they force the choice between rent or food, often barely covering either. The combination of an insufficient minimum wage and egregiously high rental prices are producing the same results. Are we to leave these people to suffer? Are we to do nothing?

This piece of writing was not only cynical and misinformed but presenting a complete lack of vision. No alternative is presented, no solution broached – just speculation and judgement. But something must be done. People are exhausted. People are hungry. People are dying. We need an answer. We need programs with proven positive results. We need to hold on to our humanity, our desire to share. We need to practice the values we teach our children. We need a Universal Basic Income.