Basic Income Canada Network

Over 50 presentations made at the2018North American Basic Income Guarantee (NABIG) Congress, held May 24-27 at McMaster University in Hamilton, Ontario, are now available!

Titled “Basic Income: Bold Ideas, Practical Solutions for discussion of the idea of Basic Income,” the 17th Annual NABIG Congress wasthemed around (1) the converging paths leading to basic income (e.g., health, human rights, automation, sustainability, democracy, etc.); and (2) making basic income a reality, through pilots, policy, and public support. Approximately 275 people, from Canada, the U.S., Mexico, Brazil, Chile, the U.K., Germany, Portugal, Russia, and Australia attended, including approximately 120 people who presented on a wide range of topics. See the final Congress Program.

The annual NABIG Congress is organized by the Basic Income Canada Network and theU.S. Basic Income GuaranteeNetwork. The 2018 Congress was organized in collaboration with McMaster University, the Hamilton Roundtable for Poverty Reduction, Low Income Families Together (in Toronto), and otherpartners. Very special thanks are given to McMaster University for tremendous on-site logistical support, and to McMaster University, the LIUNA Enrico Henry Mancinelli Chair in Global Labour Issues, theHamilton Roundtable for Poverty Reduction, Deloitte Canada, the Hamilton Community Foundation, theSisters of Providence (Kingston, Ontario), and to a number of individuals for their very kind financial or in-kind support.

Read this article:

Basic Income Canada Network

Basic Income Canada Network

The2018North American Basic Income Guarantee (NABIG) Congress, held May 24-27 at McMaster University in Hamilton, Ontario, was a BIG success!Titled “Basic Income: Bold Ideas, Practical Solutions for discussion of the idea of Basic Income,” the 17th Annual NABIG Congress wasthemed around (1) the converging paths leading to basic income (e.g., health, human rights, automation, sustainability, democracy, etc.); and (2) making basic income a reality, through pilots, policy, and public support. Approximately 275 people, from Canada, the U.S., Mexico, Brazil, Chile, the U.K., Germany, Portugal, Russia, and Australia attended, including approximately 120 people who presented on a wide range of topics. See the final Congress Programand keep watch here for posting (by end of June or early July) of finalized Congress presentations and links to video footage.

The annual NABIG Congress is organized by the Basic Income Canada Network and theU.S. Basic Income GuaranteeNetwork. The 2018 Congress was organized in collaboration with McMaster University, the Hamilton Roundtable for Poverty Reduction, Low Income Families Together (in Toronto), and otherpartners. Very special thanks are given to McMaster University for tremendous on-site logistical support, and to McMaster University, the LIUNA Enrico Henry Mancinelli Chair in Global Labour Issues, theHamilton Roundtable for Poverty Reduction, Deloitte Canada, the Hamilton Community Foundation, theSisters of Providence (Kingston, Ontario), and to a number of individuals for their very kind financial or in-kind support.

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Basic Income Canada Network

Is a Basic Income Guarantee the Right Choice for Ontario?

Ontario has introduced basic income pilot projects in 3 Ontario communities that aim to provide a living wage for all. For those who believe in a living wage, the question is whether or not the approach being tested in the Ontario pilot projects is the best way to achieve this objective.

Introduction

In 2017, Ontario introduced pilot projects related to a Basic Income Guarantee (BIG) benefit in three Ontario communities. The Ontario pilot projects apply to both low-income individuals in the workforce and low-income individuals not in the workforce. The objective of the pilot projects is to assess whether there is a simple way of providing a living wage that would lift all Ontariansout of poverty.

Before assessing BIG in the context of both working and non-working low-income Ontarians, here is how the BIG benefit works in thethree Ontario pilot programs now underway.

Four thousand low-income Ontario residents in three communities have been offered a spot in the pilot study.Non-working Ontariansreceive a Basic Income payment instead of standard social assistance and those working will receive what amounts to a wage supplement. The annual payment is set at $16,989 for single individuals, or $24,027 for married couples. An additional $6,000 per year will be provided to individuals with disabilities. Recipients get to keep any child benefits, dental and pharmaceutical access, and disability supports to which they are already entitled. However, their Basic Income payment shrinks by 50 cents on each dollar of work related earnings, and by 100 cents on the dollar of CPP or EI income.

Eligible participants are those living on a low income (under $34,000 per year if youre single or under $48,000 per year if youre a couple). There are no asset tests involved in determining eligibility.

Part 1: BIG and Low-Income Workers

According to the Ontario Ministry of Community and Social services, 70% of those living below the low-income threshold in Ontario do not receive Ontario Works or Ontario Disability Support Program benefits andare eligible for the pilot projects for Ontarios Basic Income Program. In other words, all low-income workers will be eligible for the benefit as a top-up of their earnings.

For those who are working, those eligible for the BIG will include not only the approximately 14% of Ontario workers earning the minimum wage but a majority of the roughly 30% of Ontario workers earning within $4 of the minimum wage. A back of the envelop calculation suggests that close to50% of Ontarians eligible forthe Basic Income Program would presently be in the labour force.

Ifclose to 50% of Ontarians who would be eligible for a province-wide BIG are currently employed (whether part-time or full-time), the BIG project must be seen as a labour market initiative as much as it is seen as an attempt at income support reform.

In turn, viewing the Ontario BIG initiative through a labour market lens forces the fundamental question as to whether the best way to bring low-wage workers out of poverty is to: 1) provide these workers with an income supplement to theirwages funded out of the tax base (as a BIG does); or 2) to enact labour law changes that put upward pressure on wages complemented by active labour market measures (e.g. training and apprenticeship) that encourage high wage, stable employment.

The answer to this question, in turn, begs the question as to who Ontarios low wage employers are. In other words, are the employers of Ontarios low-wage workers primarily small mom and pop businesses struggling to pay their rent and hydro bills or are they larger, profitable companies that can afford to pay higher wages and provide full-time employment? If Ontarios low-wage employers are primarily very small businesses, then that strengthens the argument for a BIG as some of these small businesses may have trouble affording significant wage increases. If that is not the case, and a majority of low-wage workers are employed by good-sized, profitable companies, then the better approach is likely to be stronger labour laws and an expansion of active labour market measures that would put upward pressures on wages of large corporations that can afford the higher wage costs.

Unfortunately, definitive Canadian statistics on the size and profitability of low-wage employers are hard to come by. However,in the U.S. it is clear that some 20 mega-companies dominate the minimum-wage world. Walmart alone employs 1.3 million workers at or near minimum-wage; Yum Brands owner of Taco Bell, Pizza Hut, and KFC is in second place; and McDonalds takes third.

Overall, 60 percent of American minimum-wage workers are employed by businesses not officially considered small by U. S. government standards.

In Canada, evidence suggests that the U.S. pattern of low wage work dominated by large, profitable companies, is similar with many of the same multi-nationals ranking in the top 10 of employers of low-income workers in both countries.

The take-away from this is that the Basic Income benefits going to Ontarios low-wage workers will directly end up subsidizing some of the worlds largest and most profitable companies companies that have a history of virulent anti-unionism and companies for whom a low-wage, precarious workforce is a key element of their business strategy.

Of course, the use of means tested public programs to compensate for low wages is nothing new. The question is whether Ontario wants to initiate a new, large-scale program that would massively increase these sorts of subsidies to large profitable companies.

The U.S. Experience in subsidizing low-income workers Walmart as an example

At this point, its useful to take a close look at the role existing U.S. programs aimed at low-income households have in subsidizing the incomesof low-wage earners. Lets use Walmart as an example.

Looking at subsidies going to Walmarts U. S. operations is instructive in that a fair amount of research has been done on the subject and also because the absence in the U.S. of universal health insurance and a tradition of miserly income support programs, allows for a focus on U. S. means tested programs like Medicaid and Food Stamps and therefore an easier calculation of subsidies being funneled into a particularly profitable company through means tested programs.

First, according to a report prepared by the Americans for Tax Fairness, the annual bill that States and the U.S. government foot through means-tested programs for American working families making poverty-level wages is $153 billion with $6.2 billion of that going to Walmart alone. In many states, Walmart employees are the largest group of Medicaid and food stamp recipients!

The study estimated that the cost to U. S. taxpayers of a single Walmart Supercentre was between $904,000 and $1.75 million per year, or between $3,000 and $5,800 on average for each of 300 workers typically employed in the Supercentres!

And Walmart is not just big it is enormously profitable.

While $6.2 billion in Medicaid and food stamp aid was required to keep Walmarts low wage employees heads above water, the company had $14 billion in profits in 2016 on revenues of $473 billion. The Walton family, which owns more than 50 percent of Walmart shares, reaps roughly $5 billion in annual dividends and share buybacks from the company. Taken together, the six Walton heirs are the wealthiest family in America, with a net worth of $149 billion. Collectively, these six Waltons have more wealth than 49 million American families combined. The second richest family, the notorious Koch brothers, trail far behind with a total net worth of $86 billion.

Whither Ontario?

The point of this detour into the world of American corporate welfare is to shed some light on the central question of whether low income Ontario workers who again, comprise roughly half those eligible for BIG pilot projects can best be lifted above the poverty line through a BIG or through higher minimum wages and labour law changes that ultimately lead to increased union density in the low-wage service sector.

In the authors opinion, the fact that in Ontario so many BIG eligible workers are employed by large, profitable employers who can afford to pay higher wages and provide more full-time work, suggests that labour law reform leading to higher private sector union densities, is the preferable route.

And to be blunt, does Ontario really want to spend billions of dollars of hard-earned taxpayer money making the Waltons (Walmart) and the billionaires who run 3G Capital (owners of Tims and Burger King) even richer than they already are through subsidizing the wages of their underpaid employees?

So proposition # 1: improving the lot of the working poor is best addressed by an aggressive approach to increasing the minimum wage combined with labour law reform that allows for increased union density in the low-wage, private, service sector. Companies like Walmart, Macdonalds and RBI (the parent company of Tims and Burger King), should not be receiving tax-payer paid income supplements to compensate fortheirlow-wage, precarious workforce that is a key element of these employers business strategy.

The argument to this point is that an aggressive approach to the minimum wage and fundamental labour law reform resulting in increased union density in the low-wage, private sector is more desirable than BIG from a policy perspective.But what is the political feasibility of fundamental labour law reformof this sort? After all, Ontario just went through a comprehensive round of labour law reform that culminated in labour legislation (Bill 148) and while there was a significant increase in the minimum wage,the modest, pro-union changes in the Ontario Labour Relations Act contained in the bill were not the sortof fundamental changes that will likely lead to increased, private sector union densityin the foreseeable future.

In other words, the obvious objection to the argument that labour law changes are the answer to low-wage, precarious work is that the kind of legislative changes that would put substantial upward pressure on wages are simply not going to happen that private sector labour has been on the decline for at least 35 years in Canada and throughout much of the developed world, and that there is no reason to think that that decline is going turn around anytime soon.

Moreover, proponents of this view suggest that the forces of globalization, automation, the so-called sharing economy, and artificial intelligence will continue to strengthen and that continued downward pressure on private sector wages and working conditions is inevitable. It is worth noting that many of the most prominent proponents of the inevitability of an increase in low-wage, precarious work in particular the giants of Silicon Valley are also strong advocates for a Basic Income Guarantee as they are hostile to unions and more generally any regulatory initiatives that would impinge upon their core business models.

The problem with this view is that regional labour markets are products more of politics and policy than of global macro-economic trends. And while it may be true that the general trend over the past 35 years has been policy changes that de-regulate the labour market, keep the minimum wage low and weaken unions, that has not always been the case. The fact is that the politics of labour market policy plays out in a particular time in a particular place and that there have been a number of exceptions to the general trend towards deregulated labour markets. Just looking at Canada, examples of significant initiatives towards the re-regulation of regional labour markets include Ontario in 1992, British Columbia in 1993, Alberta in 2017 and Ontario again in 2017. And Quebec has for decades maintained the strongest labour laws in North America.

In Ontario, the labour legislation passed in December, 2017 (Bill 148), certainly represented a modest tilt towards more regulation of the Ontario labour market that will result in at least some upward pressure on wages. The biggest win by far for advocates of higher wages for low-income workers was the aggressive approach to increasing the minimum wage which resulted in a $14/hr. minimum wageon January 1, 2018, and $15/hr. by January 1, 2019. Of course, the increase to $15/hr. from 14/hr. is in question should there be a PC victory in the June 7 Ontario provincial election.

While Bill 148 certainly included some important gains for Ontarios workers such as the minimum wage increase, it is increasingly clear that without some sort of sectoral, broader-based bargaining regime, Ontarios labour movement will have difficulty in reversing the downward trend in private sector, union density.

On this question, it was somewhat disappointing that the Changing Workplaces final recommendations failed to endorse some of the bolder sectoral bargaining options put forth in the interim report. Moreover, important recommendations that did make it into the final report such as the consolidation into a single bargaining unit of franchisees with the same employer in the same region were rejected by the government. This suggests that labour policies that move beyond the single employer, Wagner Act model, are encountering considerable resistance from both within and outside the government (i.e. the employer community).

That said,the fundamental analysis underlying the Changing Workplaces report and the overall direction of the subsequent legislation, strongly endorsed the view that the growth of low-wage, precarious work was bad for Ontario and that measures needed to be taken to begin to reverse these labour market trends.

This is a view also shared by the provincial Liberals and New Democrats.

BIG and Non-working, Low-income Ontarians

At this point, it would be possible to simply end the paper because once one declares BIG the wrong way to go in dealing with the challenges of the working poor, one essentially abandons the notion of a BIG. It is by definition a solution that applies to all those living in poverty whether they are working or not.

But to say that BIG is not the answer for the non-working poor begs the question as to what is.

It is therefore necessary to address the roughly 50% of BIG eligible participants that are not in the labour force many of which are receiving benefits through Ontario Works and the Ontario Disability Support Program.

To provide some narrative continuity, this article will maintain the same somewhat simplified structure in this part of the paper as was provided in the first part and assess a BIG as it would apply to the non-working poor against an obvious alternative option for improving their lot: namely the policy agendas advanced for decades in one form or another to bring the non-working poor above the poverty line through Employment Insurance reform, social assistance reform and related income support measures.

The first issue that jumps out when comparing the feasibility of a province-wide BIG relative to the social assistance and EI reform agendas that have been advanced for decades, is the huge cost of a province-wide BIG.

The Ontario BIG pilot project will reportedly cost the province $50 million per year and will provide basic income to approximately 4,000 people. An extrapolation from this in an attempt to calculate the cost of a province-wide roll out of BIG involves integrating so many interdependent variables, that even coming up with a cost within a broad band involves much speculation. But starting with the costs related to the top-ups of benefit levels for OW and ODSP (currently costing the Ontario treasury roughly $9 billion dollars) and then factoring in top-ups to EI recipients and low-income workers, it is hard not to come up with an annual net incremental cost of between $15 $20 billion dollars. And by net I mean taking into account potential efficiencies to be gained by implementing a BIG, such as administrative efficiencies and the alleviation of many of the indirect costs of poverty.

And there is only one way to finance an increase in net social spending of between $15 and $20 billion through a massive increase in Ontario provincial taxes.

Tax increases needed to roll out a BIG province-wide

Here are some numbers that suggest why such an increase is not politically feasible.

Ontarios current program spending totals $130 billion on tax revenues of roughly $95 billion.

Other non-tax sources of revenue come from federal transfers which Ontario has little control over, income from Government Business Enterprises, and other forms of non-tax revenues involving fees, etc. These revenue categories provide very little room for growth leaving the only real option to fund a BIG massive increases in the taxes that Ontario has control over.

However, when it comes to the all important provincial Personal Income and Corporate Income taxes, Ontario has control only in a limited sense in that it has no say over the base on which the provincial tax rates are levied. All deductions and exemptions related to the base are controlled by the federal government so on these taxes Ontario can only increase overall revenue by increasing provincial tax rates and reducing provincial tax credits.

On the HST, Ontario still has control over the provincial portion of the rate (currently 8%) but has lost much of the flexibility to apply an increase selectively that it had under its own Provincial Sales Tax (PST). This makes it harder to tailor a HST increase in a politically tactical way. And even when Ontario had more control over what goods and services were subject to its sales tax, an increase in the old PST was always a political hard sell.

Bottom line: the Personal Income Tax, the Corporate Income Tax, and the provincial portion of the HST account for $71 billion of Ontarios total tax revenue of $95 billion. And given that Ontario has no control over the corporate and personal income tax bases, the truth of the matter is that the only way to raise an additional $15 $20 billion to finance a BIG province-wide, is to implement huge rate increases in personal and corporate income tax rates along with a significant increase in the provincial portion of the HST. And this is simply not politically feasible.

Therefore, the danger is that if too many eggs are put into the Basic Income Guarantee basket and the government of the day comes to believe that it is a political necessity to push a BIG out the door province wide, we are very unlikely to get a benefit level that ensures that no one is in poverty (and supplementary programs are maintained) because the increase in taxes to do this would be politically unacceptable. In fact, we are more likely to get a small Universal Basic Income well below the poverty line combined with social program cuts because the initiative would be scaled back to fit politically feasible tax increases.

There is also a danger of the Basic Income project replacing (or at least stalling momentum on) other initiatives under way in Ontario that have similar goals to the Basic Income for the non-working poor but are much farther along in terms of working out the details and are more political feasible. These include the proposals contained in the Income Security Reform Working Groups report, Income Security: A Roadmap for Change.

At the federal level, there is also the danger that EI reform and efforts to significantly increase the Working Income Tax Credit might be undermined by the Basic Income albeit admittedly there does not appear to be a whole lot of momentum behind these initiatives.

An alternative policy agenda to ensure a living income for Ontarios working and non-working poor.

So, whats the alternative agenda if you have your doubts about BIG but believe government should commit to a living income for all?

Here is a partial policy agenda:

Conclusion

Incrementality in all its messiness and complexity is sometimes preferable to a silver bullet that solves all problems. The search for a silver bullet such as BIG to once and for all eliminate poverty and increase equality has its attractions, but it can undermine a set of practical and incremental initiatives where there is already momentum, where many of the details have already been worked out, and which represent substantial steps that taken together, move us closer to the long-term goal of a living income for all in Ontario.

Perhaps the BIG pilot projects will give us some useful information. There are a range of administration and integration issues that will have to be worked through that can be integrated into the agenda outlined above.

But the danger is that the BIG silver bullet approach to eliminating poverty will end up with a weaker social safety net, inadequate labour laws, and a Basic Income benefit that falls far short of ending poverty. This would largely reflect the fact that Ontarians are extremely unlikely to support the kind of tax increases that would have to be implemented to finance a province-wide BIG that would truly give all Ontarians a decent living wage.

In Ontario, much of the hard work of developing detailed policy options to reduce poverty has been completed or is well advanced and are detailed in a variety of recent reports (e.g. Changing Workplaces, Gender Wage Gapand Income Security: A Roadmap for Change). Of course, the extent to whichany future provincialgovernment will actually implement these policy options remains to be seen but the past year has certainly seen some modest progress in assisting low-income Ontarians. Whether that progress continues obviously depends upon the results of the June 7, Ontario election.

Social progress is always a long-term endeavor. And if incrementalism sometimes seems frustrating and the complexity of actual implementation sometimes seems overwhelming, the truth is that it has been ever thus. There really are no alternativesto improving the lot of low-income Ontarians andreducing inequality in this province.

These days, simple solutions are much more thedomain of those who want to hurt low-income Ontarians than to help them. For proof of that assertion simply Google Doug Ford.

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Is a Basic Income Guarantee the Right Choice for Ontario?

Basic Income Canada Network

The2018North American Basic Income Guarantee (NABIG) Congress, held May 24-27 at McMaster University in Hamilton, Ontario, was a BIG success!Titled “Basic Income: Bold Ideas, Practical Solutions for discussion of the idea of Basic Income,” the 17th Annual NABIG Congress wasthemed around (1) the converging paths leading to basic income (e.g., health, human rights, automation, sustainability, democracy, etc.); and (2) making basic income a reality, through pilots, policy, and public support. Approximately 275 people, from Canada, the U.S., Mexico, Brazil, Chile, the U.K., Germany, Portugal, Russia, and Australia attended, including approximately 120 people who presented on a wide range of topics. See the final Congress Programand keep watch here for posting (by end of June or early July) of finalized Congress presentations and links to video footage.

The annual NABIG Congress is organized by the Basic Income Canada Network and theU.S. Basic Income GuaranteeNetwork. The 2018 Congress was organized in collaboration with McMaster University, the Hamilton Roundtable for Poverty Reduction, Low Income Families Together (in Toronto), and otherpartners. Very special thanks are given to McMaster University for tremendous on-site logistical support, and to McMaster University, the LIUNA Enrico Henry Mancinelli Chair in Global Labour Issues, theHamilton Roundtable for Poverty Reduction, Deloitte Canada, the Hamilton Community Foundation, theSisters of Providence (Kingston, Ontario), and to a number of individuals for their very kind financial or in-kind support.

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Basic Income Canada Network

Is a Basic Income Guarantee the Right Choice for Ontario?

Ontario has introduced basic income pilot projects in 3 Ontario communities that aim to provide a living wage for all. For those who believe in a living wage, the question is whether or not the approach being tested in the Ontario pilot projects is the best way to achieve this objective.

Introduction

In 2017, Ontario introduced pilot projects related to a Basic Income Guarantee (BIG) benefit in three Ontario communities. The Ontario pilot projects apply to both low-income individuals in the workforce and low-income individuals not in the workforce. The objective of the pilot projects is to assess whether there is a simple way of providing a living wage that would lift all Ontariansout of poverty.

Before assessing BIG in the context of both working and non-working low-income Ontarians, here is how the BIG benefit works in thethree Ontario pilot programs now underway.

Four thousand low-income Ontario residents in three communities have been offered a spot in the pilot study.Non-working Ontariansreceive a Basic Income payment instead of standard social assistance and those working will receive what amounts to a wage supplement. The annual payment is set at $16,989 for single individuals, or $24,027 for married couples. An additional $6,000 per year will be provided to individuals with disabilities. Recipients get to keep any child benefits, dental and pharmaceutical access, and disability supports to which they are already entitled. However, their Basic Income payment shrinks by 50 cents on each dollar of work related earnings, and by 100 cents on the dollar of CPP or EI income.

Eligible participants are those living on a low income (under $34,000 per year if youre single or under $48,000 per year if youre a couple). There are no asset tests involved in determining eligibility.

Part 1: BIG and Low-Income Workers

According to the Ontario Ministry of Community and Social services, 70% of those living below the low-income threshold in Ontario do not receive Ontario Works or Ontario Disability Support Program benefits andare eligible for the pilot projects for Ontarios Basic Income Program. In other words, all low-income workers will be eligible for the benefit as a top-up of their earnings.

For those who are working, those eligible for the BIG will include not only the approximately 14% of Ontario workers earning the minimum wage but a majority of the roughly 30% of Ontario workers earning within $4 of the minimum wage. A back of the envelop calculation suggests that close to50% of Ontarians eligible forthe Basic Income Program would presently be in the labour force.

Ifclose to 50% of Ontarians who would be eligible for a province-wide BIG are currently employed (whether part-time or full-time), the BIG project must be seen as a labour market initiative as much as it is seen as an attempt at income support reform.

In turn, viewing the Ontario BIG initiative through a labour market lens forces the fundamental question as to whether the best way to bring low-wage workers out of poverty is to: 1) provide these workers with an income supplement to theirwages funded out of the tax base (as a BIG does); or 2) to enact labour law changes that put upward pressure on wages complemented by active labour market measures (e.g. training and apprenticeship) that encourage high wage, stable employment.

The answer to this question, in turn, begs the question as to who Ontarios low wage employers are. In other words, are the employers of Ontarios low-wage workers primarily small mom and pop businesses struggling to pay their rent and hydro bills or are they larger, profitable companies that can afford to pay higher wages and provide full-time employment? If Ontarios low-wage employers are primarily very small businesses, then that strengthens the argument for a BIG as some of these small businesses may have trouble affording significant wage increases. If that is not the case, and a majority of low-wage workers are employed by good-sized, profitable companies, then the better approach is likely to be stronger labour laws and an expansion of active labour market measures that would put upward pressures on wages of large corporations that can afford the higher wage costs.

Unfortunately, definitive Canadian statistics on the size and profitability of low-wage employers are hard to come by. However,in the U.S. it is clear that some 20 mega-companies dominate the minimum-wage world. Walmart alone employs 1.3 million workers at or near minimum-wage; Yum Brands owner of Taco Bell, Pizza Hut, and KFC is in second place; and McDonalds takes third.

Overall, 60 percent of American minimum-wage workers are employed by businesses not officially considered small by U. S. government standards.

In Canada, evidence suggests that the U.S. pattern of low wage work dominated by large, profitable companies, is similar with many of the same multi-nationals ranking in the top 10 of employers of low-income workers in both countries.

The take-away from this is that the Basic Income benefits going to Ontarios low-wage workers will directly end up subsidizing some of the worlds largest and most profitable companies companies that have a history of virulent anti-unionism and companies for whom a low-wage, precarious workforce is a key element of their business strategy.

Of course, the use of means tested public programs to compensate for low wages is nothing new. The question is whether Ontario wants to initiate a new, large-scale program that would massively increase these sorts of subsidies to large profitable companies.

The U.S. Experience in subsidizing low-income workers Walmart as an example

At this point, its useful to take a close look at the role existing U.S. programs aimed at low-income households have in subsidizing the incomesof low-wage earners. Lets use Walmart as an example.

Looking at subsidies going to Walmarts U. S. operations is instructive in that a fair amount of research has been done on the subject and also because the absence in the U.S. of universal health insurance and a tradition of miserly income support programs, allows for a focus on U. S. means tested programs like Medicaid and Food Stamps and therefore an easier calculation of subsidies being funneled into a particularly profitable company through means tested programs.

First, according to a report prepared by the Americans for Tax Fairness, the annual bill that States and the U.S. government foot through means-tested programs for American working families making poverty-level wages is $153 billion with $6.2 billion of that going to Walmart alone. In many states, Walmart employees are the largest group of Medicaid and food stamp recipients!

The study estimated that the cost to U. S. taxpayers of a single Walmart Supercentre was between $904,000 and $1.75 million per year, or between $3,000 and $5,800 on average for each of 300 workers typically employed in the Supercentres!

And Walmart is not just big it is enormously profitable.

While $6.2 billion in Medicaid and food stamp aid was required to keep Walmarts low wage employees heads above water, the company had $14 billion in profits in 2016 on revenues of $473 billion. The Walton family, which owns more than 50 percent of Walmart shares, reaps roughly $5 billion in annual dividends and share buybacks from the company. Taken together, the six Walton heirs are the wealthiest family in America, with a net worth of $149 billion. Collectively, these six Waltons have more wealth than 49 million American families combined. The second richest family, the notorious Koch brothers, trail far behind with a total net worth of $86 billion.

Whither Ontario?

The point of this detour into the world of American corporate welfare is to shed some light on the central question of whether low income Ontario workers who again, comprise roughly half those eligible for BIG pilot projects can best be lifted above the poverty line through a BIG or through higher minimum wages and labour law changes that ultimately lead to increased union density in the low-wage service sector.

In the authors opinion, the fact that in Ontario so many BIG eligible workers are employed by large, profitable employers who can afford to pay higher wages and provide more full-time work, suggests that labour law reform leading to higher private sector union densities, is the preferable route.

And to be blunt, does Ontario really want to spend billions of dollars of hard-earned taxpayer money making the Waltons (Walmart) and the billionaires who run 3G Capital (owners of Tims and Burger King) even richer than they already are through subsidizing the wages of their underpaid employees?

So proposition # 1: improving the lot of the working poor is best addressed by an aggressive approach to increasing the minimum wage combined with labour law reform that allows for increased union density in the low-wage, private, service sector. Companies like Walmart, Macdonalds and RBI (the parent company of Tims and Burger King), should not be receiving tax-payer paid income supplements to compensate fortheirlow-wage, precarious workforce that is a key element of these employers business strategy.

The argument to this point is that an aggressive approach to the minimum wage and fundamental labour law reform resulting in increased union density in the low-wage, private sector is more desirable than BIG from a policy perspective.But what is the political feasibility of fundamental labour law reformof this sort? After all, Ontario just went through a comprehensive round of labour law reform that culminated in labour legislation (Bill 148) and while there was a significant increase in the minimum wage,the modest, pro-union changes in the Ontario Labour Relations Act contained in the bill were not the sortof fundamental changes that will likely lead to increased, private sector union densityin the foreseeable future.

In other words, the obvious objection to the argument that labour law changes are the answer to low-wage, precarious work is that the kind of legislative changes that would put substantial upward pressure on wages are simply not going to happen that private sector labour has been on the decline for at least 35 years in Canada and throughout much of the developed world, and that there is no reason to think that that decline is going turn around anytime soon.

Moreover, proponents of this view suggest that the forces of globalization, automation, the so-called sharing economy, and artificial intelligence will continue to strengthen and that continued downward pressure on private sector wages and working conditions is inevitable. It is worth noting that many of the most prominent proponents of the inevitability of an increase in low-wage, precarious work in particular the giants of Silicon Valley are also strong advocates for a Basic Income Guarantee as they are hostile to unions and more generally any regulatory initiatives that would impinge upon their core business models.

The problem with this view is that regional labour markets are products more of politics and policy than of global macro-economic trends. And while it may be true that the general trend over the past 35 years has been policy changes that de-regulate the labour market, keep the minimum wage low and weaken unions, that has not always been the case. The fact is that the politics of labour market policy plays out in a particular time in a particular place and that there have been a number of exceptions to the general trend towards deregulated labour markets. Just looking at Canada, examples of significant initiatives towards the re-regulation of regional labour markets include Ontario in 1992, British Columbia in 1993, Alberta in 2017 and Ontario again in 2017. And Quebec has for decades maintained the strongest labour laws in North America.

In Ontario, the labour legislation passed in December, 2017 (Bill 148), certainly represented a modest tilt towards more regulation of the Ontario labour market that will result in at least some upward pressure on wages. The biggest win by far for advocates of higher wages for low-income workers was the aggressive approach to increasing the minimum wage which resulted in a $14/hr. minimum wageon January 1, 2018, and $15/hr. by January 1, 2019. Of course, the increase to $15/hr. from 14/hr. is in question should there be a PC victory in the June 7 Ontario provincial election.

While Bill 148 certainly included some important gains for Ontarios workers such as the minimum wage increase, it is increasingly clear that without some sort of sectoral, broader-based bargaining regime, Ontarios labour movement will have difficulty in reversing the downward trend in private sector, union density.

On this question, it was somewhat disappointing that the Changing Workplaces final recommendations failed to endorse some of the bolder sectoral bargaining options put forth in the interim report. Moreover, important recommendations that did make it into the final report such as the consolidation into a single bargaining unit of franchisees with the same employer in the same region were rejected by the government. This suggests that labour policies that move beyond the single employer, Wagner Act model, are encountering considerable resistance from both within and outside the government (i.e. the employer community).

That said,the fundamental analysis underlying the Changing Workplaces report and the overall direction of the subsequent legislation, strongly endorsed the view that the growth of low-wage, precarious work was bad for Ontario and that measures needed to be taken to begin to reverse these labour market trends.

This is a view also shared by the provincial Liberals and New Democrats.

BIG and Non-working, Low-income Ontarians

At this point, it would be possible to simply end the paper because once one declares BIG the wrong way to go in dealing with the challenges of the working poor, one essentially abandons the notion of a BIG. It is by definition a solution that applies to all those living in poverty whether they are working or not.

But to say that BIG is not the answer for the non-working poor begs the question as to what is.

It is therefore necessary to address the roughly 50% of BIG eligible participants that are not in the labour force many of which are receiving benefits through Ontario Works and the Ontario Disability Support Program.

To provide some narrative continuity, this article will maintain the same somewhat simplified structure in this part of the paper as was provided in the first part and assess a BIG as it would apply to the non-working poor against an obvious alternative option for improving their lot: namely the policy agendas advanced for decades in one form or another to bring the non-working poor above the poverty line through Employment Insurance reform, social assistance reform and related income support measures.

The first issue that jumps out when comparing the feasibility of a province-wide BIG relative to the social assistance and EI reform agendas that have been advanced for decades, is the huge cost of a province-wide BIG.

The Ontario BIG pilot project will reportedly cost the province $50 million per year and will provide basic income to approximately 4,000 people. An extrapolation from this in an attempt to calculate the cost of a province-wide roll out of BIG involves integrating so many interdependent variables, that even coming up with a cost within a broad band involves much speculation. But starting with the costs related to the top-ups of benefit levels for OW and ODSP (currently costing the Ontario treasury roughly $9 billion dollars) and then factoring in top-ups to EI recipients and low-income workers, it is hard not to come up with an annual net incremental cost of between $15 $20 billion dollars. And by net I mean taking into account potential efficiencies to be gained by implementing a BIG, such as administrative efficiencies and the alleviation of many of the indirect costs of poverty.

And there is only one way to finance an increase in net social spending of between $15 and $20 billion through a massive increase in Ontario provincial taxes.

Tax increases needed to roll out a BIG province-wide

Here are some numbers that suggest why such an increase is not politically feasible.

Ontarios current program spending totals $130 billion on tax revenues of roughly $95 billion.

Other non-tax sources of revenue come from federal transfers which Ontario has little control over, income from Government Business Enterprises, and other forms of non-tax revenues involving fees, etc. These revenue categories provide very little room for growth leaving the only real option to fund a BIG massive increases in the taxes that Ontario has control over.

However, when it comes to the all important provincial Personal Income and Corporate Income taxes, Ontario has control only in a limited sense in that it has no say over the base on which the provincial tax rates are levied. All deductions and exemptions related to the base are controlled by the federal government so on these taxes Ontario can only increase overall revenue by increasing provincial tax rates and reducing provincial tax credits.

On the HST, Ontario still has control over the provincial portion of the rate (currently 8%) but has lost much of the flexibility to apply an increase selectively that it had under its own Provincial Sales Tax (PST). This makes it harder to tailor a HST increase in a politically tactical way. And even when Ontario had more control over what goods and services were subject to its sales tax, an increase in the old PST was always a political hard sell.

Bottom line: the Personal Income Tax, the Corporate Income Tax, and the provincial portion of the HST account for $71 billion of Ontarios total tax revenue of $95 billion. And given that Ontario has no control over the corporate and personal income tax bases, the truth of the matter is that the only way to raise an additional $15 $20 billion to finance a BIG province-wide, is to implement huge rate increases in personal and corporate income tax rates along with a significant increase in the provincial portion of the HST. And this is simply not politically feasible.

Therefore, the danger is that if too many eggs are put into the Basic Income Guarantee basket and the government of the day comes to believe that it is a political necessity to push a BIG out the door province wide, we are very unlikely to get a benefit level that ensures that no one is in poverty (and supplementary programs are maintained) because the increase in taxes to do this would be politically unacceptable. In fact, we are more likely to get a small Universal Basic Income well below the poverty line combined with social program cuts because the initiative would be scaled back to fit politically feasible tax increases.

There is also a danger of the Basic Income project replacing (or at least stalling momentum on) other initiatives under way in Ontario that have similar goals to the Basic Income for the non-working poor but are much farther along in terms of working out the details and are more political feasible. These include the proposals contained in the Income Security Reform Working Groups report, Income Security: A Roadmap for Change.

At the federal level, there is also the danger that EI reform and efforts to significantly increase the Working Income Tax Credit might be undermined by the Basic Income albeit admittedly there does not appear to be a whole lot of momentum behind these initiatives.

An alternative policy agenda to ensure a living income for Ontarios working and non-working poor.

So, whats the alternative agenda if you have your doubts about BIG but believe government should commit to a living income for all?

Here is a partial policy agenda:

Conclusion

Incrementality in all its messiness and complexity is sometimes preferable to a silver bullet that solves all problems. The search for a silver bullet such as BIG to once and for all eliminate poverty and increase equality has its attractions, but it can undermine a set of practical and incremental initiatives where there is already momentum, where many of the details have already been worked out, and which represent substantial steps that taken together, move us closer to the long-term goal of a living income for all in Ontario.

Perhaps the BIG pilot projects will give us some useful information. There are a range of administration and integration issues that will have to be worked through that can be integrated into the agenda outlined above.

But the danger is that the BIG silver bullet approach to eliminating poverty will end up with a weaker social safety net, inadequate labour laws, and a Basic Income benefit that falls far short of ending poverty. This would largely reflect the fact that Ontarians are extremely unlikely to support the kind of tax increases that would have to be implemented to finance a province-wide BIG that would truly give all Ontarians a decent living wage.

In Ontario, much of the hard work of developing detailed policy options to reduce poverty has been completed or is well advanced and are detailed in a variety of recent reports (e.g. Changing Workplaces, Gender Wage Gapand Income Security: A Roadmap for Change). Of course, the extent to whichany future provincialgovernment will actually implement these policy options remains to be seen but the past year has certainly seen some modest progress in assisting low-income Ontarians. Whether that progress continues obviously depends upon the results of the June 7, Ontario election.

Social progress is always a long-term endeavor. And if incrementalism sometimes seems frustrating and the complexity of actual implementation sometimes seems overwhelming, the truth is that it has been ever thus. There really are no alternativesto improving the lot of low-income Ontarians andreducing inequality in this province.

These days, simple solutions are much more thedomain of those who want to hurt low-income Ontarians than to help them. For proof of that assertion simply Google Doug Ford.

Read this article:

Is a Basic Income Guarantee the Right Choice for Ontario?

Basic Income Canada Network

The2018North American Basic Income Guarantee (NABIG) Congress, held May 24-27 at McMaster University in Hamilton, Ontario, was a BIG success!Titled “Basic Income: Bold Ideas, Practical Solutions for discussion of the idea of Basic Income,” the 17th Annual NABIG Congress wasthemed around (1) the converging paths leading to basic income (e.g., health, human rights, automation, sustainability, democracy, etc.); and (2) making basic income a reality, through pilots, policy, and public support. Approximately 275 people, from Canada, the U.S., Mexico, Brazil, Chile, the U.K., Germany, Portugal, Russia, and Australia attended, including approximately 120 people who presented on a wide range of topics. See the final Congress Programand keep watch here for posting (by end of June or early July) of finalized Congress presentations and links to video footage.

The annual NABIG Congress is organized by the Basic Income Canada Network and theU.S. Basic Income GuaranteeNetwork. The 2018 Congress was organized in collaboration with McMaster University, the Hamilton Roundtable for Poverty Reduction, Low Income Families Together (in Toronto), and otherpartners. Very special thanks are given to McMaster University for tremendous on-site logistical support, and to McMaster University, the LIUNA Enrico Henry Mancinelli Chair in Global Labour Issues, theHamilton Roundtable for Poverty Reduction, Deloitte Canada, the Hamilton Community Foundation, theSisters of Providence (Kingston, Ontario), and to a number of individuals for their very kind financial or in-kind support.

Continued here:

Basic Income Canada Network

Basic Income Guarantee – Your Right to Economic Security …

“This book is a great idea – brilliantly stated. Some may think it’s ultra-liberal, as they did when I proposed a similar idea in 1972. I see it as true conservatism – the right of income for all Americans sufficient for food, shelter, and basic necessities. Or, what Jefferson referred to as life, liberty, and the pursuit of happiness.” – U.S. Senator George McGovern, 1972 Democratic Party Presidential Candidate

“Sheahen and I are as far apart on political philosophy and the causes of the nation’s current mess as two people can be, but we both think that a basic income guarantee has to be part of the solution. That says something about the potential of this important idea whose time, as we both hope, is coming. Basic Income Guarantee will help make that happen.” – Charles Murray, author of In Our Hands: A Plan to Replace the Welfare State

“Basic Income Guarantee is a fascinating, lucid presentation of a complex subject. Sheahen asks and answers the questions of what a just society should and could do to overcome income insecurity. Given our prolonged economic malaise, everyone in America should be thinking about it.” – Theresa Funiciello, author of Tyranny of Kindness and head of Social Agenda

“Absent as an issue for almost fifty years, Allan Sheahen places the idea of a basic income for all Americans squarely back on the national agenda. In plain English, this radical idea is not only clearly explained but answers even the toughest objections that can be raised. This book should make sense even to my most dysfunctional colleagues in Congress.” – Bob Filner, U.S. Congressman of San Diego and former chairman of the House Veterans Affairs Committee

Originally posted here:

Basic Income Guarantee – Your Right to Economic Security …

‘Me too’ and the basic income guarantee | Basic Income News

On the evening of Sunday January 7, 2018, The Golden Globes Awards program aired. For those who may not know, this is a U.S. television program which airs each year and highlights the accomplishments of actors, directors, and others in the TV and movie industries. This years awards program was the first to be aired since the revelations about movie producer Harvey Weinstein surfaced.

For those who may not follow events in U.S. popular culture to the extent I do, Harvey Weinstein was a major Hollywood movie producer. It was revealed that he sexually harassed a number of women or engaged in other sexual transgressions. After it was revealed that hed engaged in such behaviors, a number of other women came out to accuse other powerful men of sexually inappropriate behaviors of various kinds. In fact, a few of these revelations have had political ramifications.

In one case, they led to the resignation of U.S. Senator Al Franken, a Democrat from Minnesota. In another, they resulted in Doug Jones being the first Democrat the state of Alabama has sent to the U.S. Senate in 25 years. This cascade of revelations, following upon those about Harvey Weinstein, has been dubbed the me too moment.

Initially, much of the attention paid to the me too moment or, as some would argue, me to movement was focused on relatively privileged actors in Hollywood, although they werent necessarily that privileged when the sexual transgressions occurred. But eventually someone pointed out that movie stars or would-be stars arent the only working women who deal with sexual harassment and assault. Those working in restaurants, hotels, and other low wage industries do so on a daily basis.

In fact, Ive heard it said that women in low wage industries suffer the most. Thats because they cant challenge those men they work with who engage in sexually inappropriate behaviors. Such challenges might result in these women losing their jobs. While listening to a discussion about the me too movement on the British Broadcasting Service (BBC), I heard a guest say that the way to empower women on the job is to pay them higher wages. Now I support paying women higher wages, but that might not be the best way to empower them to challenge sexually abusive men they work with. In fact, paying women more, although helpful in other respects, might make it harder for them to challenge such men.

As Bowles, Gintis, and Osborne point out in this paper, the cost of losing ones job increases with ones wage. Think about it. Suppose someone is volunteering their services. A volunteer is effectively working for a wage of 0 cents per hour. If this person decides not to volunteer, there is no pecuniary cost of doing so because they dont forgo any money by ceasing to volunteer. The more money one makes from selling their labor, the more they give up if they quit their job. This is what I meant when I said the cost of losing ones job increases with ones wage. Quitting ones job is, of course, one way of losing it.

Now suppose a woman is being sexually harassed on the job. There are a few of ways she might challenge this behavior. She could directly confront the person, she could report them to her boss, she could quit, etc. Some of these interventions on her part might get her fired. If she quits, shed lose her income just as she would if she were fired. And the bigger her income or wage was, the bigger the loss from being fired or quitting.

I think that if we want to empower women in their dealings with abusive employers, a way to do so is to provide them with a source of income they dont have to sell their labor to receive. And the bigger we could get this non-wage income, the more we could empower them. This is because the income loss from quitting or being fired for challenging sexual abuse at work, would be made up to some extent by the non-wage income. Knowing this is the case might embolden women in their dealings with sexually abusive employers and co-workers. A generous BIG, assuming we could afford it, could serve this function well.

Michael Lewis has written 9 articles.

Excerpt from:

‘Me too’ and the basic income guarantee | Basic Income News

Food shopping at dollar stores | Brantford Expositor – Brantford Expositor

Many of the community’s “working poor” appear to be getting their food from convenience stores instead of grocery stores, according the results of a recent survey.

“One possible reason for the use of convenience stores and dollar stores to buy food might be the lower upfront costs as compared to grocery stores,” according to a report prepared by the Brant Food System Coalition in partnership with the Brant County Health Unit that was presented to city councillors Tuesday night.

“Despite food from convenience stores and dollar stores being less in quantity and poorer in quality, the lower upfront cost may be a key factor for people who are on a limited budget.”

The coalition is urging further exploration of the issue.

The survey, conducted between July 2015 and April 2016, aimed to determine the barriers to getting food and to identify where people get food as well as gauge the awareness and interest in food-related programs. It followed a 2013-14 study by the health unit that found that 10 per cent of Brant households experience some degree of food insecurity.

The survey, completed by 309 people, also found higher incomes and improved access to transportation would help those who sometimes have difficulty securing enough food. It is not considered representative of the whole community because the respondents were clients of local food programs.

Most of the respondents were aged 20 to 39 and were single without dependents.

About 28 per cent said they were recovering from an illness or had a disability, while about 22 per cent said they were working either full- or part-time.

Almost half of respondents with jobs found it hard to get enough food sometimes or all the time, the survey found. Such individuals likely would be considered “working poor” — people who don’t earn enough money to live on, the report says.

“The survey results support the need for employers to pay a living wage for people to be able to lead a healthy, productive life, or a poverty reduction strategy such as the basic income guarantee,” the report says.

The cost of food also was a factor in some people not being able to get enough food, the report noted.

Despite the challenges, there is reason for optimism, Carol Haberman, a public health dietitian at the health unit, told councillors,

“There are exciting things happening with respect to the local food system,” said Haberman, citing the Brant Food Forum and the Action Against Poverty Forum.

There is also plan to develop an initiative to help bring food closer to those who are in need and have trouble getting to grocery stores, she said.

As well, the community is also part of the province’s basic income pilot project.

“It will be interesting to see how that impacts food insecurity,” she told councillors.

Haberman was also asked if an increase in the provincial minimum wage would help address some of the local challenges.

“It’s a good question but there are a lot of other factors that come into play,” Haberman said. “I can’t really say.

“We’ll have to wait and see.”

Haberman was also asked if she sees a lot of abuse of local programs that provide food to those in need.

“There may be a small number who may take advantage of the system but what I see is people in crisis,” said Haberman, adding that she would like to see a time when food banks were no longer necessary.

Going forward, the coalition aims to work with poverty reduction groups, continue to educate the public about the link between poverty and food insecurity and adapt food-related programs to meet local needs.

Brantford Expositor 2017

Here is the original post:

Food shopping at dollar stores | Brantford Expositor – Brantford Expositor

How Cities Can Rebuild the Social Safety Net – CityLab

Toby Melville/Reuters

In an age of employment uncertainty and a growing income gap, urban America needs to find new ways to support its citizens.

Think about the good jobs of the past. Whether it’s a much-lamented coal miner or a factory worker that pops in your head, what made their work good? It wasnt the day-to-day tasks themselves, but the economic security it providednot just the benefits and pay, but the stabilizing value it brought to individual households, communities, and society itself. In short, the good jobs of yesterday strengthened the safety net.

Today, we see the service sector replacing secure factory positions. The most recent Bureau of Labor Statistics report shows that restaurants are now creating more jobs than manufacturing and miningadding nearly 200,000 to the economy since January. As The Atlantics Derek Thompson recently wrote, these positions are responsible for big chunks of urban job growthmore than a third of Clevelands new hires since 2015 were in restaurants, for example. Many of these types of positions offer fewer, if any, benefits, more onerous and less predictable schedules, and a typical hourly salary of $12.50not a wage that supports a family in most of the country.

Such low-wage growing for now positions are also in a very tenuous position: Upwards of 47 percent of U.S. jobs at risk over the next two decades due to advances in technology, and workers earning below $20 per hour face a greater than 80 percent chance of displacement.

This age of employment uncertainty means that city leaders will need to help build a new urban safety net to help support their citizens. Its also an opportunity to right the wrongs in the existing system and infuse equity into the equation. Here are four ways cities can help prepare for the future of work.

Make benefits portable

On-demand and contract work has become increasingly common in the modern economy. Freelancers now make up 35 percent of the workforce, and since these gig-economy jobs don’t have benefits tied to employment, portable benefits are an option whose time has come. These benefits are connected to individuals rather than employers, and typically include paid leave, health insurance, workers compensation/unemployment, and some sort of retirement fund matching. Proposals for this type of system vary. Some suggest that benefits should be universal and administered by the government or a public/private institution created for such a purpose. Others say they should be administered by non-governmental community-based groups. Either way, portable benefits have the potential to support those who work outside the realm of the traditional 9-to-5 economy.

Most potential programs involve adding a surcharge to be paid by either the company or customer that would remit to a pool of funds for contract workers within a certain jurisdiction. The long-standing New York Black Car Fund is one such model, where fees are collected by the state from for-hire rides to help pay for workers compensation and other shared benefits. While it is still early to see a wide swath of initiatives carried out, in late 2016 the New York City Council proposed a law that would provide portable benefits to taxi and ride-hailing drivers. Additionally, legislative initiatives have been pursued in New York state and the state of Washington. There is even a proposal in Congress spearheaded by Senator Mark Warner of Virginiaso expect to see portable benefits explored more all across the country.

Require employers to provide paid leave

Women make up an ever-expanding portion of the workforceapproximately 47 percent of the U.S. workforce and the majority (51 percent) of workers in professional and technical occupations. And while studies show weve made strides in the disbursement of family and household responsibilities between men and women, existing policies put people with children at a distinct disadvantage. The U.S. only offers unpaid leave through the Family Medical Leave Act, making it an extreme outlier amongst other developed countries, which have robust paid leave requirements.

With little substantive movement on this issue at the federal level, many cities are moving to right this monumental wrong. In San Francisco, the Board of Supervisors mandated six weeks of paid parental leave for workers, and California followed suit with a statewide policy. This long-overdue policy gives parents the opportunity to maintain their careers while starting a family, helps organizations retain employees who might otherwise opt out for financial reasons, and brings stability to the workforce and economy.

Let people with criminal records join the workforce

Nearly a third of American adults have some type of criminal record, and communities of color have been disproportionately impacted by mass incarceration policies.

More city leaders agree that past indiscretions shouldnt prevent citizens from contributing to society, and theyre doing something about it.

Reducing employment barriers for those with criminal records through efforts like ban-the-box, which discourages employers from requiring disclosure on job applications, creates opportunities to engage more people in the labor force. To date, more than 100 cities have taken measures to eliminate employment barriers for otherwise qualified individuals who have records. As corrections institutions shift their programs from punitive to rehabilitative, cities must reassess policies that keep individuals with non-violent criminal records from actively participating in the workforce.

Explore universal basic income

As income inequality deepens, one anti-poverty policy proposal thats gaining some global support is universal basic income (UBI), which would guarantee every citizen a regular, unconditional sum of money to bring people up to an economic baseline. A pilot project involving 100 households is currently taking place in Oakland through funding from Y-Combinator. Finland and Canada are running pilots funded by their national governments, and even here in the United States we held government-run city experiments in the 1970s. Proposed basic income programs share similarities to existing social welfare systems, with the major exception being that the benefit is universal and unconditionalregardless of age, ability, class, or participation in the workforce.

Advocates of UBI come from various camps, but generally fall into one of several categories. Many from the tech industry tout basic income as a way to counteract the economic blow of automation replacing jobs currently occupied by humans. Other supporters argue that basic income is more streamlined, efficient, and transparent than currently administered social welfare systems. Finally, there are some who endorse the idea of less work overallarguing that a basic income can free up the time individuals currently spend workingallowing people to pursue more creative and enjoyable pursuits.

All of this being said, in this particular moment in American political life, the idea of a national program that would support UBI is probably somewhere between slim to none. Many critiques of basic income center on how it will be sustainably funded and the cultural implications of instituting such a system. Even in more progressive countries in Europe, there has been a bit of resistance to wholly decoupling social support from work. In many ways, a number of the proponents for UBI are merely laying the groundwork for what is to comea time when automation and AI take hold more fully and disrupt a wide swath of the workforce.

What city leaders can really draw from this broader discussion is a need to plan more intently for workforce shifts, think critically about current versus future employment sectors, and re-examine how and if there are ways to support people independent of their role in the workforce. Regardless of the potential solutionsour National League of Cities research provides a broad array of ideas on how city leaders can approach the future of work and the period of great challenges but also great opportunities to come. It is a safe assumption that what is imagined as the future today might not come to passthere are a wide range of potential career paths that are not even on our radar screens.

Our current social safety net was built for a different age. The urbanizing America of the mid-20th century faced a myriad of distinctive challenges that precipitated the need for the foundational safety net createdSocial Security, Medicare, and more built strength in our society. Much of the privatized safety net we all now knowretirement plans, employer provided health care, and leave policiesgrew based on the construct of a single employer for a career. But, those times have faded and the urban America of today faces vastly different economic concerns. We need a re-imagined toolkit that focuses intently on broad scale wealth inequality and the urban-rural fractures that were hardly imaginable in the Greatest Generation era of our grandparents. Now is the time for cities to lead the country forward, innovate, experiment ferociously with nationally scalable solutions, and ultimately, build a safety net for 2017not 1947.

Brooks Rainwater is the Senior Executive and Director of the Center for City Solutions at the National League of Cities.

CityLab is committed to telling the story of the worlds cities: how they work, the challenges they face, and the solutions they need.

See original here:

How Cities Can Rebuild the Social Safety Net – CityLab

How Cities Can Rebuild the Social Safety Net – CityLab

Toby Melville/Reuters

In an age of employment uncertainty and a growing income gap, urban America needs to find new ways to support its citizens.

Think about the good jobs of the past. Whether it’s a much-lamented coal miner or a factory worker that pops in your head, what made their work good? It wasnt the day-to-day tasks themselves, but the economic security it providednot just the benefits and pay, but the stabilizing value it brought to individual households, communities, and society itself. In short, the good jobs of yesterday strengthened the safety net.

Today, we see the service sector replacing secure factory positions. The most recent Bureau of Labor Statistics report shows that restaurants are now creating more jobs than manufacturing and miningadding nearly 200,000 to the economy since January. As The Atlantics Derek Thompson recently wrote, these positions are responsible for big chunks of urban job growthmore than a third of Clevelands new hires since 2015 were in restaurants, for example. Many of these types of positions offer fewer, if any, benefits, more onerous and less predictable schedules, and a typical hourly salary of $12.50not a wage that supports a family in most of the country.

Such low-wage growing for now positions are also in a very tenuous position: Upwards of 47 percent of U.S. jobs at risk over the next two decades due to advances in technology, and workers earning below $20 per hour face a greater than 80 percent chance of displacement.

This age of employment uncertainty means that city leaders will need to help build a new urban safety net to help support their citizens. Its also an opportunity to right the wrongs in the existing system and infuse equity into the equation. Here are four ways cities can help prepare for the future of work.

Make benefits portable

On-demand and contract work has become increasingly common in the modern economy. Freelancers now make up 35 percent of the workforce, and since these gig-economy jobs don’t have benefits tied to employment, portable benefits are an option whose time has come. These benefits are connected to individuals rather than employers, and typically include paid leave, health insurance, workers compensation/unemployment, and some sort of retirement fund matching. Proposals for this type of system vary. Some suggest that benefits should be universal and administered by the government or a public/private institution created for such a purpose. Others say they should be administered by non-governmental community-based groups. Either way, portable benefits have the potential to support those who work outside the realm of the traditional 9-to-5 economy.

Most potential programs involve adding a surcharge to be paid by either the company or customer that would remit to a pool of funds for contract workers within a certain jurisdiction. The long-standing New York Black Car Fund is one such model, where fees are collected by the state from for-hire rides to help pay for workers compensation and other shared benefits. While it is still early to see a wide swath of initiatives carried out, in late 2016 the New York City Council proposed a law that would provide portable benefits to taxi and ride-hailing drivers. Additionally, legislative initiatives have been pursued in New York state and the state of Washington. There is even a proposal in Congress spearheaded by Senator Mark Warner of Virginiaso expect to see portable benefits explored more all across the country.

Require employers to provide paid leave

Women make up an ever-expanding portion of the workforceapproximately 47 percent of the U.S. workforce and the majority (51 percent) of workers in professional and technical occupations. And while studies show weve made strides in the disbursement of family and household responsibilities between men and women, existing policies put people with children at a distinct disadvantage. The U.S. only offers unpaid leave through the Family Medical Leave Act, making it an extreme outlier amongst other developed countries, which have robust paid leave requirements.

With little substantive movement on this issue at the federal level, many cities are moving to right this monumental wrong. In San Francisco, the Board of Supervisors mandated six weeks of paid parental leave for workers, and California followed suit with a statewide policy. This long-overdue policy gives parents the opportunity to maintain their careers while starting a family, helps organizations retain employees who might otherwise opt out for financial reasons, and brings stability to the workforce and economy.

Let people with criminal records join the workforce

Nearly a third of American adults have some type of criminal record, and communities of color have been disproportionately impacted by mass incarceration policies.

More city leaders agree that past indiscretions shouldnt prevent citizens from contributing to society, and theyre doing something about it.

Reducing employment barriers for those with criminal records through efforts like ban-the-box, which discourages employers from requiring disclosure on job applications, creates opportunities to engage more people in the labor force. To date, more than 100 cities have taken measures to eliminate employment barriers for otherwise qualified individuals who have records. As corrections institutions shift their programs from punitive to rehabilitative, cities must reassess policies that keep individuals with non-violent criminal records from actively participating in the workforce.

Explore universal basic income

As income inequality deepens, one anti-poverty policy proposal thats gaining some global support is universal basic income (UBI), which would guarantee every citizen a regular, unconditional sum of money to bring people up to an economic baseline. A pilot project involving 100 households is currently taking place in Oakland through funding from Y-Combinator. Finland and Canada are running pilots funded by their national governments, and even here in the United States we held government-run city experiments in the 1970s. Proposed basic income programs share similarities to existing social welfare systems, with the major exception being that the benefit is universal and unconditionalregardless of age, ability, class, or participation in the workforce.

Advocates of UBI come from various camps, but generally fall into one of several categories. Many from the tech industry tout basic income as a way to counteract the economic blow of automation replacing jobs currently occupied by humans. Other supporters argue that basic income is more streamlined, efficient, and transparent than currently administered social welfare systems. Finally, there are some who endorse the idea of less work overallarguing that a basic income can free up the time individuals currently spend workingallowing people to pursue more creative and enjoyable pursuits.

All of this being said, in this particular moment in American political life, the idea of a national program that would support UBI is probably somewhere between slim to none. Many critiques of basic income center on how it will be sustainably funded and the cultural implications of instituting such a system. Even in more progressive countries in Europe, there has been a bit of resistance to wholly decoupling social support from work. In many ways, a number of the proponents for UBI are merely laying the groundwork for what is to comea time when automation and AI take hold more fully and disrupt a wide swath of the workforce.

What city leaders can really draw from this broader discussion is a need to plan more intently for workforce shifts, think critically about current versus future employment sectors, and re-examine how and if there are ways to support people independent of their role in the workforce. Regardless of the potential solutionsour National League of Cities research provides a broad array of ideas on how city leaders can approach the future of work and the period of great challenges but also great opportunities to come. It is a safe assumption that what is imagined as the future today might not come to passthere are a wide range of potential career paths that are not even on our radar screens.

Our current social safety net was built for a different age. The urbanizing America of the mid-20th century faced a myriad of distinctive challenges that precipitated the need for the foundational safety net createdSocial Security, Medicare, and more built strength in our society. Much of the privatized safety net we all now knowretirement plans, employer provided health care, and leave policiesgrew based on the construct of a single employer for a career. But, those times have faded and the urban America of today faces vastly different economic concerns. We need a re-imagined toolkit that focuses intently on broad scale wealth inequality and the urban-rural fractures that were hardly imaginable in the Greatest Generation era of our grandparents. Now is the time for cities to lead the country forward, innovate, experiment ferociously with nationally scalable solutions, and ultimately, build a safety net for 2017not 1947.

Brooks Rainwater is the Senior Executive and Director of the Center for City Solutions at the National League of Cities.

CityLab is committed to telling the story of the worlds cities: how they work, the challenges they face, and the solutions they need.

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How Cities Can Rebuild the Social Safety Net – CityLab

How Cities Can Rebuild the Social Safety Net – CityLab

Toby Melville/Reuters

In an age of employment uncertainty and a growing income gap, urban America needs to find new ways to support its citizens.

Think about the good jobs of the past. Whether it’s a much-lamented coal miner or a factory worker that pops in your head, what made their work good? It wasnt the day-to-day tasks themselves, but the economic security it providednot just the benefits and pay, but the stabilizing value it brought to individual households, communities, and society itself. In short, the good jobs of yesterday strengthened the safety net.

Today, we see the service sector replacing secure factory positions. The most recent Bureau of Labor Statistics report shows that restaurants are now creating more jobs than manufacturing and miningadding nearly 200,000 to the economy since January. As The Atlantics Derek Thompson recently wrote, these positions are responsible for big chunks of urban job growthmore than a third of Clevelands new hires since 2015 were in restaurants, for example. Many of these types of positions offer fewer, if any, benefits, more onerous and less predictable schedules, and a typical hourly salary of $12.50not a wage that supports a family in most of the country.

Such low-wage growing for now positions are also in a very tenuous position: Upwards of 47 percent of U.S. jobs at risk over the next two decades due to advances in technology, and workers earning below $20 per hour face a greater than 80 percent chance of displacement.

This age of employment uncertainty means that city leaders will need to help build a new urban safety net to help support their citizens. Its also an opportunity to right the wrongs in the existing system and infuse equity into the equation. Here are four ways cities can help prepare for the future of work.

Make benefits portable

On-demand and contract work has become increasingly common in the modern economy. Freelancers now make up 35 percent of the workforce, and since these gig-economy jobs don’t have benefits tied to employment, portable benefits are an option whose time has come. These benefits are connected to individuals rather than employers, and typically include paid leave, health insurance, workers compensation/unemployment, and some sort of retirement fund matching. Proposals for this type of system vary. Some suggest that benefits should be universal and administered by the government or a public/private institution created for such a purpose. Others say they should be administered by non-governmental community-based groups. Either way, portable benefits have the potential to support those who work outside the realm of the traditional 9-to-5 economy.

Most potential programs involve adding a surcharge to be paid by either the company or customer that would remit to a pool of funds for contract workers within a certain jurisdiction. The long-standing New York Black Car Fund is one such model, where fees are collected by the state from for-hire rides to help pay for workers compensation and other shared benefits. While it is still early to see a wide swath of initiatives carried out, in late 2016 the New York City Council proposed a law that would provide portable benefits to taxi and ride-hailing drivers. Additionally, legislative initiatives have been pursued in New York state and the state of Washington. There is even a proposal in Congress spearheaded by Senator Mark Warner of Virginiaso expect to see portable benefits explored more all across the country.

Require employers to provide paid leave

Women make up an ever-expanding portion of the workforceapproximately 47 percent of the U.S. workforce and the majority (51 percent) of workers in professional and technical occupations. And while studies show weve made strides in the disbursement of family and household responsibilities between men and women, existing policies put people with children at a distinct disadvantage. The U.S. only offers unpaid leave through the Family Medical Leave Act, making it an extreme outlier amongst other developed countries, which have robust paid leave requirements.

With little substantive movement on this issue at the federal level, many cities are moving to right this monumental wrong. In San Francisco, the Board of Supervisors mandated six weeks of paid parental leave for workers, and California followed suit with a statewide policy. This long-overdue policy gives parents the opportunity to maintain their careers while starting a family, helps organizations retain employees who might otherwise opt out for financial reasons, and brings stability to the workforce and economy.

Let people with criminal records join the workforce

Nearly a third of American adults have some type of criminal record, and communities of color have been disproportionately impacted by mass incarceration policies.

More city leaders agree that past indiscretions shouldnt prevent citizens from contributing to society, and theyre doing something about it.

Reducing employment barriers for those with criminal records through efforts like ban-the-box, which discourages employers from requiring disclosure on job applications, creates opportunities to engage more people in the labor force. To date, more than 100 cities have taken measures to eliminate employment barriers for otherwise qualified individuals who have records. As corrections institutions shift their programs from punitive to rehabilitative, cities must reassess policies that keep individuals with non-violent criminal records from actively participating in the workforce.

Explore universal basic income

As income inequality deepens, one anti-poverty policy proposal thats gaining some global support is universal basic income (UBI), which would guarantee every citizen a regular, unconditional sum of money to bring people up to an economic baseline. A pilot project involving 100 households is currently taking place in Oakland through funding from Y-Combinator. Finland and Canada are running pilots funded by their national governments, and even here in the United States we held government-run city experiments in the 1970s. Proposed basic income programs share similarities to existing social welfare systems, with the major exception being that the benefit is universal and unconditionalregardless of age, ability, class, or participation in the workforce.

Advocates of UBI come from various camps, but generally fall into one of several categories. Many from the tech industry tout basic income as a way to counteract the economic blow of automation replacing jobs currently occupied by humans. Other supporters argue that basic income is more streamlined, efficient, and transparent than currently administered social welfare systems. Finally, there are some who endorse the idea of less work overallarguing that a basic income can free up the time individuals currently spend workingallowing people to pursue more creative and enjoyable pursuits.

All of this being said, in this particular moment in American political life, the idea of a national program that would support UBI is probably somewhere between slim to none. Many critiques of basic income center on how it will be sustainably funded and the cultural implications of instituting such a system. Even in more progressive countries in Europe, there has been a bit of resistance to wholly decoupling social support from work. In many ways, a number of the proponents for UBI are merely laying the groundwork for what is to comea time when automation and AI take hold more fully and disrupt a wide swath of the workforce.

What city leaders can really draw from this broader discussion is a need to plan more intently for workforce shifts, think critically about current versus future employment sectors, and re-examine how and if there are ways to support people independent of their role in the workforce. Regardless of the potential solutionsour National League of Cities research provides a broad array of ideas on how city leaders can approach the future of work and the period of great challenges but also great opportunities to come. It is a safe assumption that what is imagined as the future today might not come to passthere are a wide range of potential career paths that are not even on our radar screens.

Our current social safety net was built for a different age. The urbanizing America of the mid-20th century faced a myriad of distinctive challenges that precipitated the need for the foundational safety net createdSocial Security, Medicare, and more built strength in our society. Much of the privatized safety net we all now knowretirement plans, employer provided health care, and leave policiesgrew based on the construct of a single employer for a career. But, those times have faded and the urban America of today faces vastly different economic concerns. We need a re-imagined toolkit that focuses intently on broad scale wealth inequality and the urban-rural fractures that were hardly imaginable in the Greatest Generation era of our grandparents. Now is the time for cities to lead the country forward, innovate, experiment ferociously with nationally scalable solutions, and ultimately, build a safety net for 2017not 1947.

Brooks Rainwater is the Senior Executive and Director of the Center for City Solutions at the National League of Cities.

CityLab is committed to telling the story of the worlds cities: how they work, the challenges they face, and the solutions they need.

Read more here:

How Cities Can Rebuild the Social Safety Net – CityLab

After lifting minimum wage, NDP government prepares to consult public about reducing poverty – Straight.com

The B.C. NDP government hopes to have a poverty-reduction strategy in place by next year.

Thats according to Social Development and Poverty Reduction Minister Shane Simpson.

At this month’s Vancouver Pride parade, Simpson told the Straightthat the province has had “flat wage growth” for well over a decade.

He also said that about 500,000 British Columbians are living in povertyand theyre not all on income assistance or disability benefits.

Half of those people are the working poor, Simpson stated. Theyve got a full-time paycheque coming into the house.

The government plans to address this by increasing the minimum wage in the hope that it will encourage employers to raise their workers pay.

Others have taken the trickle-down approach to economic benefits being distributed, Simpson noted, referring to the Gordon Campbell governments decision to cut everyones income tax by 25 percent when it took power in 2001. Were going to push it from the bottom up.

On August 15, Premier John Horgan announced that the minimum wage would increase by 50 cents an hour next month to $11.35 per hour.

He’s also promised to boost it to $15 per hour by the end of the NDP government’s first term in office.

One of the Horgan governments earliest moves was increasing income-assistance rates by $100 per month.

Meanwhile, Simpson said there will soon be a public-consultation process in advance of introducing legislation on a poverty-reduction strategy.

The objective, according to Simpson, is to involve all ministries that can play a role, including those that oversee housing, childcare, income assistance, and education.

Well bring them all together and, hopefully, be able to develop some strategies working with people in the community to start to break the cycle of poverty that captures people and captures families, he said. Its incredibly hard for them to break that. It tends to go on for generations.

Simpson stressed the importance of providing meaningful opportunities for poor people to participate in government consultations.

Were going to craft a way to do that, Simpson promised.

He also said that the NDP government is committed to creating and measuring the results of a basic-income pilot project in B.C.

The minister suggested it might take three years to generate sufficient data for the government to draw conclusions.

Theres a similar pilot under way in Ontario. But one of the challenges is how to deal with public pensions, which fall under federal jurisdiction.

Advocates of a basic-income guarantee say it will provide everyone with sufficient money to meet basic needs and live in dignity, regardless of their employment status.

Some people are quite supportive of it, others are a little more skeptical about whether it can work, Simpson said. Im not certain one way or the other, but I think its worth a look.

When he was an opposition MLA, Simpson often made the case for a provincial poverty-reduction plan.

His private member’s bill on this issue in 2011 called for a minister responsible for poverty reduction to publish an annual report detailing the state of poverty in B.C.

In addition, the bill called for independent comment from an advisory committee, and reporting on the progress toward implementing a strategy, the attainment of goals and specific objectives and performance measures, and recommendations to improve the effectiveness of the strategy.

It also included a section requiring consultation with B.C. residents living in poverty, as well as with other levels of government, First Nations, nonprofit groups, the business community, academics, and the trade-union community.

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After lifting minimum wage, NDP government prepares to consult public about reducing poverty – Straight.com

Universal Basic Infrastructure to help decrease India’s poverty – Economic Times

With over 200 million people still below the poverty line and a similar number earning barely enough, much needs to be done to improve their lives. While faster growth is an obvious antidote, the view that some sort of universal basic income (UBI) may be needed to provide immediate relief is gaining currency. The UBI must be embraced in a deliberate, phased manner as it allows reform to occur incrementally weighing the costs and benefits at every step, the Economic Survey of FY17 had said.

The idea of universal income support has been under discussion for several years but the first real push was given by chief economic adviser Arvind Subramanian in the Survey. While UBI could be more of an imperative in developed countries where manufacturing and services are moving to the developing world, India has tremendous scope for improving job creation along with strengthening its social infrastructure that in turn could lift millions out of poverty. As a result, the idea, which has seen some global success, is yet to take root in India.

According to the Survey, identified beneficiaries can be given a choice of UBI instead of subsidies under existing programmes. Based on FY12 level of distribution and consumption, the Survey estimated the income needed to take one person out of poverty at Rs 7,620 per year.

The Survey said UBI that reduces poverty to 0.5% of population would cost 4-5% of GDP, assuming that those in top 25% income bracket do not participate. The existing middleclass, food, petroleum and fertiliser sops cost about 3% of GDP. While DK Pant, chief economist of India Ratings, is in sync with the proposal to replace other subsidies with UBI, he is apprehensive of how best can beneficiaries be identified.

Unless you identify beneficiaries, the government will not be able to assess cost implications. The next challenge will be to monitor the progress. However, ensuring that all citizens have the right to a minimum income as a long-term solution to reduce poverty seems to be a distant dream with not many in the government and academia believing the option is viable.

Even if you take 2011-12 urban poverty line as Rs 1,000 in nominal terms, per person it translates into Rs 15 trillion for a population of 1.25 billion whereas the Central budget is somewhere (in the region of) Rs 21 trillion.

Hence, it is not fiscally feasible, outgoing Niti Aayog vice-chairman Arvind Panagariya said. He said the socioeconomic and caste census available can help identify beneficiaries while the National Rural Employment Guarantee scheme enables self-identification. Most experts believe that before supplementing the income of countrys over 200 million poor, India should put in place basic infrastructure for health, education, sanitation and drinking water to ensure a basic standard of living.

India still has a huge deficit on the social infrastructure side and unless we ramp up… there is no point in giving a little extra income,said another senior government official requesting not to be identified. The official said UBI has become imperative in developed countries to ensure a peaceful society or their youth will become disruptive in the wake of jobs migrating overseas.

UBI is not a bad idea but does the country have that much money? …it is essential that government significantly increase its expenditure on creation of social infrastructure which will help to bring poor people into the mainstream, said Himanshu, assistant professor of economics at JNU.

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Universal Basic Infrastructure to help decrease India’s poverty – Economic Times