Poverty has long been the scourge of every human civilization. To this day, even the most prosperous and well-organized societies struggle with its perennial presence, and it seems that no policy, economic system, or social movement can ever eradicate impoverishment entirely (even if it comes close to being extinguished, the problem resurges, as it has since the recession).
The intractability of this issue leads many people to conclude that its origins lie in the moral and personal failings of the poor themselves. This disparaging view is what fuels the indifference and even hostility towards the underclass that only reinforces their plight. After all, why support programs that benefit people who lazy, irresponsible, or negligent? Why give money to those who don’t deserve it? Wouldn’t they just squander or abuse it like they have ever other opportunity?
Aside from the absurdity and prejudice of painting an entire class of people with such a broad brush, this perception is – to my knowledge – devoid of any empirical or scientific basis. Anyone could base their worldview on limited personal anecdotes or hearsay, but has there ever been a proper examination of what would happen if the poor were given more resources – without conditions or parameters?
Dominion, a grassroots Canadian news source, reported on a fascinating government program from several decades ago that did the politically unthinkable: giving poor people money, no strings attached. This effort was only recently uncovered by Evelyn Forget, a professor who fought to obtain the ample research data, which was gathering dust in a government archive.
Beginning in 1974, Pierre Trudeau’s Liberals and Manitoba’s first elected New Democratic Party government gave money to every person and family in Dauphin who fell below the poverty line. Under the program—called “Mincome”—about 1,000 families received monthly cheques.
Unlike welfare, which only certain individuals qualified for, the guaranteed minimum income project was open to everyone. It was the first—and to this day, only—time that Canada has ever experimented with such an open-door social assistance program.
In today’s conservative political climate, with constant government and media rhetoric about the inefficiency and wastefulness of the welfare state, the Mincome project sounds like nothing short of a fairy tale.
For four years Dauphin was a place where anyone living below the poverty line could receive monthly cheques to boost their income, no questions asked. Single mothers could afford to put their kids through school and low-income families weren’t scrambling to pay the rent each month.
For Amy Richardson, it meant she could afford to buy her children books for school. Richardson joined the program in 1977, just after her husband had gone on disability leave from his job. At the time, she was struggling to raise her three youngest children on $1.50 haircuts she gave in her living room beauty parlour.
The $1,200 per year she received in monthly increments was a welcome supplement, in a time when the poverty line was $2,100 a year.
“The extra money meant that I was also able to give my kids something I wouldn’t ordinarily be able to, like taking them to a show or some small luxury like that,” said Richardson, now 84, who spoke to The Dominion by phone from Dauphin.
As part of the experiment, an army of researchers were sent to Dauphin to interview the Mincome families. Residents in nearby rural towns who didn’t receive Mincome were also surveyed so their statistics could be compared against those from Dauphin. But after the government cut the program in 1978, they simply warehoused the data and never bothered to analyze it.
The federal and provincial governments ended up spending $17 million Canadian dollars on the program, far more than the intended amount. The cost overrun, combined with difficult economic times, contributed to the project’s speedy abandonment. I’d wager that cognitive bias play a role too – like most people, perhaps the officials involved felt it was a clear waste of money, and that even the positive results wouldn’t make up for the costs.
Indeed, touching firsthand accounts notwithstanding, perhaps the benefits were ultimately less than the costs, or maybe other people ended up wasting the misusing the money.
But Forget has culled some useful info from Manitoba labour data. Her research confirms numerous positive consequences of the program.
Initially, the Mincome program was conceived as a labour market experiment. The government wanted to know what would happen if everybody in town received a guaranteed income, and specifically, they wanted to know whether people would still work.
It turns out they did.
Only two segments of Dauphin’s labour force worked less as a result of Mincome—new mothers and teenagers. Mothers with newborns stopped working because they wanted to stay at home longer with their babies. And teenagers worked less because they weren’t under as much pressure to support their families.
The end result was that they spent more time at school and more teenagers graduated. Those who continued to work were given more opportunities to choose what type of work they did.
“People didn’t have to take the first job that came along,” says Hikel. “They could wait for something better that suited them.”
For some, it meant the opportunity to land a job to help them get by.
When Doreen and Hugh Henderson arrived in Dauphin in 1970 with their two young children they were broke. Doreen suggested moving from Vancouver to her hometown because she thought her husband would have an easier time finding work there. But when they arrived, things weren’t any better.
“My husband didn’t have a very good job and I couldn’t find work,” she told The Dominion by phone from Dauphin.
It wasn’t until 1978, after receiving Mincome payments for two years, that her husband finally landed janitorial work at the local school, a job he kept for 28 years.
“I don’t know how we would have lived without [Mincome],” said Doreen. “I don’t know if we would have stayed in Dauphin.”
This conflicts with the popular notion that handouts have a corrosive effect on productivity. In fact, it would seem intuitive that giving someone money without any conditions would lower his or her incentive to work. Instead, the recipients used their newfound resources as an investment, bettering their circumstances in the long-term and thus multiplying the direct benefits.
Meanwhile, freeing up students to focus on their education brings obvious benefits – more attention to learning means good grades, graduation, and (generally-speaking) a better job. If young people can afford to be given better nutrition and healthcare, they’ll be more productive students. The developmental damage and negative stressed caused by poverty accounts for the poor performance of many low-income children.
As it turns out, this aid did more than bestow economic benefits. The positive outcomes were across the board.
Although the Mincome experiment was intended to provide a body of information to study labour market trends, Forget discovered that Mincome had a significant effect on people’s well being. Two years ago, the professor started studying the health records of Dauphin residents to assess the impacts of the program.
In the period that Mincome was administered, hospital visits dropped 8.5 per cent. Fewer people went to the hospital with work-related injuries and there were fewer emergency room visits from car accidents and domestic abuse. There were also far fewer mental health visits.
It’s not hard to see why, says Forget.
“When you walk around a hospital, it’s pretty clear that a lot of the time what we’re treating are the consequences of poverty,” she says.
The trauma of poverty can sometimes produce self-destructive behavior (such as alcoholism or substance abuse), violence, and psychological problems. The subsequent lack of healthcare access can exacerbate these trends and make them more costly for society to bear.
Furthermore, the greater access to healthcare that’s offered by “guaranteed income,” as this kind of financial aid is known in Canada, means addressing health problems before they become more severe and expensive. These savings extend to society as a whole, too.
Give people financial independence and control over their lives and these accidents and illnesses tend to dissipate, says Forget. In today’s terms, an 8.5 per cent decrease in hospital visits across Canada would save the government $4 billion annually, by her calculations. And $4 billion is the amount that the federal government is currently trying to save by slashing social programming and arts funding.
Having analyzed the health data, Forget is now working on a cost-benefit analysis to see what a guaranteed income program might save the federal government if it were implemented today. She’s already worked with a Senate committee investigating a guaranteed income program for all low-income Canadians.
I hope to see Forget’s report soon, as the implications of this project are significant. Not only could it alleviate human suffering at a lesser overall cost, but it changes our perception of human nature. Most people, when given the resources, will do better for themselves, which in the aggregate means overall prosperity for the nation as a whole.
It’d be even better if the Canadian government decided to reinstitute the program and apply it to more areas, or eventually on a national scale. Even some of Canada’s right-wing politicians are receptive to the idea.
Conservative senator Hugh Segal has been the biggest supporter of this kind of GI, claiming it would eliminate the social assistance programs now administered by the provinces and territories. Rather than having a separate office to administer child tax benefits, welfare, unemployment insurance and income supplement for seniors, they could all be rolled into one GI scheme.
It would also mean that anybody could apply for support. Many people fall through the cracks under the current welfare system, says Forget. Not everybody can access welfare and those who can are penalized for going to school or for working a job since the money they receive from welfare is then clawed back.
Most mainstream politicians here in the States, much less those on the right, would be bold enough to publicly support expanding welfare. Even Canada’s broadly liberal society would have qualms about it, for some the reasons I mentioned earlier:
If a guaranteed income program can target more people and is more efficient than other social assistance programs, then why doesn’t Canada have such a program in place already? Perhaps the biggest barrier is the prevalence of negative stereotypes about poor people.
“There are very strong feelings out there that we shouldn’t give people money for nothing,” Mulvale says.
Guaranteed income proponents aren’t holding their breaths that they’ll see such a program here anytime soon, but they are hopeful that one day Canada will consider the merits of guaranteed income.
The cost would be “not nearly as prohibitive to do as people imagine it is,” says Forget. “A guaranteed minimum income program is a superior way of delivering social assistance. The only thing is that it’s of course politically difficult to implement.”
Imagine how much more untenable this program would be in the United States, given that Americans are especially resistant to social policies and government spending. Even if GI was eventually found to be more cost-effective, it’d still be hard to convince people of its merits. There’s as much cynicism towards the state’s ability to do anything efficiently, as there is towards giving the undeserving poor more money for nothing.
But that’s why there needs to be more studies and trials. Maybe Dauphin was a fluke, or the project only works in specific circumstances (smaller population, rural areas as opposed to urban ones, etc). Maybe the benefits end up being outweighed by the costs, or begin to wear-off with time. We simply don’t have enough examples to go by.
Then again, countries such as Brazil and Mexico have enacted very similar GI programs, and their outcomes have generally been favorable too. The US could stand to experiment with similar measures, at least in a limited way, to see how they’d work. With the growing socioeconomic problems that we’re facing, there’s no reason not to be creative with ways to better our society even during a period of austerity. What are your thoughts?