A Lift Out of Poverty, No Strings Attached

The term ‘utopia’ — the way we use it today, to refer to an ideal but unattainable state — comes from the book of the same name, written by Sir (Saint) Thomas More in 1516. The form is political critique disguised as fantasy disguised as travelogue. More casts himself as the recorder of Raphael Hythloday’s travels to the island of Utopia, where, despite their lack of Christianity, the people are closer to realizing the ideal Christian society through rational government than Europe ever was.

Each year, the pre-Christmas ritual of soliciting funds to assist those in need brings with it the harsh realization of just how many of our fellow citizens require that assistance. The good will that results in creating a wonderful Christmas experience for so many is amazing but, for the grateful recipients, there is always the return to reality when Christmas is over.

Granted, many individuals and groups work throughout the year to assist those in need, but the fact is that those living near or below the poverty line in our communities must return to their daily struggles to feed, clothe and house their families with very little financial support. The goal of eliminating poverty — of every Nova Scotian living a life of dignity with all their basic needs met — seems ‘utopian,’ indeed. And the most recent statistics suggest that decent life is becoming even less attainable.

 

The 2019 Report Card on Child and Family Poverty in Nova Scotia was released on 14 January 2020. Dr. Laura Frank is a Canadian Centre for Policy Alternatives (CCPA) Nova Scotia research associate and an associate professor in the Department of Sociology at Acadia University. She has co-authored or authored the report card for this province for more than 20 years, and I have quoted her before. The 2019 edition was co-authored by Laura Fisher, a masters student in the Sociology Department at Acadia. They were assisted in their efforts by Campaign 2000, of which Frank is a steering committee member. The organization promotes “a cross-Canada movement to build Canadian awareness and support for the 1989 all-party House of Commons resolution to end child poverty in Canada by the year 2000,” something we all know has not happened.

In this year’s report card, Frank and Fisher trace incomes for one-parent families or couples with one child since 1989. They note that those incomes have changed very little in Nova Scotia in that 30-year period, with the lowest reported in the early 2000s. In 2018, the maximum income for such families was $18,240, $640 less per year than in 1989, when income was adjusted for inflation.

Between 2015 and 2017,  incomes for these families increased to a high of $28,299. It’s of note that the federal child benefit was introduced in 2016 and increased in July 2018, with a further increase due in 2019. In 2018, the benefit was adjusted to inflation. Unfortunately, as underlined in the report, those incomes fell in 2018 because income supports in Nova Scotia are not “pegged to inflation.” Nova Scotia has the third highest child poverty rate in Canada, with poverty rates in Cape Breton at 34.9%, Annapolis at 34% and Digby at 33.3.%. Poverty rates vary a great deal throughout the province, with Indigenous communities faring the worst in most instances.

In all that I have read since the release of the report on child poverty in this province, nobody has mentioned the idea of a guaranteed annual income (GAI) or basic income (BI) as a way to deal with these poverty rates. In fact, a GAI/BI is a hot topic throughout the world, and some countries have already established one. In Canada, thanks to then-Prime Minister Pierre Trudeau and Manitoba Premier Ed Schreyer, we had the now-famous Mincome experiment in the ’70s, until a Conservative government abruptly cancelled it (as Doug Ford scrapped a similar program soon after taking office in Ontario; Ford had said during the election campaign that he wouldn’t cancel it, meaning, obviously, that he would cancel it once the campaign ended and he was premier!)

 

I‘ve been reading Utopia For Realists, by the Dutch historian and author Rutger Bregman. You might have seen his TedTalk or remember him scolding the richest of the world’s rich at the Davos Economic Forum in 2019 for talking about philanthropy instead of focusing on how many amongst them avoid paying taxes (he wasn’t invited to return this year.)

Let’s take a short trip, via Bregman’s book, back to London, England in May of 2009 when an experiment took place. It was conceived as a last resort to dealing with 13 homeless men who had been sleeping rough on the Square Mile — London’s financial district — for almost 40 years. The cost in financial assistance, police and court services to deal with those homeless men amounted to US$650,000 (CAN$850,000) per year.

A London-based aid organization, Broadway, took action, replacing all the various types of assistance given the men — food stamps, access to soup kitchens and shelters, etc — with £.3,000 (CAN$5,100). The money came with “no strings attached and no questions asked” except one: “What do you think YOU need?”

One social worker who “didn’t have enormous expectations” as to how this experiment would work out, was amazed at what some of them wanted – a telephone, a hearing aid, a dictionary. All the men had modest desires and all were very careful with their money: for the most part, had spent only £800 pounds (CAN$1,300) after the first year.

After a year and a half, writes Bregman, seven of the men had roofs over their heads, and two others had acquired apartments; all the men had “taken critical steps toward solvency and personal growth.” The cost to society for a year was US$50,000 (CAN$65,000), including the social workers’ wages. One of those social workers said the move had empowered people, and given them choices. So after years of, as Bregman puts it, “fruitless pushing, pulling, pampering, penalizing, prosecuting and protecting, nine notorious vagrants have finally been brought in from the streets,” leading the Economist magazine to state that:

[T]he most efficient way to spend money on the homeless might be to give it to them.

 

Bregman is a writer for The Correspondent in the Netherlands, and the Dutch edition of his book “sparked a basic income movement that made international headlines.”

Bregman points out that the prevailing belief has always been that “poor people can’t handle money” so countries around the world have set up rigorous systems that those in need must navigate to qualify for assistance, all based on what he calls the “biblical principle ‘those unwilling to work will not get to eat’ ( 2 Thessalonians 3:10 ).'” Many governments, according to Bregman, have made employment a major part of their assistance programs demanding that recipients apply for jobs (and no doubt provide proof that they have), and that they participate in“return to work” programs and do “volunteer” work. Bregman writes that it’s called “from welfare to work,” making it clear that “free money makes people lazy.”

However, Bregman is able to prove the opposite by telling us about Bernard Omondi, who was “making $2 a day working in a stone quarry in an impoverished area of western Kenya.” When Omondi received a message that $500 had been deposited in his bank account — an amount equal to a year’s wages for him — he could hardly believe it, but he took it happily. He eventually invested in a motorcycle, and started earning $6 to $9 a day as a taxi driver. Others in Omondi’s village had been the recipients of similar aide. A New York Times journalist who visited a couple of months after those deposits, described the place as “flush with money,” homes having been fixed up and small businesses established.

GiveDirectly, the non-profit that lifted Bernard Omondi and others out of poverty, is a charitable organization based in the United States. Since 2009, it has given out over $140 million to 130,000 people in countries around the world whose lives were changed forever. The organization and its many donors were responsible for establishing the largest basic income experiment in history in 2017 in western Kenya, and according to Chris Weller’s 29 January 2018 story in Business Insider, the project could change the way the world thinks about aide.

GiveDirectly is based on providing direct cash transfers to individuals, something it has been doing in eastern Africa since 2008, and this latest experiment in western Kenya will run for 12 years in hopes of answering some of the questions around the basic income philosophy. Will an experiment whereby people are given “no strings-attached money assist people and communities or leave them worse off?” Do people stop working? Do they start businesses? Are they more likely to spend money on drugs and alcohol or education?

 

Michael Faye, founder of GiveDirectly, in speaking with Bregman, indicated that the money placed directly in the hands of the poor “puts the choice in the hands of the poor.” Referencing Moses Coady, I assume, Bregman acknowledges that Faye doesn’t “give the people fish, or even teach them to fish” but he does give them cash, convinced that “the real experts on what poor people need are the poor people themselves.”

Interestingly, when made aware of GiveDirectly’s success with the basic income project, Google made a $2.5 million donation. Economist Charles Kenny noted that “the big reason that poor people are poor is because they don’t have enough money, and it shouldn’t come as a huge surprise that giving them money is a great way to reduce that problem.” Amen to that. The CFO of GiveDirectly, Joe Huston, said the debate over a basic income “continues to rage” between those who call it “a senseless act of preemptive self sabotage” to optimists who see it as the 21st century equivalent of the 20th century’s civil and political rights victories.

It’s worth noting here, given that you’re reading this two days after Martin Luther King Day in the US., that Dr. King advocated for a basic income. In a 15 January 2010 article in The Nation, author Mark Engler refers to King’s 1967 book, Where Do We Go From Here? Chaos or Community:

For adults who could not find jobs, King promoted the concept of a guaranteed annual income. Arguing against those who believed that a person’s unemployment “indicated a want of industrious habits and moral fiber,” King wrote: “We realize that dislocations in the market operation of our economy and the prevalence of discrimination thrust people into idleness and bind them in constant or frequent unemployment against their will.” A just response, King believed, was a guaranteed annual income “pegged to the median income of society, not the lowest levels of income.” … (Historian Maurice) Isserman cites a 1965 speech to the Negro American Labor Council, in which Dr. King said, “Call it democracy, or call it democratic socialism, but there must be a better distribution of wealth within this country for all God’s children.”

Dr. Martin Luther King, August 28, 1963. Photo by NARA – National Archives, CC0, via Wikimedia Commons

Here in Canada, retired Conservative Senator Hugh Segal has been a proponent of just such a GAI/BI and assisted Kathleen Wynne in setting up that pilot project in Ontario in 2017. Segal, in 2018 opinion piece in Macleans, recalled how Jean-Denis Fuchette, parliamentary budget officer in the Liberal government, had presented a report indicating that a simple Canada-wide GAI/BI program would cost in the vicinity of $43 billion, which struck him as “impossibly expensive,” as it had been “costed to 10% of the entire government’s fiscal footprint.”

Segal suggested that the cost hadn’t included savings from provincial programs that would become redundant, and the savings that would come from having fewer people living in poverty. He talked about how the Ontario government, in the 1970s, had brought in a guaranteed annual income supplement for those over 65, reducing poverty in that age group massively, while bringing about better health outcomes. Eventually, the federal government brought in a similar supplement for all Canadians in that age category, a supplement that would “top up” the gap between what citizens were already earning and $1,200 per month.

 

We seldom hear any discussion as to the worthiness of the guaranteed annual income supplement/basic income but a GAI/BI is popular even with those who hate the notion of “free money.”

In a December 2014 story for the Huffington Post, journalist Zi-Ann Lum explains how Evelyn Forget, a researcher at the University of Manitoba, heard of the existence of records of the afore-mentioned Trudeau/Schreyer Mincome experiment in Dauphin. She finally discovered them in the National Archives in 2009 – “a treasure trove of information on the Mincome GAI/BI which revealed what a success the experiment had been.”

The aim of the experiment was to lift residents of Dauphin above the poverty line by issuing them a check. As Lum writes:

For five years, monthly cheques were delivered to the poorest residents of Dauphin, Man. – no strings attached. And for five years, poverty was completely eliminated.

Evelyn Forget told Lum that Mincome’s impacts ranged from improvements to people’s health to options for job training, which women took advantage of when they had the choice to use the money as they saw fit. For three years, Forget studied the Mincome records and subjected them to lengthy analysis, and “no matter what she tried, the results were the same every time.”  As Bregman writes in ‘Utopia for Realists’, “Mincome had been a resounding success.”

The whole notion of putting money in the hands of those who truly need it made me wonder what might have happened if all the monies donated in Nova Scotia over the pre-Christmas season had actually been placed in the hands of those whose names appeared on the many lists prepared in every corner of the province. If every person who required assistance suddenly had a lump sum dropped into his or her bank account “with no strings attached” how would they have reacted? More to the point, will it ever happen in Canada again? The ball is in the federal government’s court.

As a wise man once said:

Money is better than poverty if only for financial reasons.

 

 

Dolores Campbell, a lifelong resident of Sydney, is a freelance writer whose work has appeared in The Cape Breton Highlander, the Nova Scotian, Cape Breton Magazine, Catholic New Times and The Cape Breton Post.