
Mincome: Canada’s 1970s universal basic income experiment - rmason
https://www.bbc.com/worklife/article/20200624-canadas-forgotten-universal-basic-income-experiment
======
refurb
I'd love for someone to explain how UBI won't just inflate prices. Obviously
it comes down to exact implementation.

To me it seems it would be similar to the government intervention into housing
- the gov't wanted more people to be able to own homes. So they create 30-year
mortgages (for example). This was great because you could spread the payments
out over more time, lowering your monthly payment.

Oh wait, the 30-year mortgage is open to _everyone_. So now _everyone_ has
more buying power. Prices rise and you end up in the same spot as before - a
big chunk of the population can't afford a house.

Why wouldn't this happen with UBI? If you have everyone in the US $10,000, no
strings attached, I would guess prices would generally rise until $10,000
wasn't enough to survive on.

~~~
NOGDP
I'd love for someone to explain how UBI wouldn't just end up replacing part of
people's salaries and turning into a wage subsidy for corporations.

~~~
canjobear
Some see this as a feature, not a bug. It means that companies don't have to
pay as much to hire people, because companies don't have to be on the hook for
giving people enough money to survive. You wouldn't need a minimum wage, for
example.

~~~
elcomet
UBI need to be high enough then.

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godelski
At this point of time I seriously think we only have a few conclusions:
(Special note to 4, please address)

1) Recognize that we have sufficient "small" scale studies (note the quotes)
that are short term, and providing similar results, which necessitate longer
term studies. i.e. studies that are ~30 years, so that children can grow up
completely under this environment and live through their dependent years (<25
years old) under these conditions.

2) The experiments provide enough evidence and this warrants attempting this
on a much larger scale for the presumed future. i.e. institute a UBI
(obviously we need to determine WHICH kind of UBI we would institute).

3) There are major flaws in the studies that need to be addressed and we need
to refine them. (Personally with the many variations of these I've seen I do
not think this is an accurate conclusion, but I am open to being wrong as I am
not an expert studying this topic)

4) While the benefits are real, the cost is too much. This is one I'd
particularly like to see addressed. Pretty much every time we see UBI
experiments come up we see: 1) little to no earning wage increase (which is
difficult to say if it is because the short time periods or not) 2) lower
hospitalizations 3) higher sense of self worth 4) more children are finishing
education 5) more children are reaching their dietary needs. The issue I see
is that these have (unclear) economic values tied to them but are not
discussed. I ALWAYS see the economic _cost_ discussed, though understandably
this is a much easier thing to calculate. But aren't economists supposed to be
estimating these difficult concepts? As a voter I would like to know what the
economic benefit is to these programs as well as the cost. This will allow me
to make better judgments (e.g. even if UBI costs more economically maybe my
personal moral utility value makes up the difference between the numbers). It
is a shame that this is not discussed.

The issue of UBI and all its variations is complex but I believe that the
conversation is frequently being framed in ways that is difficult to make real
judgments on. We see the economic costs, but not the economic benefits. But we
do see moral benefits, but this isn't enough. Legitimate excuses are given
(for and against), but no one is making new experiments that address these
concerns. We need a serious conversation with less surjection.

~~~
CuriousSkeptic
I think it could be simpler. Instead for means testing and all the
administration that comes with it we could try much simpler schemes. Just give
something to everyone, could be a negative tax, but a dividend is even
simpler.

Since we are in the middle of various economic transitions where we need to
introduce taxes to control over consumption the simpler experiment (instead of
finding a region and allocating a budget) would be to introduce those taxes
together with a public dividend.

------
dang
If curious see also these other Mincome threads:

2016
[https://news.ycombinator.com/item?id=11497021](https://news.ycombinator.com/item?id=11497021)

2015
[https://news.ycombinator.com/item?id=9004287](https://news.ycombinator.com/item?id=9004287)

2014
[https://news.ycombinator.com/item?id=8792192](https://news.ycombinator.com/item?id=8792192)

------
ghufran_syed
If say, a liberal state in the US like California wanted to do a useful study
on the subject, the way to do it would be to randomly choose a pair of nearby
cities/counties with similar composition, then impose both a basic income
stipend _and_ the extra taxes needed to pay for it on one of the counties and
not on the other, for a minimum period of 10 years. You could even choose the
specific city/county pairs from only those that wanted to take part in the
experiment and had voted to that effect in a ballot proposition. _Then_ you
could answer important questions regarding effects of the increased taxes as
well as that of the payments. I'd be particularly interested in 2nd order
effects, for example, if the voters can vote to keep increasing the basic
income amount, would the increased taxes eventually drive out those who are
taxed most heavily? And would that be net negative (reduced tax revenue to
fund the program)? Or net positive (e.g. reducing housing prices?)

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skybrian
Manitoba again. If you're paying attention to universal basic income, this is
more like the experiment they keep reminding us about.

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FreakyT
I feel like there is a specific issue with the methodology of this and various
other basic income experiments: it was time-limited.

If one goes into the experiment knowing that the basic income will end after N
years, I suspect that may significantly affect one's behavior. For example,
this study found that people typically did not quit their jobs (for 4 years of
basic income). Would that result replicate with indefinite basic income? I'd
like to see a follow-up study to test that.

~~~
godelski
While I agree with this, is there any long term experiment even in proposal?
We'd really need at least 30 years to see how children develop through their
dependent years (<25). I see "it was time-limited" often stated in response to
UBI criticism (it is a legitimate complaint that these are time limited!) but
I have yet to see a proposal that tries to remedy this. Is there one?

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causality0
_They wanted to see whether a guaranteed basic income for those below the
poverty line could improve quality of life_

This is what drives me crazy about these experiments. Obviously, using
straight donations to keep people above a certain poverty line will improve
the lives of those particular people. What's always missing is the other half
of the equation: the analysis of whether UBI is the most efficient way to
spend that money. Every study seems laser-focused on the outcomes of people
who received the benefit while ignoring the projected effect on the society as
a whole. It's entirely possible UBI is a great choice but its proponents seem
bound and determined not to prove it.

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abellerose
Instead of the idea of universal basic income. I like to toy with the idea of
somehow making it so people can work less. Such as a person works every other
week and where someone else fills the role for the weeks the other person
isn't working. I think it would increase job positions and better mental
health. I'm unsure how it financially could work out but I assume money can
come from somewhere because UBI is basically proposing income for no work at
all.

~~~
oxymoran
It is not for no work at all. You would be free to work and earn more money,
so why wouldn’t you? It just guarantees a minimum income not a comfortable
income. And it would encourage people to do exactly what you want, work less.

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foobar_
Also read negative incometax. Same thing. At this point economics will make
more sense if human cost is acually made quantifiable and counted in profit
and loss.

~~~
tom_mellior
UBI is not the same thing as a negative income tax. I would be sure to get a
UBI this month, and next month, and the month after that independent of what I
do. With a negative income tax, I might be employed this month, then lose my
job and barely scrape by next month, and starve the month after that. And then
sometime next year, after filing tax papers, I would get some money to keep me
alive... this year.

It's true that in the grand scheme of things, averaged over many years, I
would get the same amount from a UBI and a negative income tax. But at
critical points in life, where my employment status changes significantly, the
delay from the negative income tax would not provide the security that a UBI
does.

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Kednicma
How much bigger do UBI experiments need to be before we can be confident that
these positive small-scale outcomes will also replicate on the scale of a USA-
sized country?

~~~
jvm_
There's some longer term unanswered/unanswerable questions as well. How do
children do if their parents have never worked?

~~~
zozbot234
I don't know where this idea is coming from that UBI will incent people to
drop out of the labor force. Any reasonable and currently-feasible UBI would
do the opposite. And experiments bear this out - those who seemingly leave the
workforce are actually doing something quite different: namely, they're
temporarily shifting from formal employment to working towards human capital
acquisition, or else providing care for others.

~~~
klmadfejno
> those who seemingly leave the workforce are actually doing something quite
> different: namely, they're temporarily shifting from formal employment to
> working towards human capital acquisition, or else providing care for
> others.

Providing care for others is a great use of labor. Working towards human
capital acquisition sounds great, but then you realize you still need people
working the bottom jobs.

Bottom jobs suck. If people have legit UBI, they won't do them. They'd be
stupid to do them unless they truly believed they could not do better with
self investment. But we need those jobs to be done.

So maybe you raise wages. So prices rise a bit, cheap foreign labor becomes
even more enticing where available, and the UBI is not Universal-not-quite-
Basic-Income. What do you do when your UBI isn't quite livable?

~~~
zozbot234
The thing is, one you've raised those wages enough, the "bottom jobs" are no
longer at the bottom. Especially if people are no longer limited to that
single source of income. So some people get actively drawn into that sector,
and prices stabilize. The whole notion of some jobs being at the "bottom"
while others aren't is quite dysfunctional and not really an inherent part of
a functioning economy.

BTW, an UBI can be less than "livable" and still be quite useful. Even a
baseline subsidy can bring a very welcome increase in flexibility in the
seemingly "bottom" sector, which is also often the entry point into the labor
market.

~~~
klmadfejno
If wages rise, then prices rise. The stabilization occurs at the point where
people need to do the bottom jobs. It's great if individuals can earn a
partial UBI and a higher paid bottom tier job.

However, when you raised the wages, you inevitably caused some of those jobs
to be outsourced. So now there's a class of people who bottom tier job doesn't
exist anymore and whose UBI isn't enough to live on. Now they're screwed. They
could offer to work for cheaper and lower the wages, and let's be fair and
acknowledge that even if they do, overall real wages per capita will probably
rise net positively. But it's much more difficult to compete with neighbor
nations.

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alexashka
This endless discussion of UBI or other programs in isolation is like trying
to find treatment for an itchy toe, ignoring that the rest of your body is
also itching.

~~~
II2II
That treatment for an itchy toe managed to reduce hospitalization rates by
over 8% and increase high school completion rates (to the point where everyone
at least started their final year). There were also indications that small
businesses started appearing, presumably because people wanted to keep working
yet also wanted more autonomy. The article states that was possible because
financing was easier to come by.

There is a possibility that addressing financial insecurity will give people
the freedom to address other social ills on their own accord. Yet we will
never find out if people keep coming up with excuses to prevent wider scale
trials.

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redis_mlc
There is UBI in Canada, but it's called welfare.

In order to form the Canada federation, Ontario had to agree to pay residents
of Quebec and the Maritime provinces for not working.

"Transfer payments" is the only reason Quebec hasn't become an independent
country yet.

How it's handled in Newfoundland is that fishermen agree to fish for a few
months, then they get "income support" for the remaining months of the year.

[https://en.wikipedia.org/wiki/Canadian_Confederation](https://en.wikipedia.org/wiki/Canadian_Confederation)

~~~
ficklepickle
That is an interesting take. I'm not sure I would agree with the way you
described it.

This is a more relevant link[0].

Technically, the money comes from the federal government. It is given to the
poorer provinces as general revenue and it is used to balance their budgets.

It is not specifically used to pay Maritime fishermen not to work. The
wealthier provinces essentially subsidize the poorer ones. It is just like
society; wealthier people pay more tax and poorer people use more social
services.

I'm not saying it is a perfect solution. But it does ensure a certain baseline
level of services across the country.

Quebec is, by far, the largest recipient of equalization payments.

[0] -
[https://en.m.wikipedia.org/wiki/Equalization_payments_in_Can...](https://en.m.wikipedia.org/wiki/Equalization_payments_in_Canada)

------
aszantu
without knowing anything about it I'd think that our system would be working
better with UBI if it was randomized and switching between citizens, would
make sense to exclude everyone who is already a millionaire or something. So
if you pull it, you get 4-8 years to build a business with the money, or do
whatever u want, and then the money goes to someone else. That way it wouldn't
just be hyper inflationary. If you give everybody more money, nobody has more
money. Capitalism is built on inequality.

~~~
tenebrisalietum
Things are still unequal with UBI - if you get $2k a month, billionaires are
still billionaries. It can make being poor less dangerous; e.g. homelessness,
car repossession, lack of basic necessities can stop being a thing.

I sometimes think really that a good alternative would be Universal Protected
Net Worth. Maybe things would be better if there was some floor of money and
assets below which no court or legal proceeding could take from you, including
taxes, fines, bail, judgements, seizures, forfeitures, etc. I don't know how
that would work in practice.

~~~
winstonewert
The Mosaic law actually has something kind of like this where you can't lose
ownership of your allotted farmland. Thus, at minimum, everyone owns a
valuable asset and thus some net worth. (Data is sparse on whether this law
was every actually followed or the effects.)

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shitgoose
In Canada anyone who is out of job now unconditionally gets 500/week of Covid
money. Pretty much same idea as UBI. The immediate effect that I observed was
that all Filipino nannies quit. There is no incentive for them to work any
more. I am not sure what they do with all the free time though. Maybe the life
was different in rural Winnipeg in 70's (btw 11k was a shitload of money back
then), but nowadays the UBI will immediately wipe out the low paying jobs.
This may disrupt industries that rely on cheap labor. But what is much worse -
it will create a class of people who are entitled to free money and have zero
incentive to do anything with their lives, like get education, progress their
careers, strive for better live. There is a need for a safety net in a society
for those who slipped, but UBI is different. It is designed to make people
regress, takes away any motivation.

~~~
ulucs
It sucks that you are now unable to take advantage of poor immigrants because
they are not in desperate need of money. It is nice that they have temporarily
escaped their cycle of poverty. Instead of complaining about how they are
wasting their lives by not working (and reciting the poem The Educated Man's
Burden), you should instead pay them their actual worth.

~~~
shitgoose
Oh, I was not complaining:) I do not have a nanny neither want one. I clean my
own shit. I was just observing. Nanny's salary is based on supply/demand.
Until government interferes with Covid payments. When payments stop, nannies
will go back to work. And, you are right, I believe that idling on Covid
handouts is a waste of time. Any sort of idling is a waste of time.

