[Marxism] A town without poverty -- minimum income.

Paren Thetic telephobia at paranoici.org
Sat Sep 24 07:08:30 MDT 2011


A Town Without Poverty?
Canada's only experiment in guaranteed income finally gets reckoning

by Vivian Belik 

WHITEHORSE, YK—Try to imagine a town where the government paid each of
the residents a living income, regardless of who they were and what
they did, and a Soviet hamlet in the early 1980s may come to mind. 

But this experiment happened much closer to home. For a four-year
period in the '70s, the poorest families in Dauphin, Manitoba, were
granted a guaranteed minimum income by the federal and provincial
governments. Thirty-five years later all that remains of the experiment
are 2,000 boxes of documents that have gathered dust in the Canadian
archives building in Winnipeg. 

Until now little has been known about what unfolded over those four
years in the small rural town, since the government locked away the
data that had been collected and prevented it from being analyzed.

But after a five year struggle, Evelyn Forget, a professor of health
sciences at the University of Manitoba, secured access to those boxes
in 2009. Until the data is computerized, any systematic analysis is
impossible. Undeterred, Forget has begun to piece together the story by
using the census, health records, and the testimony of the program's
participants. What is now emerging reveals that the program could have
counted many successes.

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

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.

“When the government introduced the program they really thought it
would be a pilot project and that by the end of the decade they would
roll this out and everybody would participate,” said Forget. “They
thought it would become a universal program. But of course, the idea
eventually just died off.”

During the Mincome program, the federal and provincial governments
collectively spent $17 million, though it was initially supposed to
have cost only a few million.

Meant to last several more years, the program came to a quick halt in
1978 when an economic recession hit Canada. The recession had caused
prices to increase 10 per cent each year, so payouts to families under
Mincome had increased accordingly.

Trudeau's Liberals, already on the defensive for an overhaul of
Canada's employment insurance system, killed the program and withheld
any additional money to analyze the data that had been amassed.

“It's hugely unfortunate and typical of the strange ways in which
government works that the data was never analyzed,” says Ron Hikel who
coordinated the Mincome program. Hikel now works in the United States
to promote universal healthcare reform.

“Government officials opposed [to Mincome] didn't want to spend more
money to analyze the data and show what they already thought: that it
didn't work,” says Hikel, who remains a strong proponent of guaranteed
income programs.

“And the people who were in favour of Mincome were worried because if
the analysis was done and the data wasn't favourable then they would
have just spent another million dollars on analysis and be even more

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.”

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.

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

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.

The Canadian government's sudden interest in guaranteed income programs
doesn't surprise Forget.

Every 10 or 15 years there seems to be a renewed interest in getting
Guaranteed Income (GI) programs off the ground, according to
Saskatchewan social work professor James Mulvale. He's researched and
written extensively about guaranteed income programs and is also part
the Canadian chapter of the Basic Income Earth Network, a worldwide
organization that advocates for guaranteed income.

GI programs exist in countries like Brazil, Mexico, France and even the
state of Alaska.

Although people may not recognize it, subtle forms of guaranteed income
already exist in Canada, says Mulvale, pointing to the child benefit
tax, guaranteed income for seniors and the modest GST/HST rebate
program for low-income earners.

However, a wider-reaching guaranteed income program would go a long way
in decreasing poverty, he says.

Mulvale is in favour of a “demo-grant” model of GI that would give
automatic cash transfers to everybody in Canada. This kind of plan
would also provide the option of taxing higher-income earners at the
end of the year so poorer people receive benefits.

A model such as this has a higher chance of broad support because it
goes out to everybody, according to Mulvale. GI can also be
administered as a negative income tax to the poor, meaning they'd
receive an amount of money back directly in proportion to what they
make each year.

“GI by itself wouldn't eliminate poverty but it would go a heck of a
long way to decrease the extent of poverty in this country,” says

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.

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's 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.”

Vivian Belik is a freelance journalist based in the frozen northlands
of Whitehorse, Yukon. She was, however, raised in Manitoba where she
has spotted many of the provinces small-town statues including the
giant beaver in Dauphin.


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