Does a basic guaranteed income decrease the need for social services?

AMNA NAWAZ: The economy may be doing well
by many measures, but, for years, there have been real concerns over wage growth and the
overall standard of living. So, perhaps it’s not surprising that at least
one recent survey showed growing public support for a new government program that would guarantee
some income to citizens. There are small pilot projects of how it could
work. In this reprised report, our own economics
correspondent Paul Solman travels to Canada to see one of the larger programs for our
ongoing series Chasing the Dream on poverty and opportunity. PAUL SOLMAN: Cheerios, sans gluten, without
gluten. ALANA BALTZER, Ontario: I may not speak French,
but I have been in a bilingual country my entire life, so I know what the French actually… PAUL SOLMAN: What sans gluten means. ALANA BALTZER: Yes. PAUL SOLMAN: A Tuesday trudge to the local
grocery store in Hamilton, Ontario. ALANA BALTZER: Love the organic vegetables. PAUL SOLMAN: This is the first time 29-year-old
Alana Baltzer has been able to afford the healthy food here at the Mustard Seed Co-op,
because, she says, when you’re poor: ALANA BALTZER: It’s buy the stuff that you
can afford, which is generally quick, easy and all processed and high in sugar and trans
fats and all the other unhealthy stuff. PAUL SOLMAN: That’s all that Baltzer could
afford on her $575-a-month welfare disability check. But Ontario will now give her $1,130 U.S.,
no questions asked, as part of a three-year basic income pilot launched late last year. NARRATOR: Around the world, people believe
that basic income could provide a simpler and more effective income support. PAUL SOLMAN: The idea’s also being piloted
in Finland and California. Now it’s Ontario too. KATHLEEN WYNNE, Premier of Ontario: How are
people’s lives changed, and how are they able to do better in their lives, prevent illness,
stay in school, get jobs and keep jobs? PAUL SOLMAN: Ontario Premier Kathleen Wynne. KATHLEEN WYNNE: We should be looking at different
ways of providing support, ways that actually don’t punish people, but actually support
people in getting on with their lives and produce better outcomes. PAUL SOLMAN: Four thousand randomly selected
Ontarians in three communities will get about $13,000 a year U.S. for a single person, $19,000
for a couple. In exchange, recipients give up some social
supports and the government gets back 50 cents of every dollar they earn. DR. KWAME MCKENZIE,®MD-BO¯ Wellesley Institute:
It is definitely the biggest basic income study that there’s ever been in North America. You don’t have to show that you’re sick. You don’t have to show that you can’t work. You get it as a right. PAUL SOLMAN: Research director Kwame McKenzie
and his team will analyze the results. DR. KWAME MCKENZIE: We’re going to see whether
it increases your chance of coming out of poverty. We’re trying to see if it makes your housing
stable. We’re trying to see whether it improves your
mental health, whether it basically decreases your use of other services, such as hospital
beds. PAUL SOLMAN: Turns out Manitoba launched a
basic income experiment in 1974 that the provincial government there later pulled the plug on. DR. KWAME MCKENZIE: It was an incomplete study. PAUL SOLMAN: But, long after, researchers
studying the data found: DR. KWAME MCKENZIE: We have got less health service
use. We have got mental health improving. We have got people going back to college and
they’re getting better, getting better skills to move forward. This is a great thing, right? PAUL SOLMAN: But was it a fluke? And could the same policy produce like results
40-plus years later? Well, for Jodi Dean and family, the answer
seems to be yes. Ten-year-old daughter Madison has suffered
from both brittle bone disease and epilepsy since toddlerhood. Yes, Canada has universal health care, but
not for the E.R. commute. JODI DEAN, Mother: As far as parking goes,
we’re not covered for that. That’s $25 an emergency visit. PAUL SOLMAN: How many times has she broken
bones? JODI DEAN: She’s probably had at least 70
breaks. PAUL SOLMAN: How many times a month do you
have to pay for parking? JODI DEAN: Two to three times a week. PAUL SOLMAN: Basic income now covers, in effect,
half the parking bill, a huge relief for someone who never dreamed she’d be poor, used to volunteer
at the food bank, then found she couldn’t live without it. JODI DEAN: How do you go back to where you
just gave that time and tell them now you’re in need? PAUL SOLMAN: Jodi Dean, like Alana Baltzer,
lives in Hamilton, a once-thriving steel city of 750,000 within an hour of Toronto. TOM COOPER, Director, Hamilton Roundtable
for Poverty Reduction: We used to have 40,000 people working directly in steel, and, today,
it’s probably closer to 7,000. PAUL SOLMAN: Tom Cooper, who directs an anti-poverty
project, claims he’s already seen benefits from the program. TOM COOPER: Many of the individuals I have
talked to who are on the basic income pilot are going back to school, wanting to improve
their opportunities to get a better job. PAUL SOLMAN: Moreover, he says: TOM COOPER: There’s not the oversight we see
in traditional social assistance systems that requires people to report monthly on their
income or their housing status or their relationship status. PAUL SOLMAN: While most poor Ontarians didn’t
make it into the pilot, Baltzer did, and no longer has to deal with the provincial welfare
system. ALANA BALTZER: You do not have the bureaucracy
involved with welfare or disability. If you get a job, you simply call, let them
know, give them the information, submit your pay stubs, bada boom, bada bing, done PAUL SOLMAN: And your mom made it on to the
program. Has it made a difference in her life? ALANA BALTZER: Oh, God, yes. She’s more ecstatic about not having to deal
with Ontario Works, the welfare workers. PAUL SOLMAN: The pilot has even induced Baltzer
to lose five pounds since November, more exercise, more confidence. ALANA BALTZER: The first time in years I have
been able to wear high heels without groaning in absolute pain and sheer agony. PAUL SOLMAN: As for the depression she has
long struggled to fend off: ALANA BALTZER: It’s nice to not have a full-blown
episode because I’m worried about whether or not I’m going to be able to eat tonight
or be able to pay my rent or do something as simple as laundry. PAUL SOLMAN: Other pluses? Well, from the government’s point of view,
it no longer has to subsidize Baltzer’s housing, so the pilot is costing Ontario less than
$700 a month more. DR. KWAME MCKENZIE: It’s important to measure
that and measure sort of use of government services. PAUL SOLMAN: But Baltzer attends college in
the fall, as now planned, and then gets a job, government would be off the hook entirely. DR. KWAME MCKENZIE: And it’s also important to
measure whether people are actually generating wealth, because everybody’s thinking often
about the cost, but people don’t always think about the possible economic benefits. PAUL SOLMAN: But, look, say skeptics, basic
income will cost a pretty, albeit Canadian, penny going out, while benefits may never
actually flow in. DAVID WAKELY, Attorney: I don’t think the
savings are actually going to be there. So, I think that’s misleading. PAUL SOLMAN: That’s local lawyer David Wakely,
who says, if the program is extended universally, it would cost Ontario two-thirds of its annual
revenue. And he doubts recipients will go to school
or get a job. DAVID WAKELY: Where someone can stay home
and get a basic income guarantee, this just serves as a security blanket for them, because
they have always got this income to rely on. PAUL SOLMAN: And as I asked former U.S. union
leader Andy Stern, isn’t that the time-honored objection to a basic income? If you pay people to do nothing, isn’t that
an incentive for them to continue to do nothing? ANDY STERN, Economic Security Project: There
are always people who are going to stay at home and take advantage of government programs. There are a lot of wealthy people and children
who are paid to do nothing, and it doesn’t seem to affect them being vital and involved
in society. PAUL SOLMAN: John Clarke of the Ontario Coalition
Against Poverty doesn’t worry about poor people taking advantage of a basic income. But he does worry that the program is a move
to take advantage of them by laying the groundwork for the elimination of government-provided
social workers, health care, the eventual privatization of social services. JOHN CLARKE, Ontario Coalition Against Poverty:
So you’re shopping for health care, you’re shopping for housing, you’re shopping for
public transportation, child care, all these things. And this is the prevailing agenda at the moment. And a basic income system takes us in that
direction. PAUL SOLMAN: Moreover, says Clarke, a basic
income creates downward wage pressure on the working poor. JOHN CLARKE: If you create a situation where
low-wage workers are receiving a significant portion of their wages out of the tax revenues,
then the pressure on employers to increase wages is reduced, the pressure on governments
to increase minimum wages is reduced. PAUL SOLMAN: So how to know then if the costs
outweigh the benefits? DR. KWAME MCKENZIE: We can all of these theoretical
discussions, or we can say let’s do a test and see what actually happens. What are the costs? Is it a more efficient way of giving people
who need it support? What are the benefits? Does it grow the economy or not? And then we can have a rational discussion
based on evidence, rather than just based on theory. PAUL SOLMAN: And rather than based on promises
of breaking the cycle of poverty, which might or might not, in the end, be mainly smoke
and mirrors. For the “PBS NewsHour,” this is economics
correspondent Paul Solman reporting, mainly from Ontario. AMNA NAWAZ: Tomorrow on the “NewsHour,” more
in our Chasing the Dream series, with a report on helping people remain stable after they
start work and begin to earn incomes again.

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