What If Basic Income Isn’t A Disincentive to Work
“If you give people free money, no one’s going to want to work.”
The consequences of a significant number of Canadians walking away from the workforce would be dire indeed. The economy would take a significant hit, and the amount of money the government collects in taxes would drop, causing services that we depend on to become more expensive, less available, or both.
The fear that people receiving a basic income would just stop working is based on a valid concern.
But is it true?
What if basic income doesn’t disincentivize work?
First of all, it’s important to note that a basic income is just that: basic. No one can get rich off of a basic income. It is designed to be just enough to make sure you can afford food and keep a roof over your head.
Until you are making a reasonable amount of money, any income you earn from work would get added to your total income. The basic tenet of incentive - the more you work, the more money you make - isn’t removed.
So why would people continue to work if they were getting a basic income?
- To get ahead. A basic income is not enough to pay for vacations, the latest electronics, or a new car, or to buy a home. It’s basically enough for food and a roof over your head. For anything else, you would have to find more money, and that’s why most people would still prefer to work. A part-time job would increase your income. A full-time job would increase it more. Going back to school and getting the qualifications for a really good job, and then getting that job, would increase your income substantially. So the incentive to work hasn’t gone anywhere. But the consequences of misfortune, or an uncertain economy, have been softened.
- To find meaning. We tend to believe that we earn money as a reward for the unpleasantness of working. But many people find meaning and value in the work they do, it’s not just a means to a paycheque. Indeed, it’s this search for something meaningful to do with our time that drives many people’s satisfaction at work. It’s when this satisfaction is lacking that people may come to resent their work - but it’s rarely because they don’t want to work, it’s because they aren’t finding it meaningful. If you already find meaning and value in your work, basic income likely isn’t going to change your desire to do it. If you don’t find meaning in your work, basic income offers the opportunity to take a risk - to start a business, to retrain, to start a new job - in order to find more satisfying employment.
- To live healthier lives. It’s extremely stressful to be living on the edge of a financial abyss. To be uncertain about how you’re going to pay for your housing, food or bills. And yet, that’s the reality for thousands of working Canadians, as minimum wage is not a livable wage in Canada’s expensive cities. Working more than forty hours a week can be extremely draining, as can stress and anxiety. Studies have shown that basic income can lower stress and improve people’s health outcomes.
- To have choice and freedom. In our current economy, many people find themselves trapped. Trapped in bad situations with abusive partners. Trapped in dead-end jobs with no hope for promotion or escape. Trapped in the cycle of poverty and homelessness. Trapped in debt. There are a significant number of Canadians who have - through no fault of their own - had their choices taken away from them. Canadians who want to improve their lives, but have no clear path to do so, and no choices available to change their destiny.
"Basic income offers them the freedom to take positive steps forward in their lives."
- To change their lives. When we’re young, we make career decisions based on what interests us in the moment. But as we mature, we also sometimes change our ideas of what we want out of life. At 40, people’s career interests can be very different than they were at 20, and our life circumstances can also be very different. Basic income offers the opportunity to take more calculated risks. Want to start a business, but you can’t afford the gap in income until it becomes profitable? Want to go back to school, to retrain for work that better suits your current interests? Want to make something, like a film, or furniture, or art, or technology? Basic income provides a foundation to change your life for the better, until you no longer need the help.
But where’s the proof?
There have been studies on this very issue with basic income programs all over the world, and they all agree on one thing - there is little evidence that a basic income disincentivizes work.
The majority of studies showed that most working hours stayed the same, or showed slight increases. Some people within certain pilots did show a small reduction in work hours, but that’s because they went back to school, or stayed home to care for children or other family members. Volunteer hours in communities frequently showed an uptick, and some people spent a little longer looking for a job, not because they were lazy, but because they were able to hold out for a better offer and a better fit.
In some parts of the world, hours worked and entrepreneurship actually increased. People wanting to start small businesses were able to manage the financial risks, and before long were becoming job creators. So a basic income can lead to more work and more jobs.
In Ontario’s pilot program, one in four people went back to school for further education. Twenty-five per cent of an entire community upgrading their skills to get better jobs does not suggest a disincentive to work. And as automation becomes more common, training for a new career is going to become significantly more important in a changing economy.
So, if a basic income could help people start businesses, find fulfilling work, retrain for better-paying jobs, parent, or afford childcare so they can get back into the workforce, and it doesn’t actually encourage anyone to just stop working, isn’t it worth giving it serious consideration?