Universal Basic Income Can Provide a Temporary Fix

Determinants of health reflect underlying forces that are at work in the subsequent development of disease. The World Health Organization has declared poverty to be the single largest determinant of health. Poverty can and does lead to illness (due to poor nutrition, inadequate shelter, greater environmental risks and lesser access to healthcare) but the opposite is also true; illness leads to poverty by reducing household savings, overall productivity, and quality of life for individuals and families. Many people do not realize the cost to the healthcare system that stems directly from poverty. Canadians in the lowest income groups are three times less likely to fill prescriptions and 60% less able to get needed tests because of cost. Living in poverty can double or triple the chances of developing diabetes and complications such as blindness and cardiovascular disease – but it also causes financial problems for the healthcare system itself.

The economy of the 1950s and 1960s was about an unprecedented rise in middle class jobs: there was more room at the top. In 1958, Michael Young wrote a futuristic novel, The Rise of the Meritocracy, a satire on a society stratified by merit. Young coined the term, formed by combining the Latin root “mereō” and the ancient Greek suffix “cracy”, in his essay to describe and ridicule such a society. The story was intended as a warning: if society was viewed as perfectly meritocratic, then disproportionate awards are showered on the elite, and contempt is increasingly shown to those on the bottom. Young mocked the existing education system in Britain, arguing it was simply a centuries-old class system in sheep’s clothing. Typically lacking the best schools, underprivileged children routinely did badly on exams – the standardized intelligence tests that consequently determined their social position.

The cost and pain of poverty in the U.S. is less about basic goods like water and electricity than nonmaterial factors: insecurity, stress, lack of opportunity and discrimination. Also, a study by scholars at Villanova University concluded that mass incarceration has increased the U.S. poverty rate by an estimated 20 percent. Childhood poverty is estimated to cost the United States approximately $1 trillion a year. This is the result of a loss of economic productivity, higher health expenses, and increased criminal justice costs. It is also estimated that for every dollar spent in reducing poverty (in US), the nation would save up to $12 in reduced expenses. The cost-of-living crisis is disproportionately affecting poorer households. With fewer resources to cover rising bills, many are taking on debt just to get by. This has consequences in the short term, but also lengthens the effects of this crisis for the most vulnerable.

Poverty means living with constant worry about having enough healthy food to eat, adequate housing, clothing, not to mention time to get outside, to exercise and to socialize with friends and relatives. This applies not only to those living on incomes in the poorest ten per cent but also to those at each rung up the income scale; the middle class experiences more stress, a higher prevalence of disease and earlier death than high earners, while those with low incomes and living in poverty suffer most of all. Systemic poverty is the root cause of many health and social problems, not to mention the economic toll. People living in poverty face barriers to work such as personal, health, and disability challenges, mental health and addictions issues, a limited number of good jobs, a lack of education and training, discrimination, criminal records, and structural and historical barriers such as those faced by Indigenous people.

Here’s what the evidence tells us. The stress of worrying about the basics of life lowers the body’s defences against disease. As a result, we see a higher and increasing prevalence of all disease (obesity, diabetes, heart disease, stroke, cancer, lung disease, mental illness, addictions and others) among those who are worse off right across the income gradient. Children who go to school hungry and whose parents are under constant stress tend not to learn well and so become discouraged and leave school early. They then are often doomed to repeat the poverty cycle with low-paid work, chronic unemployment, and a greater likelihood of becoming involved in crime and drug addiction as well as early pregnancy. Real life is nothing like the neoliberal narrative. Support for neoliberalism comes from enabling the myths of privatization, deregulation, and retrenchment of the welfare state.

In the late 80s, in Canada, as in many developed countries, the trend began toward smaller government, lower taxes, fewer social supports, privatization, and a reliance on continued economic growth with “trickle down” economics to “raise all boats.” The result has been a flattening of income tax with greater relief for the wealthy, fewer social supports in the way of welfare rates, child benefits, employment insurance (EI) and other income supplements for the poor, and inadequate government investments in social housing, child care and development, education and skills training. The increasing income gap in society is alarming because it erodes social cohesion – a basic sense of trust between people who do not know each other. A reasonable degree of social cohesion is needed so that a society (and the world) can function, and for people to have the chance to increase their opportunities in life. Inequality tests our ethics.

Poverty limits choices. Poor people have limited choices for their diet. They often lack shops in their area where they live, or have trouble reaching them. In particular, the poor have the lowest intake of fruits and vegetables. This leads to consumption of an overabundance of cheaper junk food (high fructose corn syrup drinks and processed foods), leading to more obesity and chronic disease than the general population. Few courageous politicians exist today, as they all look over their shoulders to check that the crowd is following them (to make sure they are still leading), especially as elections approach. They introduce fear tactics, and then check to see if it resonates with voters. It falls to the general public to be the agents of change. We realize we have become disillusioned not because our expectations failed, but because they were false.

Data consistently show that poverty destroys opportunity and causes worse health outcomes. The poorer you are the more likely you will die early. Creating lasting and meaningful plans that use a human rights framework to address poverty would be costly, but not nearly as expensive as doing nothing. Taxpayers’ dollars (federal, provincial and local) are being wasted. Research by economists for the Ontario Association of Food Banks demonstrated that the cost of poverty in Canada is between $72-86B annually (healthcare, soup kitchens, shelters, police, corrections). Poverty could be eliminated for just a fraction of this amount. Enacting policies to end poverty is the best step forward legally, morally and economically. That same report pegs the national health care costs attributable to poverty at $7.6 billion. A 2008 report from the Public Health Agency of Canada estimates that $1 invested in the early years saves between $3 and $9 in future spending on the health and criminal justice systems, as well as on social assistance.

The Sustainable Development Goals (SDGs) were adopted by the United Nations in 2015 as a universal call to action to end poverty and protect the planet; provide the blueprint to achieve a better and more sustainable future for all. The global challenges we face include poverty, gender equality, climate change, food security, sustainable agriculture.  Give poor people cash without conditions attached, and it turns out they use it to buy goods and services as well as improve their lives and increase their future earnings potential. This would buy time for the necessary long-term change: increase pay for low-wage workers (a living wage); increase welfare rates, EI and child benefits; provide universal subsidized child care; invest in social housing, education and skills training; improve healthcare access; and specifically focus on First Nations’ issues. How? reduce the tax breaks, loopholes and offshore shelters for the wealthy, and ensure that our natural resource revenue is used to improve the well-being of all.

The small government and minimal regulations mindset has heralded the globalization of indifference that prevents progressive government initiatives to address the issue. The purpose of UBI on the surface is to prevent or reduce poverty and increase equality among citizens, in reality, it is to control the restless mob. We need to adopt policies that have science behind them. The trickle-down economic theory was rebranded in the 1970s to an ideology – supply side economics – the doctrine that tax cuts could be had for free (incentive effects would generate new activity hence more revenue) without causing budget deficits. An ideology is a set of ideas proposed by the dominant class of a society to all members of this society (that is normative or based on what is considered the normal or correct way of doing something). We must not let laissez-faire apologists explain away various failures during the pandemic by the (false) existence of a vast left-wing conspiracy.

With ongoing deterioration of the economy, it is becoming clear for stability in the community we need to ensure the availability of bread. Universal basic income (UBI) is an answer – perhaps the answer – to long-term economic stagnation – a trickle-up form of Keynesianism that would stimulate our economy through increased household spending. Moreover, if funded by fees on unproductive activities like pollution and speculation, it would help solve two other deep problems of 21st – century capitalism: climate change and financial instability. And it wouldn’t need to replace or reduce spending on current programs that benefit the poor, a regressive trade-off that conservatives favor but most progressives oppose. If the amount is significant enough it could replace a large part of existing welfare and social programs. A lifelong base income, along with health insurance for all, are the next pieces.

With the present economic model now discredited, it’s time to devise a new narrative to guide our economies in a way that prevents neoliberalism’s excesses, promotes universal well-being as an economic imperative and ensures nationalism doesn’t once again win the battle of ideas. Donald Trump’s appearance on the world stage is accelerating our understanding of the scope of failure of the neoliberal version of globalization and the risks associated with not addressing it. This flags the urgency for structural changes in society that need to be taken in order to overcome social problems, as well as avoid the easy-sounding solutions (surveillance, censorship, control, policing, law and order) of creeping fascism, that are now advanced. The need for a steady income among middle-class Americans and Canadians is accelerating as the labor-market changes. The UBI approach buys time for progressives to reform neoliberal capitalism.

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