Thursday, November 10, 2016

Canada: A Universal Basic Income, should never be more than a step-ladder to help reach up to the real economy.

Had Venezuela’s oil revenues over the last 15 years been distributed directly to the Venezuelans by means of a (in this case a variable) Universal Basic Income (UBI), instead of by redistribution profiteers, the poorest of my homeland would have received at least six times more of it, and the country would not be so close to being a totally failed state.

Be sure, the best way to increase the efficiency of our citizen-to-citizen solidarity, everywhere, is to avoid the redistribution profiteers’ tolls.

I am not a Canadian but I have two Canadian granddaughters, and so I have a vested interest in Canada’s future. I firmly believe that a UBI is a very important tool in order to meet many actual and future social and economic challenges.

But the number one objection to a UBI, and which your local redistribution profiteers will try to argue in order to keep their franchise, is that it could reduce the willingness for work.

In this respect, and referring to Andre Picard’s “Basic income is not just about work, it’s about health” Globe and Mail, November 8, I believe that the UBI to be tested, should not be set as is proposed as 75% of low income measure before tax (LIM-BT), $1,320, but as a percentage of the salary you could obtain working, for instance 60% at the minimum salary level. As I calculate it, that would yield $1,100.

For me the biggest benefit of UBI is as a step-ladder that facilitates reaching up to that gig-economy that seems to have arrived as a fixed feature. We do need worthy and decent unemployments.

UBI should never be seen as lifting anyone out of poverty but allowing millions to lift themselves out of poverty.

UBI has much less to do with human rights, "doing good", than with an intelligent society organizing itself for challenging times, "doing smart".

UBI should always be a beautiful citizens to citizens affair. At no moment should it be soiled by referring to it as a government handout. 

Of course UBI has to be funded with real money, no cheating paying it with inflation or public debt. Besides natural savings in the redistribution costs, one interesting alternative is the use of revenues from high carbon taxes. That would align the incentives between the fights for a better environment and against inequality.

PS. Joking but not really joking: Perhaps a payroll tax on robots and driverless cars could also be used as funding mechanism; that would also help us humans workers to be able to compete on a more level playing field.