Enough to live on

The case for guaranteed income and the end of the growth economy

Precarious work is on the rise in Canada. Although the quantity of jobs has increased, often dramatically, during recent years of economic boom, there has also been a strong tendency for full-time, relatively well-paid jobs with benefits and security of tenure to be replaced by part-time, short-term, insecure jobs that pay low wages and provide no employment-related benefits. As a result, the level of economic insecurity of most individuals and households in Canada has increased significantly over the last several years. The National Council of Welfare points out that there were 4.9 million people living in poverty in Canada in 2003, which is 700,000 more than the entire population of British Columbia. Additionally, the Inequality Project of the Canadian Centre for Policy Alternatives documents that “in 2004, the richest 10 per cent of families earned 82 times more than the poorest 10 per cent—-almost triple the ratio of 1976.” Adequate nutrition, decent housing, and post-secondary education have moved increasingly out of reach for those caught in the precarious employment trap.

Perhaps a big part of the problem is the way we understand “work” itself and the way we compensate it. “Work” should be understood as all that we do to provide ourselves and others with basic necessities, socially useful products and services, and the care and nurturing that we all require as social, interdependent beings. Work is done not just in the labour market for wages or a salary, but also in the home and the community—-though this unpaid work is seldom recognized as such.

If we are to move beyond precarious paid employment and ensure a decent standard of living for all, a critical step in this direction would be the introduction of a basic income—-a universal, unconditional income granted by the state to all residents of a country that would meet the cost of essential needs and thereby ensure an adequate standard of living for everyone. Redefining work by providing a basic income for all would be an important step towards both social justice and environmental sustainability.

The welfare state and the “full employment” model

Emerging from the Second World War, Canada and other Allied nations were determined to avoid a repeat of the Great Depression of the 1930s, which ended in 1939 only after massive government spending to mobilize people and industry for the war effort. Citizens of the industrialized world were led to believe that full-time, secure, non-precarious employment was to be the bedrock of economic security in enlightened capitalist economies, and that the state would play a crucial but largely indirect role in ensuring this security. This economic model became known as the Keynesian welfare state after the influential liberal economist John Maynard Keynes, who preached active government involvement in the economy as a means of correcting, and softening, the periodic downturns of capitalism.

The Keynesian welfare state that took shape in Canada and other industrialized democracies in the postwar period was premised on a “full employment” economy, in which well-paying and secure jobs would be plentiful and would provide all households with a decent standard of living. Instead of producing tanks, ammunition, and other military hardware, Canada’s postwar industry would be largely devoted to the manufacture of family cars, refrigerators, and other household commodities.

A crucial element of this scenario was a postwar compromise between labour and capital, in which both labour and management rights were formalized. Orderly collective bargaining was to be the means through which workers would achieve decent pay, better benefits, improved working conditions and job security. Goods would be produced and services would be provided by a full-time, predominantly male, and largely unionized labour force. Not only would management-labour peace be ensured, but workers and their families would also have the money to buy the products that they were mass-producing.

This arrangement was to ensure high levels of consumption, a modicum of economic equality, and ongoing prosperity. Income security programs of the state such as unemployment insurance, the family allowance, and old-age pensions would be made universally available. However, such programs were primarily intended to fill temporary gaps in family earnings by the male breadwinner. They were not intended to provide basic economic security or to permanently or fully replace wages or salaries.

This postwar vision of prosperity was in some ways attractive. Postwar economic collapse was averted through a relatively smooth transition from wartime to peacetime production. But the realities of the postwar Canadian economy differed in significant ways from the Keynesian vision of full employment and social welfare provision.

Capital did not take its accord with labour to heart and Canadian unions embarked on long and bitter strikes in the late 1940s for the right to organize and bargain collectively, for decent wage and benefit packages, and for basic protection from the absolute and arbitrary power of bosses. Also, belying the myth of the male family breadwinner, women continued to play a vital (and from the 1960s onwards, a growing) role in the paid labour force. The capitalist economy continued to suffer periodic downturns marked by high rates of unemployment and economic hardship for the working class.

Although welfare state programs expanded significantly in the 30-year period from the mid-1940s to the mid-1970s, they did not eliminate poverty or provide a basic level of economic security for all. This failure was particularly acute for economically marginalized groups such as single mothers, persons with disabilities, the elderly, women, Aboriginal people and immigrants.

And finally, the Korean conflict, the Cold War, and American involvement in Vietnam meant that a significant proportion of production in both the U.S. and Canada was devoted to nuclear stockpiling and conventional warfare rather than the economic betterment of the general population. For all of these reasons, the postwar goal of full employment in a peacetime economy was never fully or consistently achieved.

Neoliberalism’s rise

The abandonment of the vision of a full-employment Keynesian welfare state occurred without fanfare about 30 years after the end of World War II. In the mid-1970s, the process of neoliberal globalization began to reshape the international political economy. A massive, sustained and, in the end, successful ideological campaign was launched by transnational business interests with the support of right-wing political parties in various countries to deregulate the economy, cut or eliminate social programs, and privatize public assets.

In this ideological climate, the commitment of the state to full employment and collective economic security was dramatically weakened. Instead, political decisions were taken to make individuals and families responsible for their own economic well-being in a risky and unpredictable labour market. Workers were to become, as it were, professional trapeze artists leaping from one job to another without much in the way of a social safety net to catch them if they fell.

Highly industrialized countries like Canada experienced a deindustrialization of sorts, as transnational corporations closed factories and shifted work to poorer countries in Asia and Latin America where workers earned a fraction of the wages their North American and European counterparts used to receive. This international division of labour meant that workers all over the world were increasingly pitted against one another in a climate of widespread precarity: low job security, weakened or non-existent workplace rights and protections, and safety net programs that were partial and tattered at best.

In Canada, the results of this shift have been predictable: rising levels of economic inequality in a climate of increasing economic insecurity and deprivation. These conditions have persisted in spite of protracted periods of economic growth, which suggests they are not accidental, but rather a deliberate outcome of the proper functioning of the system—-extreme wealth being generated by the production of extreme poverty.

Under neoliberalism, there has also been an entrenchment in public consciousness of the view that everyone must work for wages in order to survive, and that we have only ourselves to blame if we live in poverty. This view has led in turn to broad public acceptance of the supposed need to cut social programs, especially those that are aimed specifically at helping people in poverty.

In the midst of this dismantling of the social safety net, the supposed commitment of politicians to full employment and universal social welfare measures was quietly dropped from electoral platforms across the political spectrum. Instead, neoliberalism came to dominate the thinking of economists and politicians in the 1980s and 1990s.

An unfettered and dynamic capitalist economy, rather than labour market regulation or social welfare programs set in place by government, was supposed to create jobs and enable the economic survival, perhaps even the enrichment, of those willing to work hard and be entrepreneurial in a lean and mean labour market. Although many jobs would be poorly paid, insecure, and precarious, the social Darwinist ethic of the new economic order proclaimed that those who deserved to thrive, would. For those who did not thrive, well, that question was either ignored, or in some instances punitive measures such as workfare, which requires social assistance applicants to work for their benefits, were set in place to spur on the “unmotivated.”

From full employment to guaranteed income

Much of the Canadian Left expends its energies defensively pushing to replace the neoliberal model of a full-employment economy with the old Keynesian model of a full-employment economy. But in fact, a deeper, more radical leap is required: for the sake of social justice and the environment, we need to scrap the full-employment paradigm entirely and start thinking about work and income in fundamentally different ways.

In both the old Keynesian welfare state model and the new neoliberal economic model, only paid jobs in the labour market count as “real work.” The work of raising children and doing domestic labour, as well as other forms of unpaid work such as gardening, volunteer community service, and non-commercial artistic production, are not recognized as valid or valuable activities that contribute to the health, wealth, and resilience of a society. Unpaid work is considered to be largely without value.

But all of these forms of labour have tremendous social value. In fact, the “reproductive” labour of maintaining households and bearing and nurturing children in loving families is absolutely essential, not only to the well-being of the economy but to the very survival of the species.

As political communities, using mechanisms available through our elected governments, we must begin to recognize the value of unpaid work in its various forms as socially necessary and useful. A guaranteed adequate income or “basic income” for all would provide such recognition by ensuring that we need no longer choose between paid work and poverty.

The financial recognition of the value of unpaid work is not just a moral imperative—-it is also a practical necessity. The looming environmental crisis we face, with its interrelated problems of global warming, pollution, depletion of key resources including oil and natural gas, and rapid loss of biodiversity, calls for a radical rethinking of our economic assumptions and models.

The goal of unregulated and indiscriminate economic growth is simply unsustainable in environmental terms. Not to put too fine a point on the argument, but given the gravity and immediacy of the threats to the natural environment upon which we all depend, our addiction to economic growth and the endless accumulation of wealth amounts to a collective death wish. If the human species is to survive on an ecologically troubled planet, open-ended economic growth quite simply must come to an end.

Instead, we must be guided by the principles of steady-state economics—-the creation of a stable economy with stabilized population and consumption—-and we must take immediate and concrete measures to reduce inequality by redistributing wealth on both the national and international levels.

In an ecologically benign and socially just economy, “work” would be defined as the necessary and useful effort of humans to sustain themselves, nurture their families, contribute to their communities, and produce necessary goods and services in the least environmentally taxing ways possible. Much of the work performed in such a society would still be done for a wage or salary. Markets in labour, goods, and services would not disappear. But value would also be attached, and financial recognition granted, to socially necessary and useful work done outside the paid labour market. We would have the freedom to undertake unpaid work for some or all of our time, to enjoy additional leisure time, and to undertake personal projects of our own choosing.

Enough to live on

If we are to have not just hypothetical but real choices between unpaid and paid work, a livable income must be provided to people through other means, such as the introduction of a guaranteed adequate income for all. Such a model is advanced by the Basic Income Earth Network (BIEN).

BIEN was founded in 1986 as the Basic Income European Network, and in 2004 broadened its geographic scope and substituted “Earth” for “European” in its name. BIEN defines basic income as “an unconditional income granted by a political community to all of its members in an amount that will meet basic needs.”

A basic income would have no means test and no work requirement, would be paid to individuals rather than households (giving persons freedom to leave oppressive or abusive family situations), and would be paid at the highest sustainable level. A basic income could thus provide a livelihood independent of one’s participation or status in the labour market.

To ensure distributive justice and to provide a financial base for the program, a basic income program would need to be combined with a progressive taxation system that would recover money at reasonable rates from high-income earners and profitable businesses. A basic income program could also be structured so as to provide a base of guaranteed adequate income for all, as well as additional and more specialized income security measures for those with particular needs (such as disability) and/or extra costs (such as raising children) that place additional financial burdens upon them.

With a basic income system in place, it would still be reasonable to expect that most people would continue to hold jobs in the labour market for at least some part of their adult lives. It would also be likely, however, that patterns of employment would change in important ways.

People would be free to work only part-time without forsaking a comfortable lifestyle. They could exit the labour market completely for shorter or longer periods of time in order to care for children or other family members, pursue advanced education or other personal goals, do unpaid community work as artists, activists and volunteers, and engage in subsistence-related activities like gardening. A basic income would also give individuals the freedom to forgo jobs in the formal labour market that are poorly paid, unfulfilling, or dangerous.

In giving such leverage to potential labour market participants, a basic income could have indirect benefits such as raising wages in the lowest-paid sectors of the labour market, improving working conditions, enhancing workplace democracy, and supporting unions in their efforts to organize workers and achieve good collective agreements.

The concept of basic income is often criticized by people from both the right and the left sides of the political spectrum. Critics on the right see it as a scheme that would reward people for “doing nothing,” and argue that it would promote idleness and perhaps even moral depravity. In response, it can be argued that more economic “idleness” would be a good thing for the environment. Downsizing activity in the paid labour market would enable us to spend more time with our families, engage in personal development, make our communities better places to live, and enjoy leisure pursuits that do not threaten the ecological health of the planet.

Meanwhile, critics on the left fear that the level of benefits in any basic income system that succeeds in being implemented would be inadequate for a modest but dignified standard of living, that necessary public services or specialized income support programs would be sacrificed to fund a basic income, or that it might be used in the labour market as merely a subsidy for cheap labour.

It is true that some minimalist and inadequate versions of what might be passed off as “basic income” could be worse than the status quo. On the other hand, our current system has already demonstrated its inability to provide economic security. A generous and well-designed basic income scheme that provides an adequate level of benefit would eliminate the bureaucratic costs of “welfare policing,” and could simplify and streamline the current ineffective and inefficient maze of income security programs.

Basic income in and of itself is not a magic bullet to ensure just economic distribution or broader social justice. We would still need high quality and readily accessible programs like universal health care, including enhancements such as home care, drug coverage, and preventative services. We still must fight for a national child care system in Canada, both to optimize child development, and to ensure that women are not involuntarily trapped in the home with young children and thereby excluded from labour market opportunities. We would still require a range of specialized social services in fields such as mental health, addictions, social housing, disability, and child protection. Along with these other components, however, basic income could be a vital component in the transition to a society based on green economics and the recognition of unpaid work.

It is an urgent priority that we embark on this path and make measurable progress very soon. The interconnected goals of meaningful, fulfilling and non-precarious work—-paid or unpaid—-and universal economic security beckon us. The imperatives of economic and social justice point the way, and the looming environmental crises we face give us no other choice.

Jim Mulvale is a faculty member in the Department of Justice Studies at the University of Regina, and the author of Reimagining Social Welfare: Beyond the Keynesian Welfare State (Garamond Press, 2001).

Basic Income resources

Basic Income Earth Network

www.etes.ucl.ac.be/BIEN/Index.html

Global Basic Income Foundation

www.globalincome.org

Ending Poverty: A Basic Income for All Canadians

by F. Blais (Lorimer, 2002)

Basic Income: Economic Security for All Canadians

by S. Lerner, C. Clark and W. R.Needham (Between the Lines, 1999)

Basic Income Studies

An International Journal of Basic Income Research

www.bepress.com/bis

Wikipedia entry on “guaranteed minimum income”

en.wikipedia.org/wiki/Guaranteed_minimum_income

Canadian Society for Ecological Economics

www.cansee.org

Centre for the Advancement of the Steady State Economy

www.steadystate.org

The Encyclopedia of Earth entry on “steady state economy”

www.eoearth.org/article/Steady_state_economy