The Intended and Unexpected Benefits of Guaranteed Basic Income

Technology has progressed in the past few decades, radically transforming our lives, and its development shows no sign of slowing down. More recently, we’ve seen the emergence of artificial intelligence which, through its ability to automate jobs, has the potential to drastically reshape our economy. In fact, as many as half of the jobs in Canada today will be impacted by automation in the next 10 years. The result is that people’s jobs are being changed in ways that they cannot predict, and the youth of today are preparing for jobs that don’t even exist yet. It is consequently of no surprise that many may now be comparing their future in the workforce to that of the horse when the assembly line was introduced.

It is within this context of increasing automation that the idea of basic income has been presented as a means of securing people’s livelihood in the face of job losses by the thousands. What a basic income may look like is open to a wide array of possibilities, for instance, it could be a universal basic income (UBI), whereby everyone regardless of employment status receives a basic income. There is also a guaranteed basic income (GBI) model, where basic income is targeted for certain people depending on their need. CPJ’s briefing note, Towards a Guaranteed Livable Income, offers a set of recommendations for how a guaranteed basic income could address issues of income security. While basic income can come in a variety of forms, the conversation around basic income remains centred around the question of job loss in the face of automation. Particularly, how it can get people working again once their job has been lost.

If the point of GBI is, in fact, to incentivize people to work, the results of Finland’s two-year GBI pilot may be a disappointing result for those who support it as a means to get people working. Preliminary results show that the GBI program didn’t have any effect on unemployment.

However, such a result shouldn’t disqualify GBI as a policy option. GBI has been tried not only in Finland, but also in Ontario, Manitoba, Namibia, and India, and each of these studies had a common result – GBI improved health outcomes for those receiving it.

For starters, although Finland’s GBI experiment had no impact on increasing employment, recipients of the GBI program reported fewer problems relating to their health and stress. This coincided with increased feelings of overall satisfaction in life,  confidence, and concentration, and lowered levels of depression.

Whereas in Ontario, 45 per cent of those receiving a GBI also reported having fewer health problems. This came in the form of people seeing the remission of migraines, fatigue, depression, better management of disabilities, and weight loss. In fact, 40 per cent of recipients reported joining a gym and working towards new fitness goals, one recipient even went so far as to lose 100 pounds while receiving GBI. These improvements in physical health also lead to improved mental health outcomes as well. For instance, 88 per cent of respondents felt less stressed and anxious, while 73 per cent reported feeling less depressed. This was paired with the fact that 28 per cent of recipients were able to stop using food banks and 74 per cent were consequently able to make better food choices as a result.

Likewise, a GBI pilot done in Manitoba during the 1970s, known as ‘Mincome’ resulted in hospital rates for those receiving UBI falling by 8.5 per cent during the test as well as reducing visits to the doctor over mental health concerns. In Namibia, recipients of UBI found that their general health improved as they were able to visit clinics more and they could now afford the clinic’s fees.

Lastly, a GBI pilot in India found that households who received GBI were also able to afford medication, which led to those households being less likely to report an incident of illness during the pilot as a result. This not only led to an improvement in health, but households who received GBI were more likely to continue taking medications as prescribed when sick. This is significant as a common behaviour for those who cannot afford medication is to stop taking them as soon as they start to feel better, which has negative long-term consequences. These households not only continued to take medications but were also more likely to begin spending money on all aspects of healthcare.

While the results of Finland’s GBI experiment may not have been what was hoped for, the fact remains that GBI has proved itself to be effective at improving health. This means that it shouldn’t be written off just quite yet. Considering the fact that in Canada 8 per cent of people report not filling their prescription in the past 12 months due to costs, it may be time we start to look at GBI as a national policy.