Despite Canada’s biggest province having recently undertaken a universal basic income (UBI) pilot of its own, there’s been very little discussion in our country about the results of a robust American study of the policy approach’s effectiveness. And when I say robust, Sam Altman-backed OpenResearch’s initiative was the Cadillac of studies. A big, honking randomized control trial over a three-year timeline, with impressive influence over external variables (they even got the State of Illinois to pass legislation to make sure) and data collection.
The researchers put the results out in July, setting off a flurry of analysis. Some UBI optimists (often the same optimists with a utopian view of the technology that might make UBI suddenly more relevant) plumbed the depths of the data, trying to put a positive spin on the results, and a number of mainstream media outlets reported on the results with a neutral to slightly positive spin.
But aside from those predisposed to see the upside, most could not avoid the glaring, and seemingly conclusive, results around the impact of cash grants on work. Not only did the UBI not increase health outcomes or lead recipients to skill or train up, but the space created by UBI seems to have mostly been taken up by leisure. In fact, it reduced labour market participation, and, most damningly, reduced income overall.
In other words, it turns out that despite its adherent’s insistence, UBI is not a revolutionary policy tool but rather a far more expensive, far less targeted, far more inefficient way to alleviate poverty—in most cases achieving what various other tax credit and income support programs already do, while disincentivizing work and ultimately hurting economic growth.
As it turns out, if you give too many people too much cash, they work less.
Despite these results though, we shouldn’t blame the tech optimists looking for an alternative to the status quo. We do have a problem with making work pay. Whether it’s tax policy design that claws back benefits as working people earn more, or inflexible childcare and senior care programs that fund rigid service delivery but not informal caregivers, too often in our system work does not pay.
But our response to that should not be, as it is for the tech optimists, to try to decouple work from comfort with no-string-attached, universal cash, inevitably devaluing it. Our response should be to recognize the dignity in work, in all work, by designing policies—tax reform, as well as choice and market-oriented tax credits, and other benefits—that uncovers the hidden labour, much of it the height of dignified, and rewards it.
Indeed, there are active policy debates in the United States and in Canada that contemplate this very challenge. Because while it’s important to design policy that values all work, including work in the home or the community, it’s also important to heed the lesson of Altman’s study that, at a certain point, cash benefits become a disincentive to work.
As it happens, this is at the heart of the ongoing debate about the size and design of supports for parents in the United States. When the pandemic exposed the challenges American parents were facing in balancing child care and work, Democrats and Republicans alike got behind various iterations of plans to increase the Child Tax Credit. A few years ago, Mitt Romney and his former policy advisor, and now think tank head, Oren Cass debated design principles like eligibility and universality. Today, Republicans and Democrats are debating matters of scale, with Kamala Harris and JD Vance engaging in a veritable child tax credit arms race on behalf of their respective campaigns.
Polymer bank notes are shown during a news conference at the Bank of Canada in Ottawa, April 30, 2013. Sean Kilpatrick/The Canadian Press.
Canadians should take some pride in the fact that, years ago, we beat all of these policy proponents to the punch when Stephen Harper designed the Universal Canada Child Benefit. Justin Trudeau doubled down on the model, only to then pivot later into funding a far less desirable universal childcare plan, moving away from valuing all work and towards recognizing only certain childcare labour performed at certain hours of the day, by certain people.
It’s clear that confusion about how to value all work exists across ideological predispositions and partisan lines, and that wealthy, developed countries continue to struggle with the question of how to redistribute money paid in taxes to address poverty and value work. Given the uncertainty, it’s no wonder ambitious people want to find a magic bullet.
But a universal basic income isn’t it. If policymakers want to get on the path to finding the right solutions, they first need to land on clear principles. Principles that hinge neither on the false premise that technologically decoupling labour from comfort is desirable, nor the inhuman view that the only valuable work is that which has a monetary value in the current economy.
Rather, we should direct public policy toward human flourishing.
Is it in the interest of greater human flourishing to take the income tax dollars paid by hard-working Canadians, the corporate tax dollars remitted by growing companies, and the GST paid by those putting food on their own tables and redistribute some of it back to those opting out of the workforce to care for an elderly parent or raise young children? Of course it is.
Is it in the interest of human flourishing to take from that same pot of money and pay to lift the baseline income of anyone in the country, regardless of how he or she chooses to spend his or her time? The answer to that has always seemed intuitive to most people. Now, given the results of last month’s excellent study, we have the evidence pointing to a definitive answer: no.
Ginny Roth is a Partner at Crestview Strategy and a long-time conservative activist who most recently served as the Director of Communications…
