Make the social net more equitable

Having money does not make somebody smart. It makes them wealthy. Similarly, not having money does not make someone stupid.

Having money does not make somebody smart.

It makes them wealthy.

Similarly, not having money does not make someone stupid.

But society rarely credits our impoverished citizens with intelligence.

It views them with suspicion. And well-paid agents tell clients precisely what they must do with the social assistance the government doles out.

The help comes with strings attached because the state assumes it knows what people need to have better lives.

But, as we know, our governments sometimes have a hard time planning a subdivision.

So, let’s go to crazy town for a minute.

Why not simply give the poor a wage, with no strings attached? Cut the red tape, the case workers and the thousands of rules and simply pay them a guaranteed income.

Nuts, right?

Not really.

Under the current social service regime, the wage gap is growing and poverty is not going away.

Six in 10 Canadians would be in financial trouble if their paycheque were delayed a week, according to a poll conducted last year by the Canadian Payroll Association.

One in 10 Canadians lives below the poverty line. And, despite our wealth, our record on child poverty is at best one of neglect. If you factor in aboriginal communities, it is abysmal.

Every month, 770,000 Canadians use food banks, and almost half of those relying on them are children.

This suggests the current system isn’t working all that well.

So, perhaps it’s time to try something different. Something radical.

Something simple.

Get rid of social assistance. And EI. And Old Age Security, supplementary pensions, student grants, housing subsidies, child tax benefits and the myriad programs that service the nation’s poor.

Instead, guarantee everyone a minimum annual income – somewhere between $12,000 and $20,000, or whatever society decides would provide folks with an acceptable life.

And then, let them live it.

Any money a Canadian citizen earns above the grant would be theirs to keep.

Such a program would remove the stigma of being a recipient. People would be better off working, because any money they earned above the guaranteed income would be theirs, though taxed at normal levels.

And, at a tax rate of 50 per cent, middle-income Canadians would be forced to pay the state back half the grant in taxes anyway.

Fraud would be eliminated, because everyone would get it. And you couldn’t get a more efficient delivery.

The Fraser Institute, in a paper suggesting such a plan, estimates it would cost about the same as the existing social net. But some of the cost would be recovered through taxes on those who were better off.

There is plenty of evidence that, if such a system were in place, people would manage their money better than the bureaucrats we currently task with strong-arming them into better lives.

In developing nations, where such programs are becoming common, the effect has been to greatly reduce childhood poverty and improve literacy.

If you give people money, most spend it caring for their children and invest whatever is left to improve their own income, through education or whatever.

Studies by the World Bank have also shown such measures improve health and education.

And in Britain, the “personalized budgets” offered the elderly and infirm were expanded to an admittedly small test group of impoverished people as well. Nine out of the 15 people in the study moved into better housing, said a report in the Globe and Mail.

It wasn’t a total success. One person went to jail, another couple moved out of housing. But most spent their wages on food, clothing and shelter.

A federal parliamentary committee has also recently examined the issue.

It’s really not that hard to see why.

Such a system would be far easier to administer than the existing one, with its overlapping bureaucracies and case workers who are tasked with interpreting hundreds of rules, often trying to manipulate them to fit oddball circumstances.

Government programs are often about simply getting people off the streets. Perhaps the goal should be about normalizing them – making society more equal, come what may.

Perhaps it’s time to remove the stigma and shame that comes with our existing social programs, and the way they are administered.

Maybe it’s time for a little more trust.

Society must remember that poverty is not about being stupid. It’s about not having money.

And that’s something completely different. (Richard Mostyn)

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