From the equality of rights springs identity of our highest interests; you cannot subvert your neighbor's rights without striking a dangerous blow at your own. Carl Schurz

Sunday, May 29, 2011

Mincome: A bold experiment that was too successful for it's own good

 In the mid seventies the governments of Canada and Manitoba entered into an agreement to set up a program to study a Guaranteed Annual Income(GAI) which they dubbed Mincome. The study ran for three years before being terminated with all the data tossed into storage and no final report being completed let alone released.

Mincome selected families from Manitoba and assigned them randomly to different GAI plans for three years. The sample took into account family structure, as well as normal income received. They were divided into four groups. One was  a control group that received no assistance The rest were assigned to three different levels of support and claw-back amounts

Three support levels  were used: $3,800, $4,800, and $5,800 (all in $1975) for a family of four. These support levels were adjusted for differing family size and structure and were adjusted annually for inflation Three claw-back rates  were used: 35 per cent, 50 per cent, and 75 per cent. 

Going in and in fact still today one of the believed drawbacks to a GAI is the disincentive to work. What Mincome showed us is that disincentive is relatively minor, about one per cent for men, three per cent for wives, and five per cent for unmarried women.

The delivery of the program proved to be fairly simple with some exceptions however, Farmers, the self employed and those with transient lifestyles proved to be difficult to accommodate.

There was one surprising development discovered during the Mincome experiment and that was the effect that it had on family structure. Families that stayed together solely for economic reasons were no longer compelled to do so, since individual members could continue to receive the GAI separately
after a marriage breakup.  In my opinion this is not necessarily a bad thing given the effects of abuse and unhealthy relationships have on those concerned.

Which now brings us to the great boogyman when discussing GAI, cost! The answer is likely locked up in all those boxes of data derived from the Mincome experiment. Yet when you think of all the income support programs that exist today delivered by various levels of government and a multitude of agencies and government departments along with the inevitable overlap,on the surface at least a GAI and it's simplicity should result in savings. After all most of the recipients of a GAI are already receiving some sort of government assistance. 

One further allure of a GAI is the removal of the stigma some feel when on government assistance, perhaps this is why the Mincome experiment was buried in the first place.