Hugh Segal, Guaranteed Incomes and Trade-offs

Blog, Poverty, Ben Eisen

Another piece in The Globe and Mail today on the idea of a guaranteed national income.

To clarify a point I made in a previous post, the fact that there is some evidence that a negative income tax (NIT) would somewhat discourage work effort does not necessarily mean it is a bad idea. Few public policies are perfect – most have advantages and disadvantages. If a guaranteed national income had a significant effect in terms of reducing poverty but slightly discouraged work effort, it may be well worth the trade-off.

I’m still not 100% on board with Segal’s policy proposal, but he is right in arguing that our current approach to fighting poverty does not seem to be working as well as most of us would like. Lane Kenworthy of the University of Arizona has produced research showing that household income gains at the bottom of the income distribution in Canada have been significantly slower than in many other OECD countries in recent decades. Figuring out exactly why this is happening and what to do about it should be an urgent priority for Canadian policymakers. Segal deserves credit for shining a light on the problem and for forcefully presenting the case for one potential solution.