Basic Income Is Already Transforming Life and Work In a Postindustrial Canadian City
In Hamilton, Ontario, a basic income pilot is improving individual lives—but bureaucratic pitfalls and tepid goals can limit its potential.
Illustration: Xavier Lalanne-Tauzia
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Something is happening in the postindustrial pocket of Hamilton, Ontario, a 45-minute drive from Toronto’s gleaming skyscrapers. In its squat downtown, where payday loan services with names like Money Mart and Cash 4 U compete across the street from each other and a beware of dog sign hangs from a church gate, a potentially transformational future is on trial.
Hamilton (population: roughly 500,000 people) was built with steel and smoke, and recent downturns in manufacturing have hit the once-booming steel town hard. A study by the city’s social planning office last year found that in 2014 one in five children there were living in poverty. What’s more, dropping housing prices have made Hamilton something of a destination for would-be Toronto property owners looking for a deal, arguably driving up rental prices in the city even as vacancies increase.
So there was a sense of relief—excitement, even—when the Ontario government announced in mid 2017 that Hamilton had been chosen as one of three cities in the province for a pilot study on the effects of a basic income. A basic income is essentially social support in the form of lump-sum payments with no strings attached, just like income from waged labor minus the work.
As of January 2018, more than 2,000 people in Ontario were getting basic income checks. All of them have applied of their own volition, though some people who met the criteria were sent application packages by the government as an incentive to check out the program. Ultimately, the government wants 4,000 people to participate in the pilot, which has the potential to be rolled out across the province as real policy after the trial runs its three-year course.
Yet the Ontario government has had substantial difficulties onboarding people for the pilot, which is why it enlisted the help of community groups like the Hamilton Roundtable for Poverty Reduction. At the Roundtable’s office in downtown Hamilton, I met a pilot participant, Dave Cherkewski, who chalked up the slow uptake to people’s fear of losing the benefits they already receive, or getting caught in bureaucratic quagmires. This, he said, is the attitude created by living under existing social programs.
Even if the Ontario trial is new, basic income isn’t a novel idea. Anti-poverty advocates have long promoted it as bringing freedom and dignity to the lives of people who need government support.
Recently, basic income has gained support among the political left as a way to both diminish the role of capitalist work in society and distribute the benefits—beyond just company shareholders—of the robot workers predicted to automate more manufacturing and other jobs in the near future. Silicon Valley elites, and even some conservatives, have also gotten onboard. The startup incubator Y Combinator is planning to run a full-scale basic income pilot for 1,000 people after a small but successful 2016 trial in Oakland, California. Finland is currently running its own pilot, and pilots are also being planned in Scotland and in the city of Stockton, California.
Such a broad political base of support hasn’t made basic income uncontroversial. The left is suspicious of it as a Trojan horse for right-wing plots to dismantle social supports, while the right frets about money going to the poor. Many of the people who could potentially benefit from receiving it, meanwhile, can be (understandably) wary of government programs after years of living under the current system.
“I’m most excited about not going to bed hungry once or twice a week"
In Ontario, the basic income trial is open to anybody in the trial areas aged 18 to 64. Single people making under $34,000 annually receive up to $17,000, and couples earning under $48,000 will get up to $24,000 (as a whole sum or as a top-up), minus 50 percent of any earned income. People with disabilities receive up to $6,000 more per year, although they must stop receiving disability supports for the duration of the trial (“basic needs” disability payments in Ontario max out at roughly $8,000 per year for singles with no dependents and $12,000 for couples), which will run for three years.
By contrast, Ontario’s current last-resort social support program, Ontario Works, gives single people roughly $4,000 annually to live on, treating them as “clients” to be managed with case workers and regular check-ins.
Still, this isn’t Canada’s first experience with basic income. The province of Manitoba first tested the idea in the 1970s, and the results suggested that people don’t become lazy slobs when freed from the struggle for survival. Instead, they go to school, get jobs, care for their families, and engage in their community. And while a basic income does cost more than many existing social programs, the cost of persistent poverty to provinces—reinforced, some argue, by services that seek to reduce poverty rather than eliminate it—amounts to tens of billions of dollars annually, through healthcare costs and lost productivity.
That a basic income lets people rethink their relationships with work, and one another, gives it a revolutionary aura for those who want society to move beyond capitalism to something more egalitarian. In a recent book called Postcapitalism and a World Without Work, authors Nick Srnicek and Alex Williams argue that we should automate as much work as possible and distribute the proceeds from robot labor to everyone as a basic income.
It’s these kinds of ideas that proponents say a basic income unlocks—that life freed from waged labor engenders more, fuller life. What new kinds of social cooperation, recreation, or work might emerge?
“A basic income makes people’s lives easier now, and I don’t think capitalism is going to end imminently,” said Evelyn Forget, an economist at the University of Manitoba who studies basic income and is consulting on the Ontario pilot. “But I also think it lets us have these wider conversations.”
This February, I visited a community center in Hamilton where people were signing up for the basic income pilot. Outside of the Beasley Community Centre downtown, I met a 31-year-old man named Ray Ralston. He works as a temp, he told me, meaning his hours can be unreliable week to week. He is not on social assistance. When we spoke, he’d just completed an application to join the pilot.
“I’m most excited about not going to bed hungry once or twice a week,” Ralston told me. “Helping to cut the struggle is basically it.” He’s lived most of his life in Hamilton, he said. “We’ve been hit pretty good here. Downtown still looks like a hockey smile—store, no store, store, no store.” According to Ralston, if everyone had a basic income, the biggest change would be less stress and more cooperation between people.
For Cherkewski, whom I met at the Hamilton Roundtable for Poverty Reduction, participation in the basic income trial means a check for roughly $1,900 CAD (about $1,500 USD) every month, up from $1,150 CAD (around $900 USD) per month from his previous social supports, which included disability payments. Cherkewski, who is 46 and looks a bit like Robin Williams, has lived in poverty for 15 years, he said, after a decade-long career at the telecommunications company Nortel ended when his mental health deteriorated. A basic income has doubled Cherkewski’s spending money, he told me. “I can go out for a meal without suffering for the rest of the week, or the month.”
“You’re surveilled on Ontario Works—it’s a system of denial,” Cherkewski continued. Receiving $1,900 a month stress-free was “almost too good to be true.”
Cherkewski has been an anti-poverty advocate in Hamilton for several years, and with a basic income secured, he now plans to dedicate himself full-time to helping others in poverty. “I want to create a community initiative that helps to get you to a place of recovery, and then helps you turn ideas into reality,” he said. Ideas included healing arts and mental-health services, as well as a work co-op.
In other words, Cherkewski is now receiving financial support for work that would otherwise go unrecognized by the labor market. Arguably, a basic income is enabling him to do this work full-time in the first place.
Another Hamilton resident, Jodi Dean, whom I spoke to over the phone, is in a similar situation. Dean is a 44-year-old mother of three children, the youngest of whom has special needs that require extended care, making Dean a full-time mom. She’s also a part-time student finishing her social work degree. She’s never been on social assistance before, she said, and she and her husband, who works as a manager at a Best Buy, receive $325 per month as a top-up from the basic income pilot. This only amounts to a few thousand extra dollars per year, but it makes a huge difference for her.
“I have a buffer, a little bit of security. I know I’m going to be OK.”
“It has guaranteed that we have grocery money every week,” Dean said. “When the first check came in, my daughter had an out-of-town treatment, and the money was such a relief because it helped with the expenses to take her to Toronto and do everything we needed in the three days we were there.”
The money also allows Dean to pay for her part-time courses, but the biggest difference a basic income has made for her and her husband is a sense of stability. “I have a buffer, a little bit of security,” she told me. “I know I’m going to be OK.”
In Cherkewski and Dean, one of the most impactful elements of a basic income is being realized: Society is recognizing and making possible forms of work that are normally taken for granted. In Cherkewski’s case, it’s volunteer work organized from the bottom of the system up; for Dean, it’s being a dedicated mom and a student. With a basic income, dedicating oneself to these roles does not mean poverty; it means more life.
Basic income isn't a perfect solution to poverty or politics, and this pilot is no exception. For example, going on a basic income in Ontario means giving up your disability benefits. Right now, Ontario’s disability program can cover the remaining costs of assistive devices not paid by Ontario’s Assistive Devices Program, which covers up to 75 percent of the cost. That will now have to be paid out of pocket by individuals on a basic income. This approach smacks of the right-wing ideology, expressed by some politicians in Canada, that sees basic income as a convenient way to justify dismantling existing government supports.
There is also the feeling that the Ontario pilot does not go far enough in divorcing waged labor from a decent standard of living. A basic income could be structured to provide slightly more than existing benefits, but not so much as to remove the incentive to work a job on pain of living miserably.
And then there’s the Reaganite crowd, hand-wringing about layabouts getting their tax dollars. Even for these fiscally conservative types, there’s a business case for eliminating poverty, something a basic income took big strides toward accomplishing during Canada’s previous provincial pilot study in the 1970s. According to a 2018 report published by the Ontario government, a 2008 study pegged the costs of poverty—due to stress on the healthcare system, cost of social programs, lost productivity, and so on—at $32–$38 billion annually just in Ontario, all at the government’s expense. According to the most recent census data, there are 5 million people living in poverty across Canada, a country of 36 million.
So far, the evidence suggests that more money makes people’s lives better, and given the cost of poverty, a basic income likely won’t break the bank. It would probably be too much to say that a monthly stipend below Canada’s low-income measure will transform the country’s economy overnight, but it could start transforming the lives of individuals and their communities. That is where the future begins, and there’s no telling what everyday life will look like if basic income takes hold across Canada, and beyond.
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- Universal Basic Income
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