Fascinating Story of Basic Income: A Town without Poverty, with Better Well-being and Health

Try to imagine a town where the government pays each of the residents a living basic income, regardless of who they were and what they did.
For a four-year period in the 1970s, families in Dauphin, a small rural town in Canada, were granted a guaranteed minimum income by the federal and provincial governments. Unlike welfare, which only certain individuals qualified for, this guaranteed minimum income project, called MINCOME, was open to everyone. Most important for an agriculturally dependent town with a lot of self-employment, MINCOME offered stability and predictability; families knew they could count on at least some support, no matter what happened to agricultural prices or the weather. They knew that sudden illness, disability or unpredictable economic events would not be financially devastating.
It was the first—and to this day, only—time that Canada has ever experimented with such an open-door social assistance program. For four years Dauphin was a place where anyone living below the poverty line could receive monthly cheques ($1,200 and up, amount was variable due to family characteristics) to boost their income, no questions asked. Single mothers could afford to put their kids through school and low-income families weren’t scrambling to pay the rent each month.
As part of the experiment, an army of researchers were sent to Dauphin to interview the Mincome families. Residents in nearby rural towns who didn’t receive Mincome were also surveyed so their statistics could be compared against those from Dauphin. But after the government cut the program in 1978, they simply warehoused the data and never bothered to analyze 2,000 boxes of documents. Government officials opposed to Mincome didn’t want to spend more money to analyze the data.
Until now little has been known about what unfolded over those four years in the small rural town, since the government locked away the data that had been collected and prevented it from being analyzed. But after a five-year struggle, Evelyn Forget (University of Manitoba) secured access to those boxes in 2009. Forget has begun to piece together the story by using the census, health records, and the testimony of the program’s participants. What is now emerging reveals that the program could have counted many successes.
Initially, the Mincome program was conceived as a labor market experiment. The government wanted to know what would happen if everybody in town received a guaranteed income, and specifically, they wanted to know whether people would still work. It turns out they did! The research results were encouraging to those who favour the idea of a guaranteed income.
Only two segments of Dauphin’s labour force worked less as a result of Mincome—new mothers and teenagers. Mothers with newborns stopped working because they wanted to stay at home longer with their babies. And teenagers worked less because they weren’t under as much pressure to support their families.
The end result was that they spent more time at school and more teenagers graduated. Those who continued to work were given more opportunities to choose what type of work they did. “People didn’t have to take the first job that came along,” says Ron Hikel who coordinated the Mincome program. “They could wait for something better that suited them.”
Although the Mincome experiment was intended to provide a body of information to study labour market trends, Forget discovered that Mincome had a significant effect on people’s well-being. In the period that Mincome was administered, hospital visits dropped 8.5 per cent. Fewer people went to the hospital with work-related injuries and there were fewer emergency room visits from car accidents and domestic abuse. There were also far fewer mental health visits.
The involvement of friends and neighbours in the project might have led to changes in social attitudes and behaviours that influenced individual behaviour even among families that did not receive the supplement.
The moral of this fascinating story is that a guaranteed basic income, implemented broadly, may definitely improve health and social outcomes at the community and society levels and bring about significant positive social and economic benefits. But the point is, whether such kind of program will be implemented –this is essentially a political decision.