In this article, Rachelle Younglai details the Ontario government’s plan to introduce a basic income, which will provide 4,000 residents in Hamilton, Thunder Bay, and Lindsay with an opportunity to either improve their quality of life or improve their job prospects.
Appropriate Subject Area(s):
Economics, personal finance.
Key Questions to Explore:
- Why is the Ontario government rolling out a basic income?
- What does the Ontario government hope to achieve with this experiment?
- What are the pros and cons of the basic income guarantee?
- How will the government fund the cost of the basic income?
- A basic income guarantee ensures all residents receive a regular sum of money from the public purse, regardless of their work status. It provides recipients with sufficient income to meet basic living needs.
A copy of the article.
Introduction to Lesson and task:
The Ontario government recently announced a three-year pilot program for a basic income guarantee, which will provide 4,000 single recipients in Hamilton, Thunder Bay and Lindsay with up to $16,989 annually.
The goal is to enable residents to increase their standard of living, reduce poverty levels and improve job prospects by providing funding to enroll in programs which will increase education levels/skills.
The recipients for the three-year pilot program will be selected randomly. It is targeted towards individuals receiving social assistance, earning a minimum wage and workers living below the poverty line.
The Ontario Basic Income Pilot will ensure that participants receive:
- Up to $16,989 per year for a single person, less 50% of any earned income
- Up to $24,027 per year for a couple, less 50% of any earned income
People with a disability will also receive up to $500 per month on top.
It appears that the government has selected areas which have been adversely impacted by globalization and technological advance. For example, Hamilton has undergone years of economic woes with the decline of the steel industry and Thunder Bay has suffered from the elimination of forestry jobs.
The basic income will cost the Ontario government $150 million over three years. The government will assess the program’s success in Hamilton and Thunder Bay based on its impact on the lives of recipients. Lindsay, on the other hand, will be assessed on the impact on the entire community.
The pros of the basic income include the following:
- It will improve the health and quality of life of recipients.
- It will increase their standard of living.
- It will remove the stigma of collecting social assistance, as recipients are randomly selected.
- It could Improve the job prospects of recipients, if they invest this extra income into developing professional skills.
- It will reduce the number of individuals living below poverty levels.
- It will enable individuals to deal better with financial shocks like temporary unemployment.
The potential cons of the basic income include the following:
- It may lead to a reduction in funding of other essential public services. For example, the recent budget cut tax credits for public transportation passes.
- Basic income might give workers an incentive to drop out of the workforce or reduce the number of hours they spend working.
- Basic income could lead to an increase in labour costs if it reduces the labour participation rate.
Action (Lesson plan and task)
Engage your students in a short discussion about the reasoning behind the basic income, the pros and cons of the basic income, and finally, the goals of the program.
- Ask your students to state the goals of the basic income. (Improve job prospects and quality of life).
- Ask your students to state some factors that might hinder the government from achieving these goals
Divide your students into two equal groups for the next activity.
Task for Group #1
- Ask them to explain the basic income guarantee to the class.
- Ask them to state the pros of the basic income.
- Ask them to them to advocate for widespread implementation of the basic income across Canada.
Task for Group #2
- Ask them to state the cons of the basic income program.
- Ask them to argue against widespread implementation of the basic income across Canada.
After this activity, revert to the full class as follows:
Ask your students to state how they would spend a basic income if they received annual payments from their provincial government.
Ask them to state if they would be more likely to spend this additional income towards developing certain skills or towards improving their quality of life.
Ask your students to state if they would still look for summer/part-time jobs if they received a basic income of $16,989.
Ask your students to conclude whether they believe basic income is necessary, considering technological advances we have seen in recent times.
(It is important to note that globalization and technological advancement has lead to the elimination of many jobs in manufacturing and agriculture. Thus, a significant number of workers will need to develop new skills to improve their job prospects.)
Consolidation of Learning:
- Ask your students to state the target audience of the current basic income, and explain why workers in these communities have been selected.
- Students should also explain how a basic income could positively affect people’s lives .
- After completing this lesson plan, students should have a better understanding of the basic income.
- The basic income guarantee is also being tested in Kenya and Finland. For a better understanding of the topic, you can ask your students to research results of this experiment in these regions and share their findings with the rest of the class.