Repackaging neoliberalism

Basic income proposals come with big strings attached

Ontario Coalition Against Poverty raises alarm
Photo: AshtonPal

There’s no such thing as a “free lunch” — that’s what the Ontario Coalition Against Poverty wants people to remember when the Ontario Liberals claim their basic income project comes with no strings attached.

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Any support for a basic income scheme within the confines of a capitalist economy is a “big mistake,” warns OCAP in a Sept. 18 statement.

Despite “progressive hopes to the contrary,” the statement reads, basic income “is being developed as a measure of neoliberal attack that should be opposed.”

Ontario’s Liberals unveiled their basic income pilot project in April of this year. The three-year program will include 4,000 low-income people in the Hamilton area, Thunder Bay and Lindsay, and each will receive up to about $17,000 annually — single adults between the ages of 18 and 64 will receive up to $16,989 and couples will receive up to $24,027. People with disabilities will receive an additional $6,000. Those working will lose fifty cents for every dollar earned.

A Trojan horse

But OCAP considers it a Trojan horse of sorts whose first attack will come in the form of cuts to social services that affect people with disabilities while perpetuating the systemic causes of job precariousness and economic misery.

According to a memo obtained by OCAP, people who go on the pilot will have to give up income supplement benefits like the Special Diet Allowance, which can give recipients up to an extra $250 for to address dietary needs related to medical conditions.

“The capitalist system itself requires a job market,” Clarke said, “and economic coercion is very central to the functioning of that job market.”

While the Ontario Association of Food Banks has neither endorsed OCAP’s statement against basic income nor officially come out in support of the pilot project, the organization has stressed the importance of retaining access to these social services for any basic income scheme to be remotely helpful.

From consultations, “one of the key pieces of feedback we shared was that [basic income] should not be an alternate to, or takeaway from, existing programs for those currently using them such as the Special Diet Benefit or Medical Transportation Assistance,” wrote Carolyn Stewart, the OAFB executive director, in an email.

The ODSP’s Special Diet Allowance has been a government target since at least 1995, when the provincial Conservative government of Mike Harris gutted social services by 21.6 per cent. The McGuinty Liberals cut the program in 2005 and 2010 and called it fiscal responsibility. Both times, OCAP’s direct-action protests were instrumental in pressuring the government to restore it.

Since then, the small increases to social assistance benefits implemented under Kathlyn Wynne’s Liberals have failed to keep up with inflation. That is why groups like OCAP continue demanding an immediate 55 per cent increase to social assistance benefits in order to restore their buying power to pre-1995 levels.

Asked multiple times if basic income recipients would have to opt out of the Special Diet Allowance, a government spokesperson answered through an email that individuals would remain eligible for the Ontario drug benefit and dental benefits “if they were receiving them prior to entering the Pilot.”

According to Kristen Tedesco, with the Ministry of Community and Social Services, participants “may be eligible for existing health benefits provided to Ontarians living with low incomes, including dental benefits for kids through Healthy Smiles Ontario, the Trillium Drug Benefit, Assistive Devices Program, Northern Health Travel Grant and other benefits.”

Scramble for precarious work

The government claims it will streamline access to services by cutting down bureaucratic red tape, failing to mention this will mean laying off hordes of case workers. This risks leaving people alone to navigate the confusing web of available supports using services like 211 and community agency directories.

Though these services are far from adequate, OCAP stresses, they are nevertheless vital to many people trying to make ends meet. The pilot, which will run for three years — discounting the time that will be required to study the findings and then come up with a new province-wide or nation-wide program — would effectively suppress struggles to better the services.

“Those in the neoliberal driving seat are happy to ease up on some of the bureaucratic intrusion,” explained John Clarke, a long-time OCAP member and organizer, “precisely because they have been sufficiently successful in creating a scramble for low-wage precarious work and simply don’t need it to the same degree.”

Indeed, over the years, the government has saved hundreds of thousands of dollars by driving down the adequacy of social assistance and making it harder for people to access programs like Ontario Disability Support Program and Ontario Works. This has created such economic misery, precariousness, and desperation that more and more people are scrambling for any low-paying jobs available — no matter how exploitative.

OCAP argues that the proposed pilot does not address the systemic issues that perpetuate those conditions in the first place, namely low wages. In fact, OCAP says, it would work as a subsidy to low-wage employers, removing all pressure on them to provide better wages and on government to legislate it.

The project can thus also be seen as an attack against the social struggles and movements that try to remove those systemic barriers that perpetuate economic misery and job precariousness.

Fight for 15

One example is the Fight for 15 and Fairness Campaign, which has made significant gains in pushing to raise the minimum wage to $15 per hour. The government has laid out a plan to do so by 2019. But the bill is still being debated, and corporations are scrambling to shoot it down, claiming many people would lose their jobs. That is why any basic income implemented without immediately addressing workers’ right to earn a decent, living wage would essentially be giving low-wage employers a free pass.

“Once you start saying to employers that from now on, a significant percentage of what used to be wages is going to be paid out of the general tax revenues, you’ve destroyed any capacity to make gains and to fight and increase wages,” Clarke said. “So you’re institutionalizing working poverty.”

OCAP acknowledges that raising the minimum wage to $15 per hour will in no way spell the end of precarious work. Nevertheless, it argues, it represents a modest victory that would effectively raise the floor on which the wage structure rests, thus providing workers with leverage to pressure governments and employers for better working conditions.

The organization’s statement is therefore also a call to action directed at international progressive organizations. The idea is to raise awareness among people to whom the project appeals of the many traps built into it.

“Ultimately, we hope that we can build a progressive opposition to basic income that actually can rise against the left, liberal lobby that has been put together,” Clarke said.

One of over 30 organizations that have thus far endorsed OCAP’s document is the Toronto-based Parkdale Community Legal Services. According to Mary Gladly, a community legal worker and organizer, the two organizations share the same concerns over the veiled attack on the working poor and people with disabilities.

“When you look at it, it’s about efficiency in the delivering of income supplements,” she said, “which our experience working with government around people on social assistance and precarious workers means that programs will be cut, and it will end up hurting workers and people on social assistance.”

Progressive idea, regressive implementation

This all comes at a time when support for basic income schemes around the country and the world are gaining traction.

While the demand for a truly revolutionary universal basic income has been a staple in progressive and leftist circles interested in reducing the systemic barriers that allow for poverty to continue, more watered down, liberal approaches to basic income have been presented as more palatable in recent times. That is why it has been more easily co-opted even by conservative politicians who see it as away to do away with the welfare state.

“The danger lies in the fact that progressive lobbies for basic income provide legitimacy to those who are actually implementing a regressive measure”

Many have pointed to Finland’s project as a leading model, but critics find that it, too, falls short of any real effort to effect long-term, systemic change, while allowing the government to pass itself off as benevolent and genuinely interested in helping the poor. With its origins in a centrist party interested namely in pushing people into the job market as a way to cut down on the “welfare traps” that supposedly keep people from working, the Finnish model is being examined by many on the left as a cautionary tale.

That’s why OCAP finds the notion of a truly revolutionary basic income taking root in a capitalist system simply impossible. Though the intentions may be commendable, the group considers the “welcome mat” that the left has laid down for basic income projects more dangerous than the scheme itself.

“The danger lies in the fact that progressive lobbies for basic income provide legitimacy to those who are actually implementing a regressive measure,” Clarke said.

Economic coercion

A capitalist system needs a pool of low-wage workers to survive. A truly universal, progressive basic income would soon dry up that pool as it would provide workers with the resources to fight back, including going on strike, and effectively increase labour’s negotiating power.

But a strong working-class in charge of their own labour is not what neoliberal governments like that of Wynne’s, nor employers, want. That would be catastrophic to an economic system where profit-making is based on the exploitation of human labour.

“The capitalist system itself requires a job market,” Clarke said, “and economic coercion is very central to the functioning of that job market.”

Instead, the government seems more interested in giving people some cash that would top their meagre salaries and simultaneously cut down on their own responsibilities towards the most vulnerable sectors of society.

Four decades of neoliberal governments and policies should serve as a strong indicator that the road to truly revolutionary, social transformation will not happen through policies but through action taken by the organized working class.

But this is understandably a hard pill to swallow. How do you convince those who have their backs against the wall, having to decide to eat or pay rent, or rushing from one job to the other just to make ends meet, that a top-up of their meagre salaries is simply a bribe? That it is a way to take more from them, when they already have near to nothing?

It’s a “long and hard fight,” Clarke said, but something they hope their statement helps people understand, on all sides of the political spectrum, as support for it grows.

In the meantime, he added, current struggles to improve minimum wages, working conditions and social assistance rates to pre-1996 levels should be ramped up.

“But there is no immediate solution to that,” he concluded. “We have to start building the fight to turn that situation around.”

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