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Sam Altman's OpenResearch basic income pilot lifted virtually everyone out of poverty and left working class families financially better off, with a minimal reduction in work hours. For some recipients, basic income helped them take risks leading to better jobs, start new businesses, and pursue education not possible before. Some were able to leave abusive homes, while parents found a more sustainable balance of work and childcare. Money was mostly spent on basics and helping others.
The impact on work was small — equal to an extra 15 minute break a day, or just over 5 hours/month. Most of this reduction was from single working parents. Critics miss this important detail. Numerous stories tell of working parents buying back just a bit of time to spend with their children.
Recipients’ income increased 67% on average by the end of the pilot, compared to 72% for control group, an average difference of $1,500/year. Some critics latched onto this, while losing sight of the fact that total income of recipients was still $10,500 higher than the control group. A society with a basic income leaves those receiving it permanently better off.
People spent more time and money on medical care, like seeing the dentist or doctor. Problematic drinking plummeted. While the study did not find major health changes, the elimination of poverty (the #1 predictor of health) and greater use of health services all point to long-term benefits beyond what a 3-year pilot can measure.
Building on evidence from around the world, this study shows basic income can be safely used to address poverty, provide security in times of transition, improve family incomes amidst extreme inequality, and improve equality of opportunity.
See below for key takeaways from the pilot. For an even deeper dive into the study data and stories: ubiworks.ca/openresearch.
Critics of basic income like to point out the problems of paying everyone an equal amount from taxpayer’s money — no strings attached. The truth is that this imaginary UBI program is not at all what advocates and policymakers working on basic income are actually for, nor what any government is seriously considering.
There are 2 dominant models of basic income: 1) a guaranteed basic income (GBI) for low-income households to reduce poverty and encourage work, and 2) a universal basic income (UBI) distributed to everyone as a dividend from a public fund or natural resource. Common critiques on cost, inflation, and work incentive simply don’t apply because they imagine something entirely different.
The political focus today is on the former, a guaranteed basic income aimed at reducing poverty. The amount declines gradually as earned incomes rise to minimize work disincentive, making it an order of magnitude cheaper than a paying everyone the same amount. We already have working examples of this today in child and seniors benefits, which have been overwhelmingly successful in lowering poverty rates. This model was also being tested in the Ontario Basic Income Pilot, which guaranteed a single person $17,000/year and phased out by $0.50 per $1 of work income. This is a different design than Sam Altman’s pilot, which paid recipients a flat $1,000/month unconditionally.
Basic income can be funded without taxing working Canadians, can grow the economy more than it costs, and would save taxpayers from the even higher costs of poverty. In Canada, a broad-based GBI for working aged adults could cost as low as $24B or 2.5% of all government spending. According to the Parliamentary Budget Officer, such a program would have “very low” impact on work — about 0.6% or “a few hours a year”.
In contrast, UBI is about sharing wealth from a public fund or resource, like Alaska’s oil dividend which pays every resident $2,000/year, or Sam Altman’s proposal for a US AI dividend fund. Prominent conservative organizations Canadian Taxpayers Federation and the Fraser Institute have both championed calls for Alaska-style resource dividends to Canadians. These serve an entirely different purpose: whereas a GBI targets poverty, UBI is a dividend from something we all have a claim to. In fact, the most influential UBI advocates are generally unanimous that it should be financed this way.
Critics point to CERB as an example of UBI not working, but this is another case in point of what basic income is not. CERB had a crippling disincentive that no basic income program would ever have, where people lost the entire amount when they went back to work. Even the Conservatives under Scheer proposed changing it to be more like a GBI with a gradual clawback that rewards work. They called it the “Back To Work Bonus”.
Because critiques don’t typically reflect an understanding of these distinctions, they’re misinformed at best and strawman arguments at worst. No government is seriously considering a taxpayer-funded basic income that pays everyone equally. This imaginary policy achieves neither purpose of a GBI or UBI dividend. Critics are usually arguing about an idea that will never be implemented.
So let’s get this straight. Guaranteed basic income reduces poverty, saving lives and money. UBI shares wealth as a dividend. We already have successful working examples of both — let’s just build on those.
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To shift the conversation about basic income to recognize it as an economic need and economic opportunity, with the goal of seeing UBI implemented in Canada.
We want a Canada where everyone can pursue their potential and not be held back by basic material constraints or unsafe environments.
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