Tuesday, April 25, 2017

What I don't like in the Ontario Basic Income Pilot

I read about the Pilot here 

1. That a person will not be able to retain 100% of what he makes in salaries on top of his universal basic income, biases the pilot in favor of those who argue UBI will diminish the willingness to work.

2. Since the greatest danger for an UBI is that it is set too high from a financial sustainability and incentive distortion point of view… I opine that the pilot, instead of around $1,400 per month should maximum pay $1,000 - $1200. That amount is based on about 50% to 70% of the income that a 40 hours per week employment at minimum wages produces. That said, a general UBI plan needs to start at much lower amounts so as to guarantee its sustainability.

3. Also given the huge transformational impact of UBI, especially in times when structural unemployment is growing, you do not launch a 3-year pilot. You award the UBI in the pilot for life… perhaps picking out the pilot community by lottery.

4. The fundamental principle of UBI is that it is unconditional, so the participants in the pilot should be picked on random not as proposed, by meeting some conditions. In fact the pilot should give us information on how those who really do not need it use an UBI.