People kept working, became healthier while on basic income: report

Participants in Ontario's prematurely cancelled basic income pilot project were happier, healthier and continued working even though they were receiving money with no-strings attached.

That's according to a new report titled Southern Ontario's Basic Income Experience, which was compiled by researchers at McMaster and Ryerson University, in partnership with the Hamilton Roundtable for Poverty Reduction.

The report shows nearly three-quarters of respondents who were working when the pilot project began kept at it despite receiving basic income.

That finding appears to contradict the criticism some levelled at the project, saying it would sap people's motivation to stay in the workforce or seek employment.

"They continued working," Wayne Lewchuk, an economics prof at McMaster University who was part of the research team told As It Happens.

"Many of those who continued working were actually able to move to better jobs, jobs that had a higher hourly wage, that had in general better working conditions, that they felt were more secure."

The three-year, $150-million program was scrapped by Ontario's PC government in July. At the time, then-social services minister Lisa MacLeod, said the decision was made because the program was failing to help people become "independent contributors to the economy."

On Wednesday a spokesperson for Todd Smith, the current minister of children, community and social services sent CBC a statement saying the government is focused on programs aimed at empowering "unemployed or underemployed" people across the province.

"A research project that included only 4,000 individuals was not an adequate solution for a province where almost two million people are living in poverty," wrote Christine Wood. "We are focused on solutions for Ontario that are practical and sustainable."

A 'low-cost way' to build a foundation

But the report points to a wide range of positives after just one year.

Its findings are the result of a 70-question, anonymous online survey made available to basic income recipients in Hamilton, Brantford and Brant County. A total of 217 former recipients participated, according to the report.

Forty in-depth interviews with participants were also completed in July 2019.

"I remember one individual who said 'Look, I was on the edge of suicide. I just felt nobody cared about me. I didn't know how to make ends meet and now with basic income I feel like I can be part of society,'" Lewchuk recalled.

Nearly 80 per cent of respondents reported better overall health while taking part in the program. More than half said they were using less tobacco and 48 per cent said they were drinking less.

When it came to mental health, 83 per cent of those surveyed described feeling stressed or anxious less often and 81 per cent said they felt more self-confident.

An improved diet, better housing security and less-frequent hospital visits were other outcomes respondents pointed to, along with 66 per cent who said they formed better relationships with family members.

"What became clear is that as people moved to some stability their health improved, their mental health improved, their outlook on life improved," said Lewchuk. "You have to believe that actually made them more employable."

That's in contrast to the situation for participants once the plug was pulled.

"Almost all survey respondents indicated that the pilot's cancellation forced them to place on hold or abandon certain life plans," reads the report.

The project worked by recruiting low-income people and couples, offering them a fixed payment with no strings attached that worked out to approximately $17,000 for individuals and $24,000 for couples.

Whatever income participants earned was deducted from their basic income at 50 per cent, meaning once someone hit $34,000 they wouldn't receive a payment anymore, Lewchuk explained while speaking with As It Happens.

A 'tragedy' pilot didn't run for 3 years

The basic income payments were about 15-20 per cent higher than ODSP, said the professor, but the benefits of people visiting the hospital less often and paying more taxes would offset that cost.

"In terms of the net cost to a province, it's not monumental."

Lewchuk added that while some people did stop working, about half of them headed back to school in hopes of coming back to a better job.

He acknowledged the report's findings are only based on short-term effects but, given the project has been shut down, it's all they have.

"We just don't have the data to understand what happened in the long run. This is the tragedy of the pilot not running for three years."