If we can’t get a basic income, we should at least get a jobs guarantee

OPINION: It’s clear that the Liberals have no stomach for a permanent basic income. Maybe we can talk them into a permanent wage subsidy instead
By John Michael McGrath - Published on Apr 29, 2020
(Prime Minister Justin Trudeau announces the Canada Emergency Response Benefit at a press conference on March 25. Sean Kilpatrick/CP)



The cheques for the Canadian Emergency Response Benefit have barely begun to arrive in people’s bank accounts, but, for some folks, it’s never too soon to start planning for when the nation’s workers can be frog-marched back to their former places of work — never mind some silly little global plague.

A report from the C.D. Howe Institute published this week (written and edited, no doubt, from the safety of home offices) says that Ottawa should start planning to dial back the CERB and that the plan needs to tackle “disincentives to work.” The stated fear is that the CERB is too generous and is allegedly keeping workers at home enjoying federal largesse instead of going back to their jobs. “Allegedly,” because the report never tries to substantiate the claim, saying instead that “there is already anecdotal evidence that some people on the CERB refuse to go back to work when employment opportunities arise.”

(The people at C.D. Howe are not a group of newborn lambs, untutored in the ways of modern media. If they didn’t want people to seize on an accusation like that, they shouldn’t have included it in the final document.)

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As I write this, every single province in Canada is still under some form of public-health lockdown. New Brunswick, which is closest to substantially reopening its economy, recently allowed its residents to congregate in groups of two entire households. Quebec has its own plans to start reopening things later in May, but, in Ontario and other provinces, millions of people still don’t legally have jobs to return to — so it’s bizarre to be seized by a concern that workers are in danger of being idle.

As for the supposed generosity of the CERB, it should be sufficient to note that in neither the GTA nor Vancouver would it come close to paying for the essentials of life for an individual or for a household with any dependents. If the CERB were an actual hourly wage instead of an emergency government benefit, it would be illegal in Ontario: it pays less than the $14 minimum wage for a 40-hour workweek. If employers want workers to brave public spaces where their health and safety are still very much in question, it might be necessary — hear me out here — for bosses to pay more than the bare minimum.

But this is all quite illuminating, and it should be educational for activists who have been pushing for a universal basic income. They haven’t won the argument yet, certainly not in the halls of influence. We’re still literally in the middle of a historic global crisis, and the technocrats who advise the bureaucrats are telling the government to start pumping the brakes on this whole CERB thing, lest workers stop taking jobs they hate or fear just to avoid the most desperate forms of poverty. And when they win the argument and the threat of a UBI recedes, the government won’t bring the CERB back in anything like its current form. Even if the pandemic returns later this year with new ferocity and forces a new round of shutdowns, people should be prepared for governments both provincial and national to offer them less relief: leaders will assert that the cupboard is bare, having been emptied to deal with the first outbreak.

If that all sounds bleak, well, sometimes this writer is in a bleak mood. But the good news, such as it is, is that the federal government’s cupboard will never be bare for the voting bloc it holds closest to its heart: business. The other large emergency measure Ottawa has introduced — the Canada Emergency Wage Subsidy — goes directly to business owners to get them to rehire or retain workers.

For all the speculation that Ottawa might retain the CERB in peacetime and transform it into a UBI, there’s been little suggestion of hanging on to the CEWS or discussion of what the effects of that would be. Made permanent, a wage subsidy for businesses would start to look a lot like a national jobs guarantee, whereby the government ensures a higher-than-normal level of employment by goosing the payrolls of private firms.

(We’ve discussed the divide between the basic-income and jobs-guarantee arguments before; suffice it to say that they’re not really comparable goals, but they try in different ways to answer the problems of economic dislocation in the 21st century.)

When the pandemic is behind us, firms will need enormous help to rehire and rebuild their operations, and a federal wage subsidy could be part of that. But even when the economy is “back to normal,” there will be recessions and other dips in the business cycle, and it would be nice for Ottawa to have a permanent lever it could pull to try to prevent mass layoffs and actively encourage higher employment. Even if we were at “full employment” (something Canada has rarely had in my lifetime, and I’m nearly 40), a wage subsidy could be used to help coax employers into giving some people at the margins a second — and maybe a third — chance in life.

It wouldn’t be the same thing as a basic income. It would still require people to work for their wages, with all that entails. But it could be substantially better than what we had before COVID-19 made a mess of everything, and it’s worth trying to make something better out of all this.

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