What policies should the Conservatives Party start putting forward?

[Argus]

Why would the unemployment rate be 40%

Why do you think anyone would work at a minimum wage or near-minimum wage job if they could simply get a guaranteed income?

Hell, I wouldn't.

[cannuck]

So you feel Canada would do better with a 40% unemployment rate?

If 30% of that was ex-government, you're damned right

I think you missed the entire point of a guaranteed annual income. First of all, it would be paid to EVERYONE (sort of an negative start of the income tax table) so you get rid of ALL government handout programmes - and all of the useless tits on a power trip dispensing privilege to those under their thumb. The support level is always there, so you get MORE money by simply doing something - enough to live a very basic lifestyle (that would not be the case with the GAI).

Think about it this way: nobody is starving now in Canada, but it takes a huge army of very, very expensive bureaucrats to select who wins that lottery (you need to deal with the whole "Indian Industry" to begin to appreciate what I mean).

[Newfoundlander]

Why do you think anyone would work at a minimum wage or near-minimum wage job if they could simply get a guaranteed income?

Hell, I wouldn't.

It's more viable for people to work those jobs in many instances. A lot of people cannot survive financially in those jobs as it is. And a guaranteed income doesn't need to be huge by any means.

Would you not work if you had a guaranteed annual income of say $20,000?

While I understand your concern why would so many groups be encouraging this idea if all it did was increase the unemployment rate to 40%?

Edited January 22, 2016 by Newfoundlander

[Big Guy]

Conservatives are now the opposition. Their main role is to criticize what the government (Liberals) propose to do. To be a "critic" does not mean that you have to believe your position - only that you force the government to fully explain its position and answer any possible concerns that others may have with it.

The Conservatives can satisfy that role while they decide what in what direction they will go. I believe that they cannot begin on deciding on policy before they decide on a leader. The Conservatives have a history of decision making taking place by the leadership rather than caucus. The new leader will have to decide his/her role.

[Newfoundlander]

While it's important for a leader to be putting forth policies they believe in it's also important for policies to be grassroots driven. If a person doesn't like policies put forth by their party then maybe they shouldn't consider a leadership bid.

[Argus]

It's more viable for people to work those jobs in many instances. A lot of people cannot survive financially in those jobs as it is. And a guaranteed income doesn't need to be huge by any means.

Would you not work if you had a guaranteed annual income of say $20,000?

If my choice was between doing nothing, and making $20k, or working at a crummy minimum wage job, perhaps doing shift work, and making $20k, then I think I'd be happy to take the guarantee, and maybe do a few odd jobs on the side.

While I understand your concern why would so many groups be encouraging this idea if all it did was increase the unemployment rate to 40%?

Because they have an unrealistic view of human behaviour.

[Bonam]

If my choice was between doing nothing, and making $20k, or working at a crummy minimum wage job, perhaps doing shift work, and making $20k, then I think I'd be happy to take the guarantee, and maybe do a few odd jobs on the side.

I think what Newfoundlander and cannuck are talking about with their "guaranteed income" would be in addition to what you get from a job. So if you do nothing you get $20k, but if you work a minimum wage job, then you get the $20k income from the government + $20k from the job, for a total of $40k.

[Newfoundlander]

I think what Newfoundlander and cannuck are talking about with their "guaranteed income" would be in addition to what you get from a job. So if you do nothing you get $20k, but if you work a minimum wage job, then you get the $20k income from the government + $20k from the job, for a total of $40k.

Exactly.

[Topaz]

I think they first thing they have to do is make clear are they more PC party thinking party of are they more a former Alliance Harper think party because that does matter, especially to former PC supporters. I can't see how anyone that was within Harper's party can win the PMO, it will have to be someone from outside. Of course, maybe one person could the former Premier of Alberta.

[Newfoundlander]

I think they first thing they have to do is make clear are they more PC party thinking party of are they more a former Alliance Harper think party because that does matter, especially to former PC supporters. I can't see how anyone that was within Harper's party can win the PMO, it will have to be someone from outside. Of course, maybe one person could the former Premier of Alberta.

The Alliance and PCs are one party again now just like they were for decades. While many who considered themselves "PCs" might not have been fussy on Harper it wasn't always because of his broad policy ideas. The Conservative's need to find someone who appeals to all factions of the party, which is the case for any party that is a broad coalition.

[kimmy]

If my choice was between doing nothing, and making $20k, or working at a crummy minimum wage job, perhaps doing shift work, and making $20k, then I think I'd be happy to take the guarantee, and maybe do a few odd jobs on the side.

Because they have an unrealistic view of human behaviour.

I'd be surprised if very many of our minimum-wage workers make $20k a year. Theoretically, working full-time hours at minimum wage you could make 20k a year before-tax income, but how many minimum wage workers get full-time hours?

Depending where you live, $20k a year might be enough to cover your basics provided you share the rent. It doesn't leave much for saving up for tuition or building assets to improve your lot in life, and it doesn't leave much to save for caring for yourself later in life. These jobs are for people living at home trying to save for college or to buy a car.

-k

[hitops]

I'd be surprised if very many of our minimum-wage workers make $20k a year. Theoretically, working full-time hours at minimum wage you could make 20k a year before-tax income, but how many minimum wage workers get full-time hours?

Saying "before-tax income" for somebody making $20K, is redundant presently. There is no difference in before and after tax income at that level. When the Canada Child Benefit comes in, after tax income for that person with kid(s) will actually be higher than before-tax income on the 20K salary.

Depending where you live, $20k a year might be enough to cover your basics provided you share the rent. It doesn't leave much for saving up for tuition or building assets to improve your lot in life, and it doesn't leave much to save for caring for yourself later in life. These jobs are for people living at home trying to save for college or to buy a car.

Which is why that is exactly who fills most of them.

Edited January 23, 2016 by hitops

[Argus]

I think what Newfoundlander and cannuck are talking about with their "guaranteed income" would be in addition to what you get from a job. So if you do nothing you get $20k, but if you work a minimum wage job, then you get the $20k income from the government + $20k from the job, for a total of $40k.

That's not how a guaranteed income works.

Edited January 23, 2016 by Argus

[Argus]

Exactly.

That's not how it works, and would be unaffordable. It would involve paying $20,000 to every adult in Canada. Where do you think that money is going to come from?

Edited January 23, 2016 by Argus

[Argus]

I'd be surprised if very many of our minimum-wage workers make $20k a year. Theoretically, working full-time hours at minimum wage you could make 20k a year before-tax income, but how many minimum wage workers get full-time hours?

Depending where you live, $20k a year might be enough to cover your basics provided you share the rent. It doesn't leave much for saving up for tuition or building assets to improve your lot in life, and it doesn't leave much to save for caring for yourself later in life. These jobs are for people living at home trying to save for college or to buy a car.

-k

There are a lot of adults working in the retail, restaurant and other services sectors making minimum wage. There are a lot of people employed by a wide range of industries making minimum or near minimum wage. There are a lot of people who can't get jobs even that good. Pay them all $20k a year and they'll all stop working.

[Newfoundlander]

That's not how it works, and would be unaffordable. It would involve paying $20,000 to every adult in Canada. Where do you think that money is going to come from?

Well you'd get taxes back from people making over a certain amount, which would be most people. Then you get rid of Employment Insurance, Social Assistance, Old Age Security and other programs that target low income individuals.

[Argus]

Well you'd get taxes back from people making over a certain amount, which would be most people. Then you get rid of Employment Insurance, Social Assistance, Old Age Security and other programs that target low income individuals.

Regardless of whatever savings there are in only having one program which is not means tested, they will be massively outdone by the cost of adding so many more claimants. There would also be massive disruption in the economy because no one would want to work minimum wage jobs. Even if you taxed some of it back from 'those over a certain level" that would still mean people would make sure they didn't go over that level.

Let's, for the sake of argument, say people would get the $20k while still collecting their full minimum wage salary of approx another $20k. Now you have minimum wage people, he lowest skill level, taking home $40k. So what about those with more skills who make $40k now? Do they now make $60k? Or do you have them earning the same as minimum wage earners, which means there is absolutely no incentive to get the training and take on the stress of those harder jobs.

[Newfoundlander]

Regardless of whatever savings there are in only having one program which is not means tested, they will be massively outdone by the cost of adding so many more claimants. There would also be massive disruption in the economy because no one would want to work minimum wage jobs. Even if you taxed some of it back from 'those over a certain level" that would still mean people would make sure they didn't go over that level.

Let's, for the sake of argument, say people would get the $20k while still collecting their full minimum wage salary of approx another $20k. Now you have minimum wage people, he lowest skill level, taking home $40k. So what about those with more skills who make $40k now? Do they now make $60k? Or do you have them earning the same as minimum wage earners, which means there is absolutely no incentive to get the training and take on the stress of those harder jobs.

While I think there could be savings found by just simply eliminating social programs targeted towards those with low incomes the fact that you'd be able to get rid of so many public service employees would be huge. As well we will eventually struggle to pay for some of these programs as the population ages.

There are people who work minimum wage jobs because they want to, not because they're forced into it. I think you could see more people working those jobs because they're standard of living would be so much better. If someone is currently making $20,000 in a minimum wage job why do you think they wouldn't want to make 40,000? They wouldn't be living in poverty, they could afford to spend more money on themselves, they could afford a better place to live or buy a home if they have someone with a second income.

You'd have progressive taxes similar to now. So someone already making 40,000 would pay back some of that 20,000. Someone making $200,000 would see their taxes at a level whereby they don't necessarily benefit from the guaranteed income. Or something similar to that. I'm not sure of all those details but people who study this program have taken it into account.

[Argus]

While I think there could be savings found by just simply eliminating social programs targeted towards those with low incomes the fact that you'd be able to get rid of so many public service employees would be huge.

Miniscule compared to paying $20,000 to so many people.

As well we will eventually struggle to pay for some of these programs as the population ages.

That's not a useful argument given you propose paying all those people the same or more.

There are people who work minimum wage jobs because they want to, not because they're forced into it. I think you could see more people working those jobs because they're standard of living would be so much better.

A lot of people would stop working. A lot of people would work low skill jobs for $40k, sure. But you're talking about not only paying $20k per year to everyone who doesn't or can't work, but also to everyone who works low level jobs. That's a huge increase in payments. Where do you propose to get the money?

You'd have progressive taxes similar to now. So someone already making 40,000 would pay back some of that 20,000.

You're talking about a subsidy program which would cost hundreds of billions and drive every high income earner out of Canada along with every large business.

Someone making $200,000 would see their taxes at a level whereby they don't necessarily benefit from the guaranteed income.

Gee, ya think? Someone making $200k already forfeits more than half their income to taxes. You'd need to take more like 98% to fund your scheme

[Bonam]

Miniscule compared to paying $20,000 to so many people.

That's not a useful argument given you propose paying all those people the same or more.

A lot of people would stop working. A lot of people would work low skill jobs for $40k, sure. But you're talking about not only paying $20k per year to everyone who doesn't or can't work, but also to everyone who works low level jobs. That's a huge increase in payments. Where do you propose to get the money?

You're talking about a subsidy program which would cost hundreds of billions and drive every high income earner out of Canada along with every large business.

Gee, ya think? Someone making $200k already forfeits more than half their income to taxes. You'd need to take more like 98% to fund your scheme

The linked article mentions stats in the US. There, it calculates that paying $12k (equal to the US poverty line) to all US adults (21-65) would cost about $2 trillion. The current cost of all federal and state level welfare-related programs is $1 trillion. Cancel those and you have an extra cost of $1 trillion per year to fund the new entitlement. That's about 6% of GDP. So the US federal government would have to grow from ~20% of GDP to ~26% of GDP to fund this scheme, where all adults are paid $12k (in addition to whatever income they may have from other sources). Certainly, a large expenditure, but many Western countries have federal government spending considerably higher than 26% of GDP. I'm sure one could dig up all these numbers for Canada also and likely also come up with a result that means the federal government has to grow as a % of GDP but not to absurd levels.

One could also argue that if everyone was provided with an income that put them above the poverty line, this may reduce crime and poor health, resulting in savings in policing, the justice system, and the health system. The amount of savings here is hard to predict but there would likely be some, potentially offsetting some of the cost.

So the idea, though expensive, can't be ruled out as fiscally impossible.

That said, whether it's a good idea or not can certainly be debated from many angles. For example, $12k is sufficient to live a reasonable lifestyle in cheaper rural areas, especially if you reside together with 1 or 2 other people that also make $12k each. How many people that currently work (whether minimum wage or otherwise) would decide that they'd rather just live on $12k per year in low cost of living areas and not bother working? Would this reduction in labor force participation reduce overall productivity of the nation and impede economic and technological progress, causing a cycle of stagnation? On the other hand, one might point out that the current array of means-tested programs provides its own disincentive to work harder or find higher paying jobs, since the more you earn, the fewer means-tested programs you qualify for, reducing the additional benefit of higher salaries.

Or, one could argue that freed from the necessity to work minimum wage jobs, some people might instead pursue activities that may be more useful in the long run - such as dedicating more time to raise a child, or volunteering in the community, or pursuing a personal passion that may not pay anything but could still enrich society in some other way. One might also put forth the argument that increasing automation means there will simply be fewer and fewer low skilled jobs available, and eventually fewer and fewer jobs of any kind available, and that the expectation that everyone should be employed to provide for themselves might eventually not be realistic in practice, in which case some sort of guaranteed income may be a reasonable solution.

Edited January 24, 2016 by Bonam

[kimmy]

There are a lot of adults working in the retail, restaurant and other services sectors making minimum wage. There are a lot of people employed by a wide range of industries making minimum or near minimum wage. There are a lot of people who can't get jobs even that good. Pay them all $20k a year and they'll all stop working.

Should we design our policies around the goal of making sure that there is an abundant supply of desperate people available for minimum-wage work?

-k

[Argus]

Should we design our policies around the goal of making sure that there is an abundant supply of desperate people available for minimum-wage work?

Better that than designing our policies around the goal of allowing people to not work if they don't want to.

Look, in a capitalist society there is always going to be a hierarchy of rewards based on how much demand there is for a worker's skillset. Given the freedom in our society for people to make their own choices, that will always mean some people are not going to acquire much in the way of skills, while others will work their ass off to acquire it. The former are not very well-rewarded compared to the latter, and should not be. This is the incentive so many have for working their asses off to get ahead. Remove that incentive and you have a slacker lifestyle where a large percentage of the population is on welfare, or whatever you choose to call it. That's human behaviour, and it's been well documented over the years. It's why lefty utopia dreams like communism can't work.

Instead of trying for the impossible dream of equality of results we should be working on the equality of opportunity.

Edited January 25, 2016 by Argus

[Bonam]

Better that than designing our policies around the goal of allowing people to not work if they don't want to.

Look, in a capitalist society there is always going to be a hierarchy of rewards based on how much demand there is for a worker's skillset. Given the freedom in our society for people to make their own choices, that will always mean some people are not going to acquire much in the way of skills, while others will work their ass off to acquire it. The former are not very well-rewarded compared to the latter, and should not be. This is the incentive so many have for working their asses off to get ahead. Remove that incentive and you have a slacker lifestyle where a large percentage of the population is on welfare, or whatever you choose to call it. That's human behaviour, and it's been well documented over the years. It's why lefty utopia dreams like communism can't work

This is all true and I agree with it but it doesn't really refute the idea that perhaps there should be a guaranteed income as discussed above. Anyone who has any job would still make more than the person only getting the guaranteed income, and those who have higher paying jobs would still be more highly rewarded than those who have less highly paying jobs. So the monetary incentive to work and to have better work would still remain.

[Argus]

This is all true and I agree with it but it doesn't really refute the idea that perhaps there should be a guaranteed income as discussed above. Anyone who has any job would still make more than the person only getting the guaranteed income, and those who have higher paying jobs would still be more highly rewarded than those who have less highly paying jobs. So the monetary incentive to work and to have better work would still remain.

There are a variety of problems with a guaranteed income. One problem comes in the fact that without validation, people can take their cheque for whatever, then do some work on the side. If you allow them to work as well as collect free money then you bump up the reward for low paying jobs to the point people with more skill won't find their skill being rewarded. You could have a guy with more skill earning $30k who is making less than someone pulling in a $15k government cheque plus a $20k job. So there's no incentive for him at all. So you'll have to give him a guaranteed base cheque to work with too. How high do you take these cheques? The more people collecting, the more its going to cost, and every group which is collecting free money distorts their economic reward so that those above them will feel slighted if they don't get a raise too.

On the other hand, if people can't work while collecting the cheque then a whole lot of people will just sit back on their butts and collect the cheque.

[Bonam]

There are a variety of problems with a guaranteed income. One problem comes in the fact that without validation, people can take their cheque for whatever, then do some work on the side. If you allow them to work as well as collect free money then you bump up the reward for low paying jobs to the point people with more skill won't find their skill being rewarded. You could have a guy with more skill earning $30k who is making less than someone pulling in a $15k government cheque plus a $20k job. So there's no incentive for him at all. So you'll have to give him a guaranteed base cheque to work with too. How high do you take these cheques? The more people collecting, the more its going to cost, and every group which is collecting free money distorts their economic reward so that those above them will feel slighted if they don't get a raise too.

The guaranteed income goes to all adult citizens, regardless of what work income they may have. Tax rates are adjusted so that it's a slowly decreasing net benefit up to a certain income. Therefore there is no disincentive to work other than that which already exists with a progressive income tax structure. For example:

Right now:

0-45k: 15%

45k-90k: 20.5%

90k-140k: 26%

140k-200k: 29%

200k+: 33%

With guaranteed income and tax changes to pay for it:

*18k handout to everyone

0-45k: 35%

45-90k: 38%

90k-140k: 40%

140k-200k: 40%

200k+: 40%

Here are the results of someone that currently makes the following incomes, with and without the above changes (this is just looking at Federal tax brackets):

Work Income ---- Current After Tax Income ---- New After Tax Income w/ Handout

0 -------------------------------- 0 ------------------------------------- 18k

20k -----------------------------17k ----------------------------------- 31k

40k -----------------------------34k ----------------------------------- 44k

60k -----------------------------50.1k -------------------------------- 56.5k

80k -----------------------------66k ----------------------------------- 68.9k

100k----------------------------81.4k -------------------------------- 81.1k

120k----------------------------96.2k -------------------------------- 93.1k

140k---------------------------- 111k -------------------------------- 105.2k

So basically everyone up to about 100k gets a bump due to the tax changes and handout, while those above are impacted by the higher top tax bracket. And yes the top tax bracket is a full 7% higher than now, you do have to pay for the expensive new entitlement. The component of provincial budgets currently going to various welfare/transfer programs would also be redirected to this program to pay for it.

Is the 7% higher top tax bracket, impacting people making over 100k, worth the benefit of essentially eliminating poverty? That's the real question to discuss, since appropriate changes in the tax structure maintain the monetary incentive to work.

Edited January 25, 2016 by Bonam