clock menu more-arrow no yes

Filed under:

What can we learn from a town that beat poverty

It sounds like something from a Utopian novel, but for five years, a small Canadian city ensured basic incomes for everyone.

And for five years, poverty vanished.

Between 1974 and 1979, residents of Dauphin, a small Manitoba city, were selected as guinea pigs in a radical project that delivered monthly checks to the poorest residents.

The project was an experiment to see if giving money to the working poor in amounts large enough to boost them up to a living wage would make people unmotivated to work. It was called “Mincome” for “minimum income.”

For five years, 1,000 families that fell below the poverty line receive a minimum income. People didn’t stop working. And for a time, poverty was eliminated.

Mincome was funded by a cost-sharing agreement in which 75 percent of the $17 million budget was paid for by the federal government and the rest was paid for by the province.

“It helped you cope with unexpected things,” Amy Richardson, a Dauphin resident who received Mincome, told Al Jazeera. “They came month to month, and you told them how much you made, and they gave you a certain amount.”

But after five years, a new government was elected, and the project was scrapped. Data collected for the project was heaped into boxes, and essentially forgotten about for 30 years, until Evelyn Forget, a researcher at University of Manitoba, tracked them down.

She remembered hearing about the project in an economics class as an undergraduate, Forget told the Huffington Post. Professors talked about the exciting project that could reform social programs. When she found the data, it hadn’t been indexed or organized, so the data was scattered. Instead, she made an announcement on a local Dauphin radio station, and invited former participants to contact her.

She heard from one mother who used the money to sign up for job training, which helped her get a job as a librarian, which became a full-time career that allowed her to provide for her two daughters.

She invited Forget to her home, and showed her photos of her daughters’ graduations. “So when I talked to her, she was incredibly proud of having modelled a different kind of life for her daughters,” Forget told the Huffington Post.

When Amy Richardson’s family received Mincome, she was a mother of six who ran a small beauty salon out of her home, and her husband Gordon worked for the local phone company. Mincome gave the family stability: there was food on the table and money to pay the bills. When Gordon had a health crisis, the family still stayed afloat.

Forget's studies have powerful findings for health and education. In her 2011 report, she found that those who received Mincome had an 8.5 percent drop in hospital visits, decreased accidents and domestic violence reports and sought fewer mental health treatments, according to Al Jazeera. More students graduated from high school.

The U.S. conducted similar experiments during the same time, and there was no evidence from any of the projects that people stopped working.

“It’s surprising to find that it actually works, that people don’t quit their jobs,” Forget told Al Jazeera. “There’s this fear that if we have too much freedom, we might misuse it.”

Forget is hopeful that this kind of logic might help revive supplement programs.

“The one gap in the system right now is the working poor: people working in insecure and precarious jobs,” she told the Huffington Post.

Uganda and India are now conducting pilot projects in minimum income, and Switzerland and other European countries are eying similar programs. Activists in Canada and the U.S. have also revived interest.

The notion has appeal for those on the left who favor a strong social safety net, and American Libertarians like the possibility of less bureaucracy and more individual choice, according to the Al Jazeera report, but there's the questions of whether it would raise taxes and how it would replace or impact other programs, like welfare.

Academic and Karl Widerquist is a supporter of income supplement programs and told Al Jazeera that renewed interest comes from the rise in income inequity since the Great Recession. “It’s really incredible how much it’s grown so fast, and there’s no telling where it will go,” he said.

Proponents argue that minimum income programs could save millions in social programs and health care costs, and have been supported by economists like Milton Friedman.

Canadian economist Don Drummond is also a strong supporter of minimum income because he believes that current assistance programs let people get too far behind to ever really get on their feet again, he told the Huffington Post.

"Those in need must essentially first become destitute before they qualify for temporary assistance," he said.

“But the record shows once you become destitute you tend to stay in that state. You have no means to absorb setbacks in income or unexpected costs. You can’t afford to move to where jobs might be or upgrade your skills.”

Others are skeptical. “I’m not convinced it’s a silver bullet,” Leilani Farha, executive director of Canada Without Poverty and acting United Nations special rapporteur on adequate housing told the Huffington Post.

“Poverty is also about stigmatization and discrimination. You know, basic income is not going to address that. No single policy is going to address that.”