Money for nothing: Mincome experiment could pay dividends 40 years on

DAUPHIN, Manitoba ­— Once a month during the late 1970s, Amy Richardson received an envelope with a little extra cash to help her family make ends meet.

At the time, she was earning a modest living running a beauty parlor out of the front of her home in Dauphin, a farming community on the Canadian prairie.

Her husband, employed by a local phone company, struggled with heart problems and couldn’t always work. They had three children living at home.

“It helped you cope with unexpected things,” Richardson recalled of the monthly payments. “They came month to month, and you told them how much you made, and they gave you a certain amount.”

Richardson, now 87 and living in a senior home in Dauphin, is among those who benefited from a landmark social experiment in Canada. From 1974 to 1979, the federal and provincial governments gave money to every person and family in Dauphin below the poverty line.

Under the program, called Mincome, about 1,000 families received monthly checks. Now people are looking back to see whether it worked, as the idea of a guaranteed basic income has enjoyed a resurgence, particularly in Switzerland, which has scheduled a nonbinding referendum on the issue in the fall, and elsewhere in Europe.

Uganda and India recently completed pilot projects, with positive results. In Canada a group of activists is planning a campaign to drum up support. And in the United States, there is some support for the idea coming from both sides of ideological spectrum.

For those on the left, basic income represents a chance to strengthen the social safety net and more evenly redistribute wealth, while some American libertarians view it as a way to cut back on bureaucracy and provide individuals with greater personal choice. There’s disagreement, however, on whether there would be accompanying tax hikes and whether other social programs would remain in place.

Karl Widerquist, an academic and vocal supporter of basic income, suggested its rising popularity in the U.S. springs from concern over income inequality spurred by 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.

The Dauphin experiment, like four others in the United States around the same time, was an attempt to measure if providing extra money directly to residents below a certain household income would be effective social policy.

Dauphin was unique among those studies in that all residents of the municipality and surrounding area, with a population of about 10,000, were eligible to participate if they met the criteria.

For those who didn’t qualify for support under traditional welfare schemes, such as those for the elderly and the working poor, Mincome meant a significant increase in income. Low-wage earners had their incomes topped up.

Richardson, for instance, recalls collecting about 30 Canadian dollars some months. That’s the equivalent of about CA$145 today (US$133).

The experiment produced a trove of data, but the results were never released. After changes at the federal and provincial government levels, the program was shut down without a final report or any analysis.

Decades after the program ended, sociology professor Evelyn Forget dug up records from the period and found there were far-reaching benefits in the education and health sectors.

In a 2011 study she reported an 8.5 percent drop in hospital visits, a decrease in emergency room visits from car accidents and fewer recorded instances of domestic abuse. There was also a reduction in the number of people who sought treatment for mental health issues. And a greater proportion of high school students continued to the 12th grade.

As with U.S. experiments during the same period, there was no evidence that it led people to withdraw from the labor market, according to her research. “It’s surprising to find that it actually works, that people don’t quit their jobs,” said Forget, a University of Manitoba professor. “There’s this fear that if we have too much freedom, we might misuse it.”

Despite the results, she admits, there’s not much political traction in Canada or the United States to repeat something like the scheme in Dauphin and certainly not on a national level.

But, she said, it has played a role in shaping the debate around social policy.

A recent proposal from the Brookings Institution, for instance, made the case for an increased minimum wage combined with a more generous earned income tax credit, especially for families with young children living below the poverty line.

According to Forget, the idea of a guaranteed basic income “seems to come back every 20 years … There has been perennial dissatisfaction with social programs,” she said. “Everybody is always looking for a better way of dealing with these issues.”

In Dauphin, a cluster of homes and businesses surrounded by grain silos and canola fields, residents old enough to remember Mincome look back on it fondly.

Betty Wallace, another recipient of the monthly payments, who lives in the same farmhouse where she lived in the 1970s, recalled it had a major impact on some families. “With three or four kids and a husband struggling to find work and a wife without an education, boy, they needed it,” said Wallace, now 85.

Richardson remembers it being most useful for things like prescription drugs and, here and there, an extra something for her children. “As I like to say, it put the cream in the coffee. You got a few extras for the kids.”