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Economist warns of potentially negative consequences for basic income calls amid mass unemployment

FILE - A sign on a shop window indicates the store is closed in Ottawa, Monday March 23, 2020. THE CANADIAN PRESS/Adrian Wyld
Summary

Voices growing louder for universal basic income, amid mass unemployment related to COVID but an economist disagrees

An economist fears giving everyone basic income can reduce motivation for people to be effective members of workforce

VANCOUVER (NEWS 1130) — With so many people out of work as we deal with this pandemic, there are calls for the introduction of a Universal Basic Income, but the former chief economic analyst for Statistics Canada says he is not convinced it’s the right approach.

Philip Cross, who is now with the Macdonald-Laurier Institute, says, people simply won’t have the same drive to develop their skills if they have money handed to them on a regular basis.

“Will people who receive it, particularly young people, develop those characteristics — hard work, discipline, for example — acquiring more education that are required to succeed in the labour market in the long run?” he asks.

“Because very clearly, there is a certain percentage of our population, not a majority, but there is an unscrupulous element out there that will take the money and run.”

Given the economic costs related to COVID-19, adding another massive social spending program doesn’t make sense in Cross’s assessment.

He says, given the billions Canada has already given out during the crisis — the last thing we need is a new social spending program.

Earlier this week, the City of Vancouver says there has been a 27 percent drop in business revenue, equating to around 2-billion dollars.