The effects of COVID-19 continue to impact many Calgarians — especially small business owners.
An owner of one of those businesses is calling for a universal basic income to be put in place, but a basic income expert says now may not be the best time.
Last April, the Alberta government called for all non-essential businesses to close. In the months since, many small businesses struggled with the hardship of making profits.
Solita Work, owner of Reworks Upcycle Shop, is experiencing that hardship firsthand.
“I opened a little retail shop that specializes in things made out of recycled materials, and I’m also a huge cycling advocate so I rent bicycles as well,” Work says.
“The overall theme is to reduce waste and to live the greenest lifestyle possible while making really cool, fun items that you could give as a gift, buy for yourself or even useful items.”
COVID-19 has affected Work’s business “in a very negative way.” She was forced to close the Victoria Park shop in September due in part to the COVID-19 pandemic, increased security issues and slower traffic. Reworks’ online store is still open and available to shop.
“A lot of businesses just go online and they do fine. But, because I have such a wide variety of items, [customers] don’t purchase them online,” she says.
“They definitely go and look online but they love to come to the store and see everything first-hand. And now I’m not able to do that at all.”
Like many other small business owners, Work has seen the impact the steep rise in unemployment created, reducing the purchasing power of consumers and forcing them to focus their money on the basics like rent and groceries.
Since a lot of small businesses are not focused on selling solely essential items, Work says it will have a big impact on small businesses.
As a way to help those businesses, as well as individual Canadians, the government has put a few financial aids in place. One of which was the Canadian Emergency Response Benefit.
The CERB was a way for the government to help those who may have been laid off, or are without work during this time. It provided $500 a week — for up to 16 weeks — to those who are over 15-years-old and had an income of at least $5,000 in 2019, or in the 12 months prior to the date of application.
“To a certain extent that is helpful because now I know for sure I can pay my rent and buy food, but whether or not I’ll be able to save my business and have a livelihood, I’m not sure.”
But as the CERB came to an end in early October, she’s calling for the government to implement a universal basic income.
“If we knew that we were always guaranteed a certain amount every month for all those years, then this would be less of a problem than what it is.”
She isn’t the only one struggling either.
Jean Norland is an orthodontic dental assistant at a dental clinic, where a COVID-19 case was confirmed.
The clinic had to be shut down immediately, leaving Norland unemployed and under quarantine.
Norland says, “I was laid off. I’ve applied for Employment Insurance (EI). I’m thankful I have a little bit of savings, but I don’t have any money coming in at the moment.”
As a means to support herself, she tried to apply for the government’s offer of a one-time emergency isolation support payment of $1,146.
“I haven’t been able to get through,” she says.
“It keeps telling me that they have to temporarily close the system because it’s overloaded so you can’t even get through to these places, and if you try to call them you’re basically on hold for 8 hours.”
She says that a universal basic income would “make staying home a lot easier.”
“I’ve been a single mom for a long time. My daughter just recently moved out right before this happened, so I’ve been supporting ourselves all this time,” she says.
“It’s hard to stay at home and not want to go out and look for some sort of job when you still have bills to pay – I was doing okay, but now it’s very uncertain.”
Universal Basic Incomes (UBI)
Wayne Simpson, an economics professor for over 40 years at the University of Manitoba, also calls UBI’s a “negative income tax.”
“It’s based on assuring a level of basic need for your family depending on its size and your money is taxed away as your income increases,” Simpson says.
“How much you get depends on how much other income you have. If you had no other income you would get the full amount or what’s called ‘the income guarantee.’”
The history of UBI’s dates back to the 1500s when Juan Luis Vives, a Spanish philosopher and scholar known as the father of modern psychology, created a detailed plan to help the poor after the Renaissance.
Now, elements of UBI’s can be seen in Finland, Sweden and Kenya.
Aspects of the program can be seen in Canada with its universal health care and the Universal Child Care Benefit.
Though Simpson devoted a significant amount of his career to studying UBI’s, he isn’t sure now is the best time for a universal basic income to be put in place.
“My first reaction is that a UBI would be really helpful but I’m not quite so sure [that’s the case]. A basic income wasn’t designed for emergencies. A basic income was designed as income support for individuals at the lower end of the income spectrum as a long-term guarantee of support.”
“If people’s income circumstances changed, then there have to be arrangements where that money can be obtained more quickly, and that’s the case with COVID-19,” he says.
That’s the main problem with possibly implementing a UBI, as the system won’t “satisfy the people who are well above a low-income standard that have lost their jobs.”
He says there is evidence a basic income would have helped, though, due to the fact that the United States is carrying out the same plan “they rejected 50 years ago.”
“The U.S. is essentially inventing [a UBI] with their $2 trillion package because part of that plan is to transfer money over a temporary period along the lines of an unconditioned payment, which is a negative income tax.”
While Simpson is completely for a UBI, he says “an emergency like COVID-19 is not the basis for designing a thoughtful, effective and efficient basic income that will endure.”
Whether a UBI is put in place now or later, Work believes the best thing we can do during this time is to share, be kind and “look after each other.”
“I hope that we can create a community where we’re sharing and people don’t feel like they’re the only ones there and there is no one to help them out.”
“I hope that by the end of this pandemic, we will have figured out how to do just that,” she says.