I was reading some discussions about the idea of a Universal Basic Income here in Canada as the topic has generated more talk since in recent times many people received CERB during the shutdowns. One issues that the CERB raised was how a lot of people who could work simply didn’t because they could earn more just staying at home while collecting money. As well, there were some points on how a lot of young adults made a lot more money than they normally would have to the point where once they got the money they didn’t really know how to manage it.
That meant just buying expensive items and once the money ran out it was as if they forgot how to earn money for a living. One factor seemed to be how people got used to getting and spending say $2000 to the point where getting anything less now is almost as if you are living in extreme poverty. Keep in mind this is apparently for young adults who don’t have things such as mortgage or kids to take care of as an example.
So I was reading how one person was suggesting that if people are ever to receive this kind of money that they should have to pass some kind of financial management course. As I was thinking about it, I don’t think that would work too well considering the situation here is the person is getting free money. One would have to have the mentality of wanting to get off income assistance which is the key I would say.
It made me think if giving people say exactly what they made last year plus maybe an extra 20% would be a better way to encourage people to actually use it as temporary relief. I would imagine that would solve the issue of say a person only making about $500 the year before to then get $10,000 in income assistance the next year. Because I would think training people to manage money in this kind of scenario is only in a sense training them to live like that forever per se.