I hope this won't create material to make a case against basic income in future.
Remember Bio-Fuel? How progressive and wonderful it was suppose to be? Until it caused a global food shortage and suddenly none of the media ever talked about it again.
Large companies are getting larger. There are only a couple of choices in any category, and single companies own many different markets. When you combine that with UBI, you have the government handing you a check, and then you have a choice of a couple of companies to spend that money. The difference between this world and communism is almost nothing.
I have never heard of any group of people who were happy on government welfare. Whatever the supposed problem this is supposed to address, it is not a solution. People who are not working at all are not happy.
If I were to guess, I would say the real problems that need to be addressed are:
too many extremely large companies, often supported by laws they lobbied to create.
corrupt government that has no interest in its own country
population increases.
I mean, many of these people proposing UBI are living in countries where they are actively increasing the population. If you have an unemployment problem, why are you increasing the population?
- UBI's lack of criteria is supposed to remove distortions. The population is minimaly incentivized.
- Employers loose leverage with UBI; large companies are major employers.
- Everybody loves to hate on population size, but shrinking/aging populations are dangerous for the economy. It's a much more complex problem.
I don't know what your first point means. Your last point, you are just repeating what you have read somewhere. Population increases do not change the aging population. The new people also age believe it or not.
Also stop being childish with your "wat" bullshit.
http://www.taxpolicycenter.org/briefing-book/what-are-source... corporate tax is only 10%. They are far to influential, but not because this.
> You are just replacing one leverage with another (employers with government).
> I don't know what your first point means.
This I believe is the misunderstanding. UBI is designed so nothing you do will affect your basic income; there are no conditions. Yes, on the meta-level the UBI policy itself could be changed, but assuming it won't the government has no extra leverage over the citizens.
> Population increases do not change the aging population. The new people also age believe it or not.
I meant:
- Slowing population growth and longer life expediencies (Europe, Japan, US might catch up a little bit) together result in more old people as a portion of the total population. Some argue this is dangerous for the welfare state.
- More population growth crates more demand and helps economy grow.
You can similarly argue growing economies are bad for human and environmental health because more economic activity conventionally means pollution. For example, https://www.washingtonpost.com/news/wonk/wp/2016/10/14/resea... (sorry for the sensational headline). But growing economies are also very good in other ways.
It would be great if we could have "barber poll" economies and populations that always grow yet stay the same size, but calculus does not allow for this.
Hiding behind the money illusion doesn't fool anybody for long.
https://medium.com/modern-money-matters/is-basic-income-basi...
Square cube law: https://en.wikipedia.org/wiki/Square-cube_law
[1]: Okay maybe not a very rich king but but you'd definitely be doing more than fine.
The problem is the people coming in: how do you stop high levels of immigration from people that would not be as productive as finnish people and hence would quickly become a drain on the state. The greatest single enemy of open immigration is welfare.
Voters in Switzerland recently rejected a basic-income scheme
Edit: This was too snarky but also the parent comment is such a bold claim with no evidence justifying it. Counterclaim: Canada and the US have done plenty to destroy the fabric of native societies since their inception. As an example, the residential school system of Canada[1] which ended in 1996. History is so forgettable isn't it?
[1] https://en.wikipedia.org/wiki/Canadian_Indian_residential_sc...
What has always been more appealing to me than UBI is just the idea of sustainable living... i.e. people own their own houses and there is no property tax and they have very cheap renewable energy sources and maybe cheap robots to grow food. making really cheap stuff to survive just seems like a better long term plan to deal with technology than giving money away. that just devalues money causes inflation.. makes prices higher. seems to me.
Anything except universal basic income. You want cigarettes / alcohol? do some work on the internet. Amazon mechanical turk.
I heard/read Swiss denied this proposal though, what a shame.
Oh, and this is the most positive non-opinion piece I've seen on UBI in a major publication, people! How's that?
Somebody's going to have to pay for this...
So it's not UBI, it's a test.
Separately, in a way we already have that uneven net for the same work. If you work two jobs you get paid less (net) than one person doing either of your jobs (for that job, not total). That's what's what a progressive tax does.
Its a market distortion that could create all kinds of problems.
You could argue that's discrimination( there are equal pay and equal wages laws around employment).
You would not be allowing immigrants from doing a wide range of jobs that are desirable (and hence pay less) and 'condemn' them to do the worse jobs that pay more. So for example, immigrants will be less represented in arts, journalism, administrative work. Low paying jobs in general will not be living wages without UBI. Think that minimum wage is likely to drop considerable if you have UBI.
It undoubtedly creates an "US vs them" gap measurable in money.
> Separately, in a way we already have that uneven net for the same work. If you work two jobs you get paid less (net) than one person doing either of your jobs (for that job, not total). That's what's what a progressive tax does.
UBI is very likely not going to apply to most workers, maybe minimum wage and down. You dont really need much of a minimum wage if you have an UBI, which means many pleasent low skill jobs would pay very little (clerical work for example). So immigrants would be barred from such jobs without UBI.
Also its true that taxes make 2 people get different net income but that comes from their wealth, not their nationality. Someone with a house and a mortgage might get more income than an immigrant that has nothing. That makes it a regressive tax (the immigrant pays taxes that goes to the richer guy).
Most (all?) western countries tax income, not wealth[1]. Wealth has no impact on income taxes. If I have $1M in the bank go work for minimum wage and earn $10K for the year, I'll get taxed the same as someone with $0 in the bank earning the same $10K. The contrast I was making was someone with two jobs that make $10K each. With a progressive tax structure, each they are making less net at each job than a person working for $10K at either job. That's because the second $10K would be taxed more than the first (okay maybe not at $10K but it's true at $25K to $50K or $50K to $100K...).
> Someone with a house and a mortgage might get more income than an immigrant that has nothing.
Again that makes no sense. A house and a mortgage are expenses. The only impact on your taxes would be deducting the mortgage interest or real estate taxes. They're not increasing income, they're lowering taxable income.
> That makes it a regressive tax (the immigrant pays taxes that goes to the richer guy).
That makes no sense. There's nothing immigrant specific about that. Unless you think all immigrants are renters. Yes interest and real estate tax deductions (and really deductions in general) are regressive in that higher income people who are already paying higher taxes benefit more, but there's nothing unfair about it from a born national v.s. immigrant basis.
Last I checked, immigrants are allowed to buy houses too.
[1]: The one exception to that is taxing real estate but on the whole cash, investments, or even piles of gold are not taxed.
In a world with UBI, I'd be very tempted to pack it in and go do some rewarding, enjoyable manual labor, like farming or forestry or carpentry or improving hiking trails.
There are waves of people that would quit their job for a cozy clerical/administrative work that was cost-effective for their suffering. HOw much I dont know.
This is not a meaningless distinction -- one of the features of UBI is that it is universal. If this just goes to unemployed people we cannot see the change in behavior with people who are earning close to their reservation wage. Do they stop working?
This is streamlined rebranded welfare. Not a paradigm shift.
- Anyone except previous winners can enter.
- You can only enter once per drawing.
- As the pool increases the payout does not, only the number of winners.
- Winners get a basic income for life.
- As another condition they agree to an amount of monitoring so that we can effectively study how they behave with the basic income.
- This one would be hard, but you might have to be made ineligible for other government assistance programs maybe?
State lotteries already offer annuity payouts and even better they sometimes have 100k for life lotteries. These aren't perfect as the amount is too high but it's worth studying anyway. The basic income lottery described above would be an even better approximation.
EDIT: I just did a bit of googling and it looks like this has been tried before [1][2] , but the amounts were time-limited and low. It would probably have to be state-sponsored to take off.
[1] http://www.businessinsider.com/germany-basic-income-lottery-... [2] https://www.indiegogo.com/projects/the-my-basic-income-proje...
Aside from that, I really like your idea. Given the number of people who want to see a UBI, this might be one celebrity endorsement away from getting crowdfunded.
These kinds of economic lotteries only create more inequality; which is against the whole point of UBI.
It makes more sense to start by giving out a really low UBI to EVERYONE and then gradually raise that amount over time.
Now, my parents run a company which mostly has physical workers - and for a physical worker, in the "poorer" part of the country, 1500PLN/per month(after taxes) is an ok salary.
The day the 500+ program started, several employees left, literally saying that they have 3-4 children, so by just getting the money from the government they will be better off than working and they don't need a job anymore. They are all jobless and living off 500+ as far as I know.
I would say that's a pretty good indication what will happen with UBI - I'm sure there's loads of people who wouldn't leave their jobs because they like having more money(me included) but for a lot of people if free money is enough to get by then that's what they are going to live on.
So not really sure what we can learn from that. Perhaps salaries are simply too low in Poland?
Yeah, yeah... I know that kind of story.
This isn't the complete picture. You are presenting anecdotal evidence, and omitting important details. Some important details you are ommiting:
1A) For the job you provide, is the QoL of the work low compared to the wage and potential health hazard(s)? This seems to be the easiest counterpoint to your entire argument. You also lack statistical relevance. 1B) You omit the question wether those workers were easily replaced. If yes, what type of income & benefits did those people receive? If no, why not?
Aside from that one:
2) Which other social benefits exist in Poland?
3) Are these affected by child support benefits?
4) How exactly do the various tax systems work in Poland?
5) Are/were they performing unreported work?
> I would say that's a pretty good indication what will happen with UBI - I'm sure there's loads of people who wouldn't leave their jobs because they like having more money(me included) but for a lot of people if free money is enough to get by then that's what they are going to live on.
Do you have children yourself? Children are a huge joy, but also a huge burden. It is a living hell to both work, and also have children. What some people with good wage do is work full time, both, and have child caretaker(s). Those are going to be employed.
There's also the problem that unskilled work in the West is in decline. I don't know if that is true for Poland though.
And there is the notion that you either work full time, or you don't work at all. Why these extremes? With 3-4 children you are overburdened by them, and it'd be an option for one of the parents to not work full time.
The interesting question is what would happen if it was for everyone and not just those with children. Do you think this would be a bad thing?
Looks like this isn't quite correct:
"The new, universal child-raising benefit of PLN 500 (EUR 114) monthly is granted for every second child under 18, and for the first child if the family income is below PLN 800 (EUR 182) per capita per month (PLN 1,200/EUR 273 in the case of child disability)."[0]
[0] http://ec.europa.eu/social/BlobServlet?docId=16077&langId=en [PDF]
There may be other issues baked into the implementation, but it will be hard to say the result until it goes into action and we start getting data
I think it's worth celebrating that Iceland is doing controlled tests to explore this way. To really understand the best design for UBI, we need more of this.
"It will give them benefits automatically, absent bureaucratic hassle and minus penalties for amassing extra income."
even though the taxes from that is exactly what would make the whole program absolutely free - and is the basic point behind a UBI. It really is "free" for the country.
A proper test of UBI has to make it available to everyone.
Advocate for the Unconditional Universal Basic Income. All citizens deserve an equal allotment of the benefits, especially because no nation's populace is ever 100% mobilized as workforce.
But a detail: it will not be 'streamlined'. Those government workers are not going anywhere.
It's worth an experiment, though.
Prior to UBI, the lowest possible income is zero. After UBI, the lowest income is X. The poorest people in the nation will have an income of X, so X becomes the new relative zero, the new baseline. Prices of everything (food, housing, whatever) will reset relative to X. So uni will become worthless shortly after it's introduced.... but only if it is truly universal.
Someone feel free to tell me if I'm missing something.
Worst. Idea. Ever.
I know -- it's a common feature of income support systems, including here in the US.
I don't know whether UBI is going to prove workable or not. But even if it doesn't, if we could just redesign the systems we do have so they never give recipients a disincentive to work more, that would be a huge, huge improvement.
That last part is huge. A disincentive to work by cancelling benefits is a feature of nearly every current system. It is extremely important that someone test a system without this in it to see how a people react.
This looks like a very important test for the viability of UBI.
This is a pointless discussion. Just give everyone enough food, shelter, and free access to medicine. It'll create a society where we don't stress over losing a job because we don't know how we're going to get our food tomorrow.
The reason that some people think this "disincentiveces" people to work is that they'd have to pay higher wages and wouldn't be able to exploit human beings, as all capitalist systems do. That's it. That's their whole argument. The rest is just dressing it up with empty moral questions about "giving away the fish instead of teaching how to fish".
Starting with numbers: about 204M working age population in the US - hence the USD10K to each of them example would just make somewhere what is spend yearly for military and banks - the 8 times numbers cited in the article of what is spent today does not make any sense.
The linked article does not mention any amounts that Finland wants to provide to the 2k people - instead it is referring to Swiss calculations - last numbers I've heard with Finland were on par with current social security / poverty level pays (~EUR600 p/m) - this of course does not enable most of the key effects intended with an UBI (money into spending, freedom of choice for work etc) - it only continues the current system (with some potential savings within the administration).
To get a better understanding we have to at least repeat the Canadian experiments from the 1920s (proven that it is substantially beneficiary for the economy overall) - more money than poverty level, people must gain freedom by the possibility to live.
Given that soon a large proportion of people will not have a chance to find a job that will allow them to survive, we either go back to lords and serfs or actually look into potentially sustainable solutions.
For most of history, governments addressed unemployment by starting wars. By shipping off to war, the unemployed temporarily get a job. They either come back dead or ready to take a new job in an economy revitalized by the stimulus of government war spending.
John Maynard Keynes noticed this pattern, especially during the Great Depression and WW2, and made a brilliant suggestion: continue with these government interventions, but keep the government spending and drop the war part. We call it "Keynesian economics", but really, what Keynes invented was capitalist peace. And guess what, since then, no two countries that both had McDonald's had fought a war against each other since each got its McDonald's. [1]
We need a Keynesian boost today, not because of technological progress, but rather the contrary: the rapid technological progress of the 20th century that brought tremendous economic prosperity to humanity has finally come to a grinding halt. Let's stop denying this. The stream of lifechanging breakthrough inventions of the 20th century, from A (antibiotics) to Z (zippers), have ended. As a result, we now suffer from secular stagnation, something Keynes understood very well back then, and Larry Summers understands in the present. [2]
It's especially absurd to claim that automation is the cause of this. Automation has already upended society: it was called the Industrial Revolution and happened 200 years ago. The upheaval caused then to human lives and employment was far more dramatic than anything happening today.
And basic income is simply the most fair way to apply Keynesian policy. It is more fair to split the money up and distribute it equally to every individual than it is for the government to buy things on their behalf. Highly distributed spending will also avoid creating market distortions and liquidity traps. [3] And the resulting economic boost will lead to increased tax revenues and, who knows, maybe more jobs -- this time not subject to labor market distortions caused by people being desperate for work.
[1] https://en.wikipedia.org/wiki/The_Lexus_and_the_Olive_Tree [2] http://larrysummers.com/2016/02/17/the-age-of-secular-stagna... [3] https://en.wikipedia.org/wiki/Liquidity_trap
Finland is going to selecting 2,000 unemployed individuals, at random, and offering them cash without strings. Current unemployment schemes, they believe, hold back individuals from finding part time work / any work because the benefits outweigh the job opportunities. They hope that this new scheme promotes people to take work and have an adequate safety net to prevent homelessness and hunger.
If you just pay everyone X amount of money every month for whatever, it just means that in order to produce something you'll need to pay someone a lot more than that X amount in order to work and produce it and also it means that that item is gonna increase massively in cost in order to pay the items production itself.
I am highly against that idea.
You want to solve issues? Give free food/water and shelter for survival, thats all a human needs. It doesn't need to be a food from a chef or Evian water or a house with even an internet connection. All it needs is just to provide some safety that that person is not going to die of starvation or weather. Other than that if you want to have a better have and lifestyle well you have to work for it.
There are plenty of entrepreneurs requiring people of various backgrounds, but these are generally unpaid positions. I am currently writing a web-app for a charity, and have just launched a customised wordpress site for a new business. These are of course unpaid, and like the article states, it's not worth the risk of starting my own business (being a freelancer for example) as it would mean coming off benefits completely and hoping you'll make enough to pay for everything you need to pay for. UBA would suit me great. I could become that freelancer instantly, and with no fear. That company, who's website I just launched wanted to pay me, but legally it was impossible due to the reason I just mentioned (freelancing).
I'm also currently writing a language learning app, a mashup of my favourite features of DuoLingo and Memrise in my free time. Perhaps monetising that in some way may lead me out of this stagnation.
It's by no means a perfect test of UBI, but "re-branded welfare" isn't really fair either.
1) for the immediately unemployed that have had a history of paying tax, give them generous payment coverage between jobs for a 3-6 month window type thing. Something like 60% of their pay.
2) after said time window, if no unemployment is found you are given guaranteed 30 hours (or whatever is right) work at minimum wage in areas that are as non competing the the economy as possible. E.g. Beautifying the city or helping seniors etc.
3) if you refuse to take minimum wage work you can get a set amount of food and basic accomodation to keep you from beng homeless/starving.
From point 2, as automation becomes more prevalent and effective the number of hours worked can be reduced to match this progress.
Now I'm all for spending money on the commons in ways the private sector is too petty to address, but do this for the results of the investment, not just for employment.
I'm more OK with adjusting UBI to cancel out fluctuations in infrastructure spending.
The government is eager to see what happens next. Will more people pursue jobs or start businesses? How many will stop working and squander their money on vodka? Will those liberated from the time-sucking entanglements of the unemployment system use their freedom to gain education, setting themselves up for promising new careers? These areas of inquiry extend beyond economic policy, into the realm of human nature.
I am not a fan of the idea of universal basic income, but I would love to see the existing social safety net system get tweaked to be less retarded. I hope this experiment goes good places.
I think we're a long way off from total automation of most industries.
> universal
Doesn't sound very universal. One of the big factors that make it a good idea is that receiving the basic income shouldn't make you disincentivized from doing more and getting a job, etc. Otherwise, how is it different from existing welfare programs and such?
http://www.npr.org/sections/money/2013/10/25/240590433/what-...
Don't give them the money just for two years, but guarantee them the money over their whole life and you will see vastly different results.
Another "problem" with this kind of study is that they are giving money only to unemployed people. Because it would be also interesting to see what people with jobs would do. I suspect a lot of people would switch from full-time to part-time jobs (at least that's what I would do).
Since people born into wealth are "guaranteed money over their whole life", can't we study what they do with their life compared to what people who are not born into money do with their life? How or how not would this kind of study produce meaningful, legitimate results?
Another "problem" with this kind of study is that they are giving money only to unemployed people. Because it would be also interesting to see what people with jobs would do. I suspect a lot of people would switch from full-time to part-time jobs (at least that's what I would do).
There is some aspect of this kind of experiment/study to find out how individuals would perform if they didn't have the guaranteed income in the past but then suddenly do, but that's only meaningful for the transitional generation. If UBI were truly universal, it would need to be multi-generational. And how would those born with it, never having known anything else, treat/understand work? There's no such thing as "switching from a full-time to part-time jobs" in this context, or at least the impact and meaning of doing so is different than those who have a concept of what not having the guaranteed income means.
The time limit may, to an unrealistic degree, encourage the subjects to look for solutions for the long term. Then again the question of whether UBI encourages laziness seems to be out of scope already, since this targets only people who are already unemployed.
A proper study would be permanent and self-contained. Participants would need to give a portion of outside income to the program to simulate higher taxes and/or inflation.
I am concerned about housing though. In some places, the supply is extremely inelastic, limiting competition, and the demand is also inelastic due to the difficulty of moving. Although UBI could make moving to a cheaper area easier.
Incidentally, I'm not declaring a belief in either means-tested benefits nor UBI, just exploring the territory.
If it is redistributed, then taxes seem an obvious method. And clearly the richer should be taxed more, since we're attempting redistribution.
Unfortunately we all know that trickle-down economics fail, and corporate/elite lobbyists work hard to restrain corporate/elite taxes, to keep worker wages low, and to engage in practices such as zero-hours contacts.... and so on.
So... introducing new money risks inflation. Redistributing money risks perpetuating the existing broken system.
I don't know enough to advocate for or against basic income, but I'm pretty sure that it doesn't amount to a no-op. Whether it's done through printing money or taxation, it ends up redistributing wealth from wealthier people to poorer people.
In the case of printing money, the resulting inflation would cause everyone's money to be worth less: rich people, having more money, would end up losing more. In the case of taxation, the redistribution is more direct.
It is assumed that someone without a job will still get some money in the form of unemployment benefits, so their buying power won't be $0. Therefore, your premise is wrong.
Consider in these terms. % of economy going to the bottom may raise from say A% to B% but it's that does not push inflation. Because X% of the population has slightly less money to pay for the wealth transfer ~B-A.
Poor people get 1000% more money rich people get 1% more.
Or a poor persons income goes from 1% of a rich persons to 2%
It's already a problem that the benefits are such that net income from an actual job may be negative. But even with that, people might take a temporary job to get the experience. But they cannot afford it, because getting a job cuts the benefit payment instantly, and they can't afford to wait the time that it takes the bureaucracy to resume payments.
https://web.archive.org/web/20160321083817/http://mattbrueni...
What I care about is that the function from income earned to income (including subsidy) received be monotonic. Again, the income tax system (at least in the US) is carefully designed to have this property: when you make enough more money to move into a higher tax bracket, that higher rate is applied only to the amount of your income in excess of the lower bound at which that bracket applies. So the total amount of tax never jumps discontinuously, even though the marginal rate increases. Even though you keep less of your next dollar of earnings the more you make, there's never a point at which earning the next dollar will leave you with less money after tax.
The same should be true even if you're receiving a subsidy. That's all I'm saying.
Way to go towards helping people help themselves, encouraging middle class values, responsibility, yadda yadda, all the usual stuff Republicans blather about but don't actually care about.
Negative income tax (more emphasis) + basic income (less emphasis) would be a better system. A negative income tax would encourage people to work. Basic income by itself may just remove some barriers to working but may not result in a change (basic income > costs).
If you were to further lower the costs of labour, you risk stymieing actual economic growth which comes from improvements in efficiency. For instance, why use a machine when you can just hire more people?
Also what would the effect on monetary policy be? If this was funded though an income tax, would the lower savings rates of the poor, put more money in circulation, thus increasing inflation? Could you account for the change in prices driven by an increase in demand from those who's labour isn't actually valuable enough to sustain their consumption.
I don't claim to have the answers to welfare, but I really think that we should aim for a solution that provides as little market distortion as possible. I sincerely think that a negative tax would be a huge unwelcome and ineffective distortion in the labour market.
However, there would likely be implementation differences in practice as a consequence of their framing.
You need to understand how people react to the idea of "not doing anything and still get paid".
Do they give up? Do they get depressed? Do they create things? Does entrepreneurship increase? Violence rate?... These are all interesting questions
That's not what UBI is about at all. UBI is about getting paid no matter what you do. Which could be doing nothing. Or it could be studying or practicing or learning a new career or even working. The fact that UBI doesn't disincentivize spending ones time in a certain way (whether that's economically productive or not) is hugely important.
This is an aspect of where there's a huge misunderstanding about UBI due to competing economic theories. There are some people, a lot of people, who believe very strongly that the economy is fundamentally coercive. And, more so, that coercive economies are natural, beneficial, and overall desirable. A lot of that thinking has certainly been baked in to a lot of conventional wisdom, culture, laws, and regulation in the economy of western countries for centuries. There are other people who believe that the economy is or at least can be fundamentally cooperative, and more importantly that a cooperative economy is more beneficial and desirable and no less natural than a coercive economy. And this is where UBI comes in, because UBI is essentially how you bootstrap a more cooperative economy. One where people work not because they are coerced to participate in toil due to the alternative being starvation and privation but instead because they enjoy the work or are fairly compensated for it and treated well.
I think this is a huge factor that isn't getting enough focus. When people's jobs are replaced by automation and they are on UBI, how do they achieve self-worth? A lot of people get their self-worth from their work, even if their job is monotonous and relatively low-skill. We may be able to replace a low-skilled worker's wages with UBI, but we can't replace their feeling of self-worth. Not everyone can become an artist and even if they could, that may not be enough to give them a sense of purpose. In the long run, this may be a much bigger question than whether or not we implement UBI.
As long as it's within the law, on paper. If you're taking undocumented work then you're also taking a risk where you might lose your benefits if found out.
I think maybe there is a larger chance for undocumented work in countries like the US. I have an impression that there is a more prevalent culture of cash-in-hand jobs due to the sheer size of the country.
So maybe you react more to the quote than I would because I've always had documented work, whether it was 25%, 50% or 80% it was always documented and known to the government what I was doing so I could always apply for the necessary benefits I was eligible for.
Since I was looking for an advancement in my career (I left the company on good terms and my former boss ended up being one of my references) and not desperately looking for anything that pays, I ended up doing a lot of volunteer work while focused on increasing my skill set a bit and looking for the right opportunity. But I could have just as easily spent that time sitting on my ass.
Sure, some people who are not employed may be raising children or volunteering or doing something else beneficial to society,and encouraging them to work instead would be society's loss. But if we trust in the market economy, those people don't exist, and our real loss is people who are unproductive while on welfare who would be productive given a minimum wage job.
What motivates people to work is MASTERY, AUTONOMY and PURPOSE. This is very different from the profit motive, and is why people contribute to open source and science.
https://m.youtube.com/watch?v=u6XAPnuFjJc
And anyway, why in the 21st century does everyone need to work? Why should wages be the primary mechanism by which living wages trickle down to the plebes?
McDonalds will soon cut its workforce. So will Uber. Thanks to automation.
If you are jealous that someone somewhere is receiving free stuff, realize how much free stuff you have just by being alive in the 21st century!
If you are upset that you'd be taxed for the free stuff -- then make sure that we develop systems to tax machines. Yes you heard me, start taxing the machines.
If people were more free to choose what to do with their time, they'd probably spend more time with their family and study more and contribute more knowledge to society. Instead of working a dead-end job at McDonalds.
If you want to read more about the economics of this, I wrote an article:
The thing you are referring to is called taxes. The more money you make the more taxes you pay and there comes a point that you're paying more in taxes than the amount of the basic income.
Phase outs are a pure scam. Their purpose is to conceal imposing higher marginal rates on low and middle income people so that higher income people can pay lower rates.
That is, if you make below a certain amount, the government gives you money until your income reaches some base level.
The problem with this particular restriction is jobs that don't pay sufficiently, have wildly varying hours or are pretend part-time to stay under some benefits threshold. The solution can not be subsidize exploitative employers who don't provide a livable wage through UB. These jobs are a net cost to society and plain should not exist.
1. Anyone I know that has received benefits for being unemployed desperately wants to be employed again.
2. In the UK, unless things have changed, you can work up to 16 hours per week while receiving unemployment benefits and I believe the benefits you receive gradually falls with the amount of work you get paid for.
3. If you suddenly lose your job benefits aren't built so that you can maintain your current life style. You likely have car, insurance, and mortgage payments to make and the benefits you're receiving either just get you by or you have to renegotiate some of that debt. Not a situation you want to be in long-term.
How wide is your social network (by this I mean people you actually know and see)? How diverse is it? My experience, living in the Rust Belt in the US, just north of Appalachia, is that many people are more than happy to live on the dole for as long as possible. I chalk some of this up to laziness, and some of it up to the lack of reasonable work.
3. If you suddenly lose your job benefits aren't built so that you can maintain your current life style. You likely have car, insurance, and mortgage payments to make and the benefits you're receiving either just get you by or you have to renegotiate some of that debt. Not a situation you want to be in long-term.
Again, my sense is that your observations are true for some given demographic, but are probably not entirely accurate for people who are truly living at or near the poverty line. Those people may have been working, even steadily, but they probably didn't have a home, and may not have even owned a car.
You are right, of course, that if I lost my job (as a software developer), I'd be okay for three to four months without benefits, but it would be hard to maintain a home and a vehicle after that. That likely goes for many on HN. But we generally aren't the demographic best served by unemployment benefits.
This bug/feature in the welfare system is actually a major motivation behind the UK government's long beleaguered universal credit system, which is meant to support this kind of part-time work. The idea being that a worker should never ever be penalised by the benefits system for working, but should always earn significantly more in work than out of work and working more hours should always result in a net increase in income.
They are trying to do this by unifying almost all benefits (unemployment, disability, housing, child benefits, etc...) under a single administrative umbrella, and then only reduce the net benefit by £0.66 for each £1 earned through work. Its been delayed significantly because it requires a major IT overhaul, and that project has so far been a £1-2 billion black-hole of incompetence by a series of IT consultancies that have all failed to deliver the system needed to merge all these complicated means tested processes together.
Can't recall the specifics but they were not stupid people and I believe they'd done the math correctly.
My father makes so much money that when he's unemployed he actually doesn't really look for a job that urgently. This is because his unemployment benefits are enough for him to pay the bills. He'd like to make money to retire... but he does rest for a few months in between jobs.
The counter-argument of course is that you shouldn't have children if you can't afford to raise them, but the disincentives are there, and as crazy as it sounds people are incentivised to have a lot of children as a method of escaping work.
(Optional sad Futurama parody being: https://en.wikipedia.org/wiki/The_Cyber_House_Rules)
It should never be more beneficial for someone to sit at home than to go out and earn a living.
All the more reason not to discourage them by having them come out financially worse for doing so.
This is modern day slavery. There is nothing universal about this. It if was universal income than you must get that money irrespective of what choices you make in life. Just because you are getting money from government, government puts up a chain around your neck and says you cant work.
In USA such people might turn to underground economy such as drug peddling.
One example we can look at are university students in Finland. They get 340€ per month student benefit plus €200 student rent support, a total of 540€ per month.
This student benefit is not decreased as long as a student earns less than 1000€ per month from other income. And yes, the students are quite eager to take part-time and short-term jobs.
For me I was bumping on the limits while on receiving student benefit, so it made no sense for me to work any more hours than I did. Had I worked any more, the pay would have been effectively zero, which is crazy in my opinion.
edit: i misunderstood your comment, seems like your interpretation lines up with mine.
The problem is - Government Unions are the most powerful in every state, and they will never, ever allow any significant layoff of personnel.
So you get a 'new program' without the most important stated benefit.
The reality of government, is that it is systematically inefficient because of entrenched labour practices - no just because they 'may not be good and doing some thing'.
I love public transport.
In Toronto - we still have people at every station selling tickets and making change. 17 of them were on the 'sunshine' list last year as earning over $100K in the year. You read that right: the guys in the booth making over $100K. Granted, this is with 'overtime', but probably not more than many people in the private sector work.
So the government can't help put pay many of it's entities wages that are quite above normal, with massive add-ons and incentives.
Given that small tidbit - can you fathom why it's so gosh-darn expensive to add public transit services???
There are a few other fairly fundamental problems with the program as well, first being simply the cost (Ontario government that is 'pro' program said it would cost $175 Billion a year, basically our whole budget) - and then the moral/incentive issue: where I live in Montreal everybody is an 'artist' 'photographer' 'cinematographer' 'choreographer' 'dancer' 'writer'. But they all work in coffee shops and restaurants. Montreal would go bankrupt instantly because the 'cinematographer' that makes my latte in the morning will quit instantly. In my community - there is absolutely no sense of 'industriousness' in the Anglo sense - they see no problem with fussing about making quite bad films that nobody wants to watch. Were there some latent amazing output I might think it's a good tradeoff, but no, they're seasoned amateurs.
In a rational and sensible society ... this program would be amazing. But then, in a rational and sensible society, there would be very low unemployment, and streamlined government so that the 'means testing' issue would be moot.
It might work in some specific places.
The idea of BI is that you won't be able to live off it in Montreal. It might be sufficient to live off in some small remote town, but not in megapolis. They'll have to still wait tables, or move from Montreal.
For instance, food: Handing people a government decided food basket will not optimize for what people want to eat, or know how to prepare. Give them enough money to feed themselves, and we spend the same amount and we have happier people and less distortions. Same thing with shelter: Money means that we let people make their own choices, instead of recreating a new version of the projects. The one place where the market tends to fail is medicine, but that's because people's preferences there are a lot less valuable, as all people really want is someone to help them get healthy when they are sick. And even then, there are cases where giving people choices is better: The US' end of life care is so expensive and so dismal in part because what is covered and what isn't is decided by third parties: Often people prefer to end their life comfortably than to do many of the uncomfortable, but somewhat life extending things that we do to them.
That's the ultimate argument for money: Maximizing people's choices in how to go around getting the basic necessities of life. The trick is that the amount of money we give people would have to be modified to make sure said necessities can be met.
The moment someone stops producing, he is a burden. He must be carried on by someones else production. The government does not produce anything. The moment he starts handing over cash to people who do not produce, he is transferring the production of someone who works hard to someone who does not.
You want to help those people? Pay them to study, get some skills. Pay then to clean the streets or the public bathrooms.
But for God sake, do not pay them to do nothing. It's unfair with the rest of those who actually work really hard for this handed cash.
They're that way because the only jobs they can get are jobs that will have them work all day long for a pay that won't even cover their basic needs.
Human exploitation in several forms is all too real and happening right next to each one of us, and almost no one seems to recognize it.
Do you want to give them jobs? Fine. But don't provide minimum wage that will make them have to work 70 hours a week just to make ends meet, and want to kill themselves afterwards.
I'm not against basic income, but there absolutely is risk to society.
Notable source: https://theguardian.com/business/2016/jan/18/richest-62-bill...
We are wringing our hands over the perceived threat of "lazy" people when the cure for this alleged disease causes so much misery for so many people already. It's not a fear founded on empirical evidence.
There, you just solved the problem. Put money into creating this structure and it'll sustain itself.
I'm not trying to convince you that their worldview is better. But if you're talking about state-wide things, you have to take those people in consideration, too.
Do we need force to do this? Do we need cronyism? Do we need corruption?
The state can be efficient too, regardless of it being a monopoly. It just needs the same thing an efficient company does: overseers and the right push to be efficient (a.k.a. an informed and well educated population that knows when they're being scammed and demands better services for their taxes)
>> Now, the Finnish government is exploring how to change that calculus, initiating an experiment in a form of social welfare: universal basic income. Early next year, the government plans to randomly select roughly 2,000 unemployed people — from white-collar coders to blue-collar construction workers. It will give them benefits automatically, absent bureaucratic hassle and minus penalties for amassing extra income.
>> The government is eager to see what happens next. Will more people pursue jobs or start businesses? How many will stop working and squander their money on vodka? Will those liberated from the time-sucking entanglements of the unemployment system use their freedom to gain education, setting themselves up for promising new careers? These areas of inquiry extend beyond economic policy, into the realm of human nature.
Basically, no one knows how humans/societies will react to such a hand-out, and this is trying to figure out if an eventual universal income will be effective.
Also, this quote from later in the article:
>> Mr. Saloranta has his eyes on a former Nokia employee who is masterly at developing prototypes. He only needs him part time. He could pay 2,000 euros a month (about $2,090). Yet this potential hire is bringing home more than that via his unemployment benefits.
>> “It’s more profitable for him to just wait at home for some ideal job,” Mr. Saloranta complains.
>> Basic income would fix this, he says: “It would activate many more unemployed people.”
The "universal" quality is that all people will be eligible for UBI. Everyone will receive the difference between what they make and what UBI guarantees.
It's sort of like the popular phrase in the U.S. - "everyone is guaranteed the same opportunity but not the same outcome". Thus, while all will have access to UBI, the payout will be determined by individual circumstances.
Regarding Finland's program, it's likely they had to choose a group of individuals who were easiest to justify paying UBI under current popular-thought. Therefore, they chose a group already receiving or eligible for unemployment/assistance and argued they were simply replacing one for the other. That is of course just an educated guess on my part.
So, yes, UBI itself is in fact universal although the initial rollout, or test, is highly compartmentalized.
Edit: As someone pointed out, I'm probably confusing UBI with GMI - Guaranteed Minimum Income.
It's starting to feel like we're discussing rules on laying a foundation while others are already fast at work on their fourth and fifth floor, i/e, what's the point of giving everyone a ladder if the roof is consistently growing out of reach?
This isn't UBI either.
UBI would simply give everyone the same income without subtracting the difference for extra earned income. You could earn millions and still receive your basic income.
It ignores where the resources come from and the jobs being performed in other parts of the global economy that must be cut, often in some other country, because the resources are being used for something else.
If a country is going into debt to stimulate, its pulling resources from other countries where jobs have to decline. But perhaps those declines are more spread out and harder to measure and understand. So we can make the mistake of thinking they don't happen.
But what if a country stimulates by printing money, not borrowing? Money is only a medium of exchange, not an actual resource. Creating more of it just means more it has to be used to get the same result, if you look at what really happens over time, as opposed to comparing prices the day before you print with prices the day after.
For this, you should read Paul Krugman's babysitting co-op analogy, a basic description of how an economic depression functions: https://en.wikipedia.org/wiki/Capitol_Hill_Babysitting_Co-op
It is a try to save capitalism from itself. You see, today's tech is turning entire sectors obsolete (e.g. self-driving cars). In a standard capitalistic economy, you work at XCorp who pays you (the employee) in order to be able to buy their products. This model worked in the 20th century where industries (e.g. Ford) had thousands or even millions of workers all over the place. Now we have 5-member companies running startups with millions in turnover.
Today average Joe has a very hard time finding a job that will allow him to create a family and live well and no, not everyone can become an engineer, lawyer, doctor or banker.
So, we either find a way to re-distribute wealth or we're up for a bumpy ride that will end bad for everyone...
Universal income is an idea that is making rounds and is generally accepted by modern economists (left, right and liberals) in various forms of course. The idea is that someone with rather basic needs, will spend all his income in food, shelter, clothes, etc. So, since it's nearly impossible for them to find job, just give them money to spend buying stuff, even iPhones if possible...
I believe that we're in a phase of uber-consumerism. To sustain this kind of unnatural growth, capitalism needs to find virtual ways of creating demand or we need to start exporting to mars.
it's not gonna have much effect if only a few thousands people are paid (who may already get unemployment benefits by the way).
Inflation is generalized increases in prices.
I really dont understand why people make the argument that UBI would cause inflation due to demand: it would shift prices of many products (because increased demand in basic cheap goods) but probably marginally so and even then it would not affect inflation rates as a whole. High luxury cars are not going to have more demand.
> If you just pay everyone X amount of money every month for whatever, it just means that in order to produce something you'll need to pay someone a lot more than that X amount in order to work and produce it and also it means that that item is gonna increase massively in cost in order to pay the items production itself.
Outlandish claim! We dont know how its going to happen. Its not true that you have to pay more, actually you could argue you will have to pay less, as UBI supplements the income: i.e. someone that wants to make 1500U$S a month, and with UBI gets 500, might be satisfied with an easy 1000U$S job.
True, the jobs that nobody wants to do will probably have a higher premium: it gives higher leverage to every human being as they can choose not to work a bad job like garbage disposal, or cleaning up road kill. So some labor is subject to decreased supply,and others of increased demand. Its impossible to know what would happen without experimentation.
> You want to solve issues? Give free food/water and shelter for survival, thats all a human needs.
This is the exact opposite point of whats truly attractive about UBI. Free food and shelter is very expensive to give through the state ,and much cheaper to just hand out money!
For example, SF spent 241 million dollars in homeless programs in a year[1]. There are about 6,500 homeless people in SF[2]. Alternatively, the city could have given them 37k U$S cash and come out ahead, effectively putting them above the median income in the US[3]
In theory, the city could literally make the homeless people disappear overnight at no extra-expenditure.
http://www.sfchronicle.com/bayarea/article/S-F-spends-record...
http://projects.sfchronicle.com/sf-homeless/numbers/ [2]
https://en.wikipedia.org/wiki/Personal_income_in_the_United_... [3]
At some point it becomes worth automating the work and that means no rising pay and fewer humans having to do jobs they dislike.
Can you elaborate on that? I honestly can't see it.
I don't see why the answer to point 1A would be a"counterpoint" to anything - I don't think I presented an opinion on the 500+ program? I did mention what I think will happen with UBI, but again, I don't see the answer here being relevant. I also think that you might be under the general impression that I am against 500+ or UBI - while nothing could be further from the truth. I'm happy those people can live and care for their kids without having to work. If people can pursue their interests without having to work on UBI - great! I'm just saying that with UBI, I think it's a very safe bet to say that a lot of people who are in employment right now will actually stop working altogether. But it's just my opinion, it's not backed up by professional research or anything.
refers to "not performing a comercial activity", which means the same thing in my native language.
If you read my whole comment you can clearly see that's my point:
>Do they give up? Do they get depressed? Do they create things? Does entrepreneurship increase? Violence rate?
Once again, I'm not sure about how the reality would play out on a large scale, but obviously there is risk.
(If you wanted to really understand all the dynamics, you'd probably want to wait more than a generation to understand how subsidy recipients' decisions to raise children are affected and whether those children make systematically different life choices.)
What possible overseers can a government have? Authority begins and ends with them. It has token overseers sure, the same way a dictatorship to china might point to its token elections. But that is all.
1) High income: My personal gross income was among the top 20 % of earners. Thus, high taxes.
2) Poverty: My family's net income after housing expenses was below the threshold of the last-resort income support.
All it took was having three small children, wife not working as the youngest was a newborn thus only the minimal maternity allowance, Helsinki region housing costs and the progressive taxation of "high earners".
The way to get out of it was to take a job abroad for a while. But Finland is my home, even if I hate some parts of the welfare state politics, so I came back.
So much that can go wrong and equally right, hence they are testing this. Though a small test will be isolated from all global country impact and bias towards a false positive due to small impact. If that is projected to the entire country then and only then will the impact be truly seen.
But be interesting how this works out, I'm sure the initial trial/test will work out but once you scale that across a country then you start to see the true impact and outcome.
One question to ask yourself, when mortgages and taxes increase the costs of owning a property - have rents ever gone down! I'll say no upon that.
"Because the supply of land is essentially fixed, land rents depend on what tenants are prepared to pay, rather than on landlord expenses, preventing landlords from passing LVT to tenants."
Unlike property tax, LVT only taxes based on the land itself, and so doesn't disincentivize more productive (i.e. costlier) use of the land.
[1] https://en.wikipedia.org/wiki/Land_value_tax#Economic_effect...
When you project a local experiment to an entire country, don't forget that a concept similar to UBI known as "communism" has been tried before in the USSR, China, Cuba, and a few other countries, with limited success and many downsides.
But excellent comparison with communism and indeed that is comparable upon many levels. Though more niche in this aspect it still falls within that stable of thought. As an aside the only example most people aware of in which communism style approach works would be the Star trek universe. Which only add's fuel to the old saying "money is the root of all evil".
Certainly be interesting how this pans out and I'm mindful that if this was a whole country taking part that the true effect would take a few decades to get a true picture of the impact. With many aspects coming into play and let us not forget economic migration and with Finland part of the EU Schengen project then that aspect might be more impacting than envisioned. After all look at Spain and the UK free access to health care and how that is impacted by free movement, certainly not inconsequential.
For reference, full time day care in Belgium will cost you about 500€ per month if you are not poor.
Childcare is about 0-400 depending on your income but you have to be outrigh wealthy to get close to the latter (we pay 128€/m with a high 5-figures €/year household income).
Having UBI produces similar unemployment rates?
If you increase the amount of money available, that bids up prices for the existing resources.
If low skilled labor is already fixed at an artificially high price (like a minimum wage), a general price increase will reduce the value of the fixed wages paid under these arrangements and increase employment.
But you could accomplish the same thing by lowering the minimum wage.
No additional value is created by stimulus. The extra money is just undermining the effect of things that have been hobbling the market all along.
But creating more money has other destructive effects and causes people to make unsound investments. It creates bubbles. These bad results can take years to develop.
All the quantitive easing the Federal Reserve did after the financial crisis has helped re-inflate the housing bubble. Rising rents that also cause people to have to move or suckers them into buying into the bubble. A replay of earlier stimulus.
While all the churn in the economy benefits some industries, it destroys wealth for all income levels in the long run. It puts the country in further debt and makes us weaker.
Instead of resources flowing to industries that make the country more prosperous in the long run, we over-invest in real estate.
Without all the subsidies, both direct and indirect, real estate would be a much smaller part of the economy and there would be more capital for investments that actually create more wealth, instead of things that merely appear to do so in the short run.
And where each member had to contribute 14 hours worth of babysitting a year just to pay for using the system. That's why there was more supply than demand in that "market" when it started.
https://en.wikipedia.org/wiki/Capitol_Hill_Babysitting_Co-opThere is some aspect of this kind of experiment/study to find out how individuals would perform if they didn't have the guaranteed income in the past but then suddenly do, but that's only meaningful for the transitional generation.
IMHO you can't ignore this that easily. When more people are quitting their jobs or switch to part-time jobs from full-time jobs due to UBI, the government loses taxes but now needs to pay for UBI. This is super-important to see if this whole thing is financially feasible.
IIUC you are arguing that people that grew up with UBI would behave differently compared to people that just switched to UBI? To be honest I don't feel this particular convincing, why should this be the case? There probably isn't any data on it either. Even if it would, the government/state still has to get through the transition period. One could with the same right claim that future generations are less inclined to work/educate than the transitional generation and thus make financing UBI even more difficult.
No, I'm saying that this is worth studying, exactly because (I agree) there isn't any data on it.
One problem, as you point out, is the ongoing cost. Socialism works better when there is a capitalist system, externally, to set the prices and help determine demand. The Eloi need the Morlocks to provide for them. The monetary cost for any UBI experiment on individuals' actions is, by definition, being paid for by something outside that experiment. But that's fine, this experiment is meant to answer the question of how the recipients respond to it, not how/if it is or is not long term viable (however the results of this experiment would eventually need to feed into that). And my point is we can start to answer this experiment by examining what people who are born into money do. What kind of jobs do they take? How do they act when they have a guaranteed complete safety net? There is a lot of data available on this, and it is not time limited like a two year study would be.
Even in a UBI setup, it's the government's/public's money, not the recipient's, right up until the point where it changes hands. A wealthy family can (and often does) make just as strong of a guarantee for a stipend as a government can.
Wealthy families are able to provide a layer of security that a government stipend never could. You can blow away your monthly stipend from your wealthy family on drugs and alcohol instead of paying the rent, and you're unlikely to end up living on the streets as your family will fold and send you more money. (anecdote: over the last 15 years I've met over a dozen people who were and/or still are like this)
When comparing wealthy family stipends to government stipends, the guarantee needs to be the same. Instead, wealthy families are generally able to guarantee a minimum stipend for their dependents, while governments would be guaranteeing a minimum==maximum stipend for their dependents/recipients.
For example, if you have a negative tax of 25% on income below $40k, unemployed people on $0 income will receive a $10k tax credit. This is equivalent to $10k Basic Income with a 25% tax bracket up to $40k earned income, since in both cases people earning $0 get $10k and people earning $40k get $40k.
You could make it a requirement to work, but then people could just get trivial jobs for $1 just to get the tax credit.
I don't give a cp about taxable income. They should not have that much power. Period. Take it away from them and put it to good use.
It's very easy to describe and administer such a subsidy, but it has a terrible bug, which is obvious and everyone has known about it for decades, but somehow we haven't mustered the will to fix it.
Your argument has a place, but it's tangential to my point.
I doubt this is a typical situation of someone on unemployment benefits.
It appears you're referring to when I said "(assuming a highly controlled, completely reproducible experiment actually can be set up in social/economic sciences)". I'm not making this assumption, I'm questioning if a meaningful experiment can actually be formulated and performed.
If a meaningful experiment can not be performed (and I'm not saying that it can), then examining and observing how people born into rich families operate would give better, or at least no worse, information than an uncontrolled, non-reproducible experiment would. And it might actually be cheaper to study those with money already rather than give people money just to be able to study them.
Just as a side note - I think it would be extremely difficult to find people who genuinely enjoy doing hard physical work for 8 hours a day, even at a high price point.
My fear when comparing the two would be that UBI would, over an extended period of time, put us right back where we started. I say this because UBI would essentially just be moving the starting point, $0/mo in this case, to say $2,000/mo, and that markets would eventually catch up to this resulting in hyper-inflation, i/e $25 gallons of milk.
However, since as wikipedia says, "most modern countries have some form of GMI", either I'm being too optimistic about GMI or too pessimistic about UBI. Then again, perhaps the issue evolves into one on taxation, loopholes, etc. since GMI exists and we're still discussing how to "fix" this issue.
I think all non-business deductions should go away and turn them into fixed credits (vanishing most of them entirely). Right now two homeowners each with $1000 in deductible mortgage interest, have different tax liability reductions if they're at different tax brackets. The one in the higher bracket actually ends up with a greater reduction in tax for the same deduction. And so on.
I define UBI as having a floor on people's income, where the government ensures everyone is above that floor. So it's universally ensuring everyone had a basic income.
Isn't that a desirable outcome ? Shouldn't the able bodied person who is working obviously earn more ? Giving people incentive to work not only helps them rise up but also prevents their exploitation in case they try going to underground economy.
> For instance, why use a machine when you can just hire more people?
If people are more efficient business will use people over machines. I don't think machines are be default always a good choice. What matters is the efficiency.
Free market capitalists who otherwise like machines and automation criticize the minimum wage laws for the same reason. Minimum wage laws force business to invest more in automation by outlawing hiring of people who could compete with machines over cost.
This happens anyway in our current system. Someone who's disabled and unable to work already earns less than someone who's working 50 hours a week in a minimum wage job. Negative income exacerbates that.
Politics could become a reason -- the people who are being replaced by machines become a powerful force, have a strong work-based ethic (different from "work ethic"), and care more about their well-being than the overall efficiency of the economy.
Either way, I'm curious to see more adoption of UBI - even if it is a small, homogeneous population. Maybe working class beneficiaries of UBI could dedicate a larger portion of their time to volunteering, or re-training.
However, their framing leads to different expectations. For example consider a flat income tax of 25% on income less $20k (going negative below that so unemployed people get $5k credit). Raising the negative rate to 50% sounds kind of progressive, since you're giving more to poorer people, but frame it as Basic Income, and yes you're increasing the baseline from $5k to $10k, but you're also implementing a 50% regressive tax band up to $20k earned income.
Another point is that they'll tend to be implemented differently due to framing. Basic Income is likely to be part of the welfare system, and since it's unconditional, you can just register once and receive it in perpetuity. Negative Income Tax is likely part of the tax system, so to get it you potentially need to submit a tax return saying "Earnings: $0" every year, which makes it more embarrassing.
1) something like reducing that payment by $0.50 per $1 earned as an example.
If the question would have been 'what would you do', I think I would have quit my factory job as well, actually.
I'm advocating for turning anecdotes such as this into data by actually performing a study.
Ignoring the hypothetical nature of your second paragraph, I think you miss the incentive to all "work", which depends on how much the worker thinks his work is worth.
Take my friend the farmer, who happily works on a tiny organic farm (hard physical work) for very little pay, because he feels his work is sustainable, and productive (helps others, provides food).
Also take my friend the construction worker, who would love to build houses for the rest of his life despite low wages, but won't, because he is unable to find employer that will enable his labor to bear fruit. Sure he could build mansions, and commercial monoliths to no end, embedding stone chipped from the Italian coastline into German upper class house-fronts, or build shopping malls. But he's not an idiot, he won't waste his life pouring his talent into luxury products and consumption infrastructure that won't help anyone in the end. He wants to build sustainable housing for people to live in, houses so cost effective everybody can have one.
Depending on coercion to motivate a work force, implies that the work to be done is actually detrimental to society.
And yet people are and would be pissed.
Don't get me wrong, I know full well many people are irrational and petty - but aren't these people that'll find some other irrational detail to get angry about?
Being angry that a cheap system for welfare helps someone get off welfare makes no sense. Especially if one disagree with having a welfare system?
But besides those sources there is also the fact that the child-raising benefits are only unconditional from the second child on, for the first child there is a maximum monthly income to get it.[2] If the main goal was the well being part, then this would not make much sense.
[0] http://www.thenews.pl/1/9/Artykul/250612,Poland-pays-out-mil...
[1] http://nytlive.nytimes.com/womenintheworld/2016/02/11/poland...
[2] http://ec.europa.eu/social/BlobServlet?docId=16077&langId=en [PDF]
What you suspect of other people tells a lot about you, and very little about other people. I would be careful with that.
I recommend you read http://www.occupy.com/article/graeber-phenomenon-bullshit-jo...
Scenario 0) I do nothing, get nothing.
Scenario 1) The government gives me $1000 and I buy $1000 dollars worth of goods and services, so now the economy is better by the net gain of $1000 worth of transactions - i.e. the mutual benefits of trade.
Scenario 2) I have a job, do my job and my employer pays me $1000 dollars. Then I spend that on $1000 worth of goods and services. Now the economy gets the benefits of $1000 worth of trade plus everything that I did for my employer, which is in excess of $1000 according to his calculation.
You compared Scenario 1 to Scenario 0 and said that Scenario 1 is a win, but the context was 1 versus 2, where it's a negative. In scenario 2, the employer could be the government paying me to improve the roads, for example, instead of the government handing me the money they would have paid me. In which case the difference is the improved roads.
Perhaps corporate profits would not have to be so huge and prices could be lowered if the pay for work done was more closely related to the value added.
For that matter, how about all the jobs that nobody necessarily "wants" to do, are low paid, and yet critical to the functioning of societies?
So the benefit of giving that money must provide a gain greater than the deadweight cost. That gain could be non-monetary (a mom raising her kids for example) -- but just the 'spending' doesn't benefit the economy because spending $500 actually cost much more than $500.
> Even though you keep less of your next dollar of earnings the more you make, there's never a point at which earning the next dollar will leave you with less money after tax.
The problem is that's not the only thing you want. You also don't want marginal rates of 75%+ for low and middle income people. It's not only that taking a $20K/year job shouldn't cost you $21K/year in benefits, it's that it shouldn't cost you $15K/year in benefits while you now incur more transportation and childcare expenses.
I don't know about you, but I don't think that the problem in the US system is that a family with two senior developers pays too many taxes.
Therefore, on top of a UBI, the only thing that doesn't screw the middle class over is to maintain a progressive tax rate.
> Nothing short of a 50% fixed rate will not be a huge tax break for us in the 1%.
The current highest bracket in the US is 39.6%, which doesn't come into play until you've made more than $400K. The vast majority of "middle class" people pay 28% marginal rates or less -- anyone up to $190K for single or $231K for married filing jointly.
A household making $200K currently pays an effective tax rate of ~22% -- and that's $200K after all the deductions. To meet the same effective tax rate with a flat tax against a $12K/year UBI would require a flat tax rate of 28%.
Moreover, to be in "the 1%" you need household income in excess of $400K.
And most of the actual 1% pay the long-term capital gains rate, currently up to 20%, whereas with a 28% flat tax they would be paying 25 to 28%.
However, there are two problems that I see. I suspect there are more.
First is that what you spend is only related to what you make. Specifically, it is relatively easy to find ways to not spend money if you have extra. What this means is that, at an absolute level of what you make, a flat tax actually gives a very easy way for high income people to have a lower tax rate. Turning it into "the more you make, the more you can proportionally keep." Which is sorta antithetical to the idea of the flat tax.
The second problem is essentially the cold start problem. Society is expensive to keep going. There is not much of a way around that. So, the rate will have to be relatively high to get the necessary funds. And this will hit those with low incomes harder than the ones with high.
I don't think either of these are necessarily road blocks to the idea. But, I do think it will necessarily get complicated.
I think you are missing the point. If it is truly a flat tax, the number of dollars you are taxed goes up (in a directly proportional way to the number of dollars you make). So you DO pay more the more you make. It isn't even a logically arguable point.
"a flat tax actually gives a very easy way for high income people to have a lower tax rate.":
-- again that's a completely illogical statement. If it is truly a flat tax *EVERYONE* has the same rate -- that's the very definition of a flat tax.No one is going to refuse a salary bump because it will increase their marginal tax rate.
Taxes should be used to pay for shared resources (roads, police, military,) but paying other people's living expenses? No thanks. America has poor and unemployed, yet Democrats seem to have no problem with illegal immigration which reduces the ability for those poor and unemployed to gets jobs.
1. Poor people on welfare wouldn't be dis-incentivized to work more.
2. It reduces the cost of those programs like welfare that cost a lot in bureaucracy for no gain.
3. Lower income people have money velocity that stimulates the rest of the economy.
> Democrats seem to have no problem with illegal immigration which reduces the ability for those poor and unemployed to gets jobs
Illegal immigration doesn't do that... automation is a big factor in that. If your job is being taken away by an uneducated illegal immigrant then you are not competing for highly paid jobs.
> If I want to donate to charity, I will.
Charity has been shown to be less efficient than just giving money directly to poor people.
Can you provide sources for this? Also, what do you mean "efficient"? If you mean there's no overhead, sure, so long as you don't spend any time trying to determine where the need is and just hand cash to the homeless guy you see on the street, but I care about effectiveness, and that's very likely not going to be "give money to the guy on the street near my office".
GveDirectly is better than most charities (which is mostly just giving money to poor people, but is a charity that does it intelligently). Additionally, the Against Malaria Foundation probably has a higher effectiveness.
The problem with depending 100% on people giving to charity is not that it's worse than depending on them giving money to the poor. It's that it completely ignores the various externalities that can be corrected through taxes and government spending. Would the world be better off if we cut government spending in half and send that money to AMF, GiveDirectly, and similar programs? Sure. But would the world be better off if we just cut government spending and hoped rich people would become more altruistic? Probably not.
To answer your real point. You can never have full employment. There are always going to be people that can't have a job, whether that's due to health, lack of job availability, or a number of other issues. What do you do with these people? They have to eat or die.
The current system design is to provide a a safety net. The alternative is that people resort to crime to survive. Do you think that'd be a better country to live in? Do you have an alternative system?
>How many people have been deported under Obama?
>President Barack Obama has often been referred to by immigration groups as the "Deporter in Chief."
>Between 2009 and 2015 his administration has removed more than 2.5 million people through immigration orders, which doesn’t include the number of people who "self-deported" or were turned away and/or returned to their home country at the border by U.S. Customs and Border Protection (CBP).
>How does he compare to other presidents?
>According to governmental data, the Obama administration has deported more people than any other president's administration in history.
>In fact, they have deported more than the sum of all the presidents of the 20th century.
http://abcnews.go.com/Politics/obamas-deportation-policy-num...
The way capitalism is designed is that not everyone can have a job. So you pay the poor not to starve and come loot your house.
Also, I believe, there was a study suggesting that more equal society is better for everyone involved, including you.
Poverty also inhibits education and I suppose you can figure out why uneducated or lowly educated society is bad.
Umm, because we don't want them to die? And society as a whole benefits from it?
> I am not sure I understand why my labor must pay for others against my wishes.
What gave you the idea you get to decide what taxes are used for?
So some of your earning power really belongs to the community, and should be divided equally among the community, including yourself.
Modern day liberalism has become a religion, where "what should happen" and what's "morally right", and who has "advantage over others" replaces "God's commandments", "sin", and even in the case of affirmative action, "original sin" (being a white male, you are born having others more deserving than you).
And just like any other religion, it's all just a bunch of horse shit.
I'm pretty sure all the business owners who take advantage of illegal immigrants to violate labor laws, pay them pennies compared to what they'd have to pay those 'poor and unemployed' Americans, and generally abuse the heck out them... --all-- vote Republican.
If Trump actually builds a wall that works, a bunch of scummy Republican business owners are going to be screaming bloody murder. Illegal immigration is a problem, but there is a demand side to it and no one ever seems to bring that side up in discussions.
If it were such a great idea for a country, it would have already occurred at a smaller level.
It has. The Svanholm community in Denmark (http://svanholm.dk) raised taxes to 80% for all its members, but in return you free housing, food and all other essentials. They have been doing this successfully since the 70's.
Nothing except the humongous coordination problem involved in doing so. These are exactly the kind of problems that government exists to solve.
If so, apologies. It is still easier for the wealthy to dodge. But not as easy. (Main way I can think of is that at that level you can often live off the company. I don't think this happens enough to care about. Could be wrong.)
This still doesn't address the cold start problem. If a region needs X dollars and that requires Y rate, how do you ensure that doesn't drown out the poor?
And again, I'm not pushing these problems as show stoppers. Just things that contribute to a complicated solution.
Also, don't you see how callous it is to worry about how a rich person has to pay country club dues, in the context of talking about poor people who struggle to afford food sometimes? Why would your sympathies lie with the person who has all of their basic needs met and is "struggling" only to utilize as many luxury goods (yachts, country clubs, sports cars, box seats) as possible?
Also, from the english translation: https://translate.googleusercontent.com/translate_c?act=url&...
"It requires personal energy, commitment and desire for self-management in the community to become Svanholmer. Both people with work "out of town" and people who want to work at home on the estate can participate."
This doesn't sound like they just hand out money, and seems likely (I'm just guessing here), that if you don't work you may get kicked out.
This all in all seems a lot different than UBI.
Unfortunately taxation itself reduces the incentive to produce and distorts the economy, and the Broken Window Fallacy is still a fallacy.
(BTW, Hacker News is simply terrible at discussing economics. This comment is hardly unique.)
> Broken Window Fallacy
The entire thread and discussion is a bit off-putting but it's worth noting that the question is, as always, what to do about unproductive assets. Nobody is advocating that healthy, able-bodied people should all receive free money from the government. That's why the Broken Window Fallacy is stupid. It's a fallacy against a straw man.
And yes, when it comes to unproductive assets there's good reason to believe that the government should step in and act as the "producer of last of resort." There's always work to be done. The government is never going to run out of money. And, in reality, you're going to end up giving these people money anyways (unless you want to see women and children starving the streets) so you might as well try to see some returns. I've never been a fan of basic income but a Job Guarantee[2] makes perfect sense. Finland would be far better off putting these people to work for the government. Basic income in this form (giving people free money while encouraging them to go to work for private producers) can, ironically, depress wages, unfairly subsidize badly managed firms, and ultimately hurt the economy. Unfortunately westerners are terrified by the spectre of communism so you don't get this sort of large scale public production any more.
[1] http://neweconomicperspectives.org/2011/07/mmp-blog-8-taxes-...
If we consider the goal of society to be increasing overall utility, then someone enjoying their free time is not unproductive because they are producing utility (for themselves). There may be more productive things they could be doing, but we shouldn't ignore that baseline. If the work offered by a Job Guarantee scheme is not producing as much utility for society, then it would be more efficient to just give them the money.
And moreover, how likely is it that they can increase their hours, but be paid exactly the same hourly wage?
I believe such people are extremely rare and as such this hypothetical disincentive isn't particularly relevant.
By "not worth it", I suppose you mean that he valued the marginal increase in income less than the marginal decrease in free time – which is entirely subjective and different from person to person? I don't see your point.
But if you did include the number of people who "self-deported" then you'd find that the total number is not that great under Obama and in fact is lowest since 1970s.
Now, I don't know what these two numbers from DHS reports actually mean and the DHS does not tell me, but I find it peculiar that the number of "returns" under Obama decreased 10-fold, while the number of "removals" doubled. More peculiar that the "returns" had been pretty stable for the past 30 years too, the 2014's 162K returns only had been seen in 1968 before.
https://www.dhs.gov/immigration-statistics/yearbook/2014/tab...
Obama does not initiate self-deportation though, so it's not really relevant to a discussion on the democrat's immigration policy
>I don't know what these two numbers from DHS reports actually mean and the DHS does not tell me
It tells you at the bottom of that link
> Until recent years, most people caught illegally crossing the southern border were simply bused back into Mexico in what officials called "voluntary returns," but which critics derisively termed "catch and release." Those removals, which during the 1990s reached more 1 million a year, were not counted in Immigration and Customs Enforcement's deportation statistics.
>Now, the vast majority of border crossers who are apprehended get fingerprinted and formally deported.
>Expulsions of people who are settled and working in the United States have fallen steadily since his first year in office, and are down more than 40% since 2009.
Just putting this out there.
http://www.learnliberty.org/blog/the-welfare-cliff-and-why-m...