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>So it'd be accompanied by a loss of minimum wage floor as well as it should be as low as possible (approx USD 1000/mo after initial trial phase in Finland.)

To expand on this, removing the minimum wage is meant to make it easier for people to "get their foot in the door". The economic notion is that e.g. if X's labour is not worth more than $5 per hour, and the minimum wage is $10 per hour, then X will have great difficulty finding work (because the ultimate minimum wage isn't $10, it's $0). This means they'll have more trouble obtaining the work experience that would make them more productive. Removing the minimum wage means anyone can work who wants to, and the basic income protects them from the hardships that normally accompany low-wage jobs.

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Also note that, unlike welfare/EI/disability programs today, a basic income isn't regressive toward those who want to work. You don't suddenly lose your basic income when you take that $2/hr job, so there's no disincentive to taking it.

The disincentive should be perceived by everyone, but it's not.

If I accept a lower pay job, I'm doing my part on lowering the pay for that job in the collective bargaining between employer/employee. You might think it's not detrimental for you, but it's detrimental for everyone who competes for that job. And, as your argument is truthful, it will become a spiral: no disincentive in accepting the $2/hr job, then no disincentive in the $1.95/hr job, then ... for n iterations until there's no disincentive in doing it for free, for the experience or the kicks.

And, of course, in the end the benefit will go the usual beneficiaries.

> until there's no disincentive in doing it for free, for the experience or the kicks.

You say this like it's a bad thing. Study after study show that people perform their best creative work when it's decoupled from extrinsic reward.

If basic income covers all of your needs and allows you to do what you enjoy for the sheer pleasure of it, what's wrong with that?

Basic Income should be quite a bit higher then; enough for a fairly comfortable life with no serious financial worries. But then, sure, I'd work for just the fun, the pleasure and the kicks. I probably wouldn't be freelancing for banks, though. Some jobs will always require pay in order to entice people into taking those jobs.

> what's wrong with that?

What's wrong is a potential increase in income inequality and worst wealth distribution.

A corporation or somebody from a upper class will be getting richer from the work being done while the guy(s) doing the work with the basic income will stay at the same level. I don't think we should increase our inequality metrics even further.

There's nothing at all wrong with wealth inequality if those at the bottom are having all of their needs met.

That's a fundamental premise where we disagree. Particularly in a society where most wealth inequality is due to inherited wealth, inequality - for me - should be the primary target of politics.

Is most wealth inherited? I thought it was fairly established that after 3 generations a personal fortune is usually lost.

Most wealth inequality is due to inherited wealth. I don't know if the fact you stated is true, maybe it is, but it's not the opposite of what I said.

http://inequalitywatch.eu/spip.php?article95&lang=fr#nb2

http://www.brookings.edu/blogs/social-mobility-memos/posts/2...

From the linked source in the second link you provided, it states that between 35-45 of wealth is inherited. Not to be overly contentious, but that is not "most". Is your point that inherited wealth is the majority of the unfair, and socially aggravating wealth inequality that angers a large percentage of society? Because that certainly seems believable.

By the way, thanks for the interesting links.

You're right, and not overly contentious at all: I should've said it's the biggest factor, not the major one. I had in mind values I saw somewhere for the U.S. and my country (Portugal), both around 60%.

Is there potential evidence you could imagine that would change your mind about that premise? I agree with GP that inequality is fine if the basic needs of everyone are met, I also go further and agree with Paul Graham that inequality is a sign of a healthy economy (http://paulgraham.com/inequality.html). I also find nothing wrong with inherited wealth because I love my heirs and want them to have an easier life than I did, I want them to have some silver lining if I pass, I'm in this for more than just myself. I thought about it for a few minutes and one piece of evidence that might make me reconsider your side is if you could show rising inequality (in an environment with an absolute basic-needs-met floor or not) leads to falling access of the basics like food, shelter, knowledge, and useful technology like penicillin. That would be a potential downside to increased inequality that I would care about -- I don't particularly care about the potential downside of increased inequality leading to increased envy since you don't treat envy by giving in to it.

Who gets to decide what "basic needs" are? Oh, "in a democracy"! That's ok then.

But I agree with you on the whole. The serfs should just be grateful I'm not beating them.

> potential increase in income inequality

you deal with it with progressive taxation

I think that, fundamentally and strictly speaking, progressive taxation doesn't qualify as "dealing" with the problem. It's not a solution, it doesn't even attemp to solve it. It's just a quick bandage; an attempt to minimize.

And, empirically, you can see it. In my country (Portugal), with a supposedly agressive progressive taxation, inequality measures (Gini and Palma) are increasing. And the amount of luxury cars too. :)

you fail to cover more than 90% of the jobs that just need to be done, and require 0 or less creativity.

as an example - what I do to earn money, while enjoying it mildly as abstractly creative process (software development) is vastly different from what I do in my free time (mountaineering, travelling, general wilderness adventures). You cannot buy my vote on this with some basic 1000 USD income, if you tax high earners like hell on the other side.

One thing I saw consistently all around the globe - people need motivation to give their best and try hard, only few deliver without it for sheer pleasure. It doesn't have to be monetary one, but this one is universal and quite well oiled principle. BI doesn't offer me anything - I want to work, I don't have an issue finding next job, and if there is anything between, we have working social system that helps me. What does BI offer to somebody like me?

> I don't have an issue finding next job

...currently. Things change, and you may one day find you do have an issue finding your next job. As someone who has been in that situation in the past, relying on a "working social system", I would much rather have guaranteed basic income to fall back on (in addition to universal health care, which is even more urgently needed where I live).

It's still work though. People usually don't trade their free time for pennies an hour if they have an alternative. Basic income provides that alternative, nobody has to work. This will probably lead to a increase in wages for jobs that are no fun, like cleaning restrooms in a bar, and a decrease in wages for jobs that people actually want to do.

And just to hammer the point home: this is a good thing!

There's a flip side to your argument. If I'm doing a job for close to 0/hr then if the job becomes crap or my manager is abusive then there is nothing keeping me there.

This means that in the overall collective environment jobs that are undesirable (garbage collecting is the normal example) will actually pay more than something like being an political intern. But people could do both of these jobs and still have money for housing/food/etc.

>so there's no disincentive to taking it.

Only if you assume one's time is worthless.

This is actually a really compelling argument that I hadn't heard before. Is there a good, short-ish reference on these arguments that you know of?

Here: https://www.reddit.com/r/basicincome/wiki/index

Basic income better aligns everyone's economic incentives, so it solves (in theory) a whole host of the problems we've got.

It's great to hear that some form of it is going to be tried.

It's a pity that the proponents there have to resort to including mathematical impossibilities on their list.... "A basic income, coupled with a flat tax, is capable of mimicking all aspects of our current progressive (bracketed) taxation scheme, but without brackets."

Basic income realigns people's incentives. It might be better than a really badly designed welfare system at removing "welfare traps", but it also can be expected to have a whole host of negative aspects in comparison to other possible configurations of the payment of government subsidies.

> host of negative aspects

Such as?

what are the "whole host of negative aspects"?

I will accept that there are almost certainly edge cases which I can't predict that will need ironing out. probably due to the administration of updating the list appropriately. but basic income seems very much like the proverbial silver bullet that never exists, so I am curious over its negative aspects.

in discussing with friends and family, the worst thing about basic income is it means paying people for doing nothing and that _really_ _really_ angers some people. even worse, it means even millionaires get basic income!

most of the whole host of negative impacts depend heavily on the level that it's set and what other benefits are withdrawn, which there's very little agreement over. Low end BI with aggressive removal of other means tested subsidies generally leaves poor people looking for work much poorer; high end BI is leaves most taxpayers much poorer, whilst potentially seeing , much of the increase to people on low incomes swallowed up in increased rent. But more generally:

- massive distortion of low-end wages, particularly for unpleasant, useful but not particularly revenue-generating jobs such as cleaning. Further outsourcing of manufacturing work for the same reason might be considered a negative aspect by some (especially people with moderate-to high skills related to that manufacturing)

- massive skewing of wage payments away from younger people in many competitive areas of employment, because now that the taxpayer will cover living costs and assuming removal of minimum wages there's absolutely no reason to pay trainees, apprentices (or the likes of runners desperate to make it in television) any non-trivial sum until they've spend a long time "proving their worth".

- regional cost-of-living differences and a guaranteed permanent income encourage former job-seekers to relocate to areas where their prospect of getting a job is minimal. This is further exacerbated if better-targeted housing benefit payments and social housing are removed from the equation.

- depending on the level of BI entitlement children get they're either likely to become a lucrative income source or unaffordable in many areas, especially for single parents.

- a surprising amount of BI revenue will be captured by low-end rents, and other costs that people with more cash to spend at the bottom of the pyramid can't avoid. A surprising amount of BI costs will be funded by the productive

- non-citizens are inevitably going to be heavily penalised (otherwise the country becomes an migrant magnet)

- many advocates use BI as an excuse to push for middle-class squeezing flattening of the tax system, withdrawal of education and health subsidies etc.

- the cost of paying people who would really rather not work almost certainly vastly exceeds the cost of paying wages to people whose job it is to kick people who would really rather not work off benefit programmes. Throw in the fact that people who never had any intention of claiming benefits are now entitled to them.

Like every other reform to the tax or benefit system there are a whole host of winners and losers (including people you probably don't want to be winners like "slum landlords" and the indolent, and people you probably don't want to be losers like the owners of the neighbourhood cleaning firm and hardworking immigrants). It's about as far from the proverbial silver bullet as imaginable: it's reforming existing incentives that have (for better or worse) been tested and debated for decades with a blunt instrument.

thanks for the detailed reply

I imagine any sensible, practical proposal for basic income would start it relatively low, keeping many current benefits and gradually expand it if it is successful. That seems to be the option Finland proposal will probably take. This will give time to assess the impact and allow corrections/adaptions/cancelling it . No doubt basic income is a blunt instrument, honestly I think that's part of its appeal to me. It seems fair compared to a plethora of well-meaning but convoluted network of social welfare initiatives, that we call a social welfare system.

I will consider you points more carefully.

- obviously a lot depends on the level of basic income. and what is sacrificed for it. I had not considered the politics of people using basic income as an excuse to withdraw education or health subsidies.

- effect on wages can be mitigated in the short term by retaining a (perhaps lower?) minimum wage.

- I agree a lot of basic income will be swallowed in rent. but that will be because that is what is important to people with the money to spend.

- cost-of-living differences will encourage job-seekers to relocate to cheaper areas. this seems like a good thing. if inner city companies can not find the workers it needs, it will either relocate or provide company buses or something. that seems a much better solution than keeping job-seekers where they are.

- non-citizens is a very good point I hadn't considered. But then, non-citizens are penalized by requiring visas etc. plus EU nations will be restricted on what they can do to stop EU citizens claiming.

thanks again.

> massive skewing of wage payments away from younger people in many competitive areas of employment, because now that the taxpayer will cover living costs and assuming removal of minimum wages there's absolutely no reason to pay trainees, apprentices (or the likes of runners desperate to make it in television) any non-trivial sum until they've spend a long time "proving their worth".

That really only applies in industries where people would do the work regardless of pay ("passion" based industries like film). And even then it only makes sense for capital intensive roles (e.g. it wouldn't apply to music, software, painting, comedy, etc).

For most industries, in the face of steady demand (for workers) and a drop in supply (of workers), compensation for trainees, apprentices, etc will increase.

> regional cost-of-living differences and a guaranteed permanent income encourage former job-seekers to relocate to areas where their prospect of getting a job is minimal.

Good. It stops companies from externalising their costs onto the most vulnerable in society.

For example at the moment most companies in my city are located in the middle of town. Companies are happy with this situation only because they can externalise most of the costs.

For example most of the offices in my city are ~1.5 hours travel away from the poorer areas of town. But its where the jobs are. This means a lot of low income wage workers have no choice but to spend ~3hours/day in unpaid travel time. That is hardly fair.

Introduce BI and what happens? Low income earners refuse to donate ~3hours/day unpaid labor to companies. Companies will either compensate the low income earners (great outcome!), move offices closer to the low income earners (great outcome!), decentralise (great outcome!), or be forced into more automation (great outcome!).

> massive distortion of low-end wages, particularly for unpleasant, useful but not particularly revenue-generating jobs such as cleaning.

Actually, what we have now is a distortion of the market. BI would simply cause a market correction.

> a surprising amount of BI revenue will be captured by low-end rents, and other costs that people with more cash to spend at the bottom of the pyramid can't avoid.

Probably not, because like you mentioned above, you actually significantly increase the supply of land and housing available because its no longer tied to jobs.

And if you only doubled the amount of vacant housing you would send the property market into "free-fall" - aka back to affordability.

It's one of the standard arguments against a minimum wage. What follows is that by implementing it, you inadvertently hit the early-entry work force the hardest (in the US that would typically be teenagers getting their first jobs). Apart from the general arguments against price floors and ceilings I think the other major argument against the minimum wage is that in the current systems (which a cynic could call lobby capitalism), minimum wage laws actually benefit "well connected incumbants" in low wage sectors who can use them to make market entry a lot harder for the competition. German minimum wage in the postage sector could probably serve as a decent example if memory serves me well.

There's a chapter on minimum wage in "Economics in One Lesson" that picks up the argument of the parent post.

I am living in Germany, the removal of the German minimum wage in the postage sector resulted in effectively more companies providing post service, but for the end user, the price has not changed at all. But you see a lot of people bringing the mail in nearly destroyed cars, with the look of miserable people. I am all for competition, but in this case, the net benefit for the end users is zero and it created extremely low pay jobs.

The competitors of Deutsche Post are now using special structures not to pay the minimum wage to people (they are contractors) and this pushes Deutsche Post to do the same.

So, for this case, it was not good. In fact, the people in Germany pushed to get a minimum wage for all employees and the right wing government accepted. It shows you how bad the lack of minimum wage was for the people.

The government accepted, but with a lot of loopholes for companies.

Exactly. We as a society really do not need businesses whose sole competitive advantage consists of paying lower wages than existing companies.

The same thing is happening in Belgium. Once the post (Bpost) was profitable our elected overlords began selling 49% their shares in it to something-i-dont-remember and... the danish post.

I read a lot of great essays/articles by Marshall Brain. They're interesting, and have some interesting ideas how to fund it. I like the study of minimum income a lot since it involves questioning so many assumptions about our economy.

http://marshallbrain.com/manna1.htm

A friend has been really trying to get me to read this ^ and I just can't finish it.

Our world and species is not so noble as to roll over and quietly take it like the author's many many assumptions suggest. Nor would we be above being so petty as to start global wars to take what's AustraliaCorp's.

If you can read German, here is a really great article from an UBI supporter arguing against minimum wage: https://www.grundeinkommen.de/05/07/2013/warum-ein-allgemein...

Another point of view is that the wage of the labor (eg. $5/hr) is a subjective amount coming from the negociation between the employer and the employee, and consequently their respective bargaining power. So, for some jobs, the real wage is not $10 or even $5/hr, it is effectively "the lowest amount law let an employer pay someone", due to the dramatically unbalanced negociation. In this view, minimum wages protect the poorest and most exploitable job seekers from having to accept whatever the employer with full bargaining power is willing to concede. Of course, not everyone subscribe to it and it comes with its own problems too, but it is still an important part of the debate, in my opinion.

It is only unbalanced as long as there is an oversupply of people seeking these jobs. With basic income there is a real chance that shitty jobs simply remain unfilled until they improve and people consider spending their life energy on it acceptable.

For its supporters, it's a strong point of basic income: people, especially unqualified, won't have to accept pretty much any job just to get a roof over their head and some food in their plate. So this gives back some power to say "no" to the worst jobs.

Opponents to basic income argue, among other things, that this is too much power and some workers would become exceedingly picky, without the fear of not being able to pay for rent and food. There definitely is a moral aspect to the question, with "anti-cheater" emotions/reactions.

> For its supporters, it's a strong point of basic income: people, especially unqualified, won't have to accept pretty much any job just to get a roof over their head and some food in their plate.

I think that's important, and not just for those people: that they don't have to accept a minimal (and likely dead-end) job to survive also means that those who would be inclined to are not prevented from taking steps that prepare them for a better and not-dead end job, that is more useful both to them and society.

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