Why a Universal Basic Income Will Not Solve Poverty
nytimes.com
nytimes.com
For example, if you've been homeless your entire life, you've never had to lock your apartment door or carry a key around. My partner (a social worker) had a client who's apartment was always getting robbed because whenever she left, she never locked her door; it was not something she was used to doing. Another client was unable to set an alarm and follow a schedule. 20 years of living on the street, waking up whenever he felt like it, meant that he had completely lost his faculties for time management. He couldn't hold down a job and regularly missed appointments.
Part of my partner's job was carrying these people through their journey to "regular" life. She would show up to their apartments and take them to their appointments. She would call the woman who didn't lock her doors every morning to remind her to lock her door on her way out. Etc. Etc.
Basic income doesn't solve any of this. It just drops a load of money into a person's lap who has no idea what to do with it.
If we find that non-trivial numbers of parents blow all their UBI on XYZ, are we really going to let their kids starve? Or will we see that programs like SNAP need to remain in existence?
If the SSA and IRS don't have to do so much enforcement work for entitlements, that's a bunch of people there who can be laid off to save taxpayer money.
Eliminating the asset test (the area where undoubtedly some government employees work full-time) would actually increase the program cost. Most of the savings are actually derived from juggling the numbers behind "the cost of a nutritious diet".
I am personally not opposed to going full-throttle on something like SNAP - just send a free card to anyone with a SSN who requests one (I am sure agricultural and retail lobby would concur), but I think the potential savings are overblown - Medicare, SS and SNAP are generally tightly administered.
What do you mean by this? Poor people would definitely know what to do with it.
I think this is part of the problem - right now in society, if you can't be on time and hold down a job, you'll go hungry and have no place to live. Basic income removes that harsh penalty, and lets people live regardless of whether they can make an appointment.
The real challenge of a basic income isn't how to pay for it; it's how to convince regular people who get up every day and go work at jobs a lot shittier than most of us here have that that's a harsh penalty.
There is enormous social momentum behind the idea that you should work if you can.
That's not a problem. If a job is shitty and ultra-low pay so that no one wants to do it now that they have a UBI to live on, then the business owner needs to either increase the pay enough to make someone want to do it, or he can just shut down the business or do it himself. UBI prevents people from having to toil at horrible jobs unless they choose to, rather than being forced to in order to survive. That can only be a good thing. It then means that true market forces can now set the wages for jobs.
I agree with you. My whole point was that most people do not agree with you. There is enormous support for the idea that you are supposed to work for what you earn. Full stop. End of story. Anything less is charity that should, at best, be accepted as a last resort.
The trouble is convincing them that these people will never ever do anything productive anyway so the best we can do is loss minimisation by ensuring they don't turn to crime and fix basic medical issues early. And that they're not worth a single second more worth of attention compared to the other 99% of society
Finally, you never know what these "lazy" people will spawn: one of their kids could become a great author or scientist or something.
No, actually that's the real challenge, as the author of the article points out. We would have to raise taxes tremendously to give everyone a nontrivial amount (the numbers are in the article) even if we ended all current income redistribution programs.
And we'd have to raise taxes even more than you'd think at first glance, since a whole lot of people would stop working in response to higher taxes and UBI.
I probably would. Even without UBI I would probably retire early if my taxes were raised significantly, and I can't be the only one.
Taxes are good for creating currency demand (and large scale markets systems resulting from it), shaping incentives and income redistribution. It can also be used to put a brake on a bubble economy.
So practically speaking, you do have to fund expenditures with taxes. You can't just create value out of thin air.
To validate the point of work being why we are here I will roughly quote Marcus Aurelius: When you wake up in the morning get up and get going. Why are you wanting to sleep and be lazy? Does the honey bee say forget this and sleep all day? Does the ant forgo his work and sleep and eat all day? No, all creatures go to work. What makes you any different?
This is of course out of context, as this is just reasoning for himself to get up in the morning, not a blanket statement about society.
Historically, that would be an incredible luxury. (I'm interpreting "make an appointment" as a figure of speech that encompasses, e.g., sowing crops at the right time of year, harvesting when the crops are ripe, hunting when the game is afoot, etc.)
For some people, the fact that they desperately have to make that appointment on time removes the motivation.
You and I enjoy our jobs because we don't desperately have to be on time. If I had to punch a time card, I'd be fucking out of here faster than you can type "logout" and hit Enter.
People can probably fix their lives with greater ease and probability of success if they can calm down a little bit.
I think with basic income there is a risk that a lot of people will forever be lost for the working world. Especially if the basic income is so low that you can barely survive.
I've been on welfare here in the USA. The way it works is dependant on your income. The more you make by hard work, the less assistance you receive.
That sounds fair... Until you realize that section 8 (housing) is the same way. Food stamps are the same way. At the time, there was a cutoff for the free clinic (which counted benefits as income).. I made $100 too much.
When doing work and getting paid $1 means taking $3 in losses from assistance programs, this grinds people further into poverty. The further I try to dig out, the deeper I get until I hit the point that I can start to survive without any assistance...
It needs to be done in such a way that the total-income curve is monotonically increasing, so recipients never have a disincentive to make a little more money in their job. This should be fundamental and obvious, but because doing it requires just the tiniest bit of linear algebra, our elected representatives are not capable of it. Mind-blowing.
For example, food stamps (SNAP) were made permanent in 1964 as one of the great society programs. WIC came a few years later. I suspect - but have not researched - that you will find this is true for a lot of current welfare programs.
There may be people in power making bad decisions about administering these programs, but I don't believe they were designed to ensnare.
Actually, it mostly shows that the programs are not a system, and were designed separately from each other, with inadequate consideration of their interactions. The fact that they often have overlapping target populations and that benefit reductions due to means-testing are therefore sometimes much greater than 1:1 isn't due to problems with math, its due to the fact that the questions that were asked and which math was deployed to answer weren't even the right questions.
Really wish we'd focus less on what is fair and more on what brings the greatest outcome.
On the other hand, there exists a worry that people on such an income who couldn't find additional work would keep getting pushed around to new areas as the influx develops each cheap locale.
The ecological era "farmer" gene required a disposition in humans to feel compelled (or at least comfortable) staying put. And that gene just so happens to be common today in developed nations. But it's not for everyone, and the economics right now are very much against the nomadic personality type.
That could be mitigate to a good degree by such a small guaranteed income.
If someone wants to live in an expensive area, they need to earn their own money to pay for it. The whole point of BI is to make sure people aren't starving or homeless or in danger of that. If you can live comfortably on the BI in bumfuck, PA or KS, then that's enough for you: society has done its part in making sure you're provided for. Maybe it's not exactly where you want to live, but society has no obligation to provide for your whims. If you don't like it, get a job and make more money.
Edit: also what happens to all the people living in projects in what would otherwise be expensive areas? Ship them off to a sparsely populated non desirable area? Good luck with that
Layaway firms aren't that bad, it's the payday loan places that are bad. That can be fixed with legislation, if we stop electing crooks like Hillary and her buddy DWS who are in the pocket of the payday-loan industry.
In theory, no. A UBI is not a free pass for a luxurious lifestyle, it's a basic income. If you want more than that, you'll have to work. If you want to not work at all and sit on your ass, then sure, you can go move to Tornado Alley or frigid Minot or wherever and live cheap and make some extra cash doing odd jobs like shoveling snow maybe, and smoke pot most of the time. I don't think most people want to live that way; people are too greedy for that, and want a nicer standard of living than the bare minimum. So, people will strike a balance, like they already do: they'll look for places that are affordable, but where jobs are also located. But unlike now, they won't feel so much pressure to live where jobs are, and might take a chance moving somewhere cheaper. We'll probably see more movement to lower-cost, smaller cities, and maybe some revitalization of small towns, but overall I don't think it'll be all that huge. I would expect a lot of people to move out of the really high-rent places where they're being subsidized by government programs to stay there.
>also what happens to all the people living in projects in what would otherwise be expensive areas? Ship them off to a sparsely populated non desirable area? Good luck with that
Why not? If they can't pay the rent, they'll be evicted. Then they'll have nothing but the clothes on their backs, and their UBI check, so if they want to have a roof over their head, they'll get a bus ticket to someplace cheap. This is a good thing: they're not contributing productively to their current city of residence, and instead of draining it of taxpayer funds, and they're taking up space that could be used for more economically productive residents. If their labor is really needed there, then the business owners need to raise their wages to allow them to afford the rent there, otherwise the businesses can go under. If the place is so high-rent that all the businesses move out and all the service workers move out, no problem, it'll collapse under its own weight and then after the landlords all go bankrupt the rents will go back to sustainable levels. Trying to keep people like that in an area isn't doing anyone any favors, except those who are profiting from the situation.
Some midwestern states already offer free land+settlement programs to anybody who's willing to move in http://www.freelandks.com/availableland.html and market distortions made real estate in some US cities extremely affordable http://www.nydailynews.com/life-style/real-estate/1-buy-hous...
Yet the economic activity in those geographies leaves much to be desired.
As for Detroit, $500 houses aren't very appealing in a place with a reputation for horrible crime, and where again there's no jobs (if there were good jobs there, the houses wouldn't cost $500). But who knows, a UBI might allow a bunch of young hipsters to move into the place and try to turn it into an art colony or something.
With a UBI scheme, this can't be allowed. People on Social Security can do this because they've earned that check by paying into the system over their working years (and in reality, expats like that have more money than just a measly SS check; it's not that cheap to live in those places, especially NZ; these are middle-class and up people with IRAs). UBI is not like this: it's unearned, but it's a dividend paid to citizens in the society for being part of that society, and taking advantage of the fruits of that society (like automated production). It's also an investment: it's meant to allow citizens to be free of severe financial worry, so they can take more risks (like starting a new business), or take more time off for good mental health. Part of the bargain, however, is that they have to actually stay in the society. That UBI check they get needs to be spent in the country, where it can be circulated back into the economy, for it all to work. If they just move to Costa Rica and spend all their UBI money there, that isn't helping the American economy.
Living in central SF, or Manhattan would be unfeasible. Is that s bad thing? BI could prevent urbanization, and make small businesses blossom in smaller countryside towns.
And outside of a city you would have better opportunities to grow some food on your own, making your BI last a bit longer.
I agree that urbanization has its downsides. However, lets remember that they aren't making land anymore:) As someone who grew up on a farm, I remember looking at suburbs as they sprawled out, taking over farmland. I was thinking, what are those people going to eat? Also, my observation is that there are more small business downtown, whereas walmart has dominated rural areas. Totally anecdotal, I know.
"And outside of a city you would have better opportunities to grow some food on your own"
I imagine this must be a dream to those who grew up in cities, having a secluded house with a nice garden. I know i am living the dream with dozens of restaurants/bars/shops within walking distance! But if we take an acre of farmland, and replace it with a house, lawn, and .1 acre of garden, what happens to the food supply? Apartment buildings and urbanization have their pros.
And you don't need much space to grow some veggies.
you dont need much space to grow some veggies, true, the point I was trying to make is that replacing an acre of veggies with a house and .1 acre of veggies reduces the total supply of food(since good, farmable land is limited). Given the demand for food is rising, the impact on the price of food is somewhat predicable
I often think that all some people need is to be extracted from their environment and transplanted into a new one somewhere else in the world with new friends and a different job. Cut-off from their unhealthy social network they would rebuild themselves and thrive.
I took 10 months off where I lived with just two backpacks. I wasn't homeless by any means, I had my savings I was living off of (technically homeless I guess, but not in the cultural sense).
Even though I had a lot of expensive electronics, I didn't buy a lock until about 7 months in. Even then, a lot of hostels didn't have large enough lockers for my small back which contained my laptop, camera, etc.
There is a sorta social contract with backpackers I can't really explain. I still kept my stuff hidden, but I never had any real fear of people stealing my stuff.
Those 10 months were the best I've felt in a while. I was away from the cube. I was working on my own research (I wrote a lab manual for a friend's class based on some papers we wrote). I worked late into the night and walked around new cities every day. I was never tired, exhausted or irritable. I dreams of getting back into school and working on my PhD, but I'm still working on fellowship applications and I ran out of money .. so back to full-time IT work I went.
That "regular" life you talk about -- getting up early and working the 8-5 grind to get a paycheck just to keep on doing the same fucking thing day in and day out. That's bullshit. And that's coming from a software engineer who gets paid a lot and I have a lot of freedom in my work.
For those working low income jobs where they barely have enough and have to scrap and save every paycheck, that's super bullshit.
> For example, if you've been homeless your entire life, you've never had to lock your apartment door or carry a key around.
I live in a place with a massive homeless population and tent cities. People have their stuff spread out with them, but they have no fear of anyone taking it. Part of it is the poor looking after each other, part of it is if stuff is stolen, it's not like they have much to begin with. Suddenly you're housed and now you have something worth breaking into.
I'm getting a bit ranty at this point, and I'm not entirely sure what my TL;DR is. I realize being poor and homeless can suck terribly. But the things you mention...those aren't the bad things. Those are amazing ways to look at the world that are taken away when you try to bring civilization to the savages.
The barrier to entry is money, whether savings or income. I rather like the moment the fictional Sam Clemens just starts grokking the concept of Star Trek economics and decides it might be worth giving up cigars for. http://www.imdb.com/title/tt0708829/quotes?item=qt0551002
However, that's just not a reasonable argument against UBI.
Consider: Having too much money is never a problem. Quoth the sage, "If it is money, it is good.", also "Too much is always better than not enough."
Misspending that money is the problem. But if everyone around you has UBI too, their ability to spare time and effort to care for you and help you learn to cope with life is fantastically increased.
Helping others is hugely rewarding, fulfilling even, but most people are limited either by their real or perceived lack of funds, or by minor personal problems. With UBI the bottom Nth of people's BS is handled, freeing them up to help others whose BS is a little too formidable for them to cope with on their own.
If you take a step back and look at the larger picture, and take into account the synergy that will be unleashed by UBI, I think you'll reconsider. :-)
Do you think crime will increase when every person receives money at the same time?
I think money management skills are going to be needed even more (but just receiving a deposit doesn't teach you how to master your money).
Will UBI solve the human condition? No. But it seems like a workable possible solution to how to handle rampant and permanent unemployment due to advancing automation. Something worth trying. ;-)
Is there any data to support this? I'm genuinely curious. Thinking that people in general are innately good/helpful is a point where I seem to differ to a lot of others. It's just not something I see from looking at the world around me. The majority of people already have others around them with more formidable BS to deal with, and we all ignore them just fine.
And long term basic income will work precisely to reduce learned helplessness. Society will provide some cash, but individuals still need for look for a hostel to stay in, manage money for meals etc. I would prefer daily deposits to recipient accounts so that if someone spends money for one day unwisely they don't end up needing other services for the rest of the month.
BI won't magically solve every problem, like mental illness, which is another large factor for homlessness.
That's not to say that transitional services to people who have previously had that experience aren't a good thing to have along with UBI, but it doesn't invalidate the concept of UBI.
UBI is just a bad idea, jobs in themselves have nice externalities that UBI wont give. People that have jobs generally don't commit crimes. Also a UBI will disincentivize working jobs that are undesirable but are necessary for a functioning society.
That's kinda the point. You drive up the cost of undesirable jobs until you find someone who'll work it. If no one wants to work it, you'll need to automate it or do without.
Also, have you ever talked to the people who pick up your garbage?
It is "$10k times (number of humans in the USA)," because the "number of eligible people" IS the number of humans in the USA.
The people who as a result of this policy and the taxes net money is small, and that is the real cost. Not $3T which is a bald faced lie.
When you can't get the simple things right, why should we think you got the harder things right?
Partially, yes. Why do you think after school programs are so good at keeping kids out of crime?
1. http://www.cdc.gov/motorvehiclesafety/impaired_driving/impai...
and a better way to look at it is that it incentivezes changes in society that reduce the undesirable work that's necessary for it to function.
as if it were that easy. Why don't we worry about UBI once we actually reach the post scarcity economy?
If you want to argue against redistribution, then do so, but don't throw out this we can't afford it lame horse anymore.
The top 3% of income earners pay 51% of all income taxes.[1] You think that's too little? What should that number be?
[1]http://www.pewresearch.org/fact-tank/2016/04/13/high-income-...
Seems like we can work backwards to determine that?
are YOU prepared to pay let's say an 80% income tax and a 25% sales tax for example ?
Food too expensive? Robotics farming. More energy needed? Scale up solar, wind, and utility scale battery storage installations. Moar cheap transportation? Scale up bicycle and electric self-driving car manufacturing.
It _can_ be done. We simply need the will to do so. Work backwards, first principles style. We have lots of atoms and electrons, lets organize them efficiently for everyone's benefit.
On the monetary side of things - it's very easy to 'proclaim' that you're willing to sacrifice your standard of living for the benefit of the others. When it comes to concrete implementations however, things typically don't work that way, ppl tend to bust their asses when there's concrete material compensation involved, otherwise - not so much. And if you take any material incentive to work away by providing free money you get multi-generation welfare families which we have in abundance as is. One can argue that these folks would be better off without the free money killing their will to work - to 'organize atoms and electrons' for ANYONE's benefit, yours included.
As an admittedly extreme example, if the population consisted of 100 people who make 2$ and pay 1$, and one guy who makes $1000 and pays $100, he's responsible for half the tax income but probably still isn't paying his fair share since he's only paying 10% instead of 50%.
So income taxes represent almost 3x the income stream that payroll taxes do. So I'd say not paying income taxes is a pretty big break in my book.
[1]http://www.taxpolicycenter.org/briefing-book/what-are-source...
And that's not even remotely the amount of taxes on businesses that raise the price of goods secretly to compensate the taxes hidden.
And also, even illegal immigrants pay these taxes. They aren't even exempt. And many use fraudulent SSNs, so taxes are taken an applied to those SS accounts, but the illegals never use them. Yet more money for the coffers.
But some percentage isn't paying any of one specific tax.
Whatever.
So the only response to that 'fair share' argument is still only "take more from those that have/work and give to those that don't/can't".
I mean fine, but let's call it what it is.
The lottery is a tax on hope
So yes! I do think its too little, especially in the top 1%. I think some moderately more progressive tax rates would be an improvement.
One of the things that appeals to me about UBI is that it is a dramatic simplification of welfare bureaucracy. I would love to see something similar to the way we calculate taxes. Simplifying and closing tax holes would help extract more taxes from people who should be paying more while not punishing wage earners who have most of their taxes preempted out of their paycheck.
And I think Mitt Romney should pay a higher rate than me. http://money.cnn.com/2012/09/21/pf/taxes/romney-tax-return/
The problem is that we treat capital gains differently than we treat income. Most of the top 3% work and pay income taxes, but the top .1% don't really pay income tax.
"The reason Romney's rate is so low -- despite having one of the highest incomes in the country -- is because his income was derived almost entirely from capital gains and dividends from his extensive portfolio of investments. And that form of investment income is typically taxed at just 15%, well below the 35% top tax rate for high earners."
As mention before on HN, yes rates were higher a while ago, but so were deductions. Nobody actually paid a 90% marginal rate.
I don't think corporate taxes work, what's needed is systems and taxes in place to encourage keeping money more local, as well as diversifying or paying out dividends, which would in turn be taxed (assuming adjustments in capital gains). I'd just assume get rid of corporate taxes with the above adjustments and also get rid of corporate personhood and significant campaign reform.
Seriously, the whole "but rich people pay all the taxes, and poor people pay no taxes..." myth needs to die a horrible death.
But I live in a state which just lowered the income tax. And increased every other tax, as well as created a variety of taxes on services that were previously untaxed. And they then tell us our taxes have gone down. But somehow, the vast majority of people seem to be have less personal profit than the year before (assuming all income and costs sans taxes remain the same).
Think of it this way: "The top 10% (in my country) pay 74% of all taxes," really translates to "This group makes 90% of all income and but only pays 74% of taxes."
That means that those who make 10% of the total income (again, in my country) pay 26% of taxes. It's not the top that are hurting because they're paying tax in excess of their means, they're getting off lightly.
I can think of two responses to this:
(1) Perhaps work that doesn't pay more than a UBI can provide is not work worth doing --
(2) Except for charity work, which is extremely valuable, and which would be greatly incentivized because having a UBI would free up people's time to work on it.
This is a frequent argument invoked in favor of a higher minimum wage, and the answer is maybe.
But then you find out that some fairly useful work, such as running a convenience store or a corner bodega in a low-income neighborhood involves significantly lower margins than operating a Whole Foods or organic juicery in a ritzy residential neighborhood, and people start decrying "food deserts" http://baltimore.cbslocal.com/2015/02/03/food-deserts-contin...
At any rate, a UBI could possibly make these low-income operations sustainable by providing a helpful boost to the owner's income.
Work doesn't have to pay more than a UBI provides to be worth doing in a system with a UBI -- the idea that it does is a failure to recognize the central difference between UBI and means-tested benefit programs. Because UBI doesn't get reduced for additional income (beyond the effect of regular income taxation), there is little to no disincentive for additional work; additionally, most UBI proponents favor UBI eventually eliminating minimum wage (though in an early-stage, not-yet-adequate-for-independent-support UBI, the UBI might merely reduce the minimum wage by some amount), so that UBI reduces the structural barriers for low-money-value work that remains mutually beneficial getting done.
I largely agree with you here, coal mining being a notable exception. As much as I want to be only on renewables, coal makes up 33% [1] of our current production. They talk about how gas prices are a drag on the economy, I dont want to find out what happens when 33% of power becomes much more expensive!! And fwiw, I do not share the optimism/pessimism that all jobs will be obsolete in 5 years. I dont agree with people who are saying, "just automate it!" Easier said than done(which is a good thing).
this is only a bad thing to people heavily invested in coal. There are other sources of energy which are nearly competitive on price already, with a labor hike Solar would become drastically more competitive (IMO more in line with costs of externalities)
There's so much literature on this—why not look into it?
There are really just three - Social Security, Medicare+Medicaid, and EITC. Above you mentioned keeping Social Security around, so that really leaves just two programs, and it feels like the elephant in the room - Medicare - has been scrutinized by both parties so often, that one might wiggle a few percentage points of savings here and there, but nothing critical, especially in light of baby boomers retiring in larger numbers.
If you have a good plan for drastically cutting down the costs of Medicare, those are worth hearing about, whether or not UBI is involved.
I can only describe the situation in the UK - but imagine this generalises. If you are on government benefits, and you accept some money to do a small or casual job, you face a choice. Not declare it, and face court and destitution if you are found out.
Declaring the income, on the other hand, is an administrative nightmare. Worse - it might trigger a recalculation, or removal, of your benefits. Most benefit seekers don't fully understand how their benefits are calculated, and, again, they could be destitute if benefits are removed or reduced.
So, for any long term unemployed person, it's often best to sit tight and not take any risks. Thus the person is trapped in poverty, plus of course the sense of self worth that comes from doing a job.
This is also true for an entrepreneur who decides to quite his job and build a business. Basic income can provide some security while you get that business going. This is not typically true of unemployment benefit.
Everything comes back to what unemployment benefits are - a payment conditional on not doing any work. That causes so many problems, and basic income can solve them.
On the cost: basic income, at substantial levels, is clearly very expensive. However, you simply tax that money back. This can leave pay after tax absolutely unchanged for everyone, while still delivering the advantages described above.
Robots take the jobs so people have no money to spend even as the robots make more stuff, cheaper.
What to do with the people? Throw them in a volcano? "Hunger Games"? Let's just give them money and see what happens, okay?
That's UBI.
UBI isn't for the bum. It's for you (okay, well, your cousin. You read HN, you're probably fine.)
Sounds like a great idea! Companies get to save money and the tax payer effectively pays the companies profit.
And no, income earned in the US cannot be kept offshore, so yes, taxes will actually be paid on it either when "earned" by the company or distributed (buybacks, etc).
I think the reality is that it's not really a 'robot' in the sci-fi sense - it's a thousand automated machines doing one tiny piece of the process, and slowly your factory with 500 employees only needs 5, and output and quality have increased. There isn't really a single robot to 'own', and even there was it would be far too expensive for one regular person to own it.
We could intentionally try to make automating more expensive so that companies just don't do it. The problem is automating is actually great for everyone else - as a consumer I'd rather buy a car that is better made, safer, and cheaper from an automated factory than one that might be prone to human error and is more expensive.
If push comes to shove, owning some land and cultivating it could be a job. The earth will hire people its owners to work it. That is, if people will be legally allowed to cultivate their own seeds on their own land.
I see a possible utopia where individual farms or larger agricultural areas will be owned and worked by communities of people. They will be independent as a community from state welfare. They will be able to implement their own lifestyle as a consequence of their independence. Technologies working for this are: solar, batteries, 3d printers and robots.
There are certainly groups in the middle, farming cooperatives are still present in the area where I grew up, but those that exist do so largely for ideological reasons: family tradition or religion.
(Also, buy some robots. Enough to make more robots.)
Religion might have been the opiate of the masses in the past, but if price stability with a dole is feasible then I can guarantee you there's going to be a significant share of the population who wants to do nothing but sit around and engage in idle socializing, sports, or art.
Provided that there's also still a differential for working, then people will still chase after prestige but not be threatened by destitution if they choose a sub-optimal career path.
And his point still stands, it's an issue in the US that has yet to be solved.
(Of course, that's referring to the United States)
> Poverty is an issue long solved in the USA.
When? How?EDIT: While I disagree with the parent poster, primarily because I've seen plenty of homeless, underemployed, malnourished individuals in my travels around the US my entire life, and no significant decline in the past several years, my questions were not meant entirely sarcastically.
If poverty is solved, explain how or by what measure you consider it to be solved.
My viewpoint:
From a purely technical standpoint it could be considered solveable. We have sufficient housing, clothing, food for literally everyone in this country, and more. The issue becomes one of distribution. But just having the resources doesn't mean that the problem itself is solved.
That is enough money in most places to rent a basic apartment and buy plenty of food to eat. Plenty of people in that bracket also have cable TV and a car and a smart phone. It's not easy and it's not all that much fun, but you're not going to starve or freeze to death and the Wheel of Fortune you watch every night is the same Wheel of Fortune that Bill Gates watches.
That's the definition of "solved" that's in play here.
These people need to move, which is a non-trivial cost. There's no guarantee they'll get a job when they go to, say, Atlanta. And they'll be paying more in rent or living in even worse living conditions (crammed into small apartments with more people). They'd be giving up their connections to family and friends and a community that they've been a part of.
The problem of poverty will only be solved when no one is in poverty for any reason but choice. Calling it solved because technically there may be enough minimum wage jobs for everyone is the same as saying hunger is solved because technically there's enough food for everyone.
It can be hard to see because the problem is so unevenly distributed through the social fabric, but this is just objectively not true.
That's also just objectively not true, but when we're talking about the population as a whole, then it's an OK proxy for the complete truth.
I would prefer to be a homeless in USA than lower middle class in India.
When those are consequences of anything but rational, healthy, deliberate choice [0], or very temporary circumstances, then poverty is not solved.
[0] Which pretty much means religious/cultural reasons. The rationality of those choices are still debatable, but they aren't predicated on mental or physical illness.
On the other hand, some people obviously don't have able bodies or any support network to speak of. I think you both know that, too.
So, why he disconnect?
I'm not so sure. I know people who are able bodied, college degree educated, and some months can barely afford groceries after all non-discretionary spending is accounted for.
(It's not the worst of what people experience, and I would not personally call poverty solved.)
The most enlightening thing about this debate is the idea that we don't care about peoples basic standards of living and are happy to pretend there is no problem.
PS: Although the U.S. Department of Housing and Urban Development in January 2012 annual point-in-time count found that 633,782 people across the United States were homeless, other counts vary widely. https://en.wikipedia.org/wiki/Homelessness_in_the_United_Sta...
Note: Many people end up homeless temporarily which makes counting complex.
A study just done about a year ago in the City I live in, housed a fairly large number of the non-temporary homeless people (between 20 and 50 I want to say, the numbers escape me) in an apartment complex that provided basic social services and access to health care. They found that in actuality, this helped solve many of the long term problems (even if it did not solve all the problems for all the people), as these people now had access to health care, _AND_ it saved money, because these people were no longer ending up in the emergency room or the local jail (and a few other cost saving measures as well)
I'm pretty sure you don't know what you're talking about.
I'm 100% sure I don't know what I'm talking about! That's why I couched my opinion in all the weasel words like "probably" and "likely".
What makes you think most land is owned through birthright? Any stats to back that up? I would assume most land was purchased.
And if you levy a big tax on property, be prepared for the value of that property to drop dramatically. Money flows freely from one asset to another. If land becomes unattractive, those dollars will just go elsewhere.
Purchased from whom? I would imagine a lot of land in the most desirable locations (cities etc) are owned by private individuals or family trusts/companies, so they have been/will be inherited (even if the owners change in between). And if it's owned by a corporation, I guess the same logic could apply.
> And if you levy a big tax on property, be prepared for the value of that property to drop dramatically. Money flows freely from one asset to another. If land becomes unattractive, those dollars will just go elsewhere.
Yeah, that's kind of the point. Land used for investment is the purest form of unproductive rent-seeking.
"Your opinion is worthless" isn't a useful debating tactic when you're talking to people with as much political power as you yourself have.
Basic income could be started at any amount. It won't pay the rent, but an extra $100 a month makes a difference for people living on the edge. The first $100/month will make a bigger difference than anything added on top of that.
But since we're just hand-waving here, I'll argue that the point where you're paying, say, $50/month more in taxes than you get in benefits is likely to be at a high enough income that $50/month doesn't make nearly as big a difference to your life.
Also, there is an insurance effect. A guaranteed $100 a month (even if you lose your job or have to move) provides more financial security than a larger amount that you can't necessarily rely on. And folks who aren't good at saving money (for whatever reason) will benefit more from having a bit more financial security during bad times, even if increased taxes means you don't make quite as much money in a good year.
Sometimes when people talk about this, it sounds like they think any amount of financial security is bad for poor people - it provides the wrong incentives. But that seems backwards to me; when you're desperate, you're more likely to make decisions you regret later.
Theoretically, you can only tax people in such a way that they never fall below the $75,000 a year happiness threshold and use the money to bring people closer to $75,000 a year. In practice (and this is not hand-waving, it is the history of the United States) it's so much easier to pay for social programs with regressive consumption taxes (food, fuel) that they end up high enough to cause hardships. $100/month for, say, half the adults in the United States would be $144 billion, about the size of the federal education budget. Re-arranging the tax structure to accommodate this would not be easy, and I think you have to assume that at least some of the additional tax burden would fall on people who need all the money they currently earn, and on the people who receive the benefit. Likely, a high percentage of it would. I don't think an assumption that political capital would be spent to keep the tax progressive, since there are higher-priority proposals in existence that do this for Social Security/FICA/Medicare, and even those have side-effects most don't care to recognize.
Every time government starts to subsidise something the price of subsidised goods goes up. I've seen this in Europe with wind farms, "eco" lightbulbs, farming equipment. etc.
And UBI is equivalent to subsidising all basic goods at the same time. So the only noticeable effect of UBI will be price increase, so that it would take your salary + UBI to purchase goods that now can be purchased by your salary alone.
Net result: increased bureaucracy, increased cash flow for the government (higher taxes), higher profits for corporations (higher prices), no benefit for poor, big hit for middle class (which is most heavily taxed).
- Simplification of the welfare system, you get money automatically, no need to ask.
- In the current system, if you get employed, you lose benefits, so the jump in your income is small, a disincentive to work. In the BI proposals, income vs income-plus-welfare curve is smooth. That's the main improvement I think.
- More money gets redistributed from the wealthy to the poor. Personally I think the current level of redistribution is fine.
Another way to implement a mincome is to have a flat tax rate and give every citizen a large standard deductible. If one's taxable income is negative, then one would receive money from the government, which is interpreted as a negative tax payment.
Furthermore, the purpose of a mincome is not to alleviate poverty, but instead to to replace current systems of welfare (food stamps, social security, etc).
Yes. The broken, trapping, inefficient, bloated, bureaucratic messes that cost way to much and don't help people nearly enough.
Maybe they should be merged.
Another interesting aspect would be the economic effect of everyone having a minimum amount of money. I don't know enough about economic to say what the impact would be on basis good vs luxury goods and everything in between but I imagine it would have an effect.
It is true that basic income will not directly improve lifestyle of the middle class. It can well result in indirect improvement by poor becoming more productive and government bureaucrats currently running the program getting more useful jobs. But we probably need to other things as well to improve lifestyle for the other 90% of the population.
It's sort of the formalized version of "Don't give that wino a dollar; he's just going to spend it on more booze."
(The sense I get is economists lean towards "Yes, people generally look after themselves given the money to do so," but I believe this is an open question policy-wise).
research have shown over and over that as economic differences grow, social structures deteriorate.
This is what the logic was: the student loans system has a high interest rate, and when the loan is defaulted, the government needs to pay. So what the government ends up paying is not only the actual loan, but the loan with some accrued interest. Also, the default rate is high. So in this case it makes sense for the government to just pay directly.
Now, following the same mindset, how much does the government pay if there is people without a basic income? is it more than just giving away that money directly to people? If there answer is yes, then probably it's not a bad idea after all.
Now, of course there will be issues. The food stamps system imposes some restrictions that you will no longer have if you just receive basic income. Also some people might just do the minimum required to get that income and live at the expense of the government. There might be pros and cons that need to be considered.
Also it seems pointless to give basic income to well-off people. On top of free healthcare and education, why don't we just top up everyone's income to the equivalent of the minimum wage? Sure, that will disincentivize jobs that pay close to minimum wage, but such jobs are dying due to automation anyway, and good riddance.
Otherwise taking the basic income might be seen as a symbol of being poor. Also, well-off people might be envious of people receiving basic income.
(tl;dr people aren't perfectly rational)
That's what UBI essentially is, giving everyone about the equivalent of a minimum wage income.
That strongly incentivizes under-reporting income. One of the strong points of universal income is that it is relatively easy to administer.
And well-off people would be taxed more so as to return all or most of their payments. It's not pointless, since it serves as a safety net the instant the large salary goes away, with no application or needs-based investigation that slows the process and costs more money to administer.
[1] http://www.motherjones.com/politics/2004/11/two-income-trap
This may require some kind of extra government programs and legislation to do things like 1) make sure enough low-cost housing is available, and maybe 2) help people learn to use it effectively, including maybe moving them to low-cost locations if necessary.
Second, what if UBI does make the wealthy less wealthy? Isn't that kind of the point of wealth redistribution? To reduce income inequality?
1) We could definitely use better education in this country. Kids should be taught in grade/high school how to handle money, personal finance, etc. They used to have something called "home economics" when I was a kid, but it was only for girls and probably concentrated more on doing dishes or something.
2) We need to stop electing Democrats like Hillary Clinton and DWS who are big backers of the payday-loan industry, and enact legislation which severely clamps down on these practices. Interest rates over some decent number (say, 15%) simply shouldn't be allowed, as they're usurious.
There's really no reason someone on UBI should ever need a large sum of money. They're not in danger of losing it: that's the whole point of UBI. What would they need a lot of money for, beyond what their monthly (or biweekly, or whatever) UBI check gives them? Maybe a deposit for rent, that's the only thing I can think of. There can probably be some kind of laws or programs set up to handle this kind of thing without letting payday-loan vulture exploit these people. If Democrats actually cared about poor people, they'd already be working on ways of helping them with things like this rather than taking "campaign contributions" from the payday-loan vultures.
I think that's a pretty swell idea.
> There's really no reason someone on UBI should ever need a large sum of money
I don't think that's true. The problem is living paycheck to paycheck without savings. UBI adds steady income but if the recipient fails to save, then when large expenses come like bank overdraft fees, medical expenses, and general rainy day stuff, they'll have to take out loans or credit card debt. Which goes back to why education is so important.
>then when large expenses come like bank overdraft fees
Simple: ban them. These should not be allowed, ever. If the bank is too stupid to prevent you from overdrafting using technical means, then they should eat the loss. The only reason overdrafting is possible, in this age where no one uses paper checks any more, is because banks can make money on usurious fees. Ban them.
>medical expenses
Not needed. We should have single payer healthcare.
>and general rainy day stuff
Like what? The UBI is the safety net. Maybe if their car breaks down or something. Still, the whole point of UBI is to be a safety net; if someone is such a mess they need to constantly take out loans to try to get to work, then maybe they shouldn't be working a regular job at all. Ban payday loans and let them learn how to live on the UBI. It's not like they're going to lose all their money and be on the street; that's the whole point of the thing.
Welfare for many in this country basically is a subsidy for their wage (cue memes of "walmart welfare").
Take for instance when the big layoffs started in the tech/housing sector, you would hear stories of people staying on unemployment because it paid MORE than a new job in the same field would pay. And we kept extending benefit timeframes which just resulted in a vicious cycle.
That's a pretty big incentive to not work.
Ah, but a transfer payment which targets the poor is worse in this regard. A $10,000 check that you lose if you work saps your desire to work more than a $10,000 check that augments your income.
Taxes would have to go up, in some cases drastically. It's an easier sell if people immediately get a good chunk back.
> A universal basic income has many undesirable features, starting with its non-negligible disincentive to work. Almost a quarter of American households make less than $25,000. It would be hardly surprising if a $10,000 check each for mom and dad sapped their desire to work.
Except if they keep working the money just adds up. I certainly wouldn't want to stop working and give up my lifestyle.
Maybe instead of working to make enough money to just get by you keep working and put a chunk of that money into savings, or upgrading your lifestyle a bit. Maybe moving to a better area, fixing up some stuff around the house, get your kid a couple toys, etc...
Yeah, people in situations that make working hard might quit but maybe they should be allowed to. Or maybe they should quit for a while and come back when it makes more sense.
What frustrates me the most with these articles is that they don't base any of their information on actual fact. Take, for example, the argument of disincentivizing work. This is one of things that seems "logical" if you're a pessimist or an asshole, but past experiments with basic income have proven it to be untrue (look at the "Mincome" experiment in Manitoba for proof).