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Comment by Endama | Hacker News Reader

I wonder if UBI actually allows the economy to become more efficient. It could be the case that an abusive employer would be more severely punished by the labor market if the economic cost to the worker is diminished by a UBI (i.e. My boss is a jerk, I'm just going to quit and find an employer that treats me better). I would assume then that satisfied employees, with good employers, would then be more productive than their dissatisfied counterparts.

It also seems reasonable to assume that workers would also be more likely to create new businesses entirely if the personal financial risks associated with doing so were diminished by a UBI.

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This seems like the biggest win, to me. When your employer represents your important but nonessential income, while your basic survival is guaranteed, it becomes far easier to tell an asshole boss to stuff it while you go looking for new work. It becomes easier to move to a new location without getting a job in advance. It becomes easier to start your own enterprise. It even makes more sense to work part time while developing more in-demand skills or just taking a partial vacation. It opens up so many freedoms of choice that are currently only afforded to people who can make lots of excess money and stash it away as savings.

As shitty as working for Uber might be, this is a huge benefit that they currently present. You can get by driving for Uber for a bit, allowing you to hold off on accepting an okay outcome and find better employment opportunities than otherwise.

Except - you are not searching for opportunities, you are working. It takes your focus and time. I agree that it helps you get by, but the cost is much higher than it would be with basic income.

>It becomes easier to start your own enterprise.

I lived in France for a few years and noticed something that validates this a little. French unemployment pay is quite generous (can't remember the exact figures but it's close to or 100% of your last salary for 12 months) - effectively quasi UBI for a year. I knew a lot of 'twenty somethings' that used this cushion to give them 12 months runway to try their hand at a startup.

... or going abroad travelling & woofing. Which is also a rationale behavior.

Did your friends keep the unemployment allowance while creating a new company ?

No idea how it worked in detail (they were mainly acquaintances I met at meetups/co-working spaces). It just seemed like a right of passage - virtually everyone I met had bootstrapped their 2-5 person teams with guys & gals that were living off their unemployment allowances for a year (and so were fine taking equity and no salary for a while).

Yes. You even get a better replacement rate when you create a company than when you're unemployed and looking for work. If you held salaried work for long enough before, it will last for two whole years.

We often joke in France that the unemployment agency is the #1 startup investor in the country

If this is the main feature of UBI (guaranteed basic survival), then what's the difference to the current social systems as applied in several western european countries (e.g. scandinavian, french, german, swiss...). A "basic income" is in so far guaranteed that you will always have enough money for a roof over your head and enough food on the table. If your employer truly abuses your workforce, you are able to quit without the fear of becoming homeless and go hungry.

Not an expert, but in the UK the benefits system isn't 'universal', you have to meet certain qualification criteria.

So if you quit your job because your boss is an arsehole or to start up your own business, you don't receive those benefits.

I think the main benefit over most welfare systems is that your save overhead by giving it unconditionally to everyone rather than having to evaluate every case, while at the same time it prevents people from falling through the cracks on technicalities.

Ya, I think these are the most important arguments for UBI. It incentivizes risk taking. We want to socialize risk-taking by entrepreneurs. We want to socialize investment in your own skills, and your own development. The only real question, IMO, is if we can afford it. We may or may not be able to today, but one day, we will be able to provide the basic necessities for all citizens as a human right. And on that day, we will reap enormous productivity gains, for exactly these reasons.

For these exact same reasons, you also don't need a minimum wage. And you don't need laws about hiring/firing people. If you get fired, it's a hit, but not an existential crisis that requires government intervention. If, as an employer, you offer too low a salary, people simply won't take it. We don't need to ensure that the minimum wage meets some basic standard of living, because you're already guaranteed that by virtue of your humanity.

A UBI raises the minimum to a level where government intervention in the workplace is no longer required to ensure decent treatment of human beings. In so doing, it eliminates deadweight loss of all kinds, from every corner of the market.

And if you don't have minimum wage/hiring/firing laws, that would help with the illegal immigrants problem, as there would be no incentive to hire an illegal immigrant (it's only the headache of in case you are caught).

The incentive is still there, they'll work for peanuts while citizens don't have to work at all.

If anything, it increases the incentive.

It incentivizes all activity productive risk taking or just sitting on the couch and playing Call of Duty - which if you've delt with most humans lately means it'll likely be Call of Duty unless there's some sort of familial pressure to do otherwise

Well, the ideal situation is that those that want to sit around playing CoD may do so, because we have a high degree of automation for relatively simple jobs. Those that have ambition and the desire to educate themselves may work hard and have an even better life for themselves.

It may or may not work out like that, but that is the vision, I think.

>The only real question, IMO, is if we can afford it.

Sure we can, if we want to. We've got the resources, we just don't have the desire to distribute them.

40% of food is goes wasted[1] and there are ~23 year-round vacant homes in the US for every homeless person[2] in the US.

[1]http://news.blogs.cnn.com/2012/08/22/40-of-u-s-food-wasted-r...

[2]https://skeptics.stackexchange.com/questions/22335/are-there...

Food/Housing are not UBI, though. UBI isn't about providing necessities, it's about providing cash at a level that one can provide the necessities for themselves.

Why does a UBI have to be cash based?

In principle, it doesn't have to be. But cash is theoretically the most efficient. Individuals know better than anyone else what they need at any given time. Giving them cash allows them to effectively manage their needs, and invest in their own development better than government could.

But as you said, providing for our basic needs (food, water, shelter) does not seem to be achievable in terms of cash.

Why is it that an arbitrary shortage of 1's and 0's in a computer somewhere is keeping us from achieving the end goal of UBI, which is to efficiently distribute the existing surplus of goods needed for survival that go wasted every year?

The flip side of this is abusive workers who will refuse to put in good effort because the cost of getting fired is lower.

Of course, we could argue that workers should be more motivated by the promise of a good reward, but it looks like evidence from behavioral economics suggests that fear of loss is approximately twice as powerful as the hope of gain. So let's not underestimate the power of fear to generate productivity.

By the way, I am generally supportive of the UBI, just wanted to point out a potential cost. Over the long run I think the UBI's benefits would exceed its costs, but I can't deny that there are real costs to an UBI (beyond the simple direct costs).

That's not an abusive worker, that's just a bad worker.

In the current system bosses are sometimes hesitant to fire people if they know they have a family to support. Knowing people have UBI to lean on there's much less guilt about letting people go.

and people can leave when they have a shitty boss and they know they could be their own boss.

It'll also kill of a load of businesses where there's a bulk of minimum wage staff that could work for themselves.

How is that any different from lazy and bad workers today? Asking for references won't go away just because of UBI. Heck, there are lazy people who are already like this even without UBI.

Yeah. Think about just what kind of workers we might be losing to UBI + laziness. Will we really miss them?

If anything, people dropping out of the workforce to live on a subsistence UBI would make it easier for both employers and motivated workers to connect. Employers would know that anyone they're interviewing is already more motivated.

I think you're immediately and clearly wrong.

If workers don't put in the effort, you fire them, or demote them, or pay them less, or give them less hours, or... all of the same things employers do today.

Productivity from fear of loss, I would expect, is inferior to productivity out of hope of gain. If I am motivated from fear, I do not want to be an outlier (I want to be nestled in the group), and I only want to make defensible decisions ("It's not my fault, see?"). And then there's the health effects from stress, the breakdown of group dynamics from members turning on each other, the issues and costs of enforcement of fear-generating policies... So let's not underestimate the costs of fear on productivity.

There are also employers who do not fire employees out of generosity - "I don't want to fire that guy, because he really needs this job". Now you can - or suspend without pay or whatever - because you're not throwing them on the street.

I can definitely deny that what you propose is a real (expected, since this is all theoretical) cost, and you should, too.

Along with the rest of the replies to your comment, I think you're also underestimating peoples motivation by greed.

UBI will guarantee you won't die by something stupid and terribly like starvation, but if you want a nice condo, nice car, better entertainment, or maybe travel -- well guess what you have to suck it up and do? And poor workers won't be tolerated. I can only assume it would become easier to fire people if doing so won't immediately place them in danger as that danger would have already been mitigated.

My impression is that starvation is already an unlikely occurrence in western countries.

There's millions of people relying on food banks in the UK thanks to the last 7 years of Tory austerity.

If that's your impression, then my impression is you've never really been poor and without social support.

As a rule, I think it's best to be aware that it can almost always be possible to be worse some for people than you think it can.

In may be easier for employers because they can fire under-performing employees easier. Most of the hurdles for firing someone are due to lack of safety-net. With UBI those regulations should be looser.

There's so rarely such thing as abusive workers. There's often bad and irresponsible ones, sure. But you have to have power over someone to be abusive.

The company almost by the nature of the relationship is telling a person what to do. It is about the only necessarily hierarchical relationship left.

But beyond that, in your average company, the company can afford to do without a certain employee for some time (their income might drop from 100 to 99), but an employee can't do with a company (their income would drop from 100 to 0). So even beyond the nature of the relationship (recognised by law), there's other informal power relationships going on as well.

So you might worry about bad workers, but you can hardly complain about abusive workers.

youth can work for free for interesting companies rather than work for peanuts for abusive companies.

I would suspect that for a lot of people their debts (particularly mortgage debt) would grow with their income leaving them unable to just quit and fall back on UBI.

Only around 40% of Americans have a mortgage, with a large chunk of those being people who earn upper middle class money and are therefore probably more stable in their career with more leverage against employer abuse. Most other common debts (credit cards) don't have the kind of consequences that would prevent you from missing a few months of payments if necessary. So, while this might be a concern for a subset of the population, it probably still stands that this would benefit most of the people most often preyed upon by shady employment practices.

Replace mortgage with rent. If leaving your job isn't well timed with lease expiration (giving you the opportunity to move somewhere cheaper) then UBI lower than rent isn't going to help much.

On the other hand, if UBI is constant across geography, it provides an incentive for the underemployed to move somewhere cheaper. It might take some of the pressure off housing in popular cities.

Many would call this "the destruction of marginalized communities" and try to stop it.

I'm pretty sure that if you replace what's in quotes there, you could make that statement for literally any proposal to do something ever made.

Breaking a lease doesn't have nearly as severe consequences as defaulting a mortgage. Most cases they just keep your deposit, if they know they aren't likely to be able to get anything more from you, because you have no assets. So yeah, if it's important, you could ditch the job and the rental and move somewhere you can afford on UBI.

Do reputable landlords rent to people who have broken leases recently? Do they even pass job background checks that include credit history?

I can peacefully exit my lease by paying an extra month's rent as a termination fee, but if I abandoned the apartment and couldn't come up with the termination fee, I'm pretty sure it would be the same, or a little worse, than being in default on any other debt.

If workers quit working for abusive employers, then you end up having more job-seekers, which makes it more difficult to find a job. That only becomes irrelevant if you have a parallel increase in entrepreneurship.

One of the reasons why UBI appeals to the HN crowd is because the HN audience leans towards entrepreneurs and wannabe entrepreneurs. But for the economy at large, far more people would rather try to keep their heads down and get home to their families.

Most people are not responsible financial stewards. They don't take their excess income and put it into investments, they take their excess income and put it into improving their standard of living. That means using the extra income generated from a day-job goes to higher rent, car payments, and other liabilities not easily released.

Most middle-income people will end up in the same place - unable to leave their jobs due to the difficulty of finding a new one. Upper-income people will pay more in taxes essentially to end financial insecurity among lower-income people living paycheck-to-paycheck.

I think the only issue I take with your assumption is that you will end up having more job-seekers. It could just be the case that the abusive employer's business will fail and thus create an opportunity in the market for another company to take over. If you rinse and repeat, you could assume that it would provide a force to push abusive employers out of the marketplace and replace them with more productive employees and employers.

I'll also argue that "improving their standard of living" does not have to be separate from an expansion in the economy. Often the means these irresponsible financial stewards take in "improving their standard of living" is in spending on goods and services, which continues to contribute to liquidity in the market. Not to mention that improving the standard of living for consumers is generally an overall win for society as a whole (lower crime, lower healthcare costs, higher productivity, etc.)

This identifies why I tend to think social spending is a good idea even if there is some uncertainty about the benefits.

If everyone gets a few thousand dollars and runs out and spends it on beer and pizza, at least they got some beer and pizza. And then the money ends up back in the hands of the people who had it originally.

There are worse ways for a project to fail, and of course all the benefits discussed elsewhere could happen.

If excessive income doesn't serve to increase my standard of living, why the hell am I getting up from bed every morning? Might as well get a lower paying job, if my standard of living should remain the same.

I highly doubt anyone would quit a high paying job because of that. You'd have access to more of society. It simply wouldn't be as much of a dip in quality.

Folks would leave stressful jobs or jobs that require you to work long hours.

Both of those effects exist at a higher income level in the Silicon Valley -- it's called "F you money".

Very few people have high paying SV jobs that allow for "F you money". UBI would give that opportunity to many more people.

> an abusive employer would be more severely punished by the labor market if the economic cost to the worker is diminished

> workers would also be more likely to create new businesses entirely if the personal financial risks associated with doing so were diminished

What kind of UBI are we talking about? If it's the one funded by dismantling the social safety net then no - you won't get more income when losing your job, because the same money is now spread among more people (most of whom still have a job). If it's in addition to the existing safety net, you'd get more of the same advantages by expanding unemployment benefits instead (make them higher / longer lasting / easier to obtain).

maybe it falls under "Easier to obtain" but you're not going to collect uninsurance in the US today if you quit your job.

> you won't get more income when losing your job, because the same money is now spread among more people

He didn't say that. The things he said:

> an abusive employer would be more severely punished by the labor market if the economic cost to the worker is diminished

> workers would also be more likely to create new businesses entirely if the personal financial risks associated with doing so were diminished

Are absolutely correct for either type of UBI.

I've always assumed a UBI would involve reducing (or removing) the tax free threshold, so a person on an average or greater income would actually have no net change in their position, or may even be worse off. Perhaps I'm wrong on this?

The advantage of the UBI comes from reduced administrative costs — at the moment, governments spend huge amounts of money on welfare departments to make sure welfare recipients are members of the worthy poor. By giving the UBI to everyone these costs get cut back.

It also smooths the transition from jobless welfare payments to employment with a tax free threshold, so that we don't have to worry about whether or not a particular person would be worse off if they picked up another five hours. They would always be better off (because they'll pick up e.g. 87c of every extra dollar they earn, instead of having welfare payments worth e.g $500/month cut but being able to keep $1 of every extra dollar).

I fear the advantages of a UBI go to the right-wing (neo-)liberal elites. They can get the government out of morality, cut costs, and pretend to be doing something for the poor. Whether it actually does something for the poor or not compared to welfare is, as you say, conditional. And in the absence of widespread community organisations (like churches in the olden days) throughout much of the west, it's not clear that taking the government out of morality is safe at this point. The article here wants me to believe that my concerns are illegitimate, but Iran is no secular western country.

This is a feature not a bug. I think it would have a positive effect on the workforce.

The thing that always concerns me about UBI is that the government controls your salary. This is sort of true already on that they have the power to raise our lower taxes, but lowering UBI would affect far more people

> The thing that always concerns me about UBI is that the government controls your salary

UBI is not salary, and doesn't prevent you (or punish you) from earning a salary alongside it.

That said, I'd prefer a universal income to be fundamentally (e.g., Constitutionally) tied to a dedicated funding stream, equally divided, and not subject to regular legislative control.

You could eventually make UBI a constitutional right. At that point the government controls it in the way they 'control' your right to free speech or to life. In material terms government coercion could deprive you of either, but it would be considered extremely illegitimate for the government to do it. If you want a 'positive right' example, in most countries the government would be considered to be failing its duties if it failed to provide free elementary public education for all citizens, and the logistics of that are more complicated to both provide and verify than a simple cash transfer.

I see it going in much the same way current governments in stable countries don't suddenly show up at your door saying you owe them 95% in tax. Refusing or delaying to pay your UBI would amount to that, an illegal tax.

Further, if you are no longer forced to sell your work, a liberalized labour market might produce fairer results.

What stops rent rising to absorb the surplus, as it currently does?

New home construction, hopefully subsidized-affordable home construction.

Enough subsidized housing to serve more than a tiny handful of lucky applicants would be a foundational societal shift even more dramatic, and more difficult to pull off, than UBI.

But that's not what ubi is. Why not just assault the causes of high land costs if so?

The amount of freedom and mobility granted by UBI might be enough to incentivize people to move if the rents started rising, increasing competition. Then landlords would either have to bear the extra cost of finding new tenants or lowering rent to competitive rates. Outside of price fixing, rent gouging at least partially relies on people being unable to afford to move.

Surely ubi has to be regionalised in some way. I think ubi without land value tax makes no sense.

It is generally opposite.

For example USA does not have government mandated paternity leave and hence a lot of people value that 3 month salary over staying at home without pay. This means the McDonald on corner is able to have necessary staff and the Comcast technician is able to come to your house on a Saturday.

People leaving jerk boss is not always a good thing because Jerk is a value between 0 to 1. UBI simply tilts it in employees favor which is exactly same as against society's benefit.

God forbid we should help ordinary working people. That's totally against society's needs, society consisting of ordinary working people...

I am only explaining the facts. Forced paternity leave takes out some amount of labor from market increasing prices for everyone else for those services.

You're not thinking very deeply. There's more to society than absolute economic efficiency. Giving fathers time to engage properly with their newborn children helps those children succeed throughout life, and makes happier and more effective workers.

Besides, I've been a father of newborns who also had to work full-time. It was beyond exhausting, and I sure wasn't working anywhere near 100%.

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