The central idea of basic income is that you get one fixed amount of income per month that needs to be sufficient for all expenses, including rent, and everybody gets the same sufficient amount of money no matter what he or she uses it for and no matter whether the person works or not. I'm writing "sufficient amount", because it is obvious that a basic income experiment that doesn't allow people to get by without working would not be basic income either, but a subsidy to the salary, as they already exist in many social welfare systems.
This is not "obvious" at all, and there's no reason why we couldn't start meeting people halfway, in a sense. Realistically, no amount of BI would allow people to "get by" in a highly-desirable urban location like SF or the Valley. It would probably be priced for areas with a more manageable cost of living, and even there most folks would be supplementing it with at least part-time or "gig" work.
Isn't it part of the idea for a UBI?
If you can't live where it is expensive, go find a better job or move out.
UBI, at least my idea of it is far from easy, it is something to ensure your survival, but if you want confort, and choosing where you want to live is part of it, then you need to work. There is only so much money that can be allocated do welfare, and you can't give more to some people without taking it from others.
It means that if you are already living on subsidies, chances are that your situation is going to get worse with UBI. OTOH, part timers in poor areas will be much better off since they will get full UBI + pay with low expenses.
Maybe that's why UBI doesn't work. Not because it is an incitation to do nothing, but because it may be devastating to families who already live on subsidies. And if we don't remove existing subsidies, then there isn't enough money.
Personally, I believe that the best way to decrease social tensions and prevent a dystopian impoverishment of the majority of the population is to lower the gap between the rich and the poor and to limit the amount of wealth that can be transmitted by heritage, for example with a Skandinavian tax and welfare model and by putting a strict upper bound on the amount of assets and resources that can be inherited.
It seems to me that UBI can only work as intended if it was fairly high, and that is perhaps not realistic for political and economic reasons.
The population of Finland is 5.503M. A sample size of 663 represents 6M population at 99% confidence levels. 2000 is more than a decent sample size. You may argue for the sample quality but the size seems beyond question here.
There are some minor effects that don’t need universal+indefinite basic income to show up, but tbh those aren’t very interesting.
It would have been a more interesting experiment to fund just 100 people for life, with the same money, even though that sample would have been smaller! But even with say 10k people funded for life, you wouldn’t see the most important effects on the job market, prices, rents...
Are there any good natural experiments like this?
Some lottery winners take the annuity, maybe that is close? (Although they are selected both to play the lottery, and to have the sense not to immediately buy a ferrari.)
Some places have pretty generous disability pay, I wonder if people who just got it or just didn't might be a useful experiment?
What business would you start that takes more than 2 years to validate but takes basically no funding?
So by “business” I mean a UBI subsidized hobby, basically.
But while a sample size of 2000 is statistically enough, a study this small can't find the effects of giving a basic income to an entire country. Giving income to one person changes that person, giving income to everyone changes the entire economy.
For an initial experiment this is actually fine. You first want to check that the effect on the individual is beneficial and people don't just stop contributing to society. But to draw useful conclusions you would need a second experiment that gives basic income at least to an entire community, preferably even an entire region, for a duration that allows people to forget about the "after".
Is it though? With the knowledge that it will be over in 2 years you get a different sort of behavior then if it actually functioned as a guaranteed support net.
I would have found it much more interesting, if it supported people 10 year from retirement for those 10 years. They could just stop everything and dont have to care for after the project ends.
A couple problems with these basic income experiments are that the participants know they are receiving their money for a limited time, which does not allow them to change their economic participation in meaningful ways. There is also the network effects to be considered. When only a tiny subset of the population is receiving basic income, the effects that you would like to study can’t be observed.
I don’t know how those two issues can be controlled for. Basic Income seems like a system where you just have to dive in a cross your fingers.
You do understand why people want to start small right? Because if the experiment fails on a large scale, the results are catastrophic to society. In my opinion, proponents of UBI had better find a way to conduct the experiment in a meaningful way on a smaller scale first if they expect to convince any rational person that it's worth pursuing on a larger scale. This idea of "well let's fundamentally change society in an irreversible way and hope it all works out" is absolutely a non-starter for me.
Yea, people would modify their behavior to account for it and thus just eliminating it outright would cause a lot of transitional pains, but thats no different than if western governments tried eliminating retirement income, subsidized / free medicine, public infrastructure upkeep, etc.
Must be fun for those working on the such problems :)
It is unclear what is the outcome. Some people will say that it is helping poor people, others will say that it demotivates people to find a job and is contributing to French high unemployment rate. It is really unclear.
edit: To receive RMI/RSA, one also need to be looking for a job, but it is not really enforced.
https://en.m.wikipedia.org/wiki/Revenu_minimum_d%27insertion
I think this type of income is best when 'between careers'.. when someone desires to walk a new path.
The alternative seems to be to leap into a new job, which could perpetuate misery.
But if a person has time to step away, and create stillness and clarity, then that decision can become obvious.
For him, the income was enough to live, for him to become a more conscious spender, and when he stopped receiving the money, he chose a new career in door-to-door sales which he's loving.
RSA (Revenu de Soliarité Active) is given to anyone, based on their resources: young graduates without a first paying job, refugees waiting for immigration decision, people who haven’t found a job in more than two years, even unpaid members of religious orders. It comes with medical coverage (“universal” medical insurance is based on your status in France).
Both are revoked when you find a job. It used to be possible that a part-time job would pay not much more than either stipend; because of that, both programs were described a possible “disincentives” by opponents (typically right-wing small-government, aka “Libéraux”). Even proponents saw a lot of edge-cases: people having to wait, seeing their hours cut or being fired soon after they changed status and struggling in the transition. To ease the transition, partial stipends were made possible.
The whole idea of real BI is that everybody gets it indiscriminately and that it's high enough to be able to live off it.
RSA just prevent people from dying too soon.
That already seems hard enough. How realistic would it be to give even more?
Finland currently has unemployment at 5.4% and working age economic inactivity (i.e. people who do not pay income tax but are also mostly not eligible for benefits) is closer to 30%.
If the state is paying out the equivalent of a livable income to >5x as many working age people as before that's a big increase in [net] income tax burden on the employed. Given that many of these economically inactive people are not looking for work by choice (probably because they don't need the money), there's a big question over whether that's an income tax burden worth imposing.
The payments are not contingent on anything, but people earning enough more than the payments are getting less basic income than they are paying in taxes towards basic income.
There would still be the potential problem of people choosing not to work (affecting tax revenue), but this is much harder to predict of course.
I know a lot a people who don't have a job, but do a shit tons of work. Think of all those retired people building stuff for the family.
People who really don't want to do anything exist, some of them are mentally sick and need help, but I think every one want to do something (at some point in their life).
Some people with a significant handicap, typically those who benefit from assistance to afford a powered wheelchair, were against it because it was likely that their benefit would be greatly reduced. There is also a large portion of the country that is considered handicapped for not obviously somatic reasons (depression and alcoholism) that would lose a lot. I have never heard any Finn disagree with the support that the latter group receives but I would assume that the assistance that they receive is controversial.
The initial goal there was to reduce the cost of managing all assistance programs (not to reduce inequality which isn’t necessarily seen as a major problem as long as everyone has a roof & eats) and was more a fringe right-wing idea.
The disagreements I often see are on how large portion of social support can be replaced by UBI. In your calculations, how much of the 560 per month would be needed to be supported by new taxes?
One can for example look at people with part time and compare the average dependence on social support vs those who are unemployed. The assumption is that those with some income are part of fewer benefit program and interacts with fewer social administrators.
Do Finland have a similar system to Sweden where Unemployment benefits depend if the person paid a unemployment insurance when they were employed?
Also, for those who pay more, part of the tax increase is fictitious, since it would be compensated by their UBI. Someone paying $2000 before and $3000 now would not actually see an increase of $1000, just $440.
You can't really argue that, because that applies to all taxation. It is like answering "Who is going to pay for the army?" by saying "the money is given to soldiers who spend it, and put it back into the economy - so really it costs nothing".
The flaw in that thinking is that, by design, a UBI will involve the consumption of real resources (like how maintaining an army involves lots of sunk resources including people's time) that could have gone into something else that creates more resources. The consumption of resources is going to appear as a cost to someone, because the people and activities consuming them didn't directly create anything.
At the moment we have an economic system that ensures consumption of real resources is matched by creation of real resources, using money as a measuring stick to prove that nobody in the chain of production believes value is being lost (net value, anyway). The cost of short circuiting that, as UBI does, is never going to be 0 and someone will have to pay it.
In the UBI's case, this is not true: the expense of resources is exactly the same, the State is just taking away the decision on which resources to spend it on from one group (net tax payers) to another (net tax receivers).
> At the moment we have an economic system that ensures consumption of real resources is matched by creation of real resources
But that's true with UBI as well (assuming it's done with taxation instead of issuing currency). If you give part of your paycheck to another person, the resources accounting is still net zero (society-wide).
That is true; which imposes an interesting upper bound on army size before the economy collapses.
> In the UBI's case, this is not true
A UBI is exactly the same, except that the resource burn is smaller than employing someone in the army because instead of being guarenteed to waste a soldiers time there is only potential to waste a citizens time, which is an improvement.
> the State is just taking away the decision on which resources to spend it on from one group ... to another
Yes. Group 1 is the group that will decide to create more resources with what they are given and Group 2 are consumers. We know that is true in practice, because if it wasn't a UBI would be pointless.
> If you give part of your paycheck to another person, the resources accounting is still net zero (society-wide).
That is not so. If you get given your paycheck automatically you clearly have not created any real resources. If you spend it, you are clearly claiming something of value. For the overwhelming majority of people in the overwhelming majority of cases, the resources are for immediate or medium-term consumption, and the society wide net is reduced resources.
Let the robots do the grunt work.