The evidence behind putting money directly in the pockets of the poor
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UBI makes sense for a purpose of bringing more buyer's/actors to the game. It's especially useful considering our dependence on jobs as the primary activating mechanism shows strain under the troubles of scaling human coordination and hiring. In a sort of backwards way we get more jobs when more people can contribute to the flow of money.
However UBI doesn't solve the problem of debt still piping the cash back into the hands of banks and other financial institutions. What are these UBI checks going to be spent on? Rent that's too high? Student loans for indulgent tuition prices? Without blocking the pipes from the poor to the the actors with pipes of their own, these throughput problems aren't solved more than delayed.
An actor is still a single actor, so if one actor has an over aggregation of wealth and has trouble spending it effectively the potential of that wealth is wasted when at least some actors don't have enough.
So surely trillions of dollars of UBI injected directly into the hands of the poor will stimulate the economy. But for how long until the cash starts to aggregate again into slower pools of cash where throughput is limited? In a sense we almost want inflation if these "overaggregators" are so abundant, but only if the population is maintained at a base level of wealth relative to the inflation. Otherwise the rich, who probably got rich by being more effective with their money respond to the market changes faster and the UBI stimulation is only temporary.
But if UBI causes significant inflation, and the pipes going directly to every individual have enough back pressure, it could be a great situation where the overaggregators lose value to inflation as they struggle to spend or invest.
That isn't a problem it's expected to solve. It's a completely independent problem that already happens whether you have a UBI or not.
The solutions there are likewise independent. Build more housing so it isn't supply constrained and doesn't increase in price to consume any gains made by the working class. Stop issuing student loans (students now have a UBI and don't need them), because student loans inflate the cost of college relative to other things which loans aren't available for. A UBI doesn't do that because the money isn't only available when spend on college.
> An actor is still a single actor, so if one actor has an over aggregation of wealth and has trouble spending it effectively the potential of that wealth is wasted when at least some actors don't have enough.
That's not how money works. Money in a bank account isn't being "wasted" because it isn't consuming resources, and if hoarding is causing currency scarcity (i.e. deflation) then additional money can easily be printed.
> So surely trillions of dollars of UBI injected directly into the hands of the poor will stimulate the economy. But for how long until the cash starts to aggregate again into slower pools of cash where throughput is limited?
For as long as they keep getting the UBI. Where do you think the money to fund it would come from?
But that doesn't work if building more housing is still prohibited by zoning.
If you think of Money as a proxy for "captured value," then one way to look at it is how much "captured value" is "captured opportunity for wealth creation," which has a certain distribution % chance across the entire population.
In that sense, total aggregate money at any point in time can be viewed as zero-sum.
Notice how printing a hundred trillion dollars would normally be expected to cause a lot of inflation, but doing the above doesn't do that. It wouldn't have been any different if they had printed monopoly money instead of real money, because it doesn't get spent.
The opportunity for wealth creation is in raw materials and labor force. We measure those things in dollars because dollars are fungible and we want to be able to compare them to each other but the green paper isn't the prize, it's only a token that represents the prize. If some of the money is removed from circulation then the rest of it is worth more. It costs fewer dollars to buy an hour of labor, but there are still the same number of hours of labor available to buy. This is deflation, which is bad for various reasons, but deflation can be countered by printing money.
Not buying stuff with your money doesn't destroy the stuff, it only causes somebody other than you to have the stuff. This is only worse if what you'd have done with it is better than what they do with it.
I think these two example are to the point. They're really the only outsized debts that most people have that aren't just "generally need more money". They should be tackled separately in addition to general wealth distribution policies.
> If a large percentage of the population can't participate, the market's capability to price, evaluate and represent value is hindered.
Note, that the actors having roughly proportional buying power is also important. Having actors that control disproportionate amounts of wealth also hinders the market's capability to price. We need explicit measures against wealth accumulation if we wish to have functioning markets.
Universal Basic Needs. I don't care how much UBI payments are, I still argue single payer healthcare is mandatory, because there is no way such a system can effectively function as a free market (besides perhaps elective procedures). Also, humans are irrational, unlucky, and do an overall poor job planning for the future.
Almost half of the US population over 55 has no retirement savings. They will be living on their Social Security alone (effectively an age tested UBI), but we still provide Medicare for them for their health needs when they arrive at age 65. This is a sound model.
EDIT: Tangentially, there is a thesis [1] which breaks apart the concept of fiat into distinct components: "machine money" and "human money". We can print "machine money" without a care, because what you buy with it is produced or delivered by automation; this might be renewable energy or automated electric transportation. We can deflate it away with technology. "Human money" is money where you must have a human do the work, and therefore there are supply and demand constraints. This currency must be carefully managed to prevent inflation or devaluation.
[1] https://wtfeconomy.com/machine-money-and-people-money-29b497...
Ah, I agree. But I'm in the UK, and universal healthcare is a given here so I didn't think to put it on the list.
Anything that accelerates the death rate of older cohorts or the election of Congressional reps who support a universal healthcare model would speed the timeline up.
[1] https://www.pewresearch.org/fact-tank/2018/10/03/most-contin...
[2] https://www.pewresearch.org/fact-tank/2017/03/20/a-wider-par...
I harp on this, but if FRANCE can create a healthcare system that incorporates free market concepts, it’s not impossible.
[0] https://link.springer.com/article/10.1007/s11606-019-05002-w
[1] https://www.cnbc.com/2019/11/10/americans-are-drowning-in-me...
The risk is perhaps a flight to an alternative currency without 10% inflation... but maybe the USD is in a fortunate position to withstand that.
It stands to reason that unrestricted welfare would reduce hours worked in developed countries. This would be especially true for young adults with no dependents. Why work overtime at McDonalds when your rent is already paid up for the month and there are so many fun video games to play?
I think we just have to accept that UBI would give people that work undesirable/uninteresting jobs an off-ramp from the economy. The problem being that our economy depends on these people performing such jobs. Employers would have increase wages significantly above the UBI level in order to attract workers, but that would either erode the UBI through inflation or cause an inflationary spiral if the UBI were indexed.
I haven't heard a satisfactory explanation as to how UBI avoids these pitfalls.
It also must be considered that many categories of jobs currently can’t be filled without some form of immigration because the existing social safety net of charities and government benefits never makes picking strawberries or meat cutting preferable to unemployment.
That doesn't mean it's bad that it doesn't occur. Just that if the equilibrium price has any link of the chain be legally unacceptable you might literally kill a market. There is no new equilibrium. There just isn't product.
I’m not sold on expansive UBI. (The EITC seems like a better middle step.) But I don’t buy this argument.
Making fruit and vegetables a luxury doesn't fit onto anyone's list of good public health outcomes.
Lots of produce production is already 90% automated. (Corn, for instance.) Strawberries are a particularly manually-intensive fruit.
https://www.nytimes.com/roomfordebate/2011/08/17/could-farms...
This is known as colonialism. It comes with a set of extremely ugly incentives. For example, keeping the population of the source country as poor as possible, at all costs, so that they accept to work for you for even less money.
They've been doing this for a long time, and have avoided those pitfalls you hypothesize about.
NOTE: It's more than that now with COVID-19, I'm giving the "normal times" number.
Couldn't another possibility besides inflation be that this incentivizes automation (which can have deflationary effects)?
See ”The effects of cash transfers on adult labor market outcomes” https://link.springer.com/article/10.1186/s40176-018-0131-9
(But of course, the qualifier is “in low and middle income country settings”.)
There's something very real and very healthy about taking power away from those that shouldn't have that power; and abusive customers and failures of managers are some people that might do well to have their pegs knocked down a notch or two.
There are more than enough unemployed people to fill any gaps created.
Why would they want to fill gaps when the rent is paid, the fridge is stocked, and there are so many games to play and movies to watch? I can totally see the "gaps" in fun jobs being filled. But the "gaps" in garbage collection, sewer inspection and other dirty jobs? Let's not kid ourselves and pretend that "if only people wouldn't have to worry about rent, they'd gladly take these jobs".
If someone wants money to engage with society in a more meaningful way, there are always jobs to allow them to do so- even if they're dirty.
You can participate by spending money you were gifted, but you're not contributing. If it was just about participation, let's remove all the clutter, just give everyone a million bucks a month - we can all participate in the economy by spending roughly $30k a day and it'll be an economic wonder. The question is: who will be there to sell us things, to cook food at the fancy restaurant etc, if they also get $30k a day? You'll have to pay them a lot more than today. And that'll just mean that your $30k are worth proportionally less.
Money is just a placeholder for value. You need the value being produced to make the money meaningful.
Even without tangling with that question, there's the argument that moving money around is itself a contribution. It's a marginal one, and if that's all you're doing, that means your total contribution is marginal. But that's fine, there's always going to be a spectrum of contributions between those that are paper-thin and the earth-shattering works of great import. Some jobs that look like hard work are a net negative on society. If you get into the game of saying "contributions below this specific level don't count", you end up splitting hairs and, because everyone's values work differently, you can't avoid bringing moral arguments into the frame.
Besides, we're not talking about giving everyone $30k a day. That's qualitatively different, not least because it's so far from the basic cost of living that it just doesn't make sense as a comparison. It is far, far better to just say "nobody will be in poverty" and leave it at that than try to attach strings to it.
The more important question is: if so, do all human lives have that worth? That is: to satisfy A's personal hobbies, are we allowed to make B work more than B would personally like?
If moving money around is a contribution, let's automate it. We have computers, we can do it at a very high frequency. Even if it's a marginal contribution, we can do it many times per second. If it's indeed a contribution, that should help, shouldn't it? If we need more contribution, we'll just add another node or increase bandwidth, and voila, we'll have even more, which we can use to add even more. Magic!
> Besides, we're not talking about giving everyone $30k a day.
Right. It will still have the same effect if everyone gets it: to convince them to continue working, you'll have to increase the wages.
> It is far, far better to just say "nobody will be in poverty" and leave it at that than try to attach strings to it.
That's just another way to say "work is optional, you don't have to contribute anything if you don't want to, but the others have to share with you". You can make that argument, but it's a very different one from the idea of UBI, which somehow magically creates wealth by moving money around and reducing the incentive to contribute to society.
That's precisely the question, yes. Although there is the question of whether B would actually be affected. There's an underlying assumption to this statement that UBI would be an appreciable net cost, rather than being offset by savings in other parts of the economy. Bear in mind that there is already a rather dramatic range of income tax levels across the developed world; there's nothing inevitable about the current level of "paying for other people's hobbies" that we currently engage in.
> If moving money around is a contribution, let's automate it.
I'd hope it was transparent that the moving around of money that an individual engages in by buying food and services in their local economy (or online, it doesn't really matter) has qualities that aren't preserved by this system.
> Right. It will still have the same effect if everyone gets it: to convince them to continue working, you'll have to increase the wages.
So jobs that fall below a very basic income level cease to be relevant. That's not necessarily a bad thing. But also, the difference between your $30k example and the sorts of realistic proposals you see is proportion, and that matters. If I was being paid ${UBI} by my employer yesterday, and today I'm being paid ${UBI} by the state, my employer now has to add to that, not replace it. It might take another $30k a day for me to appreciate the difference from an employer if that's my current rate, but at the other end of the scale people are actually considering, if I can get an extra $10 a day on top of UBI, that might be enough.
Think of it from the other side, too: today, I've got a salary cost of $X for my employee. Tomorrow, the state pays them $X. I can add $10 to that and their take-home goes up, while my costs drop by $X-$10.
> That's just another way to say "work is optional, you don't have to contribute anything if you don't want to, but the others have to share with you". You can make that argument, but it's a very different one from the idea of UBI, which somehow magically creates wealth by moving money around and reducing the incentive to contribute to society.
Only for an arbitrarily narrow definition of "contribute". There is nothing magical about removing the economy-level costs of individual poverty, and work would only be "optional" if you were content with a very basic level of existence.
I do believe we all agree that it will be, yes. There are claims that you can "reduce administrative overhead" to pay for it, but they are many orders of magnitudes off. So for all proposals that don't include magic or just hand-wave away all objections, yes, B will be affected. If we only have A and B, and B would like to work no more than required to live comfortably, B would have to work twice as hard to also pay for A. If you have A, B and C, it's 150% for both B and C and so on.
I'm sure that most people will agree to do it if A is incapable of contributing, but not if A just is unwilling to contribute. You could argue that the unwillingness should be considered a symptom, but that's pretty close to saying the unemployed are mentally ill. And if they were, shouldn't we help them get healthy instead?
> I'd hope it was transparent that the moving around of money that an individual engages in by buying food and services in their local economy (or online, it doesn't really matter) has qualities that aren't preserved by this system.
The issue with "just moving money around" is that it's really no different than doing it virtually. The point of "moving money around" in the economy is exchanging goods. Just making money change hands doesn't produce anything, so to contribute you have to produce something (or help produce it as an employee etc), you'll get money for it and you then exchange that money for things other people have produced. As long as the money is backed by value, everything is fine, and moving it around a lot is great for efficient markets. But you're not suggesting money backed by value, you're suggesting increasing money by itself, without adding value (contributing) to the economy. We don't need an extra person to buy bread from the bakery for the person who makes the bread to then go and buy something from the fruit stand etc, we can just cut out the initial person you want to gift money to, they serve no purpose, they don't add value, even marginal value, just by existing.
> So jobs that fall below a very basic income level cease to be relevant.
No more garbage collection, no more grocery store clerks, no more sewer inspections, no more farming! That's not necessarily a bad thing ;)
> Tomorrow, the state pays them $X. I can add $10 to that and their take-home goes up, while my costs drop by $X-$10.
Their motivation to do $whatever drops by $X, so you don't have to add $10, you'd have to add $X.
> There is nothing magical about removing the economy-level costs of individual poverty, and work would only be "optional" if you were content with a very basic level of existence.
Please define that very basic level of existence. I have a feeling that it's not "a bed, 3000 calories, a chair and a change of cloths", but rather "an average sized apartment, a tv, diverse food choices, a computer, internet, an allowance to spend on fun things etc", as it's widely considered today in Europe as the existential minimum.
I'm not talking about "administrative overhead", although that's certainly part of it. I'm talking about things like reducing the costs to society of having significant parts suffering malnutrition. Reducing policing costs because people aren't forced into crime simply to survive. Those sorts of costs.
> I'm sure that most people will agree to do it if A is incapable of contributing, but not if A just is unwilling to contribute.
Who gets to define what "contributing" means? Or what "unwilling" means? Why are you sure about what "most people" think? "Most people" - 51% in a recent survey - are in favour of UBI, outnumbering those opposed 2:1. In my experience, once you strip away propaganda, most people aren't that paternalistic, moralistic, and judgemental, especially when it comes to a benefit they themselves would also get.
> The issue with "just moving money around" is that it's really no different than doing it virtually...
When already-rich people automate moving money around, it's called "providing liquidity" and "price discovery". The same ideas apply on the individual level, plus the baker gets to participate and build value in a long-term relationship with an individual. There's clearly economic value here over and above the base exchange of money.
> No more garbage collection, no more grocery store clerks, no more sewer inspections, no more farming!
No more exploitation of poverty to get these things to happen, possibly. Yes, there will be economic effects: the wages for some jobs will need to go up, the wages for other jobs can go down. The point is that the directions of these things will be in a favourable direction.
> Their motivation to do $whatever drops by $X, so you don't have to add $10, you'd have to add $X.
Motivation is not linear.
> Please define that very basic level of existence.
Ok, here's a concrete proposal: https://www.politifact.com/article/2019/aug/12/andrew-yangs-... $1000 a month. $250 a week. Here's another: https://www.theguardian.com/uk-news/2020/jan/19/hull-univers... £50-£100 a week.
> I have a feeling that it's not "a bed, 3000 calories, a chair and a change of cloths", but rather "an average sized apartment..."
Where does that feeling come from?
That's not very charitable. I rather doubt that anybody here considers "Dickensian Nightmare" as a desirable world-state.
Maybe the best way to showcase the concern is to talk about some relatives of mine, who work just enough to pursue their two great life passions: (a) smoking weed; and (b) playing video games.
Now, either of these things is fine! Both of them together are fine are fine! And should you have the means, I have no problem if this is the sum total of your existence.
But I have zero interest in funding those life-choices via taxes.
With no-strings-attached UBI, that's exactly what we are talking about.
Moreover, there is a massive danger in decoupling "value contributed to the tribe" (work) from "value received from the tribe" (income).
What I think would make sense is to require that people receiving UBI still need to do some kind of work.
It can be painting, or cleaning parks, or making horrible music, or greeting people at Wal-Mart, but you are required to spend at least four full-time days per week (32 hours) contributing to society.
I am unsure how to appropriately enforce this.
On the one hand, you want to prevent bad actors; on the other hand, it would be stupid for the cost of enforcement to significantly exceed the cost of those bad actors -- like when the state of Florida blew through an extra $2 million to save $80k of welfare fraud.
If we're talking about national-level UBI, that's a lot of people involved, and a lot of money for the taking by those who are high in enterprise but rather deficient in moral fiber.
There are likely a lot of options on the enforcement front, and that smart enforcement with appropriate penalties would keep bad behavior to a minimum.
The goal of enforcement is not to stop every bad actor -- just to make the risk and hassle high enough to deter a significant portion of them.
Consider how Taiwan cheaply enforces sales tax: when you get a receipt for anything, it has a lottery code on it. Winners turn their receipts in for prizes, and the government then goes and checks those specific transactions for tax compliance. Penalties for tax violations are severe, and compliance is high, at minimal cost to the state.
Truly random checks (low probability of being caught) with severe penalties (massive pain if you are caught), and maybe even a reward for compliance, seems to be the way to go in this case.
Really, the main problem is that landlords will raise rent to match the new income levels of their tenants and everybody will be left in more-or-less the same place, except with a wider gap, not a narrower one.
Yes and no. There's a balance between "severity of punishment" and "certainty of punishment". And also proportional to the damage caused.
Also, the goal is not to prevent all bad actors! Merely to keep enough people on the honest path to prevent systemic collapse.
If you are certain of being caught, the punishment only needs to be high enough to be undesirable.
Imagine that you had a 100% chance of being caught shoplifting, in which case, a reasonable punishment would be to have to compensate the store owner an additional 50% for the stolen goods.
If you only have a 10% chance of being caught, then the punishment needs to be (financially) severe enough to make that dice-roll very, very unappealing.
There's likely minimum and maximum thresholds for both; e.g., beyond some severity, punishment stops being meaningful, and below some certainty of capture, rolling the dice "feels" safe.
Not sure what those numbers are.
Also, regarding punishment, we really need more options, and I'm not a fan of criminal records -- debts to society should not be infinite.
Proportional punishment is one tool -- a $200 fine means something very different to "a kid from the projects" than it does to "Jeff Bezos".
The other thing is that we've already massively decoupled value contributed to the tribe from value received from the tribe - many people's wages have absolutely nothing to do with how much they personally produce value. Generally speaking, employed people receive less than the value they create, and capital owners/employers receive more.
"Solving" poverty will be a complex thing no matter what we do.
We want to keep people out of utter privation. Off the streets, as it were. A chicken in every chicken and pot in every pot... or something like that.
At the same time, our resources are not infinite, and being valuable to your tribe -- e.g. "work" -- is a critical part of maintaining a healthy psychology.
The thing we absolutely, positively, must avoid at all costs is what we do now: paying people to not work, and punishing them when they do.
Even the weed smokers and the people playing video games are often maintaining a social glue with others and improving the lives of people around them - we might imagine that if these people didn't exist, multiplayer game creators might pay people to play video games and be friendly when the servers aren't particularly full, as a service to their paying players. We might actually see interactive platforms like Twitch as providing this in a roundabout sort of way - you can strike up a conversation with someone over a shared interest in video games for just a few cents. Japan has a small rent-a-friend economy, and there's a global cat cafe industry - people appear to be willing to pay for their social lives if they can't get it for free, suggesting that what many of these people do is in fact unpaid work.
Punishing people for working is really the problem; if some work (paid or unpaid) needs to be done, and somebody wants to do it, they shouldn't feel that doing that work might affect their livelihood.
This is very far-reaching. We might also imagine, that, if only we sacrificed any and all redheads once they reach the age of eight to the volcano god, the world would be blessed by everlasting peace, wealth and bliss. But let's not do it just because we can imagine something.
> suggesting that what many of these people do is in fact unpaid work
No, it's really not. They accidentally do something that other people in other contexts will pay others for. It's not that you'd have to pay someone to play video games with you if some stoner wasn't online. You'd play video games with ... all the other people who want to play video games.
As long as the cafe pays taxes, follows the law like any other business, and claims you as an employee, sounds like work to me.
You could also be part of a nonprofit that holds mini-concerts in nursing homes, provided that all the appropriate tax paperwork gets filed.
Would self-employed work not count under your system? What if I was doing something with the hope that it will make money in future? What if it's not, in fact, intended to make money at all, but would be non-profit work? If I set up a company that would sign off on me and my friends, would that change anything?
Managing a cafe in Cafe Simulator 3000 because you want entertainment: not work (but these games often do a good job emulating the monotony of work in the long run).
The lines get blurry when you're managing an actual cafe because you're bored and want entertainment.
Hanging around a cafe because your friend works there: not work, even though some people sometimes pay other people just to hang around in a cafe.
Sounds reasonable.
> But let's not do it just because we can imagine something.
Does this mean I need to take down that ad on Craigslist?
First, the "prebate" is the right idea. Every adult citizen or permanent resident gets it, no need to do anything special. Direct to your bank account, every month. Adjust tax brackets as appropriate.
Enforcement for the "must work" provision would run through the tax system as well.
You need to be able to show yourself as working for an organization which has a tax ID, which should include nonprofits, churches, government agencies, co-ops, startups, private companies, global megacorps, all of them. That organization also (already) has to report you as an employee, so no major change there.
And while groups of people could form co-ops and nonprofits that claim to "employ" each other, that's probably fine. If you're willing to go through all the work to handle the tax filings and related compliance, and do so without committing fraud, I don't see a problem there.
Basically, hippie communes are fine as long as you do all the relevant tax paperwork and meet the legal requirements for being a non-profit/startup/what-have-you. To me, that sounds like a lot of work to do nothing, and probably just easier to work for the city government, cleaning up trash in the park.
Allow a decent amount of time to change jobs on an annual basis -- maybe a month?
Work requirements are waived if you are disabled, elderly, or a student (university, trade school, etc.), although the latter comes with a hard time limit (this is similar to how things work in Germany right now, by the way).
You can also elect to stop or restart UBI payments at any time, and the above work obligations are suspended when not receiving UBI.
Paying for this is a question -- would need to run the numbers on corporate tax receipts, but I suspect a combination of corporate income taxes, tariffs, and the savings from no longer needing to run a large chunk of economic aid programs (social security, etc.) would cover it. Not sure, though.
VATs tend to be regressive, so I'd be pretty strongly opposed to one of those. We'd also need to get rid of minimum wage laws (covered by the UBI), and public-sector unions likely also need to go into the fire -- they'd fight tooth-and-nail against UBI-paid "volunteers" doing work for the government, because those people wouldn't be paying union dues.
Modulo the numbers working out, and that there are plenty of special-interest groups that would rather maintain the status quo, I think this would probably work...
Yep, instead of UBI, I'd be fine with Universal Basic Employment. It needn't even be something onerous (e.g. keeping the sidewalk clean or visiting the elderly to cheer them up) if the individual has physical or health limitations as long as it's contributing to the well being of society.
I'm all for people doing dirty jobs to be paid more. They're doing essential, undesirable work.
If that's true, doesn't it also mean UBI won't cost anything? (I realize that's some pretty twisted logic)
Either the amount paid by UBI is meaningful, which means it'll make a difference to people's lives.
Or it's so small as to be meaningless. Which means it won't cost that much per-capita to implement.
(It's late, I haven't thought this through, feel free to downvote if this is completely bonkers :-P)
Which would in turn make garbage collection more expensive. Now everyone has to pay more for it, including UBI recipients. Now UBI won't be enough to live, thus UBI has to be raised, making garbage collection at the then current rate less interesting. Back to square one, repeat.
The second sentence doesn't necessarily follow from the first one.
1. It's hard to tell how much costs would actually rise by.
2. UBI doesn't have to be enough to live on by itself. It just has to be universal and unconditional.
That'll be pretty much the increase in pay multiplied by how much of the cost of a product/service is labor, for all things your might have to buy, which includes housing, health care, food.
> 2. UBI doesn't have to be enough to live on by itself. It just has to be universal and unconditional.
I believe that's a minority opinion. Not getting anything, or getting $1 a month, meets those standards.
The point of UBI, as I understand the proponents, is that "the basics" (the B in UBI) are taken care of. They will always include housing, food, clothing etc, usually health care and it's up for debate what else should be included (TV, computer, internet etc are frequently mentioned as necessary to live in a modern society).
Not quite. Employers would be able to reduce salary costs by an amount more than the UBI, because of tax band effects, so costs of production for a bunch of stuff goes down.
I know people who live -in their eyes- comfortably off of that. They see no reason to change anything, as enough is provided to eat, sleep, smoke, get drunk, have a TV and an xbox, a computer and internet and use public transportation to meet with friends. Sure, you can't easily travel, and you're not going to buy a house any time soon (but if you own one already, you can keep it; if you're still paying the mortgage, the state will cover it for you within reasonable limits), but it's a comfortable life if you don't have a lot of ambition or can make some money on the side.
Except that isn't what actually happens. Even without basic income and in the depths of the recession, certain categories of jobs (especially in agriculture) could not be filled.
https://www.brookings.edu/wp-content/uploads/2016/06/West_Pa...
Isn’t that how capitalism works?
Conversely, if the salaries aren’t going up then there probably isn’t actually a real labour shortage.
“My startup went out of business because i couldn’t find devs to work for 20K” is a statement that would rightfully get laughed at in here.
When a farmer says the same thing people should equally call bullshit.
Double your prices, or hire devs in Elbonia.
Its hot/cold (depending on the season), humid, very noisy, vibration. Almost every American would rather work anywhere else.
Company: We are absolute desperate to hire workers but we just can't find any, anywhere! What can we possibly do?
Job seeker: Have you considered raising wages to attract more applicants?
Company: Haha, you're joking right?
It is actually a good thing that even the poor and unemployed put a value on their time higher than zero.
Where is the proof of that?
Unless the system is highly unmeritocratic this does not happen. Say you work at McDonald's and you're a brilliant person. You will soon be promoted and get more options.
In those 8 eight hours you spend at work if you give your best you will be noticed.
The system is, as you say, highly unmeritocratic. It has no incentive to be meritocratic for a vast majority of the population. Even your theoretical brilliant McDonalds employee would find a ceiling at the management level a raise of a mere handful of dollars over the line cooks.
This is a sick way of thinking about the world.
A parent doesn't get paid for the work they do raising their child. Better flip burgers.
The lady who wants to teach under privileged youth art. Has no market value, better to flip burgers.
The next JK Rowling wants to write, but her writing produces no immediate market value. Best to just flip burgers.
The man who wants to help the homeless. Darn, next to no market value, better flip burgers.
I'm sick of forcing everyone to live as a slave to the market. The market is not perfect. The market does not solve every human problem. The market cannot accomplish everything we want to do as a species. The market is a tool, let's treat it as one and stop worshiping it.
So some of your examples have a short-vs-long term aspect, but others seem to miss the relevant non-monetary aspects, like feeling like you're "making a difference", status, control, beliefs, etc. The fact that things other than money matter on both sides of trade does not mean that markets are failing.
Have you seen how many cheap books 2nd hand shops try to sell? Nobody wants them. They often get dumped. Libraries continually dump books too. Some writing is so worthless that people won't even read it for free. That's not a value like teaching underprivileged youth art. It's a zero-value or negative value.
It's his responsibility to plan his life accordingly. He may write on weekends and slowly steer toward his passion. I'm with you that some talents are less appreciated by society and thus less rewarded. Fundamentally it's down to the individual to decide what he wants to sacrifice in his life.
You don't have to be brilliant. You need to be a good worker, pay attention to detail, keep your area clean, get along well with others, not buckle under pressure, and treat the customer well.
I really don't think this is very likely. for one thing, it's hard to stand out as brilliant in a low-end food service job. no one cares. diligence is valued, but once you don't mess up customer orders and thoroughly clean everything on the closing checklist, there aren't really any ways you can improve as an employee. a place like mcdonald's is already highly optimized. there's not much room to get creative and show how clever you are. the difference in productivity between a barely qualified employee and the absolute ideal just isn't that great. if you do everything right and stick around a while, you might ultimately get to manage a single location. but you're still not making much money, and there's no obvious next promotion. the franchise owner isn't gonna be so impressed that they give you their own job.
The system is highly unmeritocratic.
https://www.fastcompany.com/40510522/meritocracy-doesnt-exis...
Up to manager, which google tells me is ~$40k/yr?
Before getting into software development I worked a couple of retail/kitchen jobs where I was continually recognized for my hard word and dedication. My best wage was $11/hr, but the many "Employee of the month" awards were nice I guess.
This may be the most Hacker News sentence ever written.
This sounds not well thought out to me. How many movers and shakers do you know that started out poor and working at Mcdonads? None?
If you were born economically disadvantaged the odds of success are highly unlikely, do not let anyone tell you otherwise.
To give an example, one of Goldman Sachs former CEO's started as a janitor in the company: https://en.wikipedia.org/wiki/Sidney_Weinberg#Career_at_Gold...
He was a high school drop-out.
It will sound harsh, but the truth is that most people are average. If you are brilliant and with a bit of luck you will make it to the top in most western countries.
Maybe you're confusing meritocracy with equality. Meritocracy does create an underclass of "unmeritous" people.
To judge whether or not a society is meritocratic, one metric until it falls to Goodhart's Law is look to how its whistleblowers and those who speak truth to power are treated. By that measure, populations in the US and most of the G20 are very tribal-, patronage- and nepotic-bound. Meritocracy prevails when challengers to ideas are embraced for the potential to further strengthen the system for everyone including themselves instead of excoriated.
Nobody cares how smart you are. Managers care that you come to work, do your job, and come in on you off days when people call off. Your coworkers only care that you don't fuck up and get them in trouble, and that you cover for them when they need a day off.
I think it just sets a floor on the wages of such undesirable jobs. And if the new wage to attract labor is higher than the marginal product of the worker, it’s likely that the job goes away rather than experiencing wage-driven inflation. In the worst case, this would simply lead to reduced output. In a best case the higher wage demanded would make capital investment more attractive, as it would improve the productivity of employees.
An analogous argument is always trotted out against minimum wage increases, and has been pretty thoroughly debunked.
I'm thoroughly convinced that economies do better when cash is distributed among more people. We currently have a situation where wealth is overly concentrated. The wealth looks for investments, and can't find much because the demand side is locked up: people are generally too poor and debt ridden to create new markets. OTOH, if wealth is widely distributed, everyone buys their needs, and there lots of economic growth, as we saw after ww2.
Another glass to see this through... In a capitalist society, if you have demands and no money, no one will care to solve your problems... And indeed, lots of people have problems and no money to pay to see them solved. Distribute the wealth and those problems suddenly have money behind them. Businesses pop up to help, employing people, etc.
Firstly, this probably isn't correct, see this recent report from Finland: https://twitter.com/rcbregman/status/1258336749828419584
I'd also point out that the current situation forces an "all or nothing" employment system. In Aus, if you're working part time you don't quality for any benefits, so the incentive to work while on unemployment is lowered. However, with UBI, there _is_ incentive to work. You can double your income by taking up a part time job, instead of getting the same amount from working as you would from unemployment.
I'd also challenge you and say why do think reduced working hours is a bad thing?
Also, what about all the people with a lot of money who don't work?
All your arguments have been made before and discussed in depth.
> The problem being that our economy depends on these people performing such jobs.
The economy should serve the people. Shareholders may depend on it though :)
Your "inflationary spiral" theory is also unfounded, and has been shown previously.
> Why work overtime at McDonalds when your rent is already paid up for the month and there are so many fun video games to play?
This is a terrible strawman, but also maybe MCD should pay better or offer other incentives? They're not owed employees.
According to that report, that experiment only paid people 560 euros a month. That's not enough to make staying home and playing video games an option.
The point was that the study didn't provide a livable UBI so it doesn't provide evidence about the effects of a livable UBI, in particular, whether it would reduce hours worked. This study was just a little extra money, enough to improve the life of an average working-class person but not really enough to enable them to choose to work less.
Germany has a fundamentally different system. If you're unemployed, you can take a "mini job" or "midi job" (up to 405/1300 Euros respectively, they are lower maintenance for businesses and have no/low/blanket contributions to social security) and the first 100€ will not affect your benefits, only 80% of whatever you make on top of that will be considered. It does not really change anything, so that's apparently not what's holding people back.
I honestly believe if you wanted to, it is conceptually easy to fully automate mcdonalds, kfc & dominos (ect).
So you can afford more video games? Or a new, locally-made bike? Or any one of the other myriad nice things that we can get in exchange for money?
If you're a reasonably engaged software dev (like many on this site) it probably only takes you 10 hours a week to cover basic costs of living in an entry level apartment. Why would you work more than 10 hours?
While I am personally against a UBI, just because I think there are so many innovations right around the corner, which we should achieve first, many of the reasons why you are working over 10 hours a week, would go away with a UBI:
- Saving for your own retirement
- Saving for your childrens future, giving them a savety net
You would also have to check whether a UBI would change some of the motivations to work, due to the culture changing:
- If you want to accomplish something as a team, a workplace is a great place to fullfill that need. Less people working fulltime due to other reasons would provide more obvious opportunities here. If you are not really sold by the other reasons and you are here for the team-aspect, you could join the party later, after more groups working together have established themselves.
- At least where I live, you could already live relatively comfortable on social benefits. You just don't do it, because it's not accepted socially. So people work, because it is expected of them by society. If society would change it's mind here, e.g. due to an understanding, that not everyone can have a job anymore, that expectation would not force people to work anymore.
- (Especially as a male) your job takes a big part in defining your social status. I could imagine additionally to the general trend of women having careers, UBI could chip away another part of that, because now even really conservative, family-oriented women would be less dependent. I am just guessing here, though. It could be that our underlying instincts of what we find attractive are much stronger and a UBI would not change anything here.
I personally could imagine for software developers, a UBI would lower the threshold for many to exclusively work on more fullfilling (open source) side projects. I personally have a number in my mind, at which point I might do just that. With UBI that number would certainly be a little bit lower.
It probably would, if recent events are any indication. The current stay-at-home orders have increased video game sales by 65%
It's funny, people say that. But what would you do, personally? If I offered you just over your rent to stay home... would you... stay home? I know I wouldn't. People derive their sense of self-worth from a combination of intrinsic and extrinsic factors, and derive a lot of their social validation from their coworkers.
Personally, I could retire on a beach and do nothing for the next 60 years. That sounds shit though. I mean, it sounds great when I hate my boss, but about five minutes later, it sounds pretty shit.
I'll take you up on that; my health is deteriorating.
Such a program would be indeed beneficial to me and, if that were my sole concern, I'd be all for it. However, it seems likely sufficiently deleterious to society that I don't support society being required to pay for my subsistence.
IMO we don't need gas station attendants, we don't need grocery store clerks, we don't need manufacturing jobs. We need more robots. When robots inevitably replace these menial jobs, we're gonna have to do something with those folks. Over time the birth rate will decline and the population will even out, and there won't be more people than jobs, and that UBI is an elegant stop-gap measure.
Otherwise, keeping people in these jobs is just some sort of Rube Goldberg-esque make work project.
Folks like yourself can stop working, folks doing menial work will stop working. Those who want to get ahead and do crazy new things will always be motivated to do so.
> People derive their sense of self-worth
I 100% agree with this, but I'm not so sure that everybody would act correctly to maximize this for themselves. I think we do need to be careful to intentionally craft society that incentivizes us to do activities that build genuine self worth.
Incentives can be carrots, they don't all have to be the specter of death. I think lack of social mobility and not seeing any meaningful achievements materialize from your hard work, seeing retirement and property ownership move further away all play into this.
We can have social support/nets besides UBI right. I can agree with the negatives you point out. I'm just skeptical of UBI as the best solution.
One thing I've never heard addressed is how you'd scale it. We see this with COVID payments. You either give enough to live like a king in rural areas or give enough to live like a pauper in urban areas. The US is a huge country with many diverse populations/needs. UBI seems overly optimistic and poorly targeted.
But somehow people feel that those supported by social welfare deserve to live in whatever place they prefer, no matter how expensive it is while people who pay for their own housing are forced to choose somewhere cheap enough they can afford.
There are neighborhoods in my city with required minimum house construction costs. You're not allowed to spend less than a certain amount to build your house!
No, because UBI (being universal) is paid to anyone, working or not.
Employers would not have to increase wages "significantly above the UBI level" because the UBI is paid in addition to wages. They might have to increase wages somewhat in order to convince people to do undesirable jobs, but isn't that a good thing?
It also makes automation of those jobs more profitable, which allows more people to do what they want to do instead of being forced into drudgery out of survival.
Meanwhile there is no obvious means for this to cause inflation because no additional money is inherently being created. There would merely be less income inequality because some money is transferred from executives and shareholders to workers when they have to pay higher wages.
The only real mechanism for inflation would be if you transferred money from people inclined to save it to people inclined to spend it immediately, but there is no way for that to consume the entire amount unless the supply of all goods and services is completely inelastic. Otherwise some of the money gets spent on things whose prices don't increase significantly with demand and you just get more production.
Meanwhile necessities with inelastic supply are evils in themselves, because it's nearly always an artificial barrier. If people had more money and housing supply is constrained then rents might go up, but the problem there isn't that people have more money, it's that housing supply is artificially constrained. A solution to one problem isn't defective just because it fails to solve a completely independent problem. We have to solve the other problem either way.
I had to read your comment three times; it was unbelievable that somebody could ever hold such a revolting argument. You are saying that it is OK to keep large swaths of the population under the permanent menace of starvation, exposure and death from curable illnesses, lest they wouldn't have an incentive to pick your trash and serve you fast food. Dude, relax.
They might be right or wrong, but at least respond to what they're actually saying. Picking and choosing sentences to quote out of context is a big problem in todays discourse.
This is a legitimate question to ask.
Do you want to spend your day sniffing glue but can't now because you also have to work? Now you can just sniff the glue.
Do you want some social mobility through earnings? Great, have the UBI and a job.
To tackle this the UBI has to have a required level of education attached to it for proper usage. We need to ensure that public funding in a transition period (whereby taxation might reduce whilst the novelty of not having to work plays out) is protected.
And there needs to be some level of societal acceptance of what people should be doing (currently there's a number of communities where there isn't an expectation to have a job, even without UBI).
This!
I use to be a proponent of wholesale UBI. Not any longer after I saw first hand what unfettered welfare system does to people's attitudes. Sex, drugs and video games is what people spend more time on! This is ofcourse from experience living in a developed country in Europe. I think this will apply to developing countries as well because human nature is same everywhere. What people on the left and right of the political spectrum don't take into account is human nature; the left does not take into account "laziness" and the right does not take into account "greed". A system should be designed in such a way that it should not unintentionally promote either laziness or greed.
Worse: it might be great, but it might be a horrifying failure. What I have yet to hear is a plan for how to a) recognize that it's gone horribly wrong and b) back out of it without causing civil unrest that leads to open rebellion. Although articles like this are cautiously optimistic, they seem to ignore that once you pull the trigger, it's full speed ahead, damn the torpedoes.
If an economy depends on young people working fast food service jobs then that economy is stupid and needs to be fixed.
They're providing value that people want; the jobs aren't arbitrary. And some people WANT these jobs. Some young people are proud of having a job, getting experience, and buying their own stuff.
Why should anyone have to work overtime, to make rent payment?
https://abcnews.go.com/Politics/trumps-budget-resurrects-har...
I would not go as far to say it operates in peace, but not having it cash based is the position of the less extreme people.
Republicans pretty much never do that, it’s just boom, let’s give big tax cuts to the rich or stop all immigration.
Left side of the US needs to boldly actually fight for things rather than step my step planning out what “seems reasonable to republicans”, it’s just a bad losing idea, go boldly with what’s the moral and reasonable thing.
The left is legitimately fractured, but maybe it's not as bad as it looks. Sound and fury on social media in the Bernie camp, yet the party coalesced strongly around Biden.
I'd like to hear the case for a left "political upheaval." Where will it come from? Bernie's theory was that youth would vote en masse, and that did not happen.
The problem the left is having right now is articulating what it is they actually want to do. Their main rallying cry for some time has been that they're not Trump, but then what are they?
It seems less than inspiring.
The USA democrats aren't a left wing party, they're a center and even center right party. A politically established left wing doesn't exist in the USA like it does in Europe.
> The USA democrats aren't a left wing party, they're a center and even center right party. A politically established left wing doesn't exist in the USA like it does in Europe.
"The USA republicans aren't a right wing party, they're a center and even center left party. A politically established right wing doesn't exist in the USA like it does in Saudi Arabia."
You can anchor anything anywhere. The Saudis aren't really right wing because they're not literally Hitler. The Nordic countries aren't really left wing because they have private industry. It isn't really saying anything.
Even the concept is flawed. Is a tax cut for the poor a left-wing program because it goes to the poor, or a right-wing program because it's a tax cut and implies a reduction in the size of government?
It matters if a policy is sound, not whether it's dexter or sinister.
EDIT: Which, by the way, also happens in the Republican party. See, for instance, the repeal vs replace movement and how those went nowhere.
I’m not sure how anyone who follows Democrats wouldn’t see the constant compromises unless they’re center or center right. Pelosi has control of the House but refuses to pass extremely popular ideas like pay check guarantees or cash per month for everyone, or rent cancellation etc.
It could setup a showdown in the senate where republicans have to vote down very popular ideas, but she refuses.
That’s just a recent example, it happens continuously...
Regan's amnesty for over 3 million illegals: https://www.npr.org/templates/story/story.php?storyId=128303...
Bush doubles immigration: https://immigration.laws.com/immigration-act-of-1990
Trump supports immigration in "greatest numbers ever" in 2019 State of the Union: https://time.com/5521860/2019-state-of-the-union-trump-trans...
The GOP has supported immigration since the civil war. Both parties are controlled by the same political forces, and neither are on the real left or right, however hard though they pretend to be.
EDIT: Of course brits will still look for work. My point is that Ive seen brits in talk shows audiences talk about taking public assistence without thinking of themselves as "bad people" the way American conservatives would. The desire to eliminate all public assistance is absent in Europe. Don't mean to offend brits, I think you guys have the right attitude here. Take assistance if you need it and dont needlessly refuse to help others.
£75 sounds like an extravagant weekly shop, even for a couple with a child.
For example, sequence LFM2 at the Office of National Statistics entitled "inactive - wants a job". That's 1,869,000 people at the last estimate.
The overwhelming number of people who end up short of work due to the structural failures of our current economic system want to work. And they should have the opportunity to do so.
It's a slang term for unemployment benefit. That's somewhat confused these days because there isn't such a thing as unemployment benefit in the UK any more. There's "jobseeker's allowance", "income support", "housing benefit", "universal credit", and a few others, all of which can be claimed by people who are currently looking for work, or in work but on a low income, or who are unable to work. It's a confusing minefield designed to put people off claiming what they're legally entitled to.
That is, when the argument is "the others are getting cash", some will oppose it. But if it's "we all get cash", the opposition is less.
In America, Social Security straight up gives up cash to ALL older Americans. Assuming you live long enough, you'll get Social Security. It's not immune but it remains popular. Indeed, efforts to cut back on Social Security are framed as attempts to "save" it and keep the program solvent.
In contrast, food stamps, welfare, and unemployment benefits are very much on the chopping block year after year, their recipients stereotyped as "welfare queens" trying to cheat the system.
There are a few other narrow cases as well, such as student workers and certain government jobs.
https://www.investopedia.com/ask/answers/020315/there-any-wa...
I always wanted to look up that history for when that forked path was allowed and when it was eliminated and why. The author of the piece I read mentioned how he earned much better returns with the money he otherwise would have had he put it into social security and was thankful he took the more "risky" route.
But it's a sleight of hand. It's "you'll get it too (but I will take the same amount out of your pockets by increasing your taxes, ha!)", and then hoping that people will not realize it. That's quite the bet.
While this is nowhere near as progressive a tax as regular income tax, it's still a wealth transfer from high earners to low earners.
This was the proper place to stop. Both parties are full of politicians.
It's completely the opposite. You have to call the cash a tax credit and give it to everyone. Then no one can get rid of it because nobody wants a tax hike.
As soon as you start having eligibility restrictions or purchasing restrictions or effort-based gatekeeping, it reduces the number of people who benefit from the program, which is how it gets ruined or dismantled once the number of beneficiaries are no longer enough people that politicians have to care about them.
Make it so that everybody below the 51st percentile income is a net beneficiary and the program is locked in.
https://www.washingtonpost.com/opinions/free-money-might-be-...
> A year later, 11 of the 13 had roofs over their heads. (Some went to hostels; others to shelters.)
> The cost? About 50,000 pounds, including the wages of the aid workers.
No, apparently the cost is the same, at least in the cases of those at shelters (I don't know who pays for the hostels), plus 50,000 pounds.
Don't get me wrong, it might still be a good idea, even if just nudges them to get into programs, not sleep on the street etc. But just pretending those programs don't cost money and it's therefore cheaper sounds so close to lying to me that I don't know how to tell the difference.
I'm genuinely curious.
That's going to be a problem with UBI. If the rent isn't paid directly any longer but the money is given to the person instead and they decide they'd rather buy fun things instead of paying rent, and we're saying "we've got your back", we're going to pay for the exact same social programs we have today and UBI on top.
Edit: Another batch may come soon but it still amounts to nothing for the gravity of the situation so many are in. Some sort of weak mitigation.
> In low and middle income country settings, cash transfers also mostly do not affect whether, or how much, people work.
Our idea are vending machines for jobs. Everybody who looks for work or medicinal assistance gets help in less than 30 seconds. The hypothesis behind BIM is proximity: For some people, it is too complicated to follow a routine to pick-up a job.
I like the the idea of a reverse income tax at the lower levels and wish it was more popular, but it needs to be done in a way that it doesn’t discourage earning more money.
How is that so?
Why would we want to enable snobbery?
Let’s have UBI when there actually are no jobs. Not when there are just no fun jobs.
Most people just think they wouldn't get paid enough for doing that. If the job is the very opposite of fun but doesn't pay significantly more than unemployment then that's not the fault of potential workers.
Considering how unfun and stressful jobs like package delivery are but still get people to do it, I wonder how bad the pay and/or work conditions are for widely unfilled positions.
As in they buy things they need? What else are they gonna do, not eat and die? If you are really poor you basically have no choice to only buy what you need. The problem is, once they are in a slightly better situation, they probably won't start investing that money or opening a business, because they don't need to. The problem is psychological, and "grants" just patronize poor people from the start, preventing them form seeing themselves as their own primary benefactor.
This is a claim that you will need to support by a reputable source.
I keep saying it: Germany is a great real-life study to support this.
We have those "slightly better situations". And we have plenty of people being stuck in it.
It's not because there's some law or some stigma stopping them, we even have good programs and subsidies that will continue to pay your benefits for up to two years while you're getting your business off the ground, you can get cash subsidies on top to invest in your business (up to 5k Euros), and you will also get vouchers for consulting and services, and your health insurance will be paid by the government.
Yet it does not happen in large numbers. It's frustrating, and I agree, it seems plausible that it should, but it doesn't. Sure, you may say "that's just Germany, Germans are weird", but I believe you should make an argument why it wouldn't be the same elsewhere under similar circumstances. And I'm somewhat sure that other European countries have similar programs and are seeing similar results, so you may want to make sure that Germany is the outlier.
That's a strawman you made up.
Basically: if you can't get the well-behaved children to do what you ask of them, what makes you think the rowdy kids will do when you ask them?
I'd support a system like this if the money was spent mostly on healthy food and durable goods. But I fear a blunt money giveaway will exacerbate the existing problems.
Do you ever wonder why so many evil corporations support democrats/labour/etc? Handouts get votes, and as long as handouts get spent mostly in things these corporations sell it's all good. Think junk food, rent (landowners), non-durable goods (mobile, shoes, clothing), gasoline, alcohol, and tobacco. It's a feedback loop of well meaning but lazy left wing politics and the worst of Capitalism.
Think about it.
https://www.christianpost.com/news/fast-food-chains-lobby-go...
https://cms.qz.com/wp-content/uploads/2017/10/file-20171009-...
Have fun.
Second blurry link is about population growth, showing Africa expanding. That is missing the matching curves of extreme poverty falling drastically for those regions [1], even for sub-Saharan Africa. Further supporting my points of outdated approach to combat poverty.
Capitalism is doing good in some ways by lifting all those people from poverty. But they are falling into a trap of poor health and poor money management.
[1] https://ourworldindata.org/exports/share-of-population-livin...
But you are right about removing income taxes. Federal income taxes and corporate taxes should go away. A simple Federal real estate tax would be the easiest and fairest way to do it. Remove the brain drain that filing a 1040 is. Put intuit out of business.
Austrians have been saying for years that State calculation to achieve desired economic outcomes is doomed to failure ( https://en.m.wikipedia.org/wiki/Economic_calculation_problem). This just seems like a special case of that.
Of course, I'd personally like to see this taken further, and see a) welfare programs in kind in general replaced with cash, and then b) taxpayer funding of same replaced by charitable giving (quite the opposite to the UBI folks, and motivated by quite a different morality). This feels like quite a viable transition to me.