If the government starts giving me enough money each month to subsist while drastically raising taxes on my earnings from employment then I'll simply stop working. I would imagine most people would do the same.
Also, look around groups of wealthy people. The ones who don't have to work anymore. Sure, some of them live a life of leisure, but many of them still work, because they get bored otherwise.
If they raise the salaries and start getting applicants, who's going to buy the much more expensive produce? They'd have to increase the amount of ubi, and there you have inflation.
That's in fact the biggest issue with UBI -- it creates a de-facto class system.
And that's OK, there area a lot of parasitic zombie companies around that could use a culling, wasting peoples working years doing inane tasks rather than starting a project of their own and innovating. As they say, imagine if Mozart never held a violin but was busy working double shifts flipping burgers for 30 years instead.
But probably less "meaningful" work, in however society defines meaningful.
>>Also, look around groups of wealthy people. The ones who don't have to work anymore. Sure, some of them live a life of leisure, but many of them still work, because they get bored otherwise.
This is due to earning a return matching their effort. At some point, if enough income is withheld at that level, what's the point? Or, they will leave en-mass to countries more willing to employ entrepreneur muscle. These aren't anecdotes. Look at emigration from USSR, China, Venezuela or others of their scientists, professors, doctors, lawyers, financiers, etc.
Typically in these experiments the people start small businesses. When the risk of failure has a floor it makes you more likely to take on the risk.
> At some point, if enough income is withheld at that level, what's the point?
Most UBI proposals are VAT taxes. The more you consume the more you pay. So if you're a wealthy person, you will still see the return on your effort.
I'm not sure UBI is the right way to go. But if we are to do it, my own current thinking that you start by trying to keep it neutral in the tax code (so most families get increased taxes that claw back the majority of the UBI value)
But then we need need to account for additional funds needed beyond that:
- Those currently earning less than would be clawed back (net-recipients of UBI) - Those who we would expect to become net-recipients, that would also cut back on their current earnings.
The latter group, I'd expect to be smaller than some suspect, but still big enough that it needs to taken into account.
So how much extra are we talking about?
Back of the envelope math starting from:
https://dqydj.com/average-median-top-household-income-percen...
127,679,100 households in the US, in 2018
If we take the approach that this acts as an income floor (the clawbacks per above), and we set that floor at $40k.
We can see that 33% make less than that from the data. For laziness sake, I'll assume a linear transition from 0% to 33%. That would imply $20k/year at 16%, which is roughly what the data shows. So we can assume an average of 20k UBI for 33% of households as the net benefit.
127,679,100 * $20000 * 0.33 = $843B
Then we need to take into account those that stop earning. So let's round it up to a trillion. Note household income already take into account existing transfers like social security and unemployment benefits so we can't subtract those out as savings.
The US is wealthy enough to raise taxes by a trillion/year. It is something like 5% GDP. But that is a massive increase. It doesn't come for free with "neutral" taxation. On the other hand, we could have a lower floor, but then I don't think we actually get the benefits.
EDIT: I do think there is risk that the coercion will become more intensely focused on illegal immigrants and foreign labor to fill in that niche, however, so better safeguards for illegal exploitation probably need to come along with UBI.
We have paid employment to get people to do things that need to be done!
I’m aware the definition of “need” is a can of worms - but as an example, I know plenty of people who started doing call-center work in their early-20s while they “figure out what I want to do with their life” and by the time they know what they want to do (and it’s definitely not call-center work!) they’re trapped in their jobs, especially as after a few years they will have moved-out of their parents’ home - so having to pay rent and cover their cost-of-living while they’re getting started or experimenting with their own personal life projects (e.g. doing art, etc) is unfeasible - and don’t suggest getting a loan either. Meanwhile people with wealthier and accommodating parents can afford to take their time living off their parents - I see this as an example of the inequality of opportunity in our society.
Another example is the unseen and underreported unpaid work that exists, such as when a family has a child and the child has a disability that requires extra care: if they’re a married couple then one of them would drop-out of their career to become a full-time - unpaid - caregiver. If it’s a single—parent situation then the outcomes are often heartbreaking. This isn’t the society I want to live in.
UBI would mean the cost of labor for “McJob”s would rise - probably significantly (UBI would mean the end of the minimum wage, however) - but having fewer people doing jobs they don’t want to do means greater net happiness and we’d see further rises in automation - which further raises GDP. I see employers using human labor for unrewarding work because it’s cheaper than automation as a terrible local-maxima in our system. We just need to push past it to get to an even bigger maxima.
Surely it's reasonable to expect that people will be passionate about the things that actually need to be done, precisely because they are necessary. One of the most intense people I've ever met has cleaned SUPERFUND sites for decades. I'm not sure how well paid they are, but I am sure it isn't about the money. If they have trouble attracting people, they'll raise wages, and surely we can expect that what some people enjoy is making lots of money. Would it be so bad if working a shitty job no one would do voluntarily was well compensated, instead of poorly?
In experiments with UBI, many of the people who quit do so to spend more time with their family - and keep in mind, domestic work is _work_ that is _necessary_ and incredibly valuable to society - or to retire earlier. Doesn't that sound reasonable? Do we really need to force people to work when they could be engaged in other activities valuable to society or to themselves? Wouldn't it be nice if there was more room for young people to be promoted?
Another thing idea I've been toying with is the devil's bargain of trading UBI for eliminating minimum wage. I was watching a video about getting into locksmithing, and the speaker joked that if you made some faux pas, your potential employer would value you at $2/hr and send you packing.
But that begged the question for me; what if I could work for $2/hr, with very few barriers, and get enough experience to earn more? In order to be hireable, I'd have to work at a negative rate, investing money in tools and locks to practice on. I have the privilege of having a family that could support me while I did something like that. But what if we could all do that, not because you won a socioeconomic lottery, but because our society was willing to invest in you and take a chance on you, regardless of your background?
I think that the work that needs to be done, will still get done but it'll be better rewarded (ie it'll be more expensive) - jobs that people don't want to do need to get paid more because employers can't just rely on economic coercion of the poor to force them to do dangerous or boring jobs, they need to remunerate them accordingly - which IMO is how the system should work. Result would probably be that businesses whose only value prop is predicated on cheap labor, will suffer, and businesses whose value prop is predicated on quality, will be rewarded.
EDIT: I do think there is risk that the coercion will become more intensely focused on illegal immigrants and foreign labor to fill in that niche, however, so better safeguards for illegal exploitation probably need to come along with UBI.
Has even one of these been a permanent (for the recipients) experiment?
There has never been a test on a scale which would lead people to do it though. If you know you're part of a short lived experiment you're not quitting your job.
People who built their wealth, they keep working because it's in their personality makeup.
People who inherit wealth often wind up frittering it away.
That’s why it’s important we don’t accidentally create a two class system with UBI.
For a few months maybe. Soon, you will realise that to keep your previous lifestyle (or to simply fill your time with something other than browsing text-heavy sites) you need to work. So you will go back to work. And so will everyone else.
(Genuine question, no gotchas here)
You seem to forget that while you might be an affluent middle/upper class person, a lot of people out there are struggling really hard to fulfill their primary needs. You realize how many people in the states are poor (lacking primary needs resources) or borderline poor? Yes, some people (plenty of HN users I am sure) might struggle to maintain highly consumerist lifestyles (not sure if that's necessarily bad) but for the majority of people, this will improve their lives for as long as UBI is a thing. All the money spent on fighting social phenomena that is the result of people being unable to or/and having being raised without enough primary need resources to ensure their physical, emotional and cognitive capabilities are not hampered by their poverty will be able to be allocated to better uses?
Or, maybe you're taking that into account already, and are worried about an uncanny valley in between "not working" and "working" where a significant number of people simply don't work because that first rung in the "working" ladder isn't rewarding enough to start climbing the ladder, so they're incentivized to never work. If so, that's certainly a concern, but that would also be an indicator of a failed system that needed to be revised. It goes without saying that any implementation of a UBI system would have to be designed such that that didn't happen, but that's not an intrinsic quality of UBI systems.
Tax increases themselves would have to be progressive (as our current tax system supposedly is and always has been) to avoid creating these sorts of discontinuities that would disincentivize people from working. Any functional UBI system would have to take that into account, otherwise it's a failed implementation.
This was a concern with the recent economic assistance bill, the additional money from this bill going to unemployment was higher than minimum wage. Should the amount given been lowered so that "it doesn't disincentive work"? Maybe this shows that minimum wage needs to be raised?
I imagine most people would continue working.
And, by definition, everybody who earns higher than the median wage will also receive a tax increase higher than the basic income they're being given "back".
That UBI is therefore worthless for everyone, because some people won't get it, in effect?
There are many variations, but one benefit of continuing its issuance even if someone is in a high tax bracket is unemployment - one of many services that could go away if UBI were in place.
If I make $200k, and lose my job, I don't apply for unemployment - I just get the UBI for that month to pay for expenses.
1) The incentive to enter the workforce is greatly reduced. Every high-school graduate would have the means to shack up with a few of their buddies and live the college lifestyle indefinitely. I'm currently a productive adult, but only because there was no alternative. UBI is an alternative.
2) The nest-egg required to retire is greatly reduced. If a married couple is saving up for retirement with a retirement income of 60K, they're currently need $2,000,000 to retire (pre social security). If that same married couple is receiving 12K each in UBI, the required nest-egg is almost halved to $1,200,000. That means couple can retire a decade earlier than they previously could. This will see millions of people retiring during what would have been their most productive (i.e. tax-payingest) years.
3) Much like a shorter work week, UBI will be a tremendous competitive disadvantage for US goods and services. When the labor market inevitably shrinks, wages will necessarily rise. This will a competitive drag on exports of US goods and services.
I'm not saying that these things are bad. They sound great for the individuals in question. But they will eventually hollow out the workforce.
If you are only making the COL, most people are simply not going to sustain the college lifestyle indefinitely. People have wants and needs and drives outside of financial hardship. Yes, it might mean kids 18-23 are relaxing a bit more on getting into the workforce, but thats ideally the age in which they are learning and getting prepared to get a real job. Ideally we want to remove those barriers of entry for them, and allow them room to develop.
If financial hardship was a main factor of drive and high impact, productive work, we'd only see people under the poverty line entering into the high impact fields. That isn't the current reality.
Also, people that are willing to group up and live a college lifestyle for 30 years are people who were unlikely to EVER get involved in high impact work. At worst it's a net neutral here.
As for the retirement age, is that really terrible? Since we have established drive isn't inherent to financial hardship, it stands to reason people would continue to work through their prime working years. If people are now able to call it at 55, thats just a better quality of life for everyone, and ensure a constantly revolving job market.
3 is possible. But if we expect insane inflation due to UBI, then it invalidates all the other points you made, as now the UBI isn't meeting COL for a normal QOL.
I don't think we have enough information in either direction to assume the impact to the workforce. When in history has this ever been achieved in a society that also has high social mobility? People have interests and drives and I believe they will always pursue these things. And instead of squandering peoples potential on useless jobs that they enter into only to make ends meet, we can allow them to achieve a much higher potential by contributing to something that better aligns with their skills.
2) One goal of UBI is to unlock human potential by allowing people to actual pursue things they care about. Smaller scale UBI experiments indicate that this most often means starting some form of small business. If you're doing something you actually enjoy, I think you are more likely to retire later, not earlier.
3) See above about unlocking potential. One of the greatest strengths of the US has always been the inventiveness of its populace. This would potentially be multiplied many times over by a UBI that allowed people to actually pursue things they want.
It's not about "support human life" as in "3000kcal a day". Nobody wants that. They want a comfy human life. We can do that as well, only we need other humans to work to make that happen. Still, good for them if enough people are found to voluntarily work more so they can work on self-actualization and enjoy hedonism.
We have? We have machines that can do everything it takes to grow food, prepare it, ship it where it's needed, with no humans? We have machines that can build houses, cars, bicycles, and other forms of transportation, with no humans? We have machines that can make our clothes and all other necessary items with no humans? We have machines that can fix all our crumbling infrastructure with no humans?
I think you are drastically underestimating the amount of human work that is needed just to keep the basic functions of society working. Let alone to provide all the nice to have things that we all want.
If it turns out that we don't actually want smartphones, new jeans, Starbucks coffee, etc -- then that's great too. We'll end up with a lot less pointless consumption and people can spend their lives chillin' with their buddies!
So Bob needs to work so Fred can follow his passion for surfing and video games?
The thought is that we have enough Bobs in the world now, and enough technology and infrastructure, that allowing the Bobs to be Bobs and the Freds to be Freds will still work out fine.
(And I agree.)
AKA: responsibility
Bob's work isn't subsidizing Fred's lifestyle unfairly (at least under Yang's proposal) because the UBI is paid for by a tax on consumption (the VAT)
So then it's Bob's consumption that subsidizes Fred? That doesn't seem fair either. When Bob consumes, he spends money he earned through work. One way or another, money he earned is taken from him and given to Fred.
People are trying to express this idea that the "people will be lazy and content themselves with a meager UBI" is not an accurate one, and nearly every reply you've made has been a nonsequitor about how we should presumably be resentful at paying surfers to surf.
Nothing I've seen in this thread would satisfy the people who keep working.
Most people feel a fundamental sense of moral injustice and outrage when people who work are forced to support people who could work but choose not to. That is why our current welfare systems have means testing.
Many people who "go off the reservation" and travel/live mobile tend to settle down after a while.
How few people would be allowed to go screw around instead of working, for this outcome to be okay?
If you don't like surfers, think video gamers, artists, chillin' with the boys (as another poster mentioned), hanging out at the mall, going fishing, hanging out in front of the drugstore, watching TV, etc.
Now, I might make an exception if they were into drag racing :-)
There are also numerous financial options available to you such as annuities or insurance if you are worried about protecting yourself from unforeseen financial hardships.
No. You need to factor in the future.
The whole passive income/early retirement crowd is a great example of it. They want to create regular income (from projects/businesses or investments) to allow them a simple life for all of their future years, while they go do whatever they please. Few people do that, because it typically entails working much harder today so you don't have to work as much or at all tomorrow.
If you removed the hurdle or working harder today, many people would choose that route.
> There are also numerous financial options available to you such as annuities or insurance if you are worried about protecting yourself from unforeseen financial hardships.
Absolutely. And you need to pay for those. To do that, you need to earn more than you currently need to subsist.
Maybe I have a different understanding of subsistence than you? They don't live of the land and sleep in a tent, they live pretty average lives, living in an apartment in the city, buy food from the super market, wear normal clothes and ride bicycles. It does take quite a bit of money to guarantee enough secure long-term passive income (so "just invest it at 15% profit" is not an option) to pay for the basics, I'd put it at 300-500k Euros in my area, post tax.
Where does this "trust fund" come from? It doesn't just magically appear.
What you are actually saying is: you don't want to have to exercise prudence and common sense and planning for the future in your own life, so instead, you want the government to forcibly take resources from other people (like me) who do exercise prudence and common sense and planning for the future, and use those resources to provide you a "trust fund" to take care of you. If I can't avoid having my resources stolen from me, my only other option is to stop producing any excess over my own minimum needs. Which means the "trust fund" you are counting on is no longer there, because now nobody has any incentive to exercise prudence and common sense and planning for the future--because you punished all the people who did that by taking their resources away.
This is (a) incompatible with having a free country, and (b) a very, very bad idea in general, since society cannot survive if people do not have any incentive to exercise prudence and common sense and planning for the future.
I agree completely. People work more than they currently need to because they don't have a trust fund. I'm not arguing that we should give everybody their personal trust fund, I'm explaining why people work and try to save up money even though they don't need those savings in the next 10 minutes.
No, you don't. See below.
> People work more than they currently need to because they don't have a trust fund.
No, people work more than they currently need to because they are exercising prudence, common sense, and planning for the future. Which every adult human being is supposed to take responsibility for doing for themselves, and not expect a "trust fund" to magically take care of for them.
You're arguing that if people had a "trust fund", they wouldn't need to plan and save for the future. But no such "trust fund" can exist in the first place unless some people are exercising prudence, common sense, and planning for the future. You can't get rid of uncertainty about the future or the need to plan and allow for it. So, again, you are saying that the people who are going to take responsibility for planning and allowing for that uncertainty are going to be punished by having the fruits of their planning be taken from them to provide a "trust fund" to people who didn't bother to plan and allow for uncertainty.
In other words, you disagree with me completely. I think I should plan for my future, and you should plan for yours. You think I should plan for both our futures, and then you should get to just take resources from me when you need them in the future since it's a "trust fund".
> No, people work more than they currently need to because they are exercising prudence, common sense, and planning for the future. Which every adult human being is supposed to take responsibility for doing for themselves, and not expect a "trust fund" to magically take care of for them.
It may not be materially possible for everyone to actually do this within our current economic organization in light of automation. People that benefit from UBI may very well be responsible and organized.
We can twist this a little and say that the responsible and organized thing is to plan for automation, to develop skills that make sure you aren't put out of work, etc. Personally I find that position logically valid, but I ideally would push for UBI while also making sure I have a good chance for not needing it.
A cynical take is that UBI is just enough to ensure the masses of unemployed would be complacent enough to not riot.
A better way of doing that would be to allow automation to make the necessities of life drastically cheaper, so that the amount of work required to obtain them is drastically reduced. In the limit, if automation can produce all the necessities of life for everyone at essentially zero cost, then those necessities should simply be free, the way air is free now.
You also enjoy not subsisting. I enjoy not subsisting.
Not really though.
https://finance.yahoo.com/news/58-americans-less-1-000-09000...
It's a different story if those 58% contain plenty of SV SWEs who make half a million a year and still only have $1000 in savings. My intuition tells me that there are very few of them in the 58%.
Do they have the option to work more to make more? Is more work available? Are they already working close to or at maximum capacity and their current level of wealth is the result? Without the contextual information available, that's hardly useful. I'm sure somebody that's unemployed and wants to work would work more than they currently are, but can't, because, well, they don't have a job to work at.
Some random singular statistic doesn't say anything.
It really does contradict the above statement. This "random singular statistic" is a broad survey of the American populace which concludes that 58% of Americans do not have savings worth mentioning. Those people are clearly not working more than they need to because the "future is uncertain and having savings will be beneficial", otherwise they'd have savings. And 58% is in fact a majority, so the "most people" in the above statement makes it unequivocally false.
If you have "better" stats that don't falsify your premise, I'm happy to look at them.
UBI just gives you more options, yes you can stop working and pursue passions which I think would be great if more people did that. You could also maybe get a less demanding job and volunteer more.
Australia has been doing it for decades. They have low unemployment. Your hypothesis is not borne out in real life.
[1] https://www.ncoa.gov.au/report/appendix-volume-1/9-11-unempl...
It's obviously not full-blown UBI, but it's certainly a form of BI, and I think it very clearly dis-proves many of the "supposed" problems that a UBI will create like massive inflation, people lazing about not working, everyone doing drugs, etc. etc.
I'd focus on accumulating non-monetary assets. Board seats, political connections, et cetera.
Yangs proposal was a VAT, which wouldn't be a tax on your earnings. Am I off here?
> This VAT would vary based on the good to which it's applied, with staples having a lower rate or being excluded, and luxury goods having a higher rate.
That's the beauty of a VAT. It can be tuned to reach the desired result.
But who will do the tuning? My guess, as a former corporate tax lawyer, is that it would be done by industry lobbyists, seeking preferential treatment for their clients' products.
(You may think that's a bad thing, but it's still true.)
How do I get people to give me their money? Maybe now that free app idea, can sell for $1 or $2. Maybe know I can charge $3/hour tutoring.