2) UBI will tend to mean less people willing to work low-paying unpleasant jobs, which means employers will have to pay more for those jobs. People who would only take such jobs because they have to, but don't actually want those jobs, will no longer need to take them.
3) Because of (2), more research effort and investment will go into automating and otherwise reducing the number of humans required for unpleasant jobs. And with UBI, that becomes an unmitigated good, with no worry about putting people out of work.
Hopefully more of 3 than the alternative, because the alternative scenario of prices rising has negative consequences in the form of economic deadweight loss even if UBI pays for the price increases.
For instance an effect of UBI would be disappearance of bullshit jobs. A lot of job won’t see wages increase and will just be automated/optimized away instead.
OTOH it could mean getting rid of minimum salary, which would lower the cost for high demand/vocational low paying work for instance (dog walking, cafe staff, event staff etc.)
All in all I’m not sure it’s as simple as saying “people have money without working = prices go up”
Yeah no kidding so there will be hyperinflation. Making the net effect of UBI almost zilch. What use is $1000 bucks when toilet paper is $100 a roll.
> 3) Because of (2), more research effort and investment will go into automating and otherwise reducing the number of humans required for unpleasant jobs. And with UBI, that becomes an unmitigated good, with no worry about putting people out of work.
So there will be a giant underclass of people who live on nothing but UBI (UBIers) while a small minority of elite researchers in corporate labs come up with more ways to keep the UBIers from earning their own living. Great. And who buys all the stuff? Is the "stuff" just for the gilded class smart enough to work? Or do we just give the UBIers a raise every now and then to "stimulate" the economy? How is this not communism?
The difference will be there are more consumers in a safe position to make purchasing decisions.
> At a certain point equilibrium will be met and someone will come along with cheaper toilet paper.
Yes, from overseas, where they have no UBI. That's one of most insidious parts of all of this.
UBI is central planning of the economy, where the government decides the market value of you simply existing is worth $1000 a month or whatever. Whenever the government thinks they are smart enough to set prices for things, historically people end up dying of hunger. The value of the dollar will collapse unless other countries also adopt UBI, but of course that wouldn't be possible since UBI in America would hinge on cheap overseas labor. Only WE are allowed to be lazy bums! At some point the dollar would disconnect from intrinsic value and no longer represent money, because people are being given it simply for existing. One day we we would show up to the Chinese or Mexican port asking for a ship full of All The Things We Need To Survive and they throw us away because they don't want our monopoly money. That's when the music stops and the real panic begins.
How do you deal with monopoly businesses? What prevents them from rising prices to pocket sudden excess of UBI money?
I guess that those monopolies would be split to ensure that the market is competitive.
Second, you still have to deal with aggregate monopolies - ie when one societal class has monopoly pricing power over another. You cannot break up these as they are already broken up.
The prime example is real estate and land market. Landlords have monopolistic pricing power over tenants. Price for rent is not governed by landlord's costs but by what the tenant can bear.
If you inject UBI to the economy then tenants can suddenly bear more and landlords can and will rise rent prices convincing others that their cost increased so it's justified.
It's not the inflation of produced goods which would kill VAT or similarly funded UBI but rent and monopoly good inflation which by definition can't be competed away.
Therefore before you can implement UBI you have to deal with monopolies first.
Hint1: Fix it by implementing monopoly based taxes such as Land Value Tax and natural resource auctions. You will raise more than you need and will also abolish labor taxes stiffling productivity.
Hint2: Georgists (economical movement after guy named Henry George in 19th century - who coined the term "Progressive") were discussing UBI ideas already pretty extensively and understood these implications. They realized the monopoly problem and made it central to their teaching. Only instead of UBI they called it a Citizen's Dividend.
Could you expand on this a bit more? Network and utility companies can clearly be broken up. The actual infra can be owned by municipalities.
> Price for rent is not governed by landlord's costs but by what the tenant can bear.
Citation needed. There is competition amongst landlords as long as housing supply is not severely limited. If supply is limited, that is a failing of zoning policy. The flat I just started renting a few months ago was priced on supply-and-demand, not on how much I earn (otherwise the landlord did a pretty terrible job of gouging me because relative to my income I got a good deal). You can look to Japan as a country where zoning policy isn't totally nuts like it is in parts of the US.
We are dealing with monopolies, the current administration notwithstanding. Andrew Yang in particular has a number of thoughts on these issue:
https://www.yang2020.com/blog/regulating-technology-firms-in... https://www.yang2020.com/policies/net-neutrality/ https://www.yang2020.com/policies/zoning/ https://www.yang2020.com/policies/financial-transaction-tax/
> The flat I just started renting a few months ago was priced on supply-and-demand, not on how much I earn (otherwise the landlord did a pretty terrible job of gouging me because relative to my income I got a good deal).
A single example doesn't prove or disprove anything. You haven't mentioned cases for example of many others who are living on level of bare sustainability in the same city. You cannot apply micro analysis to understand this problem by citing individual cases. You need macro analysis for this.
Zoning is not enough of a solution because it doesn't deal with the underlying problem - city land supply.
Maybe tech workers will no longer need to live in the cities after covid crisis. That still doesn't make it a casr for the rest of the society and cannot serve as a basis for ignoring the issue.
Cherry-picking only some monopolies which are currently under scrutiny doesn't fix the problem either. Land monopoly is the biggest one out there and is not mentioned. Fixing the others without considering this one is merely applying a bandaid on a blister while the patient's artery is bleeding.
The land supply is finite. Housing supply is not.
They do not have UBI (yet) but have generous benefits for unemployment, sick pay, disabilities and pseudo minimum pay so that most people earn a decent income.
I am not an economist or sociologist but the economy still works, most people still work and it has lead to 2) and 3). There is less interest in the less desirable jobs so their salary has subsequently increased. And there is heavy investment in automation, in farms, in manufacturing, in shops, etc.
It is not perfect though. Maybe UBI will be even better.
1. The US is already spending over a trillion a year on welfare
2. These programs have high administrative costs and create negative incentives to work (you can make more not working than working)
3. UBI has low administrative costs, does not have extra disincentive to work (because you won't lose it by working, and most UBI proposals are poverty subsistence anyways)
There's plenty of conservative economists who support flavors of UBI. Charles Murray and Greg Mankiew to name a few. Yang's UBI was sort of centrist, it actually eliminated several existing social programs which would arguably be better replaced with the UBI, but did not go as far as Murray's which eliminates social security, medicare, etc.
Sure.
There are also millions of unemployed and disabled people who don't work, and we haven't suddenly starved and died. On the contrary, we just throw away billions of pounds of food each year[1]. So it seems that the problem isn't a shortage of workers.
Meanwhile, though, people are starving and dying, in the US, at higher levels than any other industrialized nation, because our social safety net is inadequate.
So if you are worried about people starving and dying, maybe look at what actually is causing people to starve and die.
Yes the death rate is higher in US than a lot of other countries, but overall it is quite low. According to this page [0], it's .64 per 100,000. As of May 20th the population was 329,672,928 [1]. Comes to a total of about 2110 people or 0.0000064 of the population. While tragic nonetheless, is an extremely small number.
[0] https://www.worldlifeexpectancy.com/cause-of-death/malnutrit...
Bearing in mind the increasing rate of job destruction and creation. We're no longer in a world where you can rely on being able to have the same profession your whole life.
Having that floor would be useful to smooth those transitions out, and a boon to entrepreneurship if it's easier for people to take risks.
Doing shitty jobs usually doesn't improve one's situation though. If you earn minimum wage you're going to be better off just trying to gain a marketable skill and living off your income.
You say 'easier for people to take risks'. Well, yeah. So who's gonna be dumb enough to keep scrubbing grime off the bathroom floor when its easy and safe to invest in yourself? There's a solution to that of course, which is "pay people more", which is great. Now people get paid enough to merit working a shit job even with UBI. But now we have a different problem, things cost more to produce, which means prices go up! How much do they go up? Well probably to around the point at which the guy scrubbing grime is at the same level of economic wealth as before, and the guy who stopped to work on self improvement suddenly can't survive on his not-longer-basic UBI.
We need people to perform shitty jobs. Increasing real wages would be a good step to do that. Talk of people being able to take more risks in entrepreneurship is just techie dreams about how it could be better if their privileged economic condition were a little more privileged. It's not wrong, but it's hardly an important problem for society.
In the UK we have a variety of disability benefits. Someone starting a claim today is probably going to apply for New Style ESA. https://www.gov.uk/guidance/new-style-employment-and-support...
> If you have been found to have limited capability for work, you will move onto the ‘main phase’ for New Style ESA and you will get the basic allowance, plus a ‘support component’ if you are put in the support group.
> basic allowance (standard rate) – up to £74.35 (per week)
> support component – £39.20 (per week)
((74.35 + 39.20) * 52) / 12 = £492.05 per calendar month. That's €550 per month.
To qualify for this with autism you'll need to persuade your GP to give you a referral to local MH services, and persuade them to give you a referral to an autism assessment service, and then you'd need to persuade two specialist healthcare professionals that you have autism. That will give you the diagnosis. However, the Department for Work and Pensions will use their own independent healthcare professionals and you'll need to pass that assessment. That's not seeing if you're autistic or not, that's seeing if you have impairments in your day to day life that interfere with your ability to work. These functional assessments are carried out every 3 years.
We've already seen this happen with the US Social Security program. Why repeat something that is known not to work?
It'd need to be indexed to something or have other hard controls to prevent that spiraling: "Vote for me, I'll increase it to $2k" "No, vote for me, I'll increase it to $3k!"
Do you think the type of person who would fake an autism diagnosis for $3k a month is the same type of person who could successfully run a profitable enterprise?
My parents came to the USA $500 in debt. They had no place to stay and a 6 month old baby to raise. They refused all welfare programs out of pride except for Medicaid, because they needed a doctor to vaccinate me. 21 years later and we are comfortably living as an upper middle class family. They didn't get here by swindling bureaucrats, they got here through honest work and a quarter of a lifetime of pain.
Most criminals stay stuck on the bottom rung for this reason: of course you might be able to sociopathically hustle your way to the top a la Theranos or Enron, but to do that you have to believe you are capable of honest work. Hustlers don't believe in anything except for their next hustling opportunity. For every successful hustle there are another 1000 failures that never got anywhere.
Sorry, what? The EU is the most highly developed unified economy on Earth.
>Necessity is the mother of all invention. People take risks out of desperation, not for "fun".
"People who can provide for themselves in dignity, won't let me whip them." You're expressing a strangely fetishized, sadomasochistic view of business. Perhaps you should take a cold shower?
The robot trucks are cheaper than the humans that operate the non-robot trucks, so your argument doesn't make much sense here.
[2] https://money.usnews.com/careers/best-jobs/garbage-collector...
Keep in mind a truck lasts for years, while a truck driver has to be paid yearly. I'm not figuring in maintenance costs for the truck here--if you'd like to argue that yearly maintenance costs for the truck are the same as the cost of the truck, I can look that up too, but I'm hoping you are a reasonable person.
not if you understand accounting. I can hire a guy today at <$20/hr operating cost to do it manually. That robot truck is a much more significant capital investment that will amortize over 10+ years.
2. Private garbage collection companies: just because a municipality doesn't have money to buy a robot truck in cash, doesn't mean the private garbage collection company that serves most of the surrounding municipalities doesn't.
3. If you actually look up the prices, the numbers are so skewed in the favor of automation that even without loans or private companies, I very much doubt there are any cases where this would take 10+ years to amortize. Your $20/hour collector translates to $30K/year if they works 30 hours/week, or $300K in 10 years. Is it your claim that robot trucks cost $300K more than non-robot trucks?
I realize this runs against the reality of HN, but not all solutions are technology, and not all technology solutions are as simple as "just do X". It's like the "dropbox is just ..." meme turned up to 11
Where I live now, that job now is done by the home owners or by staff of the apartment buildings. The job didn't go away, it's just no longer done by the garbage collectors.
Moved back to a much richer one 10x larger a couple years later. No robot arm garbage trucks then, and still none now. Bags on the end of the driveway, guys hanging on trucks.