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Comment by phepranto | Hacker News Reader

I realize there's no data on this, but do these localized experiments translate into actual UBI at all? I only skimmed the article but it seems to me that giving 125 people 500$/Month, which come from a donation to research UBI, has basically no relation to actual UBI.

They found that giving those 125 people an unconditional monthly allowance helps them survive and has a positive effect on their life.

They did not seem to research at all how to actually fund it, what kind of effect a higher tax to fund it would have, or what would happen to the government employees currently working in social welfare if they'd lose their job.

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I don't see the point of these small studies at all. Many people already have some form of UBI like pensioners. That their lives are pretty relaxed should come as no surprise.

The most important thing to study is the effect of UBI on total economy. Saudi Arabia is an interesting example, since their economy pretty much runs on free oil money. Saudi nationals are notorious for having bad work ethics, and they have to import many foreign workers to run the economy. To prepare the country for a post oil world companies are now required to hire a minimum percentage of Saudi nationals.

https://en.wikipedia.org/wiki/Saudization

This is one of the macroeconomic scenarios that scares me the most. I can't imagine what would happen to the global socio-economic stability if those middle east countries were to lose that source of GDP. It's not to unreasonable to conceive either as more countries are becoming oil energy independent.

> what would happen to the global socio-economic stability if those middle east countries were to lose that source of GDP

Tumultuous transition period followed by quiet.

The same wealth that currently placates them also enables them to project power. And when the wealth disappears, infighting is more likely than outward violence.

After the initial period of reorganisation, it will settle into a state similar to other formerly-wealth now-impoverished nations.

Yeah, the extreme contrast between the countries that have and don't have oil in the middle east is what creates the conflict.

If the rest of the world is oil-independent, I imagine it will truck on regardless of any post-oil chaos in the former oil-producing regions.

Open it up to all legal resident of a country, not just citizens, and you avoid this problem. The gulf state / Singapore two-tiers model begets these things.

Please correct me if I'm wrong, but wasn't the Saudi setup a lot more like a government "jobs" guarantee where the job was rather pointless. The lack of ability to do a real job without giving up the zero stress bs job would certainly seem to breed a lack of work ethic.

UBI, on the other hand, rewards anyone who works on top of the UBI supplement. There is no need to choose between working and getting the "free" money everyone else is getting.

> They did not seem to research at all how to actually fund it

And this is really the most profound part. There isn't an argument to be made against "if people have more money to buy stuff they will be better off". Nobody can argue against that, it is true.

The _entire_ case against that sort of social spending is "but we need normal people to create more than they consume or the resources won't be available" and "this isn't fair on the people who have to support them" argued at varying levels of complexity and indirection.

If you ignore the negative outcomes then any plan is a good plan and only has positive outcomes. Duh.

I disagree, it’s not the fairness, or the overproduction, but the best overall benefit to society given the money spent. Social programs that already exist are a progressive tax that penalizes healthy, working people more than those who are receiving the benefit. Examples: unemployment, Medicaid, WIC, Saver’s Credit.

The level of productivity per capita in the economy today is vastly more than enough to supply our entire population with only a fraction working.

There's also plenty of information indicating that if given the choice, most people actually want to work...they just don't want to be working shit jobs for shit pay for shit bosses.

Amen, how many times to we need to tell people, look production and consumption first, and then think about finance?

I'm not saying finance is all bad, I'm saying when the financial situation is harder to understand than the so-called "real economy"...don't!

The aim of UBI is not to make people better off, but to ensure that everyone has enough money to live on. It's intended to replace means-tested social security.

With UBI, nobody falls through the safety net and ends up with nothing to live on; you don't need an army of people assessing claimants' financial circumstances; and when someone finds a low-paid or part-time job they still keep their UBI, so there's no disincentive to work.

If you argue it's unfair that people pay for UBI, how is that different from arguing that it's unfair that people pay for means-tested social security (or poor people's medical bills)?

> If you argue it's unfair that people pay for UBI, how is that different from arguing that it's unfair that people pay for means-tested social security (or poor people's medical bills)?

There's a big difference between a welfare state designed as a form of social insurance to protect people from adverse circumstances and old age, and one designed on the assumption that those who want to work owe those who don't a living, and that the only circumstance that should affect how much people receive is whether they have the right citizenship.

Aside from the fundamental ethical rationale changing from contribution based social insurance to citizenship based entitlement, UBI would also represent a much larger bill, and a lower payout to the neediest.

Lots of loaded words in there, and not really fairly.

Nobody 'owes' anybody a living. The situation is, we can give most folks a living, without everyone working. And those that continue to work, of course are better off because they earn money for that. No unfairness at all.

I think its the old Protestant work ethic, this attitude of "folks not working are immoral". We have to get past this, to make UBI a thing.

> Nobody 'owes' anybody a living

The literal purpose of UBI is to ensure that taxpayers do owe each citizen a fixed amount set at an average living. Making that a social obligation based on birthright rather than a potential future entitlement based on need is how it's different from social insurance schemes. The assumption if you're able to work and not interested in looking for it you probably don't need the money as much as other people certainly isn't what's wrong with current welfare states.

You don't have to believe that "folks not working are immoral" to believe that helping those fortunate enough to be able to choose not to work at the expense of those that aren't [whether by reduced benefits or higher taxes] isn't what welfare states were for.

Yeah no. Its a new system of course, not the same as the one we are in. To work indefinitely, and not just through a tax or currency scheme, the results of automation would have to be reconsidered. Now if somebody builds a factory, the factory belongs to them but also the output of the factory forever belongs to them. This creates a huge imbalance, with some folks 'earning' hundreds of millions a year forever, for no real effort beyond the initial investment.

If something like VAT were used, it would change things. Without dis-incentivizing real work. This system is already in use around the world, just not in America at the moment.

I live in a post-industrial, omnipresent-VAT European world, and it doesn't make UBI any more affordable in the foreseeable future.

I think we can consider the results of just-around-the-corner-for-200-years automation-induced mass unemployment if and when it actually happens, although I'm still unconvinced that delinking benefit income from desire to actually find work or any other kind of demonstrable need would be the best solution.

Under UBI, how many people would willingly give up their jobs just to live on a subsistence level income, and for no other reason (e.g. study or childcare)?

Under means-tested benefits, how many people without work are discouraged from taking low-paid or part-time work because their social security payments are clawed back, resulting in no financial gain for them?

> Under UBI, how many people would willingly give up their jobs just to live on a subsistence level income, and for no other reason (e.g. study or childcare)?

Well the proportion will probably be smaller than the vast majority, skewed towards the asset rich when state pension ages kick in, but I don't think it'll be zero. Though even if it was zero, you've got the problem that under normal circumstances a full third of the population already doesn't work or seek benefits, and suddenly you've got to find the funds for them.

> Under means-tested benefits, how many people without work are discouraged from taking low-paid or part-time work because their social security payments are clawed back, resulting in no financial gain for them?

Relatively few even without competently-designed tapers and EITC schemes, bearing in mind the number of people receiving benefits contingent on unemployment is normally a relatively tiny fraction of the working age population.

>Relatively few

It is a little while since my 'experiment' with benefits, but in the UK benefits are a real poverty trap. If you take a single days work you can lose a month of certain benefits. Housing benefit was the worst. The next cap was a 16 hour a week rule, that after 16 hours work you lost some of your 'working tax credit', which made you worse off unless you could jump straight to near 40 hours.

Seeing the poverty trap for myself, I am a huge fan of UBI

The literal purpose of UBI is to ensure that taxpayers do owe each citizen a fixed amount set at an average living.

Not average. It's Basic. It's just enough to get by. That's the incentive to work: most people want to do more than just get by. Anyone who doesn't want that would be a drag on any system, so that's a separate problem to deal with. But there are a lot of people who can't get ahead with the current system who would do better in a UBI system, and we'd all be better off if we could get those people productive and happy.

my bad, that was supposed to be average living wage, with living wage being the concept of a just-above-subsistence income. The 'average' part of that phrase is important because a basic living in one region can be quite a comfortable living in another, or for someone not needing to factor rent into their cost of living, but it helps if I don't miss the other key word out :)

I would imagine that if a national UBI program were implemented, the amount would have to depend on the local cost of living, probably with caps. How they'd work that out, I don't know.

If that's not done, then UBI would encourage migration from higher cost-of-living areas to lower cost-of-living areas. That might not be a terrible outcome; it would probably lead to balancing the cost-of-living across regions as the populations change.

"most people want to do more than just get by" maybe so, maybe not?

There's a massive gap between wanting something and doing what it takes to get it. If you were to ask people vs. watch what they do, you'll see the truth; it's never about what people say but instead what they do.

And I'd welcome any supporting research demonstrating that, based off their actions, "most people want to do more than just get by" as stated. My anecdotal observation is that most of (working age) society actually does just enough to get by for today, this week, or maybe the month...

> The aim of UBI is not to make people better off, but to ensure that everyone has enough money to live on.

I think there is an entirely reasonable argument that having enough money to live on (guaranteed) would make people better off.

If a policy isn't being done to make people better off, why do it? The easiest way to maintain the status quo is to do nothing - rather than finding innovative ways to maintain stasis but with new laws.

> If you argue it's unfair that people pay for UBI, how is that different from arguing that it's unfair that people pay for means-tested social security (or poor people's medical bills)?

Yep. The argument against most social spending boils down to the same two things. Sometimes other arguments do crop up (eg, some truly foolish policies incentivise destructive behaviour).

For many, many things its not really a questions of 'normal people creating" resources. Because most goods are not made by people on assembly lines any more. That's pretty much a tiny fraction.

Automation means, only the Engineers and Maintenance people need report to work to keep the goods flowing. Its been happening for 20 years, and accelerating.

The UBI may not be quite ready to deploy, but its coming. If we try it too soon, then some goods will indeed become scarcer and thus more expensive. But many things may continue just as they are. We want to make sure that's enough to keep everyone healthy and fed.

In fairness, funding and spending are 2 separate problems. Other people can independently do research on whether a particular tax or some other spending cut is the best way to fund this.

I agree the same size is small (I thought it was 525), and I'd also say there is an issue with the length of the study.

But it should still provide some useful stats on how many people give up work or start businesses or go back to school and what the impact is on crime, drug use etc...

And that's the question here: how does this effect people's economic and social behaviour?

> But it should still provide some useful stats on how many people give up work or start businesses or go back to school and what the impact is on crime, drug use etc...

Why would "here's an extra $9k across 18 months" tell you anything about how a low income person would respond to being promised a livable income for life?

Because for those 18 months their lives would be different.

I'd like to see a 5+ yr study specifically because that would allow people to give up low paying jobs, go get a full degree and then get a new better paying job.

18 months isn't that, obviously.

But it would allow you to go and do something. Instead of going from being a waiter to a programmer, maybe you can go from being a waiter to a basic plumber or a truck driver or start a small business or something?

We can all agree that having more cash will improve people health\community\whatever. The big question is what will people do with the opportunity no-strings-attached cash gives them. How many people will just spend the money? How many people will stop working and do nothing useful? How many people will stop working and do something very very useful?

You only need a small proportion of people to make significant changes like this (and thus pay a lot more tax) and suddenly these programs get very affordable net.

You need a very large proportion to make changes like that if it's offset by people using the money to retire from working life altogether[1]. Since this choice can't be made with this study design, it tells us nothing about what people would actually do with no-strings attached money for life, and indeed actively distorts the reality of how people will respond by at least as much as that other great UBI experiment no UBI advocate ever talks about: state pensions....

[1]actually you need an implausibly large proportion simply to offset the amount of people who already don't work and aren't entitled to benefit payments who would be eligible to receive UBI

Respectfully, that is exactly what we need an experiment to prove\disprove. At least some people took this 9k as an opportunity to sit at home playing video games. At least some got a (small) education or started a business.

The issue with pensions as an example of UBI is that the only people getting them are old. So they mostly already have the assets they want, they don't have careers they want to improve, they don't want to start business or earn money, they want to retire...

Yes, old people are also an imperfect proxy for the workforce as a whole.

But this experiment which is designed to make it impossible for participants to retire off the money proves even less about people's likelihood of retiring off free money than the natural experiments where they're encouraged to do so.

Yeah, a bigger, longer, better funded trial would be better. But we can still learn some things from this. I actually get a bit frustrated at all the too small/short/low-amount payment studies out there. But c'est la vie.

Also what kind of effect on pricing it would have. Surely if everyone's baseline income increases, it creates a safe buffer-of-a-sort that necessities' prices (housing, food) can comfortably consume.

Wouldn't the naive expectation be that prices would rise somewhat but that if the markets in question were competitive that this would not be severe?

I direct your attention to the market for "housing"

https://news.ycombinator.com/item?id=23857621 gets at what I was thinking but was too lazy to articulate.

Housing prices are barely correlated with incomes in a meaningful way across cities, let alone caused by them. See [1]. The #1 determinant of housing prices is supply, which is usually an issue of regulation, not of local ability to pay rent/mortgage. There's not much consensus on this topic among economists since there are so many confounding factors - the best paper I've seen so far is [2] which finds that income increases via minimum wage hikes might increase rents anywhere from a quarter to a half of the wage increase, absent other factors.

[1] https://www.cnbc.com/2019/03/07/heres-the-share-of-income-th...

[2] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3282661

I do wonder what the inflationary effects of UBI would be. In areas where there simply isn't enough spacious housing to meet demand (which includes most of the internationally known cities in the west), you'd expect to see rents rise - not really changing much.

However, people often want to live in these areas because jobs are there. The trend over the last 40 years has been for the decline of industrial areas as factories close. In most post-industrial countries there's towns and cities with really cheap housing - because there's no high paying jobs nearby. I wonder if UBI would have a longer term effect of injecting money into these areas, increasing prosperity and drawing in people who live in expensive cities but have seen their UBI get inflated to zero.

I don't think food (as in, grains and vegetables and meat) will be subject to the same inflationary problem - there's not the same fundamental supply limit that you get with housing in a city.

I think we should try it though.

In the US we’re nowhere near running out of space. I live in one of the most wealthy and densest areas in the US and like to go up to the roof of the building. When I look out it’s pretty much just trees with some 1-3 story buildings and lots of parking lots with occasional clusters of high density buildings like the one I live in. 30-60 miles south of here it’s almost completely undeveloped nothingness (some farms and gas stations but mostly forest.) The rest of the entire state (Save a few small cities) is like that too.

That so many people in the US can’t afford housing is a spectacular social failure. It feels similar to California’s water problem; yes it’s possible to run out of the resource but if you actually look at how it’s used it’s just very very poorly allocated.

Also, with UBI, if people don't need to work multiple shifts to pay rent near their workplaces, there will be demand to develop those areas.

How do you propose that UBI be tested? If you give it to a small number of people, or to everyone for a limited time, it's argued it isn't UBI.

Various services are funded out of taxation at present. The higher gross tax rate would be offset by UBI (those in work would get it too), so the mean net tax rate shouldn't change much.

What would happen to the government employees currently working in social welfare if they'd lose their job is that they'd get UBI until they were given or found more productive work.

Another question I never see answered is if people are better off on UBI instead of welfare/food stamps/etc. Most of the time I hear people talking about finding UBI, they say it will replace existing social programs, but no UBI experiment that I have seen actually tests if people are better off with cash instead of social assistance.

That’s a great point. Social services are about more than cash.

We give mothers baby formula because we want babies to have adequate nutrition. If you hand out cash, some percentage of people will buy beer instead.

This is a valid point. I’ve never seen a response to how you make sure the spending goes to the resources. While one can argue that the people should be adults, reality shows that is not true. Having the infrastructure to pay rent automatically by the government means rent is paid. What do we do when people piss away their UBI and don’t have money for the necessities?

Anyone who intentionally did that would soon find themselves without accommodation or food. If it's because they can't budget, it could be paid to them weekly or even daily. People who can't manage their own lives (e.g. mentally ill, drug addicts) would need to be given help, whatever safety net there is.

The point of UBI is to remove non-private charity support. How will politicians react when people are dying in the streets? The US is not about persons responsiblity.

Yeah, that’s exactly what happens. People make bad choices, and we care because innocents like children suffer.

We have the programs we have now because giving away cash didn’t work. Recipients drank it away and landlords gouged them.

A program like Section 8 for housing balances those issues — the landlord gets paid on time every month, but is on the hook for a minimum standard of maintenance and livability. That’s why we don’t have children in tenements anymore.

Every once in awhile politicians and academics who know everything show up with a magic wand. UBI is no different.

I don't know of any country other than the US which gives food stamps to unemployed people. Elsewhere, they're given cash payments, and the alcohol abuse problem you mention is rare enough that food stamps aren't considered as an alternative. In the UK, there's housing benefit which might be similar to the US's Section 8. As rents/mortgage interest payments vary depending on where you live, it makes sense for this to be paid, directly to the landlord/bank, in addition to unemployment benefit.

Proposed UBI amounts would barely even cover health insurance premiums and deductibles on the individual market for a single person, let alone a family.

If UBI were to replace social services like general assistance, housing assistance, SNAP, WIC, CHIP, Medicaid etc, it would cause many people to choose eating over healthcare, or paying rent over seeing a doctor and eating.

In my opinion, general UBI needs to be issued alongside programs that target specific issues that are endemic to our current economic order. That includes programs that fight hunger, and the lack of access to affordable housing, healthcare and education.

Read the Tryanny of Kindness. It is from 1993 and is a former welfare mother and advocate who advocates for a guaranteed income.

The book goes into great length of the pathology of the welfare system and its non-profit charity profiteers. Of course that was 27 years ago.

It obviously depends on the UBI. If it covered children, it would be absolutely better for the recipients. If it does not cover children, as in Yang's plan, then it is questionable, but it still could benefit a lot because many do not get it at all:

https://medium.com/basic-income/there-is-no-policy-proposal-...

http://www.scottsantens.com/tanf-is-terrible

There has been an accidental larger study: https://www.wired.com/story/free-money-the-surprising-effect...

They should have also collected monthly a total of $62500 extra “taxes” from all these people — the higher the income, the bigger the tax share.

tbf since their targeting was low income neighbourhoods, one can assume the higher income neighbourhoods would have contributed some of the share.

A fair experiment would have at least stripped away all the other state funded benefits UBI supposedly replaces, but I guess 'UBI is good for the spending power of single-income couples but leaves the poorest people much worse off' wasn't the headline the advocacy group was shooting for...

Why $62500?

The participants should be voting on how much to take from those among them with the higher incomes. I mean--unless we're assessing how UBI might work in a country without democracy.

Democracy is not a free pas to vote anything, especially if it is negatively impact some people, otherwise you justify gang rapes as a majority decision.

Sure, but it's tough to imagine in today's climate that a majority of voters living only on UBI would vote to maintain or lower the amount of money given directly to them from the top X%.

We already have the issue today but it's not quite so direct.

This is a huge problem with UBI. Maybe people will have to make a choice, either live on UBI or vote, but not both - it is immoral to vote for your own benefits.

One step at a time to open peoples’ minds

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