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Comment by thephyber | Hacker News Reader

The most likely implementation in the existing US federal government is a negative income tax.

> I definitely would choose not to work or work less if that money came free from government.

You aren't alone, so your $1200 would not go as far in that future as it does now. There would be some inflation (perhaps only localized increased costs to some industries), but I'd suspect that people working less would be a feature, not a bug.

UBI doesn't make people not want to work at all. Work provides income, meaning, and dignity. Some people would move from industries which have lots of crappy manual jobs (like janitorial services) to industries which are currently only hobbies, but with UBI subsidies could be sustainable as a career. I imagine lots more Etsy shops.

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You also have to remember that supply and demand still works. If the UBI causes several of your janitors to quit because they now have better options, you can still get them back by paying them more. All it does is give more negotiating leverage to labor because they no longer starve if they walk away.

That money has to come from some where. If you're paying janitors more and they're no more productive than before, someone else is making less.

Yes, that is an apt description of a reduction in income inequality, i.e. the intended effect.

No telling if that would be the only effect. You could reduce income inequality while also increasing poverty, so I don't see the reduction of inequality as an end in and of itself.

> You could reduce income inequality while also increasing poverty

So let's think about what it would mean to do that.

In one case you could have some people who are just above the poverty line and if you took a little bit of money from them and gave it to people below the poverty line then the first group could end up below it while the people already below it don't get enough to end up above it. In theory that's "increasing poverty" but only in a strict technical sense which isn't even inconsistent with the result still being a net positive. Also, that wouldn't be possible under plausible rate structures because anybody in the approximate vicinity the poverty line would be receiving more than they pay in taxes and the net payers would be making significantly more than that with no reasonable possibility of falling into poverty as a result.

The other possibility is that the program somehow causes such a dramatic amount of economic damage that more people end up below the poverty line than started there as a result of increased involuntary unemployment etc. But the poverty line in the US is $12,760, whereas the most commonly proposed amount for the UBI is $12,000, so that seems incredibly unlikely -- people would have to be unable to find a job making $760/year, in an environment where employees have greater leverage. And you could preclude the possibility entirely if desired by making the UBI e.g. $13,000, which would just outright directly eliminate poverty.

If this program causes inflation because the cost of it is untenable, then $12K can quickly become worthless. Supply and demand are laws of nature, you cannot escape them. If the economy suffers from lack of productivity as a result of this program, and money must be printed in excess of what goods and services are being produced...then nominal payouts matter not. Hyper-inflation is a real possibility and has ruined more than one empire in history.

The argument that a UBI would cause a significant amount of inflation continues to be nonsense. Necessities do not have perfectly inelastic supply and would not be consumed in significantly larger amounts than they are already. The large majority of the US population already has access to food, shelter and medicine and pulling the remaining <10% of people into the market is not going to cause hyperinflation. There is a pretty good guess that it could relieve a lot of the existing regional high prices by making it more attractive for people to move into lower cost of living areas and use the UBI to offset the lower average wages there, until enough people have done so to bring down the already existing high costs in major cities.

But also inflation.

Inflation refers to the value of the currency, which would not be directly affected.

If different people had money than currently do then they might buy different things with it, and then the demand for the things they want would go up and demand for some other things would go down. That isn't inflation, it's a demand shift. And for most types of products it would only cause increased production of those things rather than significant price changes. Meanwhile for other things (e.g. things which are artificially scarce), the price changes themselves would shift demand elsewhere -- who is going to pay $10,000 rent in San Francisco if it's <$1000 in Pennsylvania and the difference in local wages doesn't close the gap?

Yes, hopefully some executives whose salaries have been increasing far faster than the janitors' salaries for the past 50 years. That's the point!!

“There would be some inflation”

Which serves as a reason to regularly increase the amount.

“UBI doesn't make people not want to work at all“

Speak for yourself. Work is a means to an end. I have no desire to work if basic income takes care of my basic necessities. I have no intrinsic desire to get up every day at the same time and do what my employer tells me to do. And to be clear, when I say work I mean the necessity of doing things in exchange for money. Cultivating my garden, writing software nobody uses, or music nobody pays for, isn’t what I mean by work.

> I have no desire to work if basic income takes care of my basic necessities.

It is widely observed that many people work far more than is necessary to supply their basic necessities, because people's desires don't tend to end with those needs.

You may have quite limited desires, but there is no evidence that that is true of humans generally.

> Which serves as a reason to regularly increase the amount.

Which serves to further increase inflation.

So you increase the amount more, and shortly thereafter inflation increases more again.

And so you increase the amount again, and so on, and so on until suddenly you have hyperinflation and your economy collapses, see for example the Weimar Republic, Zimbabwe, or any of a dozen other examples throughout history.

I definitely don't want to feel like I'm in a rat race while on the job, but I enjoy lots of parts of work. After taking ~18 months off work, I realized I enjoyed the first 3-4 months of unstructured self-directed activities, but I think I'd prefer more daily structure (whether job or otherwise). If I get the place where I can retire, I'm probably volunteer for part of my time.

Most of the proposals I've heard of UBI / negative income tax are good supplements but don't completely replace work-based income. $1000/month per adult is among the largest benefit I've heard.

> Cultivating my garden, writing software nobody uses, or music nobody pays for, isn’t what I mean by work.

That's great, but if a significant number of people feel that way, then there is a noticeable loss of productivity in the economy as say 35% of people are not producing anything of economic value. That impacts tax revenue. It probably also means there is work not getting done, like the stuff nobody wants to do.

I find it super hard to believe 35% of the population would be satisfied coasting out the rest of their life on UBI.

I'm pretty sure there have been various studies all but disproving the "common sense" notions people have about UBI and laziness. Or the fundamental idea that if you don't make it hard on poor people they won't do anything of value. Or that poor people are lazy, and that they are poor because they are lazy. Etc, etc, etc.

>Some people would move from industries which have lots of crappy manual jobs (like janitorial services)

That work still has to get done though. Somebody has to be the janitor. If you then increase the pay of a janitor then lots of people that would otherwise increase their skills to do with that requires more skills would end up as a janitor instead. This triggers a pay increase in those jobs too.

I don't see how you don't end up with just a lot of inflation. The money a job pays doesn't matter on a societal level. What matters is the products/service doing the job provides. No amount of money shuffling is going to make 2 apples turn into 3.

I agree there would be inflation, but how much and where it would present aren't clear.

The highest paid jobs (eg. CEO) inflate very little and the lowest page jobs inflate quite a lot. There is currently an anti-inflation effect in the lowest paid jobs when inflation would help these workers have a better living.

Jobs thought of as "minimum wage jobs" in the USA (eg. hourly workers at McDonalds) pay a decent living in Denmark. They don't have runaway inflation. We should examine why there is a such stark difference in expectation between the USA and these other countries.

That said, I don't think UBI is the only way to solve the issues I care about. I might be satisfied simply by easier and fairer access to existing welfare programs (which are already subsidizing those low-wage employers).

> The highest paid jobs (eg. CEO) inflate very little and the lowest page jobs inflate quite a lot.

The issue is that you have few of the highest paid jobs and many of the lowest paid jobs. The labor cost of a giant factory isn't so much the director, it's the thousands of workers. If you double their wages, you double the cost. If you double the director's salary, you'll hardly notice in the balance sheet.

Wrong.

"Since 1978, and adjusted for inflation, American workers have seen an 11.2 percent increase in compensation. During that same period, CEO’s have seen a 937 percent increase in earnings. That salary growth is even 70 percent faster than the rise in the stock market, according to the Economic Policy Institute."

https://www.cnbc.com/2018/01/22/heres-how-much-ceo-pay-has-i....

Yes, that work has to be done. I'd just rather we find a way to do it that does not involve a system of glorified slavery where we force people to do it for survival.

As us engineers like to say, the goal is to automate ourselves out of a job.

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