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Comment by richrichardsson | Hacker News Reader

I've never really looked too closely at the idea of UBI, although I like the concept. I always assumed that any money you earn would then be deducted from future payments. With completely arbitrary numbers, let's say UBI was 1000€/month and I earned 500€ in a particular month, then next month my UBI payment would be reduced by that amount. If I earned 1500€ my next UBI payment would be zero, but the excess 500€ would not be rolled over. I may have completely misunderstood how UBI is supposed to work though.

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I always assumed that any money you earn would then be deducted from future payments

Not directly, at least not in most described implementations. Most implementations say that, if you qualify, you get 1000€/month every month no matter how much you earn. Now a lot of people add a secondary mechanism where some or all of that money gets clawed back, indirectly via increased income tax, if you earn 'too much', but the base idea is the 1000€ gets deposited into your account every month no matter how much or little you earn.

The rationale for this is a), not do disincentivize doing extra work and b) to simplify the system as much as possible and remove the need to spend a lot of extra time and effort on means testing, fraud detection, handling complaints etc.

I believe most implementations do not do that. That could lead to a disincentive for work, since you would need to make the entire amount of the ubi payment before your labor is benefiting you.

It is usually a flat rate for everyone, no matter the income. If you want more money, you sell your labor like normal

Sadly, this is the way it works in the UK. Welfare payments are cut by any increases in your pay. So a person who might be offered overtime for some extra money has no incentive to take it because their total take home stays the same but with the latter they miss out on spending time with their family/resting etc.

That's a terrible way to implement UBI. It causes the dreaded welfare trap where people are incentivized to do nothing. UBI should be unconditional. This makes it much easier to implement, removes the stigma, and most importantly avoids the welfare trap. You want people who rely on welfare to be encouraged to become self sufficient, not trap them in dependence.

Welfare traps are a policy feature for company owners who employ a lot of people. It's a strong disincentive for employees who are trapped to ask for a raise.

Nonetheless when they appear their presence is typically (naively) chalked up to simple incompetence.

>Welfare traps are a policy feature for company owners who employ a lot of people.

It's simpler than that. There's not even a need to speculate about outside meddling.

No bureaucrat or appointee ever got a promotion or got more resources at their disposal for getting people off of government services and shrinking the relevance of the program. If you start with the program serving 10k people budget negotiations, getting those job reqs, etc, etc. will be harder if the program is so good that next year there's only 9k people on it. There's a massive incentive to just not give a shit about giving people a bridge to actually get off of welfare because why would any organization actively give a shit about creating a pathway toward making itself less relevant.

>It's simpler than that.

This isnt complicated.

>No bureaucrat or appointee ever got a promotion or got more resources at their disposal for getting people off of government services and shrinking the relevance of the program.

I can remember a number of such examples where there were incentives this being just one: https://www.theguardian.com/commentisfree/2016/nov/30/cruel-...

If business runs government then it's in their interests to keep benefits systems stingy, capricious, hard to navigate and unpredictable as it makes people more reliant on their employers.

Removing it altogether would probably trigger riots but the frog can certainly be boiled.

Is the welfare trap real though? I suspect it may be for tiny minority, but imo most people would prefer to actually do something than sit on their ass and collect money for nothing. Again I may be grossly naïve in this area.

It is absolutely real and the biggest cliffs are for those already working full time.

Here's an example showing how someone making 31k per year needs to find a job making 80k a year to increase their net income.

Regarding who this impacts:

Approximately 35% of Americans make <31k and would see their quality of life go down if they took a job paying >31k.

Another approximately 40% of Americans earn between 31-80K and would be better off financially if they took a pay cut to 30K (at least in the short term). They get to see those making less living better.

https://en.wikipedia.org/wiki/Welfare_trap#/media/File:Welfa...

OK, that is a different kind of welfare trap. Something similar occurs in the UK, where earning more money from an employer can reduce benefits payments and you end up worse off in real terms. However I was really asking about the welfare trap of "get money for doing literally nothing", which I personally believe is a nonsense that only a tiny minority would be happy doing.

"a basic income pilot program that would award SELECTED arts workers €10.50 ($11.90) per hour."

Selected is the key word. I imagine it would be only a handful that are paid to be full time artists, while the remainder might get funding for specific projects or periods of time.

> I always assumed that any money you earn would then be deducted from future payments

Contrary to what everyone says in this thread, this is the crappy way welfare exists in the UK

Most welfare systems work something like that. This is why welfare is generally not considered a form UBI.

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