Universal basic income of nearly $2000/mo to be trialed in UK for the first time | Hacker News Reader

Universal basic income of nearly $2000/mo to be trialed in UK for the first time

cnbc.com

48 pointsgslin89 comments

I don't understand what conclusions you can draw from an experiment with a predefined termination date like this. If I were part of this group, I would realize that in two years, I am back to supporting myself, so I would keep working the entire time. If instead I knew my basic needs would be covered for free for the rest of my life, I might just quit my job and enjoy life.

As someone else posted here a long time ago, a better way to estimate the effects of UBI on productivity is to study people living off a lottery annuity of a similar allowance.

I feel like not everyone plans into the future in detail, and a lot of people make serious life choices using emotion. They might actually get a lot of useful data (though in that case it would be quite mean or exploitative towards the sample group).

Something that just crossed my mind...

I've always been a proponent of a decent minimum wage, because I've argued that eliminating minimum wage would result in a race to the bottom on wages as people become more desperate for work, and the standard of living would hit rock bottom for the people at the bottom.

But with UBI, the dynamic changes. If UBI pays for your basic necessities, people only need to work if they want something better than the bare minimum. The power dynamic has changed, and now all employees have leverage. No longer is it "The job pays next to nothing, but if I want a least two meals a day, I still gotta do it", and instead is "I don't need this job to survive, so they need to make it worthwhile."

In short, I would happily be in favor of dropping minimum wage laws entirely if UBI was implemented and was enough to survive off of.

Who pays the taxes that fund UBI? What happens to that economic activity under UBI? Who grows the food? Who maintains civilization if a not-insignificant percentage of it decide they can't be bothered.

Theoretically, automation takes over much of the manual labor.

Let's be real here. We absolutely have the technology to automate most farming jobs. We just need to build the machines to do it. But right now, it's cheaper to pay a bunch of illegal immigrant workers [0] cash under the table to pick crops than to hire a team of robotics and automation experts to develop a robot that does it.

The money they save in labor costs can be taxed to fund UBI.

Think long term here. Given enough time, most manual jobs can and will be automated. UBI will be a necessity as unemployment goes up as jobs are lost to automation. We're probably still 20+ years away from the tipping point, but it WILL happen.

[0] 41% of farmworkers are not authorized to work in the USA: https://www.ers.usda.gov/topics/farm-economy/farm-labor/

A lot of people would want more and therefore stay with their job. Society won't just simply throw their paperwork out the window and become hermits.

The sample size of thirty people is going to be too small and the two year duration is too short.

I expect that participants will be happier than average and feel more secure. On the flip side they will continue working and their lives will not change much because they can see the payments will be terminated reasonably soon.

Even with the small sample size they are splitting the trial between two locations and trying to make it representative (whatever that means). This seems to raise the risk of a lot of anomalies.

I struggle to see how any meaningful conclusions would come out of this.

"Thirty people in the U.K. could soon receive £1,600 ($1,983) each month if the trial by independent think tank Autonomy secures funding."

Yeah, I'm running one of these too, and I'll give people £5k each month if I receive funding. How is this news?

If I get 5 people to fund you, can I get 5k a month? Perhaps we could design a tiered system based on how many people are brought in to fund your think tank, possibly in the shape of a triangle.

I want in on this.

It’s not news, it’s journalism.

Any serious UBI study would look at entire population of a town/county/region, not thirty people. This is beyond useless.

I see every small UBI study as a move to make the idea of UBI more acceptable rather than a study to prove the effectiveness of UBI. In my opinion, these kinds of small steps are needed because gaining political momentum is the hardest thing to achieve when money is involved.

But it was studied many times across large populations. USSR, Cambodia, North Korea, Venezuela, Hungary, Somalia, etc, etc... They didn't use the same euphemism, but they did take it seriously and to its logical conclusion.

As someone who's lived in a communist country, no, that had nothing to do with UBI.

The related communist motto is "From each according to their ability, to each according to their needs"[0]. Basically, you have to work to the best of your ability, and what you'll get is whatever someone on top decides you need. You don't need to go further than that to realize that idea is bonkers.

The idea of UBI is universal basic income with no strings attached. It does not preclude having other income, nor does it require any work to be performed.

[0] https://en.wikipedia.org/wiki/From_each_according_to_his_abi...

Where does the tax revenue that funds UBI come from? (those who are able). Where do UBI payments go? (those who need). It's written right on the tin. What happens when those who can't or won't contribute realize they "need" more?

The "no strings attached" idea is a fantasy. How many times do we need to learn the same lesson.

I don't know if that misread is intentional or not, so I'm going to assume the best:

U in UBI is universal. Everyone gets it, not just those who need. You get $X/mo! That homeless guy on the corner gets $X/mo! Jeff Bezos gets $X!

That $X gives you the ability to tell your boss to shove it, and avoid a burnout. The same $X helps that homeless guy to stop being homeless and get a new chance for life of happiness.

But Jeff Bezos doesn't give a shit about $X. He wants superyachts, hypercars and phallic rockets and $X ain't gonna do it. So he makes gazillion $, pays a smaller number of gazillion $ in taxes, and funds $X for you, the homeless guys and a million other less driven, talented or fortunate souls.

That's the idea. Yes you can poke holes in it (and people do), but if you think that's communism, you haven't seen communism.

Follow the money and second and third order consequences rather than simply trusting the claims. Where does the money come from? What happens when the source of that money disappears?

There's a well known saying in economics: tax what you want less of, subsidise what you want more of. I think that saying has merit and one doesn't need to look very hard to find evidence to support it. Suppose we apply it to UBI? Could it not be said that we'd be taxing wealth/success/innovation and subsidising idleness? If the saying does indeed have merit, what do you suppose the downstream consequences would be?

So far, you seem to be focusing on the "gimme free stuff" aspect of UBI, not who pays for it. Millionaires and billionaires only have a limited amount of money we can steal. Once it's gone - it's gone. Then where does the funding for the next year come from? The next Bezos won't fail to notice this and might (understandably) decide the juice ain't worth the squeeze. Or more cynically, none of this will affect the billionaire class as they will structure and/or relocate their assets to mitigate the losses.

UBI only works by taking $3000 from you and giving $1000 back to you, and $1000 each to your two unemployed neighbors until you decide to quit and just rely on UBI from the guy across the street, until he quits...

Taxation to support UBI is, as you point out, problematic.

However, there is a long-running UBI project in the United States that we have a ton of data on.

The Alaska Permanent Fund, which takes profits from selling off the natural resources of Alaska and distributing those profits to citizens of Alaska.

The ideal with UBI is that we take the profits from Generative AI, for instance, and distribute them to people. Ideally, the population that have lost the ability to support themselves, because they've been replaced by Generative AI.

"The PFD is a Basic Income in the form of a resource dividend. Some researchers argue, "It has helped Alaska attain the highest economic equality of any state in the United States... And, seemingly unnoticed, it has provided unconditional cash assistance to needy Alaskans at a time when most states have scaled back aid and increased conditionality."

A 2018 paper found that the Alaska Permanent Fund "dividend had no effect on employment, and increased part-time work by 1.8 percentage points (17 percent)... our results suggest that a universal and permanent cash transfer does not significantly decrease aggregate employment."

A 2019 study found "a 14% increase in substance-abuse incidents the day after the [Alaska Permanent Fund] payment and a 10% increase over the following four weeks. This is partially offset by a 8% decrease in property crime, with no changes in violent crimes. On an annual basis, however, changes in criminal activity from the payment are small. Estimated costs comprise a very small portion of the total payment, suggesting that crime-related concerns of a universal cash transfer program may be unwarranted.""

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

Your comment infers that the great majority of citizens will just stop working altogether. But that's a wrong assumption. Multiple studies (and even logic) shows that the average person does not want to keep idle. You want to contribute to something.

So, why would they stop working if the pay's good? Or, what does it say about our current system if everybody stops working if you get bare subsistence for free?

Presumably if the money dries up (because there aren't enough goods and services produced to tax) then you just get inflation as the demand allowed by the UBI payments exceeds supply of said goods and services.

> Thirty people in the U.K. could soon receive £1,600 ($1,983) each month if the trial by independent think tank Autonomy secures funding. The basic income payments are estimated to cost £1.15 million through the duration of the two-year project.

This is much cheaper than other political tactics and obviously these are cherry picked recipients. This is awful.

Care to expand on your thinking here? In what way do you think these recipients would be cherry picked, and what do you think would be the political goals?

If you're running a study like this and want to ensure a certain result to support your take on the issue it'd be easy to pick recipients to reinforce whatever your goals are. IE. only choose people with stable employment who won't all quit their jobs immediately when they start getting checks, or the opposite if your goal is to sink UBI.

This is the political equivalent of paid Amazon reviews. The goal is to be the winning despot for a socialist regime. It's like the lottery, but for power. They're never going to stop these "trials" until anti-bribery laws are updated to include false philanthropy.

Would love for you to expound on how 30 votes will change the outcomes of elections.

Here's how all these experiments should work: first participants volunteer, then everyone who volunteers will pay a special tax to pay benefits for the duration of the program.

Taking outside money and funneling into a closed system is guaranteed to produce distorted results, likely to be made worse because anyone running such an experiment is extremely likely to have a strong pre-existing pro-UBI bias that makes the result even more of a foregone conclusion.

30 people, for 2 years? Just as meaningless as every other time someone has done this. It would need to be for more than 30 people, and funded indefinitely. People are not going to make life changes based on a mere 2 years of guaranteed income.

I don't get how you can trial UBI and get much out of it. Being universal is the key concept. If everyone had it, the entire economy would change direction. Do they do these just to say "look, we tried, and it didn't work"?

Having it time-limited, here two years, is another challenge that gets brought up when trialing UBI. It's more of a temporary bonus than something participants can depend on.

(not making a point one way or another for UBI itself)

Are you saying because everyone gets it, it's a wash? Isn't it more about how the money moves around the economy? Others are pointing out the small sample size, which makes this seem pretty insignificant to impact the economy, and more about the people's experience and change in living/living quality.

The whole point of UBI is that it is universal, and therefore causes those at the very bottom to immediately renegotiate their pay to quality of life ratio. Without this action on a mass scale, it cannot flow up the chain to properly adjust the supply and demand curves to fulfill the goals of UBI.

Whether that is what GP was saying or not, I don't know. But everyone receiving a basic income guarantee, with no other economic changes, would mean that the amount that landlords and other rent-seekers could expect to charge would dramatically increase, and almost all of the benefits would go to those who hold all the bargaining power by controlling the essentials of life.

Money isn't wealth. Bargaining power is wealth. Adding more magic numbers in a broad-based way doesn't change the bargaining power. The main change is that funds would be diverted from productive enterprises to rent-seeking ones.

UBI would drastically shift supply/demand curves for all sorts of things. It's hard to predict what all the nth order effects would be. I'm generally in favor of some kind of broad assistance to establish a floor that preserves people's dignity, but the cynic in me also expects the rich to play games with supply and demand if it's implemented to paint the effort as destructive to the economic order.

At some point tax laws would be changed. I can think of several ways they could change so have no idea what would be the ultimate result.

Because the concept itself is a lie and panderous ploy for voters. If UBI was universal, nobody would work and UBI would have no funding source since government can only ever be funded by tax revenue by people who work.

> If UBI was universal, nobody would work

If you take a literal definition of "nobody", this is 100% wrong.

UBI should only give you a bare minimum. Cheap food. Cheap housing. Cheap clothes. The bare essentials, with very little discretionary income.

There are a lot of people where this is all they want. They have no ambitions. No life goals. These people would take UBI and not work.

But most people want more. They want better food. Better housing. More entertainment options. Funds to fuel a hobby. Money to travel. These people will still work. And they'll be happier about it, knowing that they don't have to work.

Minimum wage jobs are filled with people that can't get anything better and are just taking what they can get. You could swap them out with people that are there because they want to be.

We don't even have it yet and already we are seeing people complaining that the proposed amounts are too low. It's pretty obvious to anyone who has paid attention to the current situation that this rate would immediately become a/the major political issue and would get ratcheted up preceding every election.

How is it different than any other political initiative? There several ways to objectively/scientifically establish an amount that matches the poverty threshold.

That doesn't strike me as inevitable.

Middle class people already have the equivalent of UBI from their families. Not only do they still work, they are more productive and pay more taxes than people without that support.

My parents provided me with free housing and food for over 20 years with no strings attached. They never told me to get a job or to help pay the bills. While my less fortunate peers wasted their lives working at McDonald's, I had the privilege of being able to study and experiment with different careers without needing to worry about food and shelter.

Behind every highly productive worker is hundreds of thousands of dollars of FREE support that they did not work for or earn in any way.

The only problem is that how much support you get depends on what family you happen to be born into. When the government provides that support instead, it means everyone gets equal opportunity and it doesn't matter what family you come from.

But it's under the pretense of 'keep the flame burning'

Your parents literally created you. You didn’t just happen to be born. Also someone has to work at McDonald’s and do other dangerous or otherwise undesirable and uncompetitive jobs. Unless we all have the same genetics, we can’t have equality even with communism.

Alaska already has UBI, yet people continue to work in Alaska.

Alaska doesn't have UBI. The dividend doesn't even cover the increased cost of living of Alaska relative to the rest of the US, let alone the entire cost of living. UBI is supposed to be consistent, but Alaska's dividend is heavily dependent on the price of oil.

Because they need to pay people to stay in Alaska, also becaues they have oil money.

nobody would work in a miserable job for a miserable wage

FTFY

This is the true meaning behind most bullshit arguments against UBI. And it sort of shows why most people that probably think of themselves as fair and honest are actually pretty cruel.

They count on existing people poor enough to work miserable jobs that no one would do if not for the threat of homelessness and starvation. They count on the coercion inherent to the system to keep things chugging along.

Someone gotta collect that garbage, and the sewer won't unclog itself.

>Someone gotta collect that garbage, and the sewer won't unclog itself.

What's your answer then? Robots? "These dirty but necessary jobs should pay better" would be a reasonable take, "let's give free money to everybody" seems a bit less so to me.

> What's your answer then? Robots?

My answer is that a system that forces people into miserable jobs for miserable payment is inherently an unfair system.

Would you be alright with slavery because no one else would pick cotton or cut sugar cane while being threatened with a whip because "these dirty but necessary jobs should should be better"?

> would be a reasonable take, "let's give free money to everybody" seems a bit less so to me.

Giving free money to everybody would result in undesirable jobs either having their conditions improved or eliminated entirely. If unclogging sewers is necessary, people would only do it for the proper payment.

You're right. The government should just pay people to stay home, smoke weed, and play video games.

Yea, it is "cruel" to want to keep the money for which you work and not give it to people who refuse to work. Utter and complete nonsense.

> If UBI was universal, nobody would work

[citation needed]

I can only speak for myself, but the instant I start getting 2k a month for doing nothing I'm quitting. Especially when I look at my paycheck and see how much more is being taken in taxes than before. Why should I be one of the suckers? I'll just reduce my expenses and coast as long as I can, which is probably indefinitely since I've been saving for a while. Maybe have a few buddies put our free money together to move in and cover rent/mortgage. And I'm willing to bet a large proportion of my peers will do the same. When all your friends are getting stoned and playing video games all day while you work your ass off, in part to support their lifestyle, it'll be very tempting to join them and tell 'em to pass the bong.

> I can only speak for myself

The argument was that "if everyone gets UBI no one will work".

Many people choose not to work even without UBI. Many people would still work even with UBI.

I probably still would work, mostly because I'm greedy. I like money. It's colorful and buy things.

Personal perspective in this discussion is less than useful as it fails to address the reason why UBI is a good thing. It attempts to remove the coercion inherent to the existing system, where people are essentially forced into servitude under threat of homelessness and starvation.

>Many people choose not to work even without UBI. Many people would still work even with UBI.

What would the actual difference be though? How many more people would choose not to work if they received UBI? This is just hand-waving that question away with a "more, but it doesn't matter" answer. I understand GP said "if everyone gets UBI no one will work", which was clearly an exaggeration and shouldn't be taken verbatim. But the number of people who would stop working is not 0, nor can you say with any certainty it wouldn't be enough to cause major problems.

>Personal perspective in this discussion is less than useful as it fails to address the reason why UBI is a good thing.

Ah so personal perspectives are only useful if they reinforce that UBI is a good thing, gotcha

>It attempts to remove the coercion inherent to the existing system, where people are essentially forced into servitude under threat of homelessness and starvation.

Which system are you referring to? Physical reality? Resources are finite. Every living thing on this planet has to work to survive, with the possible exceptions of pets and zoo animals, neither of which are conditions I aspire to. It's a great testament to our kindness and empathy that we're willing to help those who are unable to provide for themselves, and we should. But until we're able to replicate matter like Star Trek this concept of "I have the inherent right to be provided for indefinitely regardless of circumstance" is nonsensical and destructive

> What would the actual difference be though? How many more people would choose not to work if they received UBI?

Why does this matter? I suppose people should be free to choose to work without threat of homelessness and starvation. Do you disagree with this notion?

> Which system are you referring to? Physical reality? Resources are finite.

The current system that society uses to organize itself in democratic countries where discussion of UBI is a thing, obviously.

Resources being finite is true, but meaningless to this discussion. Market forces should cause the cost of things and align incentives So that goods and services are still produced, but without forcing people in a system of coercion.

> Ah so personal perspectives are only useful if they reinforce that UBI is a good thing, gotcha

This line clearly shows you are unwilling to argue in good faith. I will reply no further. Feel free to have the last word.

I'm running a political party that will give everyone $2000/month at a minimum.

If another party promises more money we will beat it by 15%. We will always give the people more money than any other party.

30 people.. completely pointless, the behavior of the participants would never match actual reality. Truly universal UBI would just cause price increases for everything and will never be possible in a resource scarce society. Sure you might be able to afford necessities for a few months until the market adjusts..

One thing I don't understand: I only spend about 25-30 a year, despite making a devs salary. I think 45-50 ubi is the point where I'd just leave the workforce.

Every time I stumble upon a thread like this one, multiple posters react with "but everybody will stop working!". I always find this reaction to be curious.

Why are we working now if, only by not being afraid of starvation and homelessness, we shall stop doing so? It seems to me only two conclusions follow:

1. It means that the actual labor market isn't free since we are essentially coerced into exchanging by fear of being destitute.

2. It means that the free market does not operate properly since if it was, the price of labor would adjust to find a new equilibrium where employers and employees satisfied by the exchange.

UBI would not induce mass idleness. It would rebalance labor relations.

Startling conclusion: The 30 people who received a substantial amount of free money liked getting free money.

Follow up conclusion: Therefore we should give everyone cash.

Next years headlines "Why did food prices skyrocket?"

Socialism never works, not even this time. Not even next time.

Correct.

Similarly, Food prices have dramatically gone down since they cut out the extra COVID foodstamps in my state. It's not the only reason, but I know people with like $2000 in foodstamps that don't know what to do with it

The U.S. economy and welfare state are quite dissimilar to the UK.

Do you mean last year's headlines? Or this years?

I'm curious why you think food prices will rise. Governments already fight hunger in various ways, so I assume you don't believe some people have to starve for food to be affordable to the rest of us.

I assume it's from the angle of: whose going to work to farm/sell the food if they get UBI?

Or was yours just a sarcastic knee-jerk response?

Assume for a moment all farmers continue to work.

Sellers are incentivized to charge as much as the market will bear.

Suppose you have a market of 1 person and he has $10 to spend on pork per month. You as the pork producer will charge $10 for a months supply of pork (if you can profit). Suppose that is how things go.

Now you learn your customer has $20 to spend on pork thanks to an increase in government benefits. The customer is feeling much better about himself. But Whoopee, you can suddenly charge $20!!

The customer now has a dilemma: either give you his increase, or go without pork. He choose to continue buying pork. He is no better off, it just enriches you the seller.

Now this is not perfect - it’s quite possible some new pork farmer may enter the market and charge $15. But more money tends to just shift price points up.

What actually lowers real prices is shifts in supply (offshoring, crop yield technologies, etc).

Consider an even simpler example, your own spending. If you suddenly gained $2k per month more, that’d be great! You could save, or buy something nice etc. but your consumption will largely remain the same - you still need housing, food, transit, etc. what if those suppliers just happen to increase prices at the same time? Are you really going to change your patterns? Probably not especially if it’s all suppliers, like we saw with covid. Everything got more expensive but everyone kept buying because they still need what they need. And if there was suddenly an increase in government benefits, you can safely bet most suppliers would raise prices as much as they can.

> I'm curious why you think food prices will rise

More money (provided by UBI) chasing fewer resources (less reason to work) until a new equilibrium is reached.

Somebody has to farm, and it’s not easy work.

Yeah! Because the amount of food you eat is only limited by how much money you have, right?

Socialism works fine for the rich in capitalist countries. The government is always quick to bail them out with everybody's money whenever something doesn't go their way. Remember that funky business of SVB some time ago?

I didn't even mention the number of loopholes and tax exemptions they get.

Maybe extending those benefits to lower castes of society would be a good idea.

Capitalism didn't work either. Maybe we should try a little of both at the same time.

I'm curious why you describe UBI as socialism. I wouldn't think transfer payments would have that deep of an effect on the underlying economic system. Are you suggesting that without fear of starvation the workers will rise up and seize the means of production?

This whole idea is stupid. How about giving proper financial support for parents and covering all expenses for raising a child and not just give away money to lazy people who don't want to work and contribute nothing to society.

The Job Guarantee proposal is much better [1]. At its essence is to guarantee a federally funded job to anyone that wants one with a living wage and full benefits. This would tighten the labor market, put a floor on it, and lift society from the ground up. Firms would then have to provide better jobs than the guarantee if they want labor.

1. https://gimms.org.uk/job-guarantee/

Its just a cynical power play as usual. "Vote for me and I'll give you money" is a platform as old as politics

This whole idea is stupid. How about giving proper financial support for unfortunate and beaten down people and covering all expenses for sustaining life and not just give away money to lazy parents who don't want to work and contribute nothing to society.

Parents contribute to society by providing future workers and soldiers.

Subsiding parenthood is far worse than subsidizing laziness.

The opposite would be better: give financial support to people only if they agree not to waste that money on kids they can't afford to have.

Then almost anyone except software developers and riches won't be able to have kids, and 20-30 years later there will be nobody to serve in the army and protect your country. Great plan.

Exactly. Government preferences should be given to people raising children, regardless of race, sexuality, or gender. Much of the social services network is about supporting children. If parents were given job preference over other identity categories it would be a) fair and b) protect children without creating social service costs.

Well, this is a nice change of pace of governments giving money and "get out of jail free cards" to their cronies that belong to the rich elites, who quite often are damaging to society, instead of simply "not contributing".

Who says these 30 recipients aren't politically connected?

The 'U' in "UBI" has a meaning.

Unless you are implying that everyone is politically connected, I'll guess that you are just throwing any argument against a wall to see if anything sticks.

> This whole idea is stupid. How about giving proper financial support for parents and covering all expenses for raising a child

— like a universal basic income —

> and not just give away money to lazy people who don't want to work and contribute nothing to society.

— like “investors' dividends”.

This argument makes more sense against capitalism than against this.

As the amount of money is limited it is important to set priorities.

If you have extra money to give away then it is better to give them to parents to promote creating families, to pay for education for children from poor families, to improve free medicine, to create new jobs etc. It doesn't make sense to give money to people who are just lazy and got used to spending their parents' money instead of working. They will just spend money on alcohol, cigarettes or online games.

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