It would also help if more people that are doing marginal work could receive a wage that they felt secure with. Money is one of the biggest stressors for couples and families.
There's a strong case to be made that a minimum wage helps people whose value approaches the minimum while hurting people above or below (e.g. $12 and $18 wages in an unlimited market both round to $15 with a minimum, while someone who only produces $7 of value is no longer employable). Similarly with cash infusions - giving people more money is inflationary.
Nobody wants to live in a world where people are trying to participate in society and failing. That's truly heartbreaking.
At the same time, naive solutions (decide a "living wage" and force people to pay it, set up and enforce rent control, give out stimulus payments) seem to have a lot of second-order effects/unintended consequences without actually solving the problems they're meant to solve.
Yes, this is UBI. But phrased as a tax cut makes it politically viable (at least in the US).
One of the classic unintended consequences of social welfare is making someone at the bottom unwilling to work. We saw this during the pandemic when people in formerly low-wage jobs got a lot of cash assistance and stopped being interested in low-wage jobs. (Remember all the "help wanted" signs and early closing hours at local restaurants?)
I'm curious to see an example scale that would continue to incentivize social behavior the whole way up the chain - avoiding the "oh I don't want to make $100 more dollars because I'm in a sweet spot now and bad things happen at $99."
You can certainly argue that many of the current disincentives are bugs in the bureaucracy. I'd like to see a proposal for the UBI tax scale you describe that doesn't have any bugs (that is, bumps in the distribution where people are afraid to reach for state C from state A, because the intermediary state B is worse than A).
I remember this, the cash assistance gave people back their time to focus on starting their own businesses, pursuing self-education, taking care of their kids, etc. It was fully apparent to me that these low-wage jobs effectively trapped people by sucking up all the time they had for self-improvement.
Unwilling to work or temporarily not desperate to stay alive? How many receiving assistance were still working, just doing it less?
The only studies on outcomes I recall is that a lot of kids were no longer experiencing food insecurity.
https://www.heart.org/en/news/2021/09/22/food-insecuritys-lo...
In any case, given how badly broken the current system is, surely it's at least worth a try?
It also becomes clearly tenable with households of more than 1. Supporting a family of 2-3 on $24k-36k is like, yep, I've met married international grad students. Of course they'll spring for supplemental income where available, but as a baseline it is tenuously "enough".
1) A check (issued by Social Security service?) if income is less than X
2) Less of your paycheck being withheld if your income is greater than X (or more if you're significantly above X, depending on how this gets funded)
Expansion of the EITC program is fairly well-regarded among economists and has been historically quite popular! We should do more of it!
This is the wrong model. You're using a worker's wage to describe their productivity, and a big reason for the mess we're in is that wages stopped increasing with productivity fifty years ago. (search "wages productivity graph")
Imagine someone's contribution to a business increases revenue by $1000 and the total cost to employ that person for the same period is $800. Do you think most businesses would go "nope, we only hire highly leveraged people who produce $2000 in revenue"?
There are inefficiencies in scale (like communication/bookkeeping overhead) that might disincentivize a business from growing, but generally speaking, I think it's fine to model decisions as rational cost/benefit ones.
Workers who are only "worth it" at some wage. Nobody is going to pay you a million dollars to go sell a hundred dollars worth of stuff. If the value you can earn on the market is sufficiently lower than what someone is allowed to pay, they simply won't hire you. That's bad for everyone.
For example, suppose janitors all make the minimum wage. If we increase it, there might be some company at the margin that will go without janitorial services, but most companies will pay their janitors the new wage, which (from the "a worker costs $X and produces $Y" model's perspective) will look a lot like the nation's janitors suddenly started producing more value. Ergo, it's not to say that that model is wrong, just that it's not useful in answering a question like should we increase the minimum wage.
$7.25 x 8 hours = $58 for the day. However what they create is based on output, which for most businesses, varies day by day along with their sales.
A McDonald's could sell 500 burgers in one day at one location, but only 300 at another. In this case the employee at the larger restaurant generates 2/5 more value than the employee at the smaller one, even if both can output at the same speed and quality. So, in reality, the employee at the larger restaurant is being exploited by 2/5 more than the employee at the smaller location. Which also means the employee at the smaller location is getting paid more for doing 2/5 less work than an equally capable employee.
Profits are multiplicative yet unpredictable, while labor is static and predictable.
Now that program is gone and minimum wage for fast food is $20/hr. She simply cannot perform $20/hr worth of work, so she's unemployed (and living on government assistance).
The previous arrangement was fantastic because the work gave her a purpose and something to do all day, and she contributed to society while saving the government money. Now she stays home and watches TV endlessly.
This has informed my ideas - I think supplementing minimum wages could be a better alternative to UBI (with some exceptions).
https://www.dol.gov/agencies/whd/fact-sheets/39-14c-subminim...
In the short term it would make a lot of stuff less efficient, but when people talk about "efficiency" they really mean driving costs down and driving income up. So we really don't want an efficient capitalist economy, we want a capitalist economy that is just efficient enough to meet our needs while not being so efficient that a few people can exploit that efficiency and run away with our things.
I don't think we put enough money behind it today, but the Earned Income Tax Credit is designed to do this while minimizing the disincentives for people to work. https://www.cbpp.org/research/policy-basics-the-earned-incom...
Baseline quality of life isn't decided just by pay. I find that society doesn't support people having a baseline quality of life when it comes to areas other than pay, so it makes me question the motives of society in the case of pay.