Ask HN: What can startups do to increase prosperity for everyone?
I think basic income is important to do but decreasing the cost of living is a critical component as well. I'd be very interested to hear thoughts from the HN community about what we could be doing here.
Edit: please respond in the main thread so we don't get an unbalanced comment tree. I'll be in the discussion here for a couple hours, but if it feels like there's momentum in the ideas we might do a proper Ask HN about it next week.
The experiment allowed households to opt out, and after a while most did. However this result is convoluted by the fact that the income was not inflation indexed, and inflation rates in Canada in the 1970s got quite high.
The main conclusion from this is, basic income is going to have to be VERY carefully implemented to work at all.
In the USA, if Basic Income were to be implemented, where would the money come from? Currently the rate of monetary inflation is quite high- we've gone from $11T to $18T in the monetary system during the Obama administration. If we were to start printing even more money to pay people a basic income, this monetary inflation would cause prices to rise to wipe out the benefit of the program, most likely.
In fact, the reason people are suffering now is the level of monetary inflation (Which has been high going back to the Reagan era, so it's the fault of both parties. This is not a partisan issue- it's an economics one. And the problem is that politicians get elected by promising stuff, but to produce the stuff, they can't raise taxes, so they do the equivalent by printing money.)
> the reason people are suffering now is the level of monetary inflation
I don't think any respectable economist actually agrees with you on that. The increase in the monetary base during QE was paired with a collapse in the money multiplier. Most of that cash stayed in reserve at banks (see 'Repeat After Me: Banks Cannot And Do Not "Lend Out" Reserves'). Price inflation is nowhere in sight; inflation is below historic levels and even slightly below the Fed's inflation target.
As for the original question, the general idea seems to be eliminating most other forms of government welfare programs (TANF, SNAP, social security, etc.) since basic income will replace them, along with redistributive increases in income/capital gains/wealth taxes.
Depends on which inflation figure you count. When I think of inflation, I think of the largest costs first -- housing, which can easily be 30 to 50% of your earnings for most people. Check out the Housing Price Index -- does that look flat to you?
http://us.spindices.com/indices/real-estate/sp-case-shiller-...
> Most of that cash stayed in reserve at banks (see 'Repeat After Me: Banks Cannot And Do Not "Lend Out" Reserves').
This is a very misleading use of terminology. It is true that banks can't lend out "reserves", if by "reserves" you mean the 3% reserve that banks in the "upper reserve tranche" at the Fed (which is basically any bank you've ever heard of) have to keep in their accounts at the Fed and not lend out.
But the actual balances of those banks at the Fed are far in excess of that 3% reserve requirement; they are being kept in "reserve" by the banks not because the Fed requires them to but because the banks choose not to lend it out. Why would they do that? They aren't saying, at least not publicly, but the obvious hypothesis is that it's because their expected rate of return from lending it is lower than the rate of interest the Fed pays on their balances. In other words, they are worried about borrowers defaulting and driving the banks into insolvency and then bankruptcy, and the government refusing to bail them out because it wouldn't be politically acceptable this time around.
So the reason inflation has been so low is that most of the several trillion dollars the Fed has printed in the last few years has never actually been put into circulation. (The doublespeak about "collapse of the money multiplier" is just a roundabout way of saying the same thing.) Which says nothing at all about what would happen if that amount of money were put into circulation, as it certainly would be if printed money was used to fund a basic income program instead of "quantitative easing".
"An income of $300 per week is just over the average (mean) benefit income – therefore a plausible
minimum income. However, paying a guaranteed income of $300 per week to every New Zealander
aged 16 years and over, excluding superannuitants, comes at considerable fiscal cost. The fiscal cost
of the GMI proposed in the first model (Model 1) is $44.5 billion (including the cost of all social
transfers – in particular, New Zealand Superannuation payments, would cost $55.5 billion), requiring
a flat personal tax rate of approximately 45.4%. Note that this tax rate and the others considered
below are cost-neutral – not fiscally neutral – as personal taxes currently raise approximately $6
billion in excess of current social assistance costs."
"Although the Gini coefficient improves under all models, many beneficiaries (including the disabled,
carers and sole parents) currently receive more than $300 per week and would be made financially
worse off under a GMI scheme. Therefore the GMIs considered could distribute money away from
those most in need of government assistance and toward those who have choices and opportunities
but choose not to work."
this is actually a really good read about it. Perhaps a lot of comments on HN is skewed towards the young tech worker who sees himself as victimized in a souless wage slavery, but we don't hear any opinions on UBI from the truly needy - the homeless, the chronic unemployed etc.
The "truly needy" is a subjective concept. Determining who should get more money from the government is always going to be a judgment call necessitating the presumption that we're not all equal. Most people who oppose welfare, corporate welfare, or their implementations do so because they perceive the recipients are not "truly needy". UBI is the only just and democratic way to provide welfare.
Does your "US population" number include people <18yrs old, people receiving social security, and people who volunteer to not receive their basic income payment? They should be exempt from your calculation...
Yes. Since you brought it up I can provide those numbers too:
Total US population ~= 319M
Under 18 population ~= 73M
Over 65 population ~= 46M
---------------------------
Remainder ~= 200M
No data on volunteering not to receive, though I don't know many people who pay more taxes than they're required to so I'm guessing that number would be pretty small.
I think that social security is the wrong thing to compare it to. Try social security + unemployment + food stamps + aid to families with dependent children + ...
Basic income is generally designed to be revenue neutral on the middle class. In other words, you send them a cheque for $10,000 and increase their taxes by ~$10,000. So your cost is off by about an order of magnitude. That you get from increasing taxes on the rich and from cost savings for social security and other welfare benefits.
But that number is misleading. I have a spouse and three children. Does that mean we all will get 10K/yr?
I have had a different thought on this in the past; Every child born should have $10K put into an account in their name on the day they are born. It will gain interest and grow until they are 18, then they get the money. And as an adult after 21, they are taxed at some rate to pay back the initial 10K that will then be deposited into the account of some other new baby.
Only the social security number holder at 18 has access to the funds. I don't think it would be too hard to include methods to prevent abuse. I may too idealistic.
An increase in income is generally tied to having less children, not more. I read a study (which I can't find right now) that studied the effect of policies that gave income based on the amount of children, and there is no increase on the amount of children people have. Argentina, for instance, has a program called Asignación Universal Por Hijo that (roughly) pays you for each child you have, provided he goes to school.
How much would that $10k grow in 18 years? Bank of America's "Platinum Honors" interest rate is 0.06%[1], and over 18 years of compounding interest that's only $10,108.55 unless I've messed up my math.
At 2.25% that's $14,925.87, right? Don't get me wrong, I'd love to have had a ~$15k windfall right after high school, but I don't think that would be comparable to an ongoing basic income payment.
I think the idea has merit, but any good idea also has to stand up to criticism.
Your 401k comment gave me an idea for one potential tweak that would make a big difference. If there were a plan to collect a small yet reasonable tax over the course of, say, 10 years or so, to build up an initial pool to draw from, then it might be able to generate enough interest to sustain a continuous payout. Once payouts have started the initial tax might be relaxed or eliminated, though it would depend largely on population growth and how quickly the pool compounds.
"Down on your luck? No problem. We understand that terrible things happen to people just like you all the time. But did you know there is a way out? Just sign right here and we'll provide an annuity based on your child's 'right to help' income. After all, what's good for you is good for them too!"
I don't like the interest part of the formula. There is too much financial "imprisonment" because of interest.
But what you are really saying is put aside $10k and grow it through investments. Then withdraw the gains only, and make the $10k a withdraw-but-pay-back option.
Federal poverty level is 15930 for a two people family unit, that gives 8000 USD/person/year (slightly below 10k), * 300 mln is 2.4trln. Total income from social security tax (assuming you're replacing all social security with flat just-out-of-poverty basic income) comes to 1.1trln. So definitely short, but assuming 4% annual growth (figure reverse engineered from budget predictions in the futute), that gives us 20 years when in real terms we would be able to fund it entirely from social security tax.
Of course. But you were also talking in nominal (not inflation adjusted) returns when you said that 20 years of growth in Social Security income could fund a basic income.
You can inflation adjust neither or both sides of the equation but not just one which is what you were doing.
4% GDP growth year-on-year while a bit on the wishy side is not THAT optimistic of an assumption. On the other hand, 59% in 20 years of moving poverty line is essentially just accounting for the inflation. It's true that the budget is not inflation adjusted, but I think 3-4% GDP growth on average is achievable (3 would push the limit quite a few years in the future of course)
Yes, but again you're talking about 3-4% nominal GDP growth not real growth (which will be less due to inflation).
If you want to pay for something using nominal growth you have to also accept the nominal growth in the cost. So in 20 years you will be able to fund 15,930 per year but that won't be enough anymore because that number will have risen.
It's still quite a lot of money, but I think the basic assumption with a guaranteed income is that it would be accompanied by a tax increase such that net income is neutral for some percentage of the population.
Taking the extreme example where no one's net income is decreased and people below median get the full $10k net, you've already halved that number. I think most formulations of actually paying for such a guaranteed income would include some degree of reduction as you approach median and increased taxes at the high end of the income spectrum, further reducing the cost. As mentioned exhaustively, you also can subtract the cost of many of the pre-existing social programs because they get replaced by the guaranteed income.
Note that the about 23% of the population is under 18 (possibly zero or reduced BI), and 14.5% is 65 or older (possibly offset by SS).
Also, since the census is tasked with counting all people in the united states, it also includes non-citizen long-term visitors and illegal (or undocumented) immigrants.
So it's not quite as simple as latest census count * 10k. It's still quite a lot though.
Except almost all of that money will be immediately spent by the recipients, greatly accelerating economic activity. It should provide quite a boon to local entities and the federal government through taxes. Not to mention the various businesses who will suddenly have more customers with money to spend.
Economics is not a zero-sum game and trying to treat it as one will always lead you astray.
P.S. If total US household income was 13 trillion and we assume that the top 1% took home half of that we can just tax the uber-super-mega rich at 50% and pay for a basic income for every man, woman, and child in the US.
I'm also willing to bet that those rich people will end up better off as the resulting economic spending boom circulates through the economy and ends up back in their pockets.
If current trends of automation continue there simply won't be many jobs (Foxconn is deploying a million robots right now to replace "cheap" Chinese workers). How long do you think society will last under those circumstances? Makes a 50% tax look like a bargain.
There's a very relevant section in this book ( The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies - http://amzn.to/1KFJ1Iu ) , that I just read last night:
> "His view is strongly supported by the work of economist Andrew Oswald, who found that joblessness lasting six months or longer harms feelings of well-being and other measures of mental health about as much as the death of a spouse, and that little of this decline is due to the loss of income; instead, it arises from a loss of self-worth."
The idea being that a basic income is fine, but having people sit around idle probably isn't.
That's always a hard thing to tease out of psychological studies. The tests have to be very clever to do so, and they'd have to be wide ranging. Essentially, yes, but it'll cost a lot of money.
I think if a basic income is eventually introduced nationally it will be the result of a hard-fought political battle with many proponents and detractors, and there are plenty of cases of laws like that being reversed within a few years.
I don't know this would be too unrealistic for the study.
Studies typically have a set duration. If you offer people a basic income for the duration of the study, they'll need to plan differently than if they have some reasonable chance of having a basic income indefinitely.
This is certainly true. However, for many cases there may be little difference. A year or two of basic income is sufficient to start a business, learn skills to enable a career switch (exceptions, of course), care for a newborn, deal with short-term illnesses, etc.
There are long term studies of unemployed in multiple countries that have social safety nets that would be worth reviewing (for example: http://amzn.to/1nosUtx Cultures of Unemployment: A Comparative Look at Long-Term Unemployment and Urban Poverty published by Amsterdam University press in 2006) For many the impact of unemployment (for instance following closure of UK coal mining and steel industries) its not just the loss of job in the economic sense, but the disconnect from the workplace, community, changes in sense of self-worth for individuals and long term cultural and regional impact. There are proven strategies that work and lots of examples that failed. Learning from these and seeing which opportunities map to actions that start-ups can effect through mobile, social and learning technologies might be a useful starting point.
Based on what happens in remote communities here in Australia the result is not pretty. We basically have a basic income here in Australia via our welfare system. What we have found when everyone is jobless is there are huge levels of drug use, domestic violence, child abuse and general criminality. Other than this it works quite well.
I can't say I know much about Australian welfare systems, but here in the US it can be a bit of a trap, since welfare benefits drop fast once your savings or income rises, resulting in a huge disincentive to get off welfare, and furthering the sense of hopelessness, and presumably, the drug and alcohol use.
To what extent does Australian welfare gradually taper off as a means to incentivize saving, instead of punishing it?
The Australian welfare system has lots of perverse incentives, but the tapper off is not too bad. The effective marginal tax rate is quite low and we have a very high minimum wage by OECD standards.
The real problems come when everyone in the community is unemployed. We really need to work on new societal structures to make sure that we don't follow the same path our remote communities have fallen into.
I'm not sure how well it would work, but one of my longest-standing justifications for basic income is capitalism itself. If you have enough to live on from what you get from the state, then you'll be content at best, or spin your wheels and with racks of VB at worst. But if your neighbor was in the same situation and works to increase their earnings, and you see them driving nicer cars and wearing nicer clothing, then you'll want to live at that level as well.
Then again, it might remind them of their own failures and they get double drunk that night. I'm not sure.
negative income / social welfare are packaged in a way that telegraphs dependency and low self-worth.
[ I would also be really interested in seeing an economic analysis of how much money and time is spent on administering social welfare ]
Basic income needs to be marketed as a positive way : here's some money - it is your share of the basic wealth from the land/resources and the benefits of our technology to the country - do something useful with it.
[ I also wonder how many of those 'lazy-dole-bludgers' now on social welfare would have a better sense of self-worth, and actually get off their arse and do something useful if we didn't make it so clear to them they were total failures from school age ]
This is a huge problem with no simple solution. The problem in the Australian remote communities is there is an entrenched culture that is not conducive to any productive activity.
Changing this sort of culture once it has formed is really, really hard. People much more dedicated than me have poured in enormous resources without make a dent in the problem.
I think this is a really good point I haven't heard in the discussion before. I would imagine that simply changing the name from "welfare" to something that implies motivation would make a difference.
Imagine: You're 18 years old and your Dad gives you $500. He says, "You don't make any money and have to rely on me. Here is your spending money" or "You'll be making a lot of money (value) later on in life, this will help you kickstart it."
I've always wondered if its actually the joblessness that degrades people's self worth or the job search that must not be going to well and thus keeps them jobless. Would a person without a job but with a basic income and thus not feeling pressure to get a job experience the same hit to their self worth?
> The reduced sense of self-worth is likely a result of the cultural stigma against joblessness.
And is this a problem? Societally speaking, shame and stigma are great motivators. If we remove them as motivation for work, will society really be better off?
Isaac Newton was neither shamed nor stigmatized into developing calculus. Most of that work was done during "idle" time, while his university was closed for the Plague.
I daresay society's great achievements are not derived from shame and stigma. What real benefit does society derive from meaningless jobs [1]? We've tried shame and stigma. We should see whether society is better off when the thinkers and doers are free to use their time thinking and doing what they feel called to think and do.
I think a good source of data could be the population of retired people. I'm pretty sure if I could afford to be retired, I could easily keep busy the rest of my life.
That's a big part of what I wish I had more time for. My list of things I want to watch is long and growing all the time. If I were retired, I would love to be able to sit down and finally watch The Wire or Sopranos.
People who retire earlier die sooner; for each year earlier that one retires, life expectancy is shortened by two months (and the results are robust against different assumptions).[1] This would lead one to believe that working is good for your health.
Two months per year? To me that's worth it. I want to live as long as possible, but that is strongly based on how much I enjoy life. If the things people enjoy happen to be a little unhealthy, it may be worth it.
Mathematically, it might be close to average but I don't think that's a great way of putting it either. If you click through to the study, it was actually only men that died earlier. The lifespan of women was unchanged.
Damn, this is not good news, but thanks for sharing that.
I would hope that this is not relevant to people who just want to be financially independent at an early age, and never really "retire". Maybe a lot of people just don't know what to do with their time, so they turn to unhealthy activities like drinking and sitting on the couch all day watching TV.
People value money they earn more highly than money they are given (, about twice as much from what I've read). In addition to that, many people get a sense of purpose from their work, as they feel they are contributing to something, and through a sense of fellow-feeling with their fellow workers, even though they may find it stressful and/or tedious.
There are some forms of work that are useful to society and rewarding, which don't pay enough to live on - volunteering in a hospice or school for example.
In this case the person doing the work might both derive self-worth and view the basic income as being 'earned' .. and hence value it as much as a traditional salary [ and not 'waste' it ].
I think basic income could fill a lot of little niches where the market economy is not perfectly efficient in allocating money to value - some of these are being explored thru approaches like Patreon and IndieGoGo and freelancer sites.. but maybe Basic Income is an even better way to reach more of these niches ?
I was a homemaker for two decades. I did lots of volunteer work. I strongly disagree with you.
You should Google "emotional labor metafilter". A lot of "caring" work has traditionally been done by women and we are expected to do it for free, out of the goodness of our hearts. If we expect to get compensated for it, we are taken to task as harpies, gold digging whores, etc.
I was one of the top three students of my graduating class. I have done many things that enhanced the lives of other people. I have struggled with trying to figure out how to monetize my work. The main thing I need is work that pays adequately and doesn't keep me sick. A lot of people who have benefitted from my volunteer work, public writing, etc. are offended and outraged that I desire financial compensation.
I have been homeless for just over four years. The people who expect me to do nice things for them because I "care" generally do not give a damn about that. Plenty of people have made it abundantly clear that I should shut the fuck up about how poor I am and how hard my life is. They seem to think that telling people I am homeless amounts to trying to panhandle them.
I am pretty pissed off about it because I am not a beggar. I have only ever asked for help in trying to figure out how to turn the work I do that benefits others into an income source for me. The idea that I deserve compensation gets pissed on, often by the very people who seem to think I am after their money as a beggar.
We need to pay for these jobs if we want them done. No one should be expected to live in poverty on an allotment of Basic Income while taking care of others. It is a shitty, shitty expectation.
"Fuck you, pay me" should apply equally to the kinds of work you describe. If society NEEDS this work done and it doesn't pay adequately when handled by the private sector, then create a government service. This is why fire and police are public goods, not private sector services.
Did you mean to reply to someone else? It doesn't sound like you disagree at all.
If there was a basic income, people who do things that currently aren't paid for, like what you mentioned, could be done and "paid for" by the basic income.
If you like the work, but just want to be paid, that should solve your problem.
If you don't like the work, don't do it. The basic income would mean that jobs that people don't like doing would have to increase what they pay until someone is willing to do it. Nobody would be forced to do work they don't like for a barely or non-livable wage.
Nope. To my mind, Basic Income = permanent slavery for women, with no hope of getting free as the expectation that we should "care" out of the goodness of our hearts will just become more entrenched and more doors will close to us.
If women want male privilege, they need to take the entire deal, including the risks of failure.
“Those who surrender freedom for security will not have, nor do they deserve, either one.” -- Benjamin Franklin
You were very vague about what this "care" work is. For child care, as in your own children, somebody has to do it. It shouldn't be assumed to be women but it makes no sense for this to be a paid thing.
If you mean something like elder care, for example, and you don't feel it's worth doing it for free, then just don't do it. I don't know why you feel (or you feel anyone else) would be expected to do this work
With a basic income, if you think elder care is important and/or something you want to do, you can afford to do it for free. Because you have a basic income. If you want more than a basic income you have to do something that people want to pay for. But you have the freedom to walk away from any job without fear of homelessness and poverty.
Your worries about permanent slavery seem to have very little to do with basic income. In fact, the main reason for basic income is to free people from the wage slavery we have now. People are stuck in barely livable wages because they don't have the time away from work to get into a better paying career.
Extremely long discussion here about how women get expected to do a great deal of "caring" labor for free, by all of society, in every imaginable situation (the discussion is so long it may have trouble loading):
http://www.metafilter.com/151267/Wheres-My-Cut-On-Unpaid-Emo...
I was one of the top three students of my graduating high school class. I am a woman and 50 years old. This is a problem space I have studied for decades because of my own personal frustrations with the fact that people expect a great many things from me, those things improve their lives, and I am not supposed to want compensation for them. I don't know how to make that any more clear to you. I think a Basic Income will make this a more entrenched problem. It will not alleviate it. Men already are nigh impossible to talk to about this, even with measurable negative impacts on women's lives that we can point to.
The fact that you can't see it just makes me feel all the more strongly that your idea that Basic Income "pays" women (for basically being society's slaves) is just going to make things worse.
Yeah, I'm more convinced this has nothing to do with basic income. You are just repeating over and over that basic income will make it worse but with zero proposed mechanism.
Unpaid house work isn't going to get worse if women get the (new) option of leaving situations they previously were stuck in.
The problem of unpaid "emotional work" is caused by a sexist society. More social safety net either does nothing to alleviate that problem, or it helps. It makes no sense to argue it makes things worse. Unless you provide even a shred of an argument for how it could make things worse, it sounds like you're just yelling into the void of the internet. Unless by "men are impossible to talk to about this" you really mean "men don't accept my assertions on faith".
Edit: Also, it sounds like possibly you don't know what basic income is. Or you mean something different by it. This[1] sums it up neatly in the first paragraph. I'm not trying to be insulting, it just sounds like you're talking about something different.
It makes it worse by making it less painful for the status quo to continue forward. Currently, women are making a great many hard choices in order to stop the pain of being poor because society does not want to hire them, promote them, etc for "men's work" while expecting us to continue to "care" without compensation. Give women what amounts to permanent welfare and a lot of them will not make the hard choices involved in questioning the status quo and trying to find another answer.
There are plenty of examples of populations given some kind of permanent welfare. They never result in some sort of golden era. They result in people who are overweight, out of shape, demoralized, with no goals or aspirations.
Hmm, I think there are actually zero or very few examples of populations given permanent welfare where something bad happened. In fact, the exact opposite. I really feel bad for the people in permanent welfare in Sweden where health care is free and standards of living are extremely high. Yeah, that's terrible.
I read a lot of that discussion on meta filter, and it was extremely unconvincing. I empathize with women who marry crappy people who expect them to stay at home and don't want to listen to their problems and want them to send birthday cards to their family. But the whole conversation was about a non issue. Basically like the argument any roommates would have about who has to do the dishes. Or who left the toilet seat up. It was complaining about personal things that they really just need to deal with themselves. And maybe they need help learning to do that, but "emotional work" isn't a thing. It isn't, it shouldn't be compensated, it doesn't exist. These aren't big societal dilemmas. Women aren't perfectly equal now but it is perfectly acceptable in most of the western world for women to get real jobs.
Or maybe it would help to hear an example (any example, you still haven't given one). What is one hard choice a woman might have to make to escape the pain of being poor? The hard choice not to have children? How is that a hard choice and how could it possibly go away in any imaginable future without the reality of biology being worked around with external wombs and robotic child care? And what, please tell me, could that have to do with a basic income?
I want to chime in that mz is making a great point which never would have occurred to me.
UBI could serve to further entrench an existing exploitative pattern, which currently exists because some things are "paid" work and other things are not.
I think it's also interesting to think about the exploitation of low paid workers. There are lots of jobs that very few people want to do that are low paying because anyone can do them. With basic income people will no longer be forced to work these low wage jobs just to get buy.
I could foresee lots of people quitting to learn skills for more rewarding jobs. You might see that jobs like a janitor, garbage man, and service reps at abusive companies start commanding higher wages since people don't want to do them.
Now workers have the leverage to decide not to work doing something they hate unless they are paid enough for it.
Creating free education programs for careers in demand would really strengthen this effect and I think would improve society as a whole. People will be rewarded for doing menial or dirty jobs rather than looked down on by society.
Precisely this. Basic income is a fantastic safety net and gives a lot of freedom to people. That's its whole point (that and it's a starting point to solve the problem of increasing automation eliminating jobs, but we don't know for certain if that will happen).
Jobs that are currently mostly done by people with no other choice, and hence can pay as little as they want, will have to pay better or be part time or some other benefit if they really need to get done.
And then, if a crappy or mindless job ends up paying $30/hour, people might do it because they want the extra money, not because they need it to survive.
I can barely begin to imagine what you've been thru, I was evicted from a flat once and that was incredibly stressful - but we had a support network and were helped out and got back on our feet. This is one of the reasons I feel viscerally that Basic Income is important - it would have made a massive impact in working thru this.
Yes, as a society we don't value that kind of work that traditionally women have done the majority of - child rearing for example. Maybe as a single dad I can now have some empathy or appreciation of that, that I wouldn't have otherwise as a middle class white male.
Looking after my kid and making paintings have probably been the most useful things I've ever done - neither of them paying anything, unlike programming work which does provide an income. I have to wonder what more useful things I could have spent my time doing, rather than some projects which paid ok, but were unlikely to be of much use to anyone.
I can relate to some of your comments - when I see people who want an Uber clone developed, or who think programmers should get 5 bucks an hour because they enjoy their work anyway.. or who dont understand how much skill it takes to draw a plausible figure, who think a one off oil painting should cost 70 bucks. But then these people are using apps that cost 20 million bucks to develop but are free to use, or they can buy a print for 30 bucks and a chinese replica for 150..
There are some economists and even politicians who have been talking about the value of all the work that is done which is not paid for - value and money don't match up, in many cases. I hadnt seen the term 'emotional labor metafilter' but I'd heard of the concept [ as I listen to people like Piketty, Paul Krugman, Elizabeth Warren and lately Bernie Sanders ]
My hope is that a Basic Income might be a way of partly fixing this flaw [where real work is undervalued], rather than entrenching it - if the free market is not efficient enough to pay you for the useful work you are doing, basic income might at least cover the cost of living.
Its not a solution to every ill.. teachers will probably still be paid less than their true worth, stay at home parents will probably still have to sacrifice a lot of income. It wont solve sexism, racism, ageism .. but it might alleviate some of the worst symptoms, some of the current pain ?
Maybe the government service is in fact BI, because it covers so many special cases where individuals can do useful work, that the government wont ever be able to implement an overall program ?
> No one should be expected to live in poverty on an allotment of Basic Income while taking care of others. It is a shitty, shitty expectation.
I agree.. but I assume the Basic Income is more than being poor, that it was high enough to cover living expenses so that you are free to function without stress.
So the question is how much should BI be - equivalent to 15 bucks an hour ? 25 an hour ? Should the minimum wage be set at the same level as BI ? Location dependent on average rent ?
One of the points you are missing is that there are two kinds of poverty: absolute and relative. Even if you could eliminate absolute poverty, there is no means to eliminate relative poverty. The minute you have a UBI, anyone who only has that is de fact poor relative to others.
Many years ago, I saw a study that asked people in different countries to define poverty in terms of things like how many meals per day a person ate, what kind of shelter they had, etc. The study concluded that less than 0.5 percent of Americans were poor by the standards of people in India at the time the study was conducted. Meanwhile, Americans routinely conclude that 12% to 14% of us are living below the poverty level.
As a homeless American, I have regular access to electricity via a public library. I have access to public toilets. I have access to cheap goods. My quality of life is likely higher than that of many people in the world who live in countries without consistent supply of electricity and other basic infrastructure that I take for granted. There are countries where women are fairly routinely raped and sometimes murdered while attempting to relieve their bowel or bladder in an open field because there is insufficient infrastructure.
My quality of life is likely higher than that of kings of old, who had no electricity or Internet or antibiotics etc.
Humans are a social animal. If you eliminate physical hunger but cut us off from freedom of choice, social connections and a great many other things that money cannot buy, you do us egregious harm.
We need to invent the 21st century's version of the 40 hour work week. I believe the answer here is currently being called The Gig Economy. We need to make sure the Gig Economy empowers ordinary people to work when they want, as much as they want. We need to make sure "gig" work can create a middle class lifestyle if you do it decently for about 40 hours a week.
This will empower homemakers, single parents, etc to create a comfortable life that works for them without being cut off from Society and the halls of power.
We need to worry about empowering people to readily and easily make the money they need. Giving money to people will never provide the same quality of life as earned income. It is qualitatively different. It will always be qualitatively different. You cannot change that fact.
Plenty of people voluntarily leave work. I did it last year for eight months to travel. It didn't hurt my self worth, nor those of my friends who've done the same. But if I had wanted a job and not been able to get one, I think that would hurt my self-worth even if I didn't need the money.
I have a standing offer to buy a beer for anyone who visits me here in Bend with the entire 10's of cents I get every month with those links. But hey, at least it's a free beer for someone, rather than Jeff Bezos.
I'm thrilled Deschutes Brewery has started distributing here in DC. Also, count me among the many who have no issue with the use of Amazon affiliate links.
Deschutes Brewery is just the tip of the iceberg - they're the 'big company' brewery these days! I actually get a discount at 10 Barrel because I signed up for their bike team, so one beer could probably become several before exhausting my vast haul from affiliate links.
We have to clearly start differentiating between "work", and a "job".
You can work hard at something which provides immense satisfaction and personal value (perhaps even value to others). But a job is strictly something you do in exchange for money.
A job doesn't necessarily contribute to your self-worth. Meaningful work, does.
Way to miss the point. If you don't have a job, even if you have some kind of meaningful work or hobby on the side, your self-worth will still suffers from that.
My point is that if we're going to introduce a concept like basic income then we need to start being really clear about the difference between effort in exchange of money, and effort which contributes to your satisfaction. Not sure how I'm missing the point.
> A job doesn't necessarily contribute to your self-worth. Meaningful work, does.
No, having a job like the vast majority of others around you (or the supposed ideal) contribute actively to your self-worth way more than have a meaningful hobby or unpaid meaningful work on the side. It has to do with the humane need of feeling integrated in the group.
You really have to work hard on yourself to keep your self worth for ten years by not « working » and having only a meaningful job/work/hobby.
It's not the job or the hobby or the meaningfulness that matters to your self worth. It's the sense of belonging to the group.
With that said, I completely agree with that:
> if we're going to introduce a concept like basic income then we need to start being really clear about the difference between effort in exchange of money, and effort which contributes to your satisfaction.
Benevolent activities are going to be cast under a different light.
How do you know that? That seems like an unfounded conclusion. For example, a lot of people here on Hacker News don't have a "job", but they're building startups and working on products. I wouldn't call that a job, in the sense that they're not performing work in exchange for money. It probably does have some effect on their self-worth, but I don't think it has anything to do with the lack of an employer. And to follow on from that point, someone can be retired and spend 8 hours on art, music, writing, or any other creative endeavor. I don't think those are the kinds of people who live shorter lives after retiring.
> That seems like an unfounded conclusions. For example, a lot of people here on Hacker News don't have a "job", but they're building startups and working on products. I wouldn't call that a job, in the sense that they're not performing work in exchange for money. It probably does have some effect on their self-worth, but I don't think it has anything to do with the lack of an employer.
That's because you are drinking the koolaid without reading the warnings all over HN about the entrepreneur porn lalaland echo chamber it is at time and succumbing to the game of redefining common words to fit a specific story. Also, very specific and small population sample here. You can't exclude the majority of the population to deny the fact that self-worthiness is linked to employment (edit: whether it is a good thing or not).
> And to follow on from that point, someone can be retired and spend 8 hours on art, music, writing, or any other creative endeavor. I don't think those are the kinds of people who live shorter lives after retiring.
But that's the thing. Retirees have a different status to hold than the unemployed. Plus, you forget that the transition from a working class member to a retiree can be really hard.
This assumes people on basic income without jobs are idle. What about stay-at-home spouses and parents? What about community volunteers? What about people who take care of sick friends and relatives?
Furthermore, what is the economic benefit of the activities listed above? What would be lost if those activities were either abandoned or required to be paid at a fair market price? I know, charging grandma by the hour is a silly idea, but I say so to illustrate the benefits to society by activities not reflected in GDP, and to invite discussion about whether society would be better served by individuals living on basic income alone who spend their time helping others, without having to worry about making next month's rent.
Aaand, it is not currently the imperative of gov't to provide people with a sense of self-worth. That may be a worthy thing to shoot for, but it isn't currently a purpose of government. Even if one accepts uncritically the self-worth imbue-ing power of labor it's not necessarily the only way to impart a sense of self-worth to the individual.
Well, that's exactly my point. A lot of people do things that satisfy themselves and can often help others, but when you need to work to live you get greedy with your time and money. A state that provides basic income frees people to find their sense of self-worth, not assign it to them.
Basic income doesn't aim for people to sit idle, and in practice basic income doesn't seem correlated with idleness. Some studies show an increase in work hours [0], and another showed a slight decrease in work hours among new parents and teenagers [1].
Loss of self-worth need not occur when people are given the freedom to say "no" to unfulfilling and unproductive jobs, the freedom to take time off to care for their own or another's health issues, and the ability to pursue their passions -- teaching inmates, launching a startup, or becoming a world-class gamer.
One big difference between basic income and negative income tax is who receives them. Basic income is given to everyone, and negative income tax is only given to those below a threshold amount -- creating two classes of people: givers and receivers, us and them.
The negative income tax experiment in New Jersey showed that the negative income tax created a disincentive to work, and increased family breakups. [0]
Negative income tax, by virtue of being tied to the tax system, operates on a year-based system and pays retroactively. Regardless of whether the year's overall income would qualify for negative income tax, the individual still needs to self-fund any time off. A negative income tax does nothing to help those who are temporarily out of work, or who only want a few months off to help with childcare, learn a new skill, or address an illness.
Is increased family breakups necessarily a bad thing? There are plenty of people who are stuck in abusive marriages because they are financially dependent on the abuser.
Ability to leave bad relationships is one of the proposed benefits of basic income and similar ideas.
The linked article hypothesized "reduced pressure on the breadwinner to remain". Too many fights over money, financial ability to leave a bad relationship, and no need to "stay together for the bills" could all be causes.
A negative income tax is basically equivalent to a basic income funded with a progressive income tax. No matter how you pay for it, some people are going to pay more in taxes than they get from the basic income, and some will pay less.
For people who have a job, we already have a system for them to pay taxes with each paycheck (withholding). By reversing that, you could make negative income tax payments year-round rather than at tax return time.
> By reversing that, you could make negative income tax payments year-round rather than at tax return time.
Withholding adjustments would help those in low-paying jobs, part time workers, etc. But how does it address temporary or long-term joblessness without requiring individuals to self-fund until refund time?
> A negative income tax is basically equivalent to a basic income funded with a progressive income tax.
I disagree. The funding structure is substantially similar -- some people pay more in taxes than they receive. However, by only distributing the payments to a subset of the population, there is a social stigma associated with receiving benefits. With a universal payment, there is no stigma.
Consider food stamps. The funding structure is set up so some people pay more in taxes than they get from food stamps, and some pay less. But because only some people receive food stamps, there is a stigma associated with them. By contrast, consider the Alaska dividend, which is given equally to every citizen, regardless of income. There is no stigma associated with receiving or using an Alaska dividend. It isn't seen as welfare, but as a right.
Agreed, something different would have to be done for the jobless.
I only claim economic equivalence, not political or marketing equivalence. On the other hand, we already have a negative income tax for working people (the earned income tax credit) and no national basic income, so maybe the marketing advantages aren't a slam dunk.
> However, by only distributing the payments to a subset of the population, there is a social stigma associated with receiving benefits. With a universal payment, there is no stigma.
People aren't so naive that they would ignore the fact that their basic income is being immediately taken out of their pockets to pay for other people's basic incomes.
Certainly. With a tax-based universal basic income, the vast majority of individuals would be net beneficiaries.
As of 2011, an individual paying >$12k/yr in USA federal taxes is in the top 25%. [0] With a basic income of $1k/yr, anyone in the bottom 75% would effectively be receiving a 100% refund of all taxes, not only the funds earmarked for BI.
There is also the option of voluntary basic income systems, which have the advantage of being immediately implementable. [Disclosure: currently developing a voluntary basic income project/study]
>creating two classes of people: givers and receivers, us and them.
You get the same effect with basic income. Those who pay more in taxes than basic income gives and those who don't. You could effectively create a negative income tax that gives the exact same payouts as basic income.
x is income, b is basic income, F(x) is tax someone has to pay at x income under the basic income scheme, G(x) is the tax scheme someone has to pay out without basic income that includes some negative taxes.
If G(x) = F(x) - b, then x + b - F(x) = x - G(x). Yes, they are coded up on law a bit differently, but the outcome on everyone's pay would be the same. All that is different is the talking points. Kinda like how people are charged higher tax rates for not having children currently in the US.
I think the key here is to help people redefine who they are. There's not a huge material difference between people who call themselves "starving artists" vs those who call themselves "unemployed", but it is a huge mental difference.
Related though not necessarily helpful section from Brave New World (1956):
> of course we could give them shorter hours. Technically, it would be
perfectly simple to reduce all lower-caste working hours to three or
four a day. But would they be any the happier for that? No, they
wouldn't. The experiment was tried, more than a century and a half
ago. The whole of Ireland was put on to the four-hour day. What was
the result? Unrest and a large increase in the consumption of soma;
that was all. Those three and a half hours of extra leisure were so far
from being a source of happiness, that people felt constrained to take
a holiday from them. The Inventions Office is stuffed with plans for
labour-saving processes. Thousands of them." Mustapha Mond made a
lavish gesture. "And why don't we put them into execution? For the
sake of the labourers; it would be sheer cruelty to afflict them with ex-
cessive leisure. It's the same with agriculture. We could synthesize
every morsel of food, if we wanted to. But we don't. We prefer to keep
a third of the population on the land. For their own sakes-because it
takes longer to get food out of the land than out of a factory. Besides,
we have our stability to think of. We don't want to change. Every
change is a menace to stability. That's another reason why we're so
chary of applying new inventions. Every discovery in pure science is
potentially subversive; even science must sometimes be treated as a
possible enemy. Yes, even science."
In a broad sense, the shift towards a services-based economy is a type of "make-work" in the shadow of heavy automation in first agriculture then manufacturing. This is very much Parkinson's Law writ large: https://en.wikipedia.org/wiki/Parkinson%27s_law
Is there any evidence that shows that Basic Income (that you DON'T lose if you happen to find work, as in the USA system) will cause people to sit around idle?
Not "idle" exactly, but in the Canadian Mincome experiment, teenagers and new parents decreased work hours (to focus on studies and childcare, respectively).
But studying and caring for children is not idleness. We're talking about "sitting around idle" which, admittedly needs to be defined, but I'd argue doesn't include productive activities.
Defining "productive" and "unproductive" activities is difficult.
Sitting around playing video games is a classic example, but it's a way to become a better video game developer or a world-class player, both of which are fulfilling and well-paying endeavors. Even sitting and doing nothing (i.e. meditating) can be one of the most productive things an individual can do. [0]
What constitutes a "productive activity" is quite subjective. And even seemingly unproductive things can be productive: if they help de-stress and refocus, they're still contributing to productivity.
Productive is really hard to define because we all value what we produce differently.
If I'm playing minecraft and optimize a factory in an hour, that is a productive hour of gaming. But to my father, that entire time was wasted because he cares naught for video games and would instead be out working his farm. But I look at the small scale farm and realize that for what it produces, it would be cheaper to just buy the produce and thus don't see it as productive.
Is watching football and prime time TV productive? What if you have someone who doesn't like either but is doing so only so they can be a better culture fit at work since that is what everyone else at work is doing?
Indeed, I'm skeptical of anything that promises to free people from work. I think of it as a mobility scooter for healthy people - the idea of not having to walk and be tired might sound appealing, but the actual use will leave you in much worse shape.
Japan seems to have one solution to this problem. It's a culture that highly discourages idleness, yet also aims to look after people's welfare, so they have a very large number of (practically speaking) quite useless jobs - crossing guards on parking lot exits and streets with no traffic, platform attendants, park attendands, etc. It was quite weird seeing this at first, but once I started thinking about it as a socially acceptable form of welfare, it made a lot of sense.
I don't think their system will work here (serving people is seen quite positively there, whereas here it is often looked down upon here), but it is a good working example.
This is a huge component that should be considered when arguing for / against basic income. Does this lack of self worth stem from actually not having a job? Or simply not putting quality time into something valuable? Did they study people who found other ways to spend their time on something productive and interesting, like volunteering or learning a hobby? Did they measure people who were jobless by choice?
Oswald's research was published on 2004. Andrew Oswald is a British economist who earnestly tried to study happiness with statistics, and government data. The study tries to corollate government data, excludes detailed information on black wages, and tries to draw conclusions based an statistics, and questionable government data.
What jumped out of the paper(around page 25) was that Europeans have been just Happy! Why are first 12 members of the EU Happy over time? I'll let you speculate.
Now to entitled--usually white upper class men--who have been telling the poor what to do since biblical times. Dummy up!
I've had seen too many people die early because they became homeless.
I think what most of these researchers fail to comprehend is the difference between poor, and poor with no safety net. No parents. No friends couch to crash on. Just the inviting, wet thicket of Scotch Broom to crawl into, and being woken by gently nudge of a police officers' latest extension of their authoritarian arm. Real poverty is homelessness. It's ugly. I don't know why we are even debating someting, like a minimum income, at this point in time. I have seen friends die way too early because of their homeless stints. It seems by the time they get a little help, it's too late. They just die early?
I'm not going to list off my gripes about making a living in this enviorment, but a lot of us tech workers are very succeptable to being homeless. At least half the guys I know without roofs over their heads were former Programmers. At one time they we happy, and young, banging away with Fortran.
(Willie Brown is actually the first one I heard, wondering out loud, exactly what we are going to do with all the future homeless tech workers.
They now sit in coffee shops fiddling with our discarded toys.
Basic income at this point--yes. I actually think if some of these poor people were given a little bit of help, they might just start business, and who know where it will end. There's only one benefit from being poor; some of you see the world a different way.
We have never had a basic income in the United States. Let's give it a shot? I look around at what's happening in the United States, and I don't like the trend. It was better in the past.
(Yea, what if it gets worse. Go back to this wonderful system of privileged elitism. I won't be back, so any comments--I will miss out on. Oh, yea as to sitting idle--the subsided poor I know, are busy. See the world is funny place. Even if you get the couch in the subsidized house, you are expected to do/fix all sorts of things, including being a amature psychiatrist. The poor always pay in some way. Think about it. Did you really ever get a completely free lunch, outside of maybe grade school, or when you were young and pretty. Pretty is gender neutral.)
The thing is, the subsidised poor already have a huge system of entitlements in most developed countries. Governments combat homelessness with social housing (net value far more than $10k per annum where I live) and direct despondent former Fortran programmers into jobs or onto retraining schemes whilst paying them enough to live on.
Arguments for universal BI (as opposed to tweaks to benefit entitlement rules) are in effect a suggestion that people on those programmes should have less so that we can afford to extend subsidies to middle class stay-at-home wives and twenty-somethings on gap years, because rich people that don't want to work obviously deserve the same as people with nothing going through a crisis. And you have the temerity to intemperately accuse anyone that questions it of being elitists.
And yes, BI is something which has been chiefly advocated by privileged white men.
There are a long list of reasons I do not want Basic Income. I really don't feel like writing an opus in comments here today. I think my last three blog posts have been about my objections to Basic Income. You are welcome to read those if you wish to get an inkling of my opinion on the subject.
It's definitely an excellent point that a basic income would only solve part of the problem associated with lower need for labour. I'm sure there are many more startups that could be founded around the expected increase in numbers and breadth of retired people. There are plenty of things that people can do to be active and engaged when not working; it's just that often they don't. Making these activities more accessible, or accessible in different ways, surely provides some opportunities.
Personally, I think this is a big part of the reason UBI will work.
Most people want to do something, and generally want to feel productive. How many stories have you heard about unhappy office drones leaving a job where they spent all their time on the internet to something more rewarding?
But where will this productive energy go? Plenty of people will still have jobs, likely doing something more in line with their interests. Others will volunteer their time and participate in the community. I think lots of people would love to spend more time mentoring young people, being with their families, etc. It could be a revolution in community participation and lead to a more healthy society.
Satisfying and productive work doesn't need to be paid work.
Removing minimum wage is a very important aspect because it allows teens to get experience early. Nothing kills teenage employment rates better than a 20$/hr mandate.
A few good ones here - another really interesting, current initiative is Bolsa Família, a Brazilian assistance program that functions similarly to a basic income subsidy - the main difference is that it requires families to demonstrate up-to-date immunizations and good school attendance rates for children.
There is non-profit startup in Berlin trying to do this, they mainly fund themselves by raising the money from the crowd. It's a lottery system where one can win 1000€ per month for one year, which in most parts of Germany gets you somewhere. They already funded 29 people analyze and blog about who won. Most people actually didn't do dramatic life changes, which also could be because it's just one year.
Is five years long enough to get a real reaction? Unless somebody is on the verge of retirement, and they want to keep working after the experiment, they must consider staying in the job pool or have difficulty getting hired in five years. To see how people would react to a government-provided basic income, which would presumably be fore life, the study may have to emulate that more perfectly.
Nevertheless, I'm very excited by this project and seeing what comes of it.
Does the basic income prevent people from doing work? Or from doing work they hate?
A correctly designed study will attempt to teach the participants to (1) have basic spending/expenses that match their income (2) procure the basic income from already-available sources (e.g. food stamps, subsidised health care, social security...) and (3) form income-pooling groups that provide/insure a basic income for their members. All three have already been done at a small scale. 100s of people in the United States currently practice #3, e.g. Federation of Egalitarian Communities. 1000s of people practice #2, e.g. Puna Hawaii or your local trailer park.
I think basic income would have the effect of insurance, to allow individuals to take bigger risks and follow their dreams more.
When I talk with people about basic income, my gut reaction and primary argument is that it contrasts with that fundamental human nature that's been show time and again throughout humanity - given a guaranteed, fixed reward no matter how much or how little you work for it, disincentivizes work. It follows along the same lines as why government instituted communism fails. Or why the first version of the mayflower compact failed - whatever was produced was put into a common warehouse and all the land, buildings and end product were communally owned.
I just think that socialism and communism (which basic income basically is - it's paid for by the working class) ultimately leads to the destruction of the economy.
I would think that it depends on what you consider "basic income". If it's just enough money to scrape by (tiny living quarters, food and a tiny amount for clothes/toilitries, etc) then people won't be worried about survival, but they'll still want to get more money for things like having a house, cell phone, vacations, etc
I think that going forward, communications are a basic need. There was a startup in ~2008 that was attempting to provide "free" cellular service to its users who agreed to watch ads on their phones. If they interacted with the ads, they would get more service time...
The Facebook phone was an utter flop - however, if they wanted to surveil the population, they may have done better by creating a cell service company and allow people to be spied on in exchange for a free phone....
That damages my DNA saying that -- but it would be a workable model for the long tail of poor people that love facebook.
A basic income doesn't remove variable rewards for work. It just sets a minimum. Very few people reading this could continue their current lifestyle on a basic income, so how is this going to make people stop working?
...given a guaranteed, fixed reward no matter how much or how little you work for it, disincentivizes work...I just think that socialism and communism (which basic income basically is...)
Wrong. Basic income lifts the floor. It does not concern itself with the ceiling. Calling it communism is utterly wrong and completely missing the point.
At $1 the second dollar is useful, at $50,000, I'm good for the year and will not pursue additional dollars. Replace $50,000 with whatever amount you need to feel content.
Though I'm several orders of magnitude less well-off than Mr Buffett, I still have more than enough that I could stop working now and survive well enough the next 50 years.
I continue to work because I genuinely enjoy what I do.
I didn't say there isn't a diminishing value of each dollar, but your comment seemed to imply that at a certain point, people will be "content" at a certain income level and not try to get more money.
Rich people are a counterpoint because there are people with incomes the size of a small country, and they are still striving for money. Given the diminishing utility of familiar pleasures, I think its likely that constantly reaching for "more" is the norm, rather than the exception.
But that's different from basic income. The idea with basic income is that you shouldn't fear dying of hunger and being homeless because you literally can't pay, but at the same time you will have to work if you want that plasma TV and iPhone on top of your basic survival money. Basic income should give everyone just about enough to survive and pay rent, but not enough to have a high quality life that most people want.
Food and shelter are limited resources which cannot be given freely. If the cost is not remunerated to the provider (in this case government) it imposes an unsustainable burden on the provider to find new resources. There are only so many houses that can be built on this planet and only so many people willing to do it.
And how is it that there coincidentally is just precisely that much to go around? You're buying into a false assumption that's built into American culture, that no one really deserves anything unless they win it through labor.
I'd go as far as saying that it is a liberal (in the sense classical liberal) idea.
Basic income recognizes the idea of a labor market, but admits that this market is neither pure nor perfect: the jobs seeker are in an unstable situation that they have to get out of to pay their bills.
Therefore the employer has an edge in the market.
By decoupling the revenu and the employment, the job seekers can make better decision for themselves.
There's a false equivalence between basic income and communism in your reasoning. Under failing communistic systems, that fixed income was generally the only allowed income, whereas basic income is guaranteed at a minimum level with other income allowed.
The capitalistic harnessing of greed still applies in the basic income situation - i.e. the motivation of going to work to get more income is still in effect.
I don't think this is a great argument without the data to back it up. People are operating at the gut level and, well, that's not the right level to disabuse powerful economic ideas.
> I just think that socialism and communism (which basic income basically is - it's paid for by the working class) ultimately leads to the destruction of the economy.
Trouble is, isn't some form of socialism inevitable? As automation continues to progress, more and more no-to-little-skill types are eliminated which then requires people to gain further education and experience to continue to qualify for some type of job. At some point we're going to automate so much that you'll essentially have to be an expert in a field to be employable.
At least that's how it looks like to me. Today socialism doesn't work (at least to a degree; some socialism-like services I could see working today like health care) but in the future where every job but the ones with the highest skill requirements are automated, what do you do?
I think one of the main arguments I've heard for basic income is that welfare is a pit of failure. Where you can make more on welfare then you can at a minimum wage job.
However, if you have a basic income that "replaces" welfare then no matter what job you get you always make more money. So it's better to have the basic income and work then to just have the basic income.
Of course the problem is MUCH more complex than that, and that is also dependent on replacing welfare not adding basic on top of welfare. Hence the research but this is the basic idea I grab onto to think of how a basic income could be better then welfare.
My gut feeling is actually similar, but I'm not sure it's quite correct. One big difference from what you are describing is that it while reward is guaranteed, it is not fixed -- any earnings are on top of that. I can see how it might actually result in people being more productive -- or it might not, that's why an experiment like this is a nice thing to do.
Also it doesn't imply communal ownership. It does not even imply communal consumption decisions -- unlike, for example, government-provided services: people themselves decide what to pay for and how much.
Why is this a problem? The market allocates work, the market has decided that a large and growing number of people's work is worth $0, the market is still producing enough to keep everyone happy and fed.
Why should someone be incentivized to work when their work has no value?
Put another way, we have made an amazing collective achievement: 100% effort from 100% of people is no longer necessary or even desirable to maintain/improve standards of living. Life has collectively gotten much easier, and coerced labor (yes, starvation and homelessness due to unemployment are coercion) is no longer necessary.
It incentivizes breeding. The more resources are freely available the more our population will grow until we reach equilibrium. Although we usually overshoot and end up with a Malthusian outcome.
"Yet in all societies, even those that are most vicious, the tendency to a virtuous attachment is so strong, that there is a constant effort towards an increase of population. This constant effort as constantly tends to subject the lower classes of the society to distress and to prevent any great permanent amelioration of their condition".
— Malthus T.R. 1798. An Essay on the Principle of Population. Chapter II.
It's usually considered bad form to point this out, but there is no divine mandate that makes human breeding a process beyond the control of human societies.
We don't know what effect basic income would have on GDP, only that it would affect distribution of wealth.
Income equality might rise while GDP falls in a re-distributive system. High GDP does not imply high income equality. That graph is misleading in this context.
> the market has decided that a large and growing number of people's work is worth $0
Or rather is worth less than the legal minimum wage, which is not the same thing.
> Why should someone be incentivized to work when their work has no value?
Very few people's work has no value, especially if they're allowed to do what they like to do. Typically the problems arise when the value is lower than the costs involved (salary, ovehead of managing them, etc).
Reducing such costs should be a pretty important part of a basic income setup.
> coerced labor (yes, starvation and homelessness due to unemployment are coercion) is no longer necessary
The interesting question is what the end game is here. If we get to a situation where 100% effort from 100% of people is no longer necessary, but 100% effort from _some_ people is still necessary, how do you ensure that the people who still need to work keep doing so? And how will those people feel about it and what will the try to do as a result? A worst-case-ish scenario that seems all too likely is bans on emigration of "productive citizens" (defined as the ones whose 100%, or even 80%, effort is in fact still needed) who would otherwise decamp for other countries with lower taxes.
It could be argued that there are many other aspects of human nature that would drive many (but certainly not all) people to work and earn increase their income - such as altruism, ambition, personal goals, greed, vanity, wanderlust, nest-building (e.g. wanting a bigger house), etc
I don't think this is equivalent to socialism and communism _at all_. Socialism and communism propose an alternate _structure_ for the economy - one of state-directed planning. This has been demonstrated to fail pretty spectacularly.
Basic income is an extension of the welfare state, which is itself a capitalist construct. It does not presuppose a state-planned economy or really threaten capital ownership or free exchange at all.
Yes, many communist countries have attempted some kind of unconditional income. Was this what sapped people's desire to work? Not really. What sapped their desire was a complete lack of a reward structure. A universal income doesn't destroy the reward structure; it destroys the penalty structure. The big question is whether or not the economy survives that.
On top of that, though, most communist economies imploded because decoupling production from market forces also destroyed incentives towards efficiency, innovation, and satisfying demand. Those are the biggest failures of the state economy and those are not related to universal income at all.
Aside from all the other stuff that people are pointing out, the 'human nature' and motivation argument is a bit stale at this point. We existed in communal hunter-gatherer societies for millennia before our current system emerged, and tons of research has shown that money is a cosnsitently bad motivator for creative productivity. People like pretty pictures so here's an old RSA animate on the issue: https://www.youtube.com/watch?v=u6XAPnuFjJc
There are shortcomings with ideas like basic income, but I don't think the ones you've mentioned are particularly valid.
Things got fiddled a bit here with the comments, but this is my response to "how can we increase prosperity for everyone?", although it's probably more a political problem than a startup one.
Maybe it's just me that has noticed it in the past few years, but "fixing housing in the US" is looming large on my list of things to improve.
It's not just San Francisco - the same debates are playing out in places like Boulder, or even here in Bend.
I wonder what basic income would do to cost of living? If everyone ends up with x amount of guaranteed income, does the cost of living eventually rise by the same amount across the board and basically negate it? It seems like rent-seeking behavior would come in to play here.
I often have the same inclination of thought with regards to university education and government-guaranteed student loans. If I'm a university executive, and I know that the average student can afford $X, and I know the average student can also receive a guaranteed $Y in student loans... Why would I not set my price at $(X+Y) and take the full rent that I can?
Can you explain why "price creep" will not occur, i.e., universities increasing their prices with small amounts (say $10 a year), so that eventually, all of them will end up at (X+Y)$ ?
According to a study be the federal reserve, it actually is happening right now. Education isn't a commodity product so this kind of pricing doesn't require collusion between different schools.
Inflation is the obvious issue here IMO. If basic income is X, then X really just becomes the new zero. We either need to provide products themselves (free food, housing, healthcare) or somehow lock the price of those things. I suspect both of those tactics will have identical challenges in terms of implementation though.
I continue to believe that the best way of 'locking' a price is to ensure that the market remains with the correct supply to buyer ratio.
As an example: to decrease the cost of rent in a city, an increase in rent-able locations and attached commercial business and non-retail jobs need to be in those locations.
This is also related to suggestions that say controlling medical care could be achieved by allowing more agents at all (doctors or not) to be able to treat obvious conditions. I agree that in the short term the suggestion would be viable, were it not for regulations; however I think that artificial diagnosis neural networks will probably achieve adoption before the regulations catch up.
I think the cost of a lot of basic goods and services would fall. Employers would only need to offer relatively modest wages because the marginal value of those wages would be so much higher. This could drive down labour costs without driving down net pay for low wage workers. Basically a worker on $1,000/Mo now might be on $600/mo basic income and $600 wage after (fantasy numbers). This could make low wage workers much more affordable for employers leading to more employment and cheaper goods and services, leading to lower cost of living. A win for employees, won for employers and win for customers. Of course this is an idealised scenario, it would all need to be funded from higher overall taxation.
This is exactly wrong. The cost basic goods would increase. Basic Income would immediately have an inflationary effect as the money supply for these good would be expanded drastically.
The Employer would not see as much benefit as you'd think as presumably he would be amongst the class of people/entities (including the middle class, upper class, and corporation) which would be paying for this indirectly in the form of taxes.
Alternatively, if Basic income is debt finance (and not financed directly through taxes), incurring more debt also has inflationary effects.
It may or may not be wrong. There will definitely be some inflation, but there will also be an equilibrium. It is also a possibility that if the UBI is adjusted accordingly, that the relative costs of things will remain roughly the same.
As for whether employers will benefit, recognize that demand will also increase when those who were formerly impoverished begin consuming things. It is direct and distributed economic stimulus.
I don't suppose it's guaranteed that the overall incomes of the lowest earners would actualy increase though. Maybe they would, but it's possible wages will fall and rents will rise to cancel that out.
You may well be right about employers. Basic income isn't going to wish away all the problems of the poor. The main benefits are likely to be a simpler, fairer and more efficient benefits system and more opportunities for employment.
3D printing and market forces will take care of raised prices. Cost of production are going down. If company X decides to sell for 100% increase company Y will see an opportunity to undercut and we will continue with our race to the bottom. If no one offers value a new company Z will enter the market and provide it or people will just start manufacturing/growing it at home.
Inflation only occurs with increased supply of new money into the system so whether or not there is inflation depends entirely where the money to pay for BI comes from.
Of course it does, it's the same thing with minimum wage increases. When businesses have to pay all of their employees more, that just doesn't come out of their pockets. Price increases across the board are passed down to customers.
The money for the basic income comes from taxation. Even though everyone would get it, higher tax rates on people with middle or high incomes would mean they were no better off, or worse off. This isn't supposed to be a way to make everyone $x per month better off, it's a way to change incentives and replace welfare.
What I'm curious about is what's stopping a large portion of the population from simply quitting their jobs to live off basic income, thus decreasing the potential pool from which taxes to pay for basic income can be extracted?
If it really worked out like you say it would, where people with middle or high incomes are no better off, I wonder what they would think when suddenly large swathes of the population are able to live off the dole without busting their humps.
>thus decreasing the potential pool from which taxes to pay for basic income can be extracted.
Basic income proposals usually work something like this (numbers all made up, but close to those I've seen):
Each person gets something around the poverty level (say $10k -$15k per year). The taxes that are raised to pay for it would increase gradually based on income up so that it would be a wash for someone making $55k a year, and once you start making more than $75k a year, you start paying more.
If you look at those numbers anyone who decides they can live off of the basic income was unlikely to have been making enough to pay any federal income tax at all, much less enough to have been contributing to the extra UBI tax.
> where people with middle or high incomes are no better off, I wonder what they would think when suddenly large swathes of the population are able to live off the dole without busting their humps.
They will be living off the dole at the poverty level, not living middle class lifestyles.
But remember, living off the dole also means not contributing anything back to society. These people could be doing something of value, but are incentivized not to.
It's not really quite that simple though. You have to look at a UBI in comparison to our current system.
How many more people will quit their jobs instead of working if we replace our current system with a UBI? Small scale preliminary studies seem to indicate not that many.
>But remember, living off the dole also means not contributing anything back to society. These people could be doing something of value, but are incentivized not to.
That's not true at all unless you think people on welfare and disability are incapable of contributing anything back to society.
Lets say we have a single parent who can't afford day care. He parks his kids in front of the TV, or pawns them off on inattentive relatives, so he can go to McDonald's 30 hours a week and make $8 an hour. I think that he would contribute more to society in the long term by staying home and raising his kids than he does making minimum wage at McDonald's.
Then we look at the economic upsides to a UBI. It is likely that a UBI will reduce crime. It will also likely encourage more entrepreneurial risk taking. And like in my previous example, a UBI will allow more parents to stay home and spend time with their children, potentially allowing the children to earn more money in the future.
Countries with generous (compared to USA) per circumstance income transfers don't generally have a big problem with this. People have a pretty basic need to feel useful to society, and for status. It does raise the bargaining position of the employee on the job market somewhat for the low end of the job market. But it's just much better for everybody if cleaners and janitors get respected a little more by their employers and aren't just a pink slip away from the gutter.
And UBI will do better in this respect than per circumstance income transfers since you get to keep all the money you earn on top of it.
If someone is willing to do this, they are likely to be people who currently are on low incomes and thus unlikely to be paying much tax if any. I think it would have the opposite effect though. In most countries, the welfare system harshly punishes people who do a small amount of work, withdrawing benefit at a very high marginal rate. This is a massive disincentive to finding work. With a basic income, people can for example do voluntary work. People on sickness benefit can gradually try to go back into work, doing a few hours per week. If you can top up your income without being penalised for it I reckon quite a lot of people currently on welfare would start working a little.
It's too early to say -- we're obviously not experts ourselves on this kind of research, so we're going to look to the researcher who joins us to first design the study.
Once again, the discussion about the basic income is framed as "would people work or sit on their ass". This is a red herring. People receive free stuff all the time, from nature, from technology. In general, free things do not make people worse off, it's just more widely discussed, as are instances of men biting dogs.
What people end up doing on a basic income is far less relevant than what people end up not doing due to the taxation burden of funding a basic income. It's telling that the post contains no mention whatsoever of studying the impact of the taxation.
If I am a participant in this subject and I am told that I will be receiving Basic Income for 5 years I might act differently compared to if I was told that I am entitled to Basic Income for the rest of my life.
The observation bias alone might motivate people to do work and strive to achieve something with all of their time. Or, it might even cause them to lie about the things they're working on.
It will be very interesting to see how they design the study, I think it has to be a little bit more nuanced than "Here's 2000 dollars a month for 5 years, bye."
Yeah if it's 5 years i would be very worried about finding employment the day after and having a 5-year gap in my resume. Would the hiring manager care that I was working on my art?
Why would there be a gap in your resume? Just because you receive a basic income doesn't mean you won't work. I suppose there will be some who would minimize their lifestyle to live off of the basic income but I suspect many will continue to earn far more.
If it's only 5 years you will feel pressured to find a conventional job that would look good to whoever would be reading your resume if/when you apply for a new job after the experiment is over. If it was guaranteed for life you might do other stuff, not necessarily non-income-producing, but how it would look to HR would be irrelevant.
Seems to me that five years is a long time. I could work on a degree for the first four. Or I could work on retraining myself for the first two. Or I could just take the first six months off.
Five years is a long enough time to let you do whatever you're going to decide to do with the first part, and then work on recovering employability/resume credibility/whatever with the last part. An interesting question would be how peoples' behavior changes through the five years, though...
One way to fix that problem is make the experiment last the entire lifetime of the "test subjects". It would be more expensive, but much more informative. They aren't worrying about what they'll do after the money runs out. Randomly pick X people who begin to receive their basic income at 18 years old and let them do whatever they want with it. You'd probably want to provide full health care too. Of course it's not a perfect experiment because they're surrounded by people who aren't receiving a basic income, which could affect their attitudes and actions in many ways.
And if you wanted to extend the experiment a bit you could create stipulations like, any literature, art, music, etc. that they produce must go into the public domain. (They could still make money off it in other ways if they want).
Opinions on Basic Income aside, if this were ever to become a reality in the US I'd like to see it be added to the US Constitution as an amendment because it seems like such a fundamental change to the structure and thinking of how government works.
What I want to know is whether Basic Income implemented with our current housing and laws about land ownership will just run afoul of the Henry George Theorem:
IE, the aggregate value of public spending in an area tends to soak into the land value -- give everybody $X,000 a year and the landlords will dutifully raise annual rents by $X,000.
A public good is a technical term in economics. One useful way of categorizing goods is to place them along two axes - excludability and rivalry. Public goods are categorized non-excludable and non-rival. Non-excludable means you can't stop people who don't pay for the good from consuming it - like clean air. Non-rival means that one person's consumption of a good does not affect another person's. Digital goods are typically non-rival.
A cash transfer doesn't really meet these conditions - it's excludable, in that you can restrict access to citizens or to whomever. And it's rival - there are only so many dollars to go around.
That said, I think inflation is a very real concern for any basic income scheme.
Agreed. Another way of looking at it is that a pure cash exchange would filter through the market demand for all goods, and as a result the nominal value of all goods would increase through the mechanism of inflation, not just land rents per the Henry George Theorem. However, there is an input consideration of identifying where this cash infusion is coming from, whether from printing money or from selling accrued assets on the open market (as what the YCombinator crew would probably be doing, if they don't already have liquid assets devoted to this endeavor).
True, although it aligns with the Law of Rent. And the Law of Rent is what shows that, when there is no freely available land, then land value gains tend to nullify any nominal increases in wages or interest from production.
The only caveat is that there are other possible "rentiers" that can capture the rent before it winds up in land. Such as patents, barriers to entry, etc.
But exclusive use of land is the first and most basic barrier to entry.
Partially it will, but mostly it won't, because it won't be an aggregate change, as you will need to increase taxes to the middle and upper income thresholds in order to pay it.
It also is being given people, not directly to the area, so if rents are raised in one area, people can move away from it. This isn't the case with infrastructure improvements such as road/rail/schools/electricity improvements.
The likely effect will be that cheap housing will increase in price, but it will be bounded by moderate housing (i.e. for those people who don't see a real terms change in their post-tax/benefits income).
The other point, is that that the sector most dramatically affected by this will be the homeless and unemployed.
An interesting question is to what extent the basic income should be linked to inflation and differential cost of living (e.g. should it be more for people who live in San Francisco as San Francisco is expensive, or should it be equal because we don't care where people live).
The CoL problem is currently "solved" in Unemployment and Social Security by tying it to past wages (which probably correlate with this). I think we do need to replicate that in some way.
A similar metric might be to tie it to the minimum wage of a region, which will hopefully capture inflation and CoL.
It works as long as the land isn't effectively free.
The theorem's theoretical basis is pretty spherical-cow: a government that governs land centered on a single point with people trying to minimize distance to the space. (Which is to say, it models best to the idea of a city-state rather than a federal government.)
I think it will. To avoid it, a significant portion of Basic Income would have to be paid out as goods and services vouchers with redemption limits.
Rather than getting $50 a day as cash, you might get 4 nutritionally balanced but generally unpalatable meal rations, two payment vouchers for one day in one state-owned 250 sq.ft. housing capsule, 30 kWh of metered electricity, 100 gallons of potable water, 10 Gb of network bandwidth, etc. But you put redemption limits in place so that you can't use vouchers to pay for more than 1000 sq.ft. of capsules, 60 kWh of electricity, 200 gallons of water, or 20 Gb of electricity per day. It places limits on the amount of benefit any single person could suck out of the system at the expense of everyone else in it.
The state would also have to be a major wholesale buyer for those things, and sometimes also set up and spin off new competitive suppliers, otherwise the incumbent suppliers might be able to jack up the price and capture a portion of the benefits intended for the end consumer. Taxes and subsidies have a different mechanism of action economically than the entry of a new supplier firm.
If the basic tenants and studies that have called basic income into the forefront are to be believed (and the actual spectre of central state control that people are afraid of in some circumstances is real, and it is), the best way to benefit people in need is to give them cash. Most of the time, people spend it on things they need. If they don't, they are either suffering from a mental or addiction issue and need treatment, or they made mistakes and its their own damn fault, and nobody needs to pity them.
But on a grand scale, where everybody knows that everyone is getting the same amount of free money, the market adjusts accordingly, within minutes.
You can give 20 people $100 each to spend as they see fit, and it wouldn't affect the price of a Happy Meal. But if you give 100000 people $100 each, you can bet that the price of that food is going up a bit, just because more people can more easily afford a higher price.
Subsidy affects market equilibria differently than using the same amount of resources to lower costs or increase supplier firms, or do industry-advocacy advertising.
This is true, however, at a point in time where we are desperately attempting to induce inflation in anything but assets (which was the end result of QE), perhaps "helicopter money" in the form of a UBI would end up stimulating more demand than QE did. Sure, we would experience some mild inflation in basic goods prices, but in net, I think it would be a benefit. Isn't the Fed trying to stimulate inflation anyways, and utterly failing?
"We"? I do not share your opinion that the price inflation resulting from monetary policy is in any way a good thing.
You can't stimulate demand with a subsidy. You can't depress demand with a tax. Both of those things are manipulations to the natural equilibrium price, and generate guaranteed deadweight losses.
The only way to "stimulate demand" is by changing what people's desires and priorities, such as by advertising. People have to want now-things more than potential future-things. Tricking them by pretending that they can have both more now and more later and then revealing only after they buy that they will actually have less later degrades trust, which causes more saving and stockpiling, which reduces the velocity of commerce. That reduces the economic leverage of controlling the size of the money supply.
You can't fool all the people all the time, and the ones you can't fool leak their information through the market. Most people know by now that the market can stay irrational longer than you can remain solvent. But we also know that you don't need to outrun the tiger, you just need to outrun your friend. So consumers are paying down debt, and companies are hoarding cash, hoping to be the best-prepared survivors when the whole house of cards falls. Fed policy is not taking into account the fact that it can't just print more confidence.
Will it cause inflation, probably. But they don't have to live in the most expensive areas. They can move to a cheaper area. There will be places above and below the inflation curve. Housing is the largest expense so other things would not be affected as much.
I am surprised that it's for only 1 researcher though. The data on startup founders seems to encourage 2 or more people to share the burden and have someone to more explicitly bounce ideas off of. It would seem to be the case that fundamental research like this would also benefit from the cofounder type setup.
The researcher we choose will be fully a part of YCR / YC. He or she will be able to bounce ideas off us at any point, and we will help out however is requested.
One of the biggest fallacies of the BI movement is they suggest that when AI automates many menial jobs it will lead to mass unemployment. This assumes that the average person is incapable of more skilled labor, when history has shown time and again that people adapt to the changing workforce. Yes there can be lag but it's not insurmountable.
Another problem I have with BI is it equally distributes assistance with no prejudice to those more needy, i.e. the elderly, the disabled, the mentally ill, etc. So you take many funds away from people such as 70+ year olds who are on medication, SS, assisted living (which cost >> BI provides) and distribute available funds to able-bodied people who are "discovering themselves".
Further, having considerable able-bodied people leave the workforce by choice delays global human progress and achievement.
Instead, I am for additional public-sector money being spent on country- and global-level goals which the private sector cannot achieve nor make profitable. These include environmental, energy, medical, transportation, and infrastructure research. By putting public money into these research fields (which is hard/impossible to make profitable) you incentivize progress in areas which further human progress that cannot be met through private means. If you instead incentivize able-bodies to not work, not only do you take money away from needy (not much savings in admin costs) but you delay human progress.
My worry about automation is less about people being left without jobs and more about that production ends up concentrated behind those with the capital to purchase automation tools.
Canada has demonstrated that (single payer) public health insurance works better than America's current public/private model while our taxes are comparable to living in California. Yet the US political system has yet to even be close to adopting it. Data doesn't always translate to political persuasion unfortunately.
I'd expect Canada to adopt basic income before the US does as well and possibly provide the data this study is looking for on a much larger and contextually relevant scale.
I'm very skeptical of basic income as commonly understood.
The typical basic income program I've seen goes something like this: give every person in the country $10k to live on, no strings attached. [a]
1) As defined above, this is horribly inefficient and expensive. I, a software engineer in Silicon Valley, would receive this $10k. How does this benefit society? I already make over $100k; I don't need additional income support.
2) As noted elsewhere in this thread, the US has 300M residents; naively the cost of this program would be $3T!
3) If you do start to add guidelines for poverty, etc., you just reproduce the current welfare system that exists in the US, which balances available government revenue against our desire to help poor people.
[a] https://en.wikipedia.org/wiki/Basic_income, "all citizens or residents of a country regularly receive an unconditional sum of money ... in addition to any income received from elsewhere"
Presumably progressive tax increases would accompany a guaranteed income such that some percentage of the population would get no net benefit, at the least. The point is that it's much cheaper to administer than traditional safety net programs and less nannyish.
I've always heard it pitched as some sort of sliding scale. Basically you'd get a certain amount based on your level of current employment but it doesn't require many of the checks Welfare has. I've also seen people say doing a basic income then eliminate food stamps and welfare and it ends up being a cost savings.
It sounds good in theory that this very odd system of income could end up _saving_ us money, but I don't actually know if that's true and is probably highly dependent on whatever scale is used when deciding how much basic income a person receives.
I'm also a bit skeptical, which is why there is a need for experimentation on the topic.
Aside from that:
1. You'd have the freedom to quit your job without fearing homelessness or hunger. Suddenly, you're a lot less stressed.
2. We are wasting trillions on making new fighter jets or new wars we don't need, surely we can cut those programs and then spare a few trillion for something more useful.
3. An open question, I think. The guidelines for poverty would likely have to be open to change in order for a UBI to work.
it's more or less negative tax; part of your income is already tax-free, BI is just stretching the idea the other way than it usually happens. also don't forget to cut the cost of most welfare - BI should handle most of it. it might actually cost less if welfare administration is expensive enough!
"As noted elsewhere in this thread, the US has 300M residents; naively the cost of this program would be $3T!"
So you raise taxes. For the people who don't need the extra $10k... well, that's OK, because their taxes will go up by some amount. Possibly more than $10k, possibly less. It depends on how much they earn.
You do still have the problem of determining what the progressive tax looks like, but this is a simpler problem than administering a large number of social welfare programs, all with their own eligibility criteria.
Naively, a $3T program would increase the US budget by around 50% even if you eliminated all existing social security and unemployment benefits.
I can't see determining a politically acceptable and GDP-neutral progressive tax that finds an average of 50% extra per person as a simple problem, and that's even before you start dealing with the backlash from equally unhappy people whose existing welfare or social security program entitlements add up to more than $10k per annum...
Personally, I think one way to handle funding is that current tax deductions might count in some form as coming 'from' basic income so if you were already making significant income, then maybe there would be no additional government expenditure.
Negative income taxes (linked in other comments) is similar to this idea.
The catch is very simple; you receive $10k, but as your income is $100k+, your income tax will go up by $10k + $X.
1) You getting the $10k benefits society in that we don't add any administration on the front end - deposits go to everyone, and then the taxing back step is already being done (as you're already filing taxes). So cheaper administration cost overall than doing a means test or whatever.
2) A basic income has to be introduced with corresponding tax increases. For some people the basic income is a net positive (if you're currently poor, broadly). For others it's a wash (middle class, by whatever definition). For others (like you and me, most likely) taxes will go up to pay for the poor. But then there are all the savings basic income leads to - fewer administration costs, fewer costs of poverty (like homelessness and crime), etc.
3) Right, don't do that. Handle it through taxation at the back end.
1) How is this more inefficient than our existing welfare system? Seems a lot more efficient to give everyone money rather than spend $100M on bureaucratic infrastructure for verification and employment tracking.
2) It benefits society because you no longer have to work to live. This affects how you make decisions about your employment. You would be more likely to change jobs when you're unhappy, for example. This is good.
3) Whether you make $40k, $100k, or $500k, the $10k isn't there to prove "additional income support". The system could be set up so that after basic income is implemented, your disposable income is the same as it was before--people making $40k wouldn't have $10k in free money to spend, because their taxes would go up $10k a year, for example. The key here is that if they choose not to work for some period of time, they can. That's not how I think it ought to be implemented, but the principle is true.
4) If government handed out $10k to everyone, they could tax everyone $10k and it would be like nothing happened. The difference in implementation would be that the additional taxes would be progressive, while the benefits are flat. So if you make over $100k a year, you might be taxed $15k more than you were before, but you would also receive $10k. Without a doubt, an effective basic income would require a more progressive tax structure than what we have.
5) "If you do start to add guidelines for poverty, etc.," not familiar with this reference, but presumably a basic income would eliminate extreme poverty. Do you mean like, for example, what would someone who was physically incapable of working receive? Is the basic income enough?
> Whether you make $40k, $100k, or $500k, the $10k isn't there to prove "additional income support". The system could be set up so that after basic income is implemented, your disposable income is the same as it was before--people making $40k wouldn't have $10k in free money to spend, because their taxes would go up $10k a year, for example.
> So if you make over $100k a year, you might be taxed $15k more than you were before, but you would also receive $10k.
So basically as a middle class person, I don't benefit at all, I may even lose money, but some kid who has no income and wants to live in his parents basement gets $10k/yr for contributing nothing to society? Am I understanding this correctly?
The upper class won't care - this is pennies to them, but this is going to bite the middle class badly and completely change their incentives to avoiding getting housing and living as cheaply as possible to minimize or eliminate work.
You always have to think very carefully about the incentives you create with something like this. This seems to create very bad incentives to me, incentives which would have caused me to make very, very different decisions in life drawing me away from any sort of productivity in society.
I'm not strictly against this idea, but as you've presented it, I can't see a way this would ever be implemented, how would you sell it to the middle class?
The idea is that the taxes scale, so for the middle class the tax is negligible. You get $10k, and your taxes are increased by $12k if you're making less than $100k.
As for teenagers sitting in their parents basement - The thought is that $10k lets them live and do anything they please instead of being tied to a shitty job or their parents basement. In theory they will choose to contribute to society in some way and not just play video games all day.
But that is what we need to test - Will people choose to play video games and watch TV all day, or choose something fulfilling and 'productive.' Then we have to redefine productive, some other comments in this thread speak about that.
> So basically as a middle class person, I don't benefit at all, I may even lose money, but some kid who has no income and wants to live in his parents basement gets $10k/yr for contributing nothing to society? Am I understanding this correctly?
The benefit for you is that you'd be living in a better society. Hopefully, you'd see reductions in crime, improvements in various service jobs, etc.
That kid gets $10k/year, sure, but then again lots of people already have the means to live in their parents' basements. Most of them prefer not to do so.
However, there'll be other people getting that $10k/year. Single mothers could spend more time with their children. More people would become educated. The job market would become more liquid for employees, hopefully improving working conditions.
It might seem more efficient to give everyone money rather than spend on bureaucratic infrastructure until you've realised just how many adults don't work or pay income tax or claim welfare. The choice between raising taxes or cutting incomes for the people that do really need the welfare payments isn't a pretty one...
1.) We'd have to implement it so that starting somewhere on the pay scale, taxes increase so that by some point you pay back to full $10k you received. Naively: $25k income you pay back $1000 of the $10k in taxes at $50k, pay back $2500, etc. That way you, making over $100k, essentially get $0 basic income by the end of the year.
2.) You probably have to say "everyone over 18 gets $10k, each child up to 3 per family gets $2k"...or something similar. Getting $10k per child creates some crazy incentives. (2010 there was roughly 70m people under 18, so it's only $2.38 trillion! ;)
3.) You can probably remove a ton of welfare programs if you do this, but not all. You can't completely remove the safety net, but a lot few people should have to be serviced by said net.
> Naively: $25k income you pay back $1000 of the $10k in taxes at $50k, pay back $2500, etc. That way you, making over $100k, essentially get $0 basic income by the end of the year.
If I recall correctly about 50k is median income for the working population, so you're still paying most of your population at least $5000. And that's just the currently working population, there are so many non-working adults who will also want the free money, I can envision the divorces being had for an extra $10k right now... the incentives this creates are very bad.
No non-strawman BI scheme that I have seen proposes just giving everybody the same net basic income, somehow pulling the money out of thin air. Everyone's gross income would rise but middle to high income households would have their income taxation increase to compensate.
> 1) As defined above, this is horribly inefficient and expensive. I, a software engineer in Silicon Valley, would receive this $10k. How does this benefit society? I already make over $100k; I don't need additional income support.
So give basic income only to people doing less than the basic income, and take it away once you are doing more. That's how it's been implemented in some countries, and I don't see any reason not to follow this scheme.
The point is that determining who is worthy or not is difficult and just giving it to everyone reduces administrative costs. Tax rates for high earners can be increased so above a certain point the benefit would be outweighed by additional taxes.
Interesting project, but personally I would be more interested to see the funding of a study on "basic financial freedom".
The test is quite similar, but instead of giving them a basic income participants are still required create their own income - however, they no longer have to pay taxes on their income. They are encouraged to create businesses and those businesses are also free from tax, and those employed by said businesses are also free from tax.
50 years from now, I think it will seem ridiculous that we used to allow government to take our money ;)
So are they no longer allowed to use public roads? How about public utilities? Does the fire department show up at their "un taxed" businesses, how about the police? Can they hire students that received their education from public schools? The fact that there existed a group of people that posted that modern society would be even remotely possible without government is far more likely to be seen as ridiculous in 50 years.
My personal viewpoint is that you should be guaranteed survival and some opportunity by society, but not guaranteed income.
That is, you should get food, shelter, medical care, and education for free (this also implies free child care). But you don't get to buy a cell phone or an XBox or whatever -- you have to work for that.
In other words, I think basic income is jumping the gun a bit. Who is going to PAY for this, if we're not even willing to pay for the necessities of life?
People still die from untreated diseases, and I believe there is significant research to show that poor health CAUSES poverty (rather than poverty causing poor health). If people are healthy they will likely be more productive members of society.
Basic Income is probably the most efficient way of giving everybody food & shelter. Giving everybody food and shelter through standard government processes would probably cost way more than $10K/year.
The problem is the cost... If we can't pay for people's health care, I wonder why we think we can pay for everyone's living expenses.
Suppose one person needs $100K to survive. Is it moral to let that person die, and instead give $10K to 10 people as basic income? That's a real resource allocation decision that has to be made.
I will consider the argument that the government would be less efficient at providing food and shelter than giving people the money to do so... that could possibly be true on a large scale.
If you try to micromanage peoples' spending, you will spend more and you will hurt them. Believing that poor people will waste their money on cell phones and XBoxes is a common justification for trying to attack them, but this sentiment is evil disguising itself as morality. For example, poor people need cell phones because it's impossible to get a job without a stable phone number.
My assumption about basic income was always that at it's core, it provides the money for food and shelter. This reduces bureaucratic overhead in terms of trying to provide people those goods, and gives them the freedom to make their own choices and not have to work to survive, and the government is no longer forced to create the infrastructure to try to find ways to provide food and shelter. This may, however, require work in terms of providing affordable housing options to everyone, but I don't think you have to solve one problem first to solve the other.
Health Care and Education are a separate (but still related and important) set of problems. Both of those require greater infrastructure on the part of the government to provide effective solutions, so again this is a problem that also requires a lot of thought and effort, but providing basic income doesn't seem like it would preclude health care/education reform. Nor does it seem like solving health care and education reform would change the structure or overall effects of a basic income program; they're simply additional solutions that would certainly improve our quality of life and possibly the efficacy of the program.
OK, well this is a good thing for YC to fund an experiment to test.
If given basic income, do people spend money on food and shelter, and plan out a good life, or do they live day-to-day and remain a burden on society?
This is why I think education, for example, comes before basic income. Without education, you can easily imagine people remaining homeless despite the income.
Of course some people will succeed and some won't -- the question is the ratio.
Some rich people are scrupulous; some rich people waste their money. I don't see any reason to believe that poor people are any different. I think we can still help those people with education, etc. without wasting taxpayer dollars. But how much would be "wasted" is of course an open question.
I am thrilled to see that there is some private interest in exploring the possibility of BI/UBI experimentally within the conditions of the USA. A properly executed study of this type could be definitive in the shaping of our society.
I expect that some form of radical redistribution of resources is going to be the next modality of human civilization, and getting started on the colossally difficult questions (how to ease existential angst of purposelessness and how to kill the work ethic) is just as important as the very-difficult particulars of implementation (how the heck do we find what the right amount of money is, and how do we pay for it) and measurements of efficacy.
I'm extremely interested in the opportunity to lead or be a part of this research group, and will be applying in the coming days.
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[ 2.4 ms ] story [ 258 ms ] threadI think basic income is important to do but decreasing the cost of living is a critical component as well. I'd be very interested to hear thoughts from the HN community about what we could be doing here.
Edit: please respond in the main thread so we don't get an unbalanced comment tree. I'll be in the discussion here for a couple hours, but if it feels like there's momentum in the ideas we might do a proper Ask HN about it next week.
https://en.wikipedia.org/wiki/Mincome http://news.nationalpost.com/full-comment/colby-cosh-what-th...
The experiment allowed households to opt out, and after a while most did. However this result is convoluted by the fact that the income was not inflation indexed, and inflation rates in Canada in the 1970s got quite high.
The main conclusion from this is, basic income is going to have to be VERY carefully implemented to work at all.
In fact, the reason people are suffering now is the level of monetary inflation (Which has been high going back to the Reagan era, so it's the fault of both parties. This is not a partisan issue- it's an economics one. And the problem is that politicians get elected by promising stuff, but to produce the stuff, they can't raise taxes, so they do the equivalent by printing money.)
I don't think any respectable economist actually agrees with you on that. The increase in the monetary base during QE was paired with a collapse in the money multiplier. Most of that cash stayed in reserve at banks (see 'Repeat After Me: Banks Cannot And Do Not "Lend Out" Reserves'). Price inflation is nowhere in sight; inflation is below historic levels and even slightly below the Fed's inflation target.
As for the original question, the general idea seems to be eliminating most other forms of government welfare programs (TANF, SNAP, social security, etc.) since basic income will replace them, along with redistributive increases in income/capital gains/wealth taxes.
This is a very misleading use of terminology. It is true that banks can't lend out "reserves", if by "reserves" you mean the 3% reserve that banks in the "upper reserve tranche" at the Fed (which is basically any bank you've ever heard of) have to keep in their accounts at the Fed and not lend out.
But the actual balances of those banks at the Fed are far in excess of that 3% reserve requirement; they are being kept in "reserve" by the banks not because the Fed requires them to but because the banks choose not to lend it out. Why would they do that? They aren't saying, at least not publicly, but the obvious hypothesis is that it's because their expected rate of return from lending it is lower than the rate of interest the Fed pays on their balances. In other words, they are worried about borrowers defaulting and driving the banks into insolvency and then bankruptcy, and the government refusing to bail them out because it wouldn't be politically acceptable this time around.
So the reason inflation has been so low is that most of the several trillion dollars the Fed has printed in the last few years has never actually been put into circulation. (The doublespeak about "collapse of the money multiplier" is just a roundabout way of saying the same thing.) Which says nothing at all about what would happen if that amount of money were put into circulation, as it certainly would be if printed money was used to fund a basic income program instead of "quantitative easing".
http://igps.victoria.ac.nz/WelfareWorkingGroup/Downloads/Wor...
Key takeaways:
"An income of $300 per week is just over the average (mean) benefit income – therefore a plausible minimum income. However, paying a guaranteed income of $300 per week to every New Zealander aged 16 years and over, excluding superannuitants, comes at considerable fiscal cost. The fiscal cost of the GMI proposed in the first model (Model 1) is $44.5 billion (including the cost of all social transfers – in particular, New Zealand Superannuation payments, would cost $55.5 billion), requiring a flat personal tax rate of approximately 45.4%. Note that this tax rate and the others considered below are cost-neutral – not fiscally neutral – as personal taxes currently raise approximately $6 billion in excess of current social assistance costs."
"Although the Gini coefficient improves under all models, many beneficiaries (including the disabled, carers and sole parents) currently receive more than $300 per week and would be made financially worse off under a GMI scheme. Therefore the GMIs considered could distribute money away from those most in need of government assistance and toward those who have choices and opportunities but choose not to work."
Something to keep in mind when discussing this topic.
> In 2015, over 59 million Americans will receive almost $870 billion in Social Security benefits.
Therefore basic income would be about 2.3x the cost of social security but 3.4x as many people would benefit.
I have had a different thought on this in the past; Every child born should have $10K put into an account in their name on the day they are born. It will gain interest and grow until they are 18, then they get the money. And as an adult after 21, they are taxed at some rate to pay back the initial 10K that will then be deposited into the account of some other new baby.
[1] https://www.bankofamerica.com/deposits/bank-account-interest...
Its kinda funny how people who have money live by the mantra "It takes money to make money, but once you have money, money makes itself"
Yet any time you talk about investing on the behalf of others/society -- everyone laughs it off as impossible.
Your 401k comment gave me an idea for one potential tweak that would make a big difference. If there were a plan to collect a small yet reasonable tax over the course of, say, 10 years or so, to build up an initial pool to draw from, then it might be able to generate enough interest to sustain a continuous payout. Once payouts have started the initial tax might be relaxed or eliminated, though it would depend largely on population growth and how quickly the pool compounds.
But what you are really saying is put aside $10k and grow it through investments. Then withdraw the gains only, and make the $10k a withdraw-but-pay-back option.
No gains :(!
so is the core idea flawed, or just my vision on execution?
Sources: http://www.usgovernmentrevenue.com/federal_budget_detail
You can inflation adjust neither or both sides of the equation but not just one which is what you were doing.
If you want to pay for something using nominal growth you have to also accept the nominal growth in the cost. So in 20 years you will be able to fund 15,930 per year but that won't be enough anymore because that number will have risen.
Taking the extreme example where no one's net income is decreased and people below median get the full $10k net, you've already halved that number. I think most formulations of actually paying for such a guaranteed income would include some degree of reduction as you approach median and increased taxes at the high end of the income spectrum, further reducing the cost. As mentioned exhaustively, you also can subtract the cost of many of the pre-existing social programs because they get replaced by the guaranteed income.
Also, since the census is tasked with counting all people in the united states, it also includes non-citizen long-term visitors and illegal (or undocumented) immigrants.
So it's not quite as simple as latest census count * 10k. It's still quite a lot though.
Economics is not a zero-sum game and trying to treat it as one will always lead you astray.
P.S. If total US household income was 13 trillion and we assume that the top 1% took home half of that we can just tax the uber-super-mega rich at 50% and pay for a basic income for every man, woman, and child in the US.
I'm also willing to bet that those rich people will end up better off as the resulting economic spending boom circulates through the economy and ends up back in their pockets.
If current trends of automation continue there simply won't be many jobs (Foxconn is deploying a million robots right now to replace "cheap" Chinese workers). How long do you think society will last under those circumstances? Makes a 50% tax look like a bargain.
> "His view is strongly supported by the work of economist Andrew Oswald, who found that joblessness lasting six months or longer harms feelings of well-being and other measures of mental health about as much as the death of a spouse, and that little of this decline is due to the loss of income; instead, it arises from a loss of self-worth."
The idea being that a basic income is fine, but having people sit around idle probably isn't.
I don't know this would be too unrealistic for the study.
To what extent does Australian welfare gradually taper off as a means to incentivize saving, instead of punishing it?
The real problems come when everyone in the community is unemployed. We really need to work on new societal structures to make sure that we don't follow the same path our remote communities have fallen into.
Then again, it might remind them of their own failures and they get double drunk that night. I'm not sure.
negative income / social welfare are packaged in a way that telegraphs dependency and low self-worth.
[ I would also be really interested in seeing an economic analysis of how much money and time is spent on administering social welfare ]
Basic income needs to be marketed as a positive way : here's some money - it is your share of the basic wealth from the land/resources and the benefits of our technology to the country - do something useful with it.
[ I also wonder how many of those 'lazy-dole-bludgers' now on social welfare would have a better sense of self-worth, and actually get off their arse and do something useful if we didn't make it so clear to them they were total failures from school age ]
Changing this sort of culture once it has formed is really, really hard. People much more dedicated than me have poured in enormous resources without make a dent in the problem.
Imagine: You're 18 years old and your Dad gives you $500. He says, "You don't make any money and have to rely on me. Here is your spending money" or "You'll be making a lot of money (value) later on in life, this will help you kickstart it."
Hopefully, merely collecting a universal/basic income will not be similarly stigmatized.
And is this a problem? Societally speaking, shame and stigma are great motivators. If we remove them as motivation for work, will society really be better off?
I daresay society's great achievements are not derived from shame and stigma. What real benefit does society derive from meaningless jobs [1]? We've tried shame and stigma. We should see whether society is better off when the thinkers and doers are free to use their time thinking and doing what they feel called to think and do.
[0] http://cudl.lib.cam.ac.uk/view/MS-ADD-04004/1
[1] http://strikemag.org/bullshit-jobs/
I think a good source of data could be the population of retired people. I'm pretty sure if I could afford to be retired, I could easily keep busy the rest of my life.
Some stay busy napping. Some stay busy zoning on TV/internet. Some stay busy actually creating stuff.
All of them may believe themselves to be "busy"
That's a big part of what I wish I had more time for. My list of things I want to watch is long and growing all the time. If I were retired, I would love to be able to sit down and finally watch The Wire or Sopranos.
[1] http://freakonomics.com/2012/05/17/retirement-kills-a-new-ma...
It's actually true only for men.
I never said all people would suffer early deaths from retirement. For all I know, some people's lives may be prolonged.
some people. Do not generalize.
I would hope that this is not relevant to people who just want to be financially independent at an early age, and never really "retire". Maybe a lot of people just don't know what to do with their time, so they turn to unhealthy activities like drinking and sitting on the couch all day watching TV.
In this case the person doing the work might both derive self-worth and view the basic income as being 'earned' .. and hence value it as much as a traditional salary [ and not 'waste' it ].
I think basic income could fill a lot of little niches where the market economy is not perfectly efficient in allocating money to value - some of these are being explored thru approaches like Patreon and IndieGoGo and freelancer sites.. but maybe Basic Income is an even better way to reach more of these niches ?
You should Google "emotional labor metafilter". A lot of "caring" work has traditionally been done by women and we are expected to do it for free, out of the goodness of our hearts. If we expect to get compensated for it, we are taken to task as harpies, gold digging whores, etc.
I was one of the top three students of my graduating class. I have done many things that enhanced the lives of other people. I have struggled with trying to figure out how to monetize my work. The main thing I need is work that pays adequately and doesn't keep me sick. A lot of people who have benefitted from my volunteer work, public writing, etc. are offended and outraged that I desire financial compensation.
I have been homeless for just over four years. The people who expect me to do nice things for them because I "care" generally do not give a damn about that. Plenty of people have made it abundantly clear that I should shut the fuck up about how poor I am and how hard my life is. They seem to think that telling people I am homeless amounts to trying to panhandle them.
I am pretty pissed off about it because I am not a beggar. I have only ever asked for help in trying to figure out how to turn the work I do that benefits others into an income source for me. The idea that I deserve compensation gets pissed on, often by the very people who seem to think I am after their money as a beggar.
We need to pay for these jobs if we want them done. No one should be expected to live in poverty on an allotment of Basic Income while taking care of others. It is a shitty, shitty expectation.
"Fuck you, pay me" should apply equally to the kinds of work you describe. If society NEEDS this work done and it doesn't pay adequately when handled by the private sector, then create a government service. This is why fire and police are public goods, not private sector services.
If there was a basic income, people who do things that currently aren't paid for, like what you mentioned, could be done and "paid for" by the basic income.
If you like the work, but just want to be paid, that should solve your problem.
If you don't like the work, don't do it. The basic income would mean that jobs that people don't like doing would have to increase what they pay until someone is willing to do it. Nobody would be forced to do work they don't like for a barely or non-livable wage.
Nope. To my mind, Basic Income = permanent slavery for women, with no hope of getting free as the expectation that we should "care" out of the goodness of our hearts will just become more entrenched and more doors will close to us.
If women want male privilege, they need to take the entire deal, including the risks of failure.
“Those who surrender freedom for security will not have, nor do they deserve, either one.” -- Benjamin Franklin
You were very vague about what this "care" work is. For child care, as in your own children, somebody has to do it. It shouldn't be assumed to be women but it makes no sense for this to be a paid thing.
If you mean something like elder care, for example, and you don't feel it's worth doing it for free, then just don't do it. I don't know why you feel (or you feel anyone else) would be expected to do this work
With a basic income, if you think elder care is important and/or something you want to do, you can afford to do it for free. Because you have a basic income. If you want more than a basic income you have to do something that people want to pay for. But you have the freedom to walk away from any job without fear of homelessness and poverty.
Your worries about permanent slavery seem to have very little to do with basic income. In fact, the main reason for basic income is to free people from the wage slavery we have now. People are stuck in barely livable wages because they don't have the time away from work to get into a better paying career.
Annotated version: https://drive.google.com/file/d/0B0UUYL6kaNeBTDBRbkJkeUtabEk...
I was one of the top three students of my graduating high school class. I am a woman and 50 years old. This is a problem space I have studied for decades because of my own personal frustrations with the fact that people expect a great many things from me, those things improve their lives, and I am not supposed to want compensation for them. I don't know how to make that any more clear to you. I think a Basic Income will make this a more entrenched problem. It will not alleviate it. Men already are nigh impossible to talk to about this, even with measurable negative impacts on women's lives that we can point to.
The fact that you can't see it just makes me feel all the more strongly that your idea that Basic Income "pays" women (for basically being society's slaves) is just going to make things worse.
Unpaid house work isn't going to get worse if women get the (new) option of leaving situations they previously were stuck in.
The problem of unpaid "emotional work" is caused by a sexist society. More social safety net either does nothing to alleviate that problem, or it helps. It makes no sense to argue it makes things worse. Unless you provide even a shred of an argument for how it could make things worse, it sounds like you're just yelling into the void of the internet. Unless by "men are impossible to talk to about this" you really mean "men don't accept my assertions on faith".
Edit: Also, it sounds like possibly you don't know what basic income is. Or you mean something different by it. This[1] sums it up neatly in the first paragraph. I'm not trying to be insulting, it just sounds like you're talking about something different.
[1] https://en.wikipedia.org/wiki/Basic_income
It makes it worse by making it less painful for the status quo to continue forward. Currently, women are making a great many hard choices in order to stop the pain of being poor because society does not want to hire them, promote them, etc for "men's work" while expecting us to continue to "care" without compensation. Give women what amounts to permanent welfare and a lot of them will not make the hard choices involved in questioning the status quo and trying to find another answer.
There are plenty of examples of populations given some kind of permanent welfare. They never result in some sort of golden era. They result in people who are overweight, out of shape, demoralized, with no goals or aspirations.
I read a lot of that discussion on meta filter, and it was extremely unconvincing. I empathize with women who marry crappy people who expect them to stay at home and don't want to listen to their problems and want them to send birthday cards to their family. But the whole conversation was about a non issue. Basically like the argument any roommates would have about who has to do the dishes. Or who left the toilet seat up. It was complaining about personal things that they really just need to deal with themselves. And maybe they need help learning to do that, but "emotional work" isn't a thing. It isn't, it shouldn't be compensated, it doesn't exist. These aren't big societal dilemmas. Women aren't perfectly equal now but it is perfectly acceptable in most of the western world for women to get real jobs.
Or maybe it would help to hear an example (any example, you still haven't given one). What is one hard choice a woman might have to make to escape the pain of being poor? The hard choice not to have children? How is that a hard choice and how could it possibly go away in any imaginable future without the reality of biology being worked around with external wombs and robotic child care? And what, please tell me, could that have to do with a basic income?
UBI could serve to further entrench an existing exploitative pattern, which currently exists because some things are "paid" work and other things are not.
Fascinating.
I could foresee lots of people quitting to learn skills for more rewarding jobs. You might see that jobs like a janitor, garbage man, and service reps at abusive companies start commanding higher wages since people don't want to do them.
Now workers have the leverage to decide not to work doing something they hate unless they are paid enough for it.
Creating free education programs for careers in demand would really strengthen this effect and I think would improve society as a whole. People will be rewarded for doing menial or dirty jobs rather than looked down on by society.
Jobs that are currently mostly done by people with no other choice, and hence can pay as little as they want, will have to pay better or be part time or some other benefit if they really need to get done.
And then, if a crappy or mindless job ends up paying $30/hour, people might do it because they want the extra money, not because they need it to survive.
Yes, as a society we don't value that kind of work that traditionally women have done the majority of - child rearing for example. Maybe as a single dad I can now have some empathy or appreciation of that, that I wouldn't have otherwise as a middle class white male.
Looking after my kid and making paintings have probably been the most useful things I've ever done - neither of them paying anything, unlike programming work which does provide an income. I have to wonder what more useful things I could have spent my time doing, rather than some projects which paid ok, but were unlikely to be of much use to anyone.
I can relate to some of your comments - when I see people who want an Uber clone developed, or who think programmers should get 5 bucks an hour because they enjoy their work anyway.. or who dont understand how much skill it takes to draw a plausible figure, who think a one off oil painting should cost 70 bucks. But then these people are using apps that cost 20 million bucks to develop but are free to use, or they can buy a print for 30 bucks and a chinese replica for 150..
There are some economists and even politicians who have been talking about the value of all the work that is done which is not paid for - value and money don't match up, in many cases. I hadnt seen the term 'emotional labor metafilter' but I'd heard of the concept [ as I listen to people like Piketty, Paul Krugman, Elizabeth Warren and lately Bernie Sanders ]
My hope is that a Basic Income might be a way of partly fixing this flaw [where real work is undervalued], rather than entrenching it - if the free market is not efficient enough to pay you for the useful work you are doing, basic income might at least cover the cost of living.
Its not a solution to every ill.. teachers will probably still be paid less than their true worth, stay at home parents will probably still have to sacrifice a lot of income. It wont solve sexism, racism, ageism .. but it might alleviate some of the worst symptoms, some of the current pain ?
Maybe the government service is in fact BI, because it covers so many special cases where individuals can do useful work, that the government wont ever be able to implement an overall program ?
> No one should be expected to live in poverty on an allotment of Basic Income while taking care of others. It is a shitty, shitty expectation.
I agree.. but I assume the Basic Income is more than being poor, that it was high enough to cover living expenses so that you are free to function without stress.
So the question is how much should BI be - equivalent to 15 bucks an hour ? 25 an hour ? Should the minimum wage be set at the same level as BI ? Location dependent on average rent ?
Many years ago, I saw a study that asked people in different countries to define poverty in terms of things like how many meals per day a person ate, what kind of shelter they had, etc. The study concluded that less than 0.5 percent of Americans were poor by the standards of people in India at the time the study was conducted. Meanwhile, Americans routinely conclude that 12% to 14% of us are living below the poverty level.
As a homeless American, I have regular access to electricity via a public library. I have access to public toilets. I have access to cheap goods. My quality of life is likely higher than that of many people in the world who live in countries without consistent supply of electricity and other basic infrastructure that I take for granted. There are countries where women are fairly routinely raped and sometimes murdered while attempting to relieve their bowel or bladder in an open field because there is insufficient infrastructure.
My quality of life is likely higher than that of kings of old, who had no electricity or Internet or antibiotics etc.
Humans are a social animal. If you eliminate physical hunger but cut us off from freedom of choice, social connections and a great many other things that money cannot buy, you do us egregious harm.
We need to invent the 21st century's version of the 40 hour work week. I believe the answer here is currently being called The Gig Economy. We need to make sure the Gig Economy empowers ordinary people to work when they want, as much as they want. We need to make sure "gig" work can create a middle class lifestyle if you do it decently for about 40 hours a week.
This will empower homemakers, single parents, etc to create a comfortable life that works for them without being cut off from Society and the halls of power.
We need to worry about empowering people to readily and easily make the money they need. Giving money to people will never provide the same quality of life as earned income. It is qualitatively different. It will always be qualitatively different. You cannot change that fact.
I'm thrilled Deschutes Brewery has started distributing here in DC. Also, count me among the many who have no issue with the use of Amazon affiliate links.
You can work hard at something which provides immense satisfaction and personal value (perhaps even value to others). But a job is strictly something you do in exchange for money.
A job doesn't necessarily contribute to your self-worth. Meaningful work, does.
Here:
> A job doesn't necessarily contribute to your self-worth. Meaningful work, does.
No, having a job like the vast majority of others around you (or the supposed ideal) contribute actively to your self-worth way more than have a meaningful hobby or unpaid meaningful work on the side. It has to do with the humane need of feeling integrated in the group.
You really have to work hard on yourself to keep your self worth for ten years by not « working » and having only a meaningful job/work/hobby.
It's not the job or the hobby or the meaningfulness that matters to your self worth. It's the sense of belonging to the group.
With that said, I completely agree with that:
> if we're going to introduce a concept like basic income then we need to start being really clear about the difference between effort in exchange of money, and effort which contributes to your satisfaction.
Benevolent activities are going to be cast under a different light.
https://www.researchgate.net/publication/222079910_'Unemploy...
http://lmgtfy.com/?q=self+worth+and+unemployement
Because I read about it many times in the past ?
> That seems like an unfounded conclusions. For example, a lot of people here on Hacker News don't have a "job", but they're building startups and working on products. I wouldn't call that a job, in the sense that they're not performing work in exchange for money. It probably does have some effect on their self-worth, but I don't think it has anything to do with the lack of an employer.
That's because you are drinking the koolaid without reading the warnings all over HN about the entrepreneur porn lalaland echo chamber it is at time and succumbing to the game of redefining common words to fit a specific story. Also, very specific and small population sample here. You can't exclude the majority of the population to deny the fact that self-worthiness is linked to employment (edit: whether it is a good thing or not).
Here's some unfounded conclusion:
- http://www.apa.org/pi/ses/resources/indicator/2012/04/unempl...
- http://psychcentral.com/blog/archives/2011/09/19/the-long-un...
- http://www.usatoday.com/story/money/columnist/kay/2013/08/31...
- https://kar.kent.ac.uk/19046/1/abrams_unemployment_self.pdf
- https://www.researchgate.net/publication/222079910_'Unemploy...
- http://commonwealthmagazine.org/economy/016-the-hidden-injur...
- http://www.ncda.org/aws/NCDA/pt/sd/news_article/67151/_PAREN...
> And to follow on from that point, someone can be retired and spend 8 hours on art, music, writing, or any other creative endeavor. I don't think those are the kinds of people who live shorter lives after retiring.
But that's the thing. Retirees have a different status to hold than the unemployed. Plus, you forget that the transition from a working class member to a retiree can be really hard.
Furthermore, what is the economic benefit of the activities listed above? What would be lost if those activities were either abandoned or required to be paid at a fair market price? I know, charging grandma by the hour is a silly idea, but I say so to illustrate the benefits to society by activities not reflected in GDP, and to invite discussion about whether society would be better served by individuals living on basic income alone who spend their time helping others, without having to worry about making next month's rent.
Basic income doesn't aim for people to sit idle, and in practice basic income doesn't seem correlated with idleness. Some studies show an increase in work hours [0], and another showed a slight decrease in work hours among new parents and teenagers [1].
Loss of self-worth need not occur when people are given the freedom to say "no" to unfulfilling and unproductive jobs, the freedom to take time off to care for their own or another's health issues, and the ability to pursue their passions -- teaching inmates, launching a startup, or becoming a world-class gamer.
[0] e.g. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2268552
[1] http://public.econ.duke.edu/~erw/197/forget-cea%20(2).pdf
The negative income tax experiment in New Jersey showed that the negative income tax created a disincentive to work, and increased family breakups. [0]
Negative income tax, by virtue of being tied to the tax system, operates on a year-based system and pays retroactively. Regardless of whether the year's overall income would qualify for negative income tax, the individual still needs to self-fund any time off. A negative income tax does nothing to help those who are temporarily out of work, or who only want a few months off to help with childcare, learn a new skill, or address an illness.
[0] http://www.econlib.org/library/Enc1/NegativeIncomeTax.html
http://www.widerquist.com/karl/Articles--scholarly/Failure2c...
The linked article hypothesized "reduced pressure on the breadwinner to remain". Too many fights over money, financial ability to leave a bad relationship, and no need to "stay together for the bills" could all be causes.
For people who have a job, we already have a system for them to pay taxes with each paycheck (withholding). By reversing that, you could make negative income tax payments year-round rather than at tax return time.
Withholding adjustments would help those in low-paying jobs, part time workers, etc. But how does it address temporary or long-term joblessness without requiring individuals to self-fund until refund time?
> A negative income tax is basically equivalent to a basic income funded with a progressive income tax.
I disagree. The funding structure is substantially similar -- some people pay more in taxes than they receive. However, by only distributing the payments to a subset of the population, there is a social stigma associated with receiving benefits. With a universal payment, there is no stigma.
Consider food stamps. The funding structure is set up so some people pay more in taxes than they get from food stamps, and some pay less. But because only some people receive food stamps, there is a stigma associated with them. By contrast, consider the Alaska dividend, which is given equally to every citizen, regardless of income. There is no stigma associated with receiving or using an Alaska dividend. It isn't seen as welfare, but as a right.
I only claim economic equivalence, not political or marketing equivalence. On the other hand, we already have a negative income tax for working people (the earned income tax credit) and no national basic income, so maybe the marketing advantages aren't a slam dunk.
People aren't so naive that they would ignore the fact that their basic income is being immediately taken out of their pockets to pay for other people's basic incomes.
As of 2011, an individual paying >$12k/yr in USA federal taxes is in the top 25%. [0] With a basic income of $1k/yr, anyone in the bottom 75% would effectively be receiving a 100% refund of all taxes, not only the funds earmarked for BI.
There is also the option of voluntary basic income systems, which have the advantage of being immediately implementable. [Disclosure: currently developing a voluntary basic income project/study]
[0] Apologies for the outdated info. http://www.fool.com/investing/general/2015/01/31/the-average...
You get the same effect with basic income. Those who pay more in taxes than basic income gives and those who don't. You could effectively create a negative income tax that gives the exact same payouts as basic income.
x is income, b is basic income, F(x) is tax someone has to pay at x income under the basic income scheme, G(x) is the tax scheme someone has to pay out without basic income that includes some negative taxes.
If G(x) = F(x) - b, then x + b - F(x) = x - G(x). Yes, they are coded up on law a bit differently, but the outcome on everyone's pay would be the same. All that is different is the talking points. Kinda like how people are charged higher tax rates for not having children currently in the US.
> of course we could give them shorter hours. Technically, it would be perfectly simple to reduce all lower-caste working hours to three or four a day. But would they be any the happier for that? No, they wouldn't. The experiment was tried, more than a century and a half ago. The whole of Ireland was put on to the four-hour day. What was the result? Unrest and a large increase in the consumption of soma; that was all. Those three and a half hours of extra leisure were so far from being a source of happiness, that people felt constrained to take a holiday from them. The Inventions Office is stuffed with plans for labour-saving processes. Thousands of them." Mustapha Mond made a lavish gesture. "And why don't we put them into execution? For the sake of the labourers; it would be sheer cruelty to afflict them with ex- cessive leisure. It's the same with agriculture. We could synthesize every morsel of food, if we wanted to. But we don't. We prefer to keep a third of the population on the land. For their own sakes-because it takes longer to get food out of the land than out of a factory. Besides, we have our stability to think of. We don't want to change. Every change is a menace to stability. That's another reason why we're so chary of applying new inventions. Every discovery in pure science is potentially subversive; even science must sometimes be treated as a possible enemy. Yes, even science."
In a broad sense, the shift towards a services-based economy is a type of "make-work" in the shadow of heavy automation in first agriculture then manufacturing. This is very much Parkinson's Law writ large: https://en.wikipedia.org/wiki/Parkinson%27s_law
http://public.econ.duke.edu/~erw/197/forget-cea%20(2).pdf
Sitting around playing video games is a classic example, but it's a way to become a better video game developer or a world-class player, both of which are fulfilling and well-paying endeavors. Even sitting and doing nothing (i.e. meditating) can be one of the most productive things an individual can do. [0]
What constitutes a "productive activity" is quite subjective. And even seemingly unproductive things can be productive: if they help de-stress and refocus, they're still contributing to productivity.
[0] https://news.ycombinator.com/item?id=10186082
If I'm playing minecraft and optimize a factory in an hour, that is a productive hour of gaming. But to my father, that entire time was wasted because he cares naught for video games and would instead be out working his farm. But I look at the small scale farm and realize that for what it produces, it would be cheaper to just buy the produce and thus don't see it as productive.
Is watching football and prime time TV productive? What if you have someone who doesn't like either but is doing so only so they can be a better culture fit at work since that is what everyone else at work is doing?
Basic income can liberate a lot of people to focus on bettering their situations, rather than just trying not to drown from day to day.
Japan seems to have one solution to this problem. It's a culture that highly discourages idleness, yet also aims to look after people's welfare, so they have a very large number of (practically speaking) quite useless jobs - crossing guards on parking lot exits and streets with no traffic, platform attendants, park attendands, etc. It was quite weird seeing this at first, but once I started thinking about it as a socially acceptable form of welfare, it made a lot of sense.
I don't think their system will work here (serving people is seen quite positively there, whereas here it is often looked down upon here), but it is a good working example.
What jumped out of the paper(around page 25) was that Europeans have been just Happy! Why are first 12 members of the EU Happy over time? I'll let you speculate.
Now to entitled--usually white upper class men--who have been telling the poor what to do since biblical times. Dummy up! I've had seen too many people die early because they became homeless.
I think what most of these researchers fail to comprehend is the difference between poor, and poor with no safety net. No parents. No friends couch to crash on. Just the inviting, wet thicket of Scotch Broom to crawl into, and being woken by gently nudge of a police officers' latest extension of their authoritarian arm. Real poverty is homelessness. It's ugly. I don't know why we are even debating someting, like a minimum income, at this point in time. I have seen friends die way too early because of their homeless stints. It seems by the time they get a little help, it's too late. They just die early?
I'm not going to list off my gripes about making a living in this enviorment, but a lot of us tech workers are very succeptable to being homeless. At least half the guys I know without roofs over their heads were former Programmers. At one time they we happy, and young, banging away with Fortran.
(Willie Brown is actually the first one I heard, wondering out loud, exactly what we are going to do with all the future homeless tech workers.
They now sit in coffee shops fiddling with our discarded toys.
Basic income at this point--yes. I actually think if some of these poor people were given a little bit of help, they might just start business, and who know where it will end. There's only one benefit from being poor; some of you see the world a different way.
We have never had a basic income in the United States. Let's give it a shot? I look around at what's happening in the United States, and I don't like the trend. It was better in the past.
(Yea, what if it gets worse. Go back to this wonderful system of privileged elitism. I won't be back, so any comments--I will miss out on. Oh, yea as to sitting idle--the subsided poor I know, are busy. See the world is funny place. Even if you get the couch in the subsidized house, you are expected to do/fix all sorts of things, including being a amature psychiatrist. The poor always pay in some way. Think about it. Did you really ever get a completely free lunch, outside of maybe grade school, or when you were young and pretty. Pretty is gender neutral.)
Arguments for universal BI (as opposed to tweaks to benefit entitlement rules) are in effect a suggestion that people on those programmes should have less so that we can afford to extend subsidies to middle class stay-at-home wives and twenty-somethings on gap years, because rich people that don't want to work obviously deserve the same as people with nothing going through a crisis. And you have the temerity to intemperately accuse anyone that questions it of being elitists.
And yes, BI is something which has been chiefly advocated by privileged white men.
I don't want Basic Income only to be told where and how to work. If I have to work for it, I want to go find work my damn self that I find palatable.
Which is (part of) why I don't want Basic Income at all.
(Edited for clarity)
http://micheleincalifornia.blogspot.com/2016/01/the-conversa...
http://micheleincalifornia.blogspot.com/2016/01/ubi-we-tried...
http://micheleincalifornia.blogspot.com/2016/01/the-dubious-...
Most people want to do something, and generally want to feel productive. How many stories have you heard about unhappy office drones leaving a job where they spent all their time on the internet to something more rewarding?
But where will this productive energy go? Plenty of people will still have jobs, likely doing something more in line with their interests. Others will volunteer their time and participate in the community. I think lots of people would love to spend more time mentoring young people, being with their families, etc. It could be a revolution in community participation and lead to a more healthy society.
Satisfying and productive work doesn't need to be paid work.
https://en.wikipedia.org/wiki/Negative_income_tax
https://www.youtube.com/watch?v=xtpgkX588nM
https://en.wikipedia.org/wiki/Bolsa_Fam%C3%ADlia
the one I'd recommend is an actual book "vozes do bolsa família".
message me if you want more info on this. wife does a phd related to this topic.
Warning German: https://www.mein-grundeinkommen.de/start
Nevertheless, I'm very excited by this project and seeing what comes of it.
A correctly designed study will attempt to teach the participants to (1) have basic spending/expenses that match their income (2) procure the basic income from already-available sources (e.g. food stamps, subsidised health care, social security...) and (3) form income-pooling groups that provide/insure a basic income for their members. All three have already been done at a small scale. 100s of people in the United States currently practice #3, e.g. Federation of Egalitarian Communities. 1000s of people practice #2, e.g. Puna Hawaii or your local trailer park.
I think basic income would have the effect of insurance, to allow individuals to take bigger risks and follow their dreams more.
https://www.swisslos.ch/de/informationen/spiele/lose/sortime...
I just think that socialism and communism (which basic income basically is - it's paid for by the working class) ultimately leads to the destruction of the economy.
I think that going forward, communications are a basic need. There was a startup in ~2008 that was attempting to provide "free" cellular service to its users who agreed to watch ads on their phones. If they interacted with the ads, they would get more service time...
The Facebook phone was an utter flop - however, if they wanted to surveil the population, they may have done better by creating a cell service company and allow people to be spied on in exchange for a free phone....
That damages my DNA saying that -- but it would be a workable model for the long tail of poor people that love facebook.
Wrong. Basic income lifts the floor. It does not concern itself with the ceiling. Calling it communism is utterly wrong and completely missing the point.
No one has ever said "I'm going to stop making money because I have $1."
At $1 the second dollar is useful, at $50,000, I'm good for the year and will not pursue additional dollars. Replace $50,000 with whatever amount you need to feel content.
I continue to work because I genuinely enjoy what I do.
Rich people are a counterpoint because there are people with incomes the size of a small country, and they are still striving for money. Given the diminishing utility of familiar pleasures, I think its likely that constantly reaching for "more" is the norm, rather than the exception.
Basic income recognizes the idea of a labor market, but admits that this market is neither pure nor perfect: the jobs seeker are in an unstable situation that they have to get out of to pay their bills.
Therefore the employer has an edge in the market.
By decoupling the revenu and the employment, the job seekers can make better decision for themselves.
The capitalistic harnessing of greed still applies in the basic income situation - i.e. the motivation of going to work to get more income is still in effect.
Trouble is, isn't some form of socialism inevitable? As automation continues to progress, more and more no-to-little-skill types are eliminated which then requires people to gain further education and experience to continue to qualify for some type of job. At some point we're going to automate so much that you'll essentially have to be an expert in a field to be employable.
At least that's how it looks like to me. Today socialism doesn't work (at least to a degree; some socialism-like services I could see working today like health care) but in the future where every job but the ones with the highest skill requirements are automated, what do you do?
However, if you have a basic income that "replaces" welfare then no matter what job you get you always make more money. So it's better to have the basic income and work then to just have the basic income.
Of course the problem is MUCH more complex than that, and that is also dependent on replacing welfare not adding basic on top of welfare. Hence the research but this is the basic idea I grab onto to think of how a basic income could be better then welfare.
Also it doesn't imply communal ownership. It does not even imply communal consumption decisions -- unlike, for example, government-provided services: people themselves decide what to pay for and how much.
Why is this a problem? The market allocates work, the market has decided that a large and growing number of people's work is worth $0, the market is still producing enough to keep everyone happy and fed.
Why should someone be incentivized to work when their work has no value?
Put another way, we have made an amazing collective achievement: 100% effort from 100% of people is no longer necessary or even desirable to maintain/improve standards of living. Life has collectively gotten much easier, and coerced labor (yes, starvation and homelessness due to unemployment are coercion) is no longer necessary.
It incentivizes breeding. The more resources are freely available the more our population will grow until we reach equilibrium. Although we usually overshoot and end up with a Malthusian outcome.
"Yet in all societies, even those that are most vicious, the tendency to a virtuous attachment is so strong, that there is a constant effort towards an increase of population. This constant effort as constantly tends to subject the lower classes of the society to distress and to prevent any great permanent amelioration of their condition".
— Malthus T.R. 1798. An Essay on the Principle of Population. Chapter II.
https://en.wikipedia.org/wiki/An_Essay_on_the_Principle_of_P...
It's usually considered bad form to point this out, but there is no divine mandate that makes human breeding a process beyond the control of human societies.
http://www.udel.edu/johnmack/apec324/excel_lab1/xy_plot1.png
As people get more resources, they tend to have FEWER children than those with little resources.
Income equality might rise while GDP falls in a re-distributive system. High GDP does not imply high income equality. That graph is misleading in this context.
Or rather is worth less than the legal minimum wage, which is not the same thing.
> Why should someone be incentivized to work when their work has no value?
Very few people's work has no value, especially if they're allowed to do what they like to do. Typically the problems arise when the value is lower than the costs involved (salary, ovehead of managing them, etc).
Reducing such costs should be a pretty important part of a basic income setup.
> coerced labor (yes, starvation and homelessness due to unemployment are coercion) is no longer necessary
The interesting question is what the end game is here. If we get to a situation where 100% effort from 100% of people is no longer necessary, but 100% effort from _some_ people is still necessary, how do you ensure that the people who still need to work keep doing so? And how will those people feel about it and what will the try to do as a result? A worst-case-ish scenario that seems all too likely is bans on emigration of "productive citizens" (defined as the ones whose 100%, or even 80%, effort is in fact still needed) who would otherwise decamp for other countries with lower taxes.
Basic income is an extension of the welfare state, which is itself a capitalist construct. It does not presuppose a state-planned economy or really threaten capital ownership or free exchange at all.
Yes, many communist countries have attempted some kind of unconditional income. Was this what sapped people's desire to work? Not really. What sapped their desire was a complete lack of a reward structure. A universal income doesn't destroy the reward structure; it destroys the penalty structure. The big question is whether or not the economy survives that.
On top of that, though, most communist economies imploded because decoupling production from market forces also destroyed incentives towards efficiency, innovation, and satisfying demand. Those are the biggest failures of the state economy and those are not related to universal income at all.
Quick! Let's tax them at 100% so that they have an inventive to work!
There are shortcomings with ideas like basic income, but I don't think the ones you've mentioned are particularly valid.
Maybe it's just me that has noticed it in the past few years, but "fixing housing in the US" is looming large on my list of things to improve.
It's not just San Francisco - the same debates are playing out in places like Boulder, or even here in Bend.
http://www.bloomberg.com/news/articles/2015-07-09/why-is-col...
http://www.businessadministrationinformation.com/news/study-...
As an example: to decrease the cost of rent in a city, an increase in rent-able locations and attached commercial business and non-retail jobs need to be in those locations.
This is also related to suggestions that say controlling medical care could be achieved by allowing more agents at all (doctors or not) to be able to treat obvious conditions. I agree that in the short term the suggestion would be viable, were it not for regulations; however I think that artificial diagnosis neural networks will probably achieve adoption before the regulations catch up.
The Employer would not see as much benefit as you'd think as presumably he would be amongst the class of people/entities (including the middle class, upper class, and corporation) which would be paying for this indirectly in the form of taxes.
Alternatively, if Basic income is debt finance (and not financed directly through taxes), incurring more debt also has inflationary effects.
As for whether employers will benefit, recognize that demand will also increase when those who were formerly impoverished begin consuming things. It is direct and distributed economic stimulus.
You may well be right about employers. Basic income isn't going to wish away all the problems of the poor. The main benefits are likely to be a simpler, fairer and more efficient benefits system and more opportunities for employment.
Inflation only occurs with increased supply of new money into the system so whether or not there is inflation depends entirely where the money to pay for BI comes from.
[0] https://news.ycombinator.com/item?id=10982605
If it really worked out like you say it would, where people with middle or high incomes are no better off, I wonder what they would think when suddenly large swathes of the population are able to live off the dole without busting their humps.
Basic income proposals usually work something like this (numbers all made up, but close to those I've seen):
Each person gets something around the poverty level (say $10k -$15k per year). The taxes that are raised to pay for it would increase gradually based on income up so that it would be a wash for someone making $55k a year, and once you start making more than $75k a year, you start paying more.
If you look at those numbers anyone who decides they can live off of the basic income was unlikely to have been making enough to pay any federal income tax at all, much less enough to have been contributing to the extra UBI tax.
> where people with middle or high incomes are no better off, I wonder what they would think when suddenly large swathes of the population are able to live off the dole without busting their humps.
They will be living off the dole at the poverty level, not living middle class lifestyles.
How many more people will quit their jobs instead of working if we replace our current system with a UBI? Small scale preliminary studies seem to indicate not that many.
>But remember, living off the dole also means not contributing anything back to society. These people could be doing something of value, but are incentivized not to.
That's not true at all unless you think people on welfare and disability are incapable of contributing anything back to society.
Lets say we have a single parent who can't afford day care. He parks his kids in front of the TV, or pawns them off on inattentive relatives, so he can go to McDonald's 30 hours a week and make $8 an hour. I think that he would contribute more to society in the long term by staying home and raising his kids than he does making minimum wage at McDonald's.
Then we look at the economic upsides to a UBI. It is likely that a UBI will reduce crime. It will also likely encourage more entrepreneurial risk taking. And like in my previous example, a UBI will allow more parents to stay home and spend time with their children, potentially allowing the children to earn more money in the future.
And UBI will do better in this respect than per circumstance income transfers since you get to keep all the money you earn on top of it.
But it may different for housing and uncomeptitive markets.
What people end up doing on a basic income is far less relevant than what people end up not doing due to the taxation burden of funding a basic income. It's telling that the post contains no mention whatsoever of studying the impact of the taxation.
The observation bias alone might motivate people to do work and strive to achieve something with all of their time. Or, it might even cause them to lie about the things they're working on.
It will be very interesting to see how they design the study, I think it has to be a little bit more nuanced than "Here's 2000 dollars a month for 5 years, bye."
Five years is a long enough time to let you do whatever you're going to decide to do with the first part, and then work on recovering employability/resume credibility/whatever with the last part. An interesting question would be how peoples' behavior changes through the five years, though...
And if you wanted to extend the experiment a bit you could create stipulations like, any literature, art, music, etc. that they produce must go into the public domain. (They could still make money off it in other ways if they want).
direct link to paper: https://www.princeton.edu/~joha/publications/Haushofer_Shapi...
https://en.wikipedia.org/wiki/Henry_George_theorem
IE, the aggregate value of public spending in an area tends to soak into the land value -- give everybody $X,000 a year and the landlords will dutifully raise annual rents by $X,000.
A cash transfer doesn't really meet these conditions - it's excludable, in that you can restrict access to citizens or to whomever. And it's rival - there are only so many dollars to go around.
That said, I think inflation is a very real concern for any basic income scheme.
The only caveat is that there are other possible "rentiers" that can capture the rent before it winds up in land. Such as patents, barriers to entry, etc.
But exclusive use of land is the first and most basic barrier to entry.
It also is being given people, not directly to the area, so if rents are raised in one area, people can move away from it. This isn't the case with infrastructure improvements such as road/rail/schools/electricity improvements.
The likely effect will be that cheap housing will increase in price, but it will be bounded by moderate housing (i.e. for those people who don't see a real terms change in their post-tax/benefits income).
The other point, is that that the sector most dramatically affected by this will be the homeless and unemployed.
An interesting question is to what extent the basic income should be linked to inflation and differential cost of living (e.g. should it be more for people who live in San Francisco as San Francisco is expensive, or should it be equal because we don't care where people live).
The CoL problem is currently "solved" in Unemployment and Social Security by tying it to past wages (which probably correlate with this). I think we do need to replicate that in some way.
A similar metric might be to tie it to the minimum wage of a region, which will hopefully capture inflation and CoL.
The theorem's theoretical basis is pretty spherical-cow: a government that governs land centered on a single point with people trying to minimize distance to the space. (Which is to say, it models best to the idea of a city-state rather than a federal government.)
Rather than getting $50 a day as cash, you might get 4 nutritionally balanced but generally unpalatable meal rations, two payment vouchers for one day in one state-owned 250 sq.ft. housing capsule, 30 kWh of metered electricity, 100 gallons of potable water, 10 Gb of network bandwidth, etc. But you put redemption limits in place so that you can't use vouchers to pay for more than 1000 sq.ft. of capsules, 60 kWh of electricity, 200 gallons of water, or 20 Gb of electricity per day. It places limits on the amount of benefit any single person could suck out of the system at the expense of everyone else in it.
The state would also have to be a major wholesale buyer for those things, and sometimes also set up and spin off new competitive suppliers, otherwise the incumbent suppliers might be able to jack up the price and capture a portion of the benefits intended for the end consumer. Taxes and subsidies have a different mechanism of action economically than the entry of a new supplier firm.
You can give 20 people $100 each to spend as they see fit, and it wouldn't affect the price of a Happy Meal. But if you give 100000 people $100 each, you can bet that the price of that food is going up a bit, just because more people can more easily afford a higher price.
Subsidy affects market equilibria differently than using the same amount of resources to lower costs or increase supplier firms, or do industry-advocacy advertising.
You can't stimulate demand with a subsidy. You can't depress demand with a tax. Both of those things are manipulations to the natural equilibrium price, and generate guaranteed deadweight losses.
The only way to "stimulate demand" is by changing what people's desires and priorities, such as by advertising. People have to want now-things more than potential future-things. Tricking them by pretending that they can have both more now and more later and then revealing only after they buy that they will actually have less later degrades trust, which causes more saving and stockpiling, which reduces the velocity of commerce. That reduces the economic leverage of controlling the size of the money supply.
You can't fool all the people all the time, and the ones you can't fool leak their information through the market. Most people know by now that the market can stay irrational longer than you can remain solvent. But we also know that you don't need to outrun the tiger, you just need to outrun your friend. So consumers are paying down debt, and companies are hoarding cash, hoping to be the best-prepared survivors when the whole house of cards falls. Fed policy is not taking into account the fact that it can't just print more confidence.
See: Food stamps.
Another problem I have with BI is it equally distributes assistance with no prejudice to those more needy, i.e. the elderly, the disabled, the mentally ill, etc. So you take many funds away from people such as 70+ year olds who are on medication, SS, assisted living (which cost >> BI provides) and distribute available funds to able-bodied people who are "discovering themselves".
Further, having considerable able-bodied people leave the workforce by choice delays global human progress and achievement.
Instead, I am for additional public-sector money being spent on country- and global-level goals which the private sector cannot achieve nor make profitable. These include environmental, energy, medical, transportation, and infrastructure research. By putting public money into these research fields (which is hard/impossible to make profitable) you incentivize progress in areas which further human progress that cannot be met through private means. If you instead incentivize able-bodies to not work, not only do you take money away from needy (not much savings in admin costs) but you delay human progress.
I'd expect Canada to adopt basic income before the US does as well and possibly provide the data this study is looking for on a much larger and contextually relevant scale.
The typical basic income program I've seen goes something like this: give every person in the country $10k to live on, no strings attached. [a]
1) As defined above, this is horribly inefficient and expensive. I, a software engineer in Silicon Valley, would receive this $10k. How does this benefit society? I already make over $100k; I don't need additional income support.
2) As noted elsewhere in this thread, the US has 300M residents; naively the cost of this program would be $3T!
3) If you do start to add guidelines for poverty, etc., you just reproduce the current welfare system that exists in the US, which balances available government revenue against our desire to help poor people.
[a] https://en.wikipedia.org/wiki/Basic_income, "all citizens or residents of a country regularly receive an unconditional sum of money ... in addition to any income received from elsewhere"
It sounds good in theory that this very odd system of income could end up _saving_ us money, but I don't actually know if that's true and is probably highly dependent on whatever scale is used when deciding how much basic income a person receives.
Aside from that:
1. You'd have the freedom to quit your job without fearing homelessness or hunger. Suddenly, you're a lot less stressed.
2. We are wasting trillions on making new fighter jets or new wars we don't need, surely we can cut those programs and then spare a few trillion for something more useful.
3. An open question, I think. The guidelines for poverty would likely have to be open to change in order for a UBI to work.
So you raise taxes. For the people who don't need the extra $10k... well, that's OK, because their taxes will go up by some amount. Possibly more than $10k, possibly less. It depends on how much they earn.
You do still have the problem of determining what the progressive tax looks like, but this is a simpler problem than administering a large number of social welfare programs, all with their own eligibility criteria.
I can't see determining a politically acceptable and GDP-neutral progressive tax that finds an average of 50% extra per person as a simple problem, and that's even before you start dealing with the backlash from equally unhappy people whose existing welfare or social security program entitlements add up to more than $10k per annum...
Negative income taxes (linked in other comments) is similar to this idea.
1) You getting the $10k benefits society in that we don't add any administration on the front end - deposits go to everyone, and then the taxing back step is already being done (as you're already filing taxes). So cheaper administration cost overall than doing a means test or whatever.
2) A basic income has to be introduced with corresponding tax increases. For some people the basic income is a net positive (if you're currently poor, broadly). For others it's a wash (middle class, by whatever definition). For others (like you and me, most likely) taxes will go up to pay for the poor. But then there are all the savings basic income leads to - fewer administration costs, fewer costs of poverty (like homelessness and crime), etc.
3) Right, don't do that. Handle it through taxation at the back end.
2) It benefits society because you no longer have to work to live. This affects how you make decisions about your employment. You would be more likely to change jobs when you're unhappy, for example. This is good.
3) Whether you make $40k, $100k, or $500k, the $10k isn't there to prove "additional income support". The system could be set up so that after basic income is implemented, your disposable income is the same as it was before--people making $40k wouldn't have $10k in free money to spend, because their taxes would go up $10k a year, for example. The key here is that if they choose not to work for some period of time, they can. That's not how I think it ought to be implemented, but the principle is true.
4) If government handed out $10k to everyone, they could tax everyone $10k and it would be like nothing happened. The difference in implementation would be that the additional taxes would be progressive, while the benefits are flat. So if you make over $100k a year, you might be taxed $15k more than you were before, but you would also receive $10k. Without a doubt, an effective basic income would require a more progressive tax structure than what we have.
5) "If you do start to add guidelines for poverty, etc.," not familiar with this reference, but presumably a basic income would eliminate extreme poverty. Do you mean like, for example, what would someone who was physically incapable of working receive? Is the basic income enough?
> So if you make over $100k a year, you might be taxed $15k more than you were before, but you would also receive $10k.
So basically as a middle class person, I don't benefit at all, I may even lose money, but some kid who has no income and wants to live in his parents basement gets $10k/yr for contributing nothing to society? Am I understanding this correctly?
The upper class won't care - this is pennies to them, but this is going to bite the middle class badly and completely change their incentives to avoiding getting housing and living as cheaply as possible to minimize or eliminate work.
You always have to think very carefully about the incentives you create with something like this. This seems to create very bad incentives to me, incentives which would have caused me to make very, very different decisions in life drawing me away from any sort of productivity in society.
I'm not strictly against this idea, but as you've presented it, I can't see a way this would ever be implemented, how would you sell it to the middle class?
As for teenagers sitting in their parents basement - The thought is that $10k lets them live and do anything they please instead of being tied to a shitty job or their parents basement. In theory they will choose to contribute to society in some way and not just play video games all day.
But that is what we need to test - Will people choose to play video games and watch TV all day, or choose something fulfilling and 'productive.' Then we have to redefine productive, some other comments in this thread speak about that.
The benefit for you is that you'd be living in a better society. Hopefully, you'd see reductions in crime, improvements in various service jobs, etc.
That kid gets $10k/year, sure, but then again lots of people already have the means to live in their parents' basements. Most of them prefer not to do so.
However, there'll be other people getting that $10k/year. Single mothers could spend more time with their children. More people would become educated. The job market would become more liquid for employees, hopefully improving working conditions.
2.) You probably have to say "everyone over 18 gets $10k, each child up to 3 per family gets $2k"...or something similar. Getting $10k per child creates some crazy incentives. (2010 there was roughly 70m people under 18, so it's only $2.38 trillion! ;)
3.) You can probably remove a ton of welfare programs if you do this, but not all. You can't completely remove the safety net, but a lot few people should have to be serviced by said net.
If I recall correctly about 50k is median income for the working population, so you're still paying most of your population at least $5000. And that's just the currently working population, there are so many non-working adults who will also want the free money, I can envision the divorces being had for an extra $10k right now... the incentives this creates are very bad.
So give basic income only to people doing less than the basic income, and take it away once you are doing more. That's how it's been implemented in some countries, and I don't see any reason not to follow this scheme.
The test is quite similar, but instead of giving them a basic income participants are still required create their own income - however, they no longer have to pay taxes on their income. They are encouraged to create businesses and those businesses are also free from tax, and those employed by said businesses are also free from tax.
50 years from now, I think it will seem ridiculous that we used to allow government to take our money ;)
That is, you should get food, shelter, medical care, and education for free (this also implies free child care). But you don't get to buy a cell phone or an XBox or whatever -- you have to work for that.
In other words, I think basic income is jumping the gun a bit. Who is going to PAY for this, if we're not even willing to pay for the necessities of life?
People still die from untreated diseases, and I believe there is significant research to show that poor health CAUSES poverty (rather than poverty causing poor health). If people are healthy they will likely be more productive members of society.
If the latter, who gets to decide what's essential and what's not? I'd be pretty useless without a cell phone and a laptop.
Suppose one person needs $100K to survive. Is it moral to let that person die, and instead give $10K to 10 people as basic income? That's a real resource allocation decision that has to be made.
I will consider the argument that the government would be less efficient at providing food and shelter than giving people the money to do so... that could possibly be true on a large scale.
Health Care and Education are a separate (but still related and important) set of problems. Both of those require greater infrastructure on the part of the government to provide effective solutions, so again this is a problem that also requires a lot of thought and effort, but providing basic income doesn't seem like it would preclude health care/education reform. Nor does it seem like solving health care and education reform would change the structure or overall effects of a basic income program; they're simply additional solutions that would certainly improve our quality of life and possibly the efficacy of the program.
If given basic income, do people spend money on food and shelter, and plan out a good life, or do they live day-to-day and remain a burden on society?
This is why I think education, for example, comes before basic income. Without education, you can easily imagine people remaining homeless despite the income.
Of course some people will succeed and some won't -- the question is the ratio.
Some rich people are scrupulous; some rich people waste their money. I don't see any reason to believe that poor people are any different. I think we can still help those people with education, etc. without wasting taxpayer dollars. But how much would be "wasted" is of course an open question.
I expect that some form of radical redistribution of resources is going to be the next modality of human civilization, and getting started on the colossally difficult questions (how to ease existential angst of purposelessness and how to kill the work ethic) is just as important as the very-difficult particulars of implementation (how the heck do we find what the right amount of money is, and how do we pay for it) and measurements of efficacy.
I'm extremely interested in the opportunity to lead or be a part of this research group, and will be applying in the coming days.