Why would you bring in probably the least authoritative source on the topic you could? I thought this forum had higher standards than that. Why not just link to the actual research mentioned, such as "universal basic income versus unemployment insurance" published by FRB St Louis?
Economic is a social science, it's subject to people's opinions and interpretations. There are economists today (at the PhD level) who will look you in the eye and tell you recessions don't exist. Not mainstream, but not also not a "quack theory". UBI for most people is just another label for welfare.
I agree with the premise that most people don't quite understand how much automations will eventually disrupt the entire labor force.
...and the economy would not benefit from a BI? With increased spending, decreased public support programs, better education and community participation? Life is about more than a balance sheet.
Couldn't UBI end up in a death spiral where it does destroy the economy? If the BI is too generous people will stop working. Cost of goods and services go up. Tax base shrinks. The people vote in a larger BI to make up for it?
For as little as 15k a person, I'd strongly consider never working again.
If no ones working then no ones providing anything. At that point either everything's being made by a robot or we're all dead. I'm pretty sure society is going to find a way around that problem.
Fewer people need to work every year. All those factory jobs? Never coming back in this civilization. Next - fast-food, bank teller. Eventually most all of them. We have 35M people in minimum-wage now; there are not and never will be enough Engineering jobs for all of them (and neither would they all want to).
We used to write fantasy stories about when robots took the yoke of work from our shoulders. Now that its happening, we resist with all our might. I wonder why?
A basic income is a massive threat to the liberal welfare state. It would totally deflate the left's institutional agenda so expect them to fight back hard. The premise of the current welfare state is that the people, too stupid to manage their own lives, are better off under the paternal care of enlightened government bureaucracies. It's gonna be entertaining in ten years to watch Republicans support the basic income and Democrats oppose it.
The debate will be about whether people should be in control of their own lives or whether they need a paternal state to protect them from themselves.
Some Republicans undoubtedly support principled, market based, small-l liberal solutions to social problems. But a lot of others just seem to want lower taxes. I would expect them to oppose basic income as just another "big government" initiative. These are folks that think taxation is the moral equivalent of theft after all.
I think that even among that crowd there's an increasing acceptance that redistribution is a fait accompli and that now the next best thing is to dismantle the bureaucracy. Give it a few more years.
You sound like a Sarah Palin speech. Instead of using meaningless buzzwords like "elite" maybe be specific about who exactly you are referring to.
That aside I don't know where you get the idea that the Republican party would be for a universal basic income. Their current position (under Trump at least) is to abolish the minimum wage in order to encourage everyone to work. And they have always favoured individual responsibility and opposed government handouts.
I edited my comment to remove that bit but I'll clarify who I'm talking about: the people who see their project as bringing more and more of our lives under the direction of the state, because they know better than you and me how we should live our lives. They've convinced the rank and file that this is the best way to achieve across the board prosperity. The prospect of a hundred years of progress toward this slow takeover being wiped out by a basic income is the biggest threat to their project.
Also, I'm pretty sure that Trump's and probably most Republicans' position on the minimum wage is that it's ideally set by the individual states in accordance with the realities of their economies. A $15 federal minimum wage would devastate vast swaths of America by effectively banning work. The economy in much of America simply can't sustain that.
But yes, if we adopted a UBI we should most certainly eliminate the minimum wage, since it accomplishes the same goal much more comprehensively (i.e. for everyone as opposed to just those who have a job).
You are making generalisations so broad that it is impossible to understand what you are even talking about. Rank and file means how many tens of millions of people exactly ? And since when did they all speak with one voice ?
That didn't sound like a Sarah Palin speech, not even remotely. What it sounded to me like was Richard Nixon, who proposed a similar thing for similar reasons, but couldn't get the proposal past the Senate:
Why didn't it happen, in the words of Canadian Professor Eveyln Forget (of the University of Manitoba, Canada) “The political right is afraid people will stop working and the left doesn't trust them to make their own choices.”
'the left'. Come on man, I've had enough with this bs reductionist rhetoric on fb. If you're dumb enough to think there are only two political categories, you're too dumb to post here. Stop, do a 'right' or 'left' turn...straight to reddit or your fb/twitter timeline. Leave us alone.
I guess to believe this you have to believe that all so-called liberals and leftists are actually just authoritarians who use the promise of "free shit", as the saying goes, merely as a means to secure power for themselves rather than as a legitimate policy goal. Because otherwise, UBI is basically the end-game of the "liberal welfare state".
At any rate, I don't see liberals and leftists taking a unanimous stand against UBI. Opinions are divided, almost as though they are each separate individuals with their own thoughts.
I'll give them the benefit of the doubt on this. The "free shit" is a sales tactic but also a genuine belief that the best way to ensure prosperity for all is through a planned society.
"Planned society" is so vague as to be meaningless anyway. "Planned society" certainly can include UBI, though you appear to suppose it doesn't. It can mean basically anything where you have a government that enforces laws, really, including laissez-faire capitalism.
For the sake of argument I guess you mean "planned economy" but you don't have to support that to support a welfare state, either. Sounds to me like you're strawmanning the hell out of liberals.
Fair enough. "Planned society" was indeed too broad here. I think "paternalistic state" is more accurate.
I think that, almost by definition, if you support a traditional welfare state over a UBI, you want a paternalistic state. OR you think that industries like health care are best directly run by the state (because otherwise, a UBI would allow everyone to buy coverage in the private market, if they choose to). That's a planned economy there. And "the economy" is such an overwhelming portion of what we call a society, that a planned economy is effectively a planned society in my eyes.
> A basic income is a massive threat to the liberal welfare state.
You are confused. Basic income is the "liberal welfare state." The people who want UBI are the same people who want a higher minimum wage and universal medical coverage.
They are totally different approaches to achieving some of the same goals. A lot of support for the UBI is coming from libertarian-minded folks like Charles Murray. The idea is replace all or almost all welfare programs with the UBI.
Read more of history. It could go a way towards non-cartoonifying your philosophical opposition and making flawless (in your mind) your position. And for the record, I lean libertarian.
>Read more of history. It could go a way towards non-cartoonifying your philosophical opposition and making flawless (in your mind) your position. And for the record, I lean libertarian.
Arguments that consist of telling people to "read more history", "educate yourself", or similar are totally worthless. You might as well not post. If you have an argument to make, then make it. Otherwise, spare me the snark.
Oh you're the person who called me "too dumb to post here" in another comment in this thread. For someone who is apparently so much more intelligent than me, you seem to have very little of substance to contribute.
Not a lot of substance. He is basically saying that we should invest in training the existing workforce to adapt. That can happen even with UBI.
He also says that UBI will cause wealth to be distributed equally which means less of the total tax will go to the poorer class. This is not exactly true because the idea is to give cold, hard cash instead of trickling down the wealth. So the dynamic will be different, and that is the whole idea. That just giving cash is generally better than welfare schemes.
I know that many countries do provide free tertiary education, but in the cases I'm aware of, its a relatively small percentage of the population that gets tertiary degrees compared to the US.
I've heard Germany brought up as an example for free tertiary education, so this might be applicable.
For Germany, secondary education splits into three tracks, with the upper third choosing between a traditional University track, a more vocational Fachhochschule, or a dual work/study arrangement in the form of a "Duale Hochschule". These all offer bachelor degrees, but AFAIK only the University track offers masters and doctoral programs.
German universities are also sparser in regards to amenities and faculty/student ratios than US or UK universities, at least from what I've heard, which brings costs down further.
Graduates from lower secondary tiers also have several options.
There's the Ausbildung, where businesses train hires internally to meet requirements for certain positions. A bank may train an "Azubi" from Teller to Account Manager to Branch Manager.
Then there's the Meisterwesen, which is still reminiscent of the guilds, and mostly prevalent in the trades (e.g., Carpentry, Baking, etc.). Levels go from apprentices, to journeymen, to masters, where masters are licensed to open their own workshops/stores. My personal perception is that socially, a master carpenter is on the level of a masters graduate, but still below that of a PhD, but that's still a fair bit of social mobility considering that this route is open to anyone with any secondary school degree.
So whilst less people get a college degree, business and industry do provide routes to livable work without one.
In New Zealand we get interest-free student loans for up to 6 years of tertiary education with the possibility to get living costs with a weekly sum being part of this loan. Although you will be living marginally without an outside source for something like pocket money (A day a week is a pretty good compromise if you don't have savings).
Effectively, anyone that wants to get a degree can. There is no barrier outside the academic. And this loan stays interest free until we leave the country long-term. A small percentage is taken automatically out of your pay when you finally start earning. It all works pretty well for us.
The Australian system is similar to the New Zealand system mentioned by Avelaps.
The overwhelming majority of Universities are government operated and are subsidised. There is a fee, that can be paid upfront or be deferred to be paid through the tax system after you graduate.
In effect it's cheap(er) education with a loan system that:
- Is interest free, but indexed at CPI
- Does not survive death (i.e. your debt disappears when you die)
- Is only repayable once you reach a specified level of income.
“Replacing part or all of that system with a universal
cash grant, which would go to all Americans regardless of
income, would mean that relatively less of the system was
targeted towards those at the bottom—increasing, not
decreasing, income inequality,” Mr. Furman said.
Does he not get that the tax structure and minimum wage would need to be changed to accommodate UBI? The welfare state needs disruption, not gradual change.
But if you assume UBI as a part of a package deal which includes tax reform and changes to minimum wage then it's much harder to write it off as clearly unviable.
Woo, rough in this thread. Treading carefully, I do notice that the subject of the article is short on concrete solutions to the (potential) problem, instead relying on:
"“The concern is that the process of turnover, in which workers displaced by technology find new jobs as technology gives rise to new consumer demands and thus new jobs, could lead to sustained periods of time with a large fraction of people not working,” he said.
Still, the solution isn’t a universal basic income, Mr. Furman said. Instead, he focused on reforming the existing array of programs meant to help the unemployed and the poor."
This almost seems to bolster the opposing point: yes, there's a real threat here, but we (hand-wavy thing) have existing programs we can fix up for that. Other than the last sentence, I don't see substance, but more of a media sound bite.
Only one solution exists to the threat of automation and that is: training.
People need to be able to rapidly move from unproductive or fully automated parts of the economy to others. It's easier said than done and in the US at least would require a massive investment in and rethinking of access to vocational education. It needs to be free as a start.
Automated driving could unemploy millions of truck drivers. Give me one other industry that needs millions of workers and that retrained truck drivers could do. Or even 5. But I don't think it exists outside of creating other, large "new deal" type programs.
I don't see why we shouldn't do a new deal. Possibly a new deal for the space age. There is also a tremendous amount of work to be done in the sciences as well. Work ranging from high skill scientific experimental design to low skill pouring of agar plates.
I am all for a new deal set of programs. The roads are all falling apart from what I've seen. Plenty of infrastructure to be maintained. Space, sciences, etc would all be great. Or how about just employing people to cook healthy food for other people? As it is even restaurants have gone largely preprocessed in the search of disminished costs.
I don't know if it's the only solution, but it would definitely help if there was adequate, well-respected and well-promoted free education.
Unfortunately, paid education will inevitably work aggressively to maintain their place in the system.
The biggest problem I think is not just the availability but the motivation for people to see it through. There are great options available now for people willing to teach themselves, do online courses (free or cheap) and most don't bother.
The problem with education, and online education specially, is the disconnect between the effort required for learning and the rewards. The latter often are realized once a sufficient amount of skill has been developed, which takes quite some patience to get to.
If employers were to somehow collaborate with online course providers to create some kind of pipeline from unskilled-> skilled workers, that would be really amazing. I honestly wonder why more companies don't do that.
> I honestly wonder why more companies don't do that.
Easy: generic education applies to any potential employer, not just the original sponsor, and there's no legal way to force a person, once educated, to work for you. (I'm not arguing there should be, either.)
Put another way, you'd be training your competitor's employees if you were to do that. No rational actor wants (or can afford) to do that.
Would they be able to put a clause in the employment contract to trade X number of years for $X amount of education? I know the US government offers college scholarships that have similar terms, but I don't know if private industry would be able to enforce something like that.
Don't be silly, it's a common practice in some industries for a company to pay some expensive course in exchange for X (usually 2) years of work (paid, very well). You can leave whenever you want, you just have to pay back the course.
I had a friend working for Airbus who just did that, the company he moved to offered to pay him back the cost of the bailing out.
Though all the times I have seen this happening was for very specialised and well paid work, when the workers have quite a lot of leverage. It's not hard to imagine this becoming really bad if the worker does not have any leverage.
I think your first paragraph especially is great. Expands on what I meant.
Perhaps industries rather than employers though? If there was a stronger connection between a point achieved in the pathway and the capabilities of the student? Obviously many students do placements and internships, but perhaps a great emphasis on that from the very beginning?
Those students are frequently paying their own training costs (tuition at university). Much less risk for the organization; let them take on debt, internship when they're close to the end, if the intern is really solid offer them a job (possibly with reimbursement)
Not disagreeing, just raising a related point. Once upon a time, children were contributing as workers early in life (on the farm, etc). Then in their teenage years. Now, many are still at home in their early- and mid-twenties pushing on after 12+ years of primary and secondary schooling to university and post-graduate qualifications.
I think working earlier has a few advantages such as being able to cover own costs (reducing the burden on parents), getting practical experience sooner, working out whether you're even on the right path earlier, etc.
The acquisition cost of an already skilled person (can start being productive quickly/immediately) is lower than the cost of training one up to be skilled. Add in the dice-roll of whether they're any good after the training, and you get the current market.
The problem with training is that the government are in charge of bursaries (or other forms of payment to learn or train) not the market. So you can get money to get a degree or become a doctor or teacher, not to learn AI or VR or cloud computing etc...
Sounds like he prefers a heavier handed approach that would result in much more government than a UBI. I completely disagree with him. Give people the power to choose with a basic income. That will do more for th nations wealth than training programs ever could. It will also require employing fewer people at the governmental level.
On the other hand, can you imagine the political fall out if he had been for UBI?
Read some of the public policy literature about 1960s and 1970s cash grant programs.
Spoiler: they failed spectacularly. Giving poor people a wad of cash and the power to choose often leads to poor choices that negatively impacts children.
>“We should not advance a policy that is premised on giving up on the possibility of workers’ remaining employed,” Jason Furman, chairman of the Council of Economic Advisers, said Thursday in remarks at New York University.
Isn't the idea that people could be employed doing anything on UBI (subject to the market demand - sans artificial restrictions)? As in, the exact opposite of what Furman claims is the premise of the UBI system?
Part of the issue is UBI poses a threat to established ways of doing things -- many businesses rely on the relative lack of social and labor mobility as a way to provide the continual supply of low-paid unskilled workers they want. The threat in UBI is that those workers would be able to take time out of the labor market and get education and training or even start their own businesses instead of settling for the "it's the only game in town" of working under the established model.
If your strategy for employing labor includes anything other than the monetary recouperation for someone's time then your entire labor strategy is perverse.
Can you clarify the question? It sounds like you think UBI's problem is that it removes the "continual supply of low-paid unskilled workers [the businesses] want".
It's not a real threat, because as UBI is slowly ratcheted up to actually be a livable wage automation will replace all of that unskilled labor. If we instituted a UBI right now it might be something really low, like maybe $200/mo. A person might work fewer hours at their shitty no-skill low wage job, but they aren't going to quit.
Eventually yes, but I was speaking of the transition period that the OP was asking about... what will happen while businesses still need labor? That is, before we've successfully automated all of the low skill human labor? Well, until then, we need people to work, so the UBI would have to be below a livable wage.
Not at all. People will still want to work. Everyone wants better than they currently have. so you can afford food and rent. you may not need it but you still want a cell phone, Internet, a car, etc etc. the point is to ensure a basic quality of life. The rest is up to the individual. Plus after UBI people will be much more open to working fewer hours or with no benefits. It's a very strong positive externality on labor flexibility.
If you mean "in practice it will vary by location because it won't be everywhere provided by the same organization, and thus likely won't be provided everywhere under the same rules," then I agree with your expectation.
If you mean "a basic income, offered by the same organization in multiple places, should be adjusted for cost of living", I disagree. Moving some "extra" funds towards lower cost-of-living areas winds up being a feature - resources are shifted (slightly) away from concentrations of wealth and toward concentrations of people, where those disagree.
Only if you think businesses that rely on extremely low wages in order to be profitable deserve to exist.
Frankly if the only way you can make widgets is to pay your widget-makers just enough so that they don't die, or perhaps less, then in my opinion society should reconsider how valuable it considers widgets to be, or at least whether someone else can make widgets more efficiently.
It's called a market externality. In economic terms, any externalities like this are a symptom of market failure. Get enough of them and a market won't exist or arguably should not. At the very least it represents inefficiencies. Everybody's supposed to agree to hate all of the aforementioned in a capitalistic economy.
An externality impacts the market through a means other than the immediate price point of a good. As Milton Friedman put it, the market only affords one communication method between supplier and demander: price. That, alone is meant to encapsulate all input costs. If to employ someone to make or render a good or service the employer relies on an external factor such as the state of the world then the employer is exploiting a market externality.
That's a much wider definition of externality then I was taught when I studied economics. To quote wikipedia: "In economics, an externality is the cost or benefit that affects a party who did not choose to incur that cost or benefit"
So, it's not just any state of the world, but in particular that my actions cause cost/benefits to other parties.
What if the widget-makers are teenagers who are working their first job? They don't need to support themselves by their labor yet. I think there is some room for these kinds of jobs.
Obviously, when adults are trying to support themselves with this kind of job, we have a problem.
Why is that a problem? The teen, not having to support themselves, has an advantage over the self-supporting individual, they can accept lower wages. In return the company has a choice, to employ teenagers for less money and dealing with the consequences that they are part time or seasonal, or to employ the individual that demands a living wage for themselves and dealing with the consequences that they are full-time and rather permanent.
To me that sounds like an upside, not a problem. With UBI, workers have more bargaining power, so employers can no longer get away with treating them like they're disposable.
This. Oh so much this. The more I learn about how the world works, the more I am amazed and horrified by the creative and subtle ways that humans come up with to coerce other humans into doing their bidding without realizing that they are being coerced. (Donald Trump is a master of this game!)
That was actually not my intent at all. The government is not exactly subtle. And the example that I cited -- Donald Trump -- is not (yet) part of the government.
What I'm referring to is the kinds of phenomena that the parent poster was describing, ideas like, "Work hard and play by the rules" which seems like a good idea except that it actually turns out to be a way for people who are willing and able (usually by virtue of their membership in some privileged social class) to bend or break the rules to manipulate those who are unwilling or unable to do the same.
Not at all. UBI is a cynical attempt to push people into even more if casual gig jobs that are en vogue right now.
UBI lets you subsist so that you're free to drop off my groceries for beer money.
All of the other unicorn bullshit (automation will free us from want, etc) is the 2016 equivalent of the 1956 flying car or magical gourmet microwave dinner.
Note how wages have not increased as productivity has? UBI is what fixes that. Its distributes that productivity to people so they are not slaves to capital.
It might fix it, but I think not directly. UBI alone won't fix the productivity-wage gap because giving everyone a flat grant isn't going to stop employers from paying low wages. However, it will remove one bit of leverage employers have when negotiating low wages, that being threat of destitution, which hopefully would help get wages tracking with productivity again, as they should.
During that same period, you broadened the scope of the workforce greatly by bringing women into the mainstream workplace and ending systematic discrimination against minorities.
...and then the scope of the workforce was globalized. Talk to any private sector union steward about the biggest roadblock in negotiations -- it's the ability to leverage the liquidity of the labor market to pick up to move to Mexico, China, India, etc.
In the public sector, unions don't have that problem -- you can't outsource the cops (yet).
It also coincides with the end of the Bretton Woods system, the last remnants of a gold standard in 1971. From there it was fiat currency, adoption of the U.S. dollar as reserve currency to the world, and rapid globalization.
My argument is that UBI would distribute existing (massive) productivity gains to citizens directly as a "citizen's dividend", instead of the current model where its being siphoned off by large corporations for investors, while leaving the working class with stagnant wages for decades.
This would push wages up, as employers would have to pay more for the privilege of utilizing labor.
The story in that graph is about change in productivity WRT change in wage, though. In order to "fix that" you either need to see an increase in wage growth or a decrease in productivity growth.
It seems that your argument is that it (UBI) will increase wages with no (or minimal?) change in productivity. Are you counting the transfer payments in your increased wages, or are you implying that wages will start growing again in addition to the payments?
I'll be very interested to see the results of the YC basic income study, and whether people actually choose to loaf around, drop off groceries for beer money, engage in self-study, or start businesses.
I don't know which'll happen. I'm surprised to see the degree of confidence exhibited by both sides of the debate, people who are either sure it'll result in entrepreneurial utopia or sure that it'll be the end of the world as everyone does nothing. My sense is that there's a good deal of projection here, where people who have successfully cashed out a startup assume everyone will build a startup, while people who wish they could do nothing but loaf around all day assume that's what everyone else will do. Personally, I just want to know, and so I'm waiting on the data before judging.
I have a feeling a lot of people will move to a more creative career, which probably won't be entrepreneurial. A great many novels will be written, films produced, etc.
In a situation where people are given a base amount of money that covers their cost of living expenses but provides no extra money to obtain physical resources they will turn to the creation of intellectual property.
This endeavor is low cost in material but high cost in terms of time.
We have data: aristocrats, trust-fund babies, the idle rich, even to Roman times. Most do nothing but follow courtly fashion; but some became politians, scientists etc.
A huge difference is being at the bottom rather at the top. Status is a motivator.
We also have data on the other side too: wealthy Google millionaires who continue to work there, startup founders who are on their 2nd or 3rd or 4th startup, Plato and Aristotle, etc.
Well, technically, these are all anecdotes, but the plural of "anecdote" is "data" after all.
There's a significant difference between wealthy Google millionaires who continue to work there and aristocrats, trust-fund babies, the idle rich. The former are largely self-made whereas the latter posses entirely unearned wealth and status. They're two entirely different categories.
The point of the study is to find out whether average Americans are more like wealthy Google millionaires or more like trust fund babies. I'm curious what the results will be - since so many people have to work to survive, we don't really know what their inclinations would be otherwise.
Sorry, re-reading my comment, I didn't actually say it, but I agree that we need more data - I just meant we do have some data (with the privisos I noted).
Regarding Google-millionaire data: what percentage actually does keep working? We hear about those who do, but not of those who don't (eg Minecraft's Notch). "Newsflash: multi-millionaire relaxes" And, confounding factor: people who succeed amazingly well often keep doing whatever made them wealthy, well beyond financial satisfaction. At least, one hears of those cases - I don't actually know the percentage of how often, vs. those who take it easy. [Guess this is what brbsix meant]
Anecdatum: when I made enough from something I created, I quit. Yet, turns out I was happier before... so was probably a mistake to quit.
India, Kenya and city of Utrecht, NL have been doing basic income experiments for a few years now surely there must be data from that available somewhere.
If you weren't solely dependent on the income it generated, I think running deliveries would actually be a decent way to pass time. Fewer pressures than what I do for a living!
Seems like best-bang-for-the-buck type of investment for most people would be to lobby to increase the UBI amount and/or vote for politicians who promise to do so.
Early 90s immediately after the collapse of the Soviet Union provide a window into social dynamics of multiple countries where the majority of population was largely employed by government, many in some meaningless occupations (the running joke was "we pretend to work, they pretend to pay us"), others with lifetime pension guarantees - hyper-inflated currencies, general switch to barter for any meaningful financial transaction and endless parade of populist politicians promising to increase everybody's personal wealth by passing pension and government salary rate increases.
Sorry, no. Giving people more options (as in, unrestricted money to spend) is the opposite of coercion. Even if it's not enough to live off by itself, everything helps.
For example, like unemployment benefits, it gives breathing room to hold out for a better job. Or if they're in a union, it's something to live on during a strike. Or maybe they will take the casual job.
Who knows? How people choose to use their freedom can be hard to predict. That can be a little scary. But the point is it's their choice, not ours.
> Giving people more options (as in, unrestricted money to spend) is the opposite of coercion.
The context is important. Are these "options" given willingly or taken by force? The distinction is pretty important. It's the difference between making love (a voluntary interaction) and rape (an involuntary one). If this "unrestricted money" is to be collected by force (or the threat of it), it is most certainly coercive.
You should be aware that it's entirely possible to construct justification of tax-supported UBI or other social-welfare programs in a way that is just even by libertarian standards. Admittedly many variations involve recasting the tax as a sort of civil damages award, but it works.
Yes, of course taxes are coercive. I was talking about the other side. The person getting unrestricted money to spend isn't being coerced.
Compare with conditional transfers (you get the money but only if you meet certain requirements). That can be coercive in effect, if you need the money badly enough.
UBI lets you ignore requests to do jobs that suck for low pay. It also lets you accept jobs that are awesome for low pay. Like maybe librarian, or craftsperson, or zookeeper, stuff that really wouldn't pay the rent too well on its own. Is this exploitation? I personally think not.
Only if you're starting at zero. It doesn't magically let me afford my mortgage as a barista.
End of the day, it's sort of like social security for everyone. It may be a more equitable form of welfare, as men and intact families would be eligible.
IMO, resources would be better spent on housing subsidy, healthcare and publicly administered pensions.
It would definitely let you sell up and move to the countryside, where houses are cheap and so are mortgages, because you wouldn't have to worry about living expenses while you established your own job out there.
More importantly politicians rely on being able to selectively dole out support and money and a UBI would take away that ability and thereby a lot of the direct influence over segments of society.
If anything I am quite sure businesses would be more than happy with UBI because they would not get people who HAD TO TAKE THAT JOB and instead people who took it because they wanted it. A UBI would never be high enough to allow you to skip work unless it also provide absolute basic housing too and food.
My hypothesis is much simpler and doesn't involve a conspiracy of evil corporations and evil government:
The only way to grow an economy is to grow the private sector.
That's not yet my hypothesis, it's just a plain fact as the government sector can only exist by the taxes paid by the private sector.
My hypothesis: The government believes that too many will simply stop working (thus causing a contraction in the private sector and in the end also in the government sector - which is supposed to use its shrinking resources to pay for UBI)
Its not as simple as that. You're assuming that all Govt. programs lose money, which is definitely not true.
Furthermore, from historical data, most of the economic miracles/expansions have been a result of large scale fiscal policies by the federal govt. of respective countries. New Deal, Marshall Plan, War Spending for WW2 etc. all provided the boost that was required to kickstart the economic engines of the respective countries and military spending continues to sustain the US economy to this day.
I love this community but really dislike the simplistic acceptance of Randian theories of economic growth and the importance of the private sector. Private sectors are most definitely important and required. But only the Government has the capacity, the resources and the will to execute something like the Manhattan Project, the Moon Mission etc. We shouldn't dismiss any sector so easily.
Very true - and as well as freeing you from bad jobs, UBI frees you from bad marriages. According to a recent Freakonomics podcast, a trial of UBI in a Canadian town lead to a rise in divorces. It was therefore shut down with extreme prejudice by socially conservative politicians.
On the bad job front, I think a UBI could resolve an imbalance that has always perturbed me. When I was travelling, I once got a job in a laundry - I hadn't realised that laundries have dirty and clean ends, and guess where new employees start! It was disgusting, and the only positive was the space everyone gave me on the crowded bus home. Then a contract job came through compiling a report that an overseas company had promised to carry out if they got some contract. I went from a horrible job on minimum wage to a plush office job at ten times the rate, and at the time it seemed crazy that I was paid more, not less.
A UBI would seriously shake this up. Society would have to pay more to incentivise people to do the the less-glamorous jobs, which to my mind would be fairer.
Very true. Note, however, that this would also increase the cost of the outputs of those jobs to consumers. In your case the cost of laundry would probably increase to the point where it wouldn't make sense for a lot of people anymore. It's a complicated web of job loss, job creation, wage increases, price increases, automation, and several other factors all bound up together.
I agree its complex but I would rather free people up and suffer the consequences of larger costs than have a majority of the populace engage in rather meaningless activities. It should at least be given a shot, especially when we have the means - automation - to do it somewhat cheaply.
The idea that people will stop working without the constant threat of total destitution lingering on the periphery, is so totally ingrained into the American psyche that it isn't even worth mentioning.
> "is so totally ingrained into the American psyche that it isn't even worth mentioning."
It's hard to appreciate something you're surrounded by (to use an analogy, it's hard to appreciate the air if you're constantly surrounded by it, would be the same for a fish with regards to water).
With that in mind, it can be useful to point out the ingrained parts of a culture. If nothing else it allows us to re-examine deeply held beliefs to see if they stand up to scrutiny.
I meant it isn't "worth it" for Jason Furman to mention it, because he can assume that virtually everyone listening (or, at least, his intended audience) not only assumes it as a given, but has it so ingrained into how they think about the world that mentioning it in the first place would actually be weird. To borrow your example, if a fish started every argument with "we are surrounded by water, therefore..."
> "We should not advance a policy that is premised on giving up on the possibility of workers’ remaining employed"
Yeah, this makes about as much sense as, say, "We should not advance a policy that is premised on giving up on the possibility of stamping out marijuana use."
It's really putting the cart before the horse. Nobody is going to their grave saying "Gee, I'm glad I was employed my whole life. Doesn't matter if I was miserable, because I had a job!"
There may be valid criticisms of UBI, but this article doesn't mention any.
> Our goal should be ... to foster the skills ... to make sure people can get into jobs, which would much more directly address the employment issues raised by [artificial intelligence] than would UBI.
That is the traditional solution, but we should question the assumption that is it the best way of life for most people.
> “Replacing part or all of that system with a universal cash grant, which would go to all Americans regardless of income, would mean that relatively less of the system was targeted towards those at the bottom—increasing, not decreasing, income inequality,” Mr. Furman said.
Nonsense. You can get any level of income inequality you want by choosing suitable numbers for UBI and tax rates. Furman is an economist, so he must understand such basic math. This part appears to be pure FUD.
FUD /fəd/ noun
Fear, uncertainty and doubt (often shortened to FUD) is a disinformation strategy used in sales, marketing, public relations, politics and propaganda. FUD is generally a strategy to influence perception by disseminating negative and dubious or false information and a manifestation of the appeal to fear.
Welcome to economics, a modern form of astrology where politicians ask their friends if "the math" can support a position. Of course it can, if the economist wants it to.
> ... employment issues raised by [artificial intelligence] than would UBI.
I didn't know that the economic situation we are in was caused by artificial intelligence. In fact I didn't even know that there was an artificial intelligence or that anyone has lost his job because of that.
There are artificial intelligences all over the place, and many people have lost their jobs to them. How many telephone switch operators do you know? Traffic control people? Typesetters?
Given this man's established ideological record, I think this article reveals more about Jason Furman's personal philosophical baises than it does about the objective costs and benefits of UBI: http://articles.latimes.com/2008/jun/11/nation/na-furman11
> The idea is to ensure everyone has a chance at a decent
> life even as technology shifts and the labor market churns,
> eliminating and creating millions of jobs that often
> require vastly different skill sets.
Is that REALLY the idea? To make everybody less prone to adapt to technology changes?
Just $10,000 per adult is $2.4 trillion. That of course wouldn't come close to being enough. Even if you assume tax redistribution of the money (rich people getting UBI, and then having it taxed away), for $2.4 trillion you probably would only manage to get the poorest 1/4 up to something like $15,000. Today the poorest 1/4 are receiving a net of more than twice that sum between Federal and State benefits.
Federal budget ($3.9 to $4.1 trillion or so depending on which year we're talking about) minus dozens of things that won't be replaced by UBI and won't go away (eg NASA, military, agriculture subsidies, budgets for countless agencies like HSA or FBI, transportation, justice and so on) = you might be lucky to break even or bleed just a few hundred billion on the budget if you allocate $2.4 trillion to UBI. That's assuming Social Security, all housing subsidy programs, all welfare programs, half of all social services programs, Medicare, Medicaid, Obamacare etc etc are all ended.
The equation at the state level is a whole 'nother calculation, and would be a very significant factor given the states budget is another ~$1.7 trillion and represents all sorts of welfare programs and healthcare spending.
Personally I favor Warren Buffett's premise of significantly boosting the earned income tax credit, and freezing or lowering the minimum wage. The UBI is dramatically regressive, there's no reason to be giving the top 50% in the US a UBI.
This is what I was wondering. The top 50% certainly don't need UBI. If everyone got it wouldn't sellers immediately increase prices and we'd be right where we started? A loaf of bread for $50.
This is where I'm confused about the benefits of UBI.
So, say that we institute UBI, and people no longer have to work. That increases the cost of labor - you can't attract a cashier for $9.30 an hour, so you have to pay $15 an hour or whatever.
This has to be passed right back to the consumer, so prices go up. Rent goes up as well - maintaining property takes labor as well. Now, the UBI is no longer sufficient to sustain a decent life, and the poor are right back to where they started.
This argument is also used against increases in the minimum wage. Now almost everything in economics is up for debate, but very few economists agree that raising the minimum wage by X dollars will result in prices rising by X dollars so that the effect is non-existent.
There are several reasons for this, the biggest is that cost of labor isn't the only input in pricing.
Basically the cost of supply constrained goods will go up, but not enough to outweigh the increased purchasing power for lower income earners.
very few economists agree that raising the minimum wage by X dollars will result in prices rising by X dollars so that the effect is non-existent
You are looking for obvious increase in prices, but raising prices is unpopular with consumers.
Instead, companies will move the production offshore, lay people off, make smaller packages [2], use machines, use cheaper ingredients etc. and those things create the illusion that the price is not rising. Price is the same, but the quality (of goods/services & of life in communities) is going down.
cost of labor isn't the only input in pricing
It's the main one, since the biggest cost to most companies are employees + suppliers (that also have their own employees). Increase in the price of labor will certainly have an effect - if not directly on higher prices, then on quality.
Only if a loaf of bread is supply constrained or there are no competing bread suppliers or alternate goods.
>The top 50% certainly don't need UBI
The top 50% get a UBI, but most plans would pay for it by increasing taxes on the wealthy. There would be a cutoff, so that above a certain point you'd be paying more in extra taxes than you'd receive in UBI.
The vast majority of UBI plans definitely aren't regressive.
The top 50% get a UBI, but most plans would pay for it by increasing taxes on the wealthy. There would be a cutoff, so that above a certain point you'd be paying more in extra taxes than you'd receive in UBI.
I can't remember seeing a single UBI plan that is regressive. The goal of almost all of them is increased income equality.
There's not really a difference in this and increasing the EITC except in perception--eliminating means testing so that everyone gets the UBI, which many people think is important.
While I'm in favor of UBI (though preferably after smaller-scale experiments and careful study), this survey of economists about one version of UBI did give me pause:
Small scale experiments are useless in the case of UBI, because introduction of UBI in small scale will not trigger inflation.
So small scale experiments are gonna to show that UBI works well, without negative inflationary consequences, but full scale introduction will be a disaster.
Is anyone really surprised? There's almost no political support for a universal basic income in the United States. Hopefully that will change someday, but it's not happening any time soon.
Seems like a nice piece of progress (if we can keep it continuing, instead of letting it die off again) that the idea is getting this much play in public to start with, compared to two years ago.
Don't be too upset that people aren't sold right now, just keep pushing the conversation forward.
The only way you get the money is by sending war and shuttering the military police industrial complex. You don't need new taxes what does it cost to run thousands of bases and run multiple wars at the same time for over a decade. There's plenty of money for UBI if we reorganize society away from violence.
It seems to me some economists simply can't fathom en economic system not fueled primarily by human labor. "Employment" is treated like a good in itself instead of what it should be treated as: a means to the desired end of high quality of life.
Why is UBI so popular on this site? This is a site for hackers, programmers and engineers.
Could it be the result of a decade long propaganda by VCs targeting Zuckerberg wannabes - those who want to have UBI, so they can work on the newest blockchain-enabled photo-sharing social local VR app ?
I wonder the same thing. I am not saying disagree. I think the YC experiment is interesting and I really want to see the results. On the other hand I wonder what they stand to gain from it?
(my guess / personal opinion, I don't claim to speak for everyone)
Because so many here believe so strongly in the power of automation. Almost all software engineers are in the business of putting people out of jobs - eg. replacing a secretary with a mail and calendar app, replacing a business middleman with an online marketplace, or replacing a sysadmin with cluster management tools.
A way to resolve this cognitive dissonance of us doing a thing we think is right (automating the world) with causing a thing we think is bad (unemployment) is to turn unemployment into not a bad thing, which is the promise UBI makes.
This doesn't mean we don't honestly believe it can work. But it makes us more likely to WANT to believe it. Brains are funny things.
Increasing levels of automation certainly plays a part in the drive to explore solutions like UBI, but it's not the only consideration. On a broader level, the issues driving UBI are those related to social mobility and quality of life. Those issues would exist without the drive towards automation.
To explain what I mean, imagine you're working a low-skilled, low-paid job just to keep a roof over your head, with very few opportunities to retrain (both in terms of free time and money). In other words, you're working just to survive, and are not making the most of your time on Earth. UBI would give people in that situation an avenue to retrain, as well as making it harder for companies to keep wages low for undesirable jobs, they would have to better compensate people for giving up their time to do a job they otherwise wouldn't be interested in doing. None of these factors are directly derived from increased automation.
As for whether or not UBI will be a net benefit, the answer is not completely clear, but that's the reason small-scale experiments looking into UBI have been started.
UBI gives people the ability to follow their dreams without risk of homelessness and starvation. Some of those dreams will be blockchain-enabled blah blah, some will be writing novels, or starting bands, or making community gardens, or teaching, or whatever.
Perhaps there are VCs who advocate UBI only because they think they can make money on the small subset of people whose dream is to start a venture-funded company and take it public. But UBI helps people follow whatever dream they have, so you'd have to hate VCs an awful lot to oppose UBI for that reason.
some will be writing novels, or starting bands, or making community gardens, or teaching, or whatever.
And slaves in 3rd world countries will make all the things (cameras, phones, clothing, furniture, raw materials etc.). Are those gardeners actually going to contribute in any way to the lives of people in China who make the things that help them be a gardener? Trade is a 2 way street. Person in China makes the things, but what does the American gardener do in return for the Chinese maker?
UBI gives people the ability to follow their dreams without risk of homelessness and starvation.
This is what independently wealthy have today. But, the way those people make money is by subjecting everyone else to wage slavery, creating monopolies and extracting rent. Sometimes it's fraud. In the past it was explicit slavery.
So, maybe Americans could live like poets and gardeners, but first the rest of the world would have to be enslaved. Meaning, you don't trade with the Chinese and provide value in return, but enslave them. Is this a possibility? Do you think Chinese makers are going to put up with American poets and gardeners on welfare?
China should also work towards UBI. Currently they are behind the US in GDP, but their growth rate is much higher so it's possible they'll be able to afford it first.
I haven't followed UBI too closely, but I don't think I've seen discussed the inflationary effects that it (in my opinion) would likely have.
What is the breakdown of winners/losers that UBI would target? From what I imagine, it's a bit like an upside-down bell curve. People who have close to 0 would be better off, big companies too, and everyone in the middle a bit worse off. Is that the intention of UBI?
Inflation is pretty much the first thing that most people think about when they look into UBI for the first time.
Here's a summary of some of the pro UBI arguments:
Most plans would be paid for by increasing taxes on the wealthy, so it doesn't actually increase the money supply;
Prices should only increase on goods that are supply constrained;
We're already giving away billions of dollars in assistance in the form of SNAP (food stamps), and increases in SNAP assistance don't seem to cause food price inflation (or at least not enough to be detectable);
We also already provide huge subsidies in the form of the Earned Income Tax Credit, which doesn't appear to have inflationary effects (again at least not enough to notice);
The examples we have of partial basic income haven't caused large scale inflation. Alaska hasn't seen an increase in inflation since they began providing a partial basic income to all residents, and Kuwait didn't see an increase in inflation when they gave every citizen $4k in 2011.
To summarize the summary, a UBI would probably cause a price increase in supply constrained goods and services, but not nearly enough to drown out the extra purchasing power provided to people with lower incomes.
How this affects the middle class depends on how high we set the cutoff where you start paying more in additional taxes than you're getting in UBI, and it depends on how income inequality and velocity of money affect the middle class. Many economists think that increasing income equality will help the economy as a whole, but that's open for debate (I personally think that it will).
I doubt it's as open for debate as some people want to claim. It's pretty sound policy. A basic income is going to have a much higher multiplier than increased government spending on defense. No need to scratch your head or needle data to see that.
I haven't seen this anywhere , but don't we already have UBI for a large number of people in the US? We call it social security, but it's just cash payments to people . That program is constantly talked about being shrunk, not expanded.
What about an expanded UBI would be different than social security? Just the fact that people are younger or not-disabled?
For the non Americans, social security provides cash payments to those over 65 and those with long term disabilities.
Social Security is funded by the money workers pay as a portion of their income over the lifetime of their employment. The elderly on Social Security paid into this system. Unfortunately many have ended up paying in less than they have received over the course of their retirement due to people living longer than the actuarial tables had accounted for. Over the course of SS 80 year history it has taken in $19.0 trillion in taxes and paid out $16.1 trillion. At the moment Social Security takes in more than it pays out, but that changes in two years when it will start running a combined deficit, it has roughly 18 years until the combined funds are depleted, *A rosey prediction as this is relying on data which includes a Labor Force Participation not dropping much more than it is now, which is tough as we're already more than a decade a head of where we should be if only Demographics were considered, and economic growth more than we've averaged since the Recession.
"Mr. Furman also said a universal basic income would exacerbate income inequality, already a rising concern in the U.S. "
What am I not understanding? Wealthy persons will fund this. Sure, they may get the $12,000 per year UBI, but their taxes will go up by much more than that.
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[ 6.5 ms ] story [ 252 ms ] threadThat's how you sound... Please don't bring in pop-econ sources to validate your points...
I agree with the premise that most people don't quite understand how much automations will eventually disrupt the entire labor force.
Edit: nevermind, it's not your thread. Just shitting the place up for fun, I guess.
A basic income to stimulate demand and take pressure off broken labor markets? Heresy.
For as little as 15k a person, I'd strongly consider never working again.
Or big business might overthrow the government.
Or maybe people figure out it was a bad idea and elect the GOP to dismantle it.
We used to write fantasy stories about when robots took the yoke of work from our shoulders. Now that its happening, we resist with all our might. I wonder why?
Maybe this time is different. But our current unemployment numbers aren't bad.
The debate will be about whether people should be in control of their own lives or whether they need a paternal state to protect them from themselves.
That aside I don't know where you get the idea that the Republican party would be for a universal basic income. Their current position (under Trump at least) is to abolish the minimum wage in order to encourage everyone to work. And they have always favoured individual responsibility and opposed government handouts.
Also, I'm pretty sure that Trump's and probably most Republicans' position on the minimum wage is that it's ideally set by the individual states in accordance with the realities of their economies. A $15 federal minimum wage would devastate vast swaths of America by effectively banning work. The economy in much of America simply can't sustain that.
But yes, if we adopted a UBI we should most certainly eliminate the minimum wage, since it accomplishes the same goal much more comprehensively (i.e. for everyone as opposed to just those who have a job).
http://www.alternet.org/economy/how-richard-nixon-almost-gav...
Why didn't it happen, in the words of Canadian Professor Eveyln Forget (of the University of Manitoba, Canada) “The political right is afraid people will stop working and the left doesn't trust them to make their own choices.”
At any rate, I don't see liberals and leftists taking a unanimous stand against UBI. Opinions are divided, almost as though they are each separate individuals with their own thoughts.
For the sake of argument I guess you mean "planned economy" but you don't have to support that to support a welfare state, either. Sounds to me like you're strawmanning the hell out of liberals.
I think that, almost by definition, if you support a traditional welfare state over a UBI, you want a paternalistic state. OR you think that industries like health care are best directly run by the state (because otherwise, a UBI would allow everyone to buy coverage in the private market, if they choose to). That's a planned economy there. And "the economy" is such an overwhelming portion of what we call a society, that a planned economy is effectively a planned society in my eyes.
You are confused. Basic income is the "liberal welfare state." The people who want UBI are the same people who want a higher minimum wage and universal medical coverage.
Arguments that consist of telling people to "read more history", "educate yourself", or similar are totally worthless. You might as well not post. If you have an argument to make, then make it. Otherwise, spare me the snark.
Oh you're the person who called me "too dumb to post here" in another comment in this thread. For someone who is apparently so much more intelligent than me, you seem to have very little of substance to contribute.
A basic income to stimulate demand and take pressure off broken labor markets? Heresy.
He also says that UBI will cause wealth to be distributed equally which means less of the total tax will go to the poorer class. This is not exactly true because the idea is to give cold, hard cash instead of trickling down the wealth. So the dynamic will be different, and that is the whole idea. That just giving cash is generally better than welfare schemes.
I know that many countries do provide free tertiary education, but in the cases I'm aware of, its a relatively small percentage of the population that gets tertiary degrees compared to the US.
For Germany, secondary education splits into three tracks, with the upper third choosing between a traditional University track, a more vocational Fachhochschule, or a dual work/study arrangement in the form of a "Duale Hochschule". These all offer bachelor degrees, but AFAIK only the University track offers masters and doctoral programs.
German universities are also sparser in regards to amenities and faculty/student ratios than US or UK universities, at least from what I've heard, which brings costs down further.
Graduates from lower secondary tiers also have several options.
There's the Ausbildung, where businesses train hires internally to meet requirements for certain positions. A bank may train an "Azubi" from Teller to Account Manager to Branch Manager.
Then there's the Meisterwesen, which is still reminiscent of the guilds, and mostly prevalent in the trades (e.g., Carpentry, Baking, etc.). Levels go from apprentices, to journeymen, to masters, where masters are licensed to open their own workshops/stores. My personal perception is that socially, a master carpenter is on the level of a masters graduate, but still below that of a PhD, but that's still a fair bit of social mobility considering that this route is open to anyone with any secondary school degree.
So whilst less people get a college degree, business and industry do provide routes to livable work without one.
Effectively, anyone that wants to get a degree can. There is no barrier outside the academic. And this loan stays interest free until we leave the country long-term. A small percentage is taken automatically out of your pay when you finally start earning. It all works pretty well for us.
The overwhelming majority of Universities are government operated and are subsidised. There is a fee, that can be paid upfront or be deferred to be paid through the tax system after you graduate.
In effect it's cheap(er) education with a loan system that:
- Is interest free, but indexed at CPI
- Does not survive death (i.e. your debt disappears when you die)
- Is only repayable once you reach a specified level of income.
"It is difficult to get a man to understand something when his salary depends upon his not understanding it." - Upton Sinclair
"“The concern is that the process of turnover, in which workers displaced by technology find new jobs as technology gives rise to new consumer demands and thus new jobs, could lead to sustained periods of time with a large fraction of people not working,” he said.
Still, the solution isn’t a universal basic income, Mr. Furman said. Instead, he focused on reforming the existing array of programs meant to help the unemployed and the poor."
This almost seems to bolster the opposing point: yes, there's a real threat here, but we (hand-wavy thing) have existing programs we can fix up for that. Other than the last sentence, I don't see substance, but more of a media sound bite.
People need to be able to rapidly move from unproductive or fully automated parts of the economy to others. It's easier said than done and in the US at least would require a massive investment in and rethinking of access to vocational education. It needs to be free as a start.
Unfortunately, paid education will inevitably work aggressively to maintain their place in the system.
The biggest problem I think is not just the availability but the motivation for people to see it through. There are great options available now for people willing to teach themselves, do online courses (free or cheap) and most don't bother.
If employers were to somehow collaborate with online course providers to create some kind of pipeline from unskilled-> skilled workers, that would be really amazing. I honestly wonder why more companies don't do that.
Easy: generic education applies to any potential employer, not just the original sponsor, and there's no legal way to force a person, once educated, to work for you. (I'm not arguing there should be, either.)
Put another way, you'd be training your competitor's employees if you were to do that. No rational actor wants (or can afford) to do that.
Here's Wikipedia on the topic: https://en.wikipedia.org/wiki/Debt_bondage
I had a friend working for Airbus who just did that, the company he moved to offered to pay him back the cost of the bailing out.
Though all the times I have seen this happening was for very specialised and well paid work, when the workers have quite a lot of leverage. It's not hard to imagine this becoming really bad if the worker does not have any leverage.
That's not the definition of a debt slave, because you're not paying back with work, you're paying back with money.
In that scenario, the business is just a loan provider. Obviously, anyone can loan anyone else money for whatever reason.
Perhaps industries rather than employers though? If there was a stronger connection between a point achieved in the pathway and the capabilities of the student? Obviously many students do placements and internships, but perhaps a great emphasis on that from the very beginning?
I think working earlier has a few advantages such as being able to cover own costs (reducing the burden on parents), getting practical experience sooner, working out whether you're even on the right path earlier, etc.
On the other hand, can you imagine the political fall out if he had been for UBI?
Spoiler: they failed spectacularly. Giving poor people a wad of cash and the power to choose often leads to poor choices that negatively impacts children.
>“We should not advance a policy that is premised on giving up on the possibility of workers’ remaining employed,” Jason Furman, chairman of the Council of Economic Advisers, said Thursday in remarks at New York University.
Isn't the idea that people could be employed doing anything on UBI (subject to the market demand - sans artificial restrictions)? As in, the exact opposite of what Furman claims is the premise of the UBI system?
If you mean "a basic income, offered by the same organization in multiple places, should be adjusted for cost of living", I disagree. Moving some "extra" funds towards lower cost-of-living areas winds up being a feature - resources are shifted (slightly) away from concentrations of wealth and toward concentrations of people, where those disagree.
Frankly if the only way you can make widgets is to pay your widget-makers just enough so that they don't die, or perhaps less, then in my opinion society should reconsider how valuable it considers widgets to be, or at least whether someone else can make widgets more efficiently.
Aren't externalities costs/benefits that accrue to third parties? But this doesn't seem to be in that category.
Obviously, when adults are trying to support themselves with this kind of job, we have a problem.
My point was that not every job needs to pay a living wage.
Boots stomping faces isn't the only thing there is.
I think you've just described government in general (and the propaganda that propagates among it's Stockholm syndrome-esque sufferers).
What I'm referring to is the kinds of phenomena that the parent poster was describing, ideas like, "Work hard and play by the rules" which seems like a good idea except that it actually turns out to be a way for people who are willing and able (usually by virtue of their membership in some privileged social class) to bend or break the rules to manipulate those who are unwilling or unable to do the same.
UBI lets you subsist so that you're free to drop off my groceries for beer money.
All of the other unicorn bullshit (automation will free us from want, etc) is the 2016 equivalent of the 1956 flying car or magical gourmet microwave dinner.
Note how wages have not increased as productivity has? UBI is what fixes that. Its distributes that productivity to people so they are not slaves to capital.
Cool, let's see it then ;)
During that same period, you broadened the scope of the workforce greatly by bringing women into the mainstream workplace and ending systematic discrimination against minorities.
...and then the scope of the workforce was globalized. Talk to any private sector union steward about the biggest roadblock in negotiations -- it's the ability to leverage the liquidity of the labor market to pick up to move to Mexico, China, India, etc.
In the public sector, unions don't have that problem -- you can't outsource the cops (yet).
This would push wages up, as employers would have to pay more for the privilege of utilizing labor.
It seems that your argument is that it (UBI) will increase wages with no (or minimal?) change in productivity. Are you counting the transfer payments in your increased wages, or are you implying that wages will start growing again in addition to the payments?
I don't know which'll happen. I'm surprised to see the degree of confidence exhibited by both sides of the debate, people who are either sure it'll result in entrepreneurial utopia or sure that it'll be the end of the world as everyone does nothing. My sense is that there's a good deal of projection here, where people who have successfully cashed out a startup assume everyone will build a startup, while people who wish they could do nothing but loaf around all day assume that's what everyone else will do. Personally, I just want to know, and so I'm waiting on the data before judging.
In a situation where people are given a base amount of money that covers their cost of living expenses but provides no extra money to obtain physical resources they will turn to the creation of intellectual property.
This endeavor is low cost in material but high cost in terms of time.
A huge difference is being at the bottom rather at the top. Status is a motivator.
But AI may "solve" thishttp://partiallyclips.com/comic/dome-house/
Well, technically, these are all anecdotes, but the plural of "anecdote" is "data" after all.
Regarding Google-millionaire data: what percentage actually does keep working? We hear about those who do, but not of those who don't (eg Minecraft's Notch). "Newsflash: multi-millionaire relaxes" And, confounding factor: people who succeed amazingly well often keep doing whatever made them wealthy, well beyond financial satisfaction. At least, one hears of those cases - I don't actually know the percentage of how often, vs. those who take it easy. [Guess this is what brbsix meant]
Anecdatum: when I made enough from something I created, I quit. Yet, turns out I was happier before... so was probably a mistake to quit.
Footage and notes from a conference talk discussing the aforementioned experiment: https://www.youtube.com/watch?v=lanUMETOqWc http://www.guystanding.com/files/documents/Basic_Income_Pilo...
Early 90s immediately after the collapse of the Soviet Union provide a window into social dynamics of multiple countries where the majority of population was largely employed by government, many in some meaningless occupations (the running joke was "we pretend to work, they pretend to pay us"), others with lifetime pension guarantees - hyper-inflated currencies, general switch to barter for any meaningful financial transaction and endless parade of populist politicians promising to increase everybody's personal wealth by passing pension and government salary rate increases.
IMO, people want to work and be useful. Ignoring that drive and substituting bread & circus is a dangerous direction.
For example, like unemployment benefits, it gives breathing room to hold out for a better job. Or if they're in a union, it's something to live on during a strike. Or maybe they will take the casual job.
Who knows? How people choose to use their freedom can be hard to predict. That can be a little scary. But the point is it's their choice, not ours.
The context is important. Are these "options" given willingly or taken by force? The distinction is pretty important. It's the difference between making love (a voluntary interaction) and rape (an involuntary one). If this "unrestricted money" is to be collected by force (or the threat of it), it is most certainly coercive.
Compare with conditional transfers (you get the money but only if you meet certain requirements). That can be coercive in effect, if you need the money badly enough.
End of the day, it's sort of like social security for everyone. It may be a more equitable form of welfare, as men and intact families would be eligible.
IMO, resources would be better spent on housing subsidy, healthcare and publicly administered pensions.
If anything I am quite sure businesses would be more than happy with UBI because they would not get people who HAD TO TAKE THAT JOB and instead people who took it because they wanted it. A UBI would never be high enough to allow you to skip work unless it also provide absolute basic housing too and food.
The only way to grow an economy is to grow the private sector.
That's not yet my hypothesis, it's just a plain fact as the government sector can only exist by the taxes paid by the private sector.
My hypothesis: The government believes that too many will simply stop working (thus causing a contraction in the private sector and in the end also in the government sector - which is supposed to use its shrinking resources to pay for UBI)
Furthermore, from historical data, most of the economic miracles/expansions have been a result of large scale fiscal policies by the federal govt. of respective countries. New Deal, Marshall Plan, War Spending for WW2 etc. all provided the boost that was required to kickstart the economic engines of the respective countries and military spending continues to sustain the US economy to this day.
I love this community but really dislike the simplistic acceptance of Randian theories of economic growth and the importance of the private sector. Private sectors are most definitely important and required. But only the Government has the capacity, the resources and the will to execute something like the Manhattan Project, the Moon Mission etc. We shouldn't dismiss any sector so easily.
On the bad job front, I think a UBI could resolve an imbalance that has always perturbed me. When I was travelling, I once got a job in a laundry - I hadn't realised that laundries have dirty and clean ends, and guess where new employees start! It was disgusting, and the only positive was the space everyone gave me on the crowded bus home. Then a contract job came through compiling a report that an overseas company had promised to carry out if they got some contract. I went from a horrible job on minimum wage to a plush office job at ten times the rate, and at the time it seemed crazy that I was paid more, not less.
A UBI would seriously shake this up. Society would have to pay more to incentivise people to do the the less-glamorous jobs, which to my mind would be fairer.
It's hard to appreciate something you're surrounded by (to use an analogy, it's hard to appreciate the air if you're constantly surrounded by it, would be the same for a fish with regards to water).
With that in mind, it can be useful to point out the ingrained parts of a culture. If nothing else it allows us to re-examine deeply held beliefs to see if they stand up to scrutiny.
I don't disagree with you.
Yeah, this makes about as much sense as, say, "We should not advance a policy that is premised on giving up on the possibility of stamping out marijuana use."
> Our goal should be ... to foster the skills ... to make sure people can get into jobs, which would much more directly address the employment issues raised by [artificial intelligence] than would UBI.
That is the traditional solution, but we should question the assumption that is it the best way of life for most people.
> “Replacing part or all of that system with a universal cash grant, which would go to all Americans regardless of income, would mean that relatively less of the system was targeted towards those at the bottom—increasing, not decreasing, income inequality,” Mr. Furman said.
Nonsense. You can get any level of income inequality you want by choosing suitable numbers for UBI and tax rates. Furman is an economist, so he must understand such basic math. This part appears to be pure FUD.
Welcome to economics, a modern form of astrology where politicians ask their friends if "the math" can support a position. Of course it can, if the economist wants it to.
I didn't know that the economic situation we are in was caused by artificial intelligence. In fact I didn't even know that there was an artificial intelligence or that anyone has lost his job because of that.
242 million adults in the US.
Just $10,000 per adult is $2.4 trillion. That of course wouldn't come close to being enough. Even if you assume tax redistribution of the money (rich people getting UBI, and then having it taxed away), for $2.4 trillion you probably would only manage to get the poorest 1/4 up to something like $15,000. Today the poorest 1/4 are receiving a net of more than twice that sum between Federal and State benefits.
Federal budget ($3.9 to $4.1 trillion or so depending on which year we're talking about) minus dozens of things that won't be replaced by UBI and won't go away (eg NASA, military, agriculture subsidies, budgets for countless agencies like HSA or FBI, transportation, justice and so on) = you might be lucky to break even or bleed just a few hundred billion on the budget if you allocate $2.4 trillion to UBI. That's assuming Social Security, all housing subsidy programs, all welfare programs, half of all social services programs, Medicare, Medicaid, Obamacare etc etc are all ended.
The equation at the state level is a whole 'nother calculation, and would be a very significant factor given the states budget is another ~$1.7 trillion and represents all sorts of welfare programs and healthcare spending.
Personally I favor Warren Buffett's premise of significantly boosting the earned income tax credit, and freezing or lowering the minimum wage. The UBI is dramatically regressive, there's no reason to be giving the top 50% in the US a UBI.
So, say that we institute UBI, and people no longer have to work. That increases the cost of labor - you can't attract a cashier for $9.30 an hour, so you have to pay $15 an hour or whatever.
This has to be passed right back to the consumer, so prices go up. Rent goes up as well - maintaining property takes labor as well. Now, the UBI is no longer sufficient to sustain a decent life, and the poor are right back to where they started.
There are several reasons for this, the biggest is that cost of labor isn't the only input in pricing.
Basically the cost of supply constrained goods will go up, but not enough to outweigh the increased purchasing power for lower income earners.
Instead, companies will move the production offshore, lay people off, make smaller packages [2], use machines, use cheaper ingredients etc. and those things create the illusion that the price is not rising. Price is the same, but the quality (of goods/services & of life in communities) is going down.
It's the main one, since the biggest cost to most companies are employees + suppliers (that also have their own employees). Increase in the price of labor will certainly have an effect - if not directly on higher prices, then on quality.Only if a loaf of bread is supply constrained or there are no competing bread suppliers or alternate goods.
>The top 50% certainly don't need UBI
The top 50% get a UBI, but most plans would pay for it by increasing taxes on the wealthy. There would be a cutoff, so that above a certain point you'd be paying more in extra taxes than you'd receive in UBI.
The vast majority of UBI plans definitely aren't regressive.
I can't remember seeing a single UBI plan that is regressive. The goal of almost all of them is increased income equality.
There's not really a difference in this and increasing the EITC except in perception--eliminating means testing so that everyone gets the UBI, which many people think is important.
http://www.igmchicago.org/igm-economic-experts-panel/poll-re...
So small scale experiments are gonna to show that UBI works well, without negative inflationary consequences, but full scale introduction will be a disaster.
Don't be too upset that people aren't sold right now, just keep pushing the conversation forward.
Gutting the entire defence budget would be worth just over $2000 / year per person. Not exactly enough for UBI.
For convenience, direct link to the paper being reported on: https://www.whitehouse.gov/sites/default/files/page/files/20...
Could it be the result of a decade long propaganda by VCs targeting Zuckerberg wannabes - those who want to have UBI, so they can work on the newest blockchain-enabled photo-sharing social local VR app ?
Because so many here believe so strongly in the power of automation. Almost all software engineers are in the business of putting people out of jobs - eg. replacing a secretary with a mail and calendar app, replacing a business middleman with an online marketplace, or replacing a sysadmin with cluster management tools.
A way to resolve this cognitive dissonance of us doing a thing we think is right (automating the world) with causing a thing we think is bad (unemployment) is to turn unemployment into not a bad thing, which is the promise UBI makes.
This doesn't mean we don't honestly believe it can work. But it makes us more likely to WANT to believe it. Brains are funny things.
To explain what I mean, imagine you're working a low-skilled, low-paid job just to keep a roof over your head, with very few opportunities to retrain (both in terms of free time and money). In other words, you're working just to survive, and are not making the most of your time on Earth. UBI would give people in that situation an avenue to retrain, as well as making it harder for companies to keep wages low for undesirable jobs, they would have to better compensate people for giving up their time to do a job they otherwise wouldn't be interested in doing. None of these factors are directly derived from increased automation.
As for whether or not UBI will be a net benefit, the answer is not completely clear, but that's the reason small-scale experiments looking into UBI have been started.
Perhaps there are VCs who advocate UBI only because they think they can make money on the small subset of people whose dream is to start a venture-funded company and take it public. But UBI helps people follow whatever dream they have, so you'd have to hate VCs an awful lot to oppose UBI for that reason.
So, maybe Americans could live like poets and gardeners, but first the rest of the world would have to be enslaved. Meaning, you don't trade with the Chinese and provide value in return, but enslave them. Is this a possibility? Do you think Chinese makers are going to put up with American poets and gardeners on welfare?
What is the breakdown of winners/losers that UBI would target? From what I imagine, it's a bit like an upside-down bell curve. People who have close to 0 would be better off, big companies too, and everyone in the middle a bit worse off. Is that the intention of UBI?
Here's a summary of some of the pro UBI arguments:
Most plans would be paid for by increasing taxes on the wealthy, so it doesn't actually increase the money supply;
Prices should only increase on goods that are supply constrained;
We're already giving away billions of dollars in assistance in the form of SNAP (food stamps), and increases in SNAP assistance don't seem to cause food price inflation (or at least not enough to be detectable);
We also already provide huge subsidies in the form of the Earned Income Tax Credit, which doesn't appear to have inflationary effects (again at least not enough to notice);
The examples we have of partial basic income haven't caused large scale inflation. Alaska hasn't seen an increase in inflation since they began providing a partial basic income to all residents, and Kuwait didn't see an increase in inflation when they gave every citizen $4k in 2011.
To summarize the summary, a UBI would probably cause a price increase in supply constrained goods and services, but not nearly enough to drown out the extra purchasing power provided to people with lower incomes.
How this affects the middle class depends on how high we set the cutoff where you start paying more in additional taxes than you're getting in UBI, and it depends on how income inequality and velocity of money affect the middle class. Many economists think that increasing income equality will help the economy as a whole, but that's open for debate (I personally think that it will).
What about an expanded UBI would be different than social security? Just the fact that people are younger or not-disabled?
For the non Americans, social security provides cash payments to those over 65 and those with long term disabilities.
UBI is the exact opposite of Social Security https://www.ssa.gov/oact/trsum/
If we assume automation results in more job-losses where does the money come to pay for it?
What am I not understanding? Wealthy persons will fund this. Sure, they may get the $12,000 per year UBI, but their taxes will go up by much more than that.