These studies have been popping up on HN, and they're all pretty interesting, yet all seem fairly inconclusive to me.
This one started in 2011, and I'm guessing since the article doesn't say they stopped, that it is still going on?
> The report found no evidence for the idea that people will work less under a universal income, and found that in some cases, like in the service industry, people worked more, expanding their businesses or pursuing more satisfying lines of work.
but yet they say:
> The researchers did find that young people — specifically people in their twenties — worked less, but noted that Iran never had a high level of employment among young people, and that they were likely enrolling in school with the added income.
It seems like tracking how many people who are enrolled in school would be fairly easy to track to verify this. They do say in the paper that youth does have a reduced labor rate, but then they say it might be education (but provide no numbers):
> While there is no evidence of a negative supply response for
the average worker, male or female, there is one for youth in their twenties. If one were to
expect a strong negative impact it would be for youth, who have weak job attachment, can stay
in school longer, or enjoy more leisure, though we do know which of these options they choose.
While I do think there's value in looking at the micro circumstances, I do wonder how culture will change and shift because of UBI, and how that will also affect its outcome.
For example, if we say that we believe in UBI, that means that basically everyone should have enough money to live. We're offering an entitlement to which people will feel entitled. Over time, how will that change society?
One past example of this would be college education. Nowadays everyone goes to college, but it wasn't always so. Would as many people to go college if society didn't push them that way? One other such cultural shift might be women entering the workforce, or desegregation, and how that lead toward the fight for civil rights.
Since many things happen in that period this is not a controlled experiment so you can't have strong conclusions, they can notice some correlations at most such as the program did not increased the number of unemployed people, maybe something else balanced this program but this was not found so the authors are challenging others to look at the data and find things that support the idea that unemployment would rise or other bad side effects.
I wonder if UBI actually allows the economy to become more efficient. It could be the case that an abusive employer would be more severely punished by the labor market if the economic cost to the worker is diminished by a UBI (i.e. My boss is a jerk, I'm just going to quit and find an employer that treats me better). I would assume then that satisfied employees, with good employers, would then be more productive than their dissatisfied counterparts.
It also seems reasonable to assume that workers would also be more likely to create new businesses entirely if the personal financial risks associated with doing so were diminished by a UBI.
This seems like the biggest win, to me. When your employer represents your important but nonessential income, while your basic survival is guaranteed, it becomes far easier to tell an asshole boss to stuff it while you go looking for new work. It becomes easier to move to a new location without getting a job in advance. It becomes easier to start your own enterprise. It even makes more sense to work part time while developing more in-demand skills or just taking a partial vacation. It opens up so many freedoms of choice that are currently only afforded to people who can make lots of excess money and stash it away as savings.
As shitty as working for Uber might be, this is a huge benefit that they currently present. You can get by driving for Uber for a bit, allowing you to hold off on accepting an okay outcome and find better employment opportunities than otherwise.
Except - you are not searching for opportunities, you are working. It takes your focus and time. I agree that it helps you get by, but the cost is much higher than it would be with basic income.
I lived in France for a few years and noticed something that validates this a little. French unemployment pay is quite generous (can't remember the exact figures but it's close to or 100% of your last salary for 12 months) - effectively quasi UBI for a year. I knew a lot of 'twenty somethings' that used this cushion to give them 12 months runway to try their hand at a startup.
No idea how it worked in detail (they were mainly acquaintances I met at meetups/co-working spaces). It just seemed like a right of passage - virtually everyone I met had bootstrapped their 2-5 person teams with guys & gals that were living off their unemployment allowances for a year (and so were fine taking equity and no salary for a while).
Yes. You even get a better replacement rate when you create a company than when you're unemployed and looking for work. If you held salaried work for long enough before, it will last for two whole years.
We often joke in France that the unemployment agency is the #1 startup investor in the country
If this is the main feature of UBI (guaranteed basic survival), then what's the difference to the current social systems as applied in several western european countries (e.g. scandinavian, french, german, swiss...).
A "basic income" is in so far guaranteed that you will always have enough money for a roof over your head and enough food on the table. If your employer truly abuses your workforce, you are able to quit without the fear of becoming homeless and go hungry.
I think the main benefit over most welfare systems is that your save overhead by giving it unconditionally to everyone rather than having to evaluate every case, while at the same time it prevents people from falling through the cracks on technicalities.
The flip side of this is abusive workers who will refuse to put in good effort because the cost of getting fired is lower.
Of course, we could argue that workers should be more motivated by the promise of a good reward, but it looks like evidence from behavioral economics suggests that fear of loss is approximately twice as powerful as the hope of gain. So let's not underestimate the power of fear to generate productivity.
By the way, I am generally supportive of the UBI, just wanted to point out a potential cost. Over the long run I think the UBI's benefits would exceed its costs, but I can't deny that there are real costs to an UBI (beyond the simple direct costs).
That's not an abusive worker, that's just a bad worker.
In the current system bosses are sometimes hesitant to fire people if they know they have a family to support. Knowing people have UBI to lean on there's much less guilt about letting people go.
How is that any different from lazy and bad workers today? Asking for references won't go away just because of UBI. Heck, there are lazy people who are already like this even without UBI.
If anything, people dropping out of the workforce to live on a subsistence UBI would make it easier for both employers and motivated workers to connect. Employers would know that anyone they're interviewing is already more motivated.
If workers don't put in the effort, you fire them, or demote them, or pay them less, or give them less hours, or... all of the same things employers do today.
Productivity from fear of loss, I would expect, is inferior to productivity out of hope of gain. If I am motivated from fear, I do not want to be an outlier (I want to be nestled in the group), and I only want to make defensible decisions ("It's not my fault, see?"). And then there's the health effects from stress, the breakdown of group dynamics from members turning on each other, the issues and costs of enforcement of fear-generating policies... So let's not underestimate the costs of fear on productivity.
There are also employers who do not fire employees out of generosity - "I don't want to fire that guy, because he really needs this job". Now you can - or suspend without pay or whatever - because you're not throwing them on the street.
I can definitely deny that what you propose is a real (expected, since this is all theoretical) cost, and you should, too.
Along with the rest of the replies to your comment, I think you're also underestimating peoples motivation by greed.
UBI will guarantee you won't die by something stupid and terribly like starvation, but if you want a nice condo, nice car, better entertainment, or maybe travel -- well guess what you have to suck it up and do? And poor workers won't be tolerated. I can only assume it would become easier to fire people if doing so won't immediately place them in danger as that danger would have already been mitigated.
In may be easier for employers because they can fire under-performing employees easier. Most of the hurdles for firing someone are due to lack of safety-net. With UBI those regulations should be looser.
There's so rarely such thing as abusive workers. There's often bad and irresponsible ones, sure. But you have to have power over someone to be abusive.
The company almost by the nature of the relationship is telling a person what to do. It is about the only necessarily hierarchical relationship left.
But beyond that, in your average company, the company can afford to do without a certain employee for some time (their income might drop from 100 to 99), but an employee can't do with a company (their income would drop from 100 to 0). So even beyond the nature of the relationship (recognised by law), there's other informal power relationships going on as well.
So you might worry about bad workers, but you can hardly complain about abusive workers.
I would suspect that for a lot of people their debts (particularly mortgage debt) would grow with their income leaving them unable to just quit and fall back on UBI.
Only around 40% of Americans have a mortgage, with a large chunk of those being people who earn upper middle class money and are therefore probably more stable in their career with more leverage against employer abuse. Most other common debts (credit cards) don't have the kind of consequences that would prevent you from missing a few months of payments if necessary. So, while this might be a concern for a subset of the population, it probably still stands that this would benefit most of the people most often preyed upon by shady employment practices.
Replace mortgage with rent. If leaving your job isn't well timed with lease expiration (giving you the opportunity to move somewhere cheaper) then UBI lower than rent isn't going to help much.
On the other hand, if UBI is constant across geography, it provides an incentive for the underemployed to move somewhere cheaper. It might take some of the pressure off housing in popular cities.
Breaking a lease doesn't have nearly as severe consequences as defaulting a mortgage. Most cases they just keep your deposit, if they know they aren't likely to be able to get anything more from you, because you have no assets. So yeah, if it's important, you could ditch the job and the rental and move somewhere you can afford on UBI.
Do reputable landlords rent to people who have broken leases recently? Do they even pass job background checks that include credit history?
I can peacefully exit my lease by paying an extra month's rent as a termination fee, but if I abandoned the apartment and couldn't come up with the termination fee, I'm pretty sure it would be the same, or a little worse, than being in default on any other debt.
> an abusive employer would be more severely punished by the labor market if the economic cost to the worker is diminished
> workers would also be more likely to create new businesses entirely if the personal financial risks associated with doing so were diminished
What kind of UBI are we talking about? If it's the one funded by dismantling the social safety net then no - you won't get more income when losing your job, because the same money is now spread among more people (most of whom still have a job). If it's in addition to the existing safety net, you'd get more of the same advantages by expanding unemployment benefits instead (make them higher / longer lasting / easier to obtain).
I've always assumed a UBI would involve reducing (or removing) the tax free threshold, so a person on an average or greater income would actually have no net change in their position, or may even be worse off. Perhaps I'm wrong on this?
The advantage of the UBI comes from reduced administrative costs — at the moment, governments spend huge amounts of money on welfare departments to make sure welfare recipients are members of the worthy poor. By giving the UBI to everyone these costs get cut back.
It also smooths the transition from jobless welfare payments to employment with a tax free threshold, so that we don't have to worry about whether or not a particular person would be worse off if they picked up another five hours. They would always be better off (because they'll pick up e.g. 87c of every extra dollar they earn, instead of having welfare payments worth e.g $500/month cut but being able to keep $1 of every extra dollar).
I fear the advantages of a UBI go to the right-wing (neo-)liberal elites. They can get the government out of morality, cut costs, and pretend to be doing something for the poor. Whether it actually does something for the poor or not compared to welfare is, as you say, conditional. And in the absence of widespread community organisations (like churches in the olden days) throughout much of the west, it's not clear that taking the government out of morality is safe at this point. The article here wants me to believe that my concerns are illegitimate, but Iran is no secular western country.
For example USA does not have government mandated paternity leave and hence a lot of people value that 3 month salary over staying at home without pay. This means the McDonald on corner is able to have necessary staff and the Comcast technician is able to come to your house on a Saturday.
People leaving jerk boss is not always a good thing because Jerk is a value between 0 to 1. UBI simply tilts it in employees favor which is exactly same as against society's benefit.
I am only explaining the facts. Forced paternity leave takes out some amount of labor from market increasing prices for everyone else for those services.
You're not thinking very deeply. There's more to society than absolute economic efficiency. Giving fathers time to engage properly with their newborn children helps those children succeed throughout life, and makes happier and more effective workers.
Besides, I've been a father of newborns who also had to work full-time. It was beyond exhausting, and I sure wasn't working anywhere near 100%.
The thing that always concerns me about UBI is that the government controls your salary. This is sort of true already on that they have the power to raise our lower taxes, but lowering UBI would affect far more people
> The thing that always concerns me about UBI is that the government controls your salary
UBI is not salary, and doesn't prevent you (or punish you) from earning a salary alongside it.
That said, I'd prefer a universal income to be fundamentally (e.g., Constitutionally) tied to a dedicated funding stream, equally divided, and not subject to regular legislative control.
You could eventually make UBI a constitutional right. At that point the government controls it in the way they 'control' your right to free speech or to life. In material terms government coercion could deprive you of either, but it would be considered extremely illegitimate for the government to do it. If you want a 'positive right' example, in most countries the government would be considered to be failing its duties if it failed to provide free elementary public education for all citizens, and the logistics of that are more complicated to both provide and verify than a simple cash transfer.
I see it going in much the same way current governments in stable countries don't suddenly show up at your door saying you owe them 95% in tax. Refusing or delaying to pay your UBI would amount to that, an illegal tax.
Ya, I think these are the most important arguments for UBI. It incentivizes risk taking. We want to socialize risk-taking by entrepreneurs. We want to socialize investment in your own skills, and your own development. The only real question, IMO, is if we can afford it. We may or may not be able to today, but one day, we will be able to provide the basic necessities for all citizens as a human right. And on that day, we will reap enormous productivity gains, for exactly these reasons.
For these exact same reasons, you also don't need a minimum wage. And you don't need laws about hiring/firing people. If you get fired, it's a hit, but not an existential crisis that requires government intervention. If, as an employer, you offer too low a salary, people simply won't take it. We don't need to ensure that the minimum wage meets some basic standard of living, because you're already guaranteed that by virtue of your humanity.
A UBI raises the minimum to a level where government intervention in the workplace is no longer required to ensure decent treatment of human beings. In so doing, it eliminates deadweight loss of all kinds, from every corner of the market.
And if you don't have minimum wage/hiring/firing laws, that would help with the illegal immigrants problem, as there would be no incentive to hire an illegal immigrant (it's only the headache of in case you are caught).
It incentivizes all activity productive risk taking or just sitting on the couch and playing Call of Duty - which if you've delt with most humans lately means it'll likely be Call of Duty unless there's some sort of familial pressure to do otherwise
Well, the ideal situation is that those that want to sit around playing CoD may do so, because we have a high degree of automation for relatively simple jobs. Those that have ambition and the desire to educate themselves may work hard and have an even better life for themselves.
It may or may not work out like that, but that is the vision, I think.
Food/Housing are not UBI, though. UBI isn't about providing necessities, it's about providing cash at a level that one can provide the necessities for themselves.
In principle, it doesn't have to be. But cash is theoretically the most efficient. Individuals know better than anyone else what they need at any given time. Giving them cash allows them to effectively manage their needs, and invest in their own development better than government could.
But as you said, providing for our basic needs (food, water, shelter) does not seem to be achievable in terms of cash.
Why is it that an arbitrary shortage of 1's and 0's in a computer somewhere is keeping us from achieving the end goal of UBI, which is to efficiently distribute the existing surplus of goods needed for survival that go wasted every year?
Enough subsidized housing to serve more than a tiny handful of lucky applicants would be a foundational societal shift even more dramatic, and more difficult to pull off, than UBI.
The amount of freedom and mobility granted by UBI might be enough to incentivize people to move if the rents started rising, increasing competition. Then landlords would either have to bear the extra cost of finding new tenants or lowering rent to competitive rates. Outside of price fixing, rent gouging at least partially relies on people being unable to afford to move.
If workers quit working for abusive employers, then you end up having more job-seekers, which makes it more difficult to find a job. That only becomes irrelevant if you have a parallel increase in entrepreneurship.
One of the reasons why UBI appeals to the HN crowd is because the HN audience leans towards entrepreneurs and wannabe entrepreneurs. But for the economy at large, far more people would rather try to keep their heads down and get home to their families.
Most people are not responsible financial stewards. They don't take their excess income and put it into investments, they take their excess income and put it into improving their standard of living. That means using the extra income generated from a day-job goes to higher rent, car payments, and other liabilities not easily released.
Most middle-income people will end up in the same place - unable to leave their jobs due to the difficulty of finding a new one. Upper-income people will pay more in taxes essentially to end financial insecurity among lower-income people living paycheck-to-paycheck.
I think the only issue I take with your assumption is that you will end up having more job-seekers. It could just be the case that the abusive employer's business will fail and thus create an opportunity in the market for another company to take over. If you rinse and repeat, you could assume that it would provide a force to push abusive employers out of the marketplace and replace them with more productive employees and employers.
I'll also argue that "improving their standard of living" does not have to be separate from an expansion in the economy. Often the means these irresponsible financial stewards take in "improving their standard of living" is in spending on goods and services, which continues to contribute to liquidity in the market. Not to mention that improving the standard of living for consumers is generally an overall win for society as a whole (lower crime, lower healthcare costs, higher productivity, etc.)
This identifies why I tend to think social spending is a good idea even if there is some uncertainty about the benefits.
If everyone gets a few thousand dollars and runs out and spends it on beer and pizza, at least they got some beer and pizza. And then the money ends up back in the hands of the people who had it originally.
There are worse ways for a project to fail, and of course all the benefits discussed elsewhere could happen.
If excessive income doesn't serve to increase my standard of living, why the hell am I getting up from bed every morning? Might as well get a lower paying job, if my standard of living should remain the same.
I highly doubt anyone would quit a high paying job because of that. You'd have access to more of society. It simply wouldn't be as much of a dip in quality.
Folks would leave stressful jobs or jobs that require you to work long hours.
>The report found no evidence for the idea that people will work less under a universal income, and found that in some cases, like in the service industry, people worked more, expanding their businesses or pursuing more satisfying lines of work.
>The researchers did find that young people — specifically people in their twenties — worked less, but noted that Iran never had a high level of employment among young people, and that they were likely enrolling in school with the added income.
Seems the authors' agendas are leaking through, these two consecutive paragraphs from the article essentially contradict each other and the premise of the article.
What I read: "we found evidence that young people did work less, but we hand waved it away with a seemingly plausible and totally unsubstantiated assumption."
Alternatively, if the decrease in young people was marginal, and the increase in other age groups balanced it out, it could be true that there was no overall decrease. Hard to say without seeing their numbers. Especially if these young people were only a tiny percentage of the labor pool to begin with, it may be an inconsequential blip in the bigger picture, which is how I read it.
In other words, if young people were 10% of the labor pool, and experienced a 10% reduction in work, that would be significant to that demographic, but a less significant 1% increase overall would mask it from impacting the bigger picture.
The linked report makes the distinction a little clearer:
> For the most part, we focus on the labor supply of poorer workers, who are more likely to
reduce their labor supply as a result of a modest increase in unearned income. Our results do
not indicate a negative labor supply effect for either hours worked or the probability of
participation in market work, either for all workers or those in the bottom 40% of the income
distribution. We do find a negative labor supply effect for workers 20-29 years old for their
hours worked.
The linked report is also more comprehensive than the summary, including the points that:
(i) the next Iranian government and Iranian press strongly believe that it did cause massive reductions in labour supply in certain suggestions including citing a paper claiming a loss of 500,000-700,000 agricultural workers[2]
(ii) the context of the poorer people not dropping out of work was a period of enormous inflation (caused in part by US sanctions) and the removal of enormous food and fuel subsidies which the program replaced and
(iii) this measures very short term impacts (prior to the program launch and within the first three months): against the backdrop of rising prices and brand new US sanctions it's perhaps particularly unlikely that many poorer workers would rush to quite their jobs, even if it were to produce such an effect in the longer term in times of greater economic security
(iv) it's actually specifically focusing whether people were more likely to quit their jobs than people who didn't get the subsidy for the first three months due to paperwork problems rather than whether employment didn't fall overall; the paper correctly points out that in an economy with wide access to cheap credit (not Iran) the orthodox economic view would actually expect those receiving subsidies now and those expecting to receive them asap to respond by reducing willingness to supply labour by similar amounts
(v) there was a perfectly good reason for them doing the study that way because Iranian labour force trends are all over the place
TLDR: the actual study doesn't tell us very much through no fault of the authors, because a lot of other shocks were happening to the economy at the time. Which is a shame, because it was a huge new program in a middle income country that didn't involve outside capital, which would have made it much better evidence of a UBI's expected effects than most studies carried out.
[2]having read that paper as well, it doesn't appear to be a claim with empirical support
Specifically they found that generally people didn't work less, although young people did and they aren't sure if they are just not working, or if they are going to school. They counter that observation that employment in young people is also low in general. (presumably allowing for systemic unemployment of some form).
There is a consistent outcome from many BI tests, which is that just knowing there will be some money each month can mitigate stress and anxiety in people. People with reduced stress and anxiety are both more productive and more functional.
I think you can judge success of UBI only over decades and generations of people. People who grew up in a world of UBI will have a totally different view on life than current generations.
I am not saying it's good or bad but I think it will be very difficult to figure out what the eventual outcome of UBI will be in a few decades.
> you can judge success of UBI only over decades and generations of people. People who grew up in a world of UBI will have a totally different view on life
Thay's why I think experiments like the Finnish one also mentioned on the linked page:
"Finland will select 2000 unemployed citizens to receive 560 euros a month for 2 years - no strings attached. It's part of an experiment to find out what happens people's desire to work when they're guaranteed a basic income."
are nearly useless for evaluating the effect of UBI on an economy.
Even though I am sympathetic to the idea of Universal income, the fact the Iran's economy experienced inflation as high as 45% the rapid rise of which correlates closely with the start of this program[1], should make this a worrisome rather than promising case study.
sure, sanctions may very well be one of the factors causing such high inflation levels (although I am hesitant to say that they completely explain away the massive increase in the money supply. FWIW, according to IMF, in 2008 Iran's M1 base has been around $70 billion[1]. Giving a population of over 75M a $1.5 * 365 does nicely increase that base by around 50%). My main main point however was not to claim that the UBI program caused the inflation, rather to challenge the reliability of the main claim of the report as to the change the UBI makes to people's working behavior. Under such high inflation, whatever the cause, people need to work more, rather than less, to make ends meet, so comparing their behavior to pre-inflation periods is just bad science.
The inflation coincided with the introduction of stricter US sanctions, which also coincided with this study's finding that over that same winter poor people who'd just seen prices rise (and lost massive food/fuel subsidies the program replaced) didn't rush to quit their jobs in the face of a more uncertain future. Even Basic Income campaign groups seem to accept that the program helped accelerate the inflation[1] but I'd be hesitant to draw any strong conclusions about BI - good or bad - from the period over which Iran first introduced it. Longer term studies might be a little more interesting if they exist, but there are plenty of other secular trends in the Iranian economy.
An even bigger issue for it as a case study might be the present Iranian government's keenness to phase the program out.
If I'm reading that right, Iran basically tried to swap fuel subsidies with "universal grants" (aka "basic income"). The grants were a lower amount than the fuel subsidies so it was a strategy for the government to reduce overall spending.
What's not clear is if people kept working to help pay for the shortfall in fuel subsidy or compensate for spending on other goods that the higher fuel subsidies allowed. Maybe this clarification is in the researchers 31 page pdf but I haven't had a chance to read the whole thing.
The article says, “In the U.S. such a measure would translate to about $16,000 per year.”
No.
$1.50 per day per household is not the same as $45.00 per day.
I see what they did. They zeroed in on 29% of median income. That’s a nice trick to make their argument stronger, but it makes no sense.
$1.50 per day is $1.50 per day regardless of the median income.
This article tells us what would probably happen if you gave a family $1.50 per day. It says absolutely nothing about what would happen if you gave them $45.00 per day
I was going to argue with this, but looking into it, it seems the cost of living is only about 50% of the US, so it's really more equivalent to $3/day or so in the US, which would be about $1k/yr. So yeah, I'm a lot less impressed by this now.
It looks like you'd be able to maybe cover basic staple foods in Iran with this income, without anything left for shelter or other necessities. But that said, it means the median income is only about equivalent to $3k/yr US in spending power, which is incredibly depressing, and makes me wonder if I'm doing some math wrong, since surely half the population can't be poor to the point of homelessness. Perhaps the numbers I'm looking at don't factor cost of living in rural vs urban areas, and there is an order of magnitude difference?
Shelter costs very little in poorer countries where the land is worth much less and building regulations and taxes are reduced (and some consumer goods Iranians don't expect to have or don't replace regularly cost more) which is one of the big problems with PPP adjustments trying to assess costs of living in different countries based on a basket of goods. Not that the unconventional method the article uses of scaling median income to suggest it's as high as $16k per year is any more representative. To the extent it's possible to compare the standard of living of an Iranian on UBI with a US standard of living it's probably in between those extremes...
Very few homeless people in Iran as people can always return back to their 'village' if they don't make it in the city. There will be relatives helping them out and land more or less costs nothing.
To be honest, the idea of universal income appeals to me because it sounds like free money.
So one could simply decide not to work at all and use that UBI money for housing, food, and habits and everybody would be fine with that.
I can see how that would have appealed to my 20-something year old self; and it's not much different than how it appeals to my 30-something year old self.
You lost me with the "and habits". Bill Gates has said he wants his kids to have enough money to do anything, but not so much they can do nothing. Which is to say you can get a good education, but at some point you need to do something with your life other than gamboling, drugs and prostitutes [you can substitute/add whatever wasteful habits you want here]. It is quite obvious (almost a straw-man) that if everybody did that society would collapse.
I want enough of a fall back that people survive. I want it uncomfortable enough that people decide to get a more productive job if they can. (leaving only the disabled to actually live on the basic income)
Of course I don't know what your habits are. If they are walking around the park you can do that cheaply, I'm willing to take the risk that you won't get bored quickly doing that.
At what point is your definition of "discomfort" another person's definition of "poverty?" Discomfort today is poverty tomorrow, especially if the standard of living keeps going up.
this is a trick question and the fact that I do not have an answer is why I ultimately oppose the idea (everything else I can see the pros and cons going either way so I would want to see how they plays out in practice in our culture before I give judgement on if it is good or bad).
The reason it is a trick question is based on the following two real people I know. (I'm trying to hide as many details as I can, but these are real people so there isn't much I can do)
Person A was a straight-A student until she dropped out in 10th grade. Then she a few kids by different men - all losers who rarely held any sort of job (she dropped out before getting pregnant, but getting pregnant was her plan). In short the stereotypical image of "folks standing in a welfare line"
Person B was born with Downs Syndrome. He is assistant usher at the movie theater, a job he has held for years and does okay in, but when there are problems the head usher (some kid who has only worked there for 2 weeks) takes over.
When we are talking person A: she made her bad choices and I have no sympathy for them, she can live well below the poverty line. I make some different choices: when she dropped out her life was better (no school) than mine, but by choosing to continue in school I made my life better.
When we are talking person B: life is stacked against him. He was never able to amount to anything, but he has my full sympathies. I want him to have a few luxuries in life that he will never earn himself.
There are lots of other cases you can point to where ultimately I want to give a different answer on a case by case basis.
The money would not be enough for you to have a decent live, maybe if you already have your own house and living is cheap, but in some countries I know that if you benefit from such program you will have to work for the community, dirty jobs like cleaning garbage from the fields or whatever the community needs, so is not free.
Iranian expat with some insight into this program here; any study that doesn't isolate confounding factors will be inconclusive at best, especially since the Iranian economy has been changing drastically in recent years. Hyperinflation during Ahmadinejad administration, economic embargoes, and the nuclear deal affected people's lives so much more than a measly basic income.
Also, a fraction of the average (or even median) income is not a good indicator, because of high class division in Iran. It certainly doesn't translate into what $16K can give you in the US. E.g. if you're an unemployed youngster living with your parents in Tehran, it can help you with your entertainment budget, but it's in no way a life-changing amount.
It could be a big help. In fact, the program's name roughly translates to "subsidy" or "helper amount", which sets the right expectation I guess.
The cost of living is vastly different in urban centres and rural areas though, as is the quality of life in general. You can live on that kind of money if you live in the boonies and only consume locally-sourced food (increasingly rare as the middle east is getting hit hard by climate change), but anything that's imported will be prohibitively expensive. That includes medicine and fuel.
Once you enter a large city (where you can have an acceptable quality of life), shelter becomes very expensive. Putting together the deposit to rent an apartment for Iranian youth is almost as hard as saving up for a mortgage downpayment in the US.
Having lived in Iran, the program is not a UBI, but a "replacement" for the petroleum and energy subsidies that were provided to all.
So, instead of the government paying for your gas - which subsidies consumption - the idea is to pay a fixed subsidy primarily to benefit the very poor.
This income has a large benefit for the very poor parts of society, but they still have to work to make ends meet. If this amount of money makes a difference to you, you probably have no disposable income.
This is more akin to a tax reform than a UBI program, though.
I disagree to call this a UBI. No one in Iran was ever able to live from this in any way. It is like the 193€ child support the German state pays to every parent: it is helping, but I could not pay even the lowest rent in the country with it. I know this "UBI" from Iran because of my relatives there and essentially it was considered a joke and no one cried a tear when it went away.
Maybe a dumb question, but I have always wondered this.
Won't UBI just shift the poverty line to a value above whatever it is now(0 maybe), without changing the income inequality/wealth difference. In a hyper-simplistic hypothetical scenario, if it's assumed that a person is poor if he has $0, with UBI, he'll have $X/month, making him above the poverty line. But now the entire country, rich and poor, have at least $X/month, which might translate to an increase in cost of all goods/services by $X, rendering the poor as poor and rich as rich.
It's unlikely for $0 pre-basic income and $X post-basic income to have the same value. The former is, well, nothing, and the latter is, well, something.
> Won't UBI just shift the poverty line to a value above whatever it is now(0 maybe), without changing the income inequality/wealth difference.
As far as I can tell this keeps coming up because the answer is "no" but the explanation is complicated.
The are two types of inflation.
One is industry-specific and happens when the government subsidizes something. For example, if the government provides education subsidies then the cost of education increases compared to other things like food or transportation.
The other is currency-specific. When the government prints a lot of new currency, the value of a dollar goes down. Prices go up not because there is more demand for products but because there is less demand for dollars.
A UBI doesn't do either of those things. It doesn't subsidize any specific thing and it doesn't create any new money.
The closest you can get is that there is a theory that higher income people spend less of their income than lower income people, so anything that transfers money from higher income people to lower income people is equivalent to creating new money, because the money in the hands of higher income people was effectively out of circulation.
That general form has nothing to do with a UBI. It applies equally to any government program that produces per-capita public benefits from sales or income tax revenues. The rich pay a tax and the poor get public schools and housing subsidies, which means the poor have the money they didn't spend on schools or housing and can spend it on something else.
Moreover, the effect is small (most people aren't rich enough to never spend their money), and it's simple to compensate for it -- the government is constantly creating new currency because more currency is required as the economy grows. So if you want less inflation, print less money.
And that's assuming that moderate inflation would be a problem, but in fact it's a benefit. The country is in a debt crisis. People have too much mortgage debt, too much student debt, too much credit card debt. The government itself has too much public debt. The prices of housing and education and medicine are too high, but lowering nominal prices is very difficult because everyone has mortgages and contracts that assume the existing prices. The US balance of trade has been out of whack for decades. Lowering the value of the dollar helps with all of those things because it lets the nominal price of those things stay the same while reducing their actual cost back to sane levels.
Imagine, though, a city where most poor people earn about $1000 per month spend about $750 rent (housing). If the landlords catch wind that everyone is now taking in $1200 after the institution of UBI, won't they collectively up their rates to $950 (because where else are the tenants going to go)? And who does that help but the landlords?
This is the (less abstract) way I've seen the question asked before. I'm not necessarily saying that this is what would happen (it could though, especially if the landlords are on the zoning board). I'm just saying you haven't necessarily answered the concern here.
> Imagine, though, a city where most poor people earn about $1000 per month spend about $750 rent (housing). If the landlords catch wind that everyone is now taking in $1200 after the institution of UBI, won't they collectively up their rates to $950 (because where else are the tenants going to go)?
Where is the extra $200/month supposed to come from? A UBI doesn't create new money. If the average person had $1000/month before then they will still have $1000/month. For the government to pay $1 in UBI it has to collect $1 in taxes. There is no extra money for the landlords to capture.
> For the government to pay $1 in UBI it has to collect $1 in taxes.
Excluding debt financing (with which it need not increase present taxes) or monetization (with which it need never increase taxes.)
> There is no extra money for the landlords to capture.
Even in the balanced-budget, non-monetized case, landlords renting to a particular social class may have more money to capture if the taxes are levied on a different class (landlords or other vendors selling to a different class may lose money for the same reason.)
> Excluding debt financing (with which it need not increase present taxes) or monetization (with which it need never increase taxes.)
Which is equally true of any government program financed in those ways.
> Even in the balanced-budget, non-monetized case, landlords renting to a particular social class may have more money to capture if the taxes are levied on a different class (landlords or other vendors selling to a different class may lose money for the same reason.)
That's hardly "UBI leads to fully-canceling prices increases".
I believe UBI would lead to changing the fundamental nature of money as it goes from scarcity based to rate-of-flow based in its value basis. It will work as long as people who receive UBI spend that money, as opposed to horde it. That mens UBI should be given to people who have no other sources of income, not to those who will likely just accumulate it with no intent to spend it.
There's a significant gap between the bottom end of people with other sources of income and those who will "accumulate it with no intent to spend it". Further, even if you give it to everyone across the board, most of the people who don't need it for basic expenditures and have no intention of saving for a big purchase at some point in the future (e.g. a down-payment on a car or house) would likely be making enough money that the UBI is less than their taxes.
This article is really bad. M. Friedman has nothing to do with UBI. What is the origin of the money given ? No one seem to talk about it.
From the paper "Assuming that leisure is a normal good, economic theory predicts that an increase in unearned income reduces labor supply [...] In this paper we study a large cash transfer program in a developing setting, one that has come under criticism for its potential negative labor supply effect"
Why would reducing the labor supply be a bad thing ? If we can live the same lives and work less, that's definitely a good thing.
I agree. Milton Friedman says; "Instead of giving non-cash benefits like food stamps, housing vouchers and education we should calculate how much those benefits cost per person distribute that to people as negative income tax." Government spends tons of resources running these programs and leads to corruption and unfair distribution for a lucky few, "bucket is leaking". Every single UBI proposal/experiment I have seen keeps all the benefits and then adds an extra basic income payment, which works fine in a small experiment but quickly becomes unaffordable if you scale it to the whole country.
Yes, you're right. To be clear, Friedman's NIT was merely a spiritual successor to the UBI, and the EITC is of course what happens when ideas traverse through the bastardization of academia to actual policy making.
Who is to say what an actual UBI would look like after undergoing a similar process.
My concern about UBI is not the initial situation, but what happens in a democratic society, when the majority of citizens can continually vote for increases in the level of UBI, which will be paid for by the small number of the richest in society. If $20000 UBI annually is good, why not vote to increase it to $40000? Or $60000? Or $1,000,000? And will "the rich" be happy to keep paying more and more, while their level of work remains the same? Isn't there some level of taxation at which those people would quite rationally either work (and earn) less, or go live in another country that doesn't have a similar tax burden?
I feel there is something very different between the richest 80% choosing to tax themselves more to support the poorest 20%, vs the poorest 80% or 90% forcing the richest 10 or 20% to hand over an ever-increasing amount of money. Even if you think that is morally correct, I don't think it would work
The biggest problem is that, as per the law of rent, rents will rise by the amount of the dividend once the market has time to react to it.
There would be constant compulsion to raise the basic incomes at the cost of greater and greater public debts or taxes on production... and all the corresponding deadweight loss.
However, if it were funded by taxing land by value, then the rising rents would produce a sustainable public surplus.
126 comments
[ 4.3 ms ] story [ 79.6 ms ] threadThis one started in 2011, and I'm guessing since the article doesn't say they stopped, that it is still going on?
> The report found no evidence for the idea that people will work less under a universal income, and found that in some cases, like in the service industry, people worked more, expanding their businesses or pursuing more satisfying lines of work.
but yet they say:
> The researchers did find that young people — specifically people in their twenties — worked less, but noted that Iran never had a high level of employment among young people, and that they were likely enrolling in school with the added income.
It seems like tracking how many people who are enrolled in school would be fairly easy to track to verify this. They do say in the paper that youth does have a reduced labor rate, but then they say it might be education (but provide no numbers):
> While there is no evidence of a negative supply response for the average worker, male or female, there is one for youth in their twenties. If one were to expect a strong negative impact it would be for youth, who have weak job attachment, can stay in school longer, or enjoy more leisure, though we do know which of these options they choose.
While I do think there's value in looking at the micro circumstances, I do wonder how culture will change and shift because of UBI, and how that will also affect its outcome.
For example, if we say that we believe in UBI, that means that basically everyone should have enough money to live. We're offering an entitlement to which people will feel entitled. Over time, how will that change society?
One past example of this would be college education. Nowadays everyone goes to college, but it wasn't always so. Would as many people to go college if society didn't push them that way? One other such cultural shift might be women entering the workforce, or desegregation, and how that lead toward the fight for civil rights.
It also seems reasonable to assume that workers would also be more likely to create new businesses entirely if the personal financial risks associated with doing so were diminished by a UBI.
I lived in France for a few years and noticed something that validates this a little. French unemployment pay is quite generous (can't remember the exact figures but it's close to or 100% of your last salary for 12 months) - effectively quasi UBI for a year. I knew a lot of 'twenty somethings' that used this cushion to give them 12 months runway to try their hand at a startup.
Did your friends keep the unemployment allowance while creating a new company ?
We often joke in France that the unemployment agency is the #1 startup investor in the country
So if you quit your job because your boss is an arsehole or to start up your own business, you don't receive those benefits.
Of course, we could argue that workers should be more motivated by the promise of a good reward, but it looks like evidence from behavioral economics suggests that fear of loss is approximately twice as powerful as the hope of gain. So let's not underestimate the power of fear to generate productivity.
By the way, I am generally supportive of the UBI, just wanted to point out a potential cost. Over the long run I think the UBI's benefits would exceed its costs, but I can't deny that there are real costs to an UBI (beyond the simple direct costs).
In the current system bosses are sometimes hesitant to fire people if they know they have a family to support. Knowing people have UBI to lean on there's much less guilt about letting people go.
It'll also kill of a load of businesses where there's a bulk of minimum wage staff that could work for themselves.
If workers don't put in the effort, you fire them, or demote them, or pay them less, or give them less hours, or... all of the same things employers do today.
Productivity from fear of loss, I would expect, is inferior to productivity out of hope of gain. If I am motivated from fear, I do not want to be an outlier (I want to be nestled in the group), and I only want to make defensible decisions ("It's not my fault, see?"). And then there's the health effects from stress, the breakdown of group dynamics from members turning on each other, the issues and costs of enforcement of fear-generating policies... So let's not underestimate the costs of fear on productivity.
There are also employers who do not fire employees out of generosity - "I don't want to fire that guy, because he really needs this job". Now you can - or suspend without pay or whatever - because you're not throwing them on the street.
I can definitely deny that what you propose is a real (expected, since this is all theoretical) cost, and you should, too.
UBI will guarantee you won't die by something stupid and terribly like starvation, but if you want a nice condo, nice car, better entertainment, or maybe travel -- well guess what you have to suck it up and do? And poor workers won't be tolerated. I can only assume it would become easier to fire people if doing so won't immediately place them in danger as that danger would have already been mitigated.
As a rule, I think it's best to be aware that it can almost always be possible to be worse some for people than you think it can.
The company almost by the nature of the relationship is telling a person what to do. It is about the only necessarily hierarchical relationship left.
But beyond that, in your average company, the company can afford to do without a certain employee for some time (their income might drop from 100 to 99), but an employee can't do with a company (their income would drop from 100 to 0). So even beyond the nature of the relationship (recognised by law), there's other informal power relationships going on as well.
So you might worry about bad workers, but you can hardly complain about abusive workers.
I can peacefully exit my lease by paying an extra month's rent as a termination fee, but if I abandoned the apartment and couldn't come up with the termination fee, I'm pretty sure it would be the same, or a little worse, than being in default on any other debt.
> workers would also be more likely to create new businesses entirely if the personal financial risks associated with doing so were diminished
What kind of UBI are we talking about? If it's the one funded by dismantling the social safety net then no - you won't get more income when losing your job, because the same money is now spread among more people (most of whom still have a job). If it's in addition to the existing safety net, you'd get more of the same advantages by expanding unemployment benefits instead (make them higher / longer lasting / easier to obtain).
He didn't say that. The things he said:
> an abusive employer would be more severely punished by the labor market if the economic cost to the worker is diminished
> workers would also be more likely to create new businesses entirely if the personal financial risks associated with doing so were diminished
Are absolutely correct for either type of UBI.
The advantage of the UBI comes from reduced administrative costs — at the moment, governments spend huge amounts of money on welfare departments to make sure welfare recipients are members of the worthy poor. By giving the UBI to everyone these costs get cut back.
It also smooths the transition from jobless welfare payments to employment with a tax free threshold, so that we don't have to worry about whether or not a particular person would be worse off if they picked up another five hours. They would always be better off (because they'll pick up e.g. 87c of every extra dollar they earn, instead of having welfare payments worth e.g $500/month cut but being able to keep $1 of every extra dollar).
I fear the advantages of a UBI go to the right-wing (neo-)liberal elites. They can get the government out of morality, cut costs, and pretend to be doing something for the poor. Whether it actually does something for the poor or not compared to welfare is, as you say, conditional. And in the absence of widespread community organisations (like churches in the olden days) throughout much of the west, it's not clear that taking the government out of morality is safe at this point. The article here wants me to believe that my concerns are illegitimate, but Iran is no secular western country.
For example USA does not have government mandated paternity leave and hence a lot of people value that 3 month salary over staying at home without pay. This means the McDonald on corner is able to have necessary staff and the Comcast technician is able to come to your house on a Saturday.
People leaving jerk boss is not always a good thing because Jerk is a value between 0 to 1. UBI simply tilts it in employees favor which is exactly same as against society's benefit.
Besides, I've been a father of newborns who also had to work full-time. It was beyond exhausting, and I sure wasn't working anywhere near 100%.
UBI is not salary, and doesn't prevent you (or punish you) from earning a salary alongside it.
That said, I'd prefer a universal income to be fundamentally (e.g., Constitutionally) tied to a dedicated funding stream, equally divided, and not subject to regular legislative control.
I see it going in much the same way current governments in stable countries don't suddenly show up at your door saying you owe them 95% in tax. Refusing or delaying to pay your UBI would amount to that, an illegal tax.
For these exact same reasons, you also don't need a minimum wage. And you don't need laws about hiring/firing people. If you get fired, it's a hit, but not an existential crisis that requires government intervention. If, as an employer, you offer too low a salary, people simply won't take it. We don't need to ensure that the minimum wage meets some basic standard of living, because you're already guaranteed that by virtue of your humanity.
A UBI raises the minimum to a level where government intervention in the workplace is no longer required to ensure decent treatment of human beings. In so doing, it eliminates deadweight loss of all kinds, from every corner of the market.
It may or may not work out like that, but that is the vision, I think.
Sure we can, if we want to. We've got the resources, we just don't have the desire to distribute them.
40% of food is goes wasted[1] and there are ~23 year-round vacant homes in the US for every homeless person[2] in the US.
[1]http://news.blogs.cnn.com/2012/08/22/40-of-u-s-food-wasted-r...
[2]https://skeptics.stackexchange.com/questions/22335/are-there...
Why is it that an arbitrary shortage of 1's and 0's in a computer somewhere is keeping us from achieving the end goal of UBI, which is to efficiently distribute the existing surplus of goods needed for survival that go wasted every year?
One of the reasons why UBI appeals to the HN crowd is because the HN audience leans towards entrepreneurs and wannabe entrepreneurs. But for the economy at large, far more people would rather try to keep their heads down and get home to their families.
Most people are not responsible financial stewards. They don't take their excess income and put it into investments, they take their excess income and put it into improving their standard of living. That means using the extra income generated from a day-job goes to higher rent, car payments, and other liabilities not easily released.
Most middle-income people will end up in the same place - unable to leave their jobs due to the difficulty of finding a new one. Upper-income people will pay more in taxes essentially to end financial insecurity among lower-income people living paycheck-to-paycheck.
I'll also argue that "improving their standard of living" does not have to be separate from an expansion in the economy. Often the means these irresponsible financial stewards take in "improving their standard of living" is in spending on goods and services, which continues to contribute to liquidity in the market. Not to mention that improving the standard of living for consumers is generally an overall win for society as a whole (lower crime, lower healthcare costs, higher productivity, etc.)
If everyone gets a few thousand dollars and runs out and spends it on beer and pizza, at least they got some beer and pizza. And then the money ends up back in the hands of the people who had it originally.
There are worse ways for a project to fail, and of course all the benefits discussed elsewhere could happen.
Folks would leave stressful jobs or jobs that require you to work long hours.
>The researchers did find that young people — specifically people in their twenties — worked less, but noted that Iran never had a high level of employment among young people, and that they were likely enrolling in school with the added income.
Seems the authors' agendas are leaking through, these two consecutive paragraphs from the article essentially contradict each other and the premise of the article.
What I read: "we found evidence that young people did work less, but we hand waved it away with a seemingly plausible and totally unsubstantiated assumption."
This is politicized science.
In other words, if young people were 10% of the labor pool, and experienced a 10% reduction in work, that would be significant to that demographic, but a less significant 1% increase overall would mask it from impacting the bigger picture.
> For the most part, we focus on the labor supply of poorer workers, who are more likely to reduce their labor supply as a result of a modest increase in unearned income. Our results do not indicate a negative labor supply effect for either hours worked or the probability of participation in market work, either for all workers or those in the bottom 40% of the income distribution. We do find a negative labor supply effect for workers 20-29 years old for their hours worked.
TLDR: the actual study doesn't tell us very much through no fault of the authors, because a lot of other shocks were happening to the economy at the time. Which is a shame, because it was a huge new program in a middle income country that didn't involve outside capital, which would have made it much better evidence of a UBI's expected effects than most studies carried out.
[2]having read that paper as well, it doesn't appear to be a claim with empirical support
There is a consistent outcome from many BI tests, which is that just knowing there will be some money each month can mitigate stress and anxiety in people. People with reduced stress and anxiety are both more productive and more functional.
I am not saying it's good or bad but I think it will be very difficult to figure out what the eventual outcome of UBI will be in a few decades.
Thay's why I think experiments like the Finnish one also mentioned on the linked page:
"Finland will select 2000 unemployed citizens to receive 560 euros a month for 2 years - no strings attached. It's part of an experiment to find out what happens people's desire to work when they're guaranteed a basic income."
are nearly useless for evaluating the effect of UBI on an economy.
[1] https://d3fy651gv2fhd3.cloudfront.net/charts/iran-inflation-...
https://en.wikipedia.org/wiki/United_Nations_Security_Counci... http://www.nytimes.com/2013/04/02/world/middleeast/irans-dou...
https://www.nytimes.com/2013/06/04/world/middleeast/us-adds-...
[1] https://en.wikipedia.org/wiki/Central_Bank_of_the_Islamic_Re...
An even bigger issue for it as a case study might be the present Iranian government's keenness to phase the program out.
[1]http://basicincome.org/news/2012/05/opinion-irans-citizens-i...
If I'm reading that right, Iran basically tried to swap fuel subsidies with "universal grants" (aka "basic income"). The grants were a lower amount than the fuel subsidies so it was a strategy for the government to reduce overall spending.
What's not clear is if people kept working to help pay for the shortfall in fuel subsidy or compensate for spending on other goods that the higher fuel subsidies allowed. Maybe this clarification is in the researchers 31 page pdf but I haven't had a chance to read the whole thing.
[1] https://books.google.com/books?id=MPahDQAAQBAJ&pg=PT162&lpg=...
It looks like you'd be able to maybe cover basic staple foods in Iran with this income, without anything left for shelter or other necessities. But that said, it means the median income is only about equivalent to $3k/yr US in spending power, which is incredibly depressing, and makes me wonder if I'm doing some math wrong, since surely half the population can't be poor to the point of homelessness. Perhaps the numbers I'm looking at don't factor cost of living in rural vs urban areas, and there is an order of magnitude difference?
Sure, this is reasonable.
> $1.50 per day is $1.50 per day regardless of the median income.
No, the relevant concept here is PPP (purchasing power parity) adjustment.
So one could simply decide not to work at all and use that UBI money for housing, food, and habits and everybody would be fine with that.
I can see how that would have appealed to my 20-something year old self; and it's not much different than how it appeals to my 30-something year old self.
I want enough of a fall back that people survive. I want it uncomfortable enough that people decide to get a more productive job if they can. (leaving only the disabled to actually live on the basic income)
Of course I don't know what your habits are. If they are walking around the park you can do that cheaply, I'm willing to take the risk that you won't get bored quickly doing that.
The reason it is a trick question is based on the following two real people I know. (I'm trying to hide as many details as I can, but these are real people so there isn't much I can do)
Person A was a straight-A student until she dropped out in 10th grade. Then she a few kids by different men - all losers who rarely held any sort of job (she dropped out before getting pregnant, but getting pregnant was her plan). In short the stereotypical image of "folks standing in a welfare line"
Person B was born with Downs Syndrome. He is assistant usher at the movie theater, a job he has held for years and does okay in, but when there are problems the head usher (some kid who has only worked there for 2 weeks) takes over.
When we are talking person A: she made her bad choices and I have no sympathy for them, she can live well below the poverty line. I make some different choices: when she dropped out her life was better (no school) than mine, but by choosing to continue in school I made my life better.
When we are talking person B: life is stacked against him. He was never able to amount to anything, but he has my full sympathies. I want him to have a few luxuries in life that he will never earn himself.
There are lots of other cases you can point to where ultimately I want to give a different answer on a case by case basis.
Also, a fraction of the average (or even median) income is not a good indicator, because of high class division in Iran. It certainly doesn't translate into what $16K can give you in the US. E.g. if you're an unemployed youngster living with your parents in Tehran, it can help you with your entertainment budget, but it's in no way a life-changing amount.
Just curious what the amount of money could cover, in terms of food and shelter.
The cost of living is vastly different in urban centres and rural areas though, as is the quality of life in general. You can live on that kind of money if you live in the boonies and only consume locally-sourced food (increasingly rare as the middle east is getting hit hard by climate change), but anything that's imported will be prohibitively expensive. That includes medicine and fuel.
Once you enter a large city (where you can have an acceptable quality of life), shelter becomes very expensive. Putting together the deposit to rent an apartment for Iranian youth is almost as hard as saving up for a mortgage downpayment in the US.
Won't UBI just shift the poverty line to a value above whatever it is now(0 maybe), without changing the income inequality/wealth difference. In a hyper-simplistic hypothetical scenario, if it's assumed that a person is poor if he has $0, with UBI, he'll have $X/month, making him above the poverty line. But now the entire country, rich and poor, have at least $X/month, which might translate to an increase in cost of all goods/services by $X, rendering the poor as poor and rich as rich.
As far as I can tell this keeps coming up because the answer is "no" but the explanation is complicated.
The are two types of inflation.
One is industry-specific and happens when the government subsidizes something. For example, if the government provides education subsidies then the cost of education increases compared to other things like food or transportation.
The other is currency-specific. When the government prints a lot of new currency, the value of a dollar goes down. Prices go up not because there is more demand for products but because there is less demand for dollars.
A UBI doesn't do either of those things. It doesn't subsidize any specific thing and it doesn't create any new money.
The closest you can get is that there is a theory that higher income people spend less of their income than lower income people, so anything that transfers money from higher income people to lower income people is equivalent to creating new money, because the money in the hands of higher income people was effectively out of circulation.
That general form has nothing to do with a UBI. It applies equally to any government program that produces per-capita public benefits from sales or income tax revenues. The rich pay a tax and the poor get public schools and housing subsidies, which means the poor have the money they didn't spend on schools or housing and can spend it on something else.
Moreover, the effect is small (most people aren't rich enough to never spend their money), and it's simple to compensate for it -- the government is constantly creating new currency because more currency is required as the economy grows. So if you want less inflation, print less money.
And that's assuming that moderate inflation would be a problem, but in fact it's a benefit. The country is in a debt crisis. People have too much mortgage debt, too much student debt, too much credit card debt. The government itself has too much public debt. The prices of housing and education and medicine are too high, but lowering nominal prices is very difficult because everyone has mortgages and contracts that assume the existing prices. The US balance of trade has been out of whack for decades. Lowering the value of the dollar helps with all of those things because it lets the nominal price of those things stay the same while reducing their actual cost back to sane levels.
This is the (less abstract) way I've seen the question asked before. I'm not necessarily saying that this is what would happen (it could though, especially if the landlords are on the zoning board). I'm just saying you haven't necessarily answered the concern here.
Where is the extra $200/month supposed to come from? A UBI doesn't create new money. If the average person had $1000/month before then they will still have $1000/month. For the government to pay $1 in UBI it has to collect $1 in taxes. There is no extra money for the landlords to capture.
Excluding debt financing (with which it need not increase present taxes) or monetization (with which it need never increase taxes.)
> There is no extra money for the landlords to capture.
Even in the balanced-budget, non-monetized case, landlords renting to a particular social class may have more money to capture if the taxes are levied on a different class (landlords or other vendors selling to a different class may lose money for the same reason.)
Which is equally true of any government program financed in those ways.
> Even in the balanced-budget, non-monetized case, landlords renting to a particular social class may have more money to capture if the taxes are levied on a different class (landlords or other vendors selling to a different class may lose money for the same reason.)
That's hardly "UBI leads to fully-canceling prices increases".
So the important questions are: does UBI increase or decrease productivity and how is wealth divided after UBI.
https://www.aei.org/wp-content/uploads/2017/05/UBI-working-p...
From the paper "Assuming that leisure is a normal good, economic theory predicts that an increase in unearned income reduces labor supply [...] In this paper we study a large cash transfer program in a developing setting, one that has come under criticism for its potential negative labor supply effect" Why would reducing the labor supply be a bad thing ? If we can live the same lives and work less, that's definitely a good thing.
I actually like M.F. negative income tax as a theorical idea, but don't think it'll ever be applied the way he formulated it.
It may have been inspired by the NIT, but the essence of the inspiration was lost entirely in conventional welfare-program thinking.
Who is to say what an actual UBI would look like after undergoing a similar process.
I feel there is something very different between the richest 80% choosing to tax themselves more to support the poorest 20%, vs the poorest 80% or 90% forcing the richest 10 or 20% to hand over an ever-increasing amount of money. Even if you think that is morally correct, I don't think it would work
There would be constant compulsion to raise the basic incomes at the cost of greater and greater public debts or taxes on production... and all the corresponding deadweight loss.
However, if it were funded by taxing land by value, then the rising rents would produce a sustainable public surplus.