Unless you don't have any food....in which case either would be pretty welcome.
I tend to agree that if we (society as a whole) determine that there should be a minimum income below which no one is allowed to fall, a UBI-type system is more equitable than a minimum wage increase.
The costs of UBI fall on everyone, while the costs for minimum wage increases fall on the very business owners who tend to employ the young and/or unskilled. It's McDonalds and the local car wash (and their employees!) that take it in the neck with a minimum wage increase, not Google or Goldman Sachs.
Capitalism is a social good to the extent that it solves problems and makes people's lives better. But capitalism only solves the problems of people with money: their cash is THE incentive for others to figure out how to solve their problems. If people with problems have no money, they effectively create no demand.
Add wealth to the bottom tier of society and we'll generate generate demand to solve problems at the bottom, which in turn generates a supply of people to fix those problems. This is effectively what happened after WW2, driving the massive growth of the American middle class and a huge increases in standard of living.
Finally, there are plenty of studies backing up minimum wage increases. The boogeyman of inflation in this context is nothing but FUD.
Using post WW2 times as a basis for any argument is wrong. Post WW2, there was no China as a superpower and no globalization. If businesses are forced to pay more for low-skill labor, they can do so easily by taking the jobs elsewhere, which was not the case (or at least as easily done) after WW2.
Offshoring cheap labor already happened everywhere possible. Domestic "low-skill" labor today is overwhelmingly in restaurants, hotels, and retail. I assure you that Taco Bell is not making bean burritos on-site because it's the cheapest place to do so.
It's articles like this that make me wonder if the purpose of the basic income movement is to act as a sort of pipe dream spoiler for more realistic progressive policies - like a $15 minimum wage.
Either that or a plan to make welfare "fairer" by ensuring that disabled veterans who can't work and tech millionaires get the same $ amount each month from the government.
Especially since the author accused the $15 minimum wage "burdensome"... this is incoherent given the cost of providing, yknow, money for nothing for everyone.
I think the idea is that while both may "get the same amount", the NET amount is, in fact, smaller for the tech millionaire than the disabled veteran, because the tech millionaire pays a much higher tax rate.
The concern is that we're soon going to reach a point where "our current economic order" - the assumption that every healthy adult should have a full-time job - is unsustainable. I wouldn't say I oppose a $15 minimum wage, and I don't think the author would either, but we do desperately need to start thinking about our transition to a post-work society and I worry minimum wage debates are sucking up a lot of the energy towards that. We risk getting stuck in a terrible equilibrium, where many people can't get jobs but all our social safety nets are built on the assumption that they can. (There's a serious argument to be made that we're already there.)
America is at risk of running out jobs, not at risk of running out of work.
It's all too easy to see a lack of infrastructure jobs, for instance, as a signal of a lack of demand. It isn't. America has crumbling infrastructure and a lack of jobs to fix it at the same time.
China turning off the trade tap will likely also stimulate the creation of jobs. iPhones will need to be made at home at some point in the not too distant future and they will still need plenty of people to do so.
Wealth re-redistribution will also stimulate demand, creating jobs. A lack of demand caused by a lack of wealth is not a "true" lack of demand.
When society starts lowering the retirement age to 50 and nobody frets about inflation ever - THAT'S when you know that full time work is really drying up. Not happening.
Why do you think we'll run out of things for people to do? The history of the last 500 years or so suggests that when old jobs get optimized out of existence, there's still plenty that needs doing. When I look around, I definitely don't see a society with no unfilled needs, so I expect we can keep going quite a spell.
Demographics impact this data, no? People in college, increased ability to retire, and an increase in the number of retire people (due to an aging population) all have an effect.
What does the data look like from 1900-1948? I imagine WWII had an impact too.
I would also consider whether the growth the welfare state is responsible for the drop--rather than just makes up for it.
I think that's a couple of misunderstandings together.
One is that the only kind of thing to do is work at a job, which is what labor force participation measures. But that's not the case at all, and it's obvious from your second graph. Do you believe that in 1950 ~70% of women were idle, doing nothing? Of course not. They were doing all sort of societally valuable work. It just wasn't in the form of a paid job. And that's my key point here: there is plenty of stuff that needs doing that would make the world better. It's just that a lot of it hasn't been converted into paid jobs that would show up in a graph like this. Just try thinking about all the things wrong with the world and ask whether more people helping with them could make them better.
Secondarily, a decline in the labor force participation rate can have all sorts of causes. The formal definition is "the percentage of the civilian noninstitutional population 16 years and older that is working or actively looking for work." Labor force participation rate for people 16-19 is low. Is that because there's nothing a teen could do? No, it's because they're in school. Labor force participation rate for people over 65 is even lower, ~15%. And over recent decades, we've seen that that segment of the population grow rapidly. So the labor force participation rate has declined significantly because people are living longer and enjoying retirement.
And of course, there's plenty of overlap in the two factors. After my dad retired, he spent a lot of time volunteering at a school. The kids definitely needed the help, but he was unpaid. That's a great example of something for people to do that wasn't counted as part of the labor force. Similarly, my aunts spent a ton of time helping raise their grandkids after they retired. Because of politics and accounting rules, that's not a formal job, but it's absolutely socially valuable labor.
We've mostly run out of things for horses to do, which is why we don't see so many anymore. Automation took longer but it's getting pretty close for a lot of simple jobs at the same time.
I can hire a guy to wash my car, or I can drop money into a machine that’s open 24/7 and doesn’t get bored. Labor to build and maintain the machine isn’t zero but it is dramatically less.
You appear to be just repeating the claim I'm challenging.
We've automated away all the simple jobs many times over. Almost all of agriculture, for example. Almost any job in the first industrial revolution. Practically any job that is embedded in a last name: Smith, Potter, Cooper, Mason, Taylor, Wright, Fletcher, Ward, Weaver, Chandler.
But again, look around you: is this a world with nothing left to do?
When we invented machines that did many of the jobs horses did, we did not find other jobs for those horses to do. Now for the first time we are inventing cost-effective machines that can see and move things and apply tools without close supervision, which is all that people are doing in a lot of jobs. I’m not confident we’re going to find a similar amount of useful work that only a person could do.
We didn't find other jobs for horses to do because horses were capital goods. That's like saying we haven't found new jobs for spinning jennies or steamboats.
As to the other bit I'm not sure if that's "OMG machines will ruin us" or "OMG robots will ruin us", but the former is multiple centuries old, while the latter just turned 100.
I get that you have personal fears here, but people have had personal fears about insufficient replacement work because machines since the Industrial Revolution. If you want people to take those fears seriously, you'll have to do better than "animals are people, probably".
If you'd like to see it differently, try naming problems in people's lives and in the broader society. How many of those could be improved with the application of human time and attention? Lots, I say. It'll be a long time before we run out of things for people to do.
>the assumption that every healthy adult should have a full-time job - is unsustainable.
Inflation makes sure that everyone can get a job. The fact people you even entertain this though is hilarious. The entire point of capitalism is to maintain growth and that growth can only be maintained by employing people.
People hate on growth but what's the alternative? Imagine being in the 15th century and saying: This is it, people will never have a full time job again, ever.
The 21th century wouldn't have happened if people thought like that. The dark ages would have lasted forever.
The reason why we have so much underemployment is quite simple. Inflation has been way too low. Honestly, we have so much inflation to do that even the measly 2% that the Fed targets is way too little. Inflation has slowly picked up and it shows. Underemployment is shrinking in the US.
A minimum wage is bad because there is work people want to do which isnt worth 15 an hour. UBI means people will be able to afford rent and food and engage in their choice of labor, even if it's not highly valuable work.
I agree UBI is better than a minimum wage, but it seems a Negative Income Tax as advocated for by Milton Friedman would be still better. It would have the desired effect of supporting the poor with guaranteed income (something minimum wage can’t do because of the labor shortage it creates, especially amongst low-skilled employees), but do so a lot more cost effectively than UBI since you wouldn’t be guaranteeing payments to people who don’t need them and would avoid any welfare trap created by existing welfare programs.
You're always incentivized to make marginally more money with the negative income tax because it gives you a monotonically increasing effective income vs job income curve, whereas some welfare systems end up with disincentives at various points of income where you'd make overall less by exiting the income level where you're receiving the aid (the same curve gets a negative slope or a downward jump).
I hate to ask, but can you dumb this down? I still don’t really get it. Are you saying that if you have no job that 100% of your income is tax funded, but if you have even a shitty job that you still get more benefit than the job alone but this is sliding scale down to some unknown point which you no longer receive any benefit at all?
This. If you go on and calculate an effective tax rate "after welfare benefits", that "+1" could easily appear being taxed at six-digit percentages. Wealth people sob dearly when they see only 50 cent from a dollar they earned, but every welfare system striving for need-based distribution ends up having income points where you can consider yourself lucky if you don't see a net negative for a dollar earned.
The crucial bit is that there's a gap. Say financial assistance worth $12,000 is available for people who make <$20,000.
* If you make $20,000 then your effective income is $32,000.
* If you make $32,000 then your effective income is $32,000.
* If you make $25,000 then you're effective income is $25,000.
This creates a terrible incentive structure where you actually don't want to make more then $20,000 unless you're sure you can make more than $32,000. Well actually more because there's really no incentive to move up to $32,000 exactly.
You have to make sure that when a person makes more money they are always better off for having done so. Having a hard cutoff for benefits doesn't work and neither does a back-off system that matches income (e.g. at $25,000 you get $7,000)
Imagine a graph where the x-axis is how much you make at your job, and the y-axis is how much spending money ends up in your bank account after the government gets involved by either giving you welfare money or taxing you. So without the government you just have y = x. At zero income you have zero money, which is not ideal, so we'll try to come up with a system to give the destitute money so they don't die of starvation.
As a first crack at it, let's just give everyone who makes less than say $10k per year a bundle of aid that amounts to the fixed value of $1000 per month. This perhaps an improvement because we aren't ignoring the needs of the poor, but it creates a problem, which is what a welfare trap is. Imagine the graph for this situation. If you're making over $10k per year it's y = x, but if you're making less it's y = x + ($1000/month). So at x = ($1000/month) there's a sharp drop in take-home money. So people who would perhaps like to make a little more money are disincetivized from doing so because they would stop taking home that $1k per month and be exchanging it for a much smaller raise.
The negative income tax proposal attempts to solve this first by just providing cash to poor people instead of various goods that are hard to measure, and then by ensuring that the curve we're talking about never has a negative slope or drop. For instance imagine if you make zero dollars, you're given $1000/month, but then for every additional dollar you make independently, you receive 25 cents less aid. You'll always want to make more independently in this situation even if you don't keep it all.
Most actual examples are less blatant, but let's say our welfare system consists of a 12'000$ welfare for anyone who makes less than 12'000$ in income. If your job pays 11'000$, your take-home pay is 11+12 = 23'000$. If you do very well and get a 2000$ raise, your income is now 13'000$, so you don't get the welfare, and your take-home pay is now 13'000$, meaning you lost 23-13 = 10'000$ of effective income by getting a raise.
I don't know about negative income taxes but UBI just gives you a flat amount no matter how much you earn or whether you are unemployed. It's always on top of your existing salary.
Hypothetically they'd get rid of a lot of welfare programs and just institute a negative tax, which has a smooth curve upwards. More money always means you make more, just maybe not linearly.
UBI can do this too - it's not clear to me what the practical differences between UBI and "negative income tax" are.
The advantage of UBI is that everyone gets it. Of course the puritans who believe that someone is only worth what a job gives them object that only those earning should get paid so some people regard this as a disadvantage.
I would surmise they mean that by giving people cash you don’t have them dependent upon any programs that dole out benefits depending on various eligibility factors. For example right now if you need food support in the US you can apply for food stamps (SNAP) but the problem is that food stamps can only be used for food and so you create a dependency on that particular program with the person needing food support. But if you give them cash you then allow the person to decide for themselves what mix of things they spend that on according to their specific needs and can probably do away with most of the specific programs that only deal with a specific benefit that may not be in the right proportion to other benefits depending on need.
The only difference between a UBI and a negative income tax is framing.
Suppose you have a negative income tax in the amount of $12,000 which phases out at a rate of 25% up to $48,000 in income, and a 5% marginal tax rate on people who make less than $48,000 and a 30% marginal tax rate on people who make more.
Suppose you have a $12,000 UBI and a flat 30% tax rate.
These are really the same thing. The advantage of the UBI is that you see more clearly what you're doing, so that if somebody suggests to e.g. have a steeper phase out, what it really corresponds to is having a higher marginal tax rate on lower income people than higher income people. Which is maybe not what you want.
Isn't the practical difference the past vs. the future? A negative income tax is based on already reported income, whereas UBI is clawed back once income is reported.
This is equivalent to whether the UBI is paid on the first day of the period or the last day of the period and is only a meaningful distinction in the first period of implementation.
To wrap my head around this, let's assume the period is the calendar year. Let's assume that I made enough from January to March that I exceed a payout position under a negative income tax system, but COVID-19 saw me lose my job in March and my income dried up since then.
When I report my income as of December 31st, 2020, I still made enough for the year that I won't receive benefits, despite not having an income. That means that I will be unsupported through 2021 and won't see the money until 2022, correct?
If it were UBI and I were paid on January 1st 2020, it would be clawed back on December 31st as I still made enough money, but I would receive another payment on January 1st 2021 to get me through the year where I have no income. Isn't that the intent of UBI and not something afforded through negative income?
You could pay out a UBI-like stipend and then claw it back on the same day (December 31st, 2020), but is it really UBI at that point? That sounds like the negative income tax.
> When I report my income as of December 31st, 2020, I still made enough for the year that I won't receive benefits, despite not having an income. That means that I will be unsupported through 2021 and won't see the money until 2022, correct?
There is no "don't receive benefits" anywhere. Everybody gets $12,000/year every year in both cases. Then separately people who make more than $48,000/year pay more than a total of $12,000/year in taxes or phase outs.
> There is no "don't receive benefits" anywhere. Everybody gets $12,000/year in both cases.
Does a negative income tax not tell that high earners pay money to the state, while low earners receive money from the state? If everyone receives money from the state, even if high earners have to pay it back at tax time, that does not meet the definition of negative income tax as I know it. That is UBI. A more concrete example would be useful.
You don't pay income tax at tax time, it gets withheld from your paycheck on an ongoing basis.
Suppose you make $20,000/month, i.e. $240,000/year if you made that the whole year.
In January through March you make $20,000/month. Under a UBI you receive $1000 but then pay $6000 in taxes, a net payment to the government of $5000/month. Under a negative income tax you pay 5% on the first $4000 ($200) and 30% on the remaining $16,000 ($4800), and expect to receive no credit because it fully phased out, so a net payment to the government of $5000/month. It's the same.
In April through December you make nothing. Then you get the $1000 UBI/credit and there is no tax. To receive the net money from the tax credit before the end of the year you would have to be able to claim it without a job, and to set your withholding amount to a negative number that month because you have no income. Which is theoretically possible (it would be what happens to anyone making <$48,000/year), and either way you still get the same total amount at the end of the year when you file your taxes and reconcile.
> You don't pay income tax at tax time, it gets withheld from your paycheck on an ongoing basis.
You're shrinking the window down from a year, but does it change anything other than you might be able to get by for a couple of weeks easier than an entire year if your income dries up? Assuming monthly payments, and a loss of income on March 1st, I'm still under the impression that UBI will give you $1,000 to spend as of March 1st, while a negative income tax will make you wait until April 1st, no?
But also, in my world there are no paychecks or ongoing regular income and income isn't reported until the end of the year. How does that fit the model?
One way to do income tax would be that if you get paid $60,000 then your employer gives you $60,000 and at the end of the year you have to cut a check to the IRS for e.g. $18,000. The problem with this is that if you give people $60,000 then a lot of them spend all $60,000 and come tax time they don't have the tax money and you need to start having tax debtors prisons or something. The analogous thing for a UBI would be that you get all the money on one day of the year, whether it's January 1st or December 31st or July 4th, and then some people spend all the money immediately and starve to death six months later.
What we do instead is withholding. Your employer is to pay you $60,000/year, i.e. $5000/month, but instead of actually giving you $5000/month, they give you $3500/month and give the rest directly to the IRS. Then you don't owe anything at the end of the year and a lot of people actually get some back because they took out more than they needed to.
The reconciliation period for this is in the law somewhere but in principle it can be whatever you want. It could be instantaneous. As soon as you get your paycheck, the employer cuts one to the IRS at the same time.
With a negative income tax, some people would have a negative withholding amount. So the IRS would cut a check to the employer and then the employer would include that money in your paycheck.
So what happens if there is no employer? Well, then you're the employer. You're a sole proprietor making $0. So you fill out the paperwork with the IRS to reconcile your withholding, which would be in a negative amount, and they send you a check (or direct deposit the money in your bank account). There is no reason in principle that they couldn't do this as soon as you fill out the paperwork, i.e. on March 1st the instant you lose your other job and become a sole proprietor with no income.
> There is no reason in principle that they couldn't do this as soon as you fill out the paperwork, i.e. on March 1st the instant you lose your other job and become a sole proprietor with no income.
But you won't really know if March is going to be income-less until it is over. On March 1st I may still be hopeful that tomorrow will be a better day. Soon it is the 31st and I realize I didn't make anything. You're still dependent on hindsight, no? Whereas UBI fronts the money and then if March 15th provided me a major windfall, I can give it back.
We can shrink the period even further. Let's say a day. If you cannot find a source of income on March 1st, you can submit the paperwork at the end of the day. But you're still looking to the past, whereas UBI would give you the money first and then adjust accordingly in the future. In the real world there is always going to be some kind of lag to the time to filing the paper work. There isn't a constant stream of conscious delivered to the tax man. And reporting daily is a huge amount of overhead for someone. I cannot imagine in practice that it would be practical to provide such reporting more often than a weekly/bi-weekly schedule at the very most. The length of period doesn't actually matter here, though. The logic is exactly the same if you report every second or only once per year.
I'm afraid I'm still not seeing how a negative income tax can ever provide you the money before you know what your income is (the past). In contrast, UBI assumes you will have no income and then is clawed back if that assumption is false (the future). That is not just framing, there is a practical difference in the real world as far as I can see in your examples.
> But you won't really know if March is going to be income-less until it is over. On March 1st I may still be hopeful that tomorrow will be a better day. Soon it is the 31st and I realize I didn't make anything. You're still dependent on hindsight, no?
You can specify how much withholding you want. There are just penalties if you end up owing too much in the end, because otherwise people would specify none all the time and we'd be back to tax debtors prisons when they didn't have the money at the end of the year.
So you can say on March 1st that you want the $1000 now. Then on March 3rd when you find a new job, you immediately go back and specify a different withholding amount which claws it back so you don't have to pay the penalty for not withholding enough now that you're making more money again.
> And reporting daily is a huge amount of overhead for someone.
Not if you're only reporting changes in your withholding amount. Then there is only something to file when your job status changes. You lose your job, you file a status change, money is immediately transferred into your account. You get a new job, you file again. At any other time there is nothing you have to do.
> The logic is exactly the same if you report every second or only once per year.
Other than the immense practical difference between having to wait for money for one year and having to wait for money for one second.
And even that doesn't exist because filing doesn't have to happen after the fact at all. If it's February 15th and your employer says you're laid off in two weeks, you can change your filing status before March 1st and get the money at exactly the same time.
> So you can say on March 1st that you want the $1000 now.
So, you state that in the morning - every morning – assuming you won't have an income and then when you hit it big on GME stock at lunchtime, you pay it back at 5PM? Seems like a lot of work that won't happen in practice. It is not like you can know in advance if you will have income for the day or not.
With UBI, people will be more selective in their job search. With negative tax rate not so much since you would need to work in order to benefit. I am not a fan of them because they will simply push out cost of living and the poor will be back in same relative economic disadvantage. The only realistic solution I see is free education even into adult age.
Isn't the another significant different in the logistics of distribution?
For UBI, you need to / get to have a direct line to every person/citizen. For NI, they come to you.
I honestly have no idea which one is better/easier from this perspective, it just seems like the logistics implementation is another significant difference.
I don't know if I would call that a significant difference, especially since neither one of them is really tied to any specific logistical approach. You could pay a UBI as net of withholding so that it comes once a year in the same check as your tax refund. You could pay a negative income tax on a weekly basis so that net recipients get a tax refund check every week.
It seems like either one could work much the same way in terms of ease of distribution, but I agree UBI sounds simpler and more direct. Maybe just because it's something new and it's straightforward in principle so we can fantasize about it actually working efficiently.
I imagine UBI as a system where every citizen gets a monthly check, no questions asked. It shows up in the mail or gets direct deposited and that's it. And if someone can't receive it that way, say if they're homeless or don't have a bank account, maybe there could even be a place they can show up and collect their money in person. This might still be a pipe dream but it doesn't seem impossible, the hard part is actually figuring out how to pay for a UBI program.
Contrast that to sticking it into the existing income tax system. I imagine that would mean you'd only collect the money annually, and only if you file a tax return. Lots of people without much income don't file tax returns so that's already a blocker. And once the money is gone, a year is a long time to wait for another payment. Of course there's no reason a negative income tax couldn't still be distributed monthly and made more easily acceptable, but there's just a lot of baggage around the thought of dealing with taxes.
> The only difference between a UBI and a negative income tax is framing.
No way.
Taxation requires benefit systems for those that are not working (unemployment, disability, maternity etc). UBI simplifies benefit systems, administratively and for the needy. The social outcomes for benefits are entirely different from what a UBI would bring.
Taxation is chunky (per year) and delayed (processing delays). There are heaps of corner cases of employment and salary changes during the year that might be equivalent over periods of many many months, but where a weekly UBI payment would make a huge difference to you if you were poor or unfortunate.
Taxation has more scope for fraud so requires much more overhead for prevention. A UBI is simple to manage - the things you need to detect are far more limited and are more easily checked and less invasively checked.
Disclaimer: I am not a UBI fan: I am just arguing against your point because it is so egregiously incorrect.
Yes, you could have a smaller overhead with a large amount of fraud and a lot of exclusion of people in need but you can also have an enormous overhead, still have some fraud and still exclude some of those who need it the most. End of the day you cant measure need. If you have 2 people with migraine, back pain and some problem in their social lives there is no way to calculate or compare their situation fairly. (both are better than what we have)
> Taxation requires benefit systems for those that are not working (unemployment, disability, maternity etc).
Not a negative income tax, for exactly the same reason that a UBI doesn't, because they're the same thing.
> Taxation is chunky (per year) and delayed (processing delays).
Neither of these is inherently different. You could have a per-year UBI with processing delays. You could have an instantaneous tax reconciliation system with electronic transfers.
> Taxation has more scope for fraud so requires much more overhead for prevention.
You say that as if the existence of a UBI would cause there to not be taxation.
Having a negative income tax is entirely orthogonal to tax complexity. The explanation is more complicated, because it's just a harder to reason about way of describing the same system.
> something minimum wage can’t do because of the labor shortage it creates
It's important to read economic literature beyond old dead economists because many modern economists disagree with this, or think it doesn't paint a full picture of the situation. Noah Smith comes to mind.
Or how about the big elephant in the room that nobody seems to be bring up; the effect on small businesses that can’t afford to pay employees $15 or $20/hr. So, instead of helping the poor, these policies raise unemployment and actually are a detriment to the overall health of the economy.
The past 25-30 years of research do not show this to be true. The link between the minimum wage and unemployment isn't really a thing. I recognize your position was the conventional wisdom in the 1990s but newer research and analysis (along with tons of states experimenting with minimum wage over the various decades) paint a clear picture that it helps not just low-income workers but can help firms too by boosting productivity.
Most certainly businesses as a response will be forced to raise prices and thus increase inflation and make everyday products more expensive.
These studies are obviously politically and progressively motivated (coming from firms such as american progress) so we have to assume a large scale national increase of minimum wage as significant as this would have unintended negative consequences.
If businesses can increase prices they have done so already and that would show in the form of higher demand for labor.
So really, the only benefit is a psychological trick. Simply handing out money to underpaid workers would drive inflation much more effectively and do the exact same thing.
Everyone talks about it. This is pretending that businesses would do nothing in response to the changes. They'd do a lot of stuff, like raise prices, invest in efficiency improvements, invest in their employees, reduce employee hours, offset the increase in lower level wages by reducing upper level wages, etc.. What the response would be just depends on the business and their circumstances.
Edit: also, I can't find the study, but I know there was one done about statewide minimum wage changes in states with large differences in cost of living. It's a smaller scale version of what you'd see on a nationwide hike given the differences in cost of living (i.e,, NYC vs Buffalo). Generally speaking, businesses adjusted.
> This is pretending that businesses would do nothing in response to the changes
No it's not, it's proposing that one of the things they'll do in response is hire fewer people. Which will absolutely happen in a non-zero fraction of cases. The only question is how big a fraction.
Sure, but that isn't the topic I was responding to. The previous poster suggested that its not a topic that anyone talks about, when it is; and suggested that businesses hiring fewer people is the only possible outcome/side-effect, when it isn't.
"The most common strategic response reported by the businesses has been to raise prices or fees of child tuition and to reduce hours of or number of staff. Center directors reported that employee wages and benefits comprise the majority of business expenses and that child tuition was the primary source of business income. Thus, most businesses reported they would need a mix of strategies to accommodate increased labor costs to ensure that added expenses were not falling entirely onto the families they serve."
>To accomplish this, we assembled the entire set of published studies in this literature and identified the core estimates that support the conclusions from each study, in most cases relying on responses from the researchers who wrote these papers.
Our key conclusions are: (i) there is a clear preponderance of negative estimates in the literature; (ii) this evidence is stronger for teens and young adults as well as the less-educated; (iii) the evidence from studies of directly-affected workers points even more strongly to negative employment effects; and (iv) the evidence from studies of low-wage industries is less one-sided.
Come on, when there is a labor surplus companies don't have to employ all workers. They can just pick the lowest bidders and if you deny people the ability to bid lower they might not get employed at all.
> I am a huge fan of a negative income tax, but I prefer a UBI for multiple reasons. It lowers the administrative burden because you don’t need to figure out how much I made last year. It removes any strange shenanigans in terms of trying to report a low income. It alleviates a payments timing issue — you’re not likely to get your negative income tax when you might need it. And politically, I think it’s more appealing to be able to say to everyone: You have intrinsic value. This is how much you get for being an American, [a] human being.
I see no reason why a direct quote from Andrew Yang (probably the best-known proponent of UBI at the present time) should be flagged to death in this conversation. Vouched -- which doesn't indicate that I necessarily agree with him. I just hate people who are making a valid contribution to the conversation being mobbed down.
It wasn't flagged to death and nobody mobbed anybody. The account that posted it was banned. Posts by banned accounts are killed by default.
You're right that the parent was a good contribution and deserved to be unkilled. That's what vouching is for, and you made an excellent use of it.
Banning on HN isn't punitive, it's preventative. When a banned account has changed its ways and has reliably been sticking to HN's rules for a while now, we're happy to unban it. If people see cases like that, they should email hn@ycombinator.com so we can look into it. That's a fine way to watch out for a fellow user.
When a banned account hasn't been reliably sticking to HN's rules for long enough, or hasn't posted enough to decide that yet, it stays banned for obvious reasons. In that case their good posts can still be unkilled, just on a comment-by-comment basis. That's why we created vouching and it works well.
>And politically, I think it’s more appealing to be able to say to everyone: You have intrinsic value.
The universality of UBI is key to its political viability. Just look at the number of people who are against forgiving college debt because they have already paid off college or are past the stage in their life in which they are personally concerned about college debt. Most people still view "fairness" as everyone being treated equally. So just give everyone an equal amount of money.
Fairness is treating everyone equally, the fact you put that in quotes is concerning...
Further it is not just people that have paid off college debt or are past the stage where are concerned about college debt..
Many people worked their ass off to become good at a trade or other profession with out incurring college debt, why should we then have to pay increased taxes to pay of those that bought into the college lie?
No one is offering me Mortgage Debt forgiveness? Housing is more of a necessity of life than a collage degree...
Let’s say you are at a family reunion and want to play a game of baseball with everyone. Is it “fair” to have the same rules for the 6 year old child and the 25 year old who used to play on his high school baseball team? More likely you would tweak the rules a little or pitch a little slower to the kid so everyone has fun and can fully participate.
Sometimes fairness means leveling the playing field so everyone can compete equally.
Well your straw-man is completely weak and not relevant the conversation about government tax policy
We are not talking about a "family" but talking about government, that is something very different and it is very dangerous to view government as a "family" in the same way it dangerous to view a corporations or your employer as "family"
It is an analogy. It doesn’t mean we are literally a family. If you want to use a tax analogy, let’s look at marginal tax rates. It is widely regarded by a majority of the population that a flat tax isn’t fair as it treats everyone the same. It is fine if you aren’t in that majority, but you can’t pretend that “fair” means treating everyone the same is some universal truth.
Well that is another bad analogy, and while I do find all income taxation to be unethical marginalize tax rates are not treating people differently, they are treating incomes differently.
To treat people differently you would have to start basing income tax rates on characteristics of a person, such as race, sexual identity, age or height (like in your previous analogy)
Saying all income from 0-50000 is tax X, and income from 50000-100000 is taxed Y is not treating PEOPLE differently, all PEOPLE are treated the same in that situation.
To be clear I am a supporter of replacing all Welfare programs with a Negative Income Tax. I would also be in favor of a UBI that was not funded with Income taxation.
I also support the abolishment of all Income based taxation replacing it with Georgism Single Tax System
>To treat people differently you would have to start basing income tax rates on characteristics of a person, such as race, sexual identity, age or height (like in your previous analogy)
Characteristics like their marriage status, the number of children they have, the status of their home, their status as a student, or even the specific example you used of age which is tied to all sorts of taxation issues?
Although I'm not sure there is any point to continuing the conversation if you are going to nitpick any analogy and refuse to recognize that your views on taxation are an extreme minority opinion.
Absolutely it would be fair to have the same rules for everyone, regardless if they were 6 or 25 or 70 or a professional player, once the players are in the game. It might be _mean_ to treat the six year old like the 25 year old, but it would be fair. It would, however, potentially be unfair to put them in the same game in the first place, especially if there were alternatives.
Meanness and unfairness are two different things.
Especially in a family setting, sometimes niceness can Trump fairness.
That is something I just really don't get. It is like being against the Polio vaccine simply because "I had gotten polio just before the vaccine came out, so if I had to suffer everyone else should too". I've never heard of anyone being against vaccines due to "fairness".
The difference is that people didn't choose to get polio. But they chose to go to college knowing that they would get into debt and then dug their way out of the consequences. If the next generation of college-goers would not have to put up with the same crap, that would mean that their own self-inflicted suffering was meaningless. At that point, cognitive dissonance kicks in and people make the illogical argument that "if I had to suffer, they should have to suffer too".
> do so a lot more cost effectively than UBI since you wouldn’t be guaranteeing payments to people who don’t need them
One of the arguments for UBI is that, as it makes no effort whatsoever to exclude anyone, it is enormously simpler than the alternatives, both in terms of people reasoning about their taxes and in terms of implementing it.
Of course, it would be UBI + lots of other tax codes, but that's meant to be part of the point.
A negative income tax is far more complex, here is an example of contemporary system.
https://en.wikipedia.org/wiki/Earned_income_tax_credit
``Millions of American families who are eligible for the EITC do not receive it, essentially leaving billions of dollars unclaimed. The IRS estimates that about 20 percent of eligible taxpayers do not claim $7.3 billion of Earned Income Tax Credit (EITC) each tax year.[43]``
So there is such a thing as low skill work that would be in high demand! That would mean there is a need to train people to have lower skills then!
There is no guarantee that anybody with any type of skill set will be offered a job aligned with their skills depending on economic issues. Skill is a vague idea.
Honestly, just do a jobs guarantee. If there is a job that cannot pay more than $13 and the government says $15 is the minimum wage then just let the government employ that person and let it cover the missing $2. Your government funds will go much further.
Negative income tax has the same problem as the insane creep in income tax allowance the UK has seen since 2010, it’s now double than it was a decade ago and it accounts essentially for the entire growth in the take home pay in the UK over the past decade.
Negative income tax and yearly increases in tax allowances shift the burden on pay increases from the employer to the government and thus to the tax payer.
In the UK employers had no incentive to increase pay when the government increases the tax free allowance year after year, and employees seeing that their take home increases don’t really care where it comes form especially in the lower income brackets.
I personally don’t like UBI either because it’s essentially a transfer of wealth from the middle to the top.
I would much rather see a universal basic services program that guarantees universal free at the point of use access to services such as housing, healthcare and education provided directly by a government body or non for profit enterprises.
>I would much rather see a universal basic services program that guarantees universal free at the point of use access to services such as housing, healthcare and education provided directly by a government body or non for profit enterprises.
I agree that creating such a program creates political incentives for increasing it over time in excess of inflation. That's a real cost that needs to be weighed against alternative approaches.
But consider what happens when you make services "free at the point of use access". The price no longer serves the purpose of summarizing and transmitting information about the good or service. The consumer of the "free" good no longer gets any information about the scarcity or quality of the resource, and the provider no longer gets any information about the demand for their good and consequently how much to produce. Prices are the primary mechanism for coordinating decisions efficiently by summarizing actionable decision making information and economizing on expensive knowledge acquisition, interpretation, and communication costs.
It should hardly be a surprise when demand and consumption of those goods and services with a zero price goes up, and supply and quality goes down. Now suddenly you need to grow large bureaucracies for rationing the resources which will inevitably miss the mark of serving disparate individual needs as efficiently as the price mechanism could in a free market.
It's the classic recipe for degrading quality and creating shortages. I believe it's much more desirable for housing, healthcare, and education to be served by the market precisely because of how important they are to people. Putting cash into people's pockets directly has a much smaller distortive effect on market operations, and allows people to express their preferences in allowing them to vote with their dollars, as opposed to "free at point of service / consumption" goods and services.
It's no accident that UBI was proposed by Friedrich Hayek, and the Negative Income Tax by Milton Friedman. You could hardly accuse either of being in favor of wealth transfers, but they both understood the profound negative consequences of distorting prices, which essentially is lying to economic decision makers about the costs and benefits of taking certain actions, resulting in inevitably less efficient allocation of scarce resources that could possibly have been used more productively elsewhere in the economy.
You might be right on the effects of market distortion, but with the current markets we have which many of them aren’t free and the fact that UBI/NIT will be funded quite solely through income tax levied on the 50th-99th percentiles which earn enough to actually pay some taxes but not enough to effectively avoid them will make it unfeasible.
We either have to completely change taxation and have wealth taxes and much higher corporate taxes as well as sufficient housing to ensure that most of UBI payouts don’t simply flow to a handful of landlords or find an alternative solution to UBI.
This is also the issue I have with UBI experiments, running an experiment that finds people lives improve when you give them money isn’t particularly interesting since all of these are too small scale to measure inflationary effects at a minimum an experiment that gives say a 1000 people UBI needs to have another group of people from income percentiles that are expected to fund it that will be taxed at a level that would incorporate the costing of the proposed UBI stipend.
The minute UBI gets instituted is the minute that politicians will arise who want to lower the quantity for one group of people and increase it for the group of people that supports them.
Eventually it will end up being means tested in one form or another just like the income tax system has been made so complex by politicians favoring one group over another.
I absolutely love the idea of UBI but I just don't see it surviving in a pure form with our populist and identity group focused political system.
I don't know how old you are or how long you've been paying taxes, but they have been an insane labyrinth since long before Trump. My taxes actually got simpler with the increased standard deduction.
This is true. The entire value proposition of UBI lies in it's unconditional nature. The expectation that governments won't butcher it is highly unreasonable.
Authors like this frame the UBI/minimum wage debate as if we just haven't figured out the right policy mix to fix poverty or precarity -- as if it's a problem of ideas. I propose that it's in fact a question of power -- 1) who benefits from people being poor and how much 2) power do they have?
1) Owners of capital, who don't want to see their labour costs escalate and use firing/the poverty gun as a disciplinary tool.
2) Overwhelming power, channeled through vectors such as billions spent in lobbying or campaign contributions or threats to take their capital to friendlier jurisdictions.
Indeed you'll find that places with high degree of union power often don't have minimum wage and far less interest in UBI, because there tends to be tariff agreements and welfare systems in place that makes these things seem rather redundant.
The continuation of poverty in most of the developed world is a choice, and one that people keep voting for. As long as people keep voting to maintain poverty, it's a relatively pointless academic discussion.
Lots of fun catch phrases, but unless you also propose a solution, it comes off like someone standing on a soap box in a campus quad preaching to three people.
I agree, which is why I generally stay out of these conversations.
But I think it's important for people go to beyond "That's not the problem. This is the problem" and on to "But here's something we might think about that could work toward a solution."
All I ever see on HN is the same talking points I've heard regurgitated in the dozen or so union halls I've been in from coast to coast over the last 30 years. Everyone gets a lot of practice shouting the right keywords, but nobody ever says anything new, or even tip-toes near a solution.
It's also amusing the every developed country except one has already figured this out, and proven over decades their solution works very well.
I'm perpetually dumbfounded America isn't able to look at the rest of the developed world, learn from what they're doing that is superior, modify and improve it a little for their needs and implement it for their own gain.
EDIT: Rather than downvotes, how about some constructive discussion around why the US appears incapable of learning from other countries?
... and you've only kept doing it. You've done it repeatedly in recent days, even in the last few minutes. This really needs to stop.
I don't want to ban you, because you also post good comments and that's great. But when an account keeps breaking the site guidelines and repeatedly flouts our requests to stop doing that, obviously that's where that ends up.
I'll stop, though it would be preferable if we could have discussions around topics, rather than just banning them.
After living and working in the US, and Canada, and Australia, I genuinely don't understand why the US can't learn from other countries to improve itself. Honestly, I'm not trying to post flamebait, I simply don't understand, and I've never heard a good explanation.
My friends here in Canadian healthcare regularly compare and contrast the system to Australia/UK/Scandanavian systems and point out the pros and cons and how the Canadian system is adopting ideas/techniques from other places that have seen good outcomes.
Other countries do this regularly. Honestly - why doesn't the US?
I believe criticism and pointing out problems/weak points is the first step to improving a situation - after all, there can be no improvement until a problem is acknowledged.
The very fact this article and thread exist suggests there is some kind of problem / or something can be improved upon with regards to paid employment.
I genuinely don't understand why the US can't learn from other countries to improve itself.
There's a pretty broad assertion buried in your confusion.
Like for healthcare, the issue isn't that we can't look at other systems and see that there are advantages, it's that there is widespread resistance to moving away from the existing system. There isn't any single reason for it (lots of people like that they are making lots of money, other people have ideological concerns, etc, etc). Trying to reduce that down to "US can't learn" isn't really very interesting, as that isn't the problem.
No one is banning any topics. Nationalistic swipes are not a topic.
The issue is that you have a long pattern of nationalistic swipes in your posts to HN (to the point where I brace myself when I see your username, because I expect to run into yet another). It's not ok, it's against the guidelines, we ban accounts that do it, and we need you to stop. You've done this many times about topics other than healthcare, so this isn't just about healthcare (though, separately, repeating the same points over and over about a classic flamewar topic is also against both the site guidelines and the intended spirit of HN).
I don't mean to pick on you personally and I hope that's clear. The same rule holds for every user, regardless of which country anyone has a problem with.
That's a very narrative driven world view. The problem with UBI is that some jobs suck but need to be done, and if you set a guaranteed income for doing nothing the incentive for doing that job suddenly needs to be a lot higher to compete. Saying that it's just the capital owners is ridiculous - consider for eg. elderly care - good luck living in with your demented mother who needs assistance to perform even the basic tasks - you think capital owners are the ones unable to afford elderly care ? And so on and so forth.
So poor people need to exist because otherwise we wouldn't be able to force people to do things we ourselves wouldnt want to do? And if they are not poor they would stop being in awful servitude jobs noone wants? I guess it just sucks to be born poor then, too bad we can't help them
At the end of the day most people don't want to work, but the option to be paid for not working isn't available. We all dislike working to some extent. Otherwise we would do it for free, as a hobby. There are some low paid jobs people choose out of passion or interest.
There are also bottom rung jobs that beginners with no job skills can enter. Think about people with no language skills, don't they deserve a chance to be productive?
Even some of the lowest paid workers take pride in their work. Some of the savoir-esque rhetoric here borders on condescension.
I understand money is used for supporting yourself, but do you honestly work for free after-hours? Everyone has better things to do than work. Travel the world, make businesses, and spend time with family. You'd rather work?
>Where did you get that from? I really think the opposite is true.
Have you ever worked in a factory, on a farm, etc. on bottom level positions ? Most people would take the money and do nothing without blinking. Hell even a bunch of my college friends would skip years of their life playing games and acquiring 0 life experience if someone gave them this option the only thing that forced them to go out in the world was existential need (as demonstrated by two guys I know who are well off and their parents allowed them to do nothing - one guy has 0 days working experience at 30, he was a top tier COD gamer)
Someone working basic job in a nursing home isn't necessarily poor - in the sense they can afford some standard of living on their income. If you add the option for them to receive 1/2 or even 1/3 of income but have to do nothing - now doing the job they would do previously to avoid poverty would probably take more money to do. And the people who get screwed are the ones who were barely able to afford their services before.
Every job I needed to do in my early life sucked and I would do none of them if someone gave me 1/3 of the income and stay at home with my parents and play video games and code for leasure. I would probably never even take that level of job (factory line work, industrial work, farm work, entry level sales shit). Multiply that by a huge fraction of the population and you seriously destabilise the economy.
Some jobs can be outsourced (like manufacturing) so it's not that big of a deal - but some jobs like for eg. elderly care, etc. are labor intensive and not easily outsourced. And everyone needs them.
Do you see the irony in that the shity jobs that noone wants to do are the ones that pay less? There is another solution to give incentive there, raise the salaries for these shity jobs to attract people. It is very convinient that this shityjob-noincentive argument is being propagated by the same people who will never have to do these jobs or live by limited money.
> How were you able to determine this from across the Internet?
Who told you my source is the internet? :) we all live irl and discuss with people. I never heard a low-paid worker throw this argument. It always comes from people who have better jobs and more stable income
It appears as a variant of the 'check your privilege' argument. Everyone who disagrees with UBI, minimum wage increases is privileged and lacking empathy according to this generalization.
While the actual thread appears to be about incentives.
There are many who have worked entry level jobs who would object to UBI or minimum wage price fixing on purely economic terms.
There are also those who are unable to afford the current cost of living or gain employment due to interventions in the market. It wouldn't be difficult to unfairly characterize interventionists as insensitive to the plight of the poor.
> I never heard a low-paid worker throw this argument. It always comes from people who have better jobs and more stable income
I grew up in dirt poor family of 6 in a post civil war country and my mother is a nurse - I'm very familiar with the realities of these jobs. I just know for a fact that if a nurse would start making 2x her salary a lot of people would suddenly not have access to assisted care. It's a shitty situation - but supply of cheap labor solves the problems of poor people - if you can't see that you're out of touch.
Rich and well off people will always have access - they already pay more anyway for quality.
So your mother said that she wanted this low paying job because noone would do the job otherwise? I am trying to figure out how you are contradicting my argument that only people with better jobs propagate these things
Unless your job is pointless - you quitting your job to take care of your mother is a net loss for the economy and again makes things less accessible for everyone - nursing homes are an optimisation.
It sounds nice to give people the option but your argument is exactly why substantial UBI is a dangerous concept.
> Unless your job is pointless - you quitting your job to take care of your mother is a net loss for the economy and again makes things less accessible for everyone
Some people prefer to live at home rather than go to a nursing home. What's worthless about giving those people better care that more closely aligns with their preferences?
> is a net loss for the economy
This is such a weird way of thinking about activity that happens outside the market. Should I feel guilty about cooking my own meals because I haven't payed a restaurant worker to do it?
Sometimes people do things outside of the market, and that's OK, they don't have to feel guilty about that. The market exists to help us live our lives, not the other way around. Whether GP watches their parents on their own or hires someone else to do it, the parents are still getting watched, and somebody is still doing that as part of their "job". That's the important part.
You're concerned about prices going up, but what GP is describing would be vastly cheaper than paying for assisted living on the market today. It's making in-home assisted living more available than it currently is on the market. Why would that be a bad thing?
Yeah that's a major issue that I bring up everytime UBI is discussed and that for some reason UBI proponents never address.
If UBI isn't high enough to ensure that welfare as we currently know it isn't needed anymore, then why have UBI at all? It just adds complexity to the system for no apparent gain. On the other hand if UBI is high enough to go by without working there's a lot of things that just won't get done anymore.
Pay like all goods on in a market are not infinitely elastic to just say the pay will simply increase because the supply of workers drop.
For example lets look at janitorial labor, that is a hard job to automate and it is required in every business. So many would think that an increase to say $15/hr would just mean all the companies would just pay the same number of workers $15/hr right? No, what you would find it maybe instead of daily trash pickup it goes to 2 times a week, or employee's are asked to take their office trash themselves to a common trash bin. Common area's are cleaned less frequently, other employee's are asked to pick up some slack, and the janitorial staff will go from 10 workers to 6 , with a responsibility of 4 floors vs 2, or other such adjustments to the "acceptable" level of janitorial services.
The business has a budget of X for janitorial, that will not change very much simply because UBI or Min Wage came into play, they will just have to accept less janitorial services for the same money (aka inflation)
Why are jobs that are needed the most paid the least? That is some sort of manufactured contradiction. If they are paid low because they are easily replaceable, why are they the most needed jobs? If they are paid low because they aren't needed, then they aren't needed and shouldn't exist.
What could a third possibility be for these jobs being paid so low, i wonder? He said, facetiously knowing the answer
> The problem with UBI is that some jobs suck but need to be done
I'm somewhat skeptical of the UBI train, but this particular objection has always rubbed me the wrong way. Those jobs should cost more.
If the only thing keeping people in a job is the threat of poverty, and they're not being paid enough otherwise to incentivize them to do the work, then that's not a free market. It's not really significantly different from holding a gun to their head or coercing them into doing the work.
What's going to happen if the people stuck in dead-end jobs retrain to work at better jobs? What's going to happen if the economy improves and suddenly they have more opportunities? The problem with underpaying essential jobs is that it forces people to think of those market outcomes as undesirable. I don't like the framing that says that if elderly-care workers retrain and have a choice whether or not to work in nursing homes, that's a bad thing. That seems very, very counter to how we should think about a healthy jobs market.
I don't want a framing that tells me that the economy becoming too good or people having too many job opportunities is a problem because those people need to be financially pressured into working underpaid jobs. To me, that's a very anti-free-market way of thinking about the economy. Jobs that are difficult or undesirable should have more compensation because they have less demand. That is the entire basis of the jobs market and of supply/demand, we shouldn't be trying to undermine those principles.
I think this is spot on. Wealth gives you power that you can use to protect that wealth and thus the endless cycle begins.
It's not that hard to build a system where everyone benefits. However, it's even easier to build a system where special interests benefit the most because they are the ones who are in charge after all.
Honestly saying a UBI is superior to anything else is so open to interpretation that it’s just asking for it to die by being gummed up in endless debate (which is where it’s been languishing so far).
Make a case that with all things considered (including government labour and other bureaucracy costs) that a UBI is fundamentally better value overall than the current system and you’d have it in two years.
I think that’s a case that could be made convincingly. UBI is simple. It’s impact is therefore easily measurable.
It’s self-regulating if you believe that the taxpayer will be incredibly sensitive to systemic abuse because they know they’re fundamentally paying a fixed amount directly. If abuse were becoming a problem, the public would express their distaste at the polls.
It also frees up a lot of people to pursue ideas they might otherwise be prevented from exploring, which could have outsized macroeconomic benefits.
I agree with most of the comments here about how UBI == negative tax, its really just changing the names of transfer payments in the economy.
That said, the really appealing thing is that it allows wages to be unbound from the question of supporting the poor. If people are below the poverty line you can raise UBI, but you don't have to put your thumb on the scales of the labor market.
But to not just re-create welfare, you have to completely dissolve the tie between UBI and taxable income. And to do that effectively you boost the marginal rates above your cut off point.
You could plot that to show how much the UBI was a net increase to your annual income and then design the tax rates to have it be effectively 100% reclaimed as tax after $400K AGI or what ever number you pick.
And that is the beauty of the separation! Once you've got the two things (minimum wage and UBI) separated, you can adjust the tax code to move around the reclaim point.
Could you elaborate on why ? I've also thought about this and would like to hear your thoughts.
If I were to take a guess, it would be politically connected organizations benefiting from the welfare system. I wonder what these organizations would be.
Or, there might be some political calculus that makes means testing and administration more favorable to the ruling establishment.
We need to open the borders up. It is so unfair that only people who happen to live in the USA right now will get UBI.
Biden needs to form military caravans to escort people across Mexico to get here as fast as possible. He can also start planes and ships from Africa. How many people can you load on an aircraft carrier? How many trips can it make a year? Let's stop messing around.
It's so nationalist to talk about UBI without including those who cannot partake of it by accident of birth. Shame.
Encourage (read: regulate) companies to offer very generous paid time off, like 3 months a year paid time off or more.
People can use the time off to work a second job, and thus receive more income from working the same hours. It will also increase worker mobility, because a worker already working 2 jobs should be much more willing to take risks and try out new jobs. This will create competition between employers, because many employees will be working two jobs. If you treat your employees bad, the will request fewer hours and spend more time at their other job, or just leave.
Or, the extra time off could be used for entrepreneurial pursuits. Or just to relax, etc.
This is an alternate plan that has many of the same benefits as a higher minimum wage and universal basic income. I haven't hear it discussed by anyone else though.
This is like contending that rewriting a subsystem is superior to a one-line patch. Sure, the new subsystem design might be great, but let's not block all small patches while waiting for the big rewrite.
Any country even conservative ones still has tax breaks, minimum wage, other social programs for people with low incomes. Combine those programs into one thing and that's essentially universal basic income.
With UBI, it's going to be difficult to extract labor out of people who aren't desperate. Without UBI, the same set of people will revolt one day. I think these are the choices being considered.
Thinking of how economics discussion usually goes with truly lay folk in this field makes me want to build a pretty little website showing various triangle diagrams for trade, market clearing under various actions etc.
Stuff from undergrad economics - mostly micro to start maybe. Maybe some international trade thrown in.
It seems way-to-hard to find such simple pictures for theory anybody can understand.
Then when alternatives are suggested it will be easy to see how they fit in the picture - what assumptions are modified etc.
I recall from my high school and college requirements for Econ it’s likely that most US educated people had a fake “civics and Econ” class in high school (We memorized questions about Sam Walton for our Econ tests, for example) and may have had one optional class in college. That makes it easy for unsound ideas to thrive.
In saying the above I make no statement about the ideas of this post. I wouldn’t hazard it online because I can’t promise to put the work in due to the above issue which I wish, similarly, I had time to address in my limited way. Since this is the internet I’ll say this: UBI seems fairly smart given the alternatives. So does Some kind of negative income tax.
I'm not an economist so I would really appreciate insight into a thought I've had about UBI. Let's say your rent is $1,000 per month, and the government began a universal basic income program of $500 per month for everyone. If your landlord raises your rent by $500, are you not in the same position as you were before without the UBI?
I ask this because my argument with a UBI is that it will create more money in the system, true, but there's no limitation that prevents landlords and merchants from also raising their prices with the justification that they know you have it. So to take a stab at a question: Would a UBI lead to inflation?
>If your landlord raises your rent by $500, are you not in the same position as you were before without the UBI?
If your landlord raises your rent then it will be more profitable to build housing which then allows construction companies to employ more workers. Of course, the problem with this is that some cities have banned new construction but that's a problem with the specific city, not with the idea itself.
Yes, it would drive inflation and moderate inflation drives jobs growth so everyone would benefit, except those whose net worth is invested in unproductive companies or assets.
It's even worse than that, since inflation hits the poors the hardest, while the capital and professional classes have skills/assets that weather inflation quite nicely. Hard to imagine a more efficient way of neutering the poors politically and economically.
>are you not in the same position as you were before without the UBI?
No, now you are dependent upon the government to pay for your inflated rent. Naturally, when $500 is eaten up by price inflation, UBI proponents will demand a commensurate increase. It is easy to see how this could spiral into total dependence.
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[ 4.0 ms ] story [ 229 ms ] threadI tend to agree that if we (society as a whole) determine that there should be a minimum income below which no one is allowed to fall, a UBI-type system is more equitable than a minimum wage increase.
The costs of UBI fall on everyone, while the costs for minimum wage increases fall on the very business owners who tend to employ the young and/or unskilled. It's McDonalds and the local car wash (and their employees!) that take it in the neck with a minimum wage increase, not Google or Goldman Sachs.
Capitalism is a social good to the extent that it solves problems and makes people's lives better. But capitalism only solves the problems of people with money: their cash is THE incentive for others to figure out how to solve their problems. If people with problems have no money, they effectively create no demand.
Add wealth to the bottom tier of society and we'll generate generate demand to solve problems at the bottom, which in turn generates a supply of people to fix those problems. This is effectively what happened after WW2, driving the massive growth of the American middle class and a huge increases in standard of living.
Finally, there are plenty of studies backing up minimum wage increases. The boogeyman of inflation in this context is nothing but FUD.
Consider this thought experiment: raise the minimum wage to $2 million/hour. What happens to prices?
For 2M/hour employers would be able to maintain sophisticated forms of automation, without the liabilities of humans.
In terms of price inflation, UBI will inject the hot flows which previously stayed in capital markets into everyday consumption.
Make minimum wage $1,000,000/hr then!
It's articles like this that make me wonder if the purpose of the basic income movement is to act as a sort of pipe dream spoiler for more realistic progressive policies - like a $15 minimum wage.
Either that or a plan to make welfare "fairer" by ensuring that disabled veterans who can't work and tech millionaires get the same $ amount each month from the government.
Especially since the author accused the $15 minimum wage "burdensome"... this is incoherent given the cost of providing, yknow, money for nothing for everyone.
It's all too easy to see a lack of infrastructure jobs, for instance, as a signal of a lack of demand. It isn't. America has crumbling infrastructure and a lack of jobs to fix it at the same time.
China turning off the trade tap will likely also stimulate the creation of jobs. iPhones will need to be made at home at some point in the not too distant future and they will still need plenty of people to do so.
Wealth re-redistribution will also stimulate demand, creating jobs. A lack of demand caused by a lack of wealth is not a "true" lack of demand.
When society starts lowering the retirement age to 50 and nobody frets about inflation ever - THAT'S when you know that full time work is really drying up. Not happening.
What does the data look like from 1900-1948? I imagine WWII had an impact too.
I would also consider whether the growth the welfare state is responsible for the drop--rather than just makes up for it.
One is that the only kind of thing to do is work at a job, which is what labor force participation measures. But that's not the case at all, and it's obvious from your second graph. Do you believe that in 1950 ~70% of women were idle, doing nothing? Of course not. They were doing all sort of societally valuable work. It just wasn't in the form of a paid job. And that's my key point here: there is plenty of stuff that needs doing that would make the world better. It's just that a lot of it hasn't been converted into paid jobs that would show up in a graph like this. Just try thinking about all the things wrong with the world and ask whether more people helping with them could make them better.
Secondarily, a decline in the labor force participation rate can have all sorts of causes. The formal definition is "the percentage of the civilian noninstitutional population 16 years and older that is working or actively looking for work." Labor force participation rate for people 16-19 is low. Is that because there's nothing a teen could do? No, it's because they're in school. Labor force participation rate for people over 65 is even lower, ~15%. And over recent decades, we've seen that that segment of the population grow rapidly. So the labor force participation rate has declined significantly because people are living longer and enjoying retirement.
And of course, there's plenty of overlap in the two factors. After my dad retired, he spent a lot of time volunteering at a school. The kids definitely needed the help, but he was unpaid. That's a great example of something for people to do that wasn't counted as part of the labor force. Similarly, my aunts spent a ton of time helping raise their grandkids after they retired. Because of politics and accounting rules, that's not a formal job, but it's absolutely socially valuable labor.
All goods and services are ultimately the product of labor.
We've automated away all the simple jobs many times over. Almost all of agriculture, for example. Almost any job in the first industrial revolution. Practically any job that is embedded in a last name: Smith, Potter, Cooper, Mason, Taylor, Wright, Fletcher, Ward, Weaver, Chandler.
But again, look around you: is this a world with nothing left to do?
As to the other bit I'm not sure if that's "OMG machines will ruin us" or "OMG robots will ruin us", but the former is multiple centuries old, while the latter just turned 100.
I get that you have personal fears here, but people have had personal fears about insufficient replacement work because machines since the Industrial Revolution. If you want people to take those fears seriously, you'll have to do better than "animals are people, probably".
If you'd like to see it differently, try naming problems in people's lives and in the broader society. How many of those could be improved with the application of human time and attention? Lots, I say. It'll be a long time before we run out of things for people to do.
Inflation makes sure that everyone can get a job. The fact people you even entertain this though is hilarious. The entire point of capitalism is to maintain growth and that growth can only be maintained by employing people.
People hate on growth but what's the alternative? Imagine being in the 15th century and saying: This is it, people will never have a full time job again, ever.
The 21th century wouldn't have happened if people thought like that. The dark ages would have lasted forever.
The reason why we have so much underemployment is quite simple. Inflation has been way too low. Honestly, we have so much inflation to do that even the measly 2% that the Fed targets is way too little. Inflation has slowly picked up and it shows. Underemployment is shrinking in the US.
Most sub 15 minimum wage work produces value far in excess of the wage. This value is then captured in profit margins and stock prices.
The minimum wage also doesn't prevent people from selling dolls on Etsy or something if they really want to.
How would it do that?
Make $x and you get rental assistance, medical care for your kids, food aid, whatever.
Make $x+1, and you get jack and shit.
There's no reason for it to be that way, in a world with ubiquitous calculators and computers, but that's how it often is.
* If you make $20,000 then your effective income is $32,000.
* If you make $32,000 then your effective income is $32,000.
* If you make $25,000 then you're effective income is $25,000.
This creates a terrible incentive structure where you actually don't want to make more then $20,000 unless you're sure you can make more than $32,000. Well actually more because there's really no incentive to move up to $32,000 exactly.
You have to make sure that when a person makes more money they are always better off for having done so. Having a hard cutoff for benefits doesn't work and neither does a back-off system that matches income (e.g. at $25,000 you get $7,000)
For all the descriptions though, there is a key lack of how to easily describe it. It’s missing it’s catch phrase if you will.
As a first crack at it, let's just give everyone who makes less than say $10k per year a bundle of aid that amounts to the fixed value of $1000 per month. This perhaps an improvement because we aren't ignoring the needs of the poor, but it creates a problem, which is what a welfare trap is. Imagine the graph for this situation. If you're making over $10k per year it's y = x, but if you're making less it's y = x + ($1000/month). So at x = ($1000/month) there's a sharp drop in take-home money. So people who would perhaps like to make a little more money are disincetivized from doing so because they would stop taking home that $1k per month and be exchanging it for a much smaller raise.
The negative income tax proposal attempts to solve this first by just providing cash to poor people instead of various goods that are hard to measure, and then by ensuring that the curve we're talking about never has a negative slope or drop. For instance imagine if you make zero dollars, you're given $1000/month, but then for every additional dollar you make independently, you receive 25 cents less aid. You'll always want to make more independently in this situation even if you don't keep it all.
Most actual examples are less blatant, but let's say our welfare system consists of a 12'000$ welfare for anyone who makes less than 12'000$ in income. If your job pays 11'000$, your take-home pay is 11+12 = 23'000$. If you do very well and get a 2000$ raise, your income is now 13'000$, so you don't get the welfare, and your take-home pay is now 13'000$, meaning you lost 23-13 = 10'000$ of effective income by getting a raise.
UBI can do this too - it's not clear to me what the practical differences between UBI and "negative income tax" are.
As opposed to a negative tax rate below some amount? Why would everyone not get that?
I guess it just feels like there are two equations that can be made equal so easily:
UBI_POLICY(income) = income + ubi_income - progressive_tax(income + ubi_constant)
NIT_POLICY(income) = income - progressive_tax(income) + negative_tax(income)
income + ubi_income - ubi_progressive_tax(income + ubi_constant) = income - nit_progressive_tax(income) + nit_negative_tax(income)
ubi_income - ubi_progressive_tax(income + ubi_constant) = nit_negative_tax(income) - nit_progressive_tax(income)
which seems a super easy thing to make equal. Is it the payments to folks that are different?
Suppose you have a negative income tax in the amount of $12,000 which phases out at a rate of 25% up to $48,000 in income, and a 5% marginal tax rate on people who make less than $48,000 and a 30% marginal tax rate on people who make more.
Suppose you have a $12,000 UBI and a flat 30% tax rate.
These are really the same thing. The advantage of the UBI is that you see more clearly what you're doing, so that if somebody suggests to e.g. have a steeper phase out, what it really corresponds to is having a higher marginal tax rate on lower income people than higher income people. Which is maybe not what you want.
When I report my income as of December 31st, 2020, I still made enough for the year that I won't receive benefits, despite not having an income. That means that I will be unsupported through 2021 and won't see the money until 2022, correct?
If it were UBI and I were paid on January 1st 2020, it would be clawed back on December 31st as I still made enough money, but I would receive another payment on January 1st 2021 to get me through the year where I have no income. Isn't that the intent of UBI and not something afforded through negative income?
You could pay out a UBI-like stipend and then claw it back on the same day (December 31st, 2020), but is it really UBI at that point? That sounds like the negative income tax.
There is no "don't receive benefits" anywhere. Everybody gets $12,000/year every year in both cases. Then separately people who make more than $48,000/year pay more than a total of $12,000/year in taxes or phase outs.
Does a negative income tax not tell that high earners pay money to the state, while low earners receive money from the state? If everyone receives money from the state, even if high earners have to pay it back at tax time, that does not meet the definition of negative income tax as I know it. That is UBI. A more concrete example would be useful.
Suppose you make $20,000/month, i.e. $240,000/year if you made that the whole year.
In January through March you make $20,000/month. Under a UBI you receive $1000 but then pay $6000 in taxes, a net payment to the government of $5000/month. Under a negative income tax you pay 5% on the first $4000 ($200) and 30% on the remaining $16,000 ($4800), and expect to receive no credit because it fully phased out, so a net payment to the government of $5000/month. It's the same.
In April through December you make nothing. Then you get the $1000 UBI/credit and there is no tax. To receive the net money from the tax credit before the end of the year you would have to be able to claim it without a job, and to set your withholding amount to a negative number that month because you have no income. Which is theoretically possible (it would be what happens to anyone making <$48,000/year), and either way you still get the same total amount at the end of the year when you file your taxes and reconcile.
You're shrinking the window down from a year, but does it change anything other than you might be able to get by for a couple of weeks easier than an entire year if your income dries up? Assuming monthly payments, and a loss of income on March 1st, I'm still under the impression that UBI will give you $1,000 to spend as of March 1st, while a negative income tax will make you wait until April 1st, no?
But also, in my world there are no paychecks or ongoing regular income and income isn't reported until the end of the year. How does that fit the model?
What we do instead is withholding. Your employer is to pay you $60,000/year, i.e. $5000/month, but instead of actually giving you $5000/month, they give you $3500/month and give the rest directly to the IRS. Then you don't owe anything at the end of the year and a lot of people actually get some back because they took out more than they needed to.
The reconciliation period for this is in the law somewhere but in principle it can be whatever you want. It could be instantaneous. As soon as you get your paycheck, the employer cuts one to the IRS at the same time.
With a negative income tax, some people would have a negative withholding amount. So the IRS would cut a check to the employer and then the employer would include that money in your paycheck.
So what happens if there is no employer? Well, then you're the employer. You're a sole proprietor making $0. So you fill out the paperwork with the IRS to reconcile your withholding, which would be in a negative amount, and they send you a check (or direct deposit the money in your bank account). There is no reason in principle that they couldn't do this as soon as you fill out the paperwork, i.e. on March 1st the instant you lose your other job and become a sole proprietor with no income.
But you won't really know if March is going to be income-less until it is over. On March 1st I may still be hopeful that tomorrow will be a better day. Soon it is the 31st and I realize I didn't make anything. You're still dependent on hindsight, no? Whereas UBI fronts the money and then if March 15th provided me a major windfall, I can give it back.
We can shrink the period even further. Let's say a day. If you cannot find a source of income on March 1st, you can submit the paperwork at the end of the day. But you're still looking to the past, whereas UBI would give you the money first and then adjust accordingly in the future. In the real world there is always going to be some kind of lag to the time to filing the paper work. There isn't a constant stream of conscious delivered to the tax man. And reporting daily is a huge amount of overhead for someone. I cannot imagine in practice that it would be practical to provide such reporting more often than a weekly/bi-weekly schedule at the very most. The length of period doesn't actually matter here, though. The logic is exactly the same if you report every second or only once per year.
I'm afraid I'm still not seeing how a negative income tax can ever provide you the money before you know what your income is (the past). In contrast, UBI assumes you will have no income and then is clawed back if that assumption is false (the future). That is not just framing, there is a practical difference in the real world as far as I can see in your examples.
You can specify how much withholding you want. There are just penalties if you end up owing too much in the end, because otherwise people would specify none all the time and we'd be back to tax debtors prisons when they didn't have the money at the end of the year.
So you can say on March 1st that you want the $1000 now. Then on March 3rd when you find a new job, you immediately go back and specify a different withholding amount which claws it back so you don't have to pay the penalty for not withholding enough now that you're making more money again.
> And reporting daily is a huge amount of overhead for someone.
Not if you're only reporting changes in your withholding amount. Then there is only something to file when your job status changes. You lose your job, you file a status change, money is immediately transferred into your account. You get a new job, you file again. At any other time there is nothing you have to do.
> The logic is exactly the same if you report every second or only once per year.
Other than the immense practical difference between having to wait for money for one year and having to wait for money for one second.
And even that doesn't exist because filing doesn't have to happen after the fact at all. If it's February 15th and your employer says you're laid off in two weeks, you can change your filing status before March 1st and get the money at exactly the same time.
So, you state that in the morning - every morning – assuming you won't have an income and then when you hit it big on GME stock at lunchtime, you pay it back at 5PM? Seems like a lot of work that won't happen in practice. It is not like you can know in advance if you will have income for the day or not.
This is not how NIT works. You can read this for an intro:
https://www.scottsantens.com/negative-income-tax-nit-and-unc...
For UBI, you need to / get to have a direct line to every person/citizen. For NI, they come to you.
I honestly have no idea which one is better/easier from this perspective, it just seems like the logistics implementation is another significant difference.
I imagine UBI as a system where every citizen gets a monthly check, no questions asked. It shows up in the mail or gets direct deposited and that's it. And if someone can't receive it that way, say if they're homeless or don't have a bank account, maybe there could even be a place they can show up and collect their money in person. This might still be a pipe dream but it doesn't seem impossible, the hard part is actually figuring out how to pay for a UBI program.
Contrast that to sticking it into the existing income tax system. I imagine that would mean you'd only collect the money annually, and only if you file a tax return. Lots of people without much income don't file tax returns so that's already a blocker. And once the money is gone, a year is a long time to wait for another payment. Of course there's no reason a negative income tax couldn't still be distributed monthly and made more easily acceptable, but there's just a lot of baggage around the thought of dealing with taxes.
No way.
Taxation requires benefit systems for those that are not working (unemployment, disability, maternity etc). UBI simplifies benefit systems, administratively and for the needy. The social outcomes for benefits are entirely different from what a UBI would bring.
Taxation is chunky (per year) and delayed (processing delays). There are heaps of corner cases of employment and salary changes during the year that might be equivalent over periods of many many months, but where a weekly UBI payment would make a huge difference to you if you were poor or unfortunate.
Taxation has more scope for fraud so requires much more overhead for prevention. A UBI is simple to manage - the things you need to detect are far more limited and are more easily checked and less invasively checked.
Disclaimer: I am not a UBI fan: I am just arguing against your point because it is so egregiously incorrect.
Not a negative income tax, for exactly the same reason that a UBI doesn't, because they're the same thing.
> Taxation is chunky (per year) and delayed (processing delays).
Neither of these is inherently different. You could have a per-year UBI with processing delays. You could have an instantaneous tax reconciliation system with electronic transfers.
> Taxation has more scope for fraud so requires much more overhead for prevention.
You say that as if the existence of a UBI would cause there to not be taxation.
Having a negative income tax is entirely orthogonal to tax complexity. The explanation is more complicated, because it's just a harder to reason about way of describing the same system.
It's important to read economic literature beyond old dead economists because many modern economists disagree with this, or think it doesn't paint a full picture of the situation. Noah Smith comes to mind.
Sources:
1. https://www.nelp.org/wp-content/uploads/NELP-Data-Brief-Rais...
2. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2705499
3. https://americanprogress.org/wp-content/uploads/kf/minimumwa...
4. https://www.piie.com/blogs/realtime-economic-issues-watch/hi...
These studies are obviously politically and progressively motivated (coming from firms such as american progress) so we have to assume a large scale national increase of minimum wage as significant as this would have unintended negative consequences.
So really, the only benefit is a psychological trick. Simply handing out money to underpaid workers would drive inflation much more effectively and do the exact same thing.
A lot of research suggests the effect is pretty small when the increase in minimum wage is small compared to the market wages for unskilled labor.
But there isn't a lot of data about a large change in minimum wage that affects a substantial number of people.
If there was no downside, why not $100 an hour?
Edit: also, I can't find the study, but I know there was one done about statewide minimum wage changes in states with large differences in cost of living. It's a smaller scale version of what you'd see on a nationwide hike given the differences in cost of living (i.e,, NYC vs Buffalo). Generally speaking, businesses adjusted.
E2: here's a study that isn't the one I was looking for, but is topical: https://www.epi.org/publication/webfeatures_viewpoints_raisi...
No it's not, it's proposing that one of the things they'll do in response is hire fewer people. Which will absolutely happen in a non-zero fraction of cases. The only question is how big a fraction.
https://www.washington.edu/news/2019/02/06/two-new-studies-p...
"The most common strategic response reported by the businesses has been to raise prices or fees of child tuition and to reduce hours of or number of staff. Center directors reported that employee wages and benefits comprise the majority of business expenses and that child tuition was the primary source of business income. Thus, most businesses reported they would need a mix of strategies to accommodate increased labor costs to ensure that added expenses were not falling entirely onto the families they serve."
https://www.nber.org/papers/w28388
> I am a huge fan of a negative income tax, but I prefer a UBI for multiple reasons. It lowers the administrative burden because you don’t need to figure out how much I made last year. It removes any strange shenanigans in terms of trying to report a low income. It alleviates a payments timing issue — you’re not likely to get your negative income tax when you might need it. And politically, I think it’s more appealing to be able to say to everyone: You have intrinsic value. This is how much you get for being an American, [a] human being.
You're right that the parent was a good contribution and deserved to be unkilled. That's what vouching is for, and you made an excellent use of it.
Banning on HN isn't punitive, it's preventative. When a banned account has changed its ways and has reliably been sticking to HN's rules for a while now, we're happy to unban it. If people see cases like that, they should email hn@ycombinator.com so we can look into it. That's a fine way to watch out for a fellow user.
When a banned account hasn't been reliably sticking to HN's rules for long enough, or hasn't posted enough to decide that yet, it stays banned for obvious reasons. In that case their good posts can still be unkilled, just on a comment-by-comment basis. That's why we created vouching and it works well.
The universality of UBI is key to its political viability. Just look at the number of people who are against forgiving college debt because they have already paid off college or are past the stage in their life in which they are personally concerned about college debt. Most people still view "fairness" as everyone being treated equally. So just give everyone an equal amount of money.
Further it is not just people that have paid off college debt or are past the stage where are concerned about college debt..
Many people worked their ass off to become good at a trade or other profession with out incurring college debt, why should we then have to pay increased taxes to pay of those that bought into the college lie?
No one is offering me Mortgage Debt forgiveness? Housing is more of a necessity of life than a collage degree...
Everything else is just corruption
Sometimes fairness means leveling the playing field so everyone can compete equally.
We are not talking about a "family" but talking about government, that is something very different and it is very dangerous to view government as a "family" in the same way it dangerous to view a corporations or your employer as "family"
To treat people differently you would have to start basing income tax rates on characteristics of a person, such as race, sexual identity, age or height (like in your previous analogy)
Saying all income from 0-50000 is tax X, and income from 50000-100000 is taxed Y is not treating PEOPLE differently, all PEOPLE are treated the same in that situation.
To be clear I am a supporter of replacing all Welfare programs with a Negative Income Tax. I would also be in favor of a UBI that was not funded with Income taxation.
I also support the abolishment of all Income based taxation replacing it with Georgism Single Tax System
Characteristics like their marriage status, the number of children they have, the status of their home, their status as a student, or even the specific example you used of age which is tied to all sorts of taxation issues?
Although I'm not sure there is any point to continuing the conversation if you are going to nitpick any analogy and refuse to recognize that your views on taxation are an extreme minority opinion.
Meanness and unfairness are two different things.
Especially in a family setting, sometimes niceness can Trump fairness.
Equality of opportunity? Equality of outcome? Low penalty for failing? Low penalty for breaking the law? Eye for an eye?
One of the arguments for UBI is that, as it makes no effort whatsoever to exclude anyone, it is enormously simpler than the alternatives, both in terms of people reasoning about their taxes and in terms of implementing it.
Of course, it would be UBI + lots of other tax codes, but that's meant to be part of the point.
There is no guarantee that anybody with any type of skill set will be offered a job aligned with their skills depending on economic issues. Skill is a vague idea.
Negative income tax and yearly increases in tax allowances shift the burden on pay increases from the employer to the government and thus to the tax payer.
In the UK employers had no incentive to increase pay when the government increases the tax free allowance year after year, and employees seeing that their take home increases don’t really care where it comes form especially in the lower income brackets.
I personally don’t like UBI either because it’s essentially a transfer of wealth from the middle to the top.
I would much rather see a universal basic services program that guarantees universal free at the point of use access to services such as housing, healthcare and education provided directly by a government body or non for profit enterprises.
I agree that creating such a program creates political incentives for increasing it over time in excess of inflation. That's a real cost that needs to be weighed against alternative approaches.
But consider what happens when you make services "free at the point of use access". The price no longer serves the purpose of summarizing and transmitting information about the good or service. The consumer of the "free" good no longer gets any information about the scarcity or quality of the resource, and the provider no longer gets any information about the demand for their good and consequently how much to produce. Prices are the primary mechanism for coordinating decisions efficiently by summarizing actionable decision making information and economizing on expensive knowledge acquisition, interpretation, and communication costs.
It should hardly be a surprise when demand and consumption of those goods and services with a zero price goes up, and supply and quality goes down. Now suddenly you need to grow large bureaucracies for rationing the resources which will inevitably miss the mark of serving disparate individual needs as efficiently as the price mechanism could in a free market.
It's the classic recipe for degrading quality and creating shortages. I believe it's much more desirable for housing, healthcare, and education to be served by the market precisely because of how important they are to people. Putting cash into people's pockets directly has a much smaller distortive effect on market operations, and allows people to express their preferences in allowing them to vote with their dollars, as opposed to "free at point of service / consumption" goods and services.
It's no accident that UBI was proposed by Friedrich Hayek, and the Negative Income Tax by Milton Friedman. You could hardly accuse either of being in favor of wealth transfers, but they both understood the profound negative consequences of distorting prices, which essentially is lying to economic decision makers about the costs and benefits of taking certain actions, resulting in inevitably less efficient allocation of scarce resources that could possibly have been used more productively elsewhere in the economy.
We either have to completely change taxation and have wealth taxes and much higher corporate taxes as well as sufficient housing to ensure that most of UBI payouts don’t simply flow to a handful of landlords or find an alternative solution to UBI.
This is also the issue I have with UBI experiments, running an experiment that finds people lives improve when you give them money isn’t particularly interesting since all of these are too small scale to measure inflationary effects at a minimum an experiment that gives say a 1000 people UBI needs to have another group of people from income percentiles that are expected to fund it that will be taxed at a level that would incorporate the costing of the proposed UBI stipend.
Eventually it will end up being means tested in one form or another just like the income tax system has been made so complex by politicians favoring one group over another.
I absolutely love the idea of UBI but I just don't see it surviving in a pure form with our populist and identity group focused political system.
Seems like voters have a lot of incentive to vote themselves increases.
1) Owners of capital, who don't want to see their labour costs escalate and use firing/the poverty gun as a disciplinary tool.
2) Overwhelming power, channeled through vectors such as billions spent in lobbying or campaign contributions or threats to take their capital to friendlier jurisdictions.
The continuation of poverty in most of the developed world is a choice, and one that people keep voting for. As long as people keep voting to maintain poverty, it's a relatively pointless academic discussion.
But I think it's important for people go to beyond "That's not the problem. This is the problem" and on to "But here's something we might think about that could work toward a solution."
All I ever see on HN is the same talking points I've heard regurgitated in the dozen or so union halls I've been in from coast to coast over the last 30 years. Everyone gets a lot of practice shouting the right keywords, but nobody ever says anything new, or even tip-toes near a solution.
It's also amusing the every developed country except one has already figured this out, and proven over decades their solution works very well.
I'm perpetually dumbfounded America isn't able to look at the rest of the developed world, learn from what they're doing that is superior, modify and improve it a little for their needs and implement it for their own gain.
EDIT: Rather than downvotes, how about some constructive discussion around why the US appears incapable of learning from other countries?
https://news.ycombinator.com/item?id=25800127
https://news.ycombinator.com/item?id=22622642
https://news.ycombinator.com/item?id=22604801
https://news.ycombinator.com/item?id=22221660
https://news.ycombinator.com/item?id=21880344
... and you've only kept doing it. You've done it repeatedly in recent days, even in the last few minutes. This really needs to stop.
I don't want to ban you, because you also post good comments and that's great. But when an account keeps breaking the site guidelines and repeatedly flouts our requests to stop doing that, obviously that's where that ends up.
After living and working in the US, and Canada, and Australia, I genuinely don't understand why the US can't learn from other countries to improve itself. Honestly, I'm not trying to post flamebait, I simply don't understand, and I've never heard a good explanation.
My friends here in Canadian healthcare regularly compare and contrast the system to Australia/UK/Scandanavian systems and point out the pros and cons and how the Canadian system is adopting ideas/techniques from other places that have seen good outcomes.
Other countries do this regularly. Honestly - why doesn't the US?
EDIT: And here I am criticizing Canada (the country I live in, and hope to become a citizen of) just a minute ago - https://news.ycombinator.com/item?id=25972362
I believe criticism and pointing out problems/weak points is the first step to improving a situation - after all, there can be no improvement until a problem is acknowledged.
The very fact this article and thread exist suggests there is some kind of problem / or something can be improved upon with regards to paid employment.
Is there really a huge difference or are you just subject to a lot of confirmation bias. Canada and Australia are far from solving poverty.
There's a pretty broad assertion buried in your confusion.
Like for healthcare, the issue isn't that we can't look at other systems and see that there are advantages, it's that there is widespread resistance to moving away from the existing system. There isn't any single reason for it (lots of people like that they are making lots of money, other people have ideological concerns, etc, etc). Trying to reduce that down to "US can't learn" isn't really very interesting, as that isn't the problem.
The issue is that you have a long pattern of nationalistic swipes in your posts to HN (to the point where I brace myself when I see your username, because I expect to run into yet another). It's not ok, it's against the guidelines, we ban accounts that do it, and we need you to stop. You've done this many times about topics other than healthcare, so this isn't just about healthcare (though, separately, repeating the same points over and over about a classic flamewar topic is also against both the site guidelines and the intended spirit of HN).
I don't mean to pick on you personally and I hope that's clear. The same rule holds for every user, regardless of which country anyone has a problem with.
There are also bottom rung jobs that beginners with no job skills can enter. Think about people with no language skills, don't they deserve a chance to be productive?
Even some of the lowest paid workers take pride in their work. Some of the savoir-esque rhetoric here borders on condescension.
Where did you get that from? I really think the opposite is true.
I understand money is used for supporting yourself, but do you honestly work for free after-hours? Everyone has better things to do than work. Travel the world, make businesses, and spend time with family. You'd rather work?
Have you ever worked in a factory, on a farm, etc. on bottom level positions ? Most people would take the money and do nothing without blinking. Hell even a bunch of my college friends would skip years of their life playing games and acquiring 0 life experience if someone gave them this option the only thing that forced them to go out in the world was existential need (as demonstrated by two guys I know who are well off and their parents allowed them to do nothing - one guy has 0 days working experience at 30, he was a top tier COD gamer)
Hint: The difference is within "shity" Hint: Jobs don't have to be shity
Someone working basic job in a nursing home isn't necessarily poor - in the sense they can afford some standard of living on their income. If you add the option for them to receive 1/2 or even 1/3 of income but have to do nothing - now doing the job they would do previously to avoid poverty would probably take more money to do. And the people who get screwed are the ones who were barely able to afford their services before.
Every job I needed to do in my early life sucked and I would do none of them if someone gave me 1/3 of the income and stay at home with my parents and play video games and code for leasure. I would probably never even take that level of job (factory line work, industrial work, farm work, entry level sales shit). Multiply that by a huge fraction of the population and you seriously destabilise the economy.
Some jobs can be outsourced (like manufacturing) so it's not that big of a deal - but some jobs like for eg. elderly care, etc. are labor intensive and not easily outsourced. And everyone needs them.
How were you able to determine this from across the Internet?
Who told you my source is the internet? :) we all live irl and discuss with people. I never heard a low-paid worker throw this argument. It always comes from people who have better jobs and more stable income
While the actual thread appears to be about incentives.
There are many who have worked entry level jobs who would object to UBI or minimum wage price fixing on purely economic terms.
There are also those who are unable to afford the current cost of living or gain employment due to interventions in the market. It wouldn't be difficult to unfairly characterize interventionists as insensitive to the plight of the poor.
First, I didn't make such a generalization and second, even if I did, you would have inverted the logic.
I said argument X comes only from people of category R, who are not affected by a problem.
This doesn't mean all people in R agree with argument X. It means That I've never heard argument X from people outside R
I grew up in dirt poor family of 6 in a post civil war country and my mother is a nurse - I'm very familiar with the realities of these jobs. I just know for a fact that if a nurse would start making 2x her salary a lot of people would suddenly not have access to assisted care. It's a shitty situation - but supply of cheap labor solves the problems of poor people - if you can't see that you're out of touch.
Rich and well off people will always have access - they already pay more anyway for quality.
However, there is no way I could have quit working and keep the house in a relatively expensive area that I bought to be close to job opportunities.
UBI changes the calculus dramatically. Suddenly you can just do things for yourself .
For the 50% of american paying paying taxes, this means 1,000 less a month.
It sounds nice to give people the option but your argument is exactly why substantial UBI is a dangerous concept.
Some people prefer to live at home rather than go to a nursing home. What's worthless about giving those people better care that more closely aligns with their preferences?
> is a net loss for the economy
This is such a weird way of thinking about activity that happens outside the market. Should I feel guilty about cooking my own meals because I haven't payed a restaurant worker to do it?
Sometimes people do things outside of the market, and that's OK, they don't have to feel guilty about that. The market exists to help us live our lives, not the other way around. Whether GP watches their parents on their own or hires someone else to do it, the parents are still getting watched, and somebody is still doing that as part of their "job". That's the important part.
You're concerned about prices going up, but what GP is describing would be vastly cheaper than paying for assisted living on the market today. It's making in-home assisted living more available than it currently is on the market. Why would that be a bad thing?
If UBI isn't high enough to ensure that welfare as we currently know it isn't needed anymore, then why have UBI at all? It just adds complexity to the system for no apparent gain. On the other hand if UBI is high enough to go by without working there's a lot of things that just won't get done anymore.
For example lets look at janitorial labor, that is a hard job to automate and it is required in every business. So many would think that an increase to say $15/hr would just mean all the companies would just pay the same number of workers $15/hr right? No, what you would find it maybe instead of daily trash pickup it goes to 2 times a week, or employee's are asked to take their office trash themselves to a common trash bin. Common area's are cleaned less frequently, other employee's are asked to pick up some slack, and the janitorial staff will go from 10 workers to 6 , with a responsibility of 4 floors vs 2, or other such adjustments to the "acceptable" level of janitorial services.
The business has a budget of X for janitorial, that will not change very much simply because UBI or Min Wage came into play, they will just have to accept less janitorial services for the same money (aka inflation)
What could a third possibility be for these jobs being paid so low, i wonder? He said, facetiously knowing the answer
I'm somewhat skeptical of the UBI train, but this particular objection has always rubbed me the wrong way. Those jobs should cost more.
If the only thing keeping people in a job is the threat of poverty, and they're not being paid enough otherwise to incentivize them to do the work, then that's not a free market. It's not really significantly different from holding a gun to their head or coercing them into doing the work.
What's going to happen if the people stuck in dead-end jobs retrain to work at better jobs? What's going to happen if the economy improves and suddenly they have more opportunities? The problem with underpaying essential jobs is that it forces people to think of those market outcomes as undesirable. I don't like the framing that says that if elderly-care workers retrain and have a choice whether or not to work in nursing homes, that's a bad thing. That seems very, very counter to how we should think about a healthy jobs market.
I don't want a framing that tells me that the economy becoming too good or people having too many job opportunities is a problem because those people need to be financially pressured into working underpaid jobs. To me, that's a very anti-free-market way of thinking about the economy. Jobs that are difficult or undesirable should have more compensation because they have less demand. That is the entire basis of the jobs market and of supply/demand, we shouldn't be trying to undermine those principles.
3) Politicians who view the poor as a voting bloc, who endlessly promise solutions that they never really deliver.
It's not that hard to build a system where everyone benefits. However, it's even easier to build a system where special interests benefit the most because they are the ones who are in charge after all.
Make a case that with all things considered (including government labour and other bureaucracy costs) that a UBI is fundamentally better value overall than the current system and you’d have it in two years.
I think that’s a case that could be made convincingly. UBI is simple. It’s impact is therefore easily measurable.
It’s self-regulating if you believe that the taxpayer will be incredibly sensitive to systemic abuse because they know they’re fundamentally paying a fixed amount directly. If abuse were becoming a problem, the public would express their distaste at the polls.
It also frees up a lot of people to pursue ideas they might otherwise be prevented from exploring, which could have outsized macroeconomic benefits.
UBI? Capital idea!
That said, the really appealing thing is that it allows wages to be unbound from the question of supporting the poor. If people are below the poverty line you can raise UBI, but you don't have to put your thumb on the scales of the labor market.
But to not just re-create welfare, you have to completely dissolve the tie between UBI and taxable income. And to do that effectively you boost the marginal rates above your cut off point.
You could plot that to show how much the UBI was a net increase to your annual income and then design the tax rates to have it be effectively 100% reclaimed as tax after $400K AGI or what ever number you pick.
If I were to take a guess, it would be politically connected organizations benefiting from the welfare system. I wonder what these organizations would be.
Or, there might be some political calculus that makes means testing and administration more favorable to the ruling establishment.
Biden needs to form military caravans to escort people across Mexico to get here as fast as possible. He can also start planes and ships from Africa. How many people can you load on an aircraft carrier? How many trips can it make a year? Let's stop messing around.
It's so nationalist to talk about UBI without including those who cannot partake of it by accident of birth. Shame.
Encourage (read: regulate) companies to offer very generous paid time off, like 3 months a year paid time off or more.
People can use the time off to work a second job, and thus receive more income from working the same hours. It will also increase worker mobility, because a worker already working 2 jobs should be much more willing to take risks and try out new jobs. This will create competition between employers, because many employees will be working two jobs. If you treat your employees bad, the will request fewer hours and spend more time at their other job, or just leave.
Or, the extra time off could be used for entrepreneurial pursuits. Or just to relax, etc.
This is an alternate plan that has many of the same benefits as a higher minimum wage and universal basic income. I haven't hear it discussed by anyone else though.
Stuff from undergrad economics - mostly micro to start maybe. Maybe some international trade thrown in.
It seems way-to-hard to find such simple pictures for theory anybody can understand.
Then when alternatives are suggested it will be easy to see how they fit in the picture - what assumptions are modified etc.
I recall from my high school and college requirements for Econ it’s likely that most US educated people had a fake “civics and Econ” class in high school (We memorized questions about Sam Walton for our Econ tests, for example) and may have had one optional class in college. That makes it easy for unsound ideas to thrive.
In saying the above I make no statement about the ideas of this post. I wouldn’t hazard it online because I can’t promise to put the work in due to the above issue which I wish, similarly, I had time to address in my limited way. Since this is the internet I’ll say this: UBI seems fairly smart given the alternatives. So does Some kind of negative income tax.
I ask this because my argument with a UBI is that it will create more money in the system, true, but there's no limitation that prevents landlords and merchants from also raising their prices with the justification that they know you have it. So to take a stab at a question: Would a UBI lead to inflation?
If your landlord raises your rent then it will be more profitable to build housing which then allows construction companies to employ more workers. Of course, the problem with this is that some cities have banned new construction but that's a problem with the specific city, not with the idea itself.
Yes, it would drive inflation and moderate inflation drives jobs growth so everyone would benefit, except those whose net worth is invested in unproductive companies or assets.
No, now you are dependent upon the government to pay for your inflated rent. Naturally, when $500 is eaten up by price inflation, UBI proponents will demand a commensurate increase. It is easy to see how this could spiral into total dependence.