universal basic income (UBI)

[mr friendly guy]

This idea has been floated before and I am at the moment unsure of whether its a good idea. I do think it is one certainly worth studying and experimenting on like some countries are doing. Basically everyone gets a guaranteed income. In exchange we save money on welfare checks (since everyone gets a government handout irrespective of other sources of income, we don't need money to catch welfare cheats).

I can see some advantages, for example if people are guaranteed an income they may spend their time doing other things like self improvement. However it will also cause inflation of certain goods. For example in Australia houses are already overpriced. Now low income people in our current system are most probably not competing for the same type of properties as middle class people, and giving them a basic income most probably won't change this too much (depends on how much UBI though). However middle class people after getting an additional UBI might just push property prices up even more.

Another thing to consider, is with increasing automation, there may not be enough jobs for humans, and hence we might end up needing more welfare than before.

Here is an article discussing UBI
http://www.abc.net.au/news/2016-12-27/i ... 16/8149398

Universal basic income: The dangerous idea of 2016
OPINION
The Conversation
Updated Tue at 10:17am

The resurrection of universal basic income (UBI) proposals in the developed world this year gained support from some prominent Australians.

But while good in theory, it's no panacea for the challenges of our modern economy.

UBI proposals centre on the idea that the government would pay a flat fee to every adult citizen, regardless of his or her engagement in skill-building activities or the paid labour market, as a partial or complete substitute for existing social security and welfare programs.

Of the schemes run in developing places like Kenya, Uganda, and India, some have been evaluated statistically, delivering some evidence of positive impacts on educational investments, entrepreneurship, and earnings.

In the developed world, Canada is trialling a UBI scheme. Finland also just rolled out a UBI trial, involving about 10,000 recipients for two years and costing about $40 million.

While Switzerland's voters just rejected a UBI proposal via referendum, a similar proposal is presently looking like a goer for Utrecht in the Netherlands.

Here in Australia, it has been suggested the government might hand out somewhere between $10,000 and $25,000 a year to every man and woman.

Can we afford it?

There are two big questions to ask before taking a UBI proposal seriously, and the first is the most obvious one: where would the money come from to pay for it?

The present Australian welfare system — excluding the Medicare bill of $25 billion — costs around $170 billion per annum.

Our GDP is around $1.7 trillion per year, so this welfare bill is about 10 per cent of annual GDP.

Giving $20,000 to every Australian adult — 19 million people — would cost approximately $380 billion. That's a little over twice the present total cost we pay for the above mentioned programs.

Economics journalist Peter Martin has suggested that abolishing the tax-free threshold would pay for a UBI scheme.

Working out whether the abolition of the tax-free threshold would fully fund a UBI is non-trivial, given the complexity of changing marginal tax rates as income rises and the need to estimate how many taxpayers fall into which tax brackets.

But one thing is sure — the income tax bill of most if not all earners would have to rise in order to fund a UBI.

One scenario

Let's look at what would happen to someone earning $80,000 per year if we were to implement a UBI, abolish the tax-free threshold, and leave the marginal income tax rate kink points unchanged.

This person presently pays about $18,000 in income tax — made up of a marginal tax rate of 19 per cent on dollars from the tax-free threshold of $18,200 to $37,000, and a marginal tax rate of 33 per cent on dollars from $37,000 to $80,000.

Under a UBI scheme involving the abolition of the tax-free threshold, that same individual would receive the UBI — say, $20,000 — but would then face a 19 per cent tax rate on ALL of the first $37,000 of income, and then a marginal tax rate of 33 per cent on dollars from $37,000 to $80,000, yielding a total tax bill of $21,220.

This person would be better off under the UBI in terms of take-home pay: instead of $62,000, he would get $79,000 in his bank account.

But is the additional revenue increment from abolishing the tax-free threshold enough to pay for the UBI, if we spread it across all earners? I've yet to see a hard-headed answer to this question.

We may need to increase taxes elsewhere to pay for a UBI — possibly corporate taxes, land taxes, etc. — and most of these other taxes disproportionately impact richer people. Would legislation to fund a UBI scheme via increasing taxes on the rich get passed?

Some might suggest taking the money we presently spend on social security and welfare payments and converting it to a UBI.

This would be enough to fund payments of about $10,000 to each adult.

But it would be a reverse-Robin-Hood policy: instead of spreading a fixed sum across our neediest citizens, we'd be spreading that sum across everyone, making the neediest worse off in order to send cash to our more well-heeled citizens.

Would UBI fix 'broken' part of present welfare system?

Any targeted — e.g. means-tested — social support payment must be clawed back as income and/or wealth rises.

While arguably an efficient way to get money to where it's most needed, means-tested social security payments inevitably depress the incentive to earn more, at least in the section of the earning distribution where social security payments are paid out.

This is talked about a lot, but I haven't seen a reliable cost estimate for Australia of the disincentivising effects of the claw-back of social security and welfare payments.

The administration costs of the present system of targeted payments, also an argument given for moving to a UBI, are estimated at about $3-4 billion.

Whether this includes all much-pilloried costs of "churn" is an open question. And a UBI scheme would also have administration costs, which have not yet been estimated.

Another frequent theme describes the modern economy as turbulent, with more part-time, casual roles and more employment uncertainty than in the past.

The implication is that the way our present system compensates people in insecure work is inadequate.

Yet, a social support model like a UBI that makes it even easier for people to be precariously attached to the workplace carries the implication that the workplace is not good for them.

In fact, work is socially and psychologically supportive for many people. Studies have found negative psychological impacts from job loss and retirement that seem driven by the social aspects of working.

Do we want to isolate our most vulnerable citizens even more?

Arguably the biggest problem in our current tax-and-transfer system is that the rich, and their organisations — like big companies — do not get taxed enough and/or benefit from special provisions, for example in regard to superannuation.

Instead of changing our present targeted welfare system into a diffuse scattergun money-for-all scheme, we could instead courageously tackle the worst part of the problem first.

What else is relevant?

Some worry that a UBI scheme would further depress the incentive to work. As I've stated elsewhere, I doubt that the drive to win in terms of labour market success is going to go away anytime soon.

Others have also found small impacts on work incentives from cash transfer programs, though this evidence is mainly drawn from developing countries.

In principle, two types of work incentives may be affected. People receiving unconditional handouts every year may feel less pressure to get and keep a job.

Secondly, if the UBI were funded by the abolition of the tax-free threshold and/or increases to income tax rates, then people would be more strongly penalised for working additional hours and might hence work less.

Would people receiving unconditional handouts feel freer to explore their creative sides? To explore entrepreneurial ideas? To engage in more meaningful work than they presently do?

These are all mentioned as possible benefits of a developed-country UBI, but we really don't know whether they would materialise, nor do we really know how to measure them.

We do know that people adapt to new reference points — including income reference points — and there is good reason to expect that at least some of a long-term UBI would be soaked up in higher prices, particularly for goods that the poor buy most.

Watch and learn

A proposal to throw money at people, while wrapping that proposal in the flags of "equality" and "basic rights", can be argued to be the lazy man's face-saving response to the complex, entrenched problems of poverty.

The poor arguably lack access and/or skills as much as or more than they lack money.

What's more, the present Australian social security and welfare system can be viewed as a UBI scheme with exceptions for people who don't need it.

Some changes to the system that do not involve wholesale overhauls could address many of the problems discussed above.

My advice for Australia? Watch the policy experiments in Europe keenly. But don't assume for one minute that universal basic income is a magic bullet.

Compared to our current system, it is expensive, inefficient, and potentially regressive.

Gigi Foster is an Associate Professor at the School of Economics at UNSW Australia.

Thoughts on UBI?

[Alyrium Denryle]

Well, you can save considerable money by using a GBI instead of a UBI. Instead of handing out a check to everyone of say... $20k, you set $20k as a minimum income (household or individual, set it up however you want), and then you make up the difference up until 20k is reached.

That way they still have an incentive to better than 20k, but you dont penalize them for going over either

[Joun_Lord]

As a complete layperson who has no clue of the economics or junk behind it, I'm for a universal basic income even if it strays dangerously close to......COMMUNISM!!!!!

Even ignoring the increasing problems of people unable to find jobs for the moment, just to have everyone with a reasonable level of income I think would make things better. The reason some people turn to crime is through desperation. They don't have enough money to feed themselves, their families, to have a shelter that is better then a shack, to pay bills, even to buy some "luxury" items. Through circumstances they might be unable to get a job, lack of education, lack of opportunities, and yes even institutional racism or classism that makes if hard for the very poor in inner cities or extreme rural areas to get ahead.

If everyone has the money to eat, to live, to buy such luxurious luxury items such as fucking washer and dryers and tvs I think people would be less likely to turn to crime.

But to turn back the job problems, even if inner cities and extremely rural areas weren't such economic dead zones through racism/classism or economic changes or both, even if everyone had the same education opportunities, there may not be enough jobs for everyone anyway. While some conservative douchenozzles like to talk about how the poor and jobless need to just pick themselves up by their bootstraps and create a job or find a job the fact is sometimes there is no jobs, none available and none to be created if even the person has the ability or time or money to create a business.

Already in atleast the US and presumably the world plenty of jobs have been lost by technological and economic changes, jobs that are unlikely to ever return anymore then wagon wheel maker or asbestos miner is going to. Further technological and economic changes will only make more jobs disappear, automation and changes to the global economy will shrink the job market for many.

Without some sort of safety net there will be larger and larger groups of people out of work and out of money. Larger and larger groups of people desperate to survive and willing to turn to the only job they can find, crime. Yeah in some ways its paying people not to be criminals but its not like most people that do become criminals set out to do so. Most are probably good people who had little choice, little chance to do anything else.

Beyond just universal basic income there also needs to be research into how boredom and lack of contribution to society will effect people. While some people would be just fine sitting on their asses all day others want to work, NEED to work. They like accomplishing shit, like working. Some people might even enjoy their jobs more if they aren't having to do it for a living. There maybe needs to be job creation programs to allow people to work who want to work even if its shitty make work, volunteer work, anything really. I'm sure though atleast some would out of work but not having to scramble to survive would turn towards creative shit, artisty crap, but some would want to do something more substantial.

Boredom or lack of self worth could be just as dangerous as lack of money.

[General Zod]

Beyond just universal basic income there also needs to be research into how boredom and lack of contribution to society will effect people. While some people would be just fine sitting on their asses all day others want to work, NEED to work. They like accomplishing shit, like working. Some people might even enjoy their jobs more if they aren't having to do it for a living. There maybe needs to be job creation programs to allow people to work who want to work even if its shitty make work, volunteer work, anything really. I'm sure though atleast some would out of work but not having to scramble to survive would turn towards creative shit, artisty crap, but some would want to do something more substantial.

Boredom or lack of self worth could be just as dangerous as lack of money.

As someone who's currently earning his income sitting around doing mostly nothing as a lab rat, I can say that sitting around doing nothing isn't all it's cracked up to be.

[Dragon Angel]

For the last three years I've been more or less progressively going insane from not having an income, or a line of work. I have things like video games I want to make, but lacking a job or any other source of income, I have not a prayer of being able to make something presentable.

With a guaranteed income, I not only have the ability to feed myself and pay at least a portion of fees for maintaining a shelter, but I also have the ability to make those games. Or work on low level hardware projects, or maybe get a higher education above my Bachelors. I have the ability to contribute something to the economy, but instead now I have to focus so much more on staying alive.

oh yeah, and those god damn student loan sharks

But nope that's probably too "communist" even if our capitalist system might gain a boost from not just me, but many millions more who are in my situation.

[Tribble]

A universal basic income can certainly be compatible with capitalism, if everyone receiving it can more or less spend the income as they see fit. Even right-wing groups like the Cato institute are coming around to the idea, though in their case it's because they think it's better to just give people income directly rather than have a massive government bureaucracy try to look after everyone. Or in other words, because a universal basic income is less communist in their view than the current welfare state.

[mr friendly guy]

It occurs to me we still may need some system to catch welfare cheats, although less extensive. In Japan elderly children keep collecting checks for their parents who went missing years ago. Identity fraud could still be a problem in countries implementing a UBI.

[Beowulf]

Well, you can save considerable money by using a GBI instead of a UBI. Instead of handing out a check to everyone of say... $20k, you set $20k as a minimum income (household or individual, set it up however you want), and then you make up the difference up until 20k is reached.

That way they still have an incentive to better than 20k, but you dont penalize them for going over either

True, but there's essentially no incentive for those getting payments to work. They get the same amount whether they sit at home playing computer games or working a McJob. A UBI incentives some form of paying work. But because they pay taxes on the combined UBI+earnings, at some point in the income scale the UBI gets effectively zeroed out. But that point is high enough that the people actually dependent on UBI don't see any penalty. Every dollar they earn increases their total income. With GBI, every dollar they earn disappears into a black hole until they exceed the GBI cap.

It occurs to me we still may need some system to catch welfare cheats, although less extensive. In Japan elderly children keep collecting checks for their parents who went missing years ago. Identity fraud could still be a problem in countries implementing a UBI.

Yeah, but it's an easier fraud to catch. You just need to check that the person exists, not that they make under a certain means tested value.

[Simon_Jester]

Beowulf, if the system worked as you described, there would also be no incentive to pay anyone less than the guaranteed minimum income. Because that is the amount of money you receive for doing nothing. Why would I expect you to work for me, in exchange for the same reward you could get for doing nothing?

Right now, the guaranteed minimum income is "zero. And lo and behold, it is very hard to find people willing to work for zero money. You have to offer quite a lot more than that, in order to convince people to apply for the job you're trying to fill.

If the guaranteed minimum income were, say, twenty thousand dollars a year... the effect is that it just isn't possible to hire people for less than twenty thousand a year.

But the flip side of that is that such jobs are extremely marginal. If I, the employer, don't think it's worth paying someone a livable wage to do XYZ... why is it so important that we find someone to do XYZ? Maybe the correct solution is to automate this labor- or to pay the people who do it more, so that they can build savings and have a future, rather than just barely scraping by in the present.

...

Also, there's really no reason the system should work that way in the first place. Think about how income taxes work. The first X dollars are taxed at Rate One, the next Y dollars are taxed at Rate Two, the Z dollars after that are taxed at Rate Three.

The analogy is simple. Guarantee a minimum income of, say, $20000 a year. If someone makes up to ten thousand dollars of yearly income, cut their "guarantee" payments by forty cents per dollar, so that they receive 60% of what they'd be getting if they had no income. For the next ten thousand, take another 30%. For the ten thousand after that, 20%, and then the last 10% is lost as you go from thirty to forty thousand dollars a year

Thus, annual income, turning your 'work' income (what you'd have without GBI) into your total income, looks like:

0 -> 20000
10000 -> 22000
20000 -> 26000
30000 -> 32000
40000 -> 40000
50000 -> 50000

Now, there isn't a lot of incentive here to go from 0 to 20000 dollars a year in income- but there's some

[The Romulan Republic]

I strongly support a basic income for several reasons:

1. Due to increasing automation, their are likely to be fewer and fewer jobs by which people can support themselves. Masses of people who cannot support themselves are the stuff of which revolutions and totalitarian regimes are made.

2. Nobody should have to suffer simply because they are unemployed (contrary to the conservative philosophy, which amounts to treating poverty and unemployment as crimes to be punished).

3. If everyone has money to spend, that'll be more money going into the economy, creating more jobs and economic growth.

4. Their are a number of professions, particularly in the arts, which are not terribly lucrative (community theatre comes to mind, because its an example which I am personally familiar with, but their are others), but which nonetheless contribute to the community. They are currently forced to rely heavily on donations and unpaid volunteer work, but a basic income would ensure that people who are employed in such fields would be able to live without having to juggle their passion with a nine to five job to feed themselves.

5. Related to the previous point, having a basic income would mean that people wouldn't have to worry about earning a paycheque every week to make ends meet, which means that more people could afford to take risks, start businesses, become entrepreneurs...

6. It'll streamline the beurocracy- we won't need separate programs for Social Security, welfare, food stamps, etc. Thought this is presuming that basic income is enough to provide everyone with the essentials, and it will only work if affordable housing and affordable health care are also available.

But if done properly, the case for it, to me, seems truly inarguable.

[Zeropoint]

It occurs to me we still may need some system to catch welfare cheats, although less extensive. In Japan elderly children keep collecting checks for their parents who went missing years ago. Identity fraud could still be a problem in countries implementing a UBI.

1) If everyone is entitled to get the UBI, then there's no cheating to look out for. Also the administrative costs would go down a LOT.

2) Some welfare fraud DOES happen. However, it happens at such a low rate that it would cost more to stop it than we lose by letting it happen. Ironically, we can't afford to stop welfare fraud.

3) I only skimmed over the article in the OP briefly, but it looked like it was mostly, if not entirely, theorizing. Theory is all well and good, but I'm an empiricist at heart, and I'd like to look at observed facts. Luckily, some small areas HAVE tried UBI and it's my understanding that the communities saved money overall, in addition to greatly improving quality of life for a lot of people.

This is what puzzles me; it's been repeatedly demonstrated that it's cheaper for a society to ensure that everyone has their basic needs met, and yet, people don't want to do it. All I can figure is that lots of people are ignorant of these facts, or that there's a wide-spread mindset that poor people need to be punished.

[Kingmaker]

At present, any livable UBI would also be ruinously expensive. At 10k USD/year, you're looking at 2.5 - 3.5 trillion dollars depending on who qualifies, i.e. most of the federal budget in the US, and $10k is not exactly the high life. You can scrap existing welfare programs, of course, but UBI is not a good replacement for many of the people who depend on them, doesn't address the subject of healthcare, etc... and overall would presently represent a net transfer from poor people to middle and upper class people. Oh, and then you have the other stuff the government does, which we still have to pay for.

We also don't know the economic or social impact of UBI. It might tank labor force participation, or it might not. It might lead people live more fulfilling lives doing what they want instead of what they have to... or it might lead to a sedentary underclass that does nothing and consumes cheap entertainment. The upcoming trials are not likely to be of much help in that regard, since how someone will act if they get free money for two years is going to be different from how they would act if they received the same for the rest of their life.

A UBI as it tends to be imagined by its advocates is a long way off, and not just for political reasons.

This is what puzzles me; it's been repeatedly demonstrated that it's cheaper for a society to ensure that everyone has their basic needs met, and yet, people don't want to do it.

I'm going to need a raft of citations on that. To be honest, this sounds like the sort of wishful thinking where people like to believe that their political preference is an unmitigated benefit with no real tradeoffs (and thus the people who oppose it are either stupid or evil). You might be confusing the general issue with more specific cases like where it costs less to house vagrants than to enforce vagrancy laws. I sincerely doubt that it will actually save anyone money to guarantee a basic standard of living.

[Raj Ahten]

For a UBI to work it would have to be a serious wealth redistribution scheme (as the right would call it) to be feasible. Given how useless billionaires are economically and morally I'm totally OK with taking their money and giving it to people who would actually use it. Right now a lot of the possible benefits of modernity are going to waste with the top players just hoarding all the benefit in off shore accounts and the like if we agree capital can equal a better life. This situation is likely to only get worse with continued automation including many white collar jobs such as even Radiologists being replaced by AI soon. A UBI might be one way to actually realize some of the ever increasing productivity increases into greater benefit for all.

[Alyrium Denryle]

At present, any livable UBI would also be ruinously expensive. At 10k USD/year, you're looking at 2.5 - 3.5 trillion dollars depending on who qualifies, i.e. most of the federal budget in the US, and $10k is not exactly the high life. You can scrap existing welfare programs, of course, but UBI is not a good replacement for many of the people who depend on them, doesn't address the subject of healthcare, etc... and overall would presently represent a net transfer from poor people to middle and upper class people. Oh, and then you have the other stuff the government does, which we still have to pay for.

Which is why GBI would be better. We'll go household rather than individual. I have a table here for income distribution in 5k incriments with a mean within that range along with percentages (link), so just by way of demonstration and budgeting (rounding does occur)

0-5k, mean ~1k, number of households ~4.5 million. Average payout of 19k.
5-10k, mean ~8k, number of households ~4.3 million. Average payout of 12k
10-15k, mean of ~12k, number of households ~6.8 million. Average payout of 8k
15-20k, mean of ~17k, number of houeholds ~6.8 million. Average payout of 3k.

Some addition and multiplication and you get a total budget of 211.9 billion. You would want some adjustments for the number of dependents or household members keeping in mind that MOST expenses are fixed rather than scaling, so maybe bring that to 300-400 billion USD. That is about 1/3rd to 1/2 the price of Social Security.


10-15k gets 12k (total between 22 and

[Zeropoint]

I'm going to need a raft of citations on that. To be honest, this sounds like the sort of wishful thinking where people like to believe that their political preference is an unmitigated benefit with no real tradeoffs (and thus the people who oppose it are either stupid or evil). You might be confusing the general issue with more specific cases like where it costs less to house vagrants than to enforce vagrancy laws. I sincerely doubt that it will actually save anyone money to guarantee a basic standard of living.

That's a reasonable response; extraordinary claims require extraordinary evidence.

Well, to begin with, it costs about $40k/yr to let homeless people be homeless, so obviously it would be cheaper to just give them $20k/yr.

There haven't been a lot of trials in North America, but there has been one in Canada a while back. Note that "Hospitalizations fell significantly, especially for mental health problems." As it turns out, preventive care is usually cheaper than emergency patch jobs. (which also argues in favor of universal health care)

India and Finland, among others, are running trial programs with apparently good results so far.

Finally, I have a couple of points about why it might be a good idea to establish a universal basic income even if it's not cheaper.

First is the moral issue: is it right for us, as a society, to let people suffer and starve and die when we can prevent that at a relatively low cost? The United States produces enough food and other economic resources to provide everyone with the basics for living, but we . . . just don't. Is that right? is that who we want to be? Couldn't we afford to divert some money from our national "defense" budget toward feeding people? If we look at what we spend our money on as an indicator of our priorities as a nation, it looks like we think that killing people overseas is much more important than helping people here at home, and I don't care for that, personally.

Second is the self-interest issue: automation is replacing jobs. Improved AI is going to be replacing even MORE jobs soon, including those of a lot of skilled workers. How sure are you that YOUR job is safe? (and I'm not just talking to Kingmaker here) The job market for humans is going to shrink in the next couple of decades, and there just won't BE jobs for everyone. How are you going to pay for education and retraining for a new job without an income? If there are more jobs than there are people, what makes you think that you'll get one? I'm training to be a mechanical engineer right now, but automated tools and offshoring are already cutting into the job market for that. Better automated tools are only going to make it worse.

[Kingmaker]

Which is why GBI would be better. We'll go household rather than individual. I have a table here for income distribution in 5k incriments with a mean within that range along with percentages
[snipped numbers]

This seems like it would have some weird incentives. You haven't got an actual welfare cliff, but below 20k, your effective income is totally flat. There's really no (economic) incentive for anyone to do any kind of work for less than 20k (and some people near the threshold might decide the marginal value of their additional wages isn't worth the time). That's going to drive costs up quite a bit, since your average payout will be pretty close to 20k, and there will be additional costs that won't be measured directly by the program's budget as people drop out of the labor force. That is, of course, a problem to some extent with any sort of income guarantee (and if the doomsayers are right and the robuts put us all out of work, you may not care), but it seems particularly egregious with this proposal (as compared to an NIT or a UBI).

India and Finland, among others, are running trial programs with apparently good results so far.

I'm skeptical that these trials will produce results more interesting than "giving poor people money makes them less poor". Trying to predict the behavioral consequences of providing a large bloc of society with a guaranteed income in perpetuity based on giving a small number of people a guaranteed income for a few years is going to be tricky.

[Simon_Jester]

The US already has bureaucratic infrastructure meant to track how much income people have from work and so on. It's called "filing your income taxes." All that really has to be done is to take the same mechanism and recalibrate it, so that if your income was low enough, the government pays you. As in, you get a "tax refund" bigger than what was originally withheld from your wages. Or, if you had no wages whatsoever, you just get a check in the mail. Or maybe a series of deposits to a bank account, or whatever.

Such a system is straightforward, and allows us to deal with any hypothetical "basic income fraud" using the same tools we routinely use to deal with tax fraud.

This seems like it would have some weird incentives. You haven't got an actual welfare cliff, but below 20k, your effective income is totally flat. There's really no (economic) incentive for anyone to do any kind of work for less than 20k (and some people near the threshold might decide the marginal value of their additional wages isn't worth the time).

Kingmaker, it is stupidly easy to design things so this doesn't happen. Like seriously, anyone who remembers what they learned in high school algebra can sit down with paper and pencil and figure out a way to keep effective income from being flat. Ensuring that people gain fifty cents of net income per dollar of work income they have, up to such and such a point, at which they gain eighty cents of net income per dollar of work income. Or whatever.

I just did that on this same page of the thread.

The only people who are really disincentivized are the ones whose employment is so marginal that it only brings in, say, five thousand dollars a year. People who are working at that minimal a level are for all intents and purposes not gainfully employed. Under present conditions they'd starve, unless someone else takes care of them. Given that it takes roughly twenty thousand dollars a year for a single person to keep themselves alive and housed in this country, at least, it's pointless to worry about people who make drastically less than that.

That's going to drive costs up quite a bit, since your average payout will be pretty close to 20k, and there will be additional costs that won't be measured directly by the program's budget as people drop out of the labor force.

Jobs that don't result in the person making $20000 a year are economically marginal and unimportant. If they weren't, they'd be worth paying more money.

Note that this includes people working two part-time jobs (with total income over $20000), or people who work odd jobs throughout the year (likewise).

India and Finland, among others, are running trial programs with apparently good results so far.

I'm skeptical that these trials will produce results more interesting than "giving poor people money makes them less poor". Trying to predict the behavioral consequences of providing a large bloc of society with a guaranteed income in perpetuity based on giving a small number of people a guaranteed income for a few years is going to be tricky.

Yeah, but you have to scale the project up somehow. If small scale trials in small areas predictably lead to a booming local economy and other good outcomes... it's time to try things on a larger scale.

[TithonusSyndrome]

The job market for humans is going to shrink in the next couple of decades, and there just won't BE jobs for everyone. How are you going to pay for education and retraining for a new job without an income? If there are more jobs than there are people, what makes you think that you'll get one?

Reducing standard workdays to something ridiculously small by modern standards, like three hours, while maintaining wages? There's no reason why the ~40h workweek is the right, proper, natural way of things, anyways. At one point working 12 or 10 hours a day was the right and proper order of the universe, and anything else would have been a recipe for disaster that only a swivel-eyed Trot would dare to suggest. Perhaps resuming labor's historical war on the size of the workweek is the vitally absent piece of the puzzle we're missing.

[Alyrium Denryle]

This seems like it would have some weird incentives. You haven't got an actual welfare cliff, but below 20k, your effective income is totally flat. There's really no (economic) incentive for anyone to do any kind of work for less than 20k (and some people near the threshold might decide the marginal value of their additional wages isn't worth the time). That's going to drive costs up quite a bit, since your average payout will be pretty close to 20k, and there will be additional costs that won't be measured directly by the program's budget as people drop out of the labor force. That is, of course, a problem to some extent with any sort of income guarantee (and if the doomsayers are right and the robuts put us all out of work, you may not care), but it seems particularly egregious with this proposal (as compared to an NIT or a UBI).

Bluntly, no one can survive on less than 20k per year in this country other than students who are heavily subsidized, or marginal cases where someone is largely self-sufficient (like mountain-hermits in Alaska who heat their homes with wood stoves, obtain most of their meat hunting, and who do extensive gardening). So talking about incentives under 20k is meaningless, as Simon_Jester pointed out.

In fact, he dealt with that WAY before you posted by calculating a system that avoids that problem. I just could not do the budgeting math on it because I dont have income distribution data fine-grained enough to do it. It was a budgetary approximation.

[Kingmaker]

Kingmaker, it is stupidly easy to design things so this doesn't happen.

You're right. A negative income tax is a vastly superior scheme to a flat income guarantee. But the proposal Alyrium Denryle made in response to my original post was a flat income guarantee, where this exact issue is a glaring flaw.

Yeah, but you have to scale the project up somehow. If small scale trials in small areas predictably lead to a booming local economy and other good outcomes... it's time to try things on a larger scale.

These projects are not 'small scale trials'. They are explicitly limited in duration, don't impose any real burden on government revenues, and in some cases don't even begin to approach actual living expenses. If their purpose to drum up political support by producing a bullshit study you can point to, okay, but let's not pretend they're actually testing basic income. It's not hard to formulate an actual test of basic income (its short-term, individual effects, anyway), just expensive: select candidates and give them a basic income (if you want to save money and give no fucks about ethics, plan to cut them off after the study is done but don't tell them.)

So talking about incentives under 20k is meaningless, as Simon_Jester pointed out.

Why? 'CoL > 20k/year, therefore economic activity that pays less than that is meaningless' is a bit of logic I don't follow.

[General Zod]

This seems like it would have some weird incentives. You haven't got an actual welfare cliff, but below 20k, your effective income is totally flat. There's really no (economic) incentive for anyone to do any kind of work for less than 20k (and some people near the threshold might decide the marginal value of their additional wages isn't worth the time). That's going to drive costs up quite a bit, since your average payout will be pretty close to 20k, and there will be additional costs that won't be measured directly by the program's budget as people drop out of the labor force. That is, of course, a problem to some extent with any sort of income guarantee (and if the doomsayers are right and the robuts put us all out of work, you may not care), but it seems particularly egregious with this proposal (as compared to an NIT or a UBI).

Bluntly, no one can survive on less than 20k per year in this country other than students who are heavily subsidized, or marginal cases where someone is largely self-sufficient (like mountain-hermits in Alaska who heat their homes with wood stoves, obtain most of their meat hunting, and who do extensive gardening). So talking about incentives under 20k is meaningless, as Simon_Jester pointed out.

In fact, he dealt with that WAY before you posted by calculating a system that avoids that problem. I just could not do the budgeting math on it because I dont have income distribution data fine-grained enough to do it. It was a budgetary approximation.

Just for fun, Here's a handy chart of how much money you have to make per hour in a 40 hour work week to pay the rent on a 1 bedroom apartment in every state.

[Starglider]

I feel we are a couple of decades (of further automation) away from these proposals actually being workable and electable, but in the mean time it would be good to see the discussion going mainstream, and some proper trials.

[The Romulan Republic]

Another reason to back UBI- its one of the very few areas where you can get socialists and right wingers to agree, to an extent, on economic policy.

[K. A. Pital]

Reducing working hours is a much better idea, I feel. A much fairer one, to the working class, at least.

[Elheru Aran]

Reducing working hours is a much better idea, I feel. A much fairer one, to the working class, at least.

With a concomitant increase in minimum wages, surely? Because otherwise people just get shafted.