So with that in mind, how the heck can these countries even consider rolling out a new "basic income" program? Doesn't this seem a bit incongruous?
Unconditional income programs (whether they meet basic needs or not) are conceived of as replacing some or all existing means-tested benefit programs, and reducing or eliminating the adverse employment effects of minimum wage laws (without eliminating the income-floor effects of those same laws).
They can be budget neutral by either being cost neutral (redirecting funds from the displaced programs) or by being tied to specific new funding sources. (Given that one of the long-term goals is to address long-term concentration of economic gains in capital rather than labor, capital-specific income or ad valorem taxation is the natural place to look for dedicated new revenue streams.)
That's literally exactly what the GP post explains. If the funds distributed as UBI are the funds redirected from replaced programs, the costs are, by definition, the same.
> That would only happen if by luck the same number of people applied to basic income as previously applied for means-tested benefits.
No, it wouldn't. You are assuming equal per beneficiary per time period total benefit + administrative costs.
> Also, even if you have some new funding source, the system would have potentially huge liabilities if lots of people decide to sign up for it.
No, its not dependent on people who "decide to sign up for" since, by definition, an unconditional income is given unconditionally to every member of the target population; that's part of the basic calculation of the benefit that can be given at any funding level.
If the cost remained exactly the same, then either you spread similar benefits across a similar group size, or you spread greatly reduced benefits over a much larger group of people, to the point where it's no longer a living "wage".
Its a lot more predictable than "requests", especially if the target population is something like adult citizens and legal permanent residents.
> If the cost remained exactly the same, then either you spread similar benefits across a similar group size, or you spread greatly reduced benefits over a much larger group of people, to the point where it's no longer a living "wage".
Yes, the cost neutral version would be reduced maximum benefit in the short term (though, again, you make the mistake of assuming that the full cost is just benefits, and ignore changes in administrative overhead), while the budget-neutral-by-increased-revenue versions might retain similar maximum benefits.
In that case it would basically just be removing all welfare and giving everyone a tax-cut.
In addition to the other points being made (about new funding sources), you're assuming the payout for basic income would exactly match previous means-tested benefits. Realistically spending, any basic income program will likely provide less than the upper end of many existing entitlement programs.
I'm not sure if this is true or not. You can find serious people with reasonable seeming numbers on both sides of that argument.
Personally I don't believe that would actually happen, but the idea does account for that angle.
Most humans naturally don't want to sidle idle all their lives, some will, but the vast majority will find some productive use of their time - a basic income means they don't have to work 40 hours a week just to survive so they can do what they really want to do in their spare hours.
If 3/4 of everyone wants to watch TV and take fun drugs and our society has the wealth to allow that to happen, hooray!
The same is true for work, while many people are forced to take whatever job they can to survive - there's no reason they wouldn't choose to punch a clock because they enjoy it.
I wouldn't mind working less, but I love what I do, I get a sense of pride and accomplishment out of it - if it weren't required for my survival I wouldn't suddenly stop.
The data suggests that men, at least, really want to watch TV and take drugs. They don't spend much time raising children or on civic engagement.
Here is a good survey article:
https://www.commentarymagazine.com/articles/our-miserable-21...
If you want to say "that isn't a true Scotsman/basic income", please explain how writing "basic income" at the top of the check would change things.
(1) People who have worked and are actually physically unable to do so any longer (and, generally, for the same reason, inhibited in other important life functions), and
(2) People who wish not to work so much that they have engaged in elaborate frauds to be adjudicated unable to work.
And, in both cases, actually receiving money from work reduces their eligibility for payments and may jeopardize their eligibility to receive benefits at all.
I think its quite reasonable to believe that neither of those (nor the two combined) would be representative in their use of money and their actions when receiving a certain amount of money, on top of the fact that receiving money which is partially conditioned on non-work induces different behaviors (even in the same set of people) than receiving unconditional funds.
This is readily apparent from the fact that disability claims are strongly correlated with the economy; recessions do not cause people to become paraplegics. And this rise is in spite of workplaces and daily life becoming safer.
NPR also has an expose on rampant disability fraud, although they of course use more polite language: http://apps.npr.org/unfit-for-work/
That's a non-sequitur, as the distribution between group (1) and group (2) in the GP post is immaterial to the argument made there.
If you want to address the points actually made in the post you are responding to instead of throwing out irrelevancies, feel free to do so.
It seems to me that in most societies, human populations continue to grow until they hit some hard resource barrier. And it's not a simple, gentle equilibrium that's reached: we usually end up with poverty and/or war as a result.
How would you reconcile my take on human nature with your expectation of post-scarcity?
Finland, for example had more deaths than births last year. I wouldn't be surprised if the population of the human race shrinks over the next century.
I think a parent should always be home with child, whether mom or dad. -- I see a rise in home schooling and learning through other ways than schools. A marriage of pre-industrialism and post-scarcity w/ the ability to spend free time coding and working on entrepreneurism, or scientific discovery sounds a lot better than working 9-6 5 days a week to make the next Bill Gates or Mark Z. rich.
Only if they choose to. Everyone will receive the basic income, those who wish (and are able to) to supplement this income by working will be free to do so.
>People who get out and work find this repugnant
Working people will cease to exist as the majority in the not-so-distant future. There needs to be a solution for humans no longer being able to add value in the workplace.
I wouldn't choose to stop coding, personally - it is one of my passions, but in a society with a UBI I could see cutting hours and spending more time with my daughter, fishing, etc.
I would go crazy if I didn't have code to write, it's not like I'll ever stop working if I wasn't forced to - but I wouldn't mind to cut back my week and spend time on my own endeavors if it wouldn't be a crushing blow financially.
Currently rich societies support many people who drink the water while carrying none. But the social contract is that they get state support because they are elderly or infirm or disabled or simply down on their luck. There is no widespread support for the idea that people are entitled to carry no water and, moreover, to live a leisurely life of hobby, merely because they were lucky enough to be born in a rich country.
What is your proposed solution for when the market economy collapses due to demand side economics ceasing to exist?
Human wants will expand to fill humankind's greater productive output, just as it has in the past. So I do "get it." I just think you're wrong.
No, those passively receiving gains from capital are supposed to do that, and the revenue structure supporting any sane UBI proposal should reflect that.
There's also a distinction to be made between "not working" and "not in paid employment". Carers, OSS devs etc can add value to society without ever showing up in employment stats.
Heck just think what some of this could do to research.
You're thinking of it as extra money. Try thinking of it instead as money that's already being paid to everyone, just made unconditional. People are not (generally) starving in the streets, so the money is clearly being spent to keep them alive. Some of that is via benefits, which BI would replace. Some of it is via pay-for-work, and given a BI employers could pay less with the BI making up the difference. You can make a separate argument about whether a BI removes incentives to work, but AIUI evidence from pilot programs so far suggests that it doesn't.
> Heck just think what some of this could do to research.
How many of the famous names in science were able to make their discoveries because they belonged to a gentry class who didn't have to work for a living? How many people have to leave academic research because they can't get funding any more? What tends to happen to OSS contribution rates once people move from study to full-time work?
This isn't really the case. Basic income is not about cost savings.
The programs you mention are wealth transfers, so the overhead is in fact trivial. They take money from person A, and give it to person B. There are checks in place to make sure person B qualifies, which accounts for the overhead. For retirement transfer (social security), you check each persons age--not too hard in America.
All those programs would have to be colossally, amazingly inefficient for basic income to be more efficient at redistributing wealth. Out of it's over $1 trillion budget, estimates of administrative overhead are around 1%. Even for more complex programs like foodstamps, overhead is likely low and under 10% [1].
Basic income is about wealth re-distribution, not efficiency. It applies a huge tax increase to the top 10-20% of society, and gives that money to the bottom 80-90%. It's that simple.
So the question everyone should ask is: should we have a policy of taking money from the top 10%, and giving it to the bottom 90%?
[1] http://www.huffingtonpost.com/susan-blumenthal/food-stamp-my... (not the most reliable source, but best I could find quickly)
And that's just for old age benefits. For Social Security disability, you have to make sure someone is disabled. For unemployment, you have to make sure they worked in the first place, that they lost their job in a manner that garners them benefits, and their benefit size depends on what their pay was.
Making all this work takes bureaucrats, judges to adjudicate claims, and people to investigate fraud. I have no idea whether UBI would be dramatically more efficient but even something like Social Security is far more complex than just checking someone's age.
Needs based systems are easily defeated and then some of give you money based on your "need". This means you get more than you should (and presumably more than BI would provide). I actually think the best BI approach is like an EITC on steroids. You get all your money back if you are at the super low end and you can also make that a multiplier to encourage filling of lower wage jobs.
What I mean by that is that if someone makes $15K a year, they may get 20K + $10K (2/3 earnings) back as a refund (could be quarterly, etc.) Someone who makes $0K a year would just get the $10K. Not well thought out yet but illustrating approach.
Or maybe there's a problem ?
Politics isn't rational.
We have a democratic republic in theory, but very much a plutocratic one in practice.
There will always be people out there who will choose to blow their entire paycheck on frivolous purchases outside of their means and not have any money left over at the end of the month for food. As stupid and irresponsible they are for making that choice, a humane, post-scarcity society shouldn't just let those people just starve to death on the streets as a consequence.
As a much more charitable example, consider the case of someone getting into an accident and ending up having to spend all or most of their basic income on medical expenses. How could someone like this survive if the basic income were to completely replace all existing social programs?
So basic income will have to coexist with these existing programs. Perhaps the existing programs can be reduced in scale due to less people needing to rely on them thanks to the introduction of a basic income, but probably not nearly enough to completely offset the immense costs of the basic income program itself.
This means the overall expenditure for social programs will likely have to increase due to the introduction of a universal basic income, and I personally am perfectly fine with increasing tax rates on the rich to make that happen, but it's not going to be easy.
While I'm a fan of the idea of adopting basic income eventually, I don't see how we can fund it now without serious negative consequences.
Unfortunately the studies I've read about here on HN (including this one I'm guessing) seem to only address the positive side without actually comparing costs vs benefits.
People who lobby for basic income certainly shouldn't pussyfoot around the notion that it's fundamentally a redistributive tax.
My goal is to eliminate poverty for US citizens who don't insist on living in extremely high cost areas. Secondary goals are to enable the poor to refuse to do bullshit jobs, and undermine the deeply-held notion that wage work is ennobling.
The only way to achieve such redistribution is now, as it has always been, to tax rich people like me.
(The US has very few real pension programs any more, since the 401(k) and IRA systems were put into effect and displaced them.)
Anyone who works for the government (including teaching & military) with retirement benefits is not going to subsist on just UBI once they stop working.
That does meet my bar of "unreasonable".
Mathematically, that makes no sense.
This whole theory hinges on automation taking a significant bite out of the workforce, which will raise profits in direct proportion to lower costs. If companies aren't paying their employees anymore, a portion of their proceeds should go to paying back society as a whole - after all, if there's nobody to buy their product then they are dead as a company.
You are confusing "federal taxes" with "federal income taxes" and assuming the only way to increase the latter is to multiply the existing marginal rates without changing the structure; since a one portion of the drive for UBI is to address concentration of returns in high-end income and capital gains, the natural first thing to do is to uncap payroll/self-employment taxes and tax capital income the same as labor income (both the taxes on labor income styled as "income tax" and those styled as "payroll tax". That -- alone -- more than doubles taxes on long-term capital gains.)
There's also other income that excluded from taxation or taxed favorably that is concentrated at the high-end that could be targetted.
If 40% end up unemployed as a result of automation, then there should be a significant increase in new jobs in the automation industry.
The solution is retraining programs. Paying displaced workers UBI while they're retraining is a compassionate temporary solution, but not long-term.
This doesn't actually fit very well with the conceptual basis of UBI as a replacement for means-tested benefit programs, as defined-benefit pensions are not means-tested benefits.
Though its true that a number (though not all) UBI proponents have either explicitly called for replacing existing Social Security-style retirement programs, or implicitly suggested that by including the existing cost of those programs as funds available for UBI.
[0] E.g., if you decide that the UBI goes to all adult citizens and legal permanent residents, then that's the population that gets the credit.
I'd argue that while they have the power to spend the money on a wide variety of social programs(per the General Welfare clause), they don't have the power to redistribute income since it doesn't have a designated purpose. Spending is an exchange of money for services or goods, while UBI would just be an exchange of money.
Even if redistribution was considered a type of spending, the case mentions specific facts that harmed the elderly(employee age limits being the main one). If these mattered to the original case, then giving UBI to young people who choose not to work should be a weaker case, which makes it reasonable for SCOTUS to disagree at least on those examples.
Social Security is a combination of a forced retirement savings plan and a delayed redistribution of income. I don't know if anyone has argued that the redistribution part alone is unconstitutional, but the forced savings part comes from the payout increasing as you put more money in. A UBI would be entirely a redistribution.
A similar argument might apply to cases where the EITC causes a net benefit to be given to someone, but: A. The government could argue that the EITC is intended to benefit the poor, which seems similar to arguing that Social Security benefits the elderly and B. I don't know if anyone has standing to bring a suit, since those cases are probably rare and the damages would be small.