[PaulJoslin]

The thing I genuinely don't understand regarding the basic income for all argument is that surely it just moves the goal posts rather than solves the problem at hand?

In the current system, you can go stay at home and get income support, which should provide you with the basics i.e. a home, food, electricity etc. If you would like more than this, you can go and get a job and hopefully earn more (have a better lifestyle) than staying at home not working.

[Note the 'should' and 'hopefully' - This system may not always work, but when it doesn't it's generally a fault with wages paid not being sufficient rather than the benefits system being broken]

This therefore means there is an incentive to go work. There is also control, to make sure the money the unemployed person is getting is mostly spent on the basics (such as housing, rather than say drugs).

The problem with suddenly giving everyone a minimum amount of money, is that due to everyone now 'at least' having that amount of money at hand, this becomes the new 'bottom' of the market. If I get a job, I earn money on top of this basic amount, which means I can afford nice things and the person unemployed still can't afford anything.

To clarify, this works similar to pricing of items in different markets. A beer in the UK is ~£3.50 (£5 in London), a beer in Vietnam is about 14 pence. Both costs are fairly relative to what they would have to pay their work force to produce the item (plus cover costs and make a profit) and what the local market can afford to pay.

If let's hypothetically say, you gave everyone in Vietnam this basic wage, the cost of beer would not remain at 14 pence. The first reason is because the work force would find their existing pay negligible compared to the basic pay (so wages would have to rise to be incentive to work on top of basic pay) which would in turn cause cost of manufacturing to rise, but also the market would realise with this extra money available - the price could be set higher and would rise accordingly.

Now back in the UK if this was to occur, you would have slight price rises due to these factors which would in affect move the poverty line up higher, which would mean the people at the bottom are still poor relatively.

What's worse is that assuming the people who are unemployed are given the choice on how that money is spent, they may in fact not spend the money sensibly (i.e. on their housing) and end up homeless instead.

The final problem with this model is that the cost of living and economic output is not evenly distributed throughout a country. £1750 a month in northern England may give you a fantastic lifestyle, where as in London you'd barely cover your rent. (What happens to the unemployed in London in a fixed give everyone a basic income situation? They have to leave London and move where they can afford, which then makes it potentially harder to find a job and splits the country into two halves, the elite / the poor).

[belorn]

I understand the confusion, but its mostly there thanks to misconception about how things works now,

> If you would like more than this, you can go and get a job and hopefully earn more (have a better lifestyle) than staying at home not working.

Staying home and not working today is not actually an option in most places in the world. The reason is why this new model is called unconditional basic income. The current system called income support is conditional.

And market forces love the fact that its conditional, since it allows exploitation. If income support is for example conditional on the unemployed not having received a job offering, then the market can exploit this fact and offer people jobs for below income support (or what ever is minimum). Unemployed people can not say no, or they loose the government income support, and thus become forced to accept a slave job or loose all income.

unconditional basic income would eliminate this issue from the board, and increase wages for unattractive jobs.

Inflation should also not be effected by much. The total amount of money in society is still the same finite amount as before. There is no "extra money available", only a different form of distribution. There is a larger group with money to spend on products, which drives prices both up (more demand), but also down (more incentives for large scale production). It also makes money change hands more often, and is often attributed as the reason why a income support system do not actually drive prices or wages down.

[btilly]

Your reasoning is severely flawed.

Nobody today wants to accept an income below what you need to survive because..you need to survive. Liberals don't want to see other people accepting an income below what is needed for them to survive in a way that we can accept, so pass rules about a minimum wage.

With this proposal, there is wage that it too low. As long as you make enough to afford something nice that you want that you couldn't otherwise afford, there is no reason not to take the job. Therefore at the low end, employers can pay LESS than they do now.

What it does instead is remove perverse incentives that make poor people receive less money for working than not working. The classic example being a single mom who, while working, and paying child care, makes less than on welfare. (Incentives that we've responded to by passing rules forcing poor people to take the otherwise irrational work option.)

[yummyfajitas]

Liberals don't want to see other people accepting an income below what is needed for them to survive in a way that we can accept, so pass rules about a minimum wage.

This is silly. If that were the motivation, then minimum wage would be a few dollars/day.

Here is a list of countries by GDP per capita, after adjusting for purchasing power. Lots of countries (e.g. Venezuela, Georgia, India) have a GDP/capita below the US minimum wage. The world GDP/capita is below the US minimum wage. Yet somehow people in those countries still survive.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_...

As long as you make enough to afford something nice that you want that you couldn't otherwise afford, there is no reason not to take the job.

Sure there is - you might value that nice thing less than you value watching tv instead of working.

[btilly]

I don't think you read what I wrote carefully enough. Here it is again.

Liberals don't want to see other people accepting an income below what is needed for them to survive in a way that we can accept, so pass rules about a minimum wage.

The key points being that liberals don't want to see it (they don't see other countries), and it is the liberals defining what seems acceptable.

As for your "after adjusting for purchasing power" comment, you know enough economics to know that such adjustments depend on the bundles of goods being purchased, and the poor purchase different bundles than middle class people would. (The same problem means that the quoted inflation figures do not accurately predict the experience of specific socioeconomic groups.) Thus the figures should be taken with a grain of salt.

But that said, yes, people survive on that. But do liberals like seeing them do that? I submit that liberals don't, and this is the motivation for the minimum wage. (See the sibling reply to yours for verification.)

As for watching TV versus working, I'm sure that would happen. I know some of those people. I also know people who would happily work for less than minimum wage just to get out of the house.

[yummyfajitas]

I definitely misunderstood what you said. Thanks for the clarification. I suspect your theory about what people like to see has more than a grain of truth to it.

[SomeCallMeTim]

>The classic example being a single mom who, while working, and paying child care, makes less than on welfare.

It can be worse that this.

At least in some states, every dollar you earn is deducted (at least in part) from your welfare checks. This was at least the case a while ago; I couldn't vouch for its truth today after welfare has been "reformed" several times. It was definitely true at one time, though.

When this was true, at the very least, it was a severe disincentive to working, since until you were able to make more than your welfare check, you would be at best be making pennies on the dollar by taking a job.

[waps]

But how you cheat on universal income is to declare having more children than you actually have. Or just actually having them, treating them badly.

Or at least, every now and then, there's an article in various European news articles that someone pulled that crap. (Most Euro countries will give a monthly stipend of ~100 euro per child you have, no questions asked (in Belgium you have to work to get it, I believe, but no other qualifications. A bank director gets it, and so does the cleaning lady))

[SomeCallMeTim]

>But how you cheat on universal income is to declare having more children than you actually have. Or just actually having them, treating them badly.

Welfare also scales payments based on the number of kids you have. This is a common (and almost certainly apocryphal) accusation against people currently on welfare; if it's ever true, it's an exception and not the rule. (which is why it would be news)

What is true is that the vast majority of people want to feel useful -- and (at least when the women in question are even moderately educated) they don't want to have extra children just to have a higher stipend.

[dllthomas]

Not that original intent should in any way be binding, but it's an interesting cultural shift that "single mom who, while working, and paying child care, makes less than on welfare" is now a reason why welfare is bad, when "mothers shouldn't be working" was part of what motivated welfare in the first place.

[philwelch]

This reminds me of the old paradox that a man who marries his maid is reducing GDP, because when she was the maid she would cook and clean and he would pay her enough to support her as a business transaction, but as husband and wife, she still cooks and cleans and he still supports her but it's not a business transaction anymore.

Likewise, a mother who goes to work and spends her whole paycheck on child care increases GDP, but if she just stays home and cares for the child herself, it doesn't count because it's not a business transaction.

[rguzman]

What people need to survive is too low a standard given how much wealth there is in the world.

[saraid216]

True, but it's a higher standard than what we have now.

[muyuu]

The problem with making it unconditional is that it will completely break the ceteris paribus calculations as to what is good enough, making a lot of collateral damage on its way while being largely ineffective.

Showering money to everybody is very likely to make more harm than good to real people's economies. A transition to Friedman's proposal on a "moderate" negative income tax (it's not what the name suggests) makes a lot more sense than this. Although I'd just give conditional help as it's done in many European countries with a reasonable degree of success.

[phillmv]

The Swiss suggestion aside, it's not really meant to be a free middle-class experience.

In the minds of most people it's more of a "you will not go hungry or get cold in the winter" level of support, and I would make the argument that the majority of folks would continue to work to supplement their income beyond the bare necessities.

It depends on your base axioms here. Most people don't like living with the bare minimum, and will try to work their way out of it. Most people aren't stuck at the bottom of the income range by choice.

Think of the entrepreneurial venues now open to people who no longer have to juggle two shitty jobs just to get by. I think we'd come along way towards reducing human misery without really harming the economy - with the exception of making jobs that are shitty for no good reason obsolete.

[neltnerb]

Yes, this.

My take is that capitalism is corrupted because people are unable to meet basic needs. We pretend that capitalism is a system where everyone is able to make informed decisions. We pretend that in capitalism, a 10% chance of making $1M a year in income has the same value as a 100% chance of making $100k a year. This is just not the case.

People have two different types of risk they can take. Income risk, and personal risk. Personal risk is your shelter, your food, your health, your family. Income risk is your expected income beyond what is needed to meet those basic needs.

If your personal risk is covered for some reason, then you are able to objectively evaluate income risk. But if your personal risk is not covered, you have to be more conservative. The downside is not that you might not make as much, it's that you might lose your home, health, or starve. You can't be logical about that.

If we have a system where personal risk is largely covered, then the free market will actually pay people what they are worth because people will feel free to actually take risks and (for instance) start companies and pursue their passions.

This is some stuff I wrote on it a while back, it's better written than what I put here.

http://neltnerb.tumblr.com/post/58818804903/an-entrepreneurs...

[maxk42]

> In the minds of most people it's more of a "you will not go hungry or get cold in the winter" level of support, and I would make the argument that the majority of folks would continue to work to supplement their income beyond the bare necessities.

And that's the essential fallacy: You cannot control the prices of goods and services in the market.

Once you provide a basic income to everybody, that will create a scenario wherein the majority of people benefit from the income inversely proportionally to their level of other income. This is the intended effect: The poor benefit the most and the upper-class are largely unaffected. So it's a good idea, right? Not exactly: What are the poor going to spend their income on? Primarily food, housing -- the "not going hungry or cold" things. So they've got more money to go out and buy food and they will. And the lower-middle-class who make a bit more than that will now have enough money to buy more food and better housing and they will. And the middle-middle class have a little extra money to spend as they wish and they will. And so on. But the majority of that money will be spent. With more free cash to go around, prices will rise to capture the additional profits. When prices go up we have inflation and now the poor are back to not being able to afford food and shelter and the lower-middle-class are back to living hand-to-mouth and so forth. The market compensates for the additional influx of cash by providing opportunities to soak it up, so it doesn't wind up helping anyone in the long run.

Well we'll just peg it to the rate of inflation and the problem will be solved, right? Again -- it's not that simple.

See, only one in three Americans is working. If we determine that each American needs about $500 per month to "not go hungry or cold" then that means the average American will have to pay $1,500 in additional taxes. We'll burden the upper class with the majority of those taxes, of course, but this isn't good for the middle class either. The upper-middle-class winds up being saddled with enough additional tax burden that they join the middle-middle class. And the middle-middle class who were previously getting along fine on a household income of $50,000 just joined the lower-middle class because even with the added income they have to pay more for the basics: food and shelter because of the additional inflation.

So now we're saddled with a shrinking middle class, (sound familiar?) nobody being able to afford any more than they were before and the rich continue to remain largely unaffected by all of this. In the end it accomplishes the exact opposite of what you set out to do.

[brazzy]

You're making a lot of completely unsupported predictions there...

[muyuu]

It's not possible to effectively predict in scenarios like this, which is why you don't go overboard.

[yetanotherphd]

so did the parent, and everyone else in this thread.

[abraxasz]

... and this is why, selfishly, I would like to see the system implemented somewhere, albeit not necessarily where I live. People keep throwing peremptory statements here and there (on both sides of the argument), even though we really have no way to know what's going to happen. So let the Swiss implement it, and let the whole world see how it's gonna play out. If it works (which I sincerely hope, from the bottom of my heart), then that can give ideas to the rest of us. If it fails, we can draw the adequate conclusions too.

[spectre256]

It's always refreshing to find someone who wants a good debate to be settled by experiment. Hopefully that would be enough. Portugal famously had great success with decriminalization of nearly all illicit drugs, but unfortunately I don't think too many countries have changed their own laws as a result. There's almost always too much politics involved, and it's usually easy to find a reason that is at least superficially convincing as to why what works elsewhere will not work at home.

[dllthomas]

There have been a few trials of related things on a small scale. Certainly nothing approaching the amounts or number of people in the Swiss proposal.

Some instances here:

http://en.wikipedia.org/wiki/Negative_income_tax#Implementat...

[neltnerb]

I wrote on this a while back (http://neltnerb.tumblr.com/post/58818804903/an-entrepreneurs...), and it is useful to note that mathematically a guaranteed income is completely identical to a negative income tax.

https://en.wikipedia.org/wiki/Negative_income_tax

That article contains a lot more information than most articles about stipends. Note that the US Earned Income Credit is a negative income tax, yet it doesn't seem to even make a blip on anyone's radar as communism.

[Flimm]

It's "lose", not "loose". I'll delete this comment in a few hours.

[Flimm]

Bah! I forgot! And now it's too late.

[gboudrias]

As a huge believer in unconditional income, let me address your whole comment:

> The thing I genuinely don't understand regarding the basic income for all argument is that surely it just moves the goal posts rather than solves the problem at hand?

I agree, but I see it as a good first step towards getting rid of the plague that is (savage) capitalism.

> In the current system, you can go stay at home and get income support, which should provide you with the basics i.e. a home, food, electricity etc. If you would like more than this, you can go and get a job and hopefully earn more (have a better lifestyle) than staying at home not working.

The problem is that a lot of minimum wage employees are treated with minimum respect since they really are forced to be there. This way of thinking makes everyone miserable by not considering the quality of life of those concerned. And I'm just talking about "not being verbally abused" here basically, not even "have a nice kitchen". And there aren't enough public employees to ensure people don't get treated like shit.

> This therefore means there is an incentive to go work. There is also control, to make sure the money the unemployed person is getting is mostly spent on the basics (such as housing, rather than say drugs).

See, I disagree that the state should have such moral authority. But more to the point, this provides an incentive to the state to disregard basic needs (thereby reducing "needed" money) and pretend everyone has the same basic needs (thereby giving more people an arbitrary minimum). Also, people are still currently buying drugs/alcohol with their state money, because at the end of the day addiction will often win over food, and that's not a problem you solve by giving people less money (who will only starve more and/or commit more crimes).

> The problem with suddenly giving everyone a minimum amount of money, is that due to everyone now 'at least' having that amount of money at hand, this becomes the new 'bottom' of the market. If I get a job, I earn money on top of this basic amount, which means I can afford nice things and the person unemployed still can't afford anything.

That's on purpose. That's why it's not a communist scheme. But don't forget that food and house prices are/can be mostly controlled by the state, so it can make sure that everyone gets the real basics (as it already tries to do).

> If let's hypothetically say, you gave everyone in Vietnam this basic wage, the cost of beer would not remain at 14 pence. The first reason is because the work force would find their existing pay negligible compared to the basic pay (so wages would have to rise to be incentive to work on top of basic pay) which would in turn cause cost of manufacturing to rise, but also the market would realise with this extra money available - the price could be set higher and would rise accordingly.

That's also on purpose. One of the points is that everyone gets to be treated in a non-shitty manner, which means everything is going to cost more to produce, which means the middle class and above will be poorer on average, all things considered. I count that as a good thing (reducing income gap). However we're not talking about Vietnam (or China or Taiwan), because the powers that be would not allow the world factories to fuck up their way of life. This program only makes sense in first world countries, if we're aiming for things staying the same.

> Now back in the UK if this was to occur, you would have slight price rises due to these factors which would in affect move the poverty line up higher, which would mean the people at the bottom are still poor relatively.

Right. But more people would be able to not work under terrible conditions.

> What's worse is that assuming the people who are unemployed are given the choice on how that money is spent, they may in fact not spend the money sensibly (i.e. on their housing) and end up homeless instead.

That doesn't really make sense, since people need an address now to receive welfare, and I see no reason for this to change. If you're homeless you have a whole new set of problems, which would not be addressed by the measure afaik.

> The final problem with this model is that the cost of living and economic output is not evenly distributed throughout a country. £1750 a month in northern England may give you a fantastic lifestyle, where as in London you'd barely cover your rent. (What happens to the unemployed in London in a fixed give everyone a basic income situation? They have to leave London and move where they can afford, which then makes it potentially harder to find a job and splits the country into two halves, the elite / the poor).

This is a problem and needs to be addressed. I don't really think people on welfare can currently afford to live in London anyway (correct me if I'm wrong), so it doesn't really change anything.

All in all, remember that no one wants to have a shit life and be homeless. So if you give people money, they're likely to use that money to get a better/steady life rather than fucking up their life. There will be people who "mooch" on the system, but there already are. This is about working conditions and the right to be treated fairly (and to left-wingers like me, the right not to work).

[Mikeb85]

> If you would like more than this, you can go and get a job and hopefully earn more (have a better lifestyle) than staying at home not working.

Except this isn't the case, since benefits are usually cut when you starting working. This means that you start work in an insecure job with no necessary increase in quality of life.

With a guaranteed income, if you were to get a job, you'd have a guaranteed increase in your quality of life, since the benefits are always there, so there is actually more incentive to work.

[PaulJoslin]

That's correct Mike, it's not always the case (benefits being cut and working a job can provide you with a worse quality of life) - but I think that is more of a problem regarding the wages people are being paid in jobs, rather than the benefits system.

For a long time inflation, house prices and general costs have beat basic wage increases - leaving many working for less money relatively than they would've got years ago. Meanwhile, the big corporations report yet ever greater profits and the CEO's take ever higher multiples of basic salary in bonuses each year.

The system is broken, but the equality of pay and living standards is not to blame with the government, it's to blame with greedy corporations, share holders insisting they need to do anything for profit and wages being pinned down to the minimum they can be that the work force will stand for (to maximise profits).

If corporation pay was fairer (like it used to be) where perhaps a CEO only makes 10 times the basic workers salary, rather than 100 or 1000 times the basic workers salary, then the wealth from the corporation output would be shared more evenly and the problem would be solved (for people in work).

Not to mention corporations which don't pay tax causing governments to lose out on a lot of tax revenue which would in turn pay to support the poor!

[Mikeb85]

> The system is broken, but the equality of pay and living standards is not to blame with the government, it's to blame with greedy corporations, share holders insisting they need to do anything for profit and wages being pinned down to the minimum they can be that the work force will stand for (to maximise profits).

Let me ask you something... If you start a new business, and let's say you take out a huge loan to pay your startup expenses, and you have a huge pool of qualified workers fighting to work for you for 10 dollars per hour, are you going to pay them any more? Knowing full well that that's a shitty wage, but that if you pay them any more you might go out of business and have a huge debt burden... Or do you pay them 20 dollars per hour out of generosity, and risk going bankrupt, with repercussions that could follow you for years?

It's easy to blame corporations, but remember, there's more players in the job market, including many struggling small businesses... Furthermore, large corporations have gone out of business, and when they fail entire towns and cities can become destitute (look at Detroit).

Corporations pay market value for wages, to increase wages you need to either increase the number of jobs, or decrease the number of workers.

[PaulJoslin]

Capitalism is powered by money and greed. At it's heart, the point is to maximise profit and efficiency. This drives innovation and growth across the world... this is no bad thing.

However, as a side of effect of this, it also means businesses want to become more efficient, reduce costs and maximise profitability - your share holders are expecting good returns and that's just the way the world works!

However, according to this http://www.epi.org/publication/ceo-ratio-average-worker/ The CEO is currently getting around 241 times the average salary!

Let's say the CEO takes $9.6 million and the average worker gets $40,000...

This income divide is causing the problem, as the prices will move up in line with the wealth the CEO has just got (along with the workers obviously), but to the average worker, they're not really being paid much more (or any more at all) to counter act the inflation.

If you go back to that graph in 1980 where the CEO only made 35 times the amount of the average worker and redistributed more of the profit to the employees, let's say average employee now gets $55,000 and the CEO gets $2,000,000 then the prices remain more affordable relative to the money in the market and the wealth has been distributed more evenly.

Note this is with the assumption the corporation still made the same profit whichever way it was divided.

The top 1% of wealth is greater than the other 80% of wealth combined in the USA and it's this greed that is causing the divide, rise in prices and rise in poverty line compared to the 'average salary'.

[drivingmissm]

The growth in the divide is caused by changes in CEO compensation that reward CEOs of public companies with large stock option rewards. In theory this is a reform-- only CEOs with rising stocks should get paid. Also just looking at the top public companies isn't really representative of the economy as a whole. The median CEO really makes around $360,000, which is a respectable 9-1 ratio.

http://chiefexecutive.net/how-much-does-the-average-ceo-real...

[corysama]

Further, being paid $9.6mil/year as a CEO is exceptionally rare. $10.2mil of total compensation would have placed you in the top 100 out of the 100Ks (millions?) of CEOs world wide in 2012. $20mil would have placed you in the top 20.

http://www.equilar.com/ceo-compensation/new-york-times-top-1...

[jonknee]

> Corporations pay market value for wages, to increase wages you need to either increase the number of jobs, or decrease the number of workers.

To a large degree the market value for wages is such only because of a government subsidy to the employers. Take Wal-Mart for example, they go as far as helping their employees enroll in all sorts of government poverty programs because even though they are full-time workers they still qualify for SNAP (food stamps), Medicaid and other similar programs.

Wal-Mart, McDonalds and other similar large low-wage paying corporations should not be able to use government welfare in what effectively part of their compensation to employees.

[chongli]

Wal-Mart, McDonalds and other similar large low-wage paying corporations should not be able to use government welfare in what effectively part of their compensation to employees.

Think about what would happen if they weren't able to do this. Prices would go up and who would this hurt the most? Their customers. Who are their customers, generally? Poor people.

[philwelch]

The government isn't subsidizing Wal-Mart; Wal-Mart is subsidizing the government by reducing these people's dependence on government benefits from 100% to something less.

[dllthomas]

"Let me ask you something... If you start a new business, and let's say you take out a huge loan to pay your startup expenses, and you have a huge pool of qualified workers fighting to work for you for 10 dollars per hour, are you going to pay them any more? Knowing full well that that's a shitty wage, but that if you pay them any more you might go out of business and have a huge debt burden... Or do you pay them 20 dollars per hour out of generosity, and risk going bankrupt, with repercussions that could follow you for years?"

This calculus does not apply at all to the companies currently turning record profits. That's not to say that there's necessarily no important reason those companies should be choosing to keep their profits high as opposed to paying out higher salaries, but this manifestly isn't it.

[Mikeb85]

> This calculus does not apply at all to the companies currently turning record profits.

Sure it does. The only difference between a small business and a big one is size and scale of the problems.

It's just like a small business owner keeping a healthy balance for potential rainy days ahead instead of giving everyone a giant bonus every year.

[jawr]

That's entirely understandable, but what about businesses where they have huge surpluses of cash and risk of bankruptcy is nominal?

[icebraining]

Actually, wages are increasing enormously, and faster than costs, for the vast majority of workers of those corporations. It's just that most of them are not American or European.

In any case, that assessment, valid or not, doesn't provide a solution.

[weddpros]

I often hear this argument, but it sounds wrong to me. Benefits are cut when you start working, and resumed when you stop again.

Did you consider the fact that salaries WILL be lowered to compensate for BI ?

If BI is 1000, that 1200 paying job will become a 200 paying job... I just can't see where's the incentive to work. Who wants a 200 paying job when you get paid 1000 for just breathing ?

[JanezStupar]

I think you have your own answer. Nobody will do jobs like that.

Because why would they?

[k__]

On the other hand, there are many jobs people are willing to do for free/minimum wage because they somehow like them. But they can't because without money they can't live or they have to maintain a very low living standard.

[chongli]

If BI is 1000, that 1200 paying job will become a 200 paying job... I just can't see where's the incentive to work. Who wants a 200 paying job when you get paid 1000 for just breathing ?

You've got it backwards. The incentive is not to work, the incentive is for employers to offer market value for their wages. When people have the power to choose not to work, the market will have to adapt. If nobody wants a 200 paying job, the pay will have to go up.

The current system we have forces people to work unfair wages just to support themselves. Basic income will make it a competitive, voluntary labour market.

[neltnerb]

Definitely. I do think that with a guaranteed income, minimum wage laws as well as welfare in most other forms should simply be eliminated. Pay a market rate for the work, if you don't pay enough, you don't deserve an employee. But you can also charge less for easy work and get away with it because to the employees it's basically just spending money to use for luxury items.

How much should a garbage man get paid? Arguably (to me) more than many other professions. The free market for labor is badly broken, and I think that a guaranteed income will help (although not perfectly). Besides, I for one think that giving people the freedom to raise their kids for a while, or do art, or start a company, is more valuable to society than having them work a very likely unnecessary job just because we incentivize working over value generation.

[weddpros]

"The incentive is not to work": I meant to contest that assertion made by previous commenter. Actually I really don't think there's any valid incentive.

"the incentive is for employers to offer market value for their wages" You might put pressure on employers, for sure -> more unemployment. Maybe wages will go north. Then inflation.. then BI will have to increase too.

It's the first time I read that BI might cause wages to increase. Most advocates say "it will not change anything for you" if you already have a job :-)

Lastly, keep in mind that workers ARE the ones who will support the cost of BI. Not employers, not the government... Only workers.

So you'd better not increase unemployment :-) or the cost of work will raise a lot

[crucifiction]

Robots will want to do that job, keeping more high paying people employed.

[iamjustin]

Then employers would have to pay people more than an extra 200 dollars.

[weddpros]

Or unemployment would raise sharply, taxes would raise sharply (to pay BI), then companies would relocate to a foreign country.

Or wages would raise, prices would raise (inflation), then BI would not anymore afford a minimal standard of living.

Or both: unemployment would raise, wages would raise, prices would raise, taxes would raise.. companies would go bankrupt or relocate, and most people on BI would be poor.

[salient]

I agree, for this to work, everyone would have to receive that amount of money. Or at least say, everyone receiving under $100,000 a year in salary. Otherwise, you might feel cheated if you replace your $12,000 free money for a $20,000 job. You'd still have to receive the free money, so you'd then earn $32,000 a year.

[wavefunction]

Every adult citizen receives basic income, no matter their "means."

That's what makes it equitable.

[allochthon]

The equitability of a basic income is not its main selling point, as I see it; in other words it is not necessary that it be equitable according to some specific conception in order for a basic income to provide value to society as a whole. The selling points are, as I see them:

- There are now more people spending money because they have disposable income. This is good for businesses.

- There is added incentive to work, because one does not lose income by starting a job.

- The people being made redundant by automation are given a cushion that will help as they figure out how to become economically relevant again. This is good for everyone, because there are fewer families forced out onto the streets, etc.

- There is, potentially, less of a bureaucracy to manage the distribution of existing welfare programs, assuming existing programs can be consolidated into the new basic income scheme. This is an attractive point for conservatives and libertarians.

There's no need for equitability here, although that's also something that is desirable within bounds. But I think few millionaires and billionaires will find a significant decrease in their standard of living if they have to pay more into the pot than they receive. Also keep in mind that the billionaires are billionaires because society provides a framework for them to accumulate and retain the capital that they have; for this reason they have an implicit debt and obligation to society.

[chrishynes]

Equitability is not absolutely necessary, but it is a great selling point.

With a scheme like this, one would replace a system full of loopholes (for the rich) and handouts (for the poor) with a simple flat system.

Everybody gets $x/yr, and everybody pays y% in taxes on all income after that (not just earned income). No deductions, no credits, no loopholes, no welfare state (other than the UBI).

[astrodust]

For some people this "mincome" would be theirs to spend, but for others it'd just be a minor reduction in income taxes.

What's somewhat clever about this is how it essentially balances out. The billionaire won't even notice the extra amount in their bank account, but there aren't many billionaires. Meanwhile the three jobs four kids single mom will be greatly impacted by this, which is the whole point.

[gergles]

The billionaire won't notice it because it won't exist; the billionaire will be taxed way above mincome, because otherwise how are you going to pay for it?

[heurist]

That's exactly the purpose of basic income. If a billionaire businessman replaces all of his workers with robots, all of his income goes directly to him. The laid off employees are now competing for the few jobs that are available which have not yet been automated, and not all of them will be able to find another job because other businesses are automating away humans too. We need a way to redistribute wealth from the billionaires who make their money off the efficiency of automation to the people who would have previously worked for them.

[nawitus]

$100k limit is completely unnecessary in a universal income. The whole point is that the basic income is fully "paid" through taxes at some point. If the universal income is $12k and someone is paying $14k in taxes total, the "true tax" to fund the state (apart from basic income) is $2k.

[a-priori]

The only way for it to be fair is for everyone to receive it. Naturally, there will be an inflection point where at some income level a person starts paying out more than they receive.

I once calculated, based on what amounts to a back-of-the-napkin calculation based on a flat tax, that the inflection point would be somewhere in the $60-70k range for Canada. The US would be a bit higher due to the greater income inequality.

[JTon]

I would hate to be the person who earns just over that arbitrary 100k line.

[rubinelli]

At some point, that $12,000 you would receive turns instead into $12,000 you deduct from your taxes, so it all works out. There isn't a sudden step.

[peteretep]

Happens in the UK. Every £2k over £100k and you lose £1k of your tax-free allowance. This means that you keep 38p of every £1 earned between £100k and £118k, before the tax rate relaxes back to a more sensible 40% after £118k (and then up to 50% at £150k).

[alextingle]

Marginal taxation rates are even higher for the very poor: well over 90% in some cases.

[salient]

Wouldn't be that much different than progress tax brackets, though. In that case, lowering the tax rate for you by 10 percent would basically mean receiving $10,000 more a year in "free money".

[steveax]

> I would hate to be the person who earns just over that arbitrary 100k line.

Yeah, that would be terrible. How could one survive?

[cynusx]

hiring managers would use it to convince people to take sub-100k wages. This pretty much happens already in progressive taxation countries(e.g. belgium) where you can actually make less money by having a higher salary because your tax-rate increases.

[levosmetalo]

I have yet to see an example about net pay decreasing with marginal tax rate increase. When you earn 120k, only those 20k over 100k will be taxed with the higher rate, not the amount below 100k, so every increase in gross salary leads to increase to net salary.

[bzbarsky]

If you include welfare state benefits (which have wage-income-based phaseouts) in income, it's not hard to produce such examples. http://mises.org/daily/3822 has a simple case which has >100% effective marginal rates between about 20k and 50k for a family with one adult and 2 kids.

_That_ is the sort of thing that could go away with a guaranteed basic income. At that point, you'd just have taxes, which do in fact behave as you describe.

[judk]

The US AMT can have that punitive effect, because AMT is an alternative calculation, not a marginal calculation. Yeah, not marginal, but it is a common tax system.

And there are some programs that don't have marginal phaseouts. Each one is trifilingly small, but they may add up.

[nawitus]

>This pretty much happens already in progressive taxation countries(e.g. belgium) where you can actually make less money by having a higher salary because your tax-rate increases.

All sane countries with progressive taxation always apply the higher tax bracket only to the part of the salary that is in the bracket.

E.g. if the tax is 10% < $50k and 25% >= $50k, a $60k salary would have to pay 10% * $50k + 25% * $10k in taxes, and all wage increases increase net pay.

[gnaritas]

> This pretty much happens already in progressive taxation countries(e.g. belgium) where you can actually make less money by having a higher salary because your tax-rate increases.

You don't understand how progressive taxes actually work. This simply doesn't happen. You can't make less money by making more money.

[ptype]

Agree, but there is one interesting example of where this went wrong: http://en.m.wikipedia.org/wiki/Pomperipossa_in_Monismania

[cynusx]

yea, I might have gotten it wrong about progressive taxation. The context I picked it up on was in choosing a higher salary vs. some benefits. The benefit did lead to more spending power compared to the salary increase and HR would push for this as salary increases would lead to more costs for the company.

[informatimago]

That's why taxes must be proportional too. The state spends X euro, the productive economy pays Y euro of salaries+dividends, therefore everybody pays incomeX/Y of taxes. X/Y is the income tax rate.

Or if you prefer to tax sales, with Z being the total amount of sales, priceX/Z. X/Z is the VAT rate.

[lmm]

> This therefore means there is an incentive to go work.

Yes and no. It's not an incentive to get a 10hr/week part-time job, for example, because you'd lose your benefits and so get paid less overall. Even making the transition can be difficult - most jobs won't pay you until the end of the month, but your benefits will be cut off at the start. How long does it take to save up a month's expenditures while on benefits?

> There is also control, to make sure the money the unemployed person is getting is mostly spent on the basics (such as housing, rather than say drugs). > What's worse is that assuming the people who are unemployed are given the choice on how that money is spent, they may in fact not spend the money sensibly (i.e. on their housing) and end up homeless instead.

Sure. But the evidence is that just giving people money works better on average than requiring them to jump through hoops.

> The problem with suddenly giving everyone a minimum amount of money, is that due to everyone now 'at least' having that amount of money at hand, this becomes the new 'bottom' of the market. If I get a job, I earn money on top of this basic amount, which means I can afford nice things and the person unemployed still can't afford anything.

You can't have it both ways. Either employed people get more money than unemployed, which provides an incentive to go work, or they don't, which doesn't.

It's not like people with more money are going to start consuming twice as much food. The unemployed should be able to afford basic necessities; the employed will find it easier to buy luxuries, which is as it should be.

[PaulJoslin]

1. I address this somewhere else. I agree this is broken, but this is not a problem with the benefit system - it's something to do with wages not rising accordingly with everything else.

2. Perhaps, although if they do something stupid with that money, they still need supporting - so you either let people go homeless / starve or help them (which creates a new layer of welfare)

3. I'm not saying twice the food would be consumed, I'm saying prices would rise accordingly which would mean consuming the same amount of food costs more than it does now. The goal posts will just be moved and the poverty line will be above the basic minimum everyone gets paid.

[lmm]

> 2. Perhaps, although if they do something stupid with that money, they still need supporting - so you either let people go homeless / starve or help them (which creates a new layer of welfare)

Maybe. Even giving people food isn't reliable - some people will sell it for drugs. Sure, we'd probably still need some kind of emergency welfare system for those circumstances, but drastically reducing the size and complexity of the welfare system is a win, even if we don't eliminate it entirely.

> The goal posts will just be moved and the poverty line will be above the basic minimum everyone gets paid.

The point isn't to make the unemployed any better off than they are now. The point is to make the working poor better off, incentivize work more than it is presently, and reduce the overheads of the welfare system.

[czr80]

The price of food will rise only if demand for food increases or supply falls, it won't change just because people have more money.

[gpvos]

> lose your benefits

An unconditional basic income should include enough money to pay health insurance yourself.

[lmm]

This is Britain, thankfully we have free healthcare already; "benefit" here is used to mean what the US call "welfare".

[gpvos]

OK, I had missed that piece of context. Also, even though I think I am generally more familiar with British than with American English usage, I did not know this meaning of the word benefit.

[coldtea]

>In the current system, you can go stay at home and get income support, which should provide you with the basics i.e. a home, food, electricity etc.

Really? How that explains millions of homeless, poors eating in soul kitchens and/or with coupons, etc?

[tinco]

He's talking about a proper country, not the U.S.

[switch007]

They mention income support, so I take that as the UK, where hundreds of thousands of people rely on foodbanks each year.

[tinco]

Ah, I just took the opportunity to naïvely hate on the U.S. a little. I think their lack of social security is appalling. How can such a well faring nation have such a low income tax, and so many poor people.

I guess I just don't understand their definition of liberty.

[Jach]

There's plenty of welfare in the US, and stable and reasonably intelligent individuals (though with dubious ethics) are already capable of exploiting it to never have to work. In some parts of the country homeless people make tens of thousands per year tax-free from panhandling and choose to live the way they do. (For more typical earnings you really have to look on a city-by-city basis. The US spans a continent.) I think the main problem with homelessness though is that there's just not much support or sympathy for the mentally ill -- who make up the majority of homeless people. If you're mentally ill, a lot of places won't even let you in a homeless shelter. Your cost-to-live-stably also goes up a lot due to the prices of medication. Furthermore, low IQ is often found in individuals with the types of mental disorders that can easily lead to homelessness, so you get the double whammy that even if they manage to get stable, they're still limited in what sorts of economic activity they can do since higher wages usually require a higher IQ. Minimum wage is not enough to cover the cost of living and the cost of medication. Some states have better support for the mentally ill than others, but it's a messy problem all around.

[vasilipupkin]

There is quite a bit of welfare benefits in the U.S. the complete lack of social security in the U.S. is a strawman. Now, it's probably true that the benefits are not as generous as elsewhere, but they are fairly extensive, and depending on the state you live in, are quite generous

[lingoberry]

You would only say that if you were born in the US. Your definition of "generous" is pretty laughable in most other developed countries.

[krapp]

It's simple, you're as free as you can afford to be.

[wil421]

> So many poor people.

I think poor is a relative term and I dont think America has as many as lets say Central or South America. I dont see people living in shacks sifting through landfills to make ends meet.

[DanBC]

A few people do not want to work, and have no intention of ever working.

Do these people currently get incapacity benefit, income support, employment and support allowance, etc, coupled with housing benefit and council tax benefit?

Some of those benefits require people to go to an office and demonstrate willingness to work. So, these people who have no intention of getting a job sap the time and energy of advisors who could be helping people who do want to work.

> What's worse is that assuming the people who are unemployed are given the choice on how that money is spent, they may in fact not spend the money sensibly (i.e. on their housing) and end up homeless instead.

Currently, people can become "intentionally homeless". Didn't pay your rent and got evicted? Tough, you don't get social housing. If you're lucky (or you have unlucky children) you may get some emergency accommodation.

It's very tough to get council / housing association housing in the UK. Some places have a waiting list of 26 years. (twenty six years, so you know this isn't a typo.) And that's of the people who are eligible to go on the list - including everyone who thinks they're eligible makes the wait even worse.

[gaius]

I like the idea of a basic income but it suffers from the flaw at the heart of democracy: "A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury" -- Alexander Tytler. So say we have a minimum income guarantee that will cover a basic standard of living, and if you want luxuries, you have to work. Every election, that minimum will be ratcheted up, until it's completely unaffordable. This structural flaw needs to be fixed in some way before we can proceed.

[polymatter]

> "In the current system, you can go stay at home and get income support, which should provide you with the basics i.e. a home, food, electricity etc."

That is assuming you know which benefits you are entitled for and how to claim them. Most of those benefits you can't apply retroactively. And you can't have someone else claim them on your behalf (for obvious reasons). There is a lot of useless and intrusive bureaucracy saved when you just pay everyone £X.

[7952]

In the UK there is already a large subsidization of low paid people by higher rate tax payers. Its just that all the money is used to pay for services. The goal posts wouldn't be moved, you are just letting poor people decide for themselves how some of that redistributed income is spent.

[jules]

If you give everyone a basic income, prices on certain goods will rise, but not nearly as much as to cancel the effect of the basic income. A basic income is just wealth redistribution from the rich to the poor. Relatively speaking the poor get a little richer and the rich get a little poorer.

If you give every person in Vietnam $1, then the poor people have a relatively higher percentage of all the money to spend than they had before. Hence the percentage of all goods and services going to the poor will also be a higher percentage of the total goods and services. This becomes even more apparent if you exaggerate the amount. What if you give all people on earth $1 trillion dollars? Now everyone is basically equally rich. Even though prices will rise massively, the total supply of goods and services going to the people who were previously poor increases a lot. (of course in practice such a massive basic income may completely destabilize a society)

[agilebyte]

I think it is not just about moving goalposts.

What is different is that it frees you from the worry that you need to eat and have an abode. And the hope is that this comfort will make you engage in work you really want to do, rather then turn you into a couch potato.

[PaulJoslin]

The idea is nice, but if it causes widespread increases in costs / consumer goods / rent due to the reasons I mentioned, then the only places you may be able to just stay at home and work may not be the place you want to be.

For example, I live in London and enjoy this city. I would love to be able to stay at home and work on my side projects in hope of making extra money, but given the outcome I believe from this, everyone who was to only accept the basic income amount would no longer be able to afford to live in London and would have to relocate to less desirable places in the country.

Yes, you would now be free to work on your projects from your own home, but you would now not live where you want, with the people you are friends with, in an area which would be full of people who also are only taking the basic wage and probably a pretty horrible place.

The on paper calculations of the affect of this is like a snapshot of some code, before you press run. In the first state it is in, it would be fine, but the economic effects from this over the long term both in social and financial terms would be profound.

[ricardobeat]

So everyone that wants to live in London will need to have a job, just like they have today. It's a decent trade-off.

[PaulJoslin]

That is incorrect, London is not like that today. London is an extremely multi cultural city, with both rich and poor living side by side in the same boroughs. A lot of people argue that most of London's unique culture in places like Brixton came from the poor and that's what made London in a lot of ways great.

If you say, everyone in London will need a job, then you are then moving the poor / unemployed on mass out of the city. On paper this may look great, but for social-economic reasons this is a disaster.

You would end up with a 'walled garden' of elite living in London and the poor / unemployed living outside. The city would lose it's unique cultures, become even more gentrified / elite than it currently is and social unrest could start to occur.

[agilebyte]

Hmm, London still needs the services of those poor that you speak of. If people are willing to pay the exorbitant prices for having a home there, I don't see why they can't be prepared to pay more to get the basic services running.

The further London moves away from the UK, the more are cities like Brighton, Cambridge etc. looking more attractive. More attractive to people willing to live in a more mixed area too.

[JonnieCache]

Come to brighton! We have a nice little tech hub style arrangement going on, it just lacks a fancy silicon-related name because it isn't built on billions in government funding.

BTW,

>You would end up with a 'walled garden' of elite living in London and the poor / unemployed living outside. The city would lose it's unique cultures, become even more gentrified / elite than it currently is and social unrest could start to occur.

This is already happening/has already happened, unfortunately.

[kristiandupont]

London is turning into a ghetto for the rich just like most major cities as it is today. Which is really sad, I agree, but I don't see how this concept would change that in one way or another.

[nawitus]

>For example, I live in London and enjoy this city. I would love to be able to stay at home and work on my side projects in hope of making extra money, but given the outcome I believe from this, everyone who was to only accept the basic income amount would no longer be able to afford to live in London and would have to relocate to less desirable places in the country.

Some models call for a universal income which takes location inconsideration. The income would be higher in London, for example. That's a pretty controversial model, though.

[judk]

That's obviously nonsensical. All the basic income would be sucked up by rising rents, raising cost of living, go to step 1. Basic income should be set up to pressure people to live where it is cheaper.

In any monopoly/duoploy/oligopoly/cartel-ish environment in which prices are determined by limited supply and therefore buyers ability to pay (seller gets the economic profit) makes buyer side cash infusion useless.

[nawitus]

>All the basic income would be sucked up by rising rents, raising cost of living, go to step 1.

Why wouldn't that happen everywhere?

[randomdata]

Supply and demand.

If we assume people prefer to live in a major city, and incomes are adjusted so that your income matches your cost of living, there is no downside to living there. That puts upward pressure on an area that is probably already maxed out for living space, which causes people to pay a little bit more in order to secure a place to live. Then, your income rises to offset your new costs of living there, providing the money necessary to allow someone to pay just a little bit more than you, thus beginning the cycle.

Outside of the city you would find a low demand and high supply of housing under such a scenario, and thus there would be no fuel to ignite a race to out-pay each other to find a place to rent. In fact, there you could probably convince the owner to accept a little bit less for rent as few people are interested in the place at all. If your offer is not accepted, it might sit vacant.

[lgieron]

In my region, there are a lot of able-bodied man in their forties and fifties who, thanks to the state policy, are already retired. The sad fact is that, due to a ton of free time that's suddenly appeared in their lives, a lot of them have become drunks.

I fear that for every person doing something meaningful with the freedom given to them via basic income, there'll be 10 or 20 who become couch poatoes or worse, self-destruct (booze, drugs, gambling) out of boredom.

[chongli]

I fear that for every person doing something meaningful with the freedom given to them via basic income, there'll be 10 or 20 who become couch poatoes or worse, self-destruct (booze, drugs, gambling) out of boredom.

Do you realize what you're saying here? That people should be forced into wage slavery to keep them from becoming lazy or alcoholic or drug addicts. That's an incredibly regressive position to take.

Basic income should be given to all. This gives everyone more freedom. If people have mental health problems including substance abuse, they should be given treatment.

Throughout the history of human civilizations we have stood on the shoulders of giants. We have built ourselves up from nothing and all of that progress has been measured by our ability to reduce our dependence on a subsistence lifestyle, freeing people to innovate and create great works of cultural or artistic importance. Now we are finally nearing the end of this long road. We are finally approaching complete freedom from labour as a survival necessity. And now people are complaining that this is a bad thing?

[handzhiev]

"That people should be forced into wage slavery to keep them from becoming lazy or alcoholic or drug addicts."

No. People should be forced to do something useful, because the goods don't come out of the blue. This is not the same as "wage slavery".

[agilebyte]

What if goods are produced by automation and where we cannot automate we have people that want to work. What kind of task would you give to all the other people?

Edit: I am alluding to the fact that we are way past full employment.

[handzhiev]

I don't think we have past full employment. We are not even close to it, at all. I'll give you several entirely random but real examples. The street here needs new paving. There is no public transport in our town and no taxi after 6PM (need drivers and support staff). I need someone to fix my roof, and it's hard to find good one. There is a need of better trains, better cars, better software, better technologies, more original movies, better restaurants... And someone to check my teeth more frequently (zero good dentists in town). I have tons of work in my backyard as well. There are loads and loads of work to do, and it's all work which can't be automated. Work is not something that will ever finish unless of course we want to stop progress.

[gnaritas]

> I fear

Well there's your problem, fear is not the proper state of mind with which to make good decisions.

[agilebyte]

If it were 1:10-20 then these people would have already voted in basic income platforms into government.

I also suspect that a lot of these guys have been trained for manual work that is, regardless of basic income, being moved overseas and automated. The work is going/gone.

Edit: Also, I would highly respect any manual labourer who would stay in their job even though they were sure of their income. I think that is a useful currency too.

[scotty79]

They turn into drunks not beacuse they have too much free time and money. It's because they were raise in a culture that said that a man is only worth as much as his job. Now they feel worthless and self-destruct. They also are too old to use modern entertainment. With internet, electronics and wide variety of recreational consumer goods hardly anyone should have become drunk to not be bored.

[informatimago]

Sure. There are some places where some kind of basic income are experimented (Alaska (very low), Norway IIRC). A big scale experiment in a more "normal" country like Switzerland would be welcome.

In any case, the problem is that we're on the verge of having roboticized (and computerized) everything. Already, most of the jobs are useless jobs. And for the remaining productive jobs, they could also me automatized a lot more than they are if the organizations performing them hadn't wrong incentives that make them perform them in silly and inefficient ways.

[switch007]

> In the current system, you can go stay at home and get income support, which should provide you with the basics...

Income support is about £71 week (25 and over, or lone parent). That's £307.66 PCM.

Assuming water, gas and electric are around £100/month, you now have £48/week.

If you have to pay the "spare" bedroom "tax (average £16) £32/week is now your budget for travel, food and clothing.

And this is not a contrived example! It's barely even survival with the changes that the Tories have implemented.

I wouldn't call £71/week being provided with the basics.

[jawr]

Well put. Perhaps if the energy sector wasn't so corrupt that £71/week might actually go a little further. I'm living in a house with an old immersion boiler and it costs around £20 every 4-5 days (that's only on for 2-3 hours a day + cooking).

[vasilipupkin]

The idea is this: in the current system of welfare benefits, they are phased out with income. At those income levels, this phaseout acts as an implicitly high marginal income tax, which creates a disincentive to work. If you give everyone basic income with no phaseouts, you accomplish the same goal of welfare transfers without those ill disincentive effects.

[return0]

This is so self-evident, that I consider every talk of 'minimum income' to be populist bullshit.

It's also evil, as a large part of this income would go to funding alcohol and drug makers. If anyone needs further evidence, consider the costs of healthcare in the US vs Europe

[kristiandupont]

>[...] would in affect move the poverty line up higher, which would mean the people at the bottom are still poor relatively.

This might happen to some degree but there is no reason to assume it would be "linear" so the effect is canceled out.

[meerita]

This sounds as the industrialist's problem. Maybe it's a good idea to give the wage and let small groups of people produce crafted beer. i'm sure the price will not be the problem.