A Basic Income Is Smarter Than a Minimum Wage

http://www.bloombergview.com/articles/2016-04-01/a-basic-income-is-smarter-than-minimum-wages

by joeyespo • 10 years ago

322 483 10 years ago

bloombergview.com

harryh5• 10 years ago

$10,000 * US_POPULATION ~= $3.2T ~= The total annual tax revenue of the US federal government.

Just something to keep in mind when discussing this topic.

seibelj• 10 years ago

Don't have an opinion on any of this, but how many of the population you calculate are citizens over the age of 18? And what would be saved from the US budget by eliminating various existing programs that would be superfluous by UBI?

Permit• 10 years ago

Do children not typically receive the universal basic income? If not, is it fair to give a parent of three children the same allowance as I (a single person) receive? I also wonder about whether or not $10,000 is more or less than someone on disability currently receives.

Is there a risk here that the more vulnerable members of society will end up receiving less money?

blacksmith_tb• 10 years ago

Presumably though you just increase income tax to recover some or all of that from people who are employed? So the actual cost should be significantly lower.

Jtsummers3• 10 years ago

That tax revenue isn't just from (personal or corporate) income tax. There are a number of other sources of federal tax revenue which could be increased without a (direct) impact on the same people intended to benefit from a UBI (though it will have an indirect impact).

tankenmate2• 10 years ago

Some argue that if an UBI is introduced then a flat rate tax should be applied to all other income; in the US this would lead to reasonably large income tax increase.

bryanlarsen• 10 years ago

Yes, taxes on the average worker would go up by the same amount as they're receiving in basic income. So the effective costs of a basic income program are a very small fraction of $3.2 trillion.

iskander• 10 years ago

Would children and retirees also claim basic income?

gpm• 10 years ago

Retirees presumably yes, since differentiating 'retired' vs 'unemployed' involves the sort of expensive invasive work that UBI looks to obsolete.

zardo2• 10 years ago

Children are included in the basic income in Alaska.

tyingq• 10 years ago

Interesting. This chart is a pretty good reference to see what types of existing spending might overlap with that (Social Security?) and what wouldn't. https://media.nationalpriorities.org/uploads/total_spending_...

refurb3• 10 years ago

You couldn't eliminate social security payments since for a lot of folks, they take home more than $10K. You could lop off the bottom 10%, but a lot of spending would remain.

virmundi3• 10 years ago

The advocates for such policy do keep this in mind. They require tax increases on business. If you make money, you have to pay. The idea is to help reallocate wealth because the market has moved beyond certain segments of labor.

For example, when McDonald's can automate half its staff, the other half can't provide labor at the minimum price to be worth while. UBI says give these people, those displaced from the labor force since they are no longer needed, tax money directly rather than going through government mediators in a piecemeal fashion like they do today. Of course McDonald's will have a higher tax burden to support these displaced workers.

Rather than McDonald's shouldering the burden by itself, the government acts as an insurance company. It takes in taxes and payout what is essentially an existence claim.

johndevor• 10 years ago

Won't higher taxes here in the US drive more and more business overseas (specifically to China) and further exacerbate the problem of income inequality?

We already see corporations keeping massive amounts of capital overseas because of high tax rates. That money should and could be here in the USA.

danvoell• 10 years ago

What happens to the people who can't get jobs to begin with? Also, does this make it harder for companies like McDonalds to higher people, if they are worried that the employee might be a future claimant?

wonderlust2• 10 years ago

Wouldn't it be a better idea to have unions, and have them negotiate shared ownership?

It seems that some people have already solved the problem with dividends in companies they own part of.

floppydisk2• 10 years ago

Playing devil's advocate, what happens to businesses in the presence of an even higher regulatory and tax environment and what will the impact of increased taxes be on employment and business viability as well as the cost of living?

For the sake of argument, think about businesses with razor thin margins like restaurants. In the presence of increased taxes, their margins significantly diminish, if not vanish, and it becomes increasingly unviable for the business to stay in business. Once they shutter their doors, the tax base and employment decreases. Extending the argument, consider other organizations that have a healthier margin and are growing and hiring. The presence of substantially increased taxation raises the costs of growth (re: hiring) and raises the costs of employing Americans and earning money in America which reduces their ability to compensate employees / develop new products etc. Yes, they might have the margin to pay the increased tax rate, but the tradeoff is they lose money that goes into R&D, increasing salaries, hiring more people, and other business activities we think are good and useful.

As a consumer, I'm also curious to know what this does to my cost of living. Prices will not stay static and if businesses are incurring higher costs to produce goods and services, those get reflected in price. Given wages aren't keeping pace with inflation, what will a sudden price shock do to the cost of living in the face of businesses adjusting prices to address the new taxes? This could take people who are getting by now and turn them into a new wave of impoverished as necessary goods and services increase in price or it could prevent UBI from achieving its goal because prices keep rising to offset the tax rate which puts goods and services outside what people can afford on UBI.

empath754• 10 years ago

The top marginal tax rate would have to be dramatically increased to pay for it. Also, you'd have to increase capital gains and estate taxes.

Make no mistake, basic minimum income would be a massive redistribution of wealth. I'm in favor of it, but let's not pretend we can pay for it by shuffling around some social safety net spending.

alttab10• 10 years ago

It would completely remove the necessity to be productive. That can't turn out well.

What's preventing me from having as many babies as I can knowing that they too will not have to work or find a job to be supported?

I know this won't work at scale, because I understand math.

aetherson2• 10 years ago

Not the top marginal tax rate, the tax rates on probably the top 50% -- certainly the top 25%.

Which is not necessarily crazy -- I think that a basic income is an attractive idea, though I doubt the ability to implement it well. But just like we shouldn't pretend we could just shuffle some social safety net programs, we also shouldn't pretend that you could just tax the 1%.

refurb3• 10 years ago

The top marginal tax rate would have to be dramatically increased to pay for it

Someone should do the math! Sure you could increase the top marginal rate, but where does that get you. Yes, the top 1% is very wealthy, but there aren't many of them.

I would bet you'd have to increase income taxes well down the income ladder, dipping down into what most people call the middle class. You simply can't avoid it, that's where all the money is.

SilasX• 10 years ago

... and you'd have to stop everyone from throwing complicated tax structures around their incomes to avoid the increasing tax rates.

I know, "just close the loopholes lol". Except that it's a battle of wits of nerds against a bureaucracy with every-bigger portions of the economy at stake, where every government victory is a longer, less transparent tax code.

mdorazio• 10 years ago

Increasing capital gains taxes back to historical levels doesn't actually get you very far. Maybe another 100-200 billion [1]. Forcing corporations to pay taxes on all money earned in the US instead of tossing it offshore would get you another 90 billion or so [2].

Realistically, almost all of the revenue has to come from increasing personal income tax, probably mostly on the top 5% of earners, but realistically everyone would have to pay more. I haven't yet done the calculations, but it seems like we're talking double digit percentage increases.

[1] http://people.opposingviews.com/percent-irs-revenue-comes-ca... [2] http://www.americansfortaxfairness.org/tax-fairness-briefing...

bunnymancer• 10 years ago

Right, which currently excludes any taxes that would've come from the population that do not have any income to spend, and is instead costing taxpayers More through constant healthcare and the insanely pricey food stamps, etc.

Just something to keep in mind.

NolF• 10 years ago

Note that there are "only" 209m Americans over the age of 18 [1]. Not that it makes it much more affordable. Without including medical, it looks the government spends about 1.5T already (including SS) [2]

1 http://www.infoplease.com/us/census/data/demographic.html 2 http://www.usgovernmentspending.com/year_spending_2016USbn_1...

EpicEng• 10 years ago

Yet I imagine that a basic income for e.g. a family of four would be quite a bit higher than that for a single 20 year old. Minors have to be factored in somehow.

Shivetya2• 10 years ago

What about working age population? Surely it isn't that much. Kind of scary when you reverse the numbers. The number of people working certainly isn't enough to generate the tax income of the country has. Yet this game is what keeps people from open rebellion; embedded taxes.

Figure it this way, if individuals had to pay the full tax load out of their paychecks that they actually do most would more than flinch.

Regardless, current subsidies to many people are higher than 10k so it would never be set there. People would get all sorts of up kicks for dependents and the like because politicians need to buy votes and punish dissenters.

So if we just consider the working population, how much does it cost? Can we then rid ourselves of some government agencies which are devoted to providing aid?

aero142• 10 years ago

Imagine a new tax passed at the same time as basic income where anyone making more than the median income of $51,939 paid an additional $10000 in taxes. Now, lets tack on a dollar for dollar replacement for anyone receiving disability or social security.

These kinds of thing make that number start dropping pretty quick and are in the spirit of what basic income would look like. The raw number you gave isn't what anyone is proposing.

merpnderp6• 10 years ago

Many people would not receive this money from the government as their taxes would be more than the $10K payment. 160 million Americans work, and likely half would receive little or no money, and only the bottom two quintiles of income earners would earn the full or close to the full amount. So probably only cost around $2T, or about 25% more than Social Security and Medicare/Medicaid combined (although this would only replace Social Security).

Very expensive, but doable in a world where our representatives weren't corrupt to the hilt.

Not sure what is an equitable solution for children, but giving the full amount per kid seems grossly unfair.

NoMoreNicksLeft2• 10 years ago

Not sure what is an equitable solution for children, but giving the full amount per kid seems grossly unfair.

Why unfair? I sometimes get the impression that the mainstream culture values children at some degree lower than "human".

kapnobatairza• 10 years ago

Does a basic income need to be generated directly through government spending?

With all the talk about QE and "helicopter money" over the past 8-9 years, I'm curious why very few have considering the merits of a basic income through inflation.

What if the central bank had a mechanism to fund special "basic income" accounts at banks on a yearly basis... These accounts would not be considered deposits but would rather be a special type of 0-interest loan that is not paid back and doesn't not count against each bank's fractional reserve requirements. Each citizen is able to open 1 of these accounts at a bank that meets the qualifications to participate in the program.

Is there any merit in a basic income through inflation? If we are going to inflate our money by through QE and throwing it out of a helicopter to banks, why not use the same principle and inflate our money by throwing it our a helicopter into the homes of citizens?

special "basic income" accounts

imtringued2• 10 years ago

The effects of Quantitative Easing can be reversed by the central bank because it's merely an asset swap. It's only a temporary measure.

spinlock3• 10 years ago

This is a very good back of the envelope calculation. But, I think you need to take a similar look at the cost of social security, etc...

kinghajj• 10 years ago

Aren't UBI proposals designed so that those who earn more than the yearly stipend from employment don't receive it?

bufordsharkley2• 10 years ago

The key to the UBI is that there is no means test (which introduces bad incentives, etc).

UBI with means testing is known as the Guaranteed Minimum Income.

earlz2• 10 years ago

No, UBI is everyone receives X amount of money, no questions asked. The theory is that the tax increases etc balance this out for the middle class so that they effectively earn the same amount of money with the UBI income

saalweachter• 10 years ago

The total personal income in the United States is $14.7T (2014); so a $3.2T spending program amounts to a ~22% flat income tax.

Which is interesting when you consider that you'd (presumably) be dissolving Social Security and Welfare in favor of UBI; Social Security is already 12.4%.

What's also fun with UBI is that you then get to assign a numeric value to how socialist your country currently is, eg, 22% socialist. (Personally I'd go for something closer to 30% socialist.)

ThomPete10• 10 years ago

It's not just smarter it's the only possible solution out of the two.

Many people wrongly discuss the premise of basic income in the context of whether it's a better solution for for the job market. I.e. as a better way to solve unemployment fluctuations which in this view are still going up.

But the whole point about Basic Income is what we do about there being fewer and fewer jobs that pay a proper salary.

paulpauper2• 10 years ago

Proponents of the UBI make the generous assumption that recipients will be as careful with money as they (the proponents) are . Choosing between food & housing credits vs. cash, the former has less room for abuse.

Its like "I would never use my UBI on alcohol"...well you're not "most people"

Karunamon5• 10 years ago

Given the frankly despair-inducing statistics of what happens to poor people when they acquire a sudden cash windfall (and if you're flat broke and living on the streets, a few hundred every couple weeks is HUGE), I intend to agree.

Most UBI implementations I've seen require gutting existing welfare systems - okay, fine, but what happens to the person who inevitably squanders their money?

andreasklinger• 10 years ago

imo the benefit of UBI is that you remove that whole disfunctional layer of figuring out who should and should not receive support.

athenot• 10 years ago

It's easy to knock on the poor for making bad choices with their resources. But what the well-off percieve as "frivolous" or "irresponsible" may very well be the most cost-effective way to maintain sanity when undergoing stress that is not unlike what founders experience when struggling to keep a company afloat.

empath754• 10 years ago

People are perfectly capable of trading food-stamp bought groceries for booze right now.

fucking_tragedy4• 10 years ago

Why do you care if someone spends it on alcohol? Where does this paternal instinct to tell someone else how to spend money come from?

ThomPete10• 10 years ago

The assumption by proponents is that if more people get their most basic needs met, they won't be making as bad choices for themselves and their families.

No one is claiming 100% perfect solution but unless you are claiming people choose to be poor you are basically saying that the current situation is better which I find quite unsubstantiated.

tikhonj3• 10 years ago

Is it that generous? My understanding is that in empirical trials, direct cash transfers are one of the most effective programs for alleviating poverty.

Of course, I've seen this evidence in a different context that might be somewhat biased: GiveDirectly[1] provides some credible research and are supported by Effective Altruist organizations like GiveWell[2]. There have also been experiments specific to basic income with similar conclusions[3].

To be fair, none of these studies are remotely bulletproof. Further research would help significantly, as is almost always true in the social sciences. But, in this light, the default position should be that the poor largely wouldn't waste their money—I'd put even shaky studies up against "common sense" any day.

[1] https://www.givedirectly.org/research-on-cash-transfers

[2] http://www.givewell.org/charities/top-charities

[3]: Unfortunately, I can't find the summary I was thinking of. The Canadian Mincome study[4] is one such experiment and the conclusions, tentative as they may be, are worth a look.

[4] https://en.wikipedia.org/wiki/Mincome

crdoconnor2• 10 years ago

But the whole point about Basic Income is what we do about there being fewer and fewer jobs that pay a proper salary.

The fact that there are few jobs rebuilding America's crumbling infrastructure is due to a political choice, not some sort of inevitable outcome of a 'fair' and just market.

Likewise, the fact that China makes most of the cheap things we buy at Walmart was thanks to a series of political choices (trade policy).

There's absolutely no reason why we couldn't reverse those policies to bring the jobs back.

Moreover, our infrastructure is going to keep crumbling and China isn't going to sell us cheap manufactured goods forever.

ThomPete10• 10 years ago

Well you are entitled to that opinion but I frankly don't see where you find the evidence that this is political.

Every country in the west wether socialist leaning or capitalist leaning is experiencing exactly the same problems.

Uber is affecting all countries the same way. Technology is disrupting even the nationstate and it's ability to control it politically.

And yes there are plenty of reasons why you couldn't bring back the jobs because even in China they are not really there anymore.

The Chinese are loosing jobs to the robots in ever expanding phase.

So yes you can get production back but it wont be coming with any jobs.

paulpauper2• 10 years ago

But what about existing entitlement sending, which keeps growing? A UBI without preconditions will only compound that problem, because what is to stop people from wasting their basic income on frivolities while also drawing from existing welfare programs.

Many people may agree to work for less than the current minimum wage, and on more flexible terms, if they're supplementing a guaranteed income, not scrambling to avoid having to beg for food.

But this is not the case. What everyone seems to forget that despite the low labor force participation rate, the poorest are not starving to death; in fact, they're more likely to be obese than higher earners.

The assumption that a UBI, on top of existing welfare programs, will make people more compelled to work seems like a stretch.

pdabbadabba4• 10 years ago

I would have thought that a UBI would replace most or all existing entitlement programs. But perhaps people have different ideas?

And you're right, of course, that the poor in the U.S. generally are not literally starving. Though their poor health and high obesity rates are themselves symptoms of their limited access to healthy food, and difficulty maintaining a healthy lifestyle that may be due to other poverty-induced stressors.

DanielBMarkham2• 10 years ago

Yes, from the very limited research I've done, the key question in the UBI discussion is this: what the heck is it? It's a great slogan, but you have to add at least a dozen or two bullet points or it can mean so many things that it effectively means nothing.

walterstucco2• 10 years ago

they are just a symptom of a very bad healthcare system. in many European countries the universal HCS takes care of everyone. My country, Italy, is quite bad in everything, except for good and the quality of the free healthcare (free as in paid by taxes)

btown• 10 years ago

This makes me wonder if food deserts would persist even in a UBI world. Within a traditionally poor community, with a lack of education about healthy eating as well as a lack of competition between grocery stores, could we see locations where all foodstuffs became more expensive, and people maintained their existing eating habits?

I'll need to do much deeper thinking on this.

aetherson2• 10 years ago

I think it would be politically difficult to replace most or all existing entitlement programs with a basic income.

When you get a bunch of disabled people up on stage and they say, "Wait a minute, we are genuinely unable to work most jobs, and we have special needs to just get through the day, and you propose to just give us the same amount of money you do to some 22 year old healthy slacker from a good family who wants to take a few years to play X-Box?" and you're already trying a very very contentious policy proposal, is that the hill you want to die on? If not, we still have disability.

What about the just genuinely irresponsible mother who blows her income on, whatever, in-app purchases, and then she and her children are homeless and starving. Do you say, "Well, tough break, you could've been more responsible" or do you have programs to keep them fed and off the streets? Food stamps and Section 8 are back.

Healthcare pretty much has to continue to be separately subsidized unless you want anyone who has enough bad luck to have an expensive health condition that exceeds the value of basic income to die.

At that point, is there a really significant entitlement program still off the table?

(Edit: Sorry, yes, of course there is one significant entitlement program not touched on above: Social Security. I think you might somewhat reasonably make a basic income essentially "Social Security for everyone," and avoid having a special carve-out for seniors by saying, "We're not taking away your social security, we're just giving social security to more and more people.")

ncallaway• 10 years ago

Most of the UBI programs I've seen suggested drastically cut entitlement spending. The UBI _becomes_ the social safety net.

refurb3• 10 years ago

Things you couldn't cut: (1) Medicaid and Medicare spending and (2) all social security payments greater than $10K per year [of which there is a lot].

dredmorbius6• 10 years ago

There's one school which argues for that (the Libertarian / Friedman argument typically runs along these lines).

My view is that UBI could substitute for many safety-net expenditures, but not all. It turns out that there are people with special needs or circumstances. The sick, disabled, mentally ill, children, military veterans.

Some specific targeted assistance will likely still remain.

But yes, the bulk of it should likely not be necessary.

pikzen• 10 years ago

But what about existing entitlement sending, which keeps growing?

Universal Basic Income removes existing welfare, and everyone gets the same amount.

the poorest are not starving to death; in fact, they're more likely to be obese than higher earners.

Because the poorest do not have access to high quality food, fruits, vegetables and eat preprocessed food that is an absolute catastrophe for your health.

The assumption that a UBI, on top of existing welfare programs, will make people more compelled to work seems like a stretch.

Once again, UBI removes existing welfare programs. As to why people would be compelled to work, you can pick from:

* Actually liking their jobs. * UBI doesn't allow you to live like a king, the amount you get is pretty low. * Why should they work anyways ? Filling more pointless jobs, which are getting increasingly replaced by machines ?

manarth2• 10 years ago

what is to stop people from wasting their basic income on frivolities while also drawing from existing welfare programs
a UBI, on top of existing welfare programs

Most proposals see UBI as replacing the existing welfare programs. No more means-testing, etc (and a cost-saving in reduced administration). How practical that is has yet to be seen.

zardo2• 10 years ago

You would still need programs for people with mental and emotional problems, but that would be a small subset of current welfare recipients. And with far fewer people to focus on, we might be more effective with that care.

So, yeah if you spend your year's stipend on a week in a Hilton suite, then can't afford to eat, you might get additional help, and lose complete control over your BI.

I knew a homeless guy in Anchorage that did this with his PFD and disability money. He needed more help than a check every month.

mordocai2• 10 years ago

I don't think your points are necessarily wrong, but I have a couple comments. These are from the standpoint of the USA, I don't know much about other countries.

1. Basic income + universal healthcare theoretically would be able to replace all other welfare programs, so there shouldn't be people "wasting" their basic income while drawing from existing programs. Also, I consider some level of frivolities as a basic need.

2. Many poor people stay on welfare instead of getting a job because there is a "gap" where if you get a job you actually are bringing in less income than on welfare. Basic income should remove this gap, which may potentially increase employment.

3. Most poor are not starving to death due to private help like churches and food banks in my experience. I know when I went through a small period of being below the poverty line we got a small amount of food stamps + wic and ended up needing help from those private entities too despite the fact that I had an above minimum wage job. However, cheap food is often bad for you food which is why a lot of them tend to be obese(food banks and the like often don't have the money to get very much good for you food). Combine this with a tendency to binge eat when you have food then have periods where you have no food to eat.

jandrese4• 10 years ago

As I understand it, that gap is a myth. You don't lose benefits as soon as you cross some imaginary threshold, they are phased out as your income increases. So you don't have as much incentive to make more money, but you never lose money in the process.

empath754• 10 years ago

I don't think it's actually a problem if people receiving basic income are 'wasting it' on 'frivolities'. If we don't start redistributing wealth, the economy is going to freeze up. There's only so much stuff that computer programmers in silicon valley can buy.

jandrese4• 10 years ago

Theoretically with UBI there is no need for a social safety net beyond catastrophe insurance (Medicare).

In practice I'm not so sure. Many social safety net programs have restrictions because it's too easy for an alcoholic to pick up his entire family's check and spend it on booze.

Also, UBI is political poison for the people who wring their hands in worry that someone is mooching off of their had work. And make no mistake, there is a sizeable segment of the population that will be perfectly happy to sit at home and do nothing all day, wasting their lives and the public's resources. They will show up in papers and angry up the old folks. What the paper's won't have is the story of the charitable work people can do without the need to constantly work to eat. It won't have the story of the artists who are breaking new ground and doing exciting things in their tiny studios. It will have the story of the 300lb lazy asshole who watches TV all day long.

This is why we can't have nice things.

sokoloff4• 10 years ago

So the alcoholic takes their entire check and blows it on booze? Don't care.

I specifically have to not care, so as to not erect a gigantic, wasteful government program designed to protect someone from their own short-sightedness (in my high-and-mighty opinion). In order for UBI to work, we have to give up substantially all notions of controlling what other people spend THEIR money on. That's the most appealing aspect of UBI to me. As someone who works hard and would end up shouldering the expense, I'm not particularly enamored of it, but the "get out of everyone else's business" aspects really do appeal.

Shivetya2• 10 years ago

there are nearly three thousand Federal assistance programs, 1800 that are domestic - meaning families and people in general, and 1200+ just to states, cities, and localities.

Not many are going to be willing to give up on any of them. There is too much power involved here to easily give it up.

knowaveragejoe• 10 years ago

the poorest are not starving to death; in fact, they're more likely to be obese than higher earners.

That isn't because they're eating well, it's because of the opposite. Malnutrition, poor sources of food(fast food) and lack of time to adequately exercise(beyond standing) cause this, not an understated availability of food to the poor in the US.

newjersey• 10 years ago

Being obese is not the same as being well fed.

Also, I'd never propose universal basic income as a complete solution. UBI doesn't make our complicated world suddenly simple without any effort. It requires a certain level of economic especially agricultural productivity for us to even consider ubi as viable for a large economy like ours.

Firstly, ubi like single payer universal healthcare will not be free of cost. I expect full cooperation from my work force in this matter. Taxes will have to go up, at least in the short to medium term and incentives and deductions must come down. The economy will likely suffer a slowdown in the short and medium term as well. We can't turn back and run away. We need a clear commitment and mandate to stay the course even if it send incredibly stupid do so.

Secondly, in my mind universal basic income requires a certain level of community support. As the saying goes "man can't live on bread alone". People need a reason to live. Perhaps indoctrination is to string of a word but we'd need a support structure to motivate people. While I strongly believe people are inherently good and not evil, it will be a difficult challenge to motivate people without the easy monetary benefit.

Thirdly, I think ubi requires a certain level of automation in what we shall term as essential goods and services. This means these guys and services should continue to flourish and flourish highly efficiently even if the workforce shows low participation. In other words, we will need a way to keep our utilities like water and electricity, our infrastructure like roads and Internet connectivity, our food supply and so on to pretty much work on autopilot.

What do you think?

Edit: in my mind, ubi replaces most if not all other entitlement and welfare programs. An important premise of ubi is we will save money on compliance such as trying to make sure wic money only goes to qualified people. If we extended wic to all children, we would not have to determine eligibility. This I think will help adoption and help remove stigma of welfare.

anonymfus• 10 years ago

Why not both?

walterstucco2• 10 years ago

because they need an enemy. just like Batman Without the bad guys is a rich prick who spent more on a bat costume than the regular people spend to eat in 10 years ...

aninhumer15• 10 years ago

Because once someone's needs are met by a Basic Income, it's much harder to get them to work for exploitative wages, so the minimum wage is redundant.

If someone is accepting $1/hour for a job when their alternative is enjoying free time, then there's probably a good reason for it. Maybe they're learning skills, maybe the working is really fulfilling, or maybe they just got bored.

DickingAround2• 10 years ago

It makes sense if-and-only-if that basic income isn't being doled out by the same organization which also runs the military-industrial or prison-industrial worlds. As an American, I think it's safe to say our federal government can't be trusted to not turn into a tyranny if it's everyone's primary employer.

We would get even more massive corruption almost instantly. For example, some people would lobby to get those tax-revenue intended for the basic income to be redirected to other projects. The people wouldn't fight the loss of a $1/year/person here or there. There would also be reams of special cases to give some people more and some people less. And like today, some people would continue to carve out exceptions so they didn't have to pay those taxes to feed the basic income. That money would be divvied up every way except as a basic income and people would spend all their time fighting over who got it instead of generating the value that backs it.

I don't live in the countries trying this so I can't say if it's safe to give their government that much power, but I know the US government is no where near ready for any more power than they already have.

EDIT: Fixed a typo

Mikeb855• 10 years ago

Unfortunately, in the US the alternative to government power is corporate power.

jff• 10 years ago

Unfortunately, in the US the alternative to government power is corporate power.

What's the alternative elsewhere? Warlord power?

cmrdporcupine• 10 years ago

There's a difference?

merpnderp6• 10 years ago

Without government power, corporations don't have any power. They only exert their power through the government. What, is Apple coming to my house to tell me what to do, how I can work, or to collect a tax? Just like Disney keeps you from file sharing by using the government, so does the your local health insurance company keep out the competition by excessive government regulations they helped write.

Jtsummers3• 10 years ago

The people wouldn't fight the loss of a $1/year/person here or there.

I'm not sure. Around here, people fight [EDIT: against] the 1 cent local sales tax add-on that goes to schools (and can only go to schools).

lujim7• 10 years ago

That's because the normal shell game with the "only for schools" taxes often involve adding 1 cent to school budgets with the new tax and subtracting 1 cent of school funding from some existing source.

merpnderp6• 10 years ago

The US is 16th in the world in perceived corruption. If the US is too corrupt for this, then it likely isn't workable on any real scale.

And I agree, at least at the federal level and likely at most state levels, the US is far too corrupt to do this (and by corrupt I mean pork style politics where representatives horse trade favors and perks for votes, all at the behest of lobbyist who support their campaigns).

https://www.transparency.org/cpi2015#results-table

pdabbadabba4• 10 years ago

Just to clarify for anyone who is puzzled: a higher ranking in that survey means that a nation is perceived to be less corrupt. So the U.S.'s 16th-place ranking means that it is perceived to be the 16th least corrupt nation.

Saying that "[t]he US is 16th in the world in perceived corruption" seems to imply the opposite, to my ears.

alistairSH• 10 years ago

In some respects, wouldn't a UBI also decrease corruption? There is no more pandering to special interests on either fringe of the social spectrum. There is a much smaller bureaucracy. And on the personal level, you don't have poor citizens trading food credits for drugs - they just buy whatever they want.

DickingAround2• 10 years ago

In theory, yes. In practice, it will be corrupted beyond that basic idea because there's no system/incentives to protect it from being corrupted.

forrestthewoods• 10 years ago

On the topic of immigrants and minimum wage/basic income. Brussels provided free housing, food, health care, and education to immigrants. And yet their immigrant community was still unable and/or unwilling to integrate.

Basic income and/or higher minimum wage doesn't solve all problems. It even causes some new ones. Which isn't to say it isn't a good idea. But we probably don't discuss the problems as much as we should. I don't think it's the silver bullet many people wish it to be.

ptaipale• 10 years ago

Yep. I think the biggest problem is the assumption that universal basic income would replace any existing welfare programs. In reality, it seems that this is not going to happen, because one size doesn't fit all, and existing welfare programs cover vastly differing cases at vastly differing cost levels (unemployment, disability, old age, serious and not-so-serious illnesses).

Over here (Finland), the current government is planning a trial for UBI. It looks like pretty much none of the existing benefits can be cut because they are "fundamental human rights" or similar.

kough6• 10 years ago

No one wants to hire them at a high minimum wage, especially when locals are readily available

The main drawback to a minimum wage is that it artificially increases the cost of labor, to the point where it's no longer worth it to an employer to hire a low-output employee. I think we'd all agree that increasing employment is a good goal, but an increased minimum wage actually hinders progress on that front. As the minimum wage increases, robots and other non-human investments start to look much, much more attractive. Many businesses would be happy to hire workers for less than minimum wage, but legally cannot, and so do not hire.

Of course, it's a complicated issue. Look at the employment of those with disabilities like Down Syndrome [0], for example. Are these employees worth hiring at $7.50/hour? No, for the most part, they're not. Are some? Sure, but on average there's no way. But are they worth hiring at $2.00/hour? Yes, and they and their families are willing for them to work at that wage, because there are huge benefits to being productively employed.

Recently these programs are coming "under attack" in various states. New Hampshire just made this practice illegal, for example [1]. We'll see how it plays out -- my bet is that a) few news outlets will follow up in a few years and see how many of these disabled workers are able to find new employment, and b) few disabled workers will be able to do so.

[0] http://www.witf.org/news/2014/07/thousands-of-disabled-worke...

[1] http://www.care2.com/causes/new-hampshire-bans-subminimum-wa...

a3n4• 10 years ago

The main drawback to a minimum wage is that it artificially increases the cost of labor,

And? Why is that artificial increase a problem. Every law on the books is an artificial act.

I don't see many people wringing their hands over the mortgage interest deduction, another of those artificial changes to the economy.

uxp100• 10 years ago

If you read precisely past the point where you stopped quoting, you see their reasoning why this bad, the answer to your "And?"

Whether or not you agree with that answer, shouldn't that answer be the part you respond to, instead of deliberately misrepresenting what the poster you were responding to was saying?

ryanmonroe• 10 years ago

Read the rest of the sentence

it's no longer worth it to an employer to hire a low-output employee

alttab10• 10 years ago

The mortgage interest deduction "hurts" only government tax revenues. Raising the tide on minimum wage impacts every business that has employees, regardless of what their cost structure is.

What if your business worked in such a way that a single employee wouldn't even produce $15 of revenue in an hour? You can't lose money on every sale and make up for it in volume.

The artificial increase is a problem because it goes against supply and demand, which is a natural law of economics.

anoonmoose• 10 years ago

He gave the "and" in his comment- artificially increasing the cost of labor can potentially prevent people whose contribution is worth less than that cost from ever entering the market.

harryh5• 10 years ago

The majority of economists (as well as many other people) think that the mortgage interest deduction is bad policy.

p4wnc64• 10 years ago

It is a problem if all of the would-be employers look at you and say, "Well, for what you bring to the table, I would be willing to pay $3/hour, but no more. If I have to pay more than that, I will simply make do with life having fewer employees."

You would prefer $7/hr instead of $3/hr, but you would prefer $3/hr instead of $0/hr.

savanaly• 10 years ago

I usually really, really hate when people trot out the "go back to econ 101" argument, but in this case it applies. The reasons why a minimum wage might be inefficient (to what degree is very much debatable and dependent on the cirumstances) are explained thoroughly in any introductory microeconomics educational resource.

merpnderp6• 10 years ago

And? It keeps people who want to work from working. People who would be willing to work at less than the minimum wage. Subsiding on government relief can lead to depression, loss of social status, load term mental illness. Not having a job is a very unhealthy thing for most people.

jackcn• 10 years ago

Actually, mortgage interest deduction was considered to be limited to only 1 home. It causes higher demand than without, which helps to drive house prices up, and at this point, out of reach of many in some cities.

Same with the availability of cheap loans and grants for colleges - it only really serves to increase the price of an education.

EGreg• 10 years ago

It makes people who got a bad education unemployable and perpetuates their culture of dependency on welfare.

Conditional welfare perpetuates it also because people are afraid to take a job and then lose it.

maxerickson2• 10 years ago

I bitch about the mortgage interest deduction on a regular basis. A national policy that drives up housing prices is plain stupid (and it obviously isn't helping the ~1/2 of the country that doesn't have any wealth build wealth).

I'm ambivalent about a minimum wage. I think the arguments about the imbalance in negotiating power have some merits, but the GP answered your question about why it is a problem with their next sentence, it likely makes some productive tasks uneconomic.

I think it's important to try to characterize the actual economic impact of a minimum wage though, just pointing to the expected negative marginal effect isn't a very useful argument.

lujim7• 10 years ago

And borders are just imaginary lines. They are however a based around the underlying reality of geographical, cultural, and political factors. We could make a law that all airplanes must slow down to 50 miles per hour over crowed areas but that doesn't matter if most planes can't fly any slower than 120mph without falling out of the sky.

Laws do have to take into account things like physics and economics. The latter is the study of scarce resources that have alternative uses and specifically addresses things like the cost of labor and the affect of artificially manipulating it.

tikhonj3• 10 years ago

Really? I read complaints about the mortgage interest deduction all the time. I mean, subsidizing home ownership isn't exactly an obviously worthy goal in and of itself and it creates weird incentives.

The difference in popular discourse is threefold: the mortgage interest deduction is less of a blue/red team tribal marker; it isn't as morally charged an issue (the arguments against it are more economic in nature than moralistic); a disproportionate number of the people who would be complaining about it are homeowners themselves and therefore heavily incentivized to keep it around, regardless of its economic effect.

BurningFrog3• 10 years ago

Because it keeps desperately poor people unemployed and outside of productive society.

p4wnc64• 10 years ago

I generally agree with this, but I think it is often overstated. There are still many domains of employment where there is room to raise the minimum wage significantly before getting anywhere near the margin at which the employer feels it's not worthwhile to hire the additional worker. Food service, for example. There are examples on the other end of the spectrum too, such as cashiers in a major convenience store chain, like CVS or Walgreens. These businesses are more capable of scaling automated cashier technology than others, so workers of this type would be disproportionately affected.

But overall, many types of business have an inefficient profit surplus right now that should rightfully be eaten into by workers claiming more share as wage.

I also think there is a genuine moral argument to be made that society, in some cases, should intervene when a person believes they are willing to sell their labor at an unsustainably low price. It's not quite right to characterize a minimum wage as "denying" them that "opportunity" as much as it is saying that the "opportunity" itself is unhealthy, unrealistic, and a person's reasons for choosing it almost always involve forms of coercion that cannot be dealt with as effectively if the person gets locked into believing they actually must provide their labor so cheaply.

Incidentally, this is perhaps the most common thing I hear about the minimum wage (that it hurts employment due to marginal employment reduction on behalf of employers). A lot of people seem to think it's counter-intuitive and that it somehow shines real economic theory on everyone's pie-in-the-sky dreams of egalitarian wages or something. But really that's not true, this argument is extremely common and is brought up in almost every forum or discussion about minimum wage, whether it's just a bunch of nonsense troll comments on a YouTube video or in a place with a higher signal-to-noise like HN.

It always makes me do a double take because I don't want to end up regurgitating what is effectively "sponsored content" from wealthy libertarian types who spam out this message to ensure it trickles down to all the conversations about minimum wage. Like I said, I mostly agree with this, but with some reservations.

msellout7• 10 years ago

You have some good points, but I think calling anything a "right" will bring downvotes. I suggest not asserting anything is a "natural right" as that's too open to interpretation and brings a visceral reaction for many people.

ThrustVectoring7• 10 years ago

Wait, what? Employment is a net-negative, the denominator of economic productivity. If we have the same amount of material wealth, it's better to not work as hard to get it.

"Increase employment" is targeting the wrong measure.

brandnewlow• 10 years ago

I think the parent comment was operating on an assumption that "staying busy" has its own benefits for people.

randyrand9• 10 years ago

"Increase employment" is targeting the wrong measure.

What is the correct measure? Sounds like you are arguing for wealth per capita or total wealth.

Even still, wealth per captia is (productivity) * (employment) / (population). Ignoring time.

So even if I agreed with you, more employment is still a good thing even under your 'correct' measure.

tamana2• 10 years ago

Employment is an approximate measure of how well income and power is distributed across the populace. Let us know if you have a better measure.

rmc• 10 years ago

it artificially increases the cost of labor

That's the point. A floor. Through which people should not have to work below at.

rm_-rf_slash8• 10 years ago

Whereas universal income means that everyone in society can tell terrible bosses that they can take their shitty job and shove it, and still live with dignity, a greater dignity than having to work at the absolute minimum of pay, regardless of whether 51% of politicians choose to call it a "living wage."

gozur884• 10 years ago

Yes, and what that means in practice is instead of making a little bit of money, people whose labor is worth less than some arbitrary amount can't get work at all. You can't mandate a minimum wage, because the true minimum is always zero.

superuser2• 10 years ago

I think we'd all agree that increasing employment is a good goal

Nope. Increasing good employment is a good goal; jobs which pay near minimum wage are not that.

Nogwater• 10 years ago

I think we'd all agree that increasing employment is a good goal

I don't agree, and I'm not sure why people would see employment for its own sake would be a good thing. I want to increase some of the things that employments brings (purchasing power, a sense of purpose, etc...) and not others (loss of time, feeling trapped, etc...).

dandermotj2• 10 years ago

I suppose from an individual standpoint examples like yours are very relevant - a big fear for myself is working a job we're I am unfulfilled - but from a broad view we must agree increasing employment is a good goal. The more people working, the greater the output and the cheaper it costs, from which everyone benefits whether we are employed ourselves or not. A highly employed nation is a bountiful one.

BurningFrog3• 10 years ago

In the minimum wage context, the advantages are pretty clear.

Mostly bringing people outside of productive society inside it. Homeless, unemployed, addicts etc.

This is not about making middle class college graduate parents work more.

fizzbatter2• 10 years ago

Agreed - furthermore, low cost employment is hard to get behind on its own for me. If we reduce minimum wage, and some unskilled worker is able to work where s/he otherwise wouldn't, is it really helping them? What good does $2/hr do if they ultimately can't provide for themselves or their families.

I feel[1] like lowering minimum wage below livable levels would require some type of basic income anyway. Am i wrong?

[1] I say feel, because i'm uneducated in these areas

ap222132• 10 years ago

Agreed. I read threads like this one, and all I wonder why all of these amazingly smart, creative, and talented people aren't banding together to put an end to this thing called work.

QuotedForTruth• 10 years ago

The counter argument is that human labor has an actual cost. That is the cost to keep a human alive and in some level of comfort. Government benefits of many different types have "artificially" lowered this cost. Where employees refuse to pay enough for a human to live on, the government picks up the slack. Raising the minimum wage may be "artificial," but its not the first control placed on some otherwise natural labor market.

clarkmoody5• 10 years ago

Critical omission on your part: not everyone needs to live on this wage.

Think about high school kids trying to get a summer job. They don't need to survive on this wage, they simply need something productive to do over the summer.

Should my business be required to shell out $15/hr for a high school kid, when the value of his/her labor is way less than that?

randyrand9• 10 years ago

Where employees refuse to pay enough for a human to live on, the government picks up the slack

This would be the perfect system, but the current system is that the difference between the maximum employment wage (low) and minimum wage (high) is paid by the company, not the gov, causing unemployment.

A negative income tax is the preferable system here.

RyanZAG• 10 years ago

Sure, but it's a low paying job vs no job.

Minimum wage is stupid - if you need people to get a higher income than the value they can output, you need to supply that additional income through social grants. Forcing them out of work by allowing robots to undercut them is idiotic when they are willing to work.

dredmorbius6• 10 years ago

Read Smith. "A man must always live by his work, and his wages must at least be sufficient to maintain him."

https://en.m.wikisource.org/wiki/The_Wealth_of_Nations/Book_...

An enterprise which cannot pay the full cost of its inputs isn't an economically viable activity. It's a charity benefiting its owner.

wnevets• 10 years ago

i.e the walmart model.

evanpw• 10 years ago

That would be contrary to how labor markets work in other income ranges: e.g., if someone gets a big inheritance, you'd expect them to be more likely to reduce their work hours than increase them.

Empirically, it seems like the same is true at the bottom of the income distribution ([1], [2]): if you give someone food stamps or cash assistance, they're less likely to work for the same wage. Means-testing the benefits makes the effect stronger, since the phase-out of benefits is equivalent to an additional tax and high taxes also discourage work.

[1] https://www.economy.com/dismal/analysis/datapoints/253947/Go...

[2] https://www.cbo.gov/sites/default/files/112th-congress-2011-...

dinkumthinkum2• 10 years ago

You are very right. Wal-mart and companies like that are deriving significant labor cost subsidies from tax payors.

branchless• 10 years ago

Even if one simply manages to force employers to hand over more of their profit to workers this will simply force up rents/land prices and ultimately once again all gains pass to the rentier.

Bloomberg don't talk about land value tax. They are happy to talk about basic income because it's not real change.

pessimizer• 10 years ago

I think we'd all agree that increasing employment is a good goal

I don't think we do. Employment is not a good in and of itself, and a person who is working is not necessarily in a better position than a person who is not. People working for a wage that doesn't support their needs (which then has to be subsidized by the government) are just vehicles for transfer payments from government to garbage business.

because there are huge benefits to being productively employed.

To make your assumptions explicit here, if you value employment for employment's sake, anything that maximizes the number of people employed is good. Why not negative wages? I suppose a full time job that pays less than it takes to feed and house a person and has to be supplemented with welfare in order to do so is a sort of negative wage...

petra2• 10 years ago

> Down Syndrome [0] .. are they worth hiring at $2.00/hour? Yes, and they and their families are willing for them to work at that wage, because there are huge benefits to being productively employed.

Realistically, for people with disabilities that aren't being able to be in the regular labor market, there are some societal useful things to do, like volunteering(say in a soup kitchen), helping their community,etc. Those are probably activities that wouldn't be done otherwise, carry a real sense of value, and usually in a custom fit environment.

That is the situation at least in enlightened places with decent government services. I'm not sure about the US.

I wouldn't want that to be replaced with people at the margin being exploited at a shitty factory , where the work is meaningless and often depression inducing, sometimes risky, etc.

Overtonwindow2• 10 years ago

I think the federal government and the states should reduce the tax burden on corporations that hire the disabled. For every disabled person you hire, your tax bill is lowered that much more. If 15% of your workforce is physically or mentally disabled, your state tax is zero. That would incentivize corporations to hire more disabled.

ksenzee2• 10 years ago

I don't know exactly how you're picturing the US, but it's not as dystopian as you seem to think. We do in fact have soup kitchens and volunteer opportunities and people with Down's Syndrome who contribute meaningfully to their communities. (What we don't have a lot of anymore are factories. Go figure.)

erroneousfunk2• 10 years ago

That's sort of how it works in the US, with a caveat. My SO runs a group home for intellectually disabled adults. Most of them are able to work for less than minimum wage, and they learn basic money management skills, have a checking account, and are able to buy "extras" like iPads and more expensive clothing, or tickets to concerts/events (all their basic needs are met already).

When they aren't able to work, it's usually because they're extremely disruptive, unable to cope in a work environment, and/or profoundly disabled, and volunteering in a soup kitchen/helping the community in lieu of "a job" probably isn't going to work out so well. It would be more of a burden and resource cost to have them monitored and supported than the benefit received by the organization. Instead, they go to day programs that have job training (if possible), therapy, and more one-on-one support in a dedicated environment. Volunteering is definitely available if they want to do that, and are able to, but it's not really a "oh, if they can't make money, we'll have them work for free" type of situation.

mc324• 10 years ago

No one wants to hire them at a high minimum wage, especially when locals are readily available

Tying this in to our own economy, this is what Bernie and the Unions miss (or perhaps they don't). A min wage increase of 50% will entice low skills Americans who were on Snap to enter the workforce, driving out foreign low skills workers.

And I agree with the increase. Too many of our workers possess too few marketable skills that jobs once the province of teenagers and part times have become the jobs for many adult household earning Americans.

kough6• 10 years ago

I'm not sure I follow your reasoning. If your "low skills Americans" were more attractive to employers than low skills workers, they would replace those workers regardless of the wage. Increasing the minimum wage will incentivize employers to hire more effectively (because the cost of a worker goes up), which means that only those workers who are productive enough to be worth being paid the new, higher, minimum wage will be hired. Your "low skills" Americans will still be competing within the same pool of labor that they were before the wage was increased, but now employers will be hiring fewer new employees.

So I guess you're arguing that your "low skills Americans who were on Snap" are a) higher skilled than foreign low skills workers, b) unable to find work that pays what they feel they are worth, which is at least 1.5 x $MIN_WAGE? I also don't follow this; if they can't get hired at 1.5 x $MIN_WAGE now, what will make them hireable at that wage in the future?

tryitnow2• 10 years ago

No, I don't think maximizing employment is a goal in and of itself. It would be better to not employ humans below a certain marginal productivity. Instead, those people need to focus on training/education to enhance their marginal productivity.

And employers should focus on automating those low productivity tasks.

I'm not going to consider the case of people with disabilities - that's fine to have an exception for them. But that's not really what's being discussed in these debates.

I actually think the market wage is socially inefficient because it encourages people to take the short term gain of immediate cash over the long term investment of training/education. It also encourages employers to forego efficiency-enhancing improvements.

Now if humans were rational, 100% responsible, and conscientious, then they would forego low wages, focus on training to achieve higher levels of productivity and enhance the economy by doing so. Instead, there are many people who either through their own lack of judgment or unfortunate circumstances do not seek to optimize their marginal productivity of labor.

That's a market failure and minimum wage is one attempt to solve it.

RivieraKid7• 10 years ago

Negative income tax makes more sense to me. (NIT is a system where you either get or give money from/to the governement, depending on your income.)

First it's both a simple welfare and tax system in one package. Basic income as typically understood is only half of the story.

It's also easier to reason about, the money flows are way more obvious, it's immediately clear whether you are a net contributor or receiver and it's easier to set the (few) parameters.

enraged_camel2• 10 years ago

I'm not sure how any of the things you said are true. How is negative income tax easier to reason about than "every citizen gets X dollars per month, unconditionally"? How is the money flow more obvious?

Furthermore, why is it important to identify whether someone is a net contributor or receiver?

pyoung• 10 years ago

A lot of folks like to argue against BI by pointing out population*(BI $/person) = $$$$$ (really big number). The counter argument is that most people won't be netting the full BI as they would be paying it back in taxes somehow. The NIC is essentially BI, but with better visibility into where the break even point is on the income scale.

philwelch• 10 years ago

The only downside is that you can con the government into paying you to commit tax evasion.

narrator• 10 years ago

I agree that it would be much better and fairer to have a negative income tax as the only form of social support. One of the worst things about the current social support system in the U.S is the welfare cliffs. There's a gap between $25,000 a year and $80,000 a year where there's a greater than 100% marginal income tax because people lose access to benefits at these income levels. This chart displays it very nicely:

http://www.zerohedge.com/sites/default/files/images/user9218...

The full study examining this phenomenon is here: http://www.scribd.com/doc/273843288/Welfare-Report-Final

RivieraKid7• 10 years ago

I think that NIC could be some sort of a base system with a set of modifications to handle various corner cases (people with disabilities etc.).

Yes, the cliff is definitely a problem with the current system.

sharemywin• 10 years ago

I read any NIC can be translated to basic income by raising income taxes. So, they are very similar.

yk• 10 years ago

The trouble with negative income tax, or at least the simplest models is, that you have to be very careful with the models. I once tried to calculate an admittedly very simple model and the results were a rather absurdly high tax already at rather low incomes. A slightly larger parameter space then produced a model of taxation with extrema.

Plus there are a lot of very good reasons for tax breaks (for example screen readers for the blind). So while I fully agree that a well engineered tax system would be a lot simpler than what we have now, I am not sure if a basic income should just be dealt with by taxation.

RivieraKid7• 10 years ago

Plus there are a lot of very good reasons for tax breaks

I agree, I think that the negative income tax could be a base system with a systematic way to give / tax more various groups of people or other modifications.

mmanfrin3• 10 years ago

NIC is analogous to basic income. At a certain point, the taxes you pay in a basic income scheme are equal to the basic income you earn. Those who earn less than you are earning a NIC, those above are paying income tax.

It is the same thing.

randyrand9• 10 years ago

No its not in practice.

NIC is generally tied to working. A part time employed person will make less than a full time one.

Under BI it is not tied to working. The incentives are worse.

RivieraKid7• 10 years ago

Equavalent to basic income with a specific tax system. But the whole system would be harder to understand and have 1 redundant parameter.

protomyth3• 10 years ago

Plus, everyone doesn't need the income and we cannot afford it anyway. I'm partial to trying pro-rated guaranteed minimum income paid weekly or nightly (one can dream). I have seen several proposals that include a clause affecting voting rights of the receivers.

tikhonj3• 10 years ago

I am generally in favor of a negative income tax, but fiddling with voting rights is a complete non-starter.

Disallowing people to vote, or giving some people more voting power, skews all politics in ways that are inherently hard to fix or even address. It creates a weirder incentive scheme for the government which already behaves oddly thanks to odd incentives. A plan that took voting power away from its beneficiaries would sow the seeds of its own undoing—if not in a single action than over hundreds of small amendments and exceptions. The end-game I'd expect is for most of the benefits of the plan to be chipped away, leaving only the changed voting rights.

That's really not the way to go.

ThomPete10• 10 years ago

Thats solving a very different problem.

UBI is based on the premise that there are fewer and fewer jobs to be had which gives a proper salary.

So negative income tax under this premise makes no sense.

RivieraKid7• 10 years ago

Not sure I understand you... Negative income is a version of basic income - if you don't have a job, you automatically get money. With a specific tax system and parameter setting, negative income is equivalent to UBI.

Turing_Machine2• 10 years ago

While negative income tax might be "simple" in theory, in practice I think it would likely turn into the same mess of loopholes and bizarre rules that we have now.

A big benefit of the basic income model is that there's really no room for lawyers, accountants, etc. to pervert the process. If everyone gets the same amount, there's no way to game it that I can see (now, I'm sure someone, somewhere will figure out a way to game it... that's what people do, but at least on the face of it it seems far less gameable than our current tax and welfare setup).

If it were made a part of the FairTax model (which would be easy to do, given that that model already requires cutting everyone a check), then gameability would take another huge hit.

InclinedPlane3• 10 years ago

Incentives. Incentives. Incentives.

People respond to incentives, it's been proven time and time again. A negative income tax isn't the worst idea, but it has all the wrong incentives. The more money you earn, the less help you get. Which seems sensible on the surface but can lead to situations where people ask themselves "why should I even bother working a job I hate when I can get the same money without working?"

The advantage of basic income is that no matter what you do you still get that money. You're still incentivized to work because a life on basic income won't exactly be a life of luxury. In fact you might be more incentivized to work for several reasons. One because working will get you money you can spend on stuff you want, not just stuff you need to survive. This is significant from a quality of life aspect. Also, working will enable you to get ahead, instead of just being on a treadmill as so often happens today. You'll be able to have more choice where you work and how much, and you'll be able to set aside some of your time to pursue new careers.

I don't think people understand just how much potential and talent is being wasted and misused in our economy at present. Human beings aren't meant to be drones, that's not our calling. And it's an insult to the human race to imply that a significant portion of the population is somehow genetically fit for nothing other than menial labor. That's never been my observation. In the vast majority of people I've met there is almost always a depth and a potential that is not being tapped by the current economic system. And you see some of this coming out with new economic models enabled by the internet. More freelancing, more startups, more people engaging in their passion projects through crowd funding or what-have-you. More people learning new things and trying new things because the internet makes discovery of knowledge a lot easier. That's true of musicians, artists, inventors, and so many others.

I can only imagine the world we'd have if we could unlock that huge untapped potential.

tempestn2• 10 years ago

It is possible to set the tax rates such that the two are financially identical. However, I agree with you that psychologically the basic income has better incentives than a negative income tax.

RivieraKid7• 10 years ago

I sympathise with the general sentiment but most of what you're saying about BI and NIT is simply incorrect.

The advantage of basic income is that no matter what you do you still get that money

Only a minority of people would get money. Because if you get $10000 (basic income) and pay $20000 (taxes), you're not actually not getting money.

A negative income tax isn't the worst idea, but it has all the wrong incentives. The more money you earn, the less help you get.

Well, obviously, this is also true for basic income. Most people with jobs would not get any help, they would give help. Welfare works by income redistribution. You take money from one part of the population and give it to another part.

As for incentives, that's the thing that NIT does right. It doesn't have the "lose welfare when you start to work" problem.

yanilkr16• 10 years ago

A Basic Income from Govt comes at a huge price of loss of individual liberty.

If someone gives you free stuff, they will expect controls like where you are allowed to spend your money and time.

This model of taking from the productive sources and rewarding everyone else will have to break at a certain point. how come you get rewarded for enjoying the gossip column and I spend extra effort doing something else which is harder and my earnings are taken away? so lets put a control on how many hours someone else works. The productive people are dragged down and discouraged.

Automation is replacing the labor that humans don't have to do. This frees up human capital so we can focus our endeavors somewhere else. America already provides free education up to high school and with this education why should people of next generation aim for minimum wage jobs?

In a modern capitalistic economy it is very difficult to make money without adding value to society and this equilibrium is reached naturally due to free markets despite of politics meddling with it.

enraged_camel2• 10 years ago

>A Basic Income from Govt comes at a huge price of loss of individual liberty. If someone gives you free stuff, they will expect controls like where you are allowed to spend your money and time.

No. The entire point of basic income is that it is unconditional. You get a check from the government at frequent intervals. Unlike food stamps, you can spend the money on whatever you want.

yanilkr16• 10 years ago

Do you think I can get the check in America and go and spend it outside America?

AnimalMuppet2• 10 years ago

You're right, but...

Politics is a real thing. It means that government programs have rules changes when people decide that they're unhappy with the way it's currently being done. Basic income might not stay unconditional for long.

knodi1236• 10 years ago

If someone gives you free stuff, they will expect controls like where you are allowed to spend your money and time.

Yeah, that's why they should pay you in cash. Every basic income discussion I've ever seen has been on that basis.

model of taking from the productive sources and rewarding everyone else

No, you take from productive sources and reward everyone, even the productive sources. Basic income is not just for the poor.

I spend extra effort doing something else which is harder and my earnings are taken away

Only a portion of them. I fail to see how your argument is not also an argument against all taxation, period.

The productive people are dragged down and discouraged

The productive people produce if they want more than the minimum. If they do produce, then they get whatever they can earn, and they pay a portion to the government in taxes.

Eerie• 10 years ago

This model of taking from the productive sources and rewarding everyone else will have to break at a certain point. how come you get rewarded for enjoying the gossip column and I spend extra effort doing something else which is harder and my earnings are taken away?

That's an argument that can be made against ABSOLUTELY ANY TAXATION.

yanilkr16• 10 years ago

did we ever try no taxation?

rm_-rf_slash8• 10 years ago

Basic income is necessary to distribute benefits for citizens with intangible value creation.

Ex: Stay-at-home parent raises children while breadwinner works. Breadwinner is freed from tedium and can be more productive at work. Children receive enough attention to become well-adjusted and productive adults.

What is the non-breadwinner worth? How do you calculate it? How do you compare value to non-working person taking care of sick family? Or a community volunteer (especially when the community needs volunteers and can't pay them)?

And that's why universal income makes sense.

yanilkr16• 10 years ago

Citizens are not some helpless victims. They make their life choices and they should by exercising personal responsibility.

The same benefits also applies to non-value creators who want to avoid tedium of work and the incentivizes to not do anything and takes risks goes away.

There is a natural Darwinism involved in influencing who wants to have kids. If someone is already struggling in their life, why should they get the incentive to have kids?

twoquestions2• 10 years ago

I'll bite, UBI is in my opinion the least worst antipoverty program I've seen.

What else can you do when someone's broke, homeless, and can't provide enough value to sell to get a roof over their head? Just telling people to "Work Harder!" in a market that's become increasingly hostile to unskilled labor seems callous and short-sighted.

We can't just get rid of nonproductive people.

yanilkr16• 10 years ago

how about insurance and charities?

If we have a transferrable health savings accounts for everyone, a parent can insure their child incase of worst case scenarios and the savings transfer from parent to children.

If we have a productivity savings accounts for the days where you cant be productive that would handle individual level failures.

Govt works best when it does less and is a last resort system instead of the first.

ricardobeat2• 10 years ago

Actually automation is replacing the work that humans have to do - this means that most activities left will be the ones that are not in high demand, with low or no pay. Imagine we have machines providing us food and all the material possessions we ever need, without any human input. Traditional capitalism/distribution of wealth through employment makes little sense under this scenario.

    This model of taking from the productive sources and rewarding everyone else will have to break at a certain point. how come you get rewarded for enjoying the gossip column and I spend extra effort doing something else which is harder and my earnings are taken away?

a) The "productive sources" are mostly automated. b) you also get rewarded since the basic income is universal. whatever work you do provides you with extra income - people who work hard will still be rewarded accordingly.

Lawtonfogle3• 10 years ago

The only way this would work is to remove income taxes and use other forms of taxes to pay for basic income. This would ensure those that own the automation pay for it. But as being discussed elsewhere in this thread, the more likely result is that people who are working for income will end up with less money than before (even when you count in the basic income), thus being rewarded less for working as hard as before.

noiv• 10 years ago

A Basic Income from Govt comes at a huge price of loss of individual liberty.

Funny, I always thought of UBI exactly the other way round. More precise I'd even say it is the most valuable opportunity at hand to generate sustainable values not degrading the planet in the aftermath.

ewzimm• 10 years ago

I hope you can see how other people see it very differently. First, basic income can be implemented different ways, including a base that everyone gets regardless of income, fair in the same way that everyone gets equal access to the roads regardless of income. Anyone can get to where they're going, but how enjoyable that trip will be depends on what kind of car you can afford. There are still huge advantages to being wealthy.

Second, there are a lot of indications that the way to make money in modern capitalistic society is not to add value to society but to extract value from it. The more surefire way is to game the financial system, and you see huge firms that nearly crash the worldwide economy making billions. There's also a ton of money in gaming the legal system, which is why patent trolling is such big business. And that's just the beginning. Look at the Panama Papers! When you look at the worldwide economy, corruption is everywhere, and the most corrupt make the most profit.

You may disagree, and I hope I'm wrong and your right, but to a lot of people the viewpoint that the economy is essentialy fair and beneficial to society looks naive. When you get into the messy details, it begins to look to a lot of people like the more damage you do to society, the more money you make.

I sincerely hope that there's something I'm missing that says that corruption is just a small problem, the wealthy are getting what they deserve, and that the system is working. I'm still open to the idea.

yanilkr16• 10 years ago

You think UBI will eliminate corruption?

All the money collected as taxes goes to the govt every year and the govt is still in debt and taxes go up every other year.

People voluntarily invest their extra savings in the wall street, look at the level of productivity and innovation that brings. the prices of electronics keeps going down.

Looks like wall street is the clear winner here. Corruption is everywhere and only the free market reduces it.

slfnflctd• 10 years ago

it begins to look to a lot of people like the more damage you do to society, the more money you make

This is mostly why I abandoned all hope of 'big' entrepreneurship. You cannot compete if you have a conscience. Someone who knows a few more schemes or a few more influential people will destroy you.

I am 100% certain I can add value in the right situations. However, if the market makes those situations untenable via barriers to entry, misleading marketing, backroom deals and whatever other means, what options am I left with? Ugly ones.

Basic income at least allows for the possibility of people contributing to society without involving the almighty dollar. It may or may not work, but whoever doesn't think that possibility is worth exploring needs to give me a hell of a good reason. The cost of food and shelter for your average human is not gonna break the damn bank.

clarkmoody5• 10 years ago

The Basic Income is the terminal phase of a democracy, wherein people are rewarded simply for existing, extracting their subsistence from the productive forces in the economy. It is the final vote-buying mechanism of the political elite to create a permanent dependent underclass.

Thanks to our democratically-installed public school system, liberty is a topic which cannot be discussed in polite company. Don't be discouraged when you get down-voted by the Hacker News progressive/socialist hive mind.

yanilkr16• 10 years ago

Hacker news crowd are usually wealthy programmers who got very lucky in the nature's randomness. You have to be definitely smart to be a good programmer and the comments are usually very optimistic and ideal world scenarios.

The programmers who graduate to be good managers and fail couple of businesses really care about liberty. The best leaders I ever worked with cared so much about giving their productive people more liberty and they think like programmers. So there is hope after all ;-).

sievebrain2• 10 years ago

Your argument could be made about any form of welfare.

"Liberty is not a topic that can be discussed in polite company" seems more likely to be an issue with your definition of liberty rather than an issue with the polite company.

aninhumer15• 10 years ago

wherein people are rewarded simply for existing, extracting their subsistence from the productive forces in the economy.

And when those forces are machines, why shouldn't we do exactly this?

liberty is a topic which cannot be discussed in polite company.

I have no problem talking about liberty, only with people who seem to think that word means "property rights" and little else.

Kenji• 10 years ago

Yes, and a fish is smarter than a snail.

We in the west are oblivious to the damage socialism like this does. Go ask people in former Eastern Bloc countries, they will tell you all you need to know about socialism.

ThrustVectoring7• 10 years ago

There's a non-obvious danger for basic income: rent-seeking behavior. Landlords charge whatever the market will bear, so there's a huge risk of funneling money through the recipients without improving their quality of life. And it isn't just landlords that hold that kind of rentier position - universities, for instance, would also extract more out of their position as employment gatekeepers.

Attacking rent-seeking behavior would likely have a bigger impact on the everyday lives of the poor. Land-value taxes are a good place to start.

donatj2• 10 years ago

I think equally a problem with raising the minimum wage as well. If people make more money on average, I can now charge more for my goods with less balking. It would be illogical for me not to raise my prices. In the end quality of life stays the same. Asking people to be illogical is... illogical.

ThrustVectoring7• 10 years ago

People can still shop around, which is a balancing economic force. What makes people balk isn't just how much money they have, but the competing prices in the market. Less competitive markets will react to GBI to a much greater extent. I'd expect mobile phone service, internet service, housing, education, and healthcare to raise prices in response to GBI. I wouldn't expect the price of rice, steel, concrete, or airplane tickets to change much.

1123581321• 10 years ago

Not only that, but if people are worth $x0,000 a year just for existing, there will be rent-seeking in the form of nursing homes that take your UBI, schools that take your UBI, organized crime that collects from people or possibly impersonates/imprisons people to collect their UBI by force.

It's not safe to create a financial safety net without an interpersonal social safety net. People, especially those who can't easily protect themselves, need both.

aninhumer15• 10 years ago

If landlords are able to charge whatever they like, then the market for housing is not competitive, and that's its own problem.

Joeboy• 10 years ago

I would think that a requisite for a basic income happening would be tax revenues growing faster than the cost of living. Is that happening? I'd be surprised, but maybe somebody who knows better can enlighten me.

vinceguidry2• 10 years ago

To give everyone in the US a basic income of $500 a month would cost ~$2 trillion dollars. Plus the cost of the inevitably humongous bureaucracy that will be necessary to administer it.

gknoy2• 10 years ago

How would there need to be a huge bureaucracy to administer it? The IRS already handles annual funds-transfer (and validation) for citizens.

Moreover, replacing welfare (which has bureaucracy to check eligibility) with a flat "everyone gets paid X" would remove the need for the bureaucracy that _currently_ exists to administer welfare programs.

It seems to me that there would be substantially lower administration costs for such a plan, since there's no need to verify whether people are eligible, other than filing tax returns. Perhaps verifying that someone is actually alive is necessary, but that still seems to be less than the current checks that exist.

vinceguidry2• 10 years ago

The IRS already handles annual funds-transfer (and validation) for citizens.

The IRS is still going to have to do its job, unless the USGov suddenly decides to not collect taxes anymore. So we're going to need a new agency. Or a new department of an existing agency. Either way it's not free.

since there's no need to verify whether people are eligible, other than filing tax returns.

What makes you think there wouldn't inevitably have to be eligibility requirements? You'd have both politically-necessary requirements, (would felons be eligible? Even the ones in jail? What about non-citizens?) and also requirements borne from the need to not create perverse incentives. How old do you have to be to get basic income? If there aren't any age requirements then Octomom will be a role model instead of a laughingstock. All of these requirements, including more that neither me nor anyone else will have thought about until a year or two into the rollout, will increase the administrative costs. I don't see why people think it will be easy or free to do this.

The whole thing reminds me of those "Things programmers believe about X" articles. Basic income is a good idea, but please don't pretend that it's going to be somehow different than every other welfare program.

Sure, Basic Income is supposed to replace welfare, but has any of the proponents actually thought through what that actually would entail? There are a lot of welfare programs that address lots of needs. Not all of them are pure cash transfers, some of them do things like provide counseling.

Some of them, like the food stamp program, provide greater value to the people they serve than if you'd just gave them a check. By replacing these programs with BI, you could be actually lowering their quality of life, like those people whose lives suddenly get awful after they get a raise at work because they no longer qualify for government assistance programs they relied on.

I suspect that a few years into replacing welfare with BI, we'll suddenly start appreciating welfare.

sweeneyrod• 10 years ago

2 trillion dollars is roughly the amount currently spent on social security, unemployment benefits, and the military. Surely the bureaucracy would decrease if there was no means testing?

sambe• 10 years ago

In one of the most flagrantly opportunistic political redefinitions I've ever seen, the UK recently raised the minimum wage and called it Living Wage: sufficiently accurate to be arguable but completely co-opting the concept without even acknowledging the intention.

Several young, intelligent people I know actually believe the fuss about a basic income they've heard is just a minimum wage increase.

I haven't run the numbers per-country but just the idea seems sufficiently interesting to be plausible. Allowing BS political branding to dilute it to "another random budget change" is a total disservice to not just the poorer part of society but also to the future of the social system.

esaym• 10 years ago

I'm never quite sure what to think about articles (or ideas) like this. I think of my grandfather who served in the air force for 20 years. When he needed more money, what did he do? He picked up a paper route early in the morning. What did he do when the paper route + air force income still wasn't enough? He started driving a taxi during evening hours. And when those three jobs weren't enough? He opened up a service station/gas shop to serve the other taxi drivers, which eventually morphed into a full blown auto service shop which allowed him to quite all his other jobs.

As a software developer I am doing ok. I crawled my way up the ladder though from blue collar work. But I still have plenty of friends that never really went anywhere after high school. Some work fast food, some general labor, but they all make less than $8/hr. What do they do when then need money? Get a second job? No. They get on facebook and whine about it or make a gofundme account. One of my friend's even works at a warehouse 10 hours a day only 4 days a week. On those 3 days off he has does he work another job? No. He just plays video games all day, as does everyone else I mentioned.

It seems that people nowadays seem to think they only need to work one job, and if that job doesn't pay enough, it is the job's fault.

Granted, I know working 70+ hours a week at $6hr won't get you any where... But we all have to learn the climb the ladder. The complete lack of work ethic and skill sets I see today I don't think we can blame on the public schooling or government policies. I'd like to think it is the fault of the parents who never taught their own children to work. Perhaps they don't know how to work either. Yet I go back to thinking about my Grandfather. He lived out in the sticks and didn't really go to school. The family spent the money his dad made (at a brick factory) on buying supplies for gardening so they could have food. For meat they only had chickens and wild rabbits (both of which he refuses to eat to this day). So perhaps formal education isn't the magic bullet either. But something is amiss in our world today.

pasquinelli• 10 years ago

people complain about money. people complain about a lot of things. people complain. this isn't something being amiss in the world today. it's pretty typical. shit, maybe your grampa even complained about money a time or two himself. just not to his grandkids, obviously.

if there's a big difference in how people now view work compared to people in your grampa's time -- go back further and they might even have viewed wage labor with some contempt -- it's foolish to assume that the reason for it is that people today are different, rather than the circumstances they're in, which determine what constitutes a rational choice, have changed.

maybe your friend who works 40 hours a week has good reason to not look for a second job for his three free days a week. maybe his assessment of his circumstances is actually better than your assessment of his circumstances, even if he complains about money now and again.

chris11• 10 years ago

I think there is huge difference between saying someone is personally responsible for their future and saying the only thing preventing the lower class from doing well is laziness.

A minimum wage would definitely not be close to a living wage, and a living wage doesn't include saving for retirement or other less basic expenses.The average income in 2015 in the U.S. for people with some college was around $37,000. That's around $18/hr for a 40 hour week. That is definitely livable in most places, but money would be a little tight.

Sure, maybe most people earning a below average income could improve themselves and do a lot better financially. But the average wage isn't really good, and low income workers will always be below average.

You could make the argument that if most of low income workers became a more valuable by raising their skill level then the average income would also raise. And you might be right, to a point. But I don't think there are enough decent jobs available for everyone. Not everyone is a good fit to work in the medical field or tech. So the increased average skill level would just mean that businesses could be more selective and even lower their pay.

I worked full-time for a short amount of time in a tech related field. I remember looking for entry level work, and it was really competitive. I did get a full-time contract position that was a really good opportunity, but the pay was very low. The job was good, it was at a good company, and it would provide me valuable experience. But I ended up going back to school to finish my degree and change fields. And I ended up applying for internships. And reviewing my offers I noticed that all of the decent offers were in the same range as an entry level full-time position in my old company. One offer was more than my yearly salary in the old field. I could have told my old coworkers that they would do a lot better changing careers, and it would be true. But if everyone in the field did that, there would be no-one applying for entry level work in that field. And I think that indicates a problem with the job market, not just a problem with laziness.

evilgenius134• 10 years ago

$37,000
That is definitely livable in most places, but money would be a little tight.
Average wage isn't really good

I consider livable to be much under $15,000, probably under $10,000 in most states. I'm not sure how you would spend $37,000 to only consider it livable.

dredmorbius6• 10 years ago

Consider, your father worked more and more hours, until he found an option in which he actually acquired capital -- the equity and goodwill of his service station.

One of the challenges of wages-based employment is that you put a large portion of the population on a track in which they have no equity. Only claims to compensation in competition with every other schlub seeking same.

Marx had a few points about means of production.

karmacondon• 10 years ago

The only way I can see Basic Income working is if the average person has a net income change of $0. That means someone making the average income of ~$45k/yr gets a $10k check from the government every year, but also has their taxes go up by ~$10k. I believe others have referred to this as a negative income tax.

From what I can tell the average salary of a hackernews reader is above $100k. Each of us would probably end up paying ~$800+ per month in additional taxes, maybe up to $1,500/mo for those making that BigCo money. [1]

The first question is, does that sound reasonable? Do you want to subtract $400 from each paycheck for the sake of total strangers? And I guess the second question is, why aren't we doing that now? How much do each of us currently give to support other people in various ways?

I think Basic Income is a good idea. If people have more money, they'll be able to click on internet ads and buy things, and that will help the companies that many of us work for. But it won't be an even exchange and many people here will end up with less disposable income. I think that it will be worth it in the long run, to ensure that the economic engine that produces our paychecks continues to function. But I don't know if every UBI proponent is prepared to deal with the short term costs.

[1] I completely made these numbers up. Could be more, could be less.

marcosdumay• 10 years ago

Well, that's the idea. That's what the UI supporters are arguing for.

In exchange of that money, given to "total strangers" we get to live in a better country, and have the security of knowing we won't end up homeless on the unlikely case we can't find work anymore (yeah, I pay for that safety today - both methods can be either added or replaced, replacing is harder). Here at Brazil the numbers would be lower overall, but the consequences get bigger.

I think any implementation would need to start with a small value and increase slowly. It's not certain that the median wage is either viable or optimum, but might be a sane ceiling.

aninhumer15• 10 years ago

Do you want to subtract $400 from each paycheck for the sake of total strangers?

Yes, happily.

And I guess the second question is, why aren't we doing that now?

Because there's no point in half measures. If a charity had some kind of pact scheme that implemented basic income outside the government, then I'd happily participate. But I don't imagine such a thing is really possible unless it includes everyone.

Mz• 10 years ago

Gig work that works would be smarter than both. One of the problems with basic income is that decouples work from income entirely. One of the things paid work accomplishes is encouraging certain kinds of human behaviors. From what I have read, every society that ever tried to promise that "we will take care of everyone, regardless of their contribution or behavior" had to reneg on that when it backfired on them.

Decoupling income from being the work equivalent of "chained to the stove" is a great idea. Gig work that is well designed allows both people of low productivity and of high productivity to participate on their own terms. If someone who isn't very productive is willing to accept a de facto lower than minimum wage hourly rate, they should be allowed to make that choice. It empowers them in ways that welfare programs do not.

joeyespo• 10 years ago

Gig work doesn't go away with BI.

One of the problems with basic income is that decouples work from income entirely

It does, but not entirely. You can still work for extra income. It only breaks the dependency in the other direction. And that's its strength.

The gig economy, while incredible and empowering, is also unstable and largely out of your control. You can have an influx of work at one moment, and near zero another. BI smooths this over by allowing you to survive during the dips. It also reduces the toxic stress contractors can experience even during a wave of work. When the gigs run out (and therefore, the income is less under BI--but not zero!), it gives you time to seek out new work without panicking.

anexprogrammer2• 10 years ago

some politicians in one of the world's most socialist countries, Sweden

I almost stopped reading there. Sweden is not socialist, and never has been.

Public ownership of production, workers control and management, social equality and a democratic plan of production. Nope, none of those. Just as much privatisation and market forces as other economies.

They just chose to fund their welfare state, education, prison reform and pensions rather better than some others. There's been some drawbacks, but you won't be hearing many renditions of the Red Flag.

snowwrestler• 10 years ago

"Socialism" in Western political discourse no longer means owning the means of production. It did, once, but that idea was so obviously discredited during the 20th century that no one takes it seriously anymore.

So "socialism" today (usually used with some variant of "democracy") has been repurposed to mean a political ideology that values government social support programs over low taxation.

anexprogrammer2• 10 years ago

By Western do you mean US? I have never once heard it used thus in UK and European news and political discussion. Not even by the Tories attempting to discredit some aspect of the discussion. Perhaps the Daily Mail might, but they're bonkers, and have been since inception. :)

You'd probably hear discussion of the Nordic approach use the term "Nordic Model", or rarely "social democracy". They're seeking to remain strictly capitalist but promote more economic security at the same time.

zxcvvcxz• 10 years ago

Besides, Sweden has one of the rich world's biggest gaps between native and immigrant employment rates. Youth joblessness is 70 percent higher among the foreign-born than among Swedes. Lowering the minimum wage could draw more of the new, mainly Middle Eastern population, into the workforce and reduce social and ethnic tension.

A minimum wage is simply not moral. It prevents me and you from entering into an employment agreement with which we may both benefit. Instead, the government is telling me how I have to interact with you.

The left-wing philosophy of a minimum livable wage is ironically hurting the new immigrants to these countries. The reality is that first-world nations have higher employment standards because citizens are more educated and capable. Instead of giving new immigrants, who are almost certainly less educated and capable (remember, they're trying to move to countries with better opportunities) the ability to work and gain experience, we leave them with little options.

And like the quote says, it's just bad for assimilation into the host society. Being able to work is fantastic for that. You have to learn at least a bit of the language. Interact with the people. Learn to follow the laws and customs of the new country. Without work opportunities, immigrants can often wind up stuck in their segregated ghettos. And high unemployment invariably leads to a lower quality of life.

Abolish the minimum wage. Give new immigrants the opportunities they want.

bluecalm• 10 years ago

>A minimum wage is simply not moral. It prevents me and you from entering into an employment agreement with which we may both benefit. Instead, the government is telling me how I have to interact with you.

This argument doesn't make any sense. It is often the case that preventing people from entering a contract thy both benefit from is beneficial for society. It's a standard social dilemma example of which is tragedy of commons.

You may argue against minimum wage but "simply not moral" is just a wrong argument. This kind of thinking is what frustrates me about common libertarian arguments. You can't just ignore social dilemma implications when arguing for voluntarily contract being the end of it.

jrs2353• 10 years ago

I lean libertarian. I don't think the argument is as much libertarian as it is Austrian Economics. What gets me going is that most GOP/Republican/conservative folks that clamor against the minimum wage are Keynesians. And if they are then they condradict themselves when they tout the importance of a strong economy and GDP yet argue against a minimum wage. If you're Keynesian you believe demand drives the economy and GDP. Well if the majority/working class doesn't have disposable income then they can't buy all the trinkets and toys that companies are producing thus grinding things to a halt. There's only so much demand for yachts. Austrians can, in a less contradictory way, argue against a minimum wage. But everyone can't continue to ignore parts of reality. Yes, there are social implications and to dismiss them is no different than dismissing emotions in arguments and marketing, or politics in offices. They exist and must be included and dealt with when trying to make "rational" and prudent choices.

gorpomon• 10 years ago

A minimum wage is moral. It ensure that you and I do not enter into an employment agreement where one side excessively benefits. The government as third party is ensuring we have minimum amount of fairness in our interaction.

The right-wing philosophy of wage bargaining is ironically hurting the workers of their countries. The reality is that first-world nations have predatory labor practices because citizens are systemically and by their own lack of resources unable to realize what fair wage is or how to effectively bargain for it. Instead of giving workers, who are almost certainly less educated and capable the ability live off their wage so they may better their lives constructively, we indenture them into subsistence living, where the minorest of life disruption can decimate savings.

It's just bad for the people living in the lower rungs of society. Being able to work at a living wage is fantastic for mitigating these shortcomings. You can actually do things like plan for the future and interact with people without worrying about the next big life problem. You can learn more labor laws to further advocate for yourself and others, and even the customs of other cultures, rather than fear someone cutting even your meager floor from under you. Without fair wage, workers can often find themselves being the "working poor", people whose jobs won't ever let them save enough money to do anything meaningful. And fair employment inevitably leads to high quality of life.

Institute a living wage. Give people the opportunities they want.

firethief4• 10 years ago

[A minimum wage] ensure[s] that you and I do not enter into an employment agreement where one side excessively benefits.

I don't see how that is a goal of minimum wage. People can be underpaid at any pay level, and a lot of jobs just aren't worth very much to the employer. A sweatshop paying pennies an hour for extremely unskilled labor could be a fair wage for that work.

Minimum wage serves important functions, but I don't see how they include preserving work value : pay level equity. Free counseling to help inform people of an appropriate wage for their skill level and find an employer who would pay that seems like more of a way to meet that goal.

nostrademons• 10 years ago

The grandparent post is highlighting an important point, though: you can't consider questions of morality without also considering morality for whom. There's often a hidden loser in decisions like this, and their perspective is ignored.

Say that a certain business unit has a labor budget of $3M/year. (Because that's how these things really work: a manager gets a budget to work with, driven either by his business's revenues or by the decisions of higher-ups.) He can hire 100 people at $15/hour, or he can hire 150 people at $10/hour.

The business owner, obviously, would prefer to hire 150 people at $10/hour. He can get more work out of them (in any industry other than R&D or software, where you have negative economies of scale). That part is not in dispute, but most commenters here don't care; business owners and managers have plenty of money & power already.

The person hired, obviously, would rather get $15/hour. It could be the difference between poverty and a decent middle-class lifestyle. The minimum wage is great for them.

But there's a third group: the 50 people who weren't hired because the business has decided they only have 100 positions instead of 150. They're fucked. They go back in the unemployment pool, and have to fend for yourself. And they're even more powerless and vulnerable than the minimum wage workers who have jobs.

I don't actually have a strong opinion on the morality of minimum wage laws, but I fear that the perspective of the workers who aren't hired is lost, and if you really want to talk morals, you need to account for all people involved. Would you still support minimum wage laws if they were sold as "Employment caps for low-wage industries"? Because that's their actual effect.

tempestn2• 10 years ago

As the original article argues though, couldn't a basic income be a better solution to most of these problems, while avoiding the negatives of a minimum wage?

pharrington• 10 years ago

Companies, empirically, keep operating costs as low as possible. There is a reason people literally fought and died to obtain a minimum wage.

twoodfin• 10 years ago

Lots of Parisians fought and died for price controls on bread. It didn't mean it was economically sound or ultimately beneficial to the poor.

pwthornton2• 10 years ago

A don't know if you're American or not, but at least in the U.S., we have lots of regulations on what kinds of contracts people can enter into. Contract law is a major part of our legal system (and the legal system it was derived from). You're arguing that any regulations on contracts are not moral. This has far wider reaching implications than you realize.

There are all kinds of things that the government -- and voters by extension -- have deemed it illegal to enter into contractually. You cannot enter into an agreement to be murdered. You cannot enter into an agreement that amounts to slavery. You cannot enter into a work agreement that violates safety law.

We could go on and on about this, but if you're arguing against contract law, you are many hundred years too late. Contracts have always been subject to laws and regulations in place.

InclinedPlane3• 10 years ago

This is horrifically naive. The minimum wage exists because there is an inherent power imbalance between employers and employees in today's economy. This distorts the labor market and puts workers and corporations on an unequal footing when it comes to negotiating pay, to the extreme disadvantage of the worker. The minimum wage is an attempt to force a correction to that inequality and unfairness. It is far from perfect, but until other, better systems exist it's one of the best tools available at present.

harryh5• 10 years ago

There is very little empirical evidence to support this point of view in non-monopsony situations.

jes5199• 10 years ago

Paying someone an hourly wage that is below the socially accepted minimum amount is simply not moral. It binds employees to a cycle of poverty where they have neither enough money nor the free time to work for themselves productively. To break this social contract is cruel, whether or not it is legal.

The right-wing philosophy that money-exchanging relationships should not be regulated is ironically destroying the economy, creating an underclass who must produce but cannot consume. New immigrants - who are often educated and productive in their home countries - are forced to enter the underclass rather than using their skills in the capacity most useful to society.

Strengthen the minimum wage. Give everyone a fair chance.

partiallypro• 10 years ago

Even Milton Friedman argued that a basic income was better than a minimum wage, but a negative income tax would be better than that. Minimum wages cause labor misallocation and hurt small businesses. It's often that larger companies will push for a minimum wage hike because it will destroy the margins of their small competitors; then they can use their pricing power later to offset their margin loss.

Overtonwindow2• 10 years ago

My primary concern about instituting a basic income is that these things have a tendency to always want to rise. It then becomes a voting platform for politicians. Vote for me and I will get your basic income raised. I think anytime you promise a populous something for nothing, you create dangerous precedents that can spin out of control. I'm for increased minimum wage and price caps, but not a minimum income with no commitment.

On the other hand, if the federal government did not give away all of the profits from American natural resources, and instead took a percentage like most developed countries - and the state of Alaska - that money could be turned around into a basic income for all. That I believe is where a basic income should come from: use a nationally produced commodity sold abroad and the profits therein to give back to the citizenry.

elcct• 10 years ago

Basic income is the most stupid idea presented here. It is basically a new zero.

leroy_masochist• 10 years ago

Bershidsky really drops the ball when he makes the following point:

"One problem with a universal basic income, of course, is that it will make a country attractive to even more immigrants from poor countries where 550 euros a month looks like a princely amount. Keeping borders open will hardly be an option."

What he's missing here is that the UBI is only payed to citizens. If you get rid of the minimum wage (because everyone gets paid the UBI no matter what), then citizens become much more willing to work for low wages, because their basic cost of living is already paid-for.

By contrast, UBI would not be paid to immigrants. Non-citizens would still be working in the US to some extent, but the incentive for people to sneak across the border would be severely reduced if prevailing low-skill wages fell from $10 to, say, $5.

It's also worth mentioning that to the extent that deterring undocumented immigration is the policy of the United States, doing it with economic incentives is (IMO) a much more ethically sound solution than doing it with walls, violence, and incarceration.

kough6• 10 years ago

Fantastic point, I have to admit I missed the consequences of that, too.

dools• 10 years ago

In addition to universal basic income the government should guarantee a job to anyone who wants to work, which effectively sets a minimum wage[0]

Also, it's stupid to exclude immigrants or to have a "closed border" policy, because more people means more labour and more resources. The economy booms BECAUSE of immigration if handled correctly.

Economics is such a confused profession ... y'all must be embarrassed.

[0] http://bilbo.economicoutlook.net/blog/?p=23719

ap222132• 10 years ago

Someday soon we will have cures for cancers, technology to repair aging, colonies on Mars, unlimited clean power, and maybe even some strong AI. Yet, Humans will still be debating economics, taxes, and the morality of work.

Can I ask you amazingly brilliant, creative and tenacious thinkers to put 'ending work' up in that list somewhere? My kids and grandkids really shouldn't have to work 70-80 hour weeks, should they?

MaricopaAz• 10 years ago

(Cross-posted from a similar thread) Has anybody studied the outcomes on American Indian reservations from having basic income guaranteed for generations? I'm not an expert or well-read in this field, but I think anybody advocating basic income would be interested to visit a reservation and observe the lifestyles, dreams, goals, and successes found there.

tryitnow2• 10 years ago

The problem I have articles like these is that they create a false dichotomy. It's possible to have both.

These two policies solve very different problems.

The Basic Income supports the notion that it's not cool to force people to work for food, shelter, etc.

The minimum wage is supported for a bunch of different reasons, most of which I disagree with. But the one I do agree with is that a minimum wage sets a floor on the marginal productivity of labor. This will force employees and employers to improve the productivity of labor - a win all around.

I support the minimum wage because I think low wages are a result of humans behaving irrationally in the market. Employers usually don't think seriously enough about productivity improvements and many employees don't invest sufficiently in training and development to improve their marginal productivity.

The problem I have with minimum wage legislation is that it too often takes place in a vacuum. Look even Marxist economists agree raising the minimum wage can lead to job losses, so let's prepare for that by investing in training programs (vo-tech and community college seem like good bets).

dredmorbius6• 10 years ago

The wages of labour are what supports and enables labour, both in the present, and the future. It is the cost of labour.

A living wage pays for the maintenance of labour. Its feeding, housing, clothing, and education. It pays for the upkeep of a family, and the raising and education of children (the next generation of labour).

Failing to pay a living wage is the same thing as buying any factor of production below cost. While it may return a short-term advantage, it fails to ensure the continuation of supply. Worse, it creates a cascade failure in which ever higher and more skilled ranks of labour find their own wages and compensation falling, that ripples through society.

An enterprise which cannot afford to pay the full cost of its labour isn't a productive economic activity. Or perhaps, it is one which faces significant positive externalities such that its own ability to command compensation is diminished.

An enterprise which can afford to pay the full cost of provisioning labour but which does not is doing nothing more than transferring wealth from that labour pool, or from the public purse if the that purse is then called on to support the labourers, into its owners pockets as profit.

The words are mine, but the ideas are Adam Smiths, very clearly expressed in The Wealth of Nations.

I mentioned the cascade failure. Smith talks at length of the conditions of workers in England (middling), the American colonies (quite good), and in China (exceedingly poor). He notes that it's the growth rather than the size of the economy which seems to promote high wages, which is interesting to consider.

Smith doesn't describe much on how to ensure that labour does earn its fair share, though suggests that the right to organise would be a benefit.

My thoughts are leaning toward not only that but institution of an employer of last resort, with a minimum wage established through same. This would act much as a central bank does as lender of last resourt, but as an endless source of labour demand rather than currency.

The demand might be social projects which cannot themselves command market compensation, or as a market broker for labour (effectively the Mother of All Labour Unions), to which companies could bid on work (the difference coming from the public purse via taxation).

A Basic Income Is Smarter Than a Minimum Wage

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