Why a Universal Basic Income Will Not Solve Poverty

http://www.nytimes.com/2016/06/01/business/economy/why-a-universal-basic-income-will-not-solve-poverty.html

by tpatke • 10 years ago

109 244 10 years ago

jcslzr• 10 years ago

letting politicians keep all the money has not worked either

hirundo• 10 years ago

Relative poverty is insoluble without totalitarian levels of redistribution to a very low common denominator, and that is unlikely to include the inevitable oligarchs. Absolute poverty is rapidly being solved (https://www.ted.com/talks/hans_rosling_shows_the_best_stats_...) by markets and globalization, and radical redistribution such as a basic income tends to interfere with that.

ktRolster3• 10 years ago

By some measures, poverty already is a solved problem in the United States. Relative poverty is all we have left to solve....

jbmorgado• 10 years ago

There are quite a lot of people in the USA that consistently starve. I'm quite sure that according to most definitions that's clearly absolute poverty, not a relative one.

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

tn132• 10 years ago

Poverty is an issue long solved in USA. We are talking about relative poverty and governments are trying to push totalitarian redistribution schemes everywhere.

Jtsummers3• 10 years ago

  > Poverty is an issue long solved in the USA.

When? How?

EDIT: While I disagree with the parent poster, primarily because I've seen plenty of homeless, underemployed, malnourished individuals in my travels around the US my entire life, and no significant decline in the past several years, my questions were not meant entirely sarcastically.

If poverty is solved, explain how or by what measure you consider it to be solved.

My viewpoint:

From a purely technical standpoint it could be considered solveable. We have sufficient housing, clothing, food for literally everyone in this country, and more. The issue becomes one of distribution. But just having the resources doesn't mean that the problem itself is solved.

toomuchtodo6• 10 years ago

You are grossly misinformed:

https://www.census.gov/hhes/www/poverty/about/overview/

Retric2• 10 years ago

Many people are still homeless in the US. Calling that 'relative' poverty is abusing the term enough to become meaningless.

The most enlightening thing about this debate is the idea that we don't care about peoples basic standards of living and are happy to pretend there is no problem.

PS: Although the U.S. Department of Housing and Urban Development in January 2012 annual point-in-time count found that 633,782 people across the United States were homeless, other counts vary widely. https://en.wikipedia.org/wiki/Homelessness_in_the_United_Sta...

Note: Many people end up homeless temporarily which makes counting complex.

pavel_lishin2• 10 years ago

There's probably a significant percentage of homeless people who are homeless because they have untreated mental illnesses. They'd likely be homeless even if they weren't monetarily impoverished.

soperj• 10 years ago

When you haven't even fulfilled the bottom tier of Maslow's hierarchy of needs, I don't think that it matters whether the poverty is relative or not.

tomp2• 10 years ago

You could simply introduce more taxes. For example, one interesting idea is a universal land tax - with more expensive/desirable land being taxed much more - the idea being that there's no fundamental reason why the right to use a piece of land would belong to one citizen and not the other just by the virtue of their birth. So those who want to use scarce land (wealthy people, corporations) would be paying rents to the rest of the society. That would quite quickly restore inequality back from inherited inequality to just meritocratic inequality (people who produce more would be richer).

refurb7• 10 years ago

not the other just by the virtue of their birth

What makes you think most land is owned through birthright? Any stats to back that up? I would assume most land was purchased.

And if you levy a big tax on property, be prepared for the value of that property to drop dramatically. Money flows freely from one asset to another. If land becomes unattractive, those dollars will just go elsewhere.

Analemma_2• 10 years ago

The fact that you even think "totalitarian levels of redistribution" is a cogent concept is a strong indicator that your opinion on this topic isn't worth much.

fixermark2• 10 years ago

... unless, of course, that individual votes.

"Your opinion is worthless" isn't a useful debating tactic when you're talking to people with as much political power as you yourself have.

MrJagil• 10 years ago

I made the same submission here: https://news.ycombinator.com/item?id=11806509

Maybe they should be merged.

nullsmack• 10 years ago

The very first argument in the article is flawed which leads me to wonder how much of it is or isn't flawed. It talks about a Universal Basic Income for everyone over 21.. then it complains that would cost 3 trillion dollars for all of the 300 million Americans. According to the Census Bureau as of 2015 there were 321 million Americans and 24% were under 18. No clue how many were under 21. But that still takes it down to 244 million people. If we left Social Security alone then that would cut another 46 million people out as well. The article doesn't even attempt to explore cost savings by eliminating excessive management of all of the existing programs.

newacct233• 10 years ago

You are arguing about specifics that do not make any difference to the overall argument the author is trying to make. UBI for 244 million is still unfeasible.

UBI is just a bad idea, jobs in themselves have nice externalities that UBI wont give. People that have jobs generally don't commit crimes. Also a UBI will disincentivize working jobs that are undesirable but are necessary for a functioning society.

otterley3• 10 years ago

How about people who want to serve society with "jobs" that don't pay well (or at all) but are incredibly valuable, like charity work? Wouldn't a UBI free them up to do that?

toomuchtodo6• 10 years ago

Also a UBI will disincentivize working jobs that are undesirable but are necessary for a functioning society.

That's kinda the point. You drive up the cost of undesirable jobs until you find someone who'll work it. If no one wants to work it, you'll need to automate it or do without.

vehementi4• 10 years ago

Why do they not talk about the tax increase that pays for it? It's supposed to be closer to neutral. I.e. people making $100k get an extra $10k tax burden to cancel out the $10k they just got. Pretty important factor to include in the discussion, yeah?

mod• 10 years ago

He's calling the veracity of the article into question by citing an example, not "arguing about specifics."

When you can't get the simple things right, why should we think you got the harder things right?

funkysquid2• 10 years ago

Are you saying that people commit crimes because they have too much time on their hands?

pasquinelli• 10 years ago

people generally don't commit crimes for want of a job.

and a better way to look at it is that it incentivezes changes in society that reduce the undesirable work that's necessary for it to function.

mempko2• 10 years ago

Notice that people do undesirable jobs because they probably don't have many other options. UBI gives them another option. This would either make pay for undesirable jobs increase, OR people would be forced to automate them. Seems like a win win.

drabiega10• 10 years ago

Look, this straw man has been beaten to death. I don't think anyone who has seriously considered UBI is arguing that all working age people should have +${UBI_AMOUNT} extra dollars. Most people would have extra taxes roughly equal to their income from UBI.

If you want to argue against redistribution, then do so, but don't throw out this we can't afford it lame horse anymore.

RamshackleJ2• 10 years ago

Yep, and it doesn't even bother talking about the $21–32tn of untaxed assets(http://www.taxjustice.net/cms/upload/pdf/Price_of_Offshore_R...). Or that we tax the rich too little while we tax everyone else too much to keep public perception focused on taxes being too high(https://commons.wikimedia.org/wiki/File:Historical_Marginal_...).

refurb7• 10 years ago

Or that we tax the rich too little

The top 3% of income earners pay 51% of all income taxes.[1] You think that's too little? What should that number be?

[1]http://www.pewresearch.org/fact-tank/2016/04/13/high-income-...

otterley3• 10 years ago

Also: "A universal basic income has many undesirable features, starting with its nonnegligible disincentive to work."

I can think of two responses to this:

(1) Perhaps work that doesn't pay more than a UBI can provide is not work worth doing --

(2) Except for charity work, which is extremely valuable, and which would be greatly incentivized because having a UBI would free up people's time to work on it.

prostoalex6• 10 years ago

Perhaps work that doesn't pay more than a UBI can provide is not work worth doing

This is a frequent argument invoked in favor of a higher minimum wage, and the answer is maybe.

But then you find out that some fairly useful work, such as running a convenience store or a corner bodega in a low-income neighborhood involves significantly lower margins than operating a Whole Foods or organic juicery in a ritzy residential neighborhood, and people start decrying "food deserts" http://baltimore.cbslocal.com/2015/02/03/food-deserts-contin...

dragonwriter3• 10 years ago

Perhaps work that doesn't pay more than a UBI can provide is not work worth doing

Work doesn't have to pay more than a UBI provides to be worth doing in a system with a UBI -- the idea that it does is a failure to recognize the central difference between UBI and means-tested benefit programs. Because UBI doesn't get reduced for additional income (beyond the effect of regular income taxation), there is little to no disincentive for additional work; additionally, most UBI proponents favor UBI eventually eliminating minimum wage (though in an early-stage, not-yet-adequate-for-independent-support UBI, the UBI might merely reduce the minimum wage by some amount), so that UBI reduces the structural barriers for low-money-value work that remains mutually beneficial getting done.

ahartman004• 10 years ago

(1) Perhaps work that doesn't pay more than a UBI can provide is not work worth doing

I largely agree with you here, coal mining being a notable exception. As much as I want to be only on renewables, coal makes up 33% [1] of our current production. They talk about how gas prices are a drag on the economy, I dont want to find out what happens when 33% of power becomes much more expensive!! And fwiw, I do not share the optimism/pessimism that all jobs will be obsolete in 5 years. I dont agree with people who are saying, "just automate it!" Easier said than done(which is a good thing).

1. https://www.eia.gov/tools/faqs/faq.cfm?id=427&t=3

caseysoftware• 10 years ago

If we start excluding groups, can we stop calling it a "Universal Basic Income" and admit that it will be yet another political weapon to wield?

mason2405• 10 years ago

Absolutely, as soon as you introduce ANY means testing at all, it is not longer UBI.

grahamburger9• 10 years ago

UBI will be yet another political weapon to yield, just on the taxes side rather than the payout side. Where do we draw the line between who nets positive on UBI after their tax increases, and who loses money? That would be an enormous political weapon to yield.

bradleyjg• 10 years ago

I did some back of the envelope math several months ago here: https://news.ycombinator.com/item?id=10172397

jgdx• 10 years ago

He also haven't looked into the strong philosophical arguments for BI, dating back to Paine in the 18th century. Justice and freedom are keys to all of these arguments, e. g. that of Van Parijs, where if one looks at work as a fundamental resource, you should be free to take or not take a job.

There's so much literature on this—why not look into it?

prostoalex6• 10 years ago

eliminating excessive management of all of the existing programs

There are really just three - Social Security, Medicare+Medicaid, and EITC. Above you mentioned keeping Social Security around, so that really leaves just two programs, and it feels like the elephant in the room - Medicare - has been scrutinized by both parties so often, that one might wiggle a few percentage points of savings here and there, but nothing critical, especially in light of baby boomers retiring in larger numbers.

If you have a good plan for drastically cutting down the costs of Medicare, those are worth hearing about, whether or not UBI is involved.

thesimon• 10 years ago

[...] Why not subsidize workers’ wages instead?

Sounds like a great idea! Companies get to save money and the tax payer effectively pays the companies profit.

bpodgursky• 10 years ago

Well, corporate income tax is higher that individual income tax for the vast majority of people... so it probably would mean more tax revenue overalll.

And no, income earned in the US cannot be kept offshore, so yes, taxes will actually be paid on it either when "earned" by the company or distributed (buybacks, etc).

brador• 10 years ago

It will absolutely solve poverty, what it won't do is make everyone rich.

digi_owl• 10 years ago

And frankly the world is likely to be better off that way.

research have shown over and over that as economic differences grow, social structures deteriorate.

skybrian2• 10 years ago

This article is yet another example of binary thinking.

Basic income could be started at any amount. It won't pay the rent, but an extra $100 a month makes a difference for people living on the edge. The first $100/month will make a bigger difference than anything added on top of that.

11235813214• 10 years ago

The problem is that a very small number of people are on that $100/month edge, a percentage of them will increase their expenses until they are as desperate as they used to be, and the increased taxes to pay this money will put others on the edge. When considering BI, or any large money transfer program, you must consider the entire system, not just the beneficial effects on a small number of people for the first few months.

witty_username4• 10 years ago

Money is correlated with happiness. Sure, people will still yearn for more money, but with the more expenses people will be more happy.

skybrian2• 10 years ago

I agree with you that a proper study would have to take all that into account.

But since we're just hand-waving here, I'll argue that the point where you're paying, say, $50/month more in taxes than you get in benefits is likely to be at a high enough income that $50/month doesn't make nearly as big a difference to your life.

Also, there is an insurance effect. A guaranteed $100 a month (even if you lose your job or have to move) provides more financial security than a larger amount that you can't necessarily rely on. And folks who aren't good at saving money (for whatever reason) will benefit more from having a bit more financial security during bad times, even if increased taxes means you don't make quite as much money in a good year.

Sometimes when people talk about this, it sounds like they think any amount of financial security is bad for poor people - it provides the wrong incentives. But that seems backwards to me; when you're desperate, you're more likely to make decisions you regret later.

snicker7• 10 years ago

It doesn't make to tax citizens only to give the money back to them.

Another way to implement a mincome is to have a flat tax rate and give every citizen a large standard deductible. If one's taxable income is negative, then one would receive money from the government, which is interpreted as a negative tax payment.

Furthermore, the purpose of a mincome is not to alleviate poverty, but instead to to replace current systems of welfare (food stamps, social security, etc).

pitaj• 10 years ago

replace current systems of welfare

Yes. The broken, trapping, inefficient, bloated, bureaucratic messes that cost way to much and don't help people nearly enough.

lossolo• 10 years ago

Problem is with capitalism and it's founders that told us all that you can't live without work. In next decades we will need to change the system diametrical because robots will take all not creative jobs out there. If we want basic pay we will need to tax corporations that use robots at around 70-90%, money from tax will go for basic pay, money from people that receive basic pay will go to corporations etc. Thing that needs to be controlled is capital, it can't be taken out of the market like it's done now, companies are gathering billions of dollars which are taken out of the market. Capital taken from the market can not be redistributed again. One thing is for sure, current system need to be changed and adapted to robots revolution.

sharemywin3• 10 years ago

maybe people should start owning the robots.

grahamburger9• 10 years ago

I remember thinking this as a kid. "Just make it illegal for a corporation to own a robot, each person only owns one robot and they keep the value it generates." Thought I'd solved the problem ;)

I think the reality is that it's not really a 'robot' in the sci-fi sense - it's a thousand automated machines doing one tiny piece of the process, and slowly your factory with 500 employees only needs 5, and output and quality have increased. There isn't really a single robot to 'own', and even there was it would be far too expensive for one regular person to own it.

witty_username4• 10 years ago

If robots take all the jobs, then nobody has to work anymore and everything will be very cheap. Think robot maids, drivers, and robot-cooked meals. People are so used to today's world of not-so-many-robots that people think not having a job is bad.

visarga• 10 years ago

Not having any money or job is bad, though. I don't see the state as being reliable enough to care for the mass of useless and unemployed. They will probably set the UBI at a level below the necessary, there will be protests and riots, people will ask for more, politicians will tell them their excuses for why it isn't possible.

If push comes to shove, owning some land and cultivating it could be a job. The earth will hire people its owners to work it. That is, if people will be legally allowed to cultivate their own seeds on their own land.

I see a possible utopia where individual farms or larger agricultural areas will be owned and worked by communities of people. They will be independent as a community from state welfare. They will be able to implement their own lifestyle as a consequence of their independence. Technologies working for this are: solar, batteries, 3d printers and robots.

drabiega10• 10 years ago

Cheap is relative to what you have. If you have no money, no one is going to build the robot that will make things for you. When automation increases without basic income, the share of resources going to those who are automated away gets squeezed, not increased.

carapace5• 10 years ago

(Dude, the "work ethic" predate capitalism by all of recorded history. C'mon.)

(Also, buy some robots. Enough to make more robots.)

boxy310• 10 years ago

Rentier classes clearly do live without work, it's largely a question of how large of a population can live without working. If the fundamental tension in Marxist theory is real, then one could argue that a UBI is insurance against a populist uprising demanding a living wage.

Religion might have been the opiate of the masses in the past, but if price stability with a dole is feasible then I can guarantee you there's going to be a significant share of the population who wants to do nothing but sit around and engage in idle socializing, sports, or art.

Provided that there's also still a differential for working, then people will still chase after prestige but not be threatened by destitution if they choose a sub-optimal career path.

jbob20002• 10 years ago

Something that is missing from the basic income/poverty debate is the notion of "learned helplessness"; after a long time in poverty, people get used to the lifestyle and have difficulty adjusting to "regular" life.

For example, if you've been homeless your entire life, you've never had to lock your apartment door or carry a key around. My partner (a social worker) had a client who's apartment was always getting robbed because whenever she left, she never locked her door; it was not something she was used to doing. Another client was unable to set an alarm and follow a schedule. 20 years of living on the street, waking up whenever he felt like it, meant that he had completely lost his faculties for time management. He couldn't hold down a job and regularly missed appointments.

Part of my partner's job was carrying these people through their journey to "regular" life. She would show up to their apartments and take them to their appointments. She would call the woman who didn't lock her doors every morning to remind her to lock her door on her way out. Etc. Etc.

Basic income doesn't solve any of this. It just drops a load of money into a person's lap who has no idea what to do with it.

Smudge2• 10 years ago

Basic income doesn't always solve this for someone who is already homeless, but it might still act as a preventative measure, giving someone enough of a financial buffer to avoid homelessness entirely.

jbob20002• 10 years ago

If you heard some of these stories, you would find that it's not just a lack of money that causes homelessness. To be brutally honest, it's a mixture of stupidity and often, an addiction. These people need other people actively intervening in their lives to keep them on track. The preventative measure should be the social worker, not the pay cheque.

swalsh2• 10 years ago

http://www.nutrition411.com/content/refeeding-syndrome-0

witty_username4• 10 years ago

Basic income doesn't solve any of this. It just drops a load of money into a person's lap who has no idea what to do with it.

What do you mean by this? Poor people would definitely know what to do with it.

theandrewbailey• 10 years ago

They might know what to do with it. They might also spend it all on drugs, or fall prey to scammers or thieves.

funkysquid2• 10 years ago

"He couldn't hold down a job and regularly missed appointments."

I think this is part of the problem - right now in society, if you can't be on time and hold down a job, you'll go hungry and have no place to live. Basic income removes that harsh penalty, and lets people live regardless of whether they can make an appointment.

dionidium6• 10 years ago

"Basic income removes that harsh penalty"

The real challenge of a basic income isn't how to pay for it; it's how to convince regular people who get up every day and go work at jobs a lot shittier than most of us here have that that's a harsh penalty.

There is enormous social momentum behind the idea that you should work if you can.

dctoedt• 10 years ago

right now in society, if you can't be on time and hold down a job, you'll go hungry and have no place to live. Basic income removes that harsh penalty, and lets people live regardless of whether they can make an appointment.

Historically, that would be an incredible luxury. (I'm interpreting "make an appointment" as a figure of speech that encompasses, e.g., sowing crops at the right time of year, harvesting when the crops are ripe, hunting when the game is afoot, etc.)

kazinator5• 10 years ago

Though it lets people live whether or not they can make an appointment, it doesn't let them live as well as they could and could leave them a bit of a buffer so that they can re-evaluate what they are doing.

For some people, the fact that they desperately have to make that appointment on time removes the motivation.

You and I enjoy our jobs because we don't desperately have to be on time. If I had to punch a time card, I'd be fucking out of here faster than you can type "logout" and hit Enter.

People can probably fix their lives with greater ease and probability of success if they can calm down a little bit.

maxxxxx• 10 years ago

When I was in my teens I worked summer jobs in a German social welfare agency (Sozialamt). There were many families that had been on welfare for generations and it was noticeable that their kids had no idea how to make progress in school or how to hold a job. They simply didn't know and had nobody who could tell them. They also had no role models.

I think with basic income there is a risk that a lot of people will forever be lost for the working world. Especially if the basic income is so low that you can barely survive.

kefka2• 10 years ago

I'm unsure about the German system...

I've been on welfare here in the USA. The way it works is dependant on your income. The more you make by hard work, the less assistance you receive.

That sounds fair... Until you realize that section 8 (housing) is the same way. Food stamps are the same way. At the time, there was a cutoff for the free clinic (which counted benefits as income).. I made $100 too much.

When doing work and getting paid $1 means taking $3 in losses from assistance programs, this grinds people further into poverty. The further I try to dig out, the deeper I get until I hit the point that I can start to survive without any assistance...

cmurf4• 10 years ago

Right. The income value I keep seeing floated is in the realm of US$8000 per year. This is not basic income, it's basically a large tax credit. I don't know why it's called basic income, there's nothing really basic about it when it can't completely pay for one basic thing like say rent or mortgage.

zcmncbv• 10 years ago

It's true. In addition to basic income, many people need support to get out of their (inherited) impoverished habits. Many people come from dreadful backgrounds and so have no idea how to look after themselves and are surrounded by bad influences.

I often think that all some people need is to be extracted from their environment and transplanted into a new one somewhere else in the world with new friends and a different job. Cut-off from their unhealthy social network they would rebuild themselves and thrive.

mempko2• 10 years ago

Yes, it does solve these. Because people who lost the faculty for time management or security can learn it again. Putting someone in a house and giving them an alarm clock is a very good start.

djsumdog• 10 years ago

There is a much much deeper question here. Which life is really better?

I took 10 months off where I lived with just two backpacks. I wasn't homeless by any means, I had my savings I was living off of (technically homeless I guess, but not in the cultural sense).

Even though I had a lot of expensive electronics, I didn't buy a lock until about 7 months in. Even then, a lot of hostels didn't have large enough lockers for my small back which contained my laptop, camera, etc.

There is a sorta social contract with backpackers I can't really explain. I still kept my stuff hidden, but I never had any real fear of people stealing my stuff.

Those 10 months were the best I've felt in a while. I was away from the cube. I was working on my own research (I wrote a lab manual for a friend's class based on some papers we wrote). I worked late into the night and walked around new cities every day. I was never tired, exhausted or irritable. I dreams of getting back into school and working on my PhD, but I'm still working on fellowship applications and I ran out of money .. so back to full-time IT work I went.

That "regular" life you talk about -- getting up early and working the 8-5 grind to get a paycheck just to keep on doing the same fucking thing day in and day out. That's bullshit. And that's coming from a software engineer who gets paid a lot and I have a lot of freedom in my work.

For those working low income jobs where they barely have enough and have to scrap and save every paycheck, that's super bullshit.

For example, if you've been homeless your entire life, you've never had to lock your apartment door or carry a key around.

I live in a place with a massive homeless population and tent cities. People have their stuff spread out with them, but they have no fear of anyone taking it. Part of it is the poor looking after each other, part of it is if stuff is stolen, it's not like they have much to begin with. Suddenly you're housed and now you have something worth breaking into.

I'm getting a bit ranty at this point, and I'm not entirely sure what my TL;DR is. I realize being poor and homeless can suck terribly. But the things you mention...those aren't the bad things. Those are amazing ways to look at the world that are taken away when you try to bring civilization to the savages.

cmurf4• 10 years ago

Call it vagrancy, it sounds more romantic :-) I've been doing the travel and vagrancy thing for a few years and it's a very different experience having owned and lived in the same house for 15 years before that. And it's very valid to question which is better and realize that mainly they're just different, and also it can be viewed as a continuum, rather than succumbing to binary logic and the ensuing value judgment.

The barrier to entry is money, whether savings or income. I rather like the moment the fictional Sam Clemens just starts grokking the concept of Star Trek economics and decides it might be worth giving up cigars for. http://www.imdb.com/title/tt0708829/quotes?item=qt0551002

carapace5• 10 years ago

I was homeless for about four years, so I know exactly what you are talking about with people losing or never having the basic skills to cope with modern life.

However, that's just not a reasonable argument against UBI.

Consider: Having too much money is never a problem. Quoth the sage, "If it is money, it is good.", also "Too much is always better than not enough."

Misspending that money is the problem. But if everyone around you has UBI too, their ability to spare time and effort to care for you and help you learn to cope with life is fantastically increased.

Helping others is hugely rewarding, fulfilling even, but most people are limited either by their real or perceived lack of funds, or by minor personal problems. With UBI the bottom Nth of people's BS is handled, freeing them up to help others whose BS is a little too formidable for them to cope with on their own.

If you take a step back and look at the larger picture, and take into account the synergy that will be unleashed by UBI, I think you'll reconsider. :-)

sounds• 10 years ago

While I was homeless I noticed how few people really made a difference. There are some, but you figure out pretty quickly which people to go to (and which to avoid).

Do you think crime will increase when every person receives money at the same time?

I think money management skills are going to be needed even more (but just receiving a deposit doesn't teach you how to master your money).

Trundle• 10 years ago

Helping others is hugely rewarding, fulfilling even, but most people are limited either by their real or perceived lack of funds, or by minor personal problems. With UBI the bottom Nth of people's BS is handled, freeing them up to help others whose BS is a little too formidable for them to cope with on their own.

Is there any data to support this? I'm genuinely curious. Thinking that people in general are innately good/helpful is a point where I seem to differ to a lot of others. It's just not something I see from looking at the world around me. The majority of people already have others around them with more formidable BS to deal with, and we all ignore them just fine.

cat_plus_plus3• 10 years ago

Government policy is for long term. We can think of how to help people to transition, but can't just stop progress because some are used to current system.

And long term basic income will work precisely to reduce learned helplessness. Society will provide some cash, but individuals still need for look for a hostel to stay in, manage money for meals etc. I would prefer daily deposits to recipient accounts so that if someone spends money for one day unwisely they don't end up needing other services for the rest of the month.

cmurf4• 10 years ago

Does basic income claim to solve this problem for people already in poverty? Or does it claim to prevent future generations from ever being in poverty?

SkyMarshal• 10 years ago

If basic income were implemented society-wide it might prevent learned helplessness from happening in the first place. Assume you start receiving BI at 18, then you never fall to a level of poverty so low that that degree of learned helplessness sets in.

kazinator5• 10 years ago

That is surprising. If you have been homeless all your life, you probably have had more than one experience in which your stuff was taken or you were even attacked, for instance when sleeping at night. You would think that a key to door that you can lock to protect Your Stuff would be like a magic talisman to you.

voxic11• 10 years ago

It solves it by keeping people out of poverty in the first place.

T2_t2• 10 years ago

But will it keep them from GETTING there? Isn't that the move important question?

geon5• 10 years ago

With BI, hopefully fewer people end up in hemelessness like that.

BI won't magically solve every problem, like mental illness, which is another large factor for homlessness.

dragonwriter3• 10 years ago

The issue you raise is an issue that exists without UBI and which a mature UBI, in the long-term, mitigates this by avoiding anyone having the experience of living "a long time in poverty".

That's not to say that transitional services to people who have previously had that experience aren't a good thing to have along with UBI, but it doesn't invalidate the concept of UBI.

partycoder• 10 years ago

In my country, there was a movement that tried to make education free of charge. One of their arguments was that it was going to be actually cheaper for the government.

This is what the logic was: the student loans system has a high interest rate, and when the loan is defaulted, the government needs to pay. So what the government ends up paying is not only the actual loan, but the loan with some accrued interest. Also, the default rate is high. So in this case it makes sense for the government to just pay directly.

Now, following the same mindset, how much does the government pay if there is people without a basic income? is it more than just giving away that money directly to people? If there answer is yes, then probably it's not a bad idea after all.

Now, of course there will be issues. The food stamps system imposes some restrictions that you will no longer have if you just receive basic income. Also some people might just do the minimum required to get that income and live at the expense of the government. There might be pros and cons that need to be considered.

cousin_it2• 10 years ago

At a minimum, we need free universal healthcare that shouldn't be replaced with basic income, because poor sick people often need more expensive healthcare than a reasonable basic income can pay for. Similar for education, the current system of loans just sucks compared to universal free education which was achieved by the frigging USSR.

Also it seems pointless to give basic income to well-off people. On top of free healthcare and education, why don't we just top up everyone's income to the equivalent of the minimum wage? Sure, that will disincentivize jobs that pay close to minimum wage, but such jobs are dying due to automation anyway, and good riddance.

witty_username4• 10 years ago

Also it seems pointless to give basic income to well-off people.

Otherwise taking the basic income might be seen as a symbol of being poor. Also, well-off people might be envious of people receiving basic income.

(tl;dr people aren't perfectly rational)

mason2405• 10 years ago

why don't we just top up everyone's income to the equivalent of the minimum wage?

That's what UBI essentially is, giving everyone about the equivalent of a minimum wage income.

robotresearcher• 10 years ago

On top of free healthcare and education, why don't we just top up everyone's income to the equivalent of the minimum wage?

That strongly incentivizes under-reporting income. One of the strong points of universal income is that it is relatively easy to administer.

And well-off people would be taxed more so as to return all or most of their payments. It's not pointless, since it serves as a safety net the instant the large salary goes away, with no application or needs-based investigation that slows the process and costs more money to administer.

cousin_it2• 10 years ago

Yes, fair point.

weatherlight• 10 years ago

The way you fund it, of course, is to further tax the higher end of the income bracket. It's an innocuous way of redistributing wealth. It helps everyone but the very wealthiest, which are the ones who need it the least. Jobs are not the answer, at least in my mind. A universal basic income would allow people to spend some time possibly developing a passion that they love, not slaving away at a job which is at best given out of pity, and at worst a waste of time which they are obligated to attend at a negative cost to everybody. A universal basic income is upfront and direct about its purpose.

cat_plus_plus3• 10 years ago

This is nuts. Basic income is not to provide extra spending money for 100% of americans. It's help 10% of the most poor while everyone else ends up paying back the money in taxes. So we are talking about 300 billion. This is half of US military budget and will be instead of, instead of in addition to, current aid programs.

It is true that basic income will not directly improve lifestyle of the middle class. It can well result in indirect improvement by poor becoming more productive and government bureaucrats currently running the program getting more useful jobs. But we probably need to other things as well to improve lifestyle for the other 90% of the population.

fixermark2• 10 years ago

One of the points the author proffers is that displacing more targeted, conditional aid with UBI may not actually be better. The question of whether---if you just give people money---they spend it wisely enough to maintain their needs is an open question.

It's sort of the formalized version of "Don't give that wino a dollar; he's just going to spend it on more booze."

(The sense I get is economists lean towards "Yes, people generally look after themselves given the money to do so," but I believe this is an open question policy-wise).

cat_plus_plus3• 10 years ago

So just give money in small daily deposits. If someone spends all money in beer one day, he/she will be hungry the next day and make better choices.

alexchantavy• 10 years ago

UBI would also provide entrepreneurs and small business owners with a safety net so they'd be able to take risks they wouldn't be able to before.

RivieraKid• 10 years ago

We already have a basic income, at least in Europe, not sure about the USA. Unemployed people get welfare. Changing this system to what BI advocates propose is not a huge change:

- Simplification of the welfare system, you get money automatically, no need to ask.

- In the current system, if you get employed, you lose benefits, so the jump in your income is small, a disincentive to work. In the BI proposals, income vs income-plus-welfare curve is smooth. That's the main improvement I think.

- More money gets redistributed from the wealthy to the poor. Personally I think the current level of redistribution is fine.

jimmytidey• 10 years ago

An absolutely key feature of basic income is the security it gives someone who is on breadline.

I can only describe the situation in the UK - but imagine this generalises. If you are on government benefits, and you accept some money to do a small or casual job, you face a choice. Not declare it, and face court and destitution if you are found out.

Declaring the income, on the other hand, is an administrative nightmare. Worse - it might trigger a recalculation, or removal, of your benefits. Most benefit seekers don't fully understand how their benefits are calculated, and, again, they could be destitute if benefits are removed or reduced.

So, for any long term unemployed person, it's often best to sit tight and not take any risks. Thus the person is trapped in poverty, plus of course the sense of self worth that comes from doing a job.

This is also true for an entrepreneur who decides to quite his job and build a business. Basic income can provide some security while you get that business going. This is not typically true of unemployment benefit.

Everything comes back to what unemployment benefits are - a payment conditional on not doing any work. That causes so many problems, and basic income can solve them.

On the cost: basic income, at substantial levels, is clearly very expensive. However, you simply tax that money back. This can leave pay after tax absolutely unchanged for everyone, while still delivering the advantages described above.

carapace5• 10 years ago

Keep in mind when discussing UBI, especially in the context of poverty, that it is not a solution to poverty. It is a solution to automation crashing demand by throwing earners permanently out of the economy.

Robots take the jobs so people have no money to spend even as the robots make more stuff, cheaper.

What to do with the people? Throw them in a volcano? "Hunger Games"? Let's just give them money and see what happens, okay?

That's UBI.

UBI isn't for the bum. It's for you (okay, well, your cousin. You read HN, you're probably fine.)

mcantelon• 10 years ago

To the ruling class, it's not about solving poverty, but about postponing insurrection due to lack of work.

grahamburger9• 10 years ago

The biggest concern that I have with UBI is how do we avoid the Basic Income Trap? It's pretty widely accepted that we fell prey to the Two Income Trap [1]. If we institute UBI, how long will it be before a person needs their UBI and another job (or two, or three) just to scrape by?

[1] http://www.motherjones.com/politics/2004/11/two-income-trap

Grishnakh15• 10 years ago

If the UBI isn't set high enough to allow someone to survive, then it by definition is not a "basic income". It has to be set high enough for this.

This may require some kind of extra government programs and legislation to do things like 1) make sure enough low-cost housing is available, and maybe 2) help people learn to use it effectively, including maybe moving them to low-cost locations if necessary.

grahamburger9• 10 years ago

It's not so much about setting it high enough as keeping it high enough. How do you convince the wealthy and powerful to keep giving up more and more of their income to keep up with inflation so that UBI continues to meet the definition of 'basic income'?

chillacy2• 10 years ago

There is an incredible amount of businesses set out to make money from those without steady pay, or who live paycheck to paycheck, which includes some UBI recipients (if they require a large sum today they may borrow money from a payday loan company, for instance, and the interest is insane). One challenge is going to be preventing this from becoming the new form of exploitation. That comes down to education, and there are a lot of americans in debt.

russelluresti• 10 years ago

In every debate, there are people on the wrong side of history. Mr. Porter, welcome to that list. Granted, the point that it won't happen today is true enough, but it is an inevitability (assuming we don't blow ourselves up beforehand), so it's important to start thinking about it now.

What frustrates me the most with these articles is that they don't base any of their information on actual fact. Take, for example, the argument of disincentivizing work. This is one of things that seems "logical" if you're a pessimist or an asshole, but past experiments with basic income have proven it to be untrue (look at the "Mincome" experiment in Manitoba for proof).

supergeek1332• 10 years ago

I'd be interested to hear more about the last part concerning "subsidizing wages".

Welfare for many in this country basically is a subsidy for their wage (cue memes of "walmart welfare").

Take for instance when the big layoffs started in the tech/housing sector, you would hear stories of people staying on unemployment because it paid MORE than a new job in the same field would pay. And we kept extending benefit timeframes which just resulted in a vicious cycle.

That's a pretty big incentive to not work.

kazinator5• 10 years ago

Almost a quarter of American households make less than $25,000. It would be hardly surprising if a $10,000 check each for Mom and Dad sapped their desire to work.

Ah, but a transfer payment which targets the poor is worse in this regard. A $10,000 check that you lose if you work saps your desire to work more than a $10,000 check that augments your income.

mamon• 10 years ago

UBI won't solve poverty for a very simple reason:

Every time government starts to subsidise something the price of subsidised goods goes up. I've seen this in Europe with wind farms, "eco" lightbulbs, farming equipment. etc.

And UBI is equivalent to subsidising all basic goods at the same time. So the only noticeable effect of UBI will be price increase, so that it would take your salary + UBI to purchase goods that now can be purchased by your salary alone.

Net result: increased bureaucracy, increased cash flow for the government (higher taxes), higher profits for corporations (higher prices), no benefit for poor, big hit for middle class (which is most heavily taxed).

serge2k• 10 years ago

Where would that money come from? It amounts to nearly all the tax revenue collected by the federal government. Nothing in the history of this country suggests Americans are ready to add that kind of burden to their current taxes

Taxes would have to go up, in some cases drastically. It's an easier sell if people immediately get a good chunk back.

A universal basic income has many undesirable features, starting with its non-negligible disincentive to work. Almost a quarter of American households make less than $25,000. It would be hardly surprising if a $10,000 check each for mom and dad sapped their desire to work.

Except if they keep working the money just adds up. I certainly wouldn't want to stop working and give up my lifestyle.

Maybe instead of working to make enough money to just get by you keep working and put a chunk of that money into savings, or upgrading your lifestyle a bit. Maybe moving to a better area, fixing up some stuff around the house, get your kid a couple toys, etc...

Yeah, people in situations that make working hard might quit but maybe they should be allowed to. Or maybe they should quit for a while and come back when it makes more sense.

damptowel4• 10 years ago

Here's a thought experiment I've been been wrestling with... Imagine a dirty low skill job. Something that currently doesn't pay much and is generally considered low status. Assume it's a job no one really wants to do but do because it pays them a living. What would happen to that job under UBI? I would assume that due to vacancies demand for people willing to do this work would go up, and companies would need to lure in applicants by raising pay. Imagine that would indeed attract workers. How would this affect that company? It's costs would rise. Will it become less competitive? Will it raise price? Would the sector have to be subsidized to stay afloat? Would it start some kind of 'moral revolution'? I imagine new coping mechanisms would need to be devised and the economy would morph into something quite unlike what we live under today.

ck4252• 10 years ago

I hope Switzerland votes for UBI, it would be interesting to see actual data rather than just conjecture. The point about people losing the will to work is interesting, as he also makes the point that jobs give us purpose and structure in life. If money is no longer an issue, or less of an issue, people may choose to do jobs because they provide purpose and structure. It could also increase innovation. There have been lots of article on HN recently about the privileges white males have in terms of financial security, that make it safer to start businesses than non-white and non-males. UBI might allow more people to do this.

Another interesting aspect would be the economic effect of everyone having a minimum amount of money. I don't know enough about economic to say what the impact would be on basis good vs luxury goods and everything in between but I imagine it would have an effect.

aminorex• 10 years ago

Of course it will not solve poverty. That's not the point. The point is that it will solve the self-destruction of social wealth. In particular, it will prevent the expansion of poverty to include the vast majority of currently wealthy persons.

anotheryou• 10 years ago

Any word about where that money goes? Back in to economy!

Why a Universal Basic Income Will Not Solve Poverty

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