It's not enough for a real tuition or to support them to study instead of work.
I don't think we've ever had a universal basic income test. We have always missed the universal and basic part. It's below basic and not at all universal.
I suspect that you need to get international cooperation and a more sophisticated form of money and resource tracking for a real UBI to be feasible.
Isn't it supposed to be a minimum base level of support? Why do we keep moving the goal posts?
And if everyone quits their job and lives in a nice apartment, where is this money going to come from? The problem with welfare today is that its a disincentive to work. Start working, you lose your transfer payments. A lot of people are stuck in this trap and don't want to start working, forsaking valuable on the job training and socialization that will hurt them in the long run. That's where universal part comes in
Your comment didn't necessarily imply it, but a lot of the discourse these days tries to imply (or directly claims) that recipients are the problem, they're a bunch of lazy bums that don't want to contribute. That's just not true.
No. The reason you say that is because you're young and you believe what you've heard. You will soon cease to be the former and then presumably, likely, stop to do the latter. People want to work, they want to be useful. And yes, if I support you but threaten to stop supporting you as soon as you get to work for money—suddenly working for money looks less attractive. Sure, natural. There's nothing wrong with that. But if I support you no matter whether you add money to that yourself, then that is not detrimental to your willingness to work, it just gives you that much more leeway to choose a suitable occupation.
> Isn't it supposed to be a minimum base level of support? Why do we keep moving the goal posts?
Ultimately, the whole point of UBI is to head off political objections to automating away most jobs, so the tech barons can pursue the technology to do that unimpeded (at least until it's too late). "Minimum base level of support" is basically the Terrafoam welfare warehouses from Manna (https://marshallbrain.com/manna).
because that's the way things are in scifi like Star Trek. people want to make life imitate art.
https://en.wikipedia.org/wiki/Universal_basic_income
It is complex. Although the label UBI suggests a good thing, I believe we should eliminate the term "universal," at least.
Humanity has always dealt with a shortage of resources and their allocation. What is certain is that no amount of UBI will fix this human condition. There will always be differences (not only economic but ideological), and people will try to compensate for them. Rinse and repeat.
The pipe dreams some people have... I mean its fine, you do you, nobody else in this world actually cares. But thats not how you actually achieve anything in life, in any system out there, rather exact opposite.
If quitting your job doesn't put your life or your ability to get another job (because you're not capable of maintaining basic grooming, for example) at risk, then the "free market" model of employment can actually work, and people can opt out of jobs that treat them poorly or underpay them. At that point all the most essential/difficult/unpleasant jobs would actually have to pay the most, and cushier jobs with more reasonable hours could pay less, and people could do the amount of work it takes to get the amount of money they want. Think of how hard people work just to make a bit more money even when they're financially stable, just because they want a house or a cool car or a nice vacation. Why would that change if you didn't have to bleed yourself dry just to eat and sleep under a roof?
In society A, machines and clean energy allow the population to work an average of 20 hours a week. Some, even many people choose not to work at all, but still get access to a basic apartment and have their basic food, social and education, etc, needs met.
In society B, machines and dirty energy allow a tiny segment of the population to live on super-yachts, replete with airstrips for their private jets. They hire people who hire people to convince the majority of the population they must work at least 40 hours a week (preferably 80).
Which society would you say is "functioning" better?
Why blame the unemployed for the functioning of a society, when record inequality and the policies that allow it are so much more responsible?
Look at this graph, and explain to me how unemployment is the problem here: https://cdn.statcdn.com/Infographic/images/normal/23410.jpeg
There's nuance worth teasing apart here.
The only definition I've ever heard is that UBI allows you to lose your job and still be able to pay for the basic necessities (food, water, shelter, transportation, etc.). Anything less misses the whole point.
However, just the basic necessities would make for a pretty dull and repetitive life, which most people hate. And so the idea (as I understood it) is that it's not supposed to go beyond that, so your incentive would still be to keep your job if you at all can, not quit it.
Which, of course, is never going to happen, nor should it. The term "basic" definitely does not automatically entail quitting jobs or getting an apartment.
It's more of a safety net than a comfortable sofa: maybe it's not as nice, but it keeps you from hitting the floor nevertheless.
Yes, we'd try and reduce that income tax increase by getting money elsewhere, most significantly because UBI should allow us to decrease welfare payments significantly. But that would still contribute well under half of the $12K.
The numbers work at $1k a month, but they don't work for levels significantly higher than that.
And if UBI isn't balanced, then it will affect inflation, making it much less impactful.
I believe that $1k/month is a good figure for UBI. It's not quite enough to live on, but it can be in a shared-housing situation, and it can go a long ways to cover expenses if you have to quit your job due to an abusive boss or something.
Granted, some form of education are cheaper than other, especially those that can easily be self taught. I spent hundred of dollars on books and materials to learn electronics. Maybe I could spent less to learn the materials. Really, the hard part is actually spending the time and effort actually building circuits and experimenting.
If you're skilled and persistent enough, you could learn mathematics and other skills for very low cost. However, tutors and coaches are worth their money even though they are expensive, because they help demolish obstacles and get you unstuck faster so that you can progress faster.
A thousand dollars a month? Please, that's enough to pay for a lot of education like you wouldn't believe. It would make the money I spent on my continuous education look like a drop in the bucket. The difference is that I am not pursuing a degree from overpriced schools, but real knowledge and skills.
Alas, it would probably not be. People like to compare apples and oranges in discussions like this. UBI is such a game-changer that we probably wouldn't be able to predict how prices would react once such a thing is enacted. Look at the pandemic stimulus worldwide, and the inflation since.
If a lot of people had more money on hand, they would: 1) want to spend it; 2) prefer to work less (on average) so they have more time to enjoy spending it. Both of those lead to inflationary pressure, so it's unlikely $1000 in the new system would get you anything near what you currently get with it.
A universally guaranteed income that does not meet your basic needs is of course a thing. But it’s not a universal BASIC income. It’s a subset. The games people play on semantics is very strange
For a living situation "basic" implies a shared space (family or otherwise). For food it would imply enough food to be healthy, but nothing about the form of food.
I think $1000/month/person probably is "basic" income. You can survive on that indefinitely.
(Healthcare is the other big expense, but I don't think UBI can reasonably cover healthcare, it's to complex and variable)
Another aspect that I think completely shifts the conversation and is often overlooked: duration.
If I am told I have X amount of money for Y amount of time, I'll plan accordingly. If Y tends to forever, that completely changes my plans.
With some money guaranteed, maybe now I can go to college or a trade school. Long term is a possibility. If it's only there for a small amount of time, I'll focus on much more immediate issues.
Without this aspect, which is kind of un-testable, all studies are kind of useless IMO.
It's the same as asking people what they would do with additional time off. The answers will vastly differ if we're talking about a couple of days, weeks, months, years or a lifetime.
I was working as a home assistant and learning C++, took me a year before getting a programming job this way. Could have been much shorter if I had $1000.
... should it be? Or should you have to save some of your basic income for a period to go to school?
If every year you got enough to live off and to be an enrolled student, I think the temptation to just be a perpetual student might be really attractive to some individuals, and not really valuable to society. Even from the yardstick of "how much do you learn", I think it's important to follow formal education with meaningful periods of trying to usefully apply what you've learned to real needs.
Every single time we see results from a study on something like UBI, someone comes out with this argument—you missed the universal and the basic! Yes.
With that stipulated, how would you propose to test UBI before rolling it out on a country-wide scale? Every test I can think of that isn't just "implement UBI" will either fail the universal or the basic part, and "implement UBI" will never get the political will until it can be tested on a small scale first. Tests like this are the best way we know how to do it.
If you want UBI then you either are going to need to figure out how to work with incomplete tests or solve the problem of how to test UBI without just implementing it. We're not going to entirely restructure our economy because some folks on the internet think that UBI sounds great in theory.
We could try an approach like: People who make less than the poverty line pay no state/federal taxes. Each month you get direct deposit (no bureaucracy) to bring you up to poverty line for last month. Each month you get direct deposit (no bureaucracy) of up to $1000 or whatever would bring you to double the poverty line.
These programs would be automatic based on payroll tax filings and help the people who need UBI most. Also, we'd slowly be able to evolve these further to handle all benefit assistance programs and save a ton of money.
also the credits expire each month for extra fun
What kind of special infrastructure is needed? Doesn't your government already have a system in place for sending tax refunds to its people? That's ultimately all your $20/month is.
One result they are missing out is that the income actually reduced overall employment compared to the control group, and ended up decreasing household earnings: https://www.nber.org/papers/w32719
Even with a generous reading, it was an extremely expensive study. And similar proposals like the Negative Income Tax would cost far less money and have none of the presented downsides.
Maybe in the distant future we do not need people to work. But we are currently dealing with the largest retiree population our country has ever had, and more money chasing after fewer goods and services nearly crippled our economy with stagflation. It takes two weeks to get a plumber right now in our area.
If you also hope to implement UBI nationwide, you need some expectation that it pays for itself with productivity gains. Otherwise it will all get inflated away into nothing.
Exactly. If I have to have 3 jobs, then with this money I "only" work 2 jobs, I'm working less but almost certainly have a better quality of life.
Because significant portion of UPI proponents argue that it will promote working more and higher productivity. The typical argument is that it will remove barriers that prevent better worker-job matching.
Working less is not so bad, but their income (before transfers) also went down. That means they did not replace poorly paying jobs with better paying ones (or they did with net decrease), nor started a business.
The issue is that social safety net is meant for people who's income is seemingly too low. If the net effect is to decrease that even lower, then yes its a concern.
(for clarity, I read the link not the paper)
I don't think realists really needed any evidence that normal people would love to quit their job and play computer games all day, but I guess this study wasn't for them.
Most people file taxes once a year, meaning they would get this payment once rather than monthly, which makes a huge difference if living on the poverty line. Similarly, many people making less than the minimum for filing [1] likely don't file their taxes. This was an issue with the child tax credit as well -- you want to get resources to the lowest-income households, but doing that with tax credits means you don't actually reach those households, meaning you still have to introduce new programs to reach those people [2]. There were proposals to make that tax credit into a monthly payment but IIRC they did not pass before the child tax credit was ended in 2022.
[1] https://www.irs.gov/newsroom/who-needs-to-file-a-tax-return [2] https://www.vox.com/22588701/child-tax-credit-accessibility-...
It all depends on how you tweak the numbers; in theory a negative income tax and a guaranteed income cost exactly the same amount. A guaranteed income of $1200 taxed at a marginal rate of 50% is just the same as a marginal tax rate of -50% on an income of $400. That being said, there are some pretty big negative externalities to a negative income tax, in the sense that it even further overburdens the tax system with knowing people's exact monthly income (assuming monthly payments), which is not-at-all straightforward for the poorest taxpayers whom presumably such a system would be designed to most help.
A negative income tax doesn't mean you get -50% of $400, it means your income starts negative. So someone making $0 gets like $1000 back (say by paying 20% over -$5000).
So did these people decrease their earnings because they were able to do more of what they value the most? Is that a thing we should try to make more people capable of doing?
That’s not something negative or even a surprise. Of all the people on this planet, why do you think Altman payed its with its own money for this study ? That’s the goal of universal income : allowing people to work less because there is/will be less work to do.
As for decreasing household earnings, I’m not even surprised : most people would accept a decrease in income in exchange of the certainty of the income. You don’t need to save a lot if your income is guaranteed.
It’s not even a bad thing because as we can see in the results, global expenditures increased. One interpretation could be that people felt like they needed less money but that they also spent more. Overall it feels like a net positive for the economy.
in the future, maybe so, but decreasing employment is surely bad during a labor shortage: you do need workers for a functioning, productive economy.
the rise in buying power may look good by the numbers, but doesn't inherently better society -- consumerism doesn't encourage quality goods/services. take AI: it's a lot easier to replace human workers when they've quit, when the positions are already vacant. you don't need to provide on-par performance or quality service(s), just fill the shoes with slop
> They also worked less on average but remained engaged in the workforce and were more deliberate in their job searches compared with a control group.
But your employer knows. And he might immediately apply "you'll need less money from me, now" logic.
There is a lot of speculation that that's not the case, but it doesn't seem to really hold up.
This comes up a lot in lefty politics imo - similar to people arguing (erroneously) that increasing housing supply raises rents or reducing crime enforcement reduces crime. The simpler/dumber causality around incentives seems more true in all of these cases, the complicated second order theories fail to hold up.
Imagine if some low wage employer could pay you $10 an hours and government throws in an extra $5. If the market clearing rate is $15 for an employee, giving a subsidy of $5 pushes the wage down to $10 (effectively $10). They could offer $15 (effectively $20), but then you have a misalignment of quantity supplied and quantity demand, which would result in too many applicants and having to select on non-economic terms (e.g. overpaid do-nothing internship going to the CEO's nephew)
Not every job is moral, essential or needed, the idea that 'everyone needs to participate with American capitalism as a worker drone' needs to die.
Working a job you don't like is a leaser evil than mooching off of your neighbors. The level of entitlement required to argue the opposite is absolutely mind boggling.
How many people have to work full time to support one able-bodied layabout?
UBI may make sense in the event of technology-induced mass unemployment, but folks won't tolerate it otherwise. The incentives are simply and universally too bass-ackwards for society to function. They're backwards for the idle (who will find it easier to cut costs than work), for new graduates (who can split living costs with friends and delay entry into the workforce indefinitely), for workers (who would rather rent a trailer and chill than work 40 hours a week and live in the 'burbs and drive a new truck), and for politicians (who will shamelessly promise endless increases in benefits).
IMO UBI is a litmus test for basement dwellers, unserious utopians and plain-old first-order thinkers.
It's not an inherent function of capitalism. If anything, Marx himself actually pitched communism as boosting overall productivity of society by putting bourgeois to work.
Once you give everybody an extra $12000 a year, the median income is now $12000 higher. I'm sure there's still some benefit, but relative to others their position hasn't changed. Someone who's yearly income is in the 5th percentile is still earning in the 5th percentile.
I'm concerned about a situation similar to college tuition in the US where easy, risk free money leads to price gouging. Once everyone has an extra $XXXXX how quickly does the market realize that the cost of goods can be raised by that amount.
This may slightly change median, I think.
Isn't this an intended feature of UBI? The idea of UBI is that some level of material support should be guaranteed. It's about bringing "up" the floor, not really re-arranging relative equal and unequal positions. Plenty of people dislike that about it, but it's an intended feature.
That said, this is basically inflationary pressure and we have a lot of tools to deal with inflationary pressure. It is a challenge, but I am always struck by how differently people speak about it in this context v.s. when average incomes rise because the labor market is doing better. On some level, average incomes going up across society is the most normal thing in the world for welfare state capitalism and is one of the challenges we are best-equipped to deal with.
Absolutely, but I guess I don't see how just giving everyone money brings that floor up. Maybe I'm looking at this naively, but I don't see what's preventing things from just costing more after UBI. If the government gives everyone $1000/mo so landlords raise rent by $1000/mo then the floor is unchanged. I realize it's not that simple and that type of inflation wouldn't happen over night, but it seems like that's the direction it would head. Just looking at the housing aspect of it, it actually seems like the people who would benefit the most from UBI would be the people at the middle to upper end of the wage scale since they are more likely to own a house which means their housing costs are more fixed than someone renting.
To me it seems like we need some way to control the cost of basic needs otherwise it's just a constant race between the government raising UBI and the market raising prices (although, admittedly, it seems like the same argument could be made about minimum wage).
This is definitely not something I'm super well versed in though, so I might be looking at it wrong and am very open to people showing me what I'm missing.
Yeah, I'm convinced state backed student loans has led to the crazy rise in college tuition. student loans should be private (but should 100% be dischargeable via bankruptcy). Alternatively, public institutions shouldn't charge for tuition. The current state makes absolutely no sense.
While I mostly agree, how do you prevent basically every student from going bankrupt immediately after graduation? None of the downsides to bankruptcy really apply to students so it's logically the best course of action if students loans could be discharged.
I'm think it's pretty widely accepted that this is at least partially true.
Note that this was a time-limited study where participants knew they would only receive money for 3 years. Personally, I feel like this leads to different behaviors than if people believe they will receive the income indefinitely.
We know welfare works. It is pretty simple. People need to eat, they need shelter, and a few other basic necessities. When they fall on hard times, not having those things can make it infinitely harder to get back on their feet.
Our current welfare system is a bit of a bureaucratic nightmare and has a stigma attached to it. The nice thing about UBI is it is universal, and simple. The second your income goes below a threshold, you start getting a little bit of money. The second it goes above, you stop. No fuss, no stigma. They are going to need that money to survive anyway, so might as well just give it to them rather than forcing them to suffer the indignities of poverty.
Public policy is a messy business. But I find it odd that this topic is so controversial as it only took me a few minutes of ruminating on it before realizing how good of an idea it is. Maybe it is because I have had a brief encounter with poverty myself, and ever since my anxieties around finances, access to healthcare, etc.. run deep. Or maybe I just realize that a ton of people were born into poverty and due to no fault of their own are now stuck in it. Money might not grow on trees, but it quite literally exists as 1's and 0's in some database. The fact that we could just flip a few bits and instantly make the lives of so many people better, boggles my mind why we wouldn't try that.
It is free money for everyone. Everyone obviously excluding the people who work full-time and who are paying taxes so that "everyone" can live of Bürgergeld.
>but especially for those relying on government money...
Yes, those are the real victims here. Who else could be victimized by working full time, so that other people don't have to work?
Maybe the real victims are the people who have to work full time and are suffering from the increased cost of living?
Oh wow, the exact thing people have been saying would happen has happened. Turn's out Quasi-UBI is a drain on tax paying citizens after all. Amazing.
If this was a genuine concern there wouldn't be so many people skimming off the top of every nation on the planet. We're surrounded by parasites and you're picking on people running calorie deficits for some reason.
As when employees work full time so that shareholders can be given dividends? Part of me would rather a cut of wages go to support thousands of people on welfare who "don't have to work" rather than that cut go to a handful of billionaires who also "don't have to work". Our economy already supports an array of non-working people (retirees, disabled people, passive shareholders). So I'm not going to get hung up on the principal. We broke that glass long ago.
As someone who was service staff as a student, I completely understand that, to be honest. It doesn't help that many restaurants just fired their whole service staff during COVID, even though there are other instruments like "Kurzarbeit" (where the state gives you welfare, and you temporarily only work few hours or not at all, if no work is available at your place of labor) - obviously people find new jobs in this case and aren't available anymore.
The tipping money often exceeds the wage, from what I hear.
More like as far as I can imagine.
Basic Income has to be provided to everyone, not just the ones who don't have a job. That's the whole point. It's not that the amount must be sufficient to live off of, that can be worked out later, but it has to start with everyone on board and that's what makes it "Basic".
If you're affecting very small percentages of the population, the impacts seem minor. We've seen this with analysis on raising minimum wage to about $10/hr. Most people make over that amount (or work in excluded roles), so the impact is small. Raise it too much too quickly, and some industries experience issues due to costs passed on in their products/services, and inflation can become detrimental to the people at the bottom.
I wonder how this sort of thing will work out with something on a nearly universal scale - Social Security. To keep up with inflation, we need higher payouts. To keep the program solved, we need more revenue. This can be achieved with more workers, but relies on ever expanding population to cover the prior generation. Or it can be achieved with higher earning workers, which generally requires higher prices which potentially drives inflation, or though higher consumption (not very competitive on the global market due to cost of living, so not likely). Or we can raise the payroll taxes to cover the payouts.
Anything besides the higher output/consumption is likely to result in higher costs to consumers and drive inflation. More money being in more people's pockets also means more competition for constrained resources, also driving inflation.
The theory is that productivity increases will in fact offset it. One way to prevent an increase in money causing inflation is to correspondingly increase the value generated by the economy. Some economic theories, including the current dominant mainstream one, would suggest that if you have that sort of productivity increase you need to increase the money supply to avoid negative impacts brought on by deflation.
One of my several major problems with the idea is I see almost no one trying to figure out how to actually bind the productivity increases together with UBI. Even if I stipulate for the sake of argument a perfectly functioning UBI system working exactly as the advocates propose, as gracious as I can possibly be, it is still a fragile system. Droughts, wars, asteroid strikes, volcanos, bad crop years, supply chain disruptions, normal economic variations including recessions, these things all happen. The productivity excess will shrink at times, but, no politician under any political governing scheme could reduce the payouts, and after long enough on UBI, the hypothetical paradise it produces full of wonderful artists and musicians and programmers creating text editors rather than CRUD apps and people just enjoying life also produces an economy full of people who can't help get the economy back on its feet when there is a disruption... but they're still there with their hands out.
We have the entire 20th century, when many countries tried exactly that. Production is decreasing, labor participation decreasing, good availability decreasing. Mass famine, millions of deaths from starvation. Governments have to decree force labor to overcome famine and totalitarian oppression to avoid revolutions and protect the progressive achievements of general welfare. Last part centralizes authority even more and gives the government tools to remain in power no matter what.
>Or we can raise the payroll taxes to cover the payouts.
This is exactly where the spiral of death begins. Hieger taxation (when there is welfare) - less work incentives - fewer workers - less goods availability - you need bigger welfare share, so even hieger taxes. And so on until people have literally nothing to eat. Not once or twice, always.
There is also statistically no existing move from work to existence supported by bürgergeld. It's just propaganda when that's claimed.
The situation exists where any low income person gets subsidies from the state, e.g. through cheaper housing, free schools and healthcare, etc. People are still incentivized to work even when they get these subsidies. UBI merely extends such subsidies to include food and other daily expenses.
The covid handouts and raised unemployment benefits gave a sneak peak to anyone else that was blind.
Even things on the user market were on shirt supply and with high prices. In California the effective unemployment rate was something like $23+.. why would anyone sell their old lawn mower for $50 if you're getting $4000 to stay home? Why work painting houses for $4k a month when you got $4k to sit home. Magically everything cost double or more instantly... I wonder why.
That's because it's BS.
Also Bürgergeld is $500 a month for an adult, which is very far from "You can easily live from the Bürgergeld". Survive maybe but definitely not "easily live".
The labor market issues in Germany like in most Europe have a demographic origin, when there's not enough young people you cannot hire them.
You're leaving out a ton of information there. The 500 Euros is after everything else has been paid for. There's also lots of benefits like Kindergeld, money for each child you have.
- 561€ cash hand out alone amount to 610$ already
- rent and heating are paid in full, which can be up to another 500€ in the city where I live
- health insurance is free which would otherwise cost ~300€ as a private insurance
Thus, Bürgergeld is closer to 1500$ or 3x your phantasy amount.
The paper's abstract:
> We study the causal impacts of income on a rich array of employment outcomes, leverag-ing an experiment in which 1,000 low-income individuals were randomized into receiving $1,000 per month unconditionally for three years, with a control group of 2,000 participants receiving $50/month. We gather detailed survey data, administrative records, and data from a custom mobile phone app. The transfer caused total individual income to fall by about $1,500/year relative to the control group, excluding the transfers. The program resulted in a 2.0 percentage point decrease in labor market participation for participants and a 1.3-1.4 hour per week reduction in labor hours, with participants’ partners reducing their hours worked by a comparable amount. The transfer generated the largest increases in time spent on leisure, as well as smaller increases in time spent in other activities such as transportation and finances. Despite asking detailed questions about amenities, we find no impact on quality of employment, and our confidence intervals can rule out even small improvements. We observe no significant effects on investments in human capital, though younger participants may pursue more formal education. Overall, our results suggest a moderate labor supply effect that does not appear offset by other productive activities.
[0] https://x.com/Afinetheorem/status/1815413121822896270
[1]https://www.openresearchlab.org/findings/nber-working-paper-...
Everyone needs somewhere to live. Everyone wants to live closer to where they work and where there friends and family are. Housing is in limited supply. If everyone had more purchasing power, then everyone's going to collectively bid up what they're willing to pay for housing simply because they can.
- UBI/Negative Income Tax (NIT) is not a handout to literally everyone, only the unemployed and lowest income folks will actually net money. Anyone with a modest income or larger will likely either see no changes to their net income or even a reduction in net income (due to higher taxes to pay for the program).
- Assuming a UBI of $1k (just making a number up, but it gets tossed around a lot), you would only get that full amount if you were unemployed, so that means you are pulling in $12k a year. Someone making $12k a year isn't really going to be renting an apartment by themselves. They are probably going to crash on a couch, live with relatives, or maybe rent a single room.
- As you go higher up the income ladder, the UBI phases out. I am also just making up numbers here, but maybe the phase out starts when you make $1k/month and stops at $3k/month. So someone making $12k a year in income would actually get $24k/year with UBI, but by the time you are making $36k/year you get $0 UBI. There are not a lot of areas in the country where you can rent apartments on these incomes. The places where you can do that, housing is probably not in as much demand and will likely not suffer from much if any inflation. So again, even if you are making a small income and bringing in some UBI, it will be designed to phase out long before someone could afford a one bedroom apartment in a high demand area.
- And I think a nice feature of this type of program, is UBI would actually help even out the demand imbalances between VHCOL and LCOL areas. No one living solely off UBI is going to be comfortable in SF or NYC. But there are a lot of regions in our country that have minimal job prospects and could desperately use some revitalization. UBI would go a lot farther in those areas and would create some monetary inflows back into those regions. That in turn could reduce some of the housing pressure on the VHCOL areas (although I am not sure it would be a huge effect).
It is worth mentioning that I assume most proponents of UBI are also acutely aware of the housing crises. To solve that, we need to build more housing. For the reasons listed above, I don't think UBI would cause much housing inflation, but even if it did, the solution to that problem is to build more housing, not to forgo welfare programs.
So wealth can be created but it makes everyone else slightly poorer in different ways
It already happened. Covid cash ended up in the hands of asset owners.
The whole point of UBI is that everyone gets the money.
When you give a select few extra money they can do things that they otherwise wouldn't. When you give everyone money the value of the money just decreases.
Further, if a UBI-like program is funded with new taxes (or cuts to existing programs), it should have a negligible impact on inflation. It is only when you do deficit spending that you risk inflation.
No impact on health. Biggest spending beverages. Slightly less time spent working. Some people start budgeting (presumably to figure out how to spend the money). And black people start businesses.
There are 300M people in the US. Giving 1k to each every month is 3.6T a year. And the effects are miniscule. With 3.6T you could do a lot of things. Just reversing the trend of obesity would be a major improvement for the lives of millions.
https://www.givedirectly.org/2023-ubi-results/
People in that study were receiving a lot more money, relative to typical local incomes. But it seems like they used it quite differently. I think there are major differences between poor people in rich vs poor countries.
UBI is not about free cash to everyone. It's about reforming basic welfare benefits and income taxes to prevent welfare traps.
The "U" part is about making basic welfare benefits automatic and unconditional. You don't have to apply for them, and you don't have to do anything specific to qualify for them.
The "B" part is fundamentally a tax reform. Everyone gets the automatic welfare benefit, but some common tax credits and deductions would disappear, as would the lowest tax brackets. In the US, the 24% federal income tax bracket might start at $0.
For low-income people, the biggest change would be lower effective marginal tax rate, as they would only pay actual taxes. For medium incomes and above, the main change would be that people would have to calculate their taxes in a different way.
The necessity of a tax reform also means that testing UBI properly is difficult. A $1000/month benefit with current income taxes would be more money for low-income workers than an actual $1000/month UBI.
The 3.6T are for everyone getting an additional 1k a month. Which is exactly what the study tested and which had negligible effects. If the effects of 3.6T free money are negligible, then spending less on the same thing is obviously more negligible.
All that combined meant for those that didn't have an immediate need, it was effectively like getting a small bonus from work - putting it in savings or an investment made a lot of sense. I also know several friends that were only able to pay rent or bills because of it.
That is different than if people who need it were given a base source of income that was predictable and long term. I don't think it would just dump into savings then - it would get spent on a new car, or rent, or to pay off debts.
Stimulus checks are nowhere close to ubi from person's and business perspective, I would not extrapolate observations from one to another.
https://www.who.int/tools/elena/review-summaries/cash-transf...
https://epar.evans.uw.edu/blog/long-term-impacts-cash-transf....
Also UBI is funded by taxes, which if applied to middle class they will vote against you. And if applied to companies, they push it down on the customer, making everything cost more (and therefore negating the UBI effect).
What probably would be more effective for society would be improved an ACA, a cap on healthcare costs for all if you will and free yearly health checkups.
In that common formulation, it would compress consumption by the entire tax+benefit base, that is, everyone would move towards median consumption by some amount, keyed to the magnitude of the UBI, if funded by any kind of proportional taxation (including a nominally regressive proportional tax, like consumption tax/VAT).
Politically, it has tough problems: 18% of the population [over age 65] already has a "MeBI" in the form of Social Security that they can vote to increase, and 22% of the population is below the age of 18, and can't vote. So that's 40% right there. Of the remaining 60% in their working years that produce the output split among themselves and that 40%, quite a few would rather not be compressed towards median consumption: the voting population is shifted higher in the consumption deciles, and people are not often so disposed to think they might find themselves luckless in the future. There's a thicket of "tax expenditures" that can form a "MeBI" for the electorate at the upper-half, like the mortgage interest deduction.
If we look at the difficulty in gaining electoral support in splitting consumption to the benefit of minors (thus, future labor) to even things out a bit, in the form of the semi-recently expired expanded child tax credit, we see the magnitude of the political problem.
Personally, I prefer to see UBI as tax reform to avoid crazy wiggling in effective marginal tax rate. But there are many reasons why it's unlikely that the electorate would see it that way, or approve of it even if they did.
Some of those taxes are already being paid. We have a lot of social programs that, for what could politely be called "political reasons", include extensive administration whose primary function is gatekeeping and means testing. Often, the administration of those programs costs substantially more than any money "saved", leaving aside that it also has a very high false positive rate, excluding people who actually should have received it. But there is a political faction that would rather see government burn a billion dollars just to make sure a tiny fraction of that isn't paid to someone who didn't "deserve" it. To quote https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra... , "the policy choices available to them impact the user experience of fraudsters and legitimate users alike. They want to choose policies which balance the tradeoff of lowering fraud against the ease for legitimate users to transact."
Eliminating entire programs and the massive administrative overhead of those programs, and replacing them with something that merits the label "universal", is much more efficient.
Also:
> on a nationwide scale it means everyone got x% more money and the market would adjust itself accordingly by raising prices?
This is assuming the injected money has zero multiplicative effect on the economy, which is very unlikely to be the case. By way of example, since we're on a site created by a startup accelerator: Many, many people have said that UBI would be a massive boon to the startup ecosystem, by making it possible for many more people to safely try to build a startup without as much personal risk.
Analyses vary, but some analyses have suggested that UBI may be a net benefit to the economy. At the very least, economic boosts provided by UBI substantially offset its cost. That's in addition to the offset mentioned above of replacing existing less-efficient programs with UBI.
> improved an ACA, a cap on healthcare costs for all if you will and free yearly health checkups.
We should do this as well, because healthcare is one of the few things that isn't addressed by UBI (since ultimately it's an insurance mechanism).
Put simply: I'm looking forward to the study where the participants get to vote every year to decide how much money they should be getting from the people running the study.
If everybody can have one vote per dollar, this system would probably tend to zero UBI. If everybody can have one vote per person then some equitable equilibrium could develop.
Honestly, it's sorta self evident that replacing a myriad of confusing and contradictory systems with one system is more efficient. We effectively have UBI already for a subset of the population and it not efficient at all because it's provided through a ton of different programs that all different regulations and inclusion parameters.
The truth of that really depends what you mean by "humans"...
All humans? Probably not, as there are a lot of people who aren't especially capable or talented, and every conceivable economic activity they could do can be done by a machine with an AI with a below-average human intelligence and a capable robot body.
Also, IIRC, solar panels are already more efficient than plants, so I doubt there's a dystopian "humans are better for manual labor" loophole.
Most humans? Still probably no, given that AI seems to be making the most progress against white collar work right now.
Some minority of humans? This might be true, as there are people who are extraordinarily smart and talented. It seems most likely that AI will be unable to replace the people at the very tops of their fields, but there are very, very few people in those positions, and most people just plain don't have the ability work at that level.
Eventually automated gas chambers, or just letting poverty take care of the problem my itself.
Consider the assertion “Cash is one important piece of the puzzle. The impact may be limited without other resources like health care and child care.” This is paradoxically spot-on in highlighting that money in of itself doesn’t create value, people create value for one another. Taking people out of an underperforming value stream by injecting cash is like confusing palliative and restorative care. Pain meds can keep a person limping along, and it is great as a bridge to get to a cure, but long term use has risks.
As an alternative, I would advocate for a government (or other org) facilitation of people strengthening the streams of value between themselves. This doesn’t rule out a cash distribution based on increased taxes, but would focus more on enlisting community cooperation.
One might look at wealthy people as tax cows to be milked or as people who have insights into how value is created. Instead of creating an adversarial relationship of tax avoidance, create a mutually beneficial relationship of opportunities to give and serve.
The most successful wealthy people serve large orgs in boards of directors. What if there was a similar set of local boards that guided a grant or a loan program for life transformation in the way that student loans or GI Bill works but with an explicit stipulation (as opposed to the implicit stipulation of education) of how the funding would be used to create a better life well after the funding is complete?
> "The transfer caused total individual income to fall by about $1,500/year relative to the control group, excluding the transfers. The program resulted in a 2.0 percentage point decrease in labor market participation for participants and a 1.3-1.4 hour per week reduction in labor hours, with participants’ partners reducing their hours worked by a comparable amount. The transfer generated the largest increases in time spent on leisure, as well as smaller increases in time spent in other activities such as transportation and finances."
> "Despite asking detailed questions about amenities, we find no impact on quality of employment, and our confidence intervals can rule out even small improvements. We observe no significant effects on investments in human capital, though younger participants may pursue more formal education."
> "Overall, our results suggest a moderate labor supply effect that does not appear offset by other productive activities."
Regulating prices will have unintended consequences (outside of a specific set of goods).
Perhaps the Govt needs to take over the provisioning of these basics (production and distribution) and anything outside the basics will be market driven.
I know this has been tried in the past and has failed miserably. But, we now have better ways to track these things. So, maybe time to give it another try?
I believe that too, and that sounds like a market failure to me.
Shouldn't competition keep prices down?
I believe we need to investigate why that mechanism doesn't seem to work, and fix it; regulating prices can only be a very narrow and interim solution.
Of course, it's still a serious social problem if people borrow against their future earnings to buy expensive things and then go years without enough money for food. It might not even be irrational, for example someone might borrow to pay for a life-saving surgery for a family member.
Ikigai, or purpose, is a Japanese concept dating back to the Heian period in Japan. The Japanese word “iki” translates to life. Additionally, the “gai” portion of the word comes from the word “kai” meaning shell.
I'm not sure that UBI actually addresses this, and may be counter productive.
The trick will be figuring out how to get people to actually do that, rather than just using the money to further participate in the same carrot/stick game that they're accustomed to.
How to get them to take a risk and start a business doing sobering w important, versus just buying the next larger SUV because that's supposedly going to make them happy.
[0] Necessarily because there was a time when this wasn't a thing at all, before the birth of wage labor. Everyone had the opportunity to contribute as they saw fit.
[1] Japan is very poor in natural resources (oil, ores, etc), and so in order to participate in the global economy, the only thing they have to rely on is their human labor pool. And so they needed a society of extra hard workers to have a competitive edge in something.
But even my dumb self makes the correlation that in 2020/2021, we handed out free money to keep people afloat (a very good thing), and then immediately following there was a surge in inflation.
So I guess I don't understand, how do you give out free money without devaluing the currency? Am I making an incorrect correlation between the stimulus checks and the subsequent inflation? Again, I don't know anything about this topic and I think the stimulus checks were a good idea that kept a lot of people afloat, but was that not the cause of the subsequent inflation?
Hidden in Covid was a massive decline in labor force productivity and participation - the lion's share coming from baby boomers retiring during this time. So it's no longer about the amount of money, but the shrinking pile of stuff it is chasing after.
They’re not the only ones. Remember Green New Deal? That also evaporated with the end of ZIRP.
You can complain relentlessly about these guys, or offer alternative solution with nothing but vibes to vouch for them. The truth is, as long as interest rates are high, the economic contraction is making everyone too scared to try anything in case things “get worse.” Sadly, the best time to make great social change was between 2009 and 2022 and it’s officially over now.
Also https://www.businessinsider.com/sam-altman-basic-income-stud... (via https://news.ycombinator.com/item?id=41037226, but we merged the comments hither)
Yes, poor tend to be unable to retain money, they spend. Spending means someone else get money from them. So those with a basic income can spend more, making local economy a bit better and still making their life a bit better.
Remember a neglect thing: money are unit of measure of various substrate, not a value per se. Exchanging money means moving something else.
After seeing the system in use, I think it would be best if general relief type programs like you have in California, do not allow cash withdrawals. It is a factor in the ongoing fentanyl crisis. The pattern of behavior is enabled by the free cash.
Instead a debit card that can be used anywhere except for cash is ideal. While many use the money for necessary things this is a factor in what is seen in inner cities.
People will find a way around it, especially desperate people with addiction issues. This will just add overhead. If you want to stop the fentanyl crisis then attack the root cause, don’t make life more difficult for the poor for a marginal benefit.
And also that if it was only given to some at a sliding scale, it is not universal.
I dont believe basic income is possible until the day humanity discover a source of limitless energy cheaply obtainable.
It seems that more affluent are way more irresponsible with their money than poorer people.
Forget Universal Basic Income, give me Universal Basic Housing.
No US citizen should be homeless, or feel like they could become homeless if they lose their job.
It's like those flat-earth people who did that experiment with the extremely sensitive gyroscope that proved that the earth was rotating and spherical; and were caught on recording saying "well, we clearly cannot accept that" and I think eventually simply deliberately ignored and suppressed it from their minds.
Do not ever underestimate certain human's capacity for self-delusion.
The bigger problem though is that this UBI cult is very authoritarian and tyrannical at its core, consistently increasing the insistence that they must take and use ever increasing amounts of other people's money to prove that UBI works, coincidentally making the researchers and the common NGO types scam artist operatives huge amounts of money in the process.
UBI is simply a con job, a fraud, a lie, theft, and even slavery ... theft of resources and services against their will and under threat of violence and harm in order to support the lives and livelihoods of others.
You want UBI? Great, sign up to have your income taxed to pay for it.
See the Libertarian angle f.ex https://en.m.wikipedia.org/wiki/Geolibertarianism
Or read John Lockes argument on how land, as given by God to all, must be shared fairly.
Expanded a bit upon by Thomas Paine https://en.m.wikipedia.org/wiki/Agrarian_Justice
It wasn't like that earlier, but at some point all the farmer families' wives applied for unemployment benefits...
My current lens is that UBI ultimately inflates prices leaving everyone back where they were before. The problem with openresarchlab's test is it's limited scope. It did increase the spending power of a particular group because the prices around them did not increase.
If everyone has more money the "open market" raises prices to simply meet that. The root problem is non-limited capitalism? The price of basic goods cannot be allowed to rise vs cash on hand.
I do believe UBI's ultimate goal is to increase "spending power", but simply giving money doesn't change the problem long term and thus UBI is doomed to fail in its current form.
This is most obvious in the case of someone who doesn't have any money at all without UBI. This person can now buy things, and before they weren't able to buy anything.
Depending on how much money people make pre-UBI, there's a point where the inflation costs them more then they get.
Why does this group of people that are not historically known for their generosity or their sympathy for the unworking poor suddenly want to give everyone a little bit of money for nothing?
In my mind, it is to create a permanent underclass. A group of people with just enough money to survive but not enough to participate in the world of the elites (or even the middle class). This underclass will represent a massive user base for the products and services that the VC class wants to sell. And they’ll be stuck there, and easier to target than ever.
My boomer dad got a job right out of high school, with only a diploma, and was able to purchase a house and support my then-stay-at-home mother within 3 months of starting work. That is simply unheard of now. And it's not because people don't have jobs.
Money can't fix everything, but a little money can make many problems go away.
> That is simply unheard of now. And it's not because people don't have jobs.
Could it be that we have higher expectations today? (housing quality, technology access, not cooking ourselves, etc).
Part of it could also be that today, like it or not, you're increasing competing in a global market. And the best leverage you can find is having a long education.