The benefits of a basic income // much higher min wage

[jennypenny]

>>The idea of leaving people to their own devices is just as much a project to make better people (making them more self-reliant, with self-reliance being the yardstick for personal value). This molding of people towards an individualistic ideal very much goes counter to everything we know about humans as social creatures.
I would say this is only true because of the way people are institutionalized from an early age (formal schooling, traditional jobs). They are trained to perform specific tasks for specific rewards. Only those with strong individualistic tendencies break out of the mold. Is that because of how we're wired, or how we're trained? I believe the latter, and I believe that with every new layer of institutionalization that gets added to our lives, fewer people are able to break free.
So I guess the argument is whether to remove most support, live with the pain that would follow, and allow society to learn how to live more independently, or increase support to provide for the people who can no longer think or do for themselves.
>>Why isn't Bill Gates relaxing on a beach? Why do most hedge fund billionaires stay active into their 70s and 80s? Why do celebrities worth hundreds of millions produce more movies?
If people believe that the goal is money and the power it can provide, then of course they would keep working. Wealth and power are moving targets so you would never get past the accumulation phase. See materialism thread

[secretwealth]

I honestly don't believe money and power are the end goal for a lot of the multibillionaires out there. The thrill of the game is the drug they chase. Wheeling and dealing, being the important man in the boardroom, is a kind of social belonging that can get as addictive as sex or love. When you're sitting on a beach, you have no value to society. Pretty much everyone cannot deal with having no value to society.

[jennypenny]

>>Wheeling and dealing, being the important man in the boardroom, is a kind of social belonging that can get as addictive as sex or love.
I guess that's how I would describe power.

[secretwealth]

Yeah, you're right. It's a little bit more than having power over others, though--there's the thrill of turning out being right that drives a lot of entrepreneurs.

[jacob]

There are two variables that determines how well off one is

1) The absolute value of the income.

2) The management of that income.
People vary widely in their ability to create income. They also vary widely in their ability to manage income.
You can help people who don't have a lot of income but manage it well by raising their basic income.
However, for those who mismanage their money, no matter how much you increase it, they'll always manage to piss it away and not improve their situation markedly.
See:

viewtopic.php?t=3729#post-52488
The problem is that there are two kinds of poverty:

Poverty of money and poverty of mind.
You're not going to fix poverty of mind by handing out money. If you believe in consequences, you might even find this counterproductive. If you believe in education, you essentially have to call people out for being stupid.
The problem is that some people simply aren't qualified to live a good life no matter how much money they're given. They don't need money. They need someone to think for them.
It's the old problem with everybody being given the same rights (both culturally and legally), to be an adult essentially, but not everybody being capable of being sufficiently responsible to act like an adult.
You can't fix this with money. You have to fix it culturally.

[secretwealth]

Jacob, I would fully agree with you but there's no reason to suppose that "poverty of mind" is limited to the lower income bracket. In fact, I have seen much more money mismanagement from the upper middle class who buy $1 million homes and luxury German cars they don't need, because they want to keep up with the Joneses or they feel the need to experience a certain upper middle class lifestyle. Stanley discusses this tendency amongst medical doctors in TMND.
I agree that you need to fix conspicuous consumption at a cultural level and the UBI does not address that. But I also think it's a very different issue, because it's a problem experienced at all levels of the income spectrum.

[jacob]

This is exactly why basic income doesn't fix poverty.
A person with a poverty of mind needs substantially more than basic income (they need high income) to bring them out of economic poverty.
An income poor person without poverty of mind just need a handout, which is covered by existing social programs, to get back on track.
With richness of mind, it's possible to live a good life on a part time job as a burger flipper. 20 hours per week. Basic income would bring those 20 hours down to zero. But really, what's so bad about working Monday, Tuesday, and half of Wednesday that we need universal basic income to alleviate that?
What's bad is having to fix this poverty of mind problem. With few/sporadic exceptions nobody likes being told or having to admit to themselves that they're lacking/immature in life skills.

[secretwealth]

Jacob, while I don't follow your logic, I must admit that I want to backtrack on the idea a bit for a very different reason.
I think the video and the UBI advocates (including myself) massively underestimate the demand for undesirable low-skill labor. After watching a very painful BBC report on the victims of the Bangladesh factory that collapsed, and thinking about all of the janitors, maids, home healthcare workers, and plenty of others who work in undesirable positions for pay and pay alone, I realize that we haven't reached the level of mechanization to make a UBI work.
When we have no need for human hands to make clothes or care for the elderly in their homes, then maybe it'll work, but it's just too early.

[Felix]

"I think where we fundamentally disagree is that I don't believe that anyone with average intelligence and a capable body is denied the means for a decent life in the United States."
Yes, that's where we think differently.
I just think that high systemic unemployment (like in Spain, Greece and other European periphery countries currently, it seems to have improved in the US with rates falling below 8%) cannot be tackled with a framework of personal responsibility.
Relating to the rest of the thread:
Not all that unemployment is voluntary. You cannot increase your standard of living by improved management of your income when you have no income to begin with.
Within the proper boundary conditions, yes, it boils down to personal responsibility and proper management.
"But really, what's so bad about working Monday, Tuesday, and half of Wednesday that we need universal basic income to alleviate that?"
We need it when there are not enough jobs available to employ everyone. This example is based on an economy with full employment. That's often not the case.

[jacob]

Uhm... the reason that Europe has higher unemployment is because of the minimum wage, the higher sitting welfare net, and especially because firing workers is much harder. This means that workers only get hired when they produce a higher value and when the employer can be sure it's economic to keep them for the long term.
Jobs essentially exist as low as the marginal net value of production (revenue from one more unit minus wages, etc.) is positive. Nobody in their right mind is going to hire people if it means decreasing their bottom line. And those who do will go under eventually.
So if you increase the cost of hiring, guess what ...
This is economics 101. It's not even ideologically driven economics. You can show this with "lemonade stand"-reasoning.

[RealPerson]

@Jacob - You are entirely correct.
This is something many employees don't think about. The cost of an employee is constantly compared to the value the employee brings to the table. Many employees think that getting raises is the goal, but be careful. If you manage to get a raise that puts your cost above your value ......chances are your employer will eventually set your future free. Or, employee output can decrease due to a variety of reasons. In that situation the value drops while the cost stays the same: same problem. Always make sure that the value you provide is greater that your cost to be employed. If you have that concept in front of you, chances are you will have a job for as long as you want one.

[secretwealth]

@jacob - Of course you're correct, but it's important to remember that employers' perceptions of what value employees bring to the company is not the same as the actual value that the employees bring to the company. Anyone who has ever had an incompetent boss knows this.

[spoonman]

Here's an article you all might find interesting:
http://www.guardian.co.uk/commentisfree ... tains-poor

[Felix]

"This is economics 101. It's not even ideologically driven economics."
Removing the minimum wage, the social safety net and job security to create jobs is not ideologically driven? We'll have to disagree on that one, I guess. You forgot job safety regulations in the list.
As you said, people can only remain hired if it's profitable. And that's dependent way more on expected sales (demand) than on basic standards for working environments. So if you focus on permanently removing working standards when you have demand crashing temporarily instead of fixing the demand side of it, that's an ideological position.

[jacob]

Explaining how the economy responds when variables change is not ideology. It's math---or whatever methodology is used. Ideology is when you argue for changing those variables to achieve a certain policy goal. I did no such thing.
Ideological blindness also occurs when, say, some side-effects are disregarded because they are inconceivable (in the double-think sense) to the person. This happens a lot in theoretical and political economics. It never happens for people with personal money on the line---at least not in the long run, because if they fail to take part of the equation into account, they'll lose money real quick.
Yes, if demand is increased, the business can produce more supply before the marginal profit is zero. However I think you can presume that all businesses are already doing all they can to do increase demand for their products. Further increase can only come externally...which means the cost of that extra demand can only come from somewhere else. This is also known as a subsidy or stimulus. However, that's nothing more than a devaluation of existing cash which has the side-effect of making people desire cash less. If people desire cash less, then what happens?...
I would really encourage a focus on considering the question "what will investors do if this happens?" ... in particular, if some policy is instituted what will the smart people buy and what will they sell. Because unless you severely curtail the freedom of buying and selling any policy response will have such a response. It can be that they are simply buying and selling stocks. But it could also be buying and selling their free time, work effort, spirit, motivation, etc. Everything that is done will have some response function.

[Felix]

"This is also known as a subsidy or stimulus. However, that's nothing more than a devaluation of existing cash which has the side-effect of making people desire cash less."
It can also be fueled by a rise in private debt.
I think we simply have a different view on money, which is where most of our differences in opinion on economic matters come from.
Europe has a higher unemployment right now because it was hit harder by the crisis thanks to implementing austerity measures. It's not that they implemented minimum wages and a social safety net and now suffer from massive unemployment.
Yes, these things do have an effect in the way you described it, but to explain the unemployment in Europe by these measures while ignoring the factor of a drop in demand across the board means missing a crucial variable.

[crosshairs]

Seems like a lot of this discussion is theoretical, but doesn't need to be. Why not try it out by doing the following?
1) Select a group of individuals (10 maybe?). They can be random, or be your friends. Doesn't matter.

2) Start a business providing a service of some sort, and 'hire' those individuals from step 1.

3) Ensure all your employees know that actually working in your company is optional.

4) Ensure all your employees know that the company will unconditionally pay each employee (including yourself) a living wage. Say, $40,000/yr?
If the company stays in business, and if the living wage even seems to decrease each participant's resource consumption, then this model will have proven itself viable in my opinion.
Alternatively, you could just hire individuals to do non-mandatory work for you, and unconditionally pay for their living wage out of your current income.
Unless I'm missing something?

[secretwealth]

@crosshairs: The idea behind a universal basic income is that it's universal. It's not something you can apply to just employees in one company.

[crosshairs]

@SW I guess the question I have is why? What negative side effects are incurred on a small scale that will not be present when implemented on a large scale?

[RealPerson]

"It's not something you can apply to just employees in one company."
Same question as crosshairs: I see no apparent reason why this cannot be attempted on a small scale. In fact, that seems like a wise approach because it would not jeopardize the overall economy.