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

[Lemur]

Relevant ...
https://www.youtube.com/watch?v=cTsEzmFamZ8

[oldbeyond]

I made a stab at doing the math on this. Taking my native country as an example, Sweden's GDP/capita (in USD PPP) stands at 53400. The public sector comprises roughly 44% of GDP, giving us a public sector expenditure/capita of 23500. Of that 23500, 42% is used for "social safety" - pensions, unemployment insurance, children's benefits, housing allowances. Basically the financial transfers/insurance that UBI could provide. If we used all of that money for UBI, you could give everyone ~800 a month. Excluding everyone under 18, you could increase that to ~1000, but then you'd get no financial aid for having kids. Not too bad you might say, but that'd be it. No special provisions for anyone, no matter your disabilities, cost of living or dependents. To me that seems a bit too rigid, and I don't think the political will* is there in the population at large. You could of course lower UBI's share of social spending, but then you lose the point of implementing it in the first place. 800 is barely worthwhile**, a fraction of it even less so. You could raise taxes, but then you start bumping into the Laffer (Khaldun) curve. So I'd agree with brute, too little OPM to go around.

Also the benefits seem debatable. Basically it seems to boil down to a sort of public sector minimalism and making people who do not want to/cannot work feel better about themselves. Basically, we already have UBI (at least in Western Europe), but you have to submit yourself to social shame and petty bureaucrat meddling. To me, the most interesting demographic with regards to UBI isn't the unemployed, but those one rung above, people working part time in low paying jobs. I'd guess that this group is quite likely to opt out of working. I know I would have been in my gap year between HS and university. I wound up working 60-70% of full time, earning a bit more than UBI and getting some (to me) valuable work experience***, but if I had had the option of spending my days in front of my laptop (which 800 a month living with my parents definitely would have given me), I'd probably have taken it. Wouldn't have ruined my life, but it would have the first job post university even more overwhelming.

*in a way, I think the political calculus is what attracts a lot of people to the idea, because it has appeals for libertarians and socialists alike. But given that the split in many countries now stands between nationalists/conservatives and social liberals/social democrats of various stripes, I'm not so sure it's such a grand solution anymore. I think most nationalist/conservatives view UBI as utopian and as a threat to the social fabric and not all liberals are crazy about it

**for the average consumer. Welfare is ~500 + housing

***showing up on time, getting the job done, handling obnoxious customers, not taking the boss too seriously, not taking myself to seriously

[Kriegsspiel]

Relevant ...
https://www.youtube.com/watch?v=cTsEzmFamZ8

For everyone who didn't click, it's a Joe Rogan podcast with Andrew Yang about (mostly) $12,000/year UBI and automation.

I can't tell (because he didn't say) if this $12,000 is in addition to

Social Security, disability insurance, unemployment insurance, Supplemental Nutrition Assistance Program, Temporary Emergency Food Assistance Program, Nutrition Program for the Elderly, Commodity Supplemental Food Program, Special Supplemental Nutrition Program for Women, Infants, and Children, Section 8, Inclusionary Affordable Housing Program, Temporary Assistance For Needy Families, Healthy Marriage and Responsible Fatherhood Program, Child Care Assistance Program, Child Care and Development Fund, Low Income Home Energy Assistance Program, Universal Service Fund Subsidized Low Income Phone Service, Weatherization Assistance Program, Supplemental Security Insurance, School Breakfast Program/National School Lunch Program/Summer Food Supplement Program, Child and Adult Care Food Program, Earned Income Tax Credit, and all their tribal equivalents and anything else I surely missed

or if it takes the place of it. I don't think he said how he would pay for it, either. Just saying you're going to give everyone $12,000 a year isn't anything remarkable.

He takes a detour in there at about the hour mark to talk about how evil it is to not allow people to discharge government-guaranteed student loan debt.

Then he finishes by saying that if he even suspects Russians are impersonating Americans on social media he's going to attack them.

Meh.

[jacob]

My big problem with UBI, is that the people it's intended to help are bad with money. If they were good with money, they would already have money. Giving someone like JLF 12,000 means he'll maximize practically every single dollar. Giving someone who is bad with money 12,000 means it'll have much less utility for them.

Yes, this. And I wouldn't even know what to spend all that money on.

This problem is also captured under the concept of multi-dimensional poverty. The reason ERE works is revealed by the way it self-selects people who are multi-dimensionally wealthy. The renaissance man concept establishes the ability to convert between all the kinds of capital (see book) that one is either actively building or already has. For example, education or critical thinking ability, good health (no nasty habits), a stable family situation, and a stable job situation.

Lack of alternative assets is REALLY expensive, but it's just hard to see in those with very high incomes. One can be multi-dimensionally poor but money can compensate to a degree. E.g. if a high-income person has a drug problem they can go into rehab instead of losing everything. If they have a criminal problem they can hire a good lawyer where the low-middle income person gets permanently marked and sunk by the system.

UBI would do jack-shit for the majority of people because consumers simply lack the capital assets/skills to use it well. IOW, the amounts required are not high enough to make a difference for most people. For my $600/month would pay for everything. For Jane and Joe Average it would just about cover the dumbass leases on their oversized vehicles.

TL;DR Technically UBI would work except we can't afford to pay that much. See oldbeyond's Swedish math above.

It's the old problem of lending money to businesses. Poor businesses are going to lose it whereas good businesses don't need in the first place.

The real issue is that UBI is using the wrong paradigm when it tries to figure out what is needed for "living well" based purely on the consumer metric of spending. That's like trying to measure happiness with GDP. OTOH, I'm not sure what the solution is in terms of building those capital skills into everybody. More education is not it. We already have longer educations than ever. Better education? ... Ehh... sure but how do you measure that?

[Campitor]

I just started watching that UBI video on the Joe Rogan podcast. The proponent Andrew Yang said everyone (18 and older) would get 1k per month regardless of income status; you can earn 100k a year and still get your 1k a month stipend. And existing government benefits wouldn't be touched - you get the 1k regardless of government subsidies currently received. He estimates the cost of the program would be 1.3 trillion a year. And the extra money floating around in the economy would generate more jobs and increase tax revenues to cover the cost.

1. 1k per month wouldn't cover rents in most major cities. I guess the poor will need to move to the rent depressed areas of the US.
2. More dollars chasing limited goods. I guess inflation isn't a factor.
3. Jacob is correct - throwing money at the financially illiterate or the unmotivated will not help.
4. Give me an extra 1k a month and I'm going to be stocking more cash into financial instruments.
5. Military, Healthcare, and Pensions outlays were approximately 3 trillion last year; 2.1 trillion just for Healthcare and Pensions.
6. The US took in 3.4 trillion in federal tax revenues last year. I guess adding another 38% to the budget isn't a big deal for him.
7. Total spending was 4.1 Trillion in 2018. I guess tacking on another 1.3 Trillion to bring the total spending to 5.4 trillion (and the deficit to 2 Trillion per year) is sound fiscal policy in his book.

I award Mr Yang 2 raspberries.

[Campitor]

So I'm 1h24m into this 1h52m podcast. I have to applaud the guy for his ambition and his ability to regurgitate facts and numbers but I really can't see past the flaw in his main argument of Universal Basic Income.

Per Andrew Yang:

1. Jobs are being automated to reduce costs and generate more profit.
2. The companies who have automated, such as Amazon, are diverting money from the local economy which leads to layoffs across many industries, i.e., malls, local stores, and the companies that provide goods and services for the people and business that operate therein.
3. The people losing employment from the primary, secondary, and tertiary effects of automation will not learn to <insert job that requires high level reasoning or blue collar labor here>.
4. Giving everyone $1000 per month, regardless of salary or existing government benefits, will stimulate the local economies, entrepreneurship, and create new jobs for displaced workers.

Okay so here is the problem as I see it which wasn't addressed at any point by Andrew Yang:

1. People are sending their money to companies like Amazon which closes local stores. How does giving everyone $1000 automagically drive people to spend locally rather than just sending Amazon an additional $1000 dollars in revenue per shopper thereby accelerating local job loss?
2. People are unable or unwilling to learn a new skill despite the looming and very public warnings regarding job displacement, i.e., truck drivers, call centers operators, etc. How does giving them $1000k per month automagically generate the ability and effort required to learn a new skill?
3. The additional money in circulation could help companies accelerate automation. How will he stop that?
4. The local jobs that are created would have to be low skilled minimum wage jobs; these would be the only jobs suitable for those unwilling or unable to learn new skills. How does that provide a suitable living in most major cities with the highest population density?
5. His proposals, per his own admission, would require strong border enforcement to stop the hoards of illegal immigrants who would flood the country looking for their free $1000 per month. How will that endear him to the current crop of SJW's that are controlling the democratic party who would torpedo his nomination because of his stance on border enforcement?

[prognastat]

[*]His proposals, per his own admission, would require strong border enforcement to stop the hoards of illegal immigrants who would flood the country looking for their free $1000 per month. How will that endear him to the current crop of SJW's that are controlling the democratic party who would torpedo his nomination because of his stance on border enforcement? [/list]

Well at least we could automate the border security in this future ;P

[tonyedgecombe]

1. 1k per month wouldn't cover rents in most major cities. I guess the poor will need to move to the rent depressed areas of the US.
2. More dollars chasing limited goods. I guess inflation isn't a factor.

This is the key problem, it would be the same in the UK. When housing supply is constrained that extra $1K will end up in the pockets of landlords.

I'm not sure peoples ability to manage their finances is a good reason to withhold any benefit, we don't withhold education because someone is a slow learner or healthcare because they didn't live on beans and lentils their whole life. It also sounds rather elitist and a bit of a generalisation to say that people who could benefit from this are necessarily bad at managing their finances.

[Campitor]

@tonyedgecombe

Giving someone money is elitist because it presupposes that 12k per year to those struggling will magically solve the majority of problems that drive poverty and job loss. Showing someone how to make, preserve, and grow money is compassion. Let's break it down. Who will benefit from $1000 per month? What income bracket "needs" this money versus which bracket will only gain disposable cash to spend on non-critical activities? If you're making over $60k and need an additional $1k per month, you're making bad financial choices. Those in the lower income bracket that haven't figured out how to improve their lives, will not magically get their heads filled with entrepreneurial or financial know-how when they get that $1k check. $1k per month will neither stop automation or create jobs for those unwilling or unable to learn new skills. Eventually all these individuals, who need this money, will only have this money and nothing else because all the jobs they are qualified for, or desire, are gone.

And this isn't free money - it's 1.3 Trillion per year that will need to be taken out of all our pockets. There needs to be checks and balances or it will incentivize bad behavior such as more borrowing, indulging in vices (drinking, strip clubs, drugs, gambling, prostitution). And others will use the $12k per year to indulge their whimsical desires such as backpacking through <insert foreign location here>. Increasing Federal spending by 38% isn't a trivial matter. Social Security will be going bankrupt but somehow giving away 1.3 Trillion on non discretionary personal spending is okay; don't forget he said that existing benefits will not be taken away. And all the extra consumerism won't be GHG friendly either.

I'm not sure peoples ability to manage their finances is a good reason to withhold any benefit, we don't withhold education because someone is a slow learner or healthcare because they didn't live on beans and lentils their whole life.

Slow learners either fail to advance or take remedial classes and tutoring. People who make poor health choices either die early, get surgery, lose limbs (diabetes), or take medicines that drain their income or produce symptoms worse than the disease. So while we don't withhold learning or withhold healthcare, the reckoning comes. The same will occur for those getting $1k per month unless they are taught to make better choices and held responsible for those choices - there's no cheating the bad consequences that result from bad choices.

[Kriegsspiel]

If I'm being honest with myself, yea 100% is of UBI is going towards vice. But on the bright side, the sex robots should bring prices down; those hookers ain't gonna learn to code.

[tonyedgecombe]

I think we are having a definition problem. By my definition, being good with money has two parts: 1) being able to get enough money to cover living expenses 2) not spending all the money

By my definition, anyone who would benefit from UBI is not good with money.

You can't imagine somebody who does both of those things yet couldn't benefit from UBI?

I must repeat I don't think it will work but the reasons have nothing to do with the fecklessness of some recipients nor the costs.

[jacob]

UBS=Universal Basic Stuff?

[tonyedgecombe]

UBH - Universal basic housing?

[Campitor]

Off topic - I'm watching The Expanse now - it has me hooked.

Back to the regularly scheduled UBI discussion. UBS needs to meet UBFK to combine into UBFKS.

Universal Basic Financial Knowlege & Support.

[Lemur]

For everyone who didn't click, it's a Joe Rogan podcast with Andrew Yang about (mostly) $12,000/year UBI and automation.

I can't tell (because he didn't say) if this $12,000 is in addition to

Social Security, disability insurance, unemployment insurance, Supplemental Nutrition Assistance Program, Temporary Emergency Food Assistance Program, Nutrition Program for the Elderly, Commodity Supplemental Food Program, Special Supplemental Nutrition Program for Women, Infants, and Children, Section 8, Inclusionary Affordable Housing Program, Temporary Assistance For Needy Families, Healthy Marriage and Responsible Fatherhood Program, Child Care Assistance Program, Child Care and Development Fund, Low Income Home Energy Assistance Program, Universal Service Fund Subsidized Low Income Phone Service, Weatherization Assistance Program, Supplemental Security Insurance, School Breakfast Program/National School Lunch Program/Summer Food Supplement Program, Child and Adult Care Food Program, Earned Income Tax Credit, and all their tribal equivalents and anything else I surely missed

or if it takes the place of it. I don't think he said how he would pay for it, either. Just saying you're going to give everyone $12,000 a year isn't anything remarkable.

He takes a detour in there at about the hour mark to talk about how evil it is to not allow people to discharge government-guaranteed student loan debt.

Then he finishes by saying that if he even suspects Russians are impersonating Americans on social media he's going to attack them.

Meh.

I wasn't saying I agree with Andrew Yang or not but it did not sound like you listened to it...he covered all these areas...in bold.

[Kriegsspiel]

K

[7Wannabe5]

IMO, Universal Basis Stuff is a terrible idea compared to Universal Basic Income. It will just greatly increase the economic waste inherent in schemes already in existence such as "You Buy, We Fry" or guaranteed student loans or mobile home financing.

Also, I can't quite comprehend how UBS could be made Universal. The whole point of being upper-middle-middle class is that you don't want the same market basket of Stuff as the hoi polloi in the middle-upper-middle-class.

Anyways, the most interesting thing I have read on the topic of automation is that it tends to drive up wages for specialist services. In realms such as Paris, where the members of the upper middle class do not spend as much money on uber square foot McMansions, they do spend a good deal of money on such things as Exclusive Personalized Herbal Tonic Advisement Session.

Also, I don't know about where you guys live, but where I am sitting, there is a sh*t-ton of needful work to be done, even if nobody has the imagination and/or motivation necessary to wrap it up in a package stamped with a LLC and fitted with Job Titles. For instance, how about tearing down that half abandoned strip mall, repurposing the materials, and planting some trees?

[iopsi]

Augustus:

I would argue that UBS is considerably less efficient than UBI. The latter needs simply a little polishing to solve its major problems.

For first it doesn't make sense that everybody gets the same in all cases. Rich people don't need UBI and middle class don't need as much as poor people. So you could have a decreasing UBI for example.
In this way you could also eliminate many public services and instead directly give money to people.

A simple, relatively personalized, transfer of money is much more pareto-efficient than the massive public infrastructure needed for UBS (and many other public services tbh). Pretty much by definition since people can use that money accordingly to their utility function, instead of getting fixed stuff from the gov.

As for the risk of it being used for wasteful garbage instead of basic necessities, you could bind it so that it can only be used for these.
For example here in Italy 18 years old can get the "bonus cultura", which are 500€ that can be used only for "cultural" goods (books and such). It works throught a specific app i think.
You could even have a state-owned cryptocurrency just for that for example, so that it is almost impossible to use it for anything else.
Even tho this partially binds what people can buy, it is still more pareto efficient than UBS since people can choose the quantity and type of "basic stuff" that they want.

On a side note i think that any Universal-Something program needs to come with strict immigration policies and maybe even general population control. Otherwise it seems like a recipe for disaster.

[prognastat]

Downside of linking it to allowable purchases is that some people will sell the allowable product for cash in a very inefficient exchange to buy what they really want to buy wasting a portion of the money spent on them.

[fiby41]

Basic income is not good as it makes people less social.
Basic income takes away the fundamental right of parents and relatives to provide for, as it gets monopolised by the government. People become mean, hateful when there is no need to be nice, in general as a habit, to parents and visit relatives biannually.

Social capital, usually children, are the basic income for people in countries in which people haven't outsourced it to their governments. It is peak communism to expect the state to take care of you when you get cranky.