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

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7Wannabe5
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Re: The benefits of a basic income // much higher min wage

Post by 7Wannabe5 » Tue Jun 18, 2019 7:54 am

Well, we already have all sorts of income transfer programs in place. What I like about UBI is that it is "universal" rather than means based, thereby reducing disincentives at the margin (obvious motivation to earn less by those just above any hard cutoff.) Expansion of the earned income credit with some easy modern system for monthly stipend could serve similar purpose, but with advantage of sloped margin and incentives towards work. It works very much like the very common Dad teaching financial responsibility move of telling kid "If you save half the money for the bike, I'll kick in the other half." :lol:

Campitor
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Re: The benefits of a basic income // much higher min wage

Post by Campitor » Tue Jun 18, 2019 8:15 am

latearlyFI wrote:
Mon Jun 17, 2019 8:57 pm
Banks & businesses had million dollar bailouts, but some people don't want to give people a small safety net?
The UBI proposal in its current manifestation would not only give 12k to the people who need it but also to the people that got the million dollar bailout. How is giving people UBI who already received millions a wise use of that money?
If you're employed, imagine your job is gone and the unemployment rate is 50%. Would you agree then that UBI is a good idea. I'd bet most of your expenses are also wildly above the UBI. It's not to create a nation of Bums, it's to create a safety net which would benefit everyone
.

The UBI being proposed would give those who have a job the same amount of money as those who are unemployed. How is that a smart way to divide up that money? Seems like UBI with some conditions would be a smarter way of allocating that money. We want to make sure that those who really can't get a job are being helped versus someone who can get a job but is being lazy; we owe it to the people who really need the money.
Would we want to live in a country with massive shanty towns of unemployed people? Competing insanely for the very few jobs?
You mean like Venezuela where taking from the rich to give to the poor was going to lead to a better life? Every economic decision creates incentives. It doesn't matter if you're rich or poor. Taking money from people who know how to maximize money and giving it to people that don't isn't going to suddenly make life better for the financially illiterate otherwise every Venezuelan would be bursting with money. The rich fled the country, took their knowledge and money with them, and now the people are struggling because they are uneducated in regards to what needs to be done to run a productive economy.
The amount of automation coming is staggering. The book, "War on Normal People", shows what is happening and thankfully proposes some solutions
When lawmakers propose artificial wage hikes (artificial in that the market doesn't support paying that wage), you incentivize the automation of unskilled labor. Paying $17k for a dishwashing machine that can run 24/7 is better than paying 1 dishwasher $15/hr (+plus tax) which costs $31.2k a year.

I'm not here arguing against UBI because I don't care for the needy. I'm arguing against UBI because I feel it's going to hurt the needy the most. Rich people have options and poor people less so. Start taking rich people's money in a punitive manner and they will leave or shutter their businesses. When costs exceed desired profits, people will walk away. Once the rich people are gone or throttling businesses so they don't get taxed at 70% to 90%, where is all this UBI money going to come from? Who is going to lend money to an impoverished nation in quantities that would make UBI possible?

bigato
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Re: The benefits of a basic income // much higher min wage

Post by bigato » Tue Jun 18, 2019 8:35 am

It’s more complicated than that. Government budget does not work like your household’s. See what has been done with QE. Except that in that case money went to banks and investors instead in an effort to save the economy. Trillions of it.

Campitor
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Re: The benefits of a basic income // much higher min wage

Post by Campitor » Tue Jun 18, 2019 4:41 pm

QE works as long as the banks are willing to lend out the cash provided by the Fed. What happens when the banks are afraid of lending out money? Is there no scenario where this wouldn't occur? What if banks were being taxed in a punitive manner - would they lend out money then? QE makes the rich richer everywhere because they are the first recipients of the money and decide who to lend money.

And I don't think anyone on this board is under the illusion that Government budgets are similar to household budgets. Regular citizens can't unilaterally take money from their neighbors and parse it out as they see fit nor do they have access to national treasures they can sell or rent such as the pristine wilderness areas that are now open to fracking/drilling/mining.

bigato
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Re: The benefits of a basic income // much higher min wage

Post by bigato » Tue Jun 18, 2019 4:59 pm

Also a household can’t legally print money. Actually that part of my comment was a response to I-Dave's “government has to take from one to give to another”.

So is it problematic taking from the rich to distribute to the poor (UBI), but it is somehow ok to take from the poor to give to rich (QE)? What about distributing those same trillions to the overall population equally and letting inefficient companies and banks crash and burn and let the free market take care of that, let chips fall where they may? Wouldn’t that stimulate the economy just the same or more?

Campitor
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Re: The benefits of a basic income // much higher min wage

Post by Campitor » Tue Jun 18, 2019 5:28 pm

@bigato

I see what you're saying. But QE is taking money. It doesn't seem like taking because it's "invented money". How QE "takes" is by making money cheap thereby incentivizing stock purchases over savings. Anyone holding cash/savings is seeing subpar returns versus stocks/commodities so they are highly incentivized to become stock/bond investors to avoid inflation eroding their modest capital because of artificially low interest rates. The rich get access to cheap money and coerced investors (the little guy). What has been stolen is "fairness". :(

tonyedgecombe
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Re: The benefits of a basic income // much higher min wage

Post by tonyedgecombe » Wed Jun 19, 2019 4:44 am

Campitor wrote:
Tue Jun 18, 2019 8:15 am
The UBI proposal in its current manifestation would not only give 12k to the people who need it but also to the people that got the million dollar bailout. How is giving people UBI who already received millions a wise use of that money?
The clue is in the word universal. Of course you could try and sort out the needy but that wouldn't be any different from the various welfare schemes in place around the world right now. Part of the justification is that you can remove the bureaucracy and to some extent the stigma that comes along with traditional welfare. In reality those people at the top of the pyramid would end up paying out more than they receive.

IlliniDave
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Re: The benefits of a basic income // much higher min wage

Post by IlliniDave » Wed Jun 19, 2019 6:01 am

bigato wrote:
Tue Jun 18, 2019 4:59 pm
So is it problematic taking from the rich to distribute to the poor (UBI), but it is somehow ok to take from the poor to give to rich (QE)? What about distributing those same trillions to the overall population equally and letting inefficient companies and banks crash and burn and let the free market take care of that, let chips fall where they may? Wouldn’t that stimulate the economy just the same or more?
It isn't necessarily a problem for the government to redistribute "rich"->"poor", In the US we already do that, explicitly to the tune of approaching $0.7-0.8T/yr in social safety net programs, but also through a graduated federal income tax system where the top ~50-ish percent of households (by income) pay 90-ish percent of all the federal income tax (and iirc the top 10% pay 50% or so).

The problem with Yang's Freedom Dividend, which he wants to fund by taxing corporations, is that it hands out more money per year than all the corporations added together make as profit in a year (or at least made in 2017, might be a wash now with the new tax laws). Taxing corporations at ~100% is tantamount to a government takeover of corporate America. If it takes the form of a VAT it gets passed on to the consumer where the low and middle income people will pay disproportionately. It should be apparent to a frugal-minded person that we can't afford it.

Printing money devalues the money of people who already have money which is essentially taking money from them. I tend to think of it as a sneaky wealth tax--so a little different than income tax, but not much.

I don't have an educated opinion on QE or the bail outs. It's frustrating that the country as a whole has had to pay for the mess created by a few. Ironically part of the underlying problem was the federal gov't exerting pressure on lenders to extend mortgage loans to borrowers down the income continuum into the gray area where reasonable likelihood of repayment was dubious. There was more to the crisis than the existence of questionable borrowing/lending, to be sure, but it was the combustible material that was mishandled. The whole 2008 saga is a reminder that well-meaning government social engineering programs can have unforeseen adverse side-effects. And the response to it (elites circling the wagons to protect their own/themselves) was a real life example among the various reasons why the slogan "drain the swamp" resonated with a wide swath of voters a couple years back. UBI expands the swamp to be an ATM for all.

7Wannabe5
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Re: The benefits of a basic income // much higher min wage

Post by 7Wannabe5 » Wed Jun 19, 2019 6:30 am

Another rather depressing thing to keep in mind, is that anybody who can at least perform their own personal care, is a huge savings to society over all the Baby Boomers who will soon be losing that functioning. Paying some lazy kid $12,000 a year to stay out of trouble is NOTHING compared to the Medicare bill for somebody like my mother who currently, awaiting extreme need for high-risk hip replacement, needs somebody to help her take a shower. Robot senior scrubbers is where I would invest my pennies now.

So, if there is any possibility that UBI would reduce the ranks of those currently trying to fade out of the workforce on disability, that would be another upside.

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Dream of Freedom
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Re: The benefits of a basic income // much higher min wage

Post by Dream of Freedom » Wed Jun 19, 2019 7:05 am

There are good and bad things with ubi imo. It would be quicker to stem the financial damage when facing tough times. People would have increased negotiation power with their employers since they could more easily quit. I could spend my days lounging in a hammock. All good things.

I'm just not convinced that it would help the poor more than the current system. Wellfare recipients aren't exactly known for great decision making skills. You would be giving them cash. Who's to say they wouldn't just use it to gamble or buy drugs and alcohol while leaving themselves and their kids homeless and malnourished. Wellfare ensures they use it for food and subsidized housing ensures they use it for housing.

tonyedgecombe
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Re: The benefits of a basic income // much higher min wage

Post by tonyedgecombe » Wed Jun 19, 2019 1:01 pm

If they were just going to use it for drugs an alcohol then they will sell whatever goods you let them buy with tokens. No doubt some do that but I’m yet to be convinced it’s the majority.

EdithKeeler
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Re: The benefits of a basic income // much higher min wage

Post by EdithKeeler » Sun Jun 23, 2019 4:35 pm

I'm just not convinced that it would help the poor more than the current system. Wellfare recipients aren't exactly known for great decision making skills. You would be giving them cash. Who's to say they wouldn't just use it to gamble or buy drugs and alcohol while leaving themselves and their kids homeless and malnourished. Wellfare ensures they use it for food and subsidized housing ensures they use it for housing.
There are quite a few studies out there that show that when poor people are given cash, they mostly spend it just like middle class people do—some buy better food, some upgrade the cable package, some move to better places, and some buy booze and drugs.

Personally, I’m convinced that if UBI was in place, people would just figure out a way to get their paws on it.

On “on the media” today the story was devoted to how rich landlords, particularly LLCs, sort of prey on poor people. Of note, rents for crappy apartments aren’t generally significantly less than good apartments, and poor people are quick to be evicted, with lots of fees tacked on. (As a landlord, I can see both sides on this one....).

But I think whenever there’s a big pool of money out there, whether it’s Medicare or Medicaid dollars or student loan $$ or welfare or UBI, someone’s gonna be trying really hard to get their hands on it. I think I’m realistic, not necessarily cynical about that.

Campitor
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Re: The benefits of a basic income // much higher min wage

Post by Campitor » Sun Jun 23, 2019 6:01 pm

The rental price for crappy apartments doesn't differ significantly for many reasons. Homeowner taxes don't differ much from bad to good neighborhoods. Residential units in poor neighborhoods get abused so the upkeep costs are higher than most people realize. Holes punched in doors and walls is not uncommon. Busted windows and doors from robberies isn't uncommon either. And high rents buffer against late and delinquent payments.

EdithKeeler
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Re: The benefits of a basic income // much higher min wage

Post by EdithKeeler » Sun Jun 23, 2019 8:34 pm

The rental price for crappy apartments doesn't differ significantly for many reasons. Homeowner taxes don't differ much from bad to good neighborhoods. Residential units in poor neighborhoods get abused so the upkeep costs are higher than most people realize. Holes punched in doors and walls is not uncommon. Busted windows and doors from robberies isn't uncommon either. And high rents buffer against late and delinquent payments.
I don’t disagree. You charge more to those who are likely to cost you more. But the fact is profit margins on the cheap apartments are actually much higher than on better apartments because they buildings aren’t as well maintained and because of fees and things tacked on to the eviction process, etc. https://www.citylab.com/equity/2019/03/ ... ch/585265/

Here’s a link to “on the media.” The story today is one of a 4 part story on eviction. https://www.wnycstudios.org/shows/otm

Personally, I think if we could get a handle on housing costs for lower income people, that would be half the battle. I would expect, though, that if UBI went into effect, rents would increase significantly.

Toska2
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Re: The benefits of a basic income // much higher min wage

Post by Toska2 » Sun Jun 23, 2019 10:09 pm

Monetary wealth is a "relative" concept. If everyone had the same amount more, the new equilibrium is that.

Tinfoil hat time...
It would flush out everyone who choses to live quietly with "under the table" jobs and out of the governments reach. What they earn now would be insufficient. This is a hunt for the true independents under the guise of helping the poor.
I cannot put into words how vile this is to me.

tonyedgecombe
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Re: The benefits of a basic income // much higher min wage

Post by tonyedgecombe » Mon Jun 24, 2019 3:14 am

EdithKeeler wrote:
Sun Jun 23, 2019 8:34 pm
Personally, I think if we could get a handle on housing costs for lower income people, that would be half the battle. I would expect, though, that if UBI went into effect, rents would increase significantly.
If the housing supply is constrained, otherwise probably not much.

latearlyFI
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Re: The benefits of a basic income // much higher min wage

Post by latearlyFI » Mon Jun 24, 2019 11:35 am

I think the UBI debate sometimes not focused on the right issue ie it becomes more about worrying about lazy people and unfairness on hard workers etc. I think the perspective needs to come from what the fuck are we going to do when 75% of the country doesn't have a job. That statistic is from a book written by a guy that has studied the possibilities, (The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future", by Martin Ford. But even with a much lower rate of unemployment due to automation, the outcome is scary. The Great Depression reached 25%. Businesses need people to have money to function. If only a small few people are rich and have income they can't make up for a mass market. You can only sell only so many phones, cars and appliances to Billionaires. So the question really is what steps can be taken to avoid calamity from the rapid reduction in available jobs.

From what I've read so far UBI is a very simple solution There may be better solutions that I'm unaware of. A VAT could fund it. Amazon is drastically reducing employment all on it's own, via robots in warehouses and shipping, drone deliveries, staff free stores and putting many retails stores out of business that hire. They also pay zero federal tax. The payroll taxes, are gone too. So if they had say a 5% VAT on all purchases, which was then redistributed to all Citizens, it would just go back into the economy.

Other countries have the VAT or GST, some countries don't apply it to basic necessities like food and utilities, but it spreads the tax load so it is not just on the shoulders of employees.

Campitor
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Re: The benefits of a basic income // much higher min wage

Post by Campitor » Mon Jun 24, 2019 6:23 pm

There are 240 million adult citizens in the US. If 75% of them were unemployed, that would mean 180 million US citizens have no income - 12k a year UBI will not be enough to compensate for a complete loss of income. The math says UBI in any form where 75% of American's are unemployed is unsustainable.

And the only incentives businesses have to stop automation is to make hiring humans the cheaper alternative again. I don't see that happening.

IlliniDave
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Re: The benefits of a basic income // much higher min wage

Post by IlliniDave » Mon Jun 24, 2019 7:45 pm

Campitor wrote:
Mon Jun 24, 2019 6:23 pm
The math says UBI in any form where 75% of American's are unemployed is unsustainable.
Same could be said for the businesses. With 75% unemployment there's basically no customer base. Or tax base for that matter.

Campitor
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Re: The benefits of a basic income // much higher min wage

Post by Campitor » Mon Jun 24, 2019 8:02 pm

IlliniDave wrote:
Mon Jun 24, 2019 7:45 pm
Same could be said for the businesses. With 75% unemployment there's basically no customer base. Or tax base for that matter.
Totally agree. There will be jobs that will never be replaced because the complexity of the task would require automation that is so expensive that it wouldn't be worth the money. But keep jacking up the price of simple labor and simple machines that cost less than a year's salary for 2 employees makes sense. No profit loss to taxes, training, benefits, and family leave.

https://www.aei.org/publication/minimum ... coal-mine/

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