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

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

Post by BRUTE »

Productivity and Pay: Is the Link Broken?
This tends to militate against pure technology-based theories of the productivity-compensation divergence. Together these results suggest that faster future productivity growth is likely to boost median and average compensation growth close to one-for-one.
seems to indicate that technological improvement is not what causes divergence between productivity and wage increases, but that other factors cause this divergence.

seems to apply to UBI. if technological progress is not what decouples working humans from economic progress, then UBI might not be the solution for that problem.

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

Post by BRUTE »

https://www.nationalreview.com/corner/a ... jim-manzi/
But what about the argument that there is an important benefit — namely, the elimination of the welfare bureaucracy and the dog’s breakfast of “food stamps, public housing, Medicaid, cash welfare, and a myriad of community development programs”

[..]

it is the difference between an academic idea that has not yet been subjected to lobbying and legislation, on one hand, and real laws that are the product of a democratic process, on the other.

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

Post by Bankai »

Has anyone had a look at this course?

https://www.coursera.org/learn/explorin ... sic-income

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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 »

"Calling it expensive and unsustainable, Ontario's new government is scrapping the province's basic income pilot, which began in April 2017 and was set to last three years. The decision brings an end to North America's first government-backed trial of the idea in decades following a move by Finland to terminate Europe's first government-backed basic income experiment"

https://seekingalpha.com/article/419293 ... le-tariffs

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

Post by prognastat »

@Dream of Freedom

I must question how a trial with a fixed timeline and fixed payments turns out to be too expensive and unsustainable. Didn't they look at how much they would be paying out per month and how much that would be over a 3 year period?

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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 »

@prognastat
I don't know what they considered. I am not a decision maker for the Ontario government.

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

Post by Bankai »

Finland basic income trial left people 'happier but jobless'

https://www.bbc.co.uk/news/world-europe-47169549

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

Post by Kriegsspiel »

"While employment levels did not improve, participants said they felt happier and less stressed."

Groundbreaking revelations. Money well spent.

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

Post by Campitor »

In Muraja's own words...

My living costs today stand at nearly €2,000 a month – it’s a sum I would never be able to pay with just the basic income. And that was not the idea. Rather, basic income acts as the perfect incentive – it gives you security to chase other opportunities. It pushes you to seek fulfilling work – and isn’t that what unemployment benefits should do?

I used bold font to emphasize the critical part of his UBI experience. UBI needs to have underlying incentives for employment otherwise you'll encourage sloth. And how will UBI affect the shadow economy and crime? Those working in the shadow economy will have some wind beneath their wings to boost their unreported gains. https://www.npr.org/2013/03/26/17536165 ... -off-radar

I imagine the low level drug dealers will skip the minimum wage job and just straight up sell drugs 24/7 since they no longer need to boost their drug income (https://www.nber.org/papers/w6592.pdf: Consequently, most low-ranking gang members hold low paying legitimate sector jobs in addition to selling drugs for the gang.). And their drug overlords will demand a percentage of their UBI to help offset cost of drug confiscation or price wars. And pimps and other sex traffickers will be encouraged to recruit/force more women into the sex trade to boost their skim. Well done UBI! :roll:

Rolling out UBI without considering all the ramifications is irresponsible. I'd rather see an audited voucher program for housing, food, and health benefits before a UBI program.


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

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

Post by Kriegsspiel »

Lemur wrote:
Tue Feb 12, 2019 8:33 pm
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.

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

Post by jacob »

Augustus wrote:
Wed Feb 13, 2019 6:12 pm
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
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Re: The benefits of a basic income // much higher min wage

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

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

Post by prognastat »

Campitor wrote:
Thu Feb 14, 2019 7:53 am
[*]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

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

Post by tonyedgecombe »

Campitor wrote:
Wed Feb 13, 2019 9:07 pm
  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
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Re: The benefits of a basic income // much higher min wage

Post by 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.

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

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

Post by tonyedgecombe »

Augustus wrote:
Thu Feb 14, 2019 7:36 pm
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.

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