These are some of the best comments from Basic Income, Not Basic Jobs: Against Hijacking Utopia. I’m sorry I still haven’t gotten a chance to read everything that people have written about it (in particular I need to look more into Scott Sumner’s take). Sorry to anyone with good comments I left out.
Aevylmar corrects my claim that Milton Friedman supported a basic income:
Technically speaking, what Milton Friedman advocated was a negative income tax, which (he thought, and I think) would be much more efficient than basic income – I don’t remember if these are his arguments, but the arguments I know for it are that the IRS can administer it with the resources it has without you needing a new bureaucracy, it doesn’t have the same distortionary effects that lump sum payment + percentage tax does, and it’s probably easier to pass through congress, since it looks as though it costs less and doesn’t have the words ‘increasing taxes’ in it.
And Virbie further explains the differences between UBI and negative income tax:
The main difference is that discussing it in terms of NIT neatly skips over a lot of the objections that people raise to flat UBIs that are abstractly and mathematically (but not logistically or politically) trivial. Many of these focus on how to get to the new policy position from where we are now. For example, people ask both about how a flat UBI would be funded and why rich people should receive a UBI. Given that the tax load to fund a basic income plan would likely fall on the upper percentiles or deciles, a flat UBI + an increase in marginal tax rates works out to a lump sum tax cut for high-earners and a marginal tax increase. Adding negative tax brackets at the bottom of the existing system and modifying top marginal rates is a simpler way to handle this and extends gracefully from the current system instead of having to work awkwardly alongside it.
In the example above, the NIT approach has the logistical advantage of the bureaucracy and systems we already have handling it more easily. And the political advantage of the net cost of the basic income guarantee looking far smaller than for flat UBI, since we’re not including the lump sum payments to upper-income people (that are more than offset by their marginal tax increases).
There’s some further debate on the (mostly trivial) advantages of NIT or UBI over the other in the rest of the thread.
Tentor describes Germany’s experience with a basic-jobs-like program:
We had/have a similar thing to basic jobs in Germany and it worked about as well as you would expect. Companies could hire workers for 1€/hour and the state would pay social security on top of that. The idea was that long-term unemployed people would find their way back to employment this way, but companies just replaced them with new 1€-workers when their contract was over and reduced fully-paid employment because duh!
Plus people on social security can be forced to take jobs or education. As a result a lot of our homeless are depressed people who stopped responding to social security demands because that’s what caused their depression.
(Links are to German Wikipedia, maybe Google translate helps)
Another German reader adds:
I agree that it doesn’t work as expected in Germany, but I think it it important to point out that not everyone is allowed is to hire workers for 1€. The work has to be neutral to the competition and in the public interest. So people are hired at a lot of public institutions (e.g. schools, universities, cleaning up the city).
Additionally these jobs improved the unemployment statistics at a low cost for the government, as people who are working in these jobs count as employed although most of these jobs are only part time jobs.
Murphy describes the UK experience:
One likely model for “guaranteed jobs” is the disaster that they tried in the UK for a while.
Basically the government partners with crappy low-skill employers who’s owners are buddy buddy with the right ministers and the state provides them with a steady supply of
They then declare it all “Education”, in fact pay a premium to the corporate partners for “providing education” in the form of 5 minutes showing someone who’s already worked shelf stacking jobs how to stack shelves.
The people who love the scheme tend to genuinely believe the fiction about “education” because they tend to be the kind of people who believe that all poor people are thick and can’t learn and really do need 6 weeks to learn how to put a tin of beans on a shelf.
Your manager is abusive? tough luck. You have no rights. if you quit or the supervisor just declare you not to be working hard enough you lose your dole money. Hope you like starvation and death.
So if your manager demands you suck his dick then make sure to bring kneepads to work.
Remarkably employers who suddenly had the option of free labor along with free money from the government leapt at the option so people found themselves fired from positions only to find themselves required to do the same job a few weeks later only this time without pay.
The government was taken to court over it, the court rules it unlawful.
“I don’t think I am above working in shops like Poundland. I now work part-time in a supermarket. It is just that I expect to get paid for working.”
So the UK Parliament passed retrospective legislation to overrule the courts.
Anyone and I mean anyone with a libertarian bone in their body and an ounce of principles should be disgusted by “guaranteed jobs” because it’s thinly disguised slavery and a drive to replace paid work with forced labor.
Herbert Herbertson on the Native American experience:
I’ve said it before, but beyond the Alaska permanent fund, there’s an area where we could see a TON of extremely varied UBI case studies that I’ve never really seen anyone talking about UBI mention, one where we could see the limits, the pitfalls, and the benefits of a UBI as applied to a population with extremely deep historical poverty, intergenerational trauma, and serious substance abuse issues: Native American tribes with (more or less) successful gaming operations who distribute a portion of profits to their members in the form of a “per capita” payment.
My anecdotal experience is that it’s no panacea, but that it sure as fuck helps–but there’s a lot of potential data out there to move beyond anecdote.
Unirt describes the Finnish experience:
There has been a universal employment trial in a Finnish town Paltamo, which lasted 3 or 4 years. Apparently it costed the government more than just paying unemployment subsidies, and they found that undesirable.
richarddormersvoice describes the Chinese experience:
the closest thing to a guaranteed work program today is the iron rice bowl in china, which is a clusterfuck.
from what I know/heard:
a) 50% of state-owned enterprises are operating at a loss, meaning they are inefficient, corrupt, unproductive, and generally terrible places to work. it is stable though because it’s guaranteed by the ccp.
b) areas where irb has been liberalized do much better economically, shenzhen, guangdong, chongqing, while much of the northeast has barely developed.
c) even so, getting rid of the irb is difficult because, well, people, firms, politicians are dependent on it. chinese politics is heavy on corruption, soes are especially heavy on corruption.
Doktor Relling describes the Scandinavian experience:
Scandinavian countries have for some years had something functionally similar to a Universal Basic Job guarantee. We label it “activation policies”.
Since we have been doing this for some years (and increasingly the rest of Europe likewise), we have some empirical knowledge of the pros and cons. For those interested, here is a simplified walkthrough of the system (full disclosure: I spend my working life as a health & social policy researcher – and I believe that, on balance, this policy is better than the alternatives.) 1) You start out by introducing a means-tested social assistance scheme that covers everybody – including single males at subway stations shouting GRAAAGH to passers by. 2) You require that those who apply for social assistance, work for the benefit if they are able to work. 3) To find out if they are able to work, the social assistance administration does a work test.
Effects of the system: When the social assistance administration does the work test, it discovers that many long-term social assistance claimants are actually disabled (which was never found out before we introduced the activation requirement plus work test). Hence they qualify for a disability pension instead (somewhat similar to US Special Supplementary Income). In short: This version of a UBJ channels the unemployable GRAAGHs among us to a (more generous and not-means-tested) disability benefit. This takes care of Scott’s objection concerning what to do with those whose net “worth” to an employer is negative.
As an aside: organisations for people with disabilities, in particular the youth organisations, like the activation requirement. Their complaint is that the government does not always follow up its job guarantee in practice.
Why not a Universal Basic Income instead? Most of the weaknesses of a UBI have already been pointed out in the discussion (by rahien.din and David Friedman among others). Let me just re-state that many disabilities are really expensive. A UBI will not be sufficient to grant people with severe disabilities a good life. If voters want to provide them with above-minimum tax-financed income, the state simply cannot avoid to burden medical personnell and administrative staff with the difficult and contradictory helper/gatekeeper roles they perform in our present social security systems. It is messy, difficult, and yes there are Type I and II errors, but these problems are unavoidable if voters want to provide people with disabilities with more than what everyone else gets. (And hey this role conflict is difficult but it is not THAT difficult; after all we have been able to live with this role conflict for more than a hundred years.)
Yakimi describes the Nauru experience:
There are societies where entire populations have been unconditionally emancipated from the necessity of labor. I have seldom heard basic income advocates talk about these precedents, probably because these experiments do nothing to justify their optimism.
The Republic of Nauru has an unemployment rate of 90%. Its people do not work because their incomes are publicly subsidized, mostly by the exploitation of their island’s phosphate deposits, an industry which once provided them with the highest incomes per capita in the world. These people who once lived on a diet of coconut and fish used their sudden influx of wealth to import all the worst excesses of civilization, leaving them with the highest obesity and diabetes rates in the world and a life expectancy of 59.7 years. They’ve nearly exhausted their sources of phosphate, completely destroying the natural beauty of their island in the process, and the people are now physiologically incapable of any existence other than idleness.
We might also look to the banlieues of France, where the youth unemployment rate is over forty percent and the underclass survives, illicit economic activities aside, at the expense of the generous French welfare state. Is there any evidence at all these beneficiaries are grateful to have been freed from drudgery? If anything, their lack of economic stake only seems to aggravate their resentment against a society that is keeping them humiliatingly idle. As recent events remind us, men hate being made to feel superfluous. Nor does there any appear to be evidence that their idleness has enabled the Byrons, Churchills, Von Brauns, et al. among them to improve the world with their genius. They are quite capable of setting cars on fire, though.
There are no doubt people, like yourself, who are natural aristocrats, who are very good at finding discipline, purpose, etc. even when freed from the pressures of necessity and would benefit from a stipend. But it is solipsistic to assume that most, or even many, humans can operate functionally when made entirely independent of the disciplinary pressure of having to earn your fill. Posthuman biotrash is a big enough problem already, and basic income can only make it worse.
I certainly don’t deny that a lot of ghettos and banlieues contain some very unhappy people. But does work help?
Suppose Alex lives in a ghetto and spends 12 hours a day watching TV and eating Cheetos. Bob lives in the same ghetto, works at a gas station 8 hours a day selling people lotto tickets, then comes home and watches TV and eats Cheetos for 4 hours. Aside from economic arguments about producing value for other people, is Bob’s life more meaningful than Alex’s? Is it happier? Would you rather be Alex or Bob? Would you rather Alex exist, or Bob exist?
If you want to make the argument for work, you have to argue that it does something other than turning Alex into Bob. That it has some other effect, where Bob gets home from work and says “You know, all that lotto-ticket selling has awoken a spark of something higher in me. Instead of watching TV, I think I’m going to read Anna Karenina.” Or something. If I’m strawmanning this argument, it’s because I don’t really know how people expect it to work.
I don’t want to disagree with Yakimi. I don’t want to come out and predict “If we institute UBI, we won’t have ghettos full of Alexes”, and have you point and laugh when I’m proven wrong. I think ghettos full of Alexes is a very likely outcome. But I don’t think that’s worse than ghettos full of Bobs. I think it’s just more surprising, more unfamiliar, more of a man-bites-dog style interesting news story that will provoke concern.
Wrong Species writes:
I only have one small quibble. Amazon is relentless with their employees because they’re so competitive. Jobs guarantee programs would be anticompetitive so we probabaly wouldn’t see anything like that. In fact it would probably be the opposite where there is too little to do and a lot of it is pointless busy work, like in high school.
Yes, this is a good point. Most surveys seem to find job satisfaction is higher in the private sector than the public sector, but I could imagine the opposite being true for the most-exploited kinds of unskilled labor.
And for what it’s worth, here’s a reader who works in an Amazon warehouse commenting to say it’s really not that bad.
Naj on another way things can go wrong:
It seems to me that many people whose lives suffer due to lack of money are in significant debt and that debt payments are a large fraction of their income. If a UBI is given to everyone, how are people prevented from borrowing $100,000 against it, blowing it quickly, and then having $0 income because their UBI is all spent on interest? Solving this problem also seems full of opaque bureaucracies and Kafkaesque rituals. Unless we just ban loaning money with interest for consumptive goods at the same time(a policy I might just favor).
Bankrupts will still be entitled to UBI. Assuming (not unreasonably) that bankruptcy laws won’t allow garnishment of UBI to pay debts, anyone with only UBI as income and more debts than assets could declare bankruptcy, surrender their assets to their creditors, and walk free from their debt.
The risk of loaning to someone with nothing but UBI would be huge, so no lender would lend.
(incidentally, the problem with this may be in the housing market, landlords will be demanding rent up-front rather than in arrears and being very aggressive about evicting people who fall behind)
Simon Sarris (author of the piece I was criticizing) writes:
The point of something like Basic Jobs is that giving people the option, but not the obligation, may result in better outcomes for some people at the margins. It’s not a panacea, it is definitely not a Utopian alternative to the largely Utopian plans of UBI because I do not think any Utopian plan as described is wise. It’s a suggestion of mere incrementalism, something to try on top of the hodge-podge of welfare that currently exists. A splint is safer than a spleen removal, as they say.
In other words, I think you are committing a mistake by comparing your Utopian vision to another Utopian vision (which I do not advocate). I do not think any Utopian vision is good or possible. You can make UBI look better by comparing it to other Utopian ideas, but this is in effect masking the deficiencies of UBI by comparing it to something else unrealistic.
I do not want to give the impression that Basic Jobs would ever accommodate everyone as UBI may intend to do. In the best case I 100% agree its positive effects would be smaller, but its implementation would also be safer. If you have a hard time imagining that, simply imagine “Maybe we should have farm subsidies, but they work more like Japan’s or Austria’s than what the US does right now.”
The huge difference between UBI and public works/job guarantee (even if it’s busywork) is that you only take a public works job if you can’t get a job on the market, and don’t have any better option. With UBI, everyone would take it, and many people who can work would quit. This may make a job guarantee at least remotely feasible.
This is the same as the difference between a homeless shelter and a rent subsidy: a homeless shelter keeps one from freezing on the street, but it’s pretty shitty, so the only people who choose it are those who really don’t have any other option. It’s a built-in means test that’s much more effective than a conventional means test that can be attached to a rent subsidy.
As such, a job guarantee may even save money if it replaces unemployment benefits. Of course, implemented this way it’s a right-wing policy (aimed to minimize welfare usage and incentivize work), rather than a left-wing one. (Hungary’s right-wing government has replaced unemployment benefits with public works like this.) It works if the goal is to keep the poor from starving, rather than to give them a decent standard of living.
This is a good and important point.
I was tempted to respond to Sarris that UBI isn’t that much more utopian than BJG. After all, it can be funded by a tax such that rich people overall pay more in extra taxes than they get in UBI, middle-class people pay the same, and poor people get more in UBI than they pay in taxes. Depending on where you set the definition of “poor”, you can ensure that only the very poor/unemployed people who would go for a basic job are really getting any money from UBI. So there’s no reason to think UBI is necessarily broader-scale than BJG.
10240’s point proves me wrong. Because basic jobs are potentially unpleasant, they act as a screening mechanism so that only people who really need them will take them. That means even targeted at the same income level, they would be less universal than UBI (another commenter points out that we could produce the same effect by making people wait in line for eight hours a day to receive their daily UBI check).
I was hoping to be able to wave away the cost issue with “this is equally bad for UBI and BJG”, but I guess I can’t anymore. I am not an expert in this so I don’t have strong opinions, but I would be pretty okay with a Piketty-esque wealth tax, a Georgist land tax, or whatever experts declare to be the least stupid and distortionary tax that mostly falls on the rich. This article (possibly wrong, possibly biased) suggests that some proposals for raising taxes on the rich could produce about $250 billion/year. That’s enough to pay the poorest 10% of Americans a $10K/year basic income (ie have a basic income plus tax increases such that they break even around the 10th percentile) even before cutting any welfare programs.
In my ideal system, we would propose some sort of inherently progressive tax at some fixed percent, and say that the basic income was “however much that produces, divided by everybody”. That means that as the economy grows, the basic income increases. At the beginning, the basic income might not really be enough to live off of (especially if I got my calculations wrong). As we get more things like robot labor and productivity increases, so does the income. By the time robots are good enough to put lots of people out of work, they’re also good enough that X% of what the rich robot-owning capitalists make is quite a lot, and everybody can be comfortable.
Then various Congresspeople can debate at what point the UBI is large enough that we can eliminate various welfare programs. On the one hand, welfare programs can be sticky, so we might worry they would be overly cautious. On the other hand, many Congresspeople are Republicans, so they probably wouldn’t be.
Yaleocon on winding down UBI:
Saying “winding down basic income is easy” assumes we have an Income Czar who can just say “all right, let’s wind it down.” We wouldn’t have that. We have a democracy, and do you really want to be the guy running on “everybody gets less money each year”? It’d be like opposing social security, except even more politically impossible. Candidates—at least, the winning ones—will only ever pledge to defend or expand it. (This also probably makes UBI a fiscally unsustainable policy in the long term.)
Once those political incentives are taken into account, I think we should view UBI as an irreversible, and probably unsustainable, change to our economic system. Scott (or any other knowledgeable UBI advocate), do you stand by the assertion that UBI would be easy to end, and if so, why? (I probably prefer the status quo to UBI, for what it’s worth.)
Thegnskald on long-term effects:
The economic right likes to pretend the distribution problem is solved. The economic left likes to pretend the production problem is solved. A UBI helps alleviate the distribution issue at minimum penalty to production; relative well-being so important, the incentive to work will be as strong as ever.
A major part of the problem with modern society is that there isn’t an economic incentive to cater to the cashless, the perpetually broke, the homeless; this is a service we want performed, but the system cannot enable it, and the system limps on.
A UBI creates such an incentive. In the short-term, we will have some shortages and price increases; in the long term, we will have a new consumer base, and new industry will arrise to support it.
Inflation is one possible result, and likely unless we make it economic to build such industry. A UBI needs a corresponding decrease in regulation, in order to make it possible to produce low-cost goods for that new money to chase.
And responding to completely different comments: if a state or city wants a higher UBI, so be it. But a major advantage that the UBI offers is to incitivize people to spread out more evenly across the US, reducing population density. Likewise, a major problem with current welfare is that it disincentivizes work, by punishing those who get it (as working costs benefits, resulting in less overall available funds). I don’t think we will have a rising class of jobless vagabonds; I think instead we will have a rising class of gig-economy people, who take short-term work to get money to buy luxuries, while they mostly skate by on the UBI. This is where we are heading anyways, so this is a net improvement, by making such gig work more secure.
I see little harm and much good in a UBI, and expect it to accelerate employment relative to the current system of “You only get your benefits if you don’t work and avoid making yourself too employable”.
Gimmickless is still worried about the rent issue:
I came of age in a military town. Part of the military benefit package is a stipend, should you qualify to live off-base. I could never find a apartment or single-wide that ever cost less than that stipend. That information gets out, and gets spread. Do people with McJobs cram themselves 3-4 to a trailer to make ends meet? Yes they do.
I fail to see how landlords will not take UBI into account on what rent they charge. Will there be a price gradient that actually settles out? Possibly. Probably. But it’s almost certainly going to end up higher than what rent is now.
This definitely sounds like what would happen in the case of a captive audience in a world with no ability to increase housing stock. If you relax some of those assumptions, I fail to see why rent shouldn’t reach a balance between supply and demand the same way other necessities like food, clothing, and gas do.
Dnkndnts doubts the “universal” part of UBI:
My problem with UBI is that it’s virtually guaranteed not to actually be universal. It’s going to be “universal” for Good Citizens. We’re going to probe and test you for any sort of substance abuse and if we find anything, you’re off the program; if you have a criminal record of any sort, you’re off the program. The government is not going to sponsor your alcoholism and crack addiction!
First, I think this immediately falls into the kafkaesque nightmare disability currently has: you have to prove to the Bureaucracy that you are, in fact, a Good Citizen in the same way that you currently have to prove to the Bureaucracy that you are, in fact, Actually Disabled.
Second, the people who need UBI the most are precisely those least likely to be labeled Good Citizens. Poverty massively correlates with substance abuse and criminal behavior.
I get that I’m attacking a strawman here in some sense, but I think there’s a snowball’s chance in hell that UBI would actually be universal.
Counterexample: Social Security. As far as I know, every elderly person gets it, whether they’re a good law-abiding citizen or not.
RC Cola writes:
I’m no economist but it seems to me that this essay under-plays what I thought would have been one of the main features of a job requirement over a free-floating income. For the moment put aside complications like disability and third-party effects and just imagine the core case of a person with no job. Jobs suck, as Scott notes toward the end. But it is in everyone’s interest if everyone who is able to support themselves with jobs do so rather than resorting to compulsory confiscation of others’ money to do so. So we want obtaining such government money to be unpleasant. This isn’t to say that most people on government programs are just lazy. But people do respond to incentives, and there are probably lots of marginal cases where it would be extra hard to support oneself with a job, and an easy, frictionless transition to government support would be an easy call whereas a costly and painful one would end up causing this marginal person to choose to remain in private employment.
so what is the main obvious attractor of a government-granted income without a work obligation? I think it’s not having to have a job. So to a first order of approximation, adding a job requirement does exactly what you would want it to do. It removes the largest incentive to avail oneself of the government program, namely the removal of work obligations during work hours. We want to do this not out of a punitive motivation, or even out of a “help the recipient” motivation. We want it out of a deterrent motivation, precisely to deter availing oneself of redistributive programs that by their nature cannot work if too many people opt in. Is that not an important part of the argument here?
My objection [to a previous comment] comes down to this: the assumption that UBI is a solution to poverty, rather than a solution to the systemic issues inherent in a bureaucracy-administrated welfare.
This puts me at odds with Scott, who seems to favor a high UBI intended to make work obsolete for most people. I favor a low UBI which makes the bureaucracy obsolete, but isn’t intended to pull people out of poverty. My preferred solution is a debit card (or maybe just a fingerprint-enabled system to disable theft) linked to an account with daily accrual of small amounts of money; 10-18 dollars per day per adult, some possibly smaller amount for children. Do away with disability and food stamps and housing assistance and social security, keep Medicaid/Medicare. Pair this with a new classification of minimal legal rental housing that amounts to an updated-fire-code-compliant barracks (a bunk, a locker or chest, and access to a bathroom and washing facilities, probably gender-segregated; family-style housing might amount to a lockable room). Toss in density maximums on the barracks, and proximity limitations, to avoid concentrating poverty. Maybe – maybe – add in a requirement for security guards.
The goal shouldn’t be to enable a luxurious life – it should be to enable a very basic one. With daily accrual of funds, huxters and con artist won’t find viable targets, and anything more expensive than a daily meal will encourage short-term thrift and the accrual of some very basic financial knowledge.
This is a more basic lifestyle than is afforded by the current system, but removes the barriers to entry and waiting lists that plague us now. I think the “lower middle class” version of UBI is a terrible idea; it should be treated as a safety net, not a replacement for productive enterprise.
This is the incrementalist version of a UBI. Trial it, adjust as necessary.
baconbits brings up other concerns:
What does it mean to have a “basic” income? Surely housing is included, and housing prices vary wildly over different regions. Are residents of Detroit getting enough money to pay for housing in NYC or are residents of NYC getting enough money to pay for housing in Detroit, or do we have a “cost of living adjusted UBI” where some people get enough for a low end car payment and others enough for a monthly subway pass and every other conceivable difference or are we just accepting that a few (tens of) millions of people are going to not be getting a basic level of income at all while a few (tens of) millions of people are getting well over their basic level?
While we are on the subject of the disabled, well the disabled have extra health costs… are getting more in terms of UBI? Long story short as soon as UBI is introduced it will be noticed that a great many people cannot afford their health insurance payments on their UBI and there will be cries for a nationalized health insurance on top of the UBI.
What about children and married couples? How are we balancing UBI payments to families without seriously screwing up incentives there? And immigrants? And families of immigrants?
The short answer is that right after you cut the Gordian you are going to pick up the slashed pieces of rope and attempt to retie them together to hold the system in place.
The optimism that there is a simple solution to an enormous issue is overwhelming.
Ninety-Three discusses risk to private industry:
You’re being unfairly rosy towards basic income by not mentioning that it too could destroy private industry. Imagine you institute basic income and most of the McDonalds workers quit. McDonalds tries to invent robots, but can’t because robots are hard. So they raise wages in order to attract more workers. In order to pay for their increased wages, they raise prices. The market informs McDonalds that people don’t want to pay more for their fast food, and McDonalds goes bankrupt because their business model was only profitable with $8/hour wages. Higher-end restaraunts will still exist, but your basic income scheme just destroyed the entire “cheap fast food” industry.”
This seems little different from minimum wage laws. Some studies suggest that $15/hour minimum wage laws don’t seem to hurt restaurants. Others do find some negative effect, but the effect is far from catastrophic and restaurants continue to exist.
If basic income is so high that nobody will work at $15/hour ($30/hour? $45/hour?) and private industries collapse, then we must have set the basic income too high. This would be a disaster, but no more than setting the minimum wage too high would be.
David Friedman adds: “From a little googling, labor is about 20% of the cost of McDonalds franchisees. Double wages and, if they pay those wages instead of substituting more skilled labor or machinery, and prices go up by about 20%.”
From Nicholas Weininger:
Scott, you mention aristocrats as a group who seem to flourish without needing to work for a living, and cherrypick a lot of great examples, but surely you’re aware of the phenomenon of corrupt wastrel layabout aristocrats too. It’s at least perceived as common enough that today, parents who have enough money that their kids don’t ever have to work typically spend a good deal of time and effort devising constraints on the kids’ ability to access their inheritances so that they don’t become corrupt wastrel layabouts. Do you think the perception of commonness is incorrect? Are the parents worried for no reason? Note too, as other commenters have, that these parents are much more capable of instilling responsibility and work ethic in their kids than the typical parents of those who might depend on a large UBI.
This is one of many reasons why I think we should start with a very small, Alaska-fund sort of level of UBI, plus a child allowance for primary caregivers of young kids, and see how that goes for awhile before taking up the question of an increased UBI level.
Martin Freedman refers us to previous work on the subject which I should get around to reading:
Hello, long time lurker first time poster here.
This is an interesting post but it seems to miss the boat on the whole Jobs Guarantee debate and analysis that has been going on for many years. This is partly due to your post being a response to another interesting article by Simon Saris, which also, but less so, misses the boat on this debate. Still he does raise points that you sort respond to as if they were never raised e.g over disability and he emphasized no removal of those benefits.
I also read as much as I could of the 100+ comment stream and only two commentators correctly identified the real issues : ShamblerBishop and userfriendlyy.
Anyway a more substantive issue is the body of work and analysis done on the JG done by many economists over the years. You mentioned economists who had argued for a CBI or UBI where you included Milton Friedman who really argued for a Negative Income Tax which is not the same BTW (as others have noted).
However why did you not mention those economists who have argued for a JG? Where were Keynes’ On-the-spot employment, Minsky’s Employer of Last Resort, Mitchell’s Buffer Stock Employment, Mosler’s Transition Jobs and, in general, collectively named by the Modern Monetary Theory economists called the Job Guarantee?
Simon’s post using the non-standard term “Basic Jobs” – which he is entitled to do – is somewhat indicative that this is an unorthodox presentation of these ideas. He (and, for that matter, I) are unknown bloggers on this topic and, regardless, stand or fall on the quality of arguments and analysis. Whilst writing for a particular audience might have been a motivation for him, for whatever reason he omitted the critical, IMV, macroeconomic basis which is particularly important both for the JG and for a more complete evaluative comparison of the JG to BI.
If you really want to do this topic justice I humbly suggest you look to the main economist out of the MMT group who has specifically focused on this topic. (Of course, the others – mentioned above or not – have researched this aspect too, this is only my recommendation). This is Pavlina Tcherneva who has written for a range of audiences from the interested lay person to the mainstream economist academics. You could start with her Job Guarantee Faq or her team at Bard
Suffice to say all your objections have long been answered. That does not mean you agree with the arguments in those answers, of course, but a clearer discussion should start with those answers not write as if these have never been considered.
Michael Handy says:
Umm, correct me if I am wrong, but didn’t we try a Basic Jobs program back in the 19th century in England? Namely, the Workhouses, carefully calibrated to make any private sphere job heaven by comparison.
I feel that a program that literally uses the first chapters of Oliver Twist as a technical manual might not need such a comprehensive debunking, but I’m glad one exists.
On the one hand, this is unfair. The workhouse was nothing like existing basic jobs guarantees – it was a combination housing program / food program / jobs program that poor people were in many cases forbidden by law to leave. This is totally unlike proposals for a $15/hour voluntary job not linked to housing or food.
On the other, what I find most interesting about workhouses is that most sources suggest they weren’t profitable. Even offering workers the most miserable conditions and paying them no wages, they still failed to produce anything that sold well and had to be subsidized by taxpayers. This reinforces my concern that basic jobs are not going to be able to produce as much as people think.
My issue here, and this comes from someone convinced of the futility of the Keynsian approach embodied by basic jobs (the left wing are clearly bored of re-hashing the bad ideas of the 1970s and are going back to the 30s for their inspiration now…), is that basic jobs appear to be much safer for a functioning democracy than basic income. Democracy is ill served if leaders are able to use their power to effectively bribe voters: any study of the working of machine politics in US cities, or of the small electorates of English rotten boroughs, will reveal this. Basic income is a tool that in the right hands could be used to bribe voters by promising an increase in the income; in the US at least I find it easy to imagine populist figures on both sides of the political divide promising voters higher basic income. Democracy requires a certain restraint from voters and basic income would be a potential danger to this by creating a clear incentive for voters to focus on self-interest in their decision making, to a degree not currently seen (mind you, it is possible I’m just repeating arguments made when income tax was introduced…).
I agree that income tax is worth considering. The “politicians will bribe voters with their own money” thing is plausible, but how come there are still taxes? It would be pretty easy to run the federal government without making the bottom 50% of the wage distribution pay taxes at all; why don’t we? I think the answer is something like “to maintain some fiction that everyone must contribute equally”, but that makes the bribe-voters-with-their-own money strategy look pretty powerless, doesn’t it?
For that matter, free universal health care is an example of bribing voters with their own money – how come it keeps failing? So is universal college – how come no one except Bernie Sanders even pushes it? For all their flaws – and they have many – the average American voter seems remarkably bribery-resistant.
Extreme example to make the point: Take a person with Down’s syndrome and give them a job (like washing dishes) which they can perform, and see how they respond to it. They’re far happier doing that as opposed to sitting at home being fed and “entertained”. However unmeaningful you might believe that work to be, it might be very meaningful to them. I’m sure there are a lot of people in the service industry (“would you like fries with that?” et al) who DO INDEED make a positive difference in people’s lives. Even a smile can do that for a frustrated, stressed out person….a smile that makes one feel they aren’t alone. A kind gesture, some simple random act of kindness of any sort can actually restore ones’ faith in humanity. So I happen to think the “fries with that?” work is meaningful. It might (depending on circumstances and how it is done, of course) be even more meaningful than far higher paid and higher skilled (on paper) labor.
Many people say they feel that they wouldn’t personally be able to handle not working very well. For example, Joyously:
The reason I have always been basic-income-skeptical is because of myself. If I had a basic income the same as my grad stipend, I could *definitely very-much* see myself mostly just playing a lot of video games. There’s a *possibility* I’d finally finish my novel. But it would be mostly video games.
And I’d be happy–but the thing is I *can* do other things that fill a slot society needs. (And I am a privileged educated person from a privileged educated background who doesn’t really *need* this assistance.) So shouldn’t I?
Yes. I think you would do great as one of the vast majority of people who would continue to work even after society had a basic income. I’m not in favor of preventing people from working. I myself would probably work even if offered a basic income. I think it’s great if people don’t have to work but want to anyway. I’m not sure how to get this point across more strongly than I already have.
Other people say that obviously everybody would quit if a Basic Income were available. Aphyer writes:
I am a programmer. I have a really good job. I quite enjoy it, I get paid well, I like my coworkers. I can listen to my favorite music over headphones while working. When someone does something stupid my coworkers and I enjoy ourselves laughing about it. I am probably somewhere north of 95th percentile job satisfaction in the country.
If you offered me enough money to support myself indefinitely while staying at home playing and designing increasingly complicated computer games and board games…well…I don’t think I would take it. Probably. But I would be very tempted.
This seems to suggest that somewhere around 90 percent of people would quit their jobs. And maybe in the Glorious Robot Future that would not be a problem. However, one thing that several of Scott’s articles on this topic seem to have missed is that we are not actually in the Glorious Robot Future yet. Yes, once you get to a position where our robot armies can do everything we want, a basic income guarantee is probably the best way to convert this into a high standard of living for many people. But we are not in that position. We are not close to that position. Right now people’s jobs are actually adding value that will be lost if they quit. And implementing a basic income guarantee now feels like it would just obviously be a disaster.
(None of this should be taken as support of a basic jobs program, which sounds even more obviously disastrous and makes me want to exhume Joseph McCarthy and turn him loose on everyone suggesting it.)
Ozy brings up that there are various ways that skilled workers can work part-time to make $10K per year (the easiest is to work a $100K job one year in ten). Since almost nobody does that, it seems unlikely that these people would really quit their job in exchange for basic income.
I’m glad Ozy showed up, because I used to think the same thing as Aphyer, and Ozy reminded me that I wasn’t taking any of the opportunities to work much less in exchange for much less money either. I wonder if this is just a universal bias, where people feel like they would definitely prefer more free time to working more, but then work more anyway.
ec429 defends the much-maligned but ever-popular position of “being angry that other people might get by without having to work”:
A lot of people have commented above on the incentive problems etc. with both UBI and UBJ, so I’ll not go into that. But I’ve noticed a bit of a thread of “why are opponents of UBI so determined that no-one ever gets a free ride?” Since this generalises to other welfare/disability/secondary distribution programs, I think my viewpoint here may be relevant. Warning: raw and emotional, rather than cool and rational. But maybe it’ll help people understand why I, at least, am so implacably opposed to redistribution. (Also it drifts a bit off-topic by the end.)
Stipulated: I’m a nerd, bookish, aspergiac. (Also, technically not fully-abled: I have a sleep disorder that prevents me working full-time.)
Between the ages of (let’s say) 8 and 18, I was bullied a lot; this was made bearable by the knowledge that in adulthood, I’d be an affluent knowledge-worker and the people bullying me were idiots who would be stuck in retail or manual labour, and that it would utterly serve the b—ers right.
And now you expect me to give up some large slice of the product of my work (when you add up income tax, national insurance*, VAT** on the goods I buy, push effects from taxes supposedly levied upon ‘business’, etc., the total tax bite is probably over 50%) to give those same b—ers welfare cheques, and then to give them more when it turns out they spent the first lot on pot and xboxes, because somehow it’s not acceptable for people who make stupid decisions to starve.
So no. If you want _my_ money to fund _your_ life, you had d-mn well better prove that you’re trying to better yourself and not just suffering the consequences of your own stupidity. Ideally, let me make that decision myself through private charity, rather than forcibly taking the decision away from me and giving it to some unaccountable bureaucrat. (If nothing else, I could hardly be _more_ Kafkaesque than the disability-scheme bureaucrats.
Good news! I hear that basic income will sap meaning and community from people’s lives. So all those bullies will be living unhappy lives without any purpose, and you’ll still have the last laugh!
Apparently *I* didn’t make my point very well, because that’s not what I meant at all. I don’t think I’d be forced not to work, and I don’t understand why you think I think that.
I think I’d be strongly *tempted* not to work and might have chosen that if it had been an option when I was younger rather than starting down the road to my career. I think that would be bad for society because a possibly useful person (hypothetical younger me) would be choosing not to be useful, even if that’s a rational choice for them at the moment.
*Edit: Rewording! In other words, I’m not saying I’d prefer my job to basic income. I’m saying that I might well “prefer” being supported by others, but that doesn’t make it good.
While I agree that Scott’s response to you missed your point, he did address it later. Why don’t you work part-time? You could work 2 days a week for 40% of your current income, which will likely be well over any plausible UBI and give yourself 3 whole days a week to play video games. There might be some level of practical difficulty, but I’m sure you could work something like that out. In practice, nobody ever seems to take the “less money for less work” deal. Conversely, people love over-time.
I myself am self-employed. I use the same computer to work and play games. Sometimes I do think, “I’m bored of working now, I’ll play games for a bit.” But sometimes I also think, “I’m bored of this game, I’ll work for a bit.” People phone me up and offer me work and even if I’ve already made enough money to pay my bills for the month, I never decline the work on the basis that I’d rather play games.
The issue is that young people may get into a situation where they have to get so much education and/or work experience to be able to get decent work, that they decide to stick with playing computer games.
Yeah, but you presumably have huge sunk costs in your education, which means that the cost for you to get nice work now is low.
Would 17 year old Robert be willing to work himself up to that level?
Maybe 17!Robert would say “I’d rather be a idle layabout making 10k/year and skip college than be a hardworking professional making (say) 60k/year after college.” And maybe Robert, and huge numbers of people like him, wouldn’t feel so much pressure to go to college purely to get better jobs.
Would that be such a bad thing?
We already have a credential inflation problem. Everyone needs a college degree to get a decent job, so everyone feels pressure to get a degree for that reason, and consequently everyone is getting their asses kicked by college tuition. Tuition that will keep going up because successive generations of American youth are a captive market to be milked for their parents’ life savings and their own future ability to take on debt. Scott’s talked about this.
For a while, we might see college admissions dropping off because college is massively expensive and the payoff on a college degree is doubtful; living as an unemployed pothead or video gamer honestly seems more appealing.
But the world won’t instantly come to an end the first year people like 17!Robert, who have no compelling need to learn SOMETHING, ANYTHING, don’t show up on college campuses. There will be time for incentives to shuffle around, for employers to realize they need to start thinking a little farther outside the box than “hire recent college graduates. There will even be time for 17!Robert to mature into 22!Robert and realize that having the bare minimum of money required to stay alive in a not-amazing part of the country plus a little left over for video games… is kind of a dull, lowly, and shitty existence.
Maybe Robert will start wanting enough money to be attractive as a dating prospect. Maybe Robert will start wanting a home with a yard, or material conveniences that he can’t really afford on UBI. Maybe Robert will even realize what he actually wants to do with his life instead of having to leap at “something, ANYTHING.”
If nothing else, most of the people with the potential to do well as skilled professionals do have some genuine desire to learn, explore, and cultivate their knowledge. If the price of college weren’t being mechanically driven up by all the people who feel like they need college to live, maybe the price would go down to where they could do so primarily because they actually want to learn how to do something.
Ending the college credential rat race is a noble goal.
Not everything in pursuit of that goal, such as destroying capitalism, is noble. (Although some might want capitalism destroyed nonetheless and have finally found something palatable to the masses to disguise it.)
Sure, but perhaps young Robert will waste so much time before recognizing this that he loses windows of opportunity.
Society may adapt*, but it will surely lag and there is a definite potential of a ‘lost generation.’
* Which can also consist of ending the UBI
My stodgy old man concern is that high school dropouts are going to go from people with no money who are living with their parents, or working to guys with money to spend with everyone they know still in high school.
The Careers that have such limited windows (Ballet Dancer, Mathematician.) generally start much earlier. That’s 12!Robert (and his parents), not 17!Robert.
I was thinking more about wasting so much time that the better colleges no longer want you, so the only option becomes community college or such. Companies judging people as slackers and them getting written off for better jobs / career tracks. Etc.
I don’t want capitalism destroyed, but if capitalism is fragile enough that it can be destroyed simply by reshaping labor availability so that people can afford minimalist living conditions without working for capitalism… Well, capitalism wasn’t the social system I thought it was.
“Who does not work, does not eat” is going to result in death or chaos for our society if we don’t break its power over us, because we are entering an era when finding profitable employment for everyone is becoming a more and more remote dream. Capitalism won’t save us from that fact, so we must save ourselves. If capitalism and the market are as robust and flexible at dealing with new problems and finding innovative, efficient solutions as we’ve been told ever since the days of Adam Smith, they should be able to cope with this.
Yes, but this is a problem we already have. People are already losing windows of opportunity. Some people have to stay in cruddy jobs and work themselves to such exhaustion that they can’t reskill to find better work. Some people miss their child’s first steps because they were at work when they really, really didn’t want to be, but two incomes are necessary to survive even if the second income is only bringing in a marginal 10-15k a year after associated expenses are factored in. People are falling into financial traps they can’t dig out of. People are waiting to have children until their most fertile years are gone.
Until and unless we combine post-scarcity productive capacity with “from each according to their nigh-unlimited ability, to each according to their finite need,” we’re always going to have missed opportunities and opportunity costs. The question isn’t “how can we avoid having opportunity costs,” it’s which ones…
We can probably find a way around this. Maybe your UBI stipend goes to a registered parent or guardian not just until your 18th birthday but until a point in time corresponding to high school graduation? If you drop out, you don’t actually have access to the money until you would have graduated, and until most of your likely-to-graduate friends have themselves graduated.
This is involves a multipolar trap. Right now, everyone makes an individually painful but tactically sound decision to go to college immediately out of high school. It’s not clear that this is optimal, but it’s the expectation, and it’s cheap/easy/cognitively undemanding for employers to insist on compliance with social expectations. Any one person who bucks the trend exposes themselves to risk.
If 30% of high school graduates, including many with high academic potential, chose to spend a year or three on something else before entering college, then while in the VERY short term (i.e. 4-6 years after high school graduates start doing this) there might be some issues with hiring discrimination… In the long run, employers would have to adapt. They can’t just ignore 30% of the labor force, or if they do it’s because of a level of automation that will demand UBI.
If employers systematically start using “went to college right out of high school” as a binary yes/no sorting mechanism for letting people into good jobs, this will become extremely obvious and that information can inform future generations of high school graduates about whether it’s worth it to take a wanderjahr after high school.
Conversely, if employers realize that such a system would unwittingly screen out lots of promising candidates who just happened to have something else to do with their life at the age of 18-19, all they need do is stop doing that and potentially snap up talent that is being randomly discriminated against elsewhere in the industry.
Furthermore, the core argument here is “If given this option, 17!Robert might fuck up his life.”
The thing is… right now, 17!Robert can (if his test scores allow it) enroll in a high-flight college and rack up a hundred thousand dollars in student loan debt his future income is unlikely to ever allow him to repay. He can pick an ill-chosen major and party-school a few years away, such that even if his degree was paid for cash on the barrelhead he’s still not getting his money’s worth. And that’s just scratching the surface of the legal ways for him to fuck up his life.
We aren’t going to create a society in which people in their late teens are literally unable to fuck up their lives. Realistically, we aren’t even going to create one that consistently incentivizes against doing so. If we were going to do that, we’d have already done that. So letting “but perverse incentives may cause people to make poor choices and fuck up their lives” stop us from changing a public policy isn’t necessarily a good idea.
Perhaps capitalism is not particularly fragile, but advanced society is…and apparently we can only maintain advanced society with capitalism.
We don’t actually have jobless people starving in the West. It’s really all about quality of life. It’s also clearly subjective, where many people now strongly desire goods and services way beyond what earlier generations and people in other countries were/are fairly content with.
How can we blame any system for not satisfying the unsatisfiable?
The issue is that humans don’t have nigh-unlimited ability or finite need. Also note that in ‘post-scarcity’ some things still remain scarce. Some people will still get more than others and quality of life is thus still going to differ.
AFAIK, the science suggests that learning is easier at a young age and losing those years probably results in people creating less wealth during their lives (because they are well-educated later and thus are productive later). So one can expect a loss in quality of life for society as a whole.
True, but my perception is that with the current system, they tend to get a reality check fairly quickly. It can get worse.
Now, I personally would favor better incentives and especially, teaching people a better culture (more austere and less hedonistic), but wireheading may be the more realistic solution 😛
You present all of this as if it meant that things were getting much worse than they were in the past, hence a problem that requires UBI or something similar to solve it. As I think you can check pretty easily, by any material standard people in the developed world at present are better off than at almost any time or place in past history—enormously better off than at almost any time or place more than two hundred years ago. Your “cruddy jobs” are a considerable improvement on what almost everyone was doing a century back.
There are legitimate arguments for (and against) a UBI or something similar. But the claim that capitalism is failing and needs a UBI to patch it depends on a badly distorted version of present and past.
Just to say: 17!Robert certainly would not have done that.
It was just a little rhetorical trick, nothing personal 🙂
Not saying anything about the actual 17!Robert, but the current Robert probably cannot really predict this decision because it all also depends a lot on the expectations and societal pressures.
For a current example, in some countries, such as Israel, gap years (between high school and college) are common and generally accepted; in other countries, such as Russia, they are not. Naturally, almost nobody takes a gap year in Russia. At the same time, the economic effect is about the same as you would expect from doing nothing for a year in both countries.
If the Overton window includes things like “not going to college after high school” as a valid and not-status-lowering life choice, many more people will do it regardless of the economics.
For jobs that aren’t rote communication overheads often mean that someone working 2 days a week is a lot less than 40% as valuable to the company as someone working 5 days a week. This might be keeping abreast of changing circumstances, having a team that needs to finish a project in a certain time frame and communication overhead growing as the team grows, or remembering the details of your own project over longer periods of time as you work more slowly.
Very few office workers do more than a couple of hours of work a day.
I wouldn’t advocate a shorter workweek, but a shorter workday does seem to be in order.
>Very few office workers do more than a couple of hours of work a day.
I feel like that’s a pretty bold overstatement. Probably we will all have our own anecdata about this, and it can certainly depend on company/industry, but I don’t think there’s any substantive proof to back this up. Certainly there are outliers, and some companies are very laid back, but in general I don’t believe this to be true.
I will accept that almost no one in an office is fully engaged in work all 8 hours of the day. But taking breaks and mind-wandering/surfing the web I think is somewhat part of working. For example, I’d say I only really get 4-5 hours of actual work done in an 8 hour day at the office. A bunch of the other time is mixed between breaks (bathroom, lunch, going out for a quick walk), being unfocused/lost in thoughts, socializing with co-workers, and surfing the web. But if you then shortened my day to be 4-5 hours it’s not like I’d come in an put my nose to the grindstone the whole day. I’d probably just cut down to only being productive for 2 hours a day.
I don’t disagree with shortening work days somewhat, but I also think that people will still not work the entire work day no matter how much you keep shortening it. Those periods of not working/rest are a fundamental part of working, the same way resting/relaxing between sets while exercising is a fundamental part of exercising.
Just to add my own anecdotes here:
For several years I went from a standard 40 hour (8 hr x 5 days) work schedule to a 30 hour schedule (10 hr days x 3 days per week). This was mainly a software job (not 100% development/writing code; a lot of configuration of other software, networking, some coding, blah blah blah, computer stuff).
In any case I often felt like I was more productive in 30 hours than I was in 40. It seemed there was a lot of daily “overhead”, and so by only being in the office 3 days, there were 2 days’ worth of overhead not happening. 3 extra-productive days felt better than 5 normally-productive days.
Maybe I’m unusual, but when I worked at a pizza place in college I never once took on a shift I didn’t have to. I even purposefully declined taking the most lucrative shifts because I would have to work harder during those busy times. And the extra money would have been really handy! At least for me personally, this doesn’t speak well for my motivation to work while getting a UBI.
After I graduated I was unemployed for about 10 months. It started off fun, but by the end I was pretty depressed before finally getting a (really crappy) job. I hated the job, but I definitely felt more like my life was on track again. After eventually going back to school and getting into a good field things are much better now, but I wonder if things would have been different if I’d had a UBI to fall back on. I think it depends on how culture changes with the availability of a UBI.
I definitely felt like my friends, family and wider social network expected me to have a job to be a worthwhile person. If it just becomes more acceptable to take part-time work… maybe the workweek or workday shrink to accommodate new norms… great! I would love that.
I think it’s more likely, however, that it widens existing cultural gaps and makes it even harder to cross them. Among the more educated class I expect the pressures will mostly remain the same as today, although maybe easier to fall out of. On the other end, though, cheap rural areas will attract those who survive on only UBI and that will just become the norm. The Amazons and WalMarts of the world mean you don’t need nearly as many local jobs to sustain a community as you used to, so there aren’t many job opportunities without traveling to more expensive areas. You can’t afford to move to an expensive area because you only get UBI. You aren’t attractive to employers because of a long period of unemployment or underemployment. Schools in the UBI-only areas are terrible because not enough people care. Etc., etc.
What I’m envisioning is essentially just like the poverty trap, except better because at least everyone has enough money to live on, but also worse because it’s even harder to escape and more people are likely to fall into it.
In the end, though, I don’t know how justified my fears are. It’s just speculation, and I think the effects would depend heavily on how big the UBI is.
It depends. IF the UBI be big enough to sustain someone doing a small piecework job with minimal startup costs on the side. Some people will become drunk gamers. Some will become Etsy tycoons. This could restart cottage industry in rural areas.
> You could work 2 days a week for 40% of your current income, which will likely be well over any plausible UBI and give yourself 3 whole days a week to play video games. There might be some level of practical difficulty, but I’m sure you could work something like that out. In practice, nobody ever seems to take the “less money for less work” deal. Conversely, people love over-time.
FWIW, I’ve spent the last several years trying to do precisely this, since it’s been clear to me since college that the breakeven point past which a marginal hour at the same job is well below 40/week. I have a number of advantages increasing my bargaining power relative to the average skilled worker, including a ludicrous amount of market power due to very lucky timing, an industry that’s famously flexible, and extreme financial security. If anyone is positioned to sell their labor piecemeal instead of fulltime and exclusively, it’s me.
It is a lot harder than you make it out to be. There’s a lot-less-than-linear relationship once you go from fulltime skilled work down to less-than-fulltime. On top of that, you’ll most likely end up paying likely-substantial costs in other job-related contributors to utility, like how challenging it is or how effectively it grows your human capital. It turns out that your fulltime commitment is a pretty sizable chunk of what you’re actually being paid for, for reasons that are probably a combination of rational and cargo-cult.
One obvious solution, as in your case, is going into consulting oneself. But now you need a parallel set of skills around managing your network, sales, etc that people may not have, may be uncertain of how to develop, and may be unable to develop.
Another one that I’ve been relying on so far is taking extended breaks between jobs, but this has its own downsides as well.
I worked for a few years in international schools a while back. Whilst I’m sure this is not the case everywhere, the schools I worked in had very small numbers of classes for me to teach; I would rarely have more than 15 hours of direct instruction per week, sometimes less. Of course there was lesson planning and homework and all the other stuff teachers do, but since the curriculums rarely changed year to year after a while you would have built up a core of lesson plans and assignments and not even have to spend much time doing that. All in all, I’d say by the end of my time teaching I was doing 20 hours per week. And this was pretty well paid work, I got a full time salary despite having part time hours.
At any time I could easily quit my current 45hr per week job and go back to working in international schools, doing 20 hour weeks and having a lot more leisure time. But I don’t. Whilst the salaries were good, my current salary is better and with a much quicker rate of growth in the future. The work I did was easy, but it was also boring and unfulfilling and I’m much happier with my current role.
It seems from your response and several of the others that a major issue with the UBI debate is that people are all assuming different amounts. When I think back to some of my days spent playing video games at university, that was always a comfortable existence because my parents are well-off; I could afford to buy decent food that I liked, to buy alcohol and go out regularly, to live in a reasonably nice place, and to purchase whatever video games or systems I wanted. But why should UBI be so high? I’ve been investigating how low UBI could feasibly go in the UK recently, and it seems to me that you would have no need to provide many of the comforts of life, but still provide enough to prevent poverty. A place to live, sustenance, some form of clothing. Whose to say that the UBI will be anything more?
One solution might be to only give an UBI above a certain age (30 year old?). Then you force young people to sink or swim*.
* Of course, you’d still need means-tested welfare for those who are young and disabled or such.
Some countries already have a non or semi means tested pension, which is essentially equivalent, just a few decades up. I wonder what the effect of that on older people working is.
There seems to be a clear asymmetry between voters’ behavior when a bribe is offered and their behavior when somebody threatens to, as it were, un-bribe them. Trying to get a UBI passed is nearly politically impossible, but trying to cut (never mind eliminate) Social Security is if anything even more so–even though Social Security is just UBI for old people! If welfare spending is indeed bribery, it’s difficult to get American voters to accept a bribe, but even harder to get them to stop being bribed. I’m not sure why this is–perhaps it’s because of the “middle class fiction” in which almost everybody in the US thinks they’re middle class even though only about 50-60% of the population is middle class by most reasonable definitions?
I wonder what de Tocqueville would make of it.
The Myth of the Temporarily Embarrassed Millionaire
The reason that nothing like Medicare for All and Free College get done is because our government is only marginally responsive to the needs of it’s citizens and entirely responsive to the mega donor class.
You were banned, on purpose.
I’m not in charge here at all, and in normal circumstances pointing out someone else’s ban is shitty, but other commenters need to know we have a John Sidles here.
I didn’t notice that, it was several days after I had stopped following that post. I thought it was the number of links I was trying to post or something.
Sorry about the indiscretion, my life has been a roller coaster lately; until a hit a patch of luck last night I was planning on how I could best distance myself from anyone in my life that would blame my suicide on ‘something they could have done’ when it was really just down to the fact that there were not any plausible ways my life would ever improve and I had no desire to keep torturing myself trying. But literally the last shot I took came through so that’s that.
Hey, I just wanted to say I’m glad something’s working out for you, and the world’s a little brighter for your staying in it. I have definitely been in a place where the only thing that kept me alive was that people would have been broken or worse by my killing myself, and yeah, I got out of there, and I’m always happy to see someone else making their way out.
I don’t think it’s obvious that there are a majority of (U. S., I assume) citizens who want either of those things, or who could elaborate the tradeoffs between those things and our current policies and institutions.
So maybe the fact that a lot of people never even think about any one of these specific ideas has something to do with it.
Also, maybe millions of people unevenly spread across a continent aren’t going to have the same wants and needs?
Absolutely right. Those things fail because the voter doesn’t have them yet.
Once the voter has it, you cannot take it away.
New York State had guaranteed issue for health insurance and banned checks for pre-existing conditions. This had the obvious result and destroyed the personal health insurance market. It was never fixed, until Federal law overruled it with PPACA. The fix was obvious and straightforward — get rid of the ban on pre-existing conditions. No one ever did this obvious fix, because it would be political suicide. The system was broken and stayed broken.
How do you reconcile this with, say, Clinton-era welfare reform?
Clinton stole welfare reform as an issue from the Republicans, and it was also a benefit going to relatively few people. (13%, Google tells me, and they were unlikely to switch to the other party in retaliation.)
Of course I’m now drawing lines exactly to distinguish between your scenario and my scenario, and those lines might not be there in reality. I’ll retreat to voters being very loss averse.
First of all, PRWORA wasn’t “Clinton-era”, it was “Gingrich-era”.
Second of all, it didn’t “take away” so much as replace existing welfare programs, which voters have a tolerance for, especially if it is promised to be redirected toward the most “deserving” people. Taxpayers see this as an improvement in how their money is spent, and recipients always see themselves as deserving, so it’s politically possible. (For a similar but not identical case, see Ryancare.)
Having had a day to think about it, the 13% that were receiving benefits were also the least likely to vote.
My point is that, in cases where there is sufficient agreement that spending should be reduced, it is reduced. I don’t care who you want to credit for PRWORA; what matters is that it happened. Similarly, Paul Martin slashed spending as Canadian finance minister in the mid 90s, and Margaret Thatcher existed.
People don’t like losing benefits without justification. In Paul Martin’s case, the debt was a major concern, and he took steps to address it. Far from being political suicide, it left the Liberals in power until 2006, with Martin himself as Prime Minister from 2003 onward.
The simple fact is that change is hard. Taking away benefits is just one example of change. This works both ways: for example, the American political landscape is littered with the rubble of failed pre-ACA attempts to tackle health care.
Iain—my point about it being to Gingrich’s credit was directed at Edward, specifically toward his comment about Clinton stealing the issue from Republicans.
To you, I would say—what did Thatcher accomplish? Rolling back the NHS? She wanted to—and failed because her cabinet wouldn’t accept something so controversial. Even at the time, the NYT pointed out that she hardly touched welfare. As far as I’m concerned, she’s a compelling point in favor of welfare programs being politically impossible to oppose—Especially because she wanted to cut them and her cabinet wouldn’t let her!
I’m spotty on Paul Martin, and the internet isn’t being very helpful right now about the actual policies he passed. But IIRC, he didn’t cut welfare programs himself, so much as cut earmarks—funding to states and municipalities—and let the officials of those lower entities take the heat for needing to make cuts. And he also had excellent PR, which I guess makes sense. Again, I couldn’t find much to confirm or reject this.
But even if I’m wrong, and an obscure Canadian did pull off miraculous cuts to welfare spending, I think the broader pattern is clear enough. From Thatcher to Gingrich to Reagan to Ryan, the “heroes” of welfare reform only ever claim to be means-testing welfare and reducing payouts to the “undeserving”, rather than cutting programs. In Reagan’s words:
The welfare state is a ratchet, and the best(/worst) fiscal conservatives can do is to keep things locked at the current tooth.
The question is, can we make things better without having to defeat the ratchet?
Since you spoke of Scott Sumner (a big fan of wage subsidies), Noah Smith over at Bloomberg had an interesting article about how a combo wage-subsidy-for-business/public investment program really helped boost wages and jobs:
You can avoid an NIT turning into a welfare trap by having it fade out slower than income growth. Thus, let’s say somebody with no income gets $10K in NIT. Have this fade to zero over the next twenty thousand dollars of income, so that the NIT rebate drops by a dollar for every two dollars in income: if you make $5000 in real income, you get $7500 in NIT (total income of $12500); at $10K of real income, you make $5K in NIT (total $15K); at your twenty thousandth dollar of income from work the NIT winds up and goes away. At no point does a raise at your job decrease your total income.
I think before committing to a basic jobs guarantee or a basic income or anything revolutionary, our first task should really be to get rid of welfare traps. That’s much cheaper, much more politically viable, and will have the similar effect of bringing millions of work-eligible (if not forty-hours-a-week-eligible) people out of the shadows.
EDIT: Seems you ninja-edited your comment and redid it entirely. For the benefit of other readers: Brett’s comment previously expressed concern that an NIT might turn into a welfare trap.
Sorry about the ninja edit. I felt like highlighting the Noah Smith piece and its connection to Scott Sumner’s writing was the more important and useful part of my comment, so I cut out the other stuff.
Is there any indication of why the federal programs succeeded while the state programs failed?
Just timing, I suspect. The Federal programs coincided with a general recovery of cities (prompted by a drop in violent crime).
But that general recovery would also have affected those areas that didn’t receive federal assistance, and the study found that the areas that received the federal assistance did significantly better than those that didn’t.
It does seem to suggest the possibility that targeted wage subsidies in poor areas could achieve most of the good that a UBI would achieve, at a significant (and more politically palatable) discount. Ideally a UBI would allow the elimination of minimum wage laws, but in my (left-leaning) experience most UBI supporters either don’t support this or don’t trumpet it as an advantage of UBI. The moralizing rhetoric surrounding minimum wage (“no company which can’t afford to pay its workers a living wage should exist!”) is fundamentally incompatible with a UBI as I understand the purpose of one. A wage subsidy in blighted areas could really help them, but like a minimum wage-less UBI it entails subsidizing businesses that Shouldn’t Afford To Exist, which might be unpalatable.
I’m not sure I understand this argument. It seems like the obvious response is ‘Great, after all the people who hate those jobs quit to live of off of UBI + part=time/gig/creative work, the people with Down’s syndrome and everyone else who would love those jobs but currently can’t get them will have a much greater chance to be hired. Everyone wins.’
This feels like an argument in favor of UBI, not against it – removing workers who hate their jobs from the workforce just increases the desirability of everyone else who actually wants to work, which means *more* jobs for everyone who wants one but currently can’t get one.
It is coupled with the assumption that UBI will cause employers to mechanize everything possible, and the only “jobs” still existing would require higher-level cognitive ability.
You don’t think a large portion (say, 50%) of the adult population having no economic value and needing to be fully supported by the other 50% is a horror?
It may be an inevitable horror; if so, what are you going to do about it? Hire 20% of the adult population to fill holes dug by another 20%, and the final 10% to handle the paperwork and the camouflage that lets you pretend there’s real economic value going on?
Not institute UBI.
If it’s inevitable without UBI, that’s a much harder problem. There’s the Moldbuggian (I think, maybe I’m mixing it up) answer of restricting automation enough to support a servant class. Most likely answer would be some disguised version of hiring 10% to act essentially as jailers for the other 40%.
And yet it’s the UBI that you find it necessary to attack as notably horrific.
Err, no, it’s having a large portion of the adult population having no economic value that I find to be horrific. @herculesorion suggested this would be caused by a UBI.
A wage subsidy will buy us time to, if we’re lucky, figure out how to deal with the 50% that are useless. It will give us a gentler transition while allowing people to continue providing value to their neighbors. Not enough value to fully cover their costs, but enough that they feel like they are.
I know some people in this conversation act like holding off an event we don’t know how to handle is useless, but it’s not.
Why is nobody proposing the solutions to this problem that have been explored in fiction?
Provide cheap or free benzodiazepine, cannibis, videogames, and porn. And offer $1000 for having a RISUG procedure.
As Huxely named it, “soma and feelies”.
I remember reading years ago in the Last Psychiatrist, one of the social purposes of his job was to launder and hide the fact that we are already as a social policy drugging the underclass with free Xanax.
Suppose we assume a future where technological progress lets a tenth of the population produce enough stuff for everyone. Consider two possibilities for the other ninety percent:
1. A UBI paid for by the tenth who are actually working.
2. The 90% are well paid and lightly worked servants for the ten percent.
This is, by hypothesis, an enormously rich society. People like having other people around doing things for them, if only for the feeling of relative status, so with a per capita income of a hundred million dollars or so the ten percent can afford to hire a staff of servants and compete their wages and employment terms up to a level that is very attractive compared to current employment.
Which future do people find more attractive? Why?
I’m genuinely unsure which of @DavidFriedman’s scenarios is better! I feel like people have way too much certainty in this debate.
I think both of those scenarios are probably not great for the happiness of the 90%, and that there is the distinct possibility that the 90% become a generational/hereditary underclass.
There is also room for a scenario in which let’s say 10% of the people become the overclass, 40% become the (relatively well-off) servants, and 50% become the (less well-off) welfare recipients.
But the population wouldn’t have changed at all. The change is the introduction of mechanization.
At some point you have to admit that the machines are doing something. It was the machines that replaced the 50% of the workforce, not the other 50% of the population, right?
At some point, as mechanization takes over more and more, the contribution of currently living human workers can’t be 100% of the GDP. A 100% fully-automated system that requires no human labor, yet is nonetheless programmed to keep humans alive and well, like animals tended by an automated zookeeper — at the point when the very last human worker ever needed to maintain the automated zookeeper retires, you have to admit that the machines are doing some of the work. Before that last worker put the finishing touches on the machine, perhaps you will maintain he contributed 100% of the GDP himself personally. But once he’s retired, some of the work is just not being done by humans at all. Wouldn’t you say?
Someone paid for those machines. Someone designed them, someone built them, someone owns them, someone operates them. It still makes sense to think of 50% of the population being supported by the other 50% when and if technological unemployment comes on that scale.
Any reasonable projection for technological unemployment, short of a Singularity, is not going to look like Rosie the Robot. It’s going to look like tools, production facilities, and workflows getting better and more complex, such that their users are massively more productive. And that’s already happened, just not to the point of producing much unemployment: almost all the work I do is mediated by a compiler or a bug tracker or a piece of scheduling software or something. I’m a lot more productive with those tools than I’d be if I was hand-twiddling bits of machine code (I’ve done it; not recommended), but we still conventionally think of it as my work.
If a Singularity does come, all bets are off, but by definition we can’t plan for its consequences ahead of time.
It isn’t now. Individuals workers produce more with the aid of capital. In the hypothetical future, the role of capital has simply become larger.
You don’t think a large portion (say, 50%) of the adult population having no economic value and needing to be fully supported by the other 50% is a horror?
You don’t think we’re there now? Romney wasn’t talking out of his ass when he brought up 47%…
Romney was talking about people who weren’t paying Federal Income Tax. You can view that as not paying for their share of government services, but that’s very different from producing no economic value at all.
If you accept the principle that non-working, possibly non-living unemployed/retirees and/or the dead are supporting the living population, then you never have to admit that machines are doing any work (no matter how much your lying eyes might tell you that machines are doing work).
But please do note that in this case, the classification of whether you’re doing work is completely orthogonal to the classification of whether you’re doing the kind of work originally mentioned as having become obsolete (i.e. labor, especially cognitive). E.g., just because your job was eliminated doesn’t mean you don’t own any of the machines, it doesn’t mean you didn’t pay for them, and it certainly doesn’t mean you didn’t design or build them. (It does mean you don’t operate them).
In the scenario I described, I didn’t specify who owned or paid for the machines, but certainly every single person in the world who designed, built, or even operated the machines was made obsolete by them in that scenario. Evidently you just meant “owning” and none of that other stuff.
If owning stuff counts as work, then can’t we always have as much of the population working as we desire, just by redistributing the stuff to own? And maybe we don’t even have to — maybe lots of people will own stuff anyway. 50% of the population becoming redundant for their labor doesn’t necessarily mean that the same 50% won’t own anything and be able to do the work of owning. That kind of work won’t be obsolete.
He’s pointing out even labor one might find menial and degrading is often found by people to be rewarding. If the point of UBI is to improve people’s lives, working from the assumption that less work is an improvement may be an error. In fact it may be an error in the opposite direction assumed.
Well, if they find it rewarding then why did they quit? Remember we’re talking specifically about the subset of labor that people wouldn’t do anymore if they had more money.
It looks to me as though you are missing the distinction between average rates and marginal rates, assuming that all that matters is how much people pay in taxes, and so missing an important cost of the UBI.
Consider two tax schemes, both applied to someone with an income of $50,000/year.
Scheme A is (for simplicity) a flat tax of 25%. Scheme B is a $10,000 UBI plus a flat tax of 45%.
It looks as though he is paying the same–you are taxing the UBI away. But under B if he earns an extra dollar he only keeps $.55 instead of $.75, which means his incentive to earn money is less, his incentive to find ways of avoiding taxes is greater, so his taxable income will be less than $50,000. He is worse off than before and you are no longer fully taxing away the UBI, so will have to raise his tax rate even more to do so.
It’s the marginal rate, not the average rate, that is relevant to incentives.
We are subject to the contraint that sum(taxes – benefits) must equal a certain amount (roughly speaking, whatever non-benefit spending is required). That amount is politically determined: from the point of view of designing a tax/benefit system, we can treat it as a constraint. That effectively fixes the area under the curve. The marginal tax rate is the gradient of the curve. Clearly we want the marginal tax rate everywhere to be as low as possible, but to decrease it in one place we would have to increase it in another place.
The effect of the status quo is we have very high marginal tax rates on the poor (sometimes over 100%), with low marginal tax rates on the middle class and higher marginal tax rates on the rich. This does not seem desirable, because we’d really like to incentivise the poor to work. It seems unlikely that a rich person is seriously put off making another £1m because he only keeps half of it, so intuitively it seems that high marginal tax rates should be less harmful the richer people are. Therefore my claim is that marginal tax rate should be an increasing function of pre-tax income.
Your scheme A is impermissible because it ignores the other constraint, which is that we need to provide a subsistence income to people with a pre-tax income of zero. It is just never going to be socially acceptable to allow the indigent to starve. So that leads to the status quo, where we give benefits to people with zero income, but withdraw the benefits rapidly if they obtain an income, giving rise to the extremely high marginal tax rates previously mentioned.
It seems to me that as a purely abstract argument, this shows that no benefits should be means tested, hence we should have UBI. It frustrates me a bit that people argue in favour of UBI for redistributive reasons (when it’s perfectly possible to make a UBI less redistributive than the current system) or in connection with some techno-utopia (in which case we’ll have far fewer resource constraints so solving the problem will be easy).
I do also find it very odd that people are concerned with the incentive effect of slightly higher marginal taxes for the middle class, but are also concerned that a massive cut in marginal taxes for the poor will somehow cause the poor to work less. My expectation is that a UBI would increase productivity both by allowing unproductive workers to remove themselves from the workforce and by freeing people from poverty traps.
I am not sure you are 100% correct in relating “taxed away” benefits that come out all at once (the traditional poverty/welfare trap) to a higher marginal tax rate. Overall I think this quibble is minor and I may also be wrong. The primary benefit to me of a UBI-style system is that it can be funded with non-redistributionist taxes, both the “disparate impact” in favor of the poor for the UBI and the “disparate impact” of flat percentile taxes are accounted for. Rich people pay larger tax bills as their productivity and income grow, therefore financing more “straw-UBI-layabouts”, not as a result of some deliberate redistribution. The Rich people also receive the same UBI, but at their income bracket whether or not they receive it is largely irrelevant to them. By the same token – a 10% flat tax objectively “hurts” the poor more because poor people have less disposable income, but the poor person receive disparate benefit because the UBI payment makes his life substantially different.
Kinda irrationally angsty that my reddit comment didn’t make the cut (edited and expanded version below):
I have one theoretical long term objection to UBI. People w/o work are miserable not because work is “ennobling” but because (in this culture) work gives you status. When everyone gets UBI, work no longer gives status and people w/o work are no longer miserable. So far so good.
Potential problem are future generations who grow up entirely under UBI. People will still want a way to measure status. One historic group that didn’t work for status were the Cavaliers. Absent work they invented alternate routes for status (some worse than other): hunting, gambling, dueling and raping slaves. I think what some people are worried is that with UBI we might end up with fully automated luxury space cavaliers.
Absent any constrains “protestant work ethic” might get replaced not with something better but with honor culture. Society where you get status by being the biggest bully.
I still think UBI is probably the least bad option for all the reasons Scott outlined. But I am worried that no one thinks long term about the issue of what will provide status sans work. Supposed problems with finding “meaning” without work are a red herring, status is where it might get dangerous.
Also you need to realize that the real gain is not the money (which is supposed to be minimal livable amount) but that you don’t have to toil 8 (or 10 or 12) hours a day for it. Money is modest, but time gain is large. So I submit that reassuring people that monetary amount is small is another red herring. With that free time, you can concentrate on status, which — in worst case scenario — might create some kind of honor-culture-based underclass.
But UBI doesn’t ban work.
Rich people are still going to get status from wealth and the guy who works a few hours for a little extra cash still gets more money/status than someone who works none and only had UBI.
Cavaliers were at the top of the social pile with the means to abuse slaves. Bob the basement dweller doesn’t gain a basement slave. It seems more likely that he’d just compete for the top ranks in his favorite MMO
Short and medium term, you are correct, of course. Question is, what about future generations? If Bob the basement dweller has children and they create a culture of basement dwelling. Eventually, they might base status on something other than work, which might include underground fighting, clockwork orange style hooliganism and finally turning some basement people into slaves.
Personally, I have close-to-zero worry that basement dwellers will turn other basement dwellers into slaves, and a huge amount of worry that people employed in a job of policing and rule enforcement will use their own position and exactly this kind of arguments to turn basement dwellers into slaves.
But this is arguably already happening and as such can’t be related to UBI. It is highly related to the ever-raising industrial productivity (usually discussed as a much milder problem of so-called technological unemployment, a vantage point that overlooks how unproductive and superfluous most of the jobs became) and the underclass it creates. Basic income will not have caused this problem, but it may alleviate it somewhat. (Job guarantee, on the other hand, is destined to fail precisely because most of the jobs it would provide will be, like most of the jobs that currently exist, bullshit. And unlike the jobs on the market, they will neither have a perverse Molochian incentive for existing, nor will they have evolved a pretense for existing, nor will they be allowed to become a conspicuous time-wasting slavery.)
Bob the basement dweller is unlikely to have many children, and if he does then those children are unlikely to want to follow in his footsteps, precisely because Bob the basement dweller has no status. All the status goes to people who can afford a house, not just a basement.
Alternatively, this question reduces to “well, what if this creates a semi-permanent underclass of unemployed or near-unemployed people who engage in criminal behavior and develop perverse internal status systems based on violent gang participation, crime, and risky behavior?” To which my reply is “well, we already have one of those now, so at least we wouldn’t be creating any NEW problems.”
Adding incentives to remain in the basement would almost certainly exaggerate the problem.
Not a new type of problem. But a new scale of the problem. Currently the underclass is perhaps 12% of the population, and the rest of us are paying a lot to merely contain and warehouse their dysfunction. Imagine if they were expanded to say 60% of the population.
Are we assuming that unemployment causes criminality, rather than, say, unemployment and criminality both being caused by a third thing?
I am assuming that status seeking might cause criminality, if combined with unemployment.
“Bob the basement dweller is unlikely to have many children”
Where did you get that idea? I thought it was common knowledge that the poor have more children than the middle and upper classes.
Leonard, none of this is new. One only has to look back pre-welfare, to times when poverty rates were higher in Western Countries than they are now, and how that fostered criminality and anti-social behavior. According to a Forbes editorial “Late 19th century Britain had some 25% of the population living at or below the subsistence level. This subsistence level is not a measure of inequality, nor of the lack of winter clothes. It is a measure of gaining enough calories each day in order to prolong life. This is the sort of subsistence level that Malthus and Ricardo were talking about. The sort of level of poverty that the World Bank currently uses as a measure of “absolute poverty”.
If people are not getting enough calories to prolong life, they die. The Forbes editorial as stated is nonsense–especially considering that by the late 19th century the real income of English workers was considerably higher than it had been in the early 19th century.
It also badly misunderstands Smith and Ricardo. The natural level they were talking about was the income at which the laboring class just reproduced itself, at which couples had enough income so that they were willing to bear the cost of producing enough children to maintain the population.
Ricardo explicitly says that if the workers have luxurious tastes, the natural wage will be higher, because they will have to have a higher wage before they are willing to reduce their own standard in order to produce and raise children.
The author of that piece should have failed his history of economic thought class, supposing that he took one.
the guy who works a few hours for a little extra cash still gets more money/status than someone who works none and only had UBI.
The exact opposite is the case.
You may never have seen it. You probably don’t believe me. I’ve seen it, didn’t believe it at first, have been to close to it, know too many people who have escaped it, know too many people who didn’t.
The guy who works and makes more money than his neighborhood and family peers that live on doles is actively hated, and is hated by the people who form an unending line of hatefully entitled requests for $20 here and $100 there for this expense and that expense incured by their cousin’s idiot babydaddy and their neighbor’s aunt’s son’s drug habit.
The people who escape escape by suffering the lower status while forcibly cutting ties from their place and family until they can escape to a different world where everyone around them is working for a living.
Yeah. That’s a big problem with poverty. I know a guy online who never speaks to anyone in his family as the only escape.
“I know a guy online”…doesent count
Being hated doesn’t imply having low status. They probably hate that guy because he has both more money and more status than they do.
If anything, hate implies the opposite status relationship — someone of lower status is more likely to hate someone of higher status.
He is low status in the eyes of that community and his family.
Status is not objective. Some things can give lower status in specific communities and more status in most other communities and vice versa.
But why do you say he’s low status? (The only reason you give is hate, but I am saying that is a evidence of the opposite.)
In your description, people are asking him for money. He can say no. That is having higher status than them.
He can say no.
No, they cannot. If they say no, the social pressure and the hatred rise, and pressure is put on on the direct family and on close friends. Then the next step is petty vandalism, and later, “slip&fall” lawsuits. The only way out is to hide the existence of the savings accounts, and to lie about it.
Until you’ve seen it in action, or had it described to you by someone who escaped, you don’t get it. Opinions otherwise are ungrounded, and need some hard reality.
You may define ‘high status’ in a way where the person who is shunned and punished has higher status than a person who gets included and rewarded, but I reject that definition as rather meaningless.
Social status is not the same as being richer or having things that the other person wants.
Well, to @Andrew Cady ‘s credit, I also can construct a workable argument that “the person who is shunned and punished has higher status”. This is one of the many ways that humans are shitty, in that lower status people will spend their own energy and wealth punishing someone to prevent them from having higher status.
This is exactly the real world dynamic that in part drives why people physically separate themselves by wealth. This is why the not hypothetical poverty escapees move out and away as soon as they can. This is why the top 1% do not live around the bottom 90%, and why the top 0.01% do not live around the 9%.
It’s really hard for people of two or more orders of magnitude of wealth difference to be part of the same chosen social groups. It’s really hard for someone who’s being crushed by 10K of credit card debt to be friends with someone who idly pops over to Europe for their pal Harry’s wedding.
I’m not sure about two orders of magnitude, but I think at least two social groups I’m involved in, SCA and sf fandom, span more than an order of magnitude of income difference. And my guess is that status differences within those groups unrelated to income, such as between a successful sf author and his fans, are larger than the status differences in those groups related to income.
Judging by a quick google, the top one percent starts at an income of about $450,000/year. That’s less than an order of magnitude above median household income.
I actually did have a list of exceptions to the general statement in an earlier draft, and it did include fandom and SCA.
Some exceptions are:
1) SF Fandom and SCA
2) the top echelons of non-pro athletics and sport
3) the top echelons of creatives, craft, and art
3a) not “patronizing” art, “creating” art
4) Burning Man
5) Religion (The Mormons especially do this pretty well. The Marriotts and the Romneys have no more standing in their congregations and faith than any other member, and are just as subject to the judgement of their bishop as any other member. And a member generally does not get to pick their congregation to stick with their wealth class, they have to attend the congregation that the LDS leadership tells them to attend.)
There is a certain something that all these things have in common, but trying to define it distracts away from the point I was making.
Yes, but they (in part) do this by defining the things that are high status outside of the community as low status in their own community and vice versa.
I would add “any sort of gaming community” to this list. Status in those communities is based on game prowess, which (barring certain incredibly expensive games) is not directly related to income. In fact, in something like the eSports arena – a UBI layabout has a distinct advantage over a workaday person.
I think we can generalize these social groups as “social groups that are directly centered around an activity that isn’t directly proportional to income”. Even in travel communities, there are the soldiers of hosteldom that have 100k+ followers on Instagram.
One of the things that seems to bind them all together is that they seem to require a high degree of some trait or another to even want to participate in (highly competitive non-professional athletics preselecting for athletes, tabletop wargamers preselecting for other people with high desire to use analytical abilities, crafting communities preselecting for high expressiveness people, religious communities preselecting for high conformity people etc etc etc).
I was saying is that being hated or resented doesn’t require having lower status, and it isn’t evidence of it. (If anything I think it’s evidence of higher status. But really it doesn’t need to be related at all.)
I certainly didn’t say that shunning constitutes higher status. But you’re not shunning someone if you’re asking them for money.
If you are literally forcing them to give you money — which is to say repeatedly literally robbing them — then I would accept that as a form of higher status. (Not because of the robbery, but because of the getting away with it repeatedly.) But I frankly do not believe this bit about “slip&fall lawsuits” and I think that if the “only way” you can say “no” is by lying about having money to give, then actually you can say no pretty easily.
I don’t think status is subjective. Status is objective, though it may be relative. It has to do with who is expected to win certain kinds of conflicts, and it’s relative to different types of conflict.
Having people regularly borrow or receive money from you gives you a status boost over them because you can bring it up, you can threaten to cut them off, you can make fun of them for their poverty and dependence and worthlessness, and if they’re really poor you can probably find some biting things to say (i.e. you can find some real pain in their life to bring up). If you can make them feel bad and look bad in front of others, and they know it, then you have higher status.
Having more money also provides more status because you can include or exclude people based on money. For example you can invite someone out to eat. You choose who you will pay for, and people who can’t afford to do the same thing on their own or invite others in the same way end up with lower status than you. (For example, if someone “shuns and punishes” you, then you certainly won’t take them out to eat.)
It’s possible there are social scenes where other elements of status not only outweigh these, but actually reverse them — but I don’t really believe it. Not unless it’s a monastery or such.
“I know a guy online”…doesent count
As this is a microcosm of the attitudes that permeate debates on welfare programs such as UBI, we can observe this dynamic right here on SSC.
I’m pretty certain that the surgeon who earns $160,000/year saving lives is still going to have more status than the craftsman who earns $60,000/year making furniture, who will in turn have more status than the guy who collects $10,000/year while drinking and playing video games all day. The $10K at the bottom, and whether it comes labeled “UBI” or “Welfare” and whether or not we give it to the surgeon and the craftsnamn at the same time as the slacker, or even take it away from all of them, are not going to change that equation very much.
It does mean that we have to perhaps worry about what sort of behavior the slackers will adopt in their inevitable hunt for status, but we can look to the behavior of people presently on welfare/disability/the dole/whatever for hints of what is to come there.
But since the UBI person has no opportunity to compete for status with the surgeon, the UBI people will invent new status games to play against each other. See Killing the Competition by Martin Daly who argues that it is not poverty so much as inequality that drives violence in inner cities.
The surgeon will never have street cred, nor will street cred ever be valuable to the surgeon. This does not prevent street cred from existing.
And indeed it exists now. Why do we care if it continues to exist under a UBI?
I don’t know. I guess I thought UBI proponents thought quality of life in the ghetto would improve after UBI? Less stigma, welfare traps, etc? But I’m not sure. In reading all of this I guess I’ve mostly absorbed concerns for the bottom of the working class, rather than the already destitute.
Could a UBI proponent chime in? Scott, maybe? What do you think would happen to say, inner city Chicago after UBI was rolled out? Was it supposed to be better, or stay the same but have less administrative overhead?
ETA: I guess I’m hung up on the proposed utopianness of UBI. It doesn’t sound much like utopia if there’s still 2 murders a day in Chicago.
There is of course the famous Chapelle’s Show sketch about reparations, the gist of which was that if you give a bunch of people in the ghetto a windfall, they’ll spend it on their existing status games (only more so) and shortly afterwards no one would really be better off.
Although a single windfall and an ongoing UBI would not be the same thing, and might have some impact.
>and shortly afterwards no one would really be better off.
Except for Tron, man owns a baby!
There are myriad of ways in which UBI could potentially help people from ghettos, but the most obvious one is giving them a way out.
If everyone escapes the ghetto, does the ghetto just move to where they are now?
There are knee-jerk answers to that question, in either direction, that don’t shed much light on the truth, but we need to do some hard work to show that this isn’t like subsidizing a positional good.
Because with the new dole it can get much worse than it is now and be potentially more dangerous than it already is to oreder and civilization.
I see UBI as a potential way to run welfare programs better–to get rid of the costs, intrusiveness, and especially the perverse incentives created by means-testing in welfare. (That is, the stuff where you can’t let your savings go over $1000 or you lose your medicaid benefits and maybe die because you can’t afford dialysis. Or where taking a second job bumps you above the eligibility limit for your subsidized rent, so you end up losing more in higher rent than you gain in extra income.)
I don’t see how this comes anywhere close to utopia. We will still have broken homes and violent crime and people in chronic pain and schizophrenic guys screaming at the little voices and children dying of cancer and all the rest, we’ll just have those things with a less broken welfare system.
THe Ghetto status games wont be affected too much by a UBI, but I highly doubt it would outright make things worse. This type of reform needs to come from within those communities, and in many cases, it has been, such as street patrols in Chicago to try to pursuade young men away from Gang activity.
Why would he have no opportunity for status. If he can drive an uber and have 20k per year he can still take dates to nicer places than the guy with 10 k even if the surgeon isn’t going to be beaten.
If anything removing the fear of losing welfare for working should make that easier.
Except then he’s the chump who’s driving an Uber all day, besides which it’s not status vis-a-vis women that’s necessarily the issue it’s status among other men.
Hell see any story of people trying to work their way out of the ghetto or the jobless underclass in general; once you start working you lose status for being unavailable for good chunks of time; having to (and often wanting to) get away from habits like drinking, fighting and loitering on street corners; you’re seen as compromising your membership of the community to serve somebody else.
None of your group of UBI-living friends cares if you took your girlfriend to a nicer restaurant and got her some shoes for her birthday, they care that you’re being the taxi guy when they want to smoke weed, sleeping because you’re tired from your job when they want to tag the nearest wall and that you were so busy working that you missed the party where the guys from across town showed up and everybody had to throw down. That’s the status you lose by working and which won’t be improved just because you’ve got a little extra cash to enrich yourself, if anything that cash just engenders jealousy/anger as it makes you an outsider playing a different status game to the one all the UBI guys are playing now.
Best case scenario in this world: you end up with the upper band of surgeon-tier people who are making so much money they compete in the world of their own; a middle band of people with enough of a work ethic to play money = status at a much lower level providing services to each other and the surgeon-tiers and a big bucket of crabs beneath them playing status games that don’t rely on money but instead on what you see in inner cities today but on a much bigger scale.
None of your scenarios make sense.
I’m not sure there’s a term for it but it’s not a great pattern: assuming that some group that you posit as a problem will do the opposite of responding vaguely rationally to incentives for basically no reason other than to be awful.
Lets try some tests, if I ask “why then do people from some of these poor communities work long dangerous hours selling drugs on street corners for less cash per hour than a mcdonalds burger flipper?”
What’s your gut reaction/response/feeling?
If the answer you feel drawn to is some variant on them of course being perfectly willing to ignore all the things you lay out as long as it’s for something criminal…. then perhaps you’ve stopped thinking of the people involved as people and rather as bizarre badness-maximisers.
A person who has lots of disposable income can typically turn that into social capital in any community. People take jobs because they aren’t all tweens and there’s things they want that cost money.
That doesn’t change under UBI.
Even in the crappiest regions unemployment is down below 20%. (ok there’s one place in the middle of nowhere Alaska where it’s 22%)
So the vast majority of the adult population, 80%+ in even those worst communities seem fully capable of telling others to go swivel on it in exchange for cash and/or your thesis is a fantasy.
@Murphy, have you BEEN THERE?
How many people do you personally know well who have LIVED THERE?
The same as my informed response after reading Venkatesh’s research on the subject. The bloody obvious and actually correct one.
They do it because it offers the possibility of winning vast, life-changing amounts of money and also non-monetary status within their existing community, in a way where making the attempt will not cost them any status within that community. Same reason some of them play basketball while hoping for an NBA career, and others just buy lottery tickets. It doesn’t require criminality, but it does require things no burger-flipping job can provide.
But criminality is also available, and the odds seem to be several orders of magnitude better than the lottery. What else is there that scratches the same itch?
People escape poverty (including ghetto poverty) now. Is there some reason to think that there will be less escaping from poverty under an UBI than under current welfare rules?
I rather think it would be higher. People dont exactly turn to criminality when there are visible alternatives. The key is that in the Ghetto, all they know is short, violent lives and constant status seeking via violence, etc…A UBI type scenario would certainly not make this worse, and it may indeed help a bit. Allow people to status seek via purchases rather than theivery…..
” have you BEEN THERE”
You clearly haven’t.
my highschool was in the middle of the largest and shittiest council estate in the region with the possible exception of a slightly smaller one which had a somewhat stabby relationship with that one.
I went to school there, I know the individuals very personally.
And then a bunch of people charge in and declare that obviously they know better.
You can always find someone willing to write a book that will confirm any existing belief, no matter how counter to reality or absurd.
Venkatesh’s research on the subject if anything massively contradicts the absurd claims being made here, it paints a picture of very reasonable responses to incentives by people with few other routes to employment or out of poverty who will happily take better work when it’s available and realistic.
There are some shitty people but the vast majority, 80%+ are normal people with non-absurd responses to normal incentives.
Though it’s becoming clear from the other comments in the threads that some people aren’t talking about poverty but rather race and don’t believe the same applies to poor white communities and just have generally shitty beliefs about black people in general.
“Criminologists have known for decades that income inequality is the best predictor of the local homicide rate, but why this is so has eluded them.”
I’m pretty sure there’s another factor that’s a better predictor of the local homicide rate…
Yeah yeah yeah. But those same demographics in equally poor rural areas do not have near the crime rates. The difference is the Gini coefficient.
I highly doubt that it has anything to do with gini coefficient. Most of these homicides are not between SES groups, right? I would assume it is density/network effects if true
Doesn’t “ennobling” literally mean “gives you status”?
It has broader meaning than that.
In context, “ennobling” means “builds character” combined with “gives you status”, though the building of the character is tied to why the status is given to begin with.
not quite. It’s more “instills virtues and character traits that are high status”
So….volunteering doesent do this?
Volunteering often does, but 1) now that’s partially because it signals you are so rich (or supported) you don’t have to work for money, and 2) thinking that the UBI-class will turn to volunteering is typical-minding.
Should have known better than to make a joke like this here.
I enjoyed it FWIW.
Apologies, didn’t realize it was a joke. x.x
I looked into the case of the Nauru, and I’m extremely skeptical of the claim that UBI was the cause of their problems. There seems to be a common narrative which blames their diet, which might be tied to economic factors, but I think it’s more likely that they were all poisoned by the strip mining of the island. See eg https://reliefweb.int/report/nauru/providing-clean-drinking-water-nauruans for some evidence that water pollution is a problem there.
Even if it wasn’t, the thing that happened to the people of Nauru is that they got access to modern goods dropped on them all at once as an outside context problem. They went directly from Neolithic hunting-gathering-farming to “oh yeah, you can just cook bacon whenever you want, without having to raise and hand-feed the hog yourself. And heck, here’s some even LESS healthy foods! Want to gorge on 100 Oreos today? Well, you can!”
Literally no one in the developed world would get hit by this problem as hard as the people of Nauru. We already know that stuffing yourself with junk food until you’re too full to move is a bad idea, and that if you keep doing it for a few years you’ll be sick as a dog and functionally crippled by sheer ill health. Sure, some of us still fall prey to those superstimulus foods, but Nauru represented a unique problem that had little to do with universal income. Other Pacific island societies are having similar problems with obesity and heart disease, for similar reasons.
Do this “we” include the poor people whose problems we are trying to diminish with UBI? Because I’m afraid what you said may not apply as readily to them as to the average SSC reader.
Poor people in the US currently have plenty of access to junk food. Why would UBI make this worse?
In the case of food, I don’t really think it would, and this for the same reason you proposed: the US is already prosperous enough that even the poor eat plenty. But Simon was pointing that the bad things that happened in Nauru wouldn’t happen in the US because people in America know better, and Nauru is unique in being too backwards. I’m just pointing that I doubt this is the case: he may know it better, but I doubt most people know or are able to use such knowledge, be it in regards to food or exercise or mental health or social stability – and I fear the few knowledgeable will be able to compensate for the general ignorance. I agree that the US would not suffer as much as Nauru, but I don’t think knowing better would be the reason for it. UBI in the US would not impact food consumption, but it may have negative impacts on other areas of life and health that maybe could be avoided if people knew better, yet I doubt many do.
I keep thinking “cultural antibodies” when I read this.
And your reason for arguing that symptoms entirely consistent with consuming a 7,000 calorie per day diet are not caused by their 7,000 per day diet is… what exactly?
Nauru was at one point the richest nation in the world per capita. It’s not like they had trouble importing water alongside soft drinks when the obesity epidemic first began there.
I feel kind of bad now that my comment is quoted. I was going for punchiness but feel like I should have included more sourcing for the specifics for that level of visibility and my post is more rehtoric than calm deliberation. It is true though. I’ll dig up the workplace sexual assault stuff but basically if you’re at the bottom of the social totem pole and part of a group with people who are also somewhat more likely to alledge sexual harassment the assumption of you lying can be the default which means that you become a juicy target for predatory individuals. After all, who’s going to believe a workfare, everyone “knows” you’re all scroungers anyway.
DWP analysis shows mandatory work activity is largely ineffective. Government is therefore extending it..
The bad outcomes are less surprising when you take into account that they forced people to stop “real” internships in fields where people were qualified to go stack shelves (stacking shelves being the ultimate in education is a bit of a theme to the polite fiction that the program is “educational”)
Should there be a link there?
So I took a look through what appeared to be the relevant parts of Tcherneva’s FAQ and it doesn’t seem to answer the basic question, despite the repeated insistence that it does. Namely, how can you simultaneously claim that:
1. The program will involve no make-work, and
2. The program is in fact a guarantee, and is distinct from just hiring people to do stuff
As best I can tell the answer to the easy version of the question above — where we drop the second part of #2 — is, it’s not actually a guarantee, or rather it’s only a guarantee in the sense that it will in fact achieve full employment, not in the sense that it will achieve full employment not only in the world that actually obtains but rather in all possible worlds including adversarially engineered ones (which to be clear is what the word “guarantee” means to those of us coming from math or CS and seeing it used in this lesser way is quite annoying). But for the hard version, I don’t see any answer that actually makes sense.
Like, the claim is that there will be no need for make-work because there will always be lots of useful work to do. OK. That much is certainly plausible. But if there’s lots of useful work to do, what’s the need for the JG, rather than just, you know, hiring people to do that work (via ordinary processes)? Like, if you’re claiming it’s work the private sector could be doing profitably, on what basis are you second-guessing the market? And if it’s work the government should be doing, why not do that through the ordinary processes? Now maybe the JG is just a fancy name for setting up a permanent government office finding things that need doing and then hiring people to do them via the ordinary processes — like a permanent infrastructure program, kind of, except more general — which sounds fine to me, but Tcherneva insists that it’s not that, that it is in fact distinct from that; that in fact it should only be doing work that neither the private sector nor the government’s ordinary workings can handle.
It’s not at all clear to me what this work might be, that it is impossible for either the private sector or the government’s ordinary workings to do. One plausible example is provided, which is paying people to care for their elders. OK. That example makes sense. (Although not total sense; after all, the government could, through its ordinary workings, run a program to hire specialists to care for the elderly, rather than paying their family to do it. Indeed I believe to some extent this already exists. So this is less impossible than it initially seems.)
But beyond that…? Like, the other example I encountered in Tcherneva’s FAQ while trying to get an answer to this question is, oh, a municipality needs to do some work, but it doesn’t have the money to pay for it. OK. Can it not, you know, get a loan? Can it not issue bonds? Can it not perhaps beg some money from the state government?
Because this is the thing — under the JG, it is said, the money will be there. But if the federal government can afford to pay for doing this stuff under the JG, then it can just as well afford to pay for it via the ordinary processes. The JG doesn’t seem relevant. The claim that this is work not possible by ordinary government processes just doesn’t seem to be true.
I agree that there’s a lot of stuff that needs to be done. If “Job Guarantee” does not actually mean “Job Guarantee” but only actually means “find stuff that needs to be done and hire people to do it, same as always but more so” then it sounds like a good thing (look at the crumbling infrastructure in this country, etc). But if, as it claims, it is meaningfully distinct from that, doing only work that simply could not be done the ordinary way, then I find it hard to believe such a quantity of work needing doing but also meeting these strict conditions exists; indeed I doubt there’s much of anything, really.
(Also once again… seriously just don’t use the word “guarantee” if you only mean it in the weak sense above.)
Unrelatedly, replying to this bit:
Unfortunately, it seems like this doesn’t work in the world that actually exists, because if you’re out of a job too long people will assume you’re unemployable, and you won’t be able to find another $100K job. It’s very annoying. Otherwise I probably wouldn’t be looking for a job right now.
(Also, once again: Separation of concerns. Really. This is the most basic argument for UBI over job guarantees. Do not join things that do not need to go together. If you find things that people are bundling, and you can unbundle/decouple them, do so.)
Also, due to progressive taxation, earning $100k one year in ten nets you quite a bit less money than earning $10k per year.
It’s possible that the reason that the private market isn’t employing people now is the tax code. It certainly matters on the margin. I can’t say for how many people, but most people consider it smart to work under the table. (You can argue that it isn’t smart because they are forgoing SS benefits, or job protection, or risking jail, or whatever, but the fact remains people continue to do it.)
I favor a wage subsidy, but the simplest way to implement it from here is to just have low-skilled labor be untaxed. Let someone pay $7/hour and have the person receive $7/hour.
I think we’ll need to start subsidizing labor, so someone can pay $7/hour and someone receive $8/hour, but let’s start with the easy step.
There are several reasons that working at a job that pays a $100,000 salary for significantly less than that is infeasible. Many people have pointed out that going without employment for too long leaves a hole in your CV that employers will be skittish about, and Brandon Berg above points out the progressive taxation issue (in my area, $100,000 gross income in one year is about $75,000 after income tax). I’d like to add that if you’re capable of doing a job with a salary that high, you almost certainly have financial obligations that can’t be paid down on $10,000/year. Student debt, for instance, or housing costs in the city where you work.
Working as a contractor carries the same issues, and for various reasons working part-time isn’t viable in many high-paying jobs (i.e. working only two days a week will net you far less than 40% of your salary, and that’s if you can even get such an arrangement in the first place).
Overall it’s not entirely surprising that people don’t ‘just’ work less.
OK, but people also don’t quit their careers the instant they have enough invested in the market to make $10k/yr in returns.
The number you need is a few times that, depending on your lifestyle, but there’s a growing subculture of people that do, in fact, save a large percentage of their income and stop working once they have enough to live off investment returns. The Mr. Money Mustache blog would be the place to start if you’re interested: https://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/ .
Anecdotally, I feel like more middle class and higher people don’t do this mostly because no one has ever told them it’s possible, rather than because they’ve thought out the pros and cons and decided to keep working.
Holdover from the 80’s “Greed is Good” mentality?
That’s true only for the narrowest definition of “job”, which people who claim to be willing to work a 10% schedule while living in poverty have no business using. Ozy’s been getting far more pushback than she deserves on this, for what was at worst an oversimplification on her part. The exact method by which one may turn a $100K/year skill into $10K/year income and beaucoup free time will depend on the industry, but:
Working full-time for five years, saving most of your wages, and then never working again, works in pretty much every industry.
Learning something like diesel generator repair and, every time there’s something like the North Dakota Shale Boom in the news, showing up with “I know how to repair diesel generators and I know how to live rough without complaining”, that gets you $100K/year or more for a few months or a few years and with nobody turning you away because your resume doesn’t show you repairing diesel generators last year.
Consulting probably doesn’t work at the literal one-full-time-year-every-ten level, but it’s a good way to get five weeks of work every year in a great many industries. The chief problem with consulting as a career is the level of self-promotion required to get anything like a full-time workload; if you’re willing to settle for picking the lowest-hanging fruit, five weeks a year often just requires establishing yourself in a specialized niche and/or keeping ties with a select few customers and waiting for your phone to ring.
Gig work, if relevant, can work the same way. And both gig work and consulting go on your resume as what you were doing that year even if you were only doing it 10% of the time.
If your job has a widely-respected hobby counterpart, that can be a recognized way of maintaining currency. Particularly relevant insofar as coding seems to be the career of choice for rationalists/SSCians. I doubt any coder actually capable of earning $100K/year is going to spend a year playing video games without coding something publishable as open source along the way, and there’s your resume. MS in Computer Science, XYZ State, 2011. Google, 2011-2013. Consulting + Open Source Software Development, 2013-present, and the consulting work is of course proprietary but here you can see my public-facing work.
Most craft skills, you can work at your own pace and sell what you make on Etsy or wherever. Running your own sole-proprietorship plumbing or auto repair business, it’s up to you how many customers you take and how many hours you work.
Whatever it is that you’re earning $100K/year to do, you should be able to earn at least $40/hour tutoring and as with consulting that’s hard to fill a full workload with but easy to pick 200 or so hours a year of low-hanging fruit.
And if you’re working full time for $100K/year while saying you’d totally like to do 10% of the work for $10K, I have a hard time believing you wouldn’t find half time/$50K to at least be an improvement over your current state. One-year gaps on your resume don’t cost you skills currency and are positively easy to explain. Sabbaticals. Parental leave. Illness, your own or a family member. Taking the time to find the perfect job, like the one you are applying for right now, rather than just working for that lame company down the street just because they made an offer. And once you have a job, there’s a good chance that when it’s time to leave you can go part-time and ramp your hours down to zero.
And again because it bears repeating, working full-time for five years, saving most of your wages, and then never working again, works in pretty much every industry.
But almost nobody other than single mothers actually does any of these things. Lots of people say they’d like to have less work for less pay, but push comes to shove, people who bother to work at all are far more likely to find excuses to work longer hours for more pay. Ozy was right to call them out on this.
So, maybe a UBI would enable the absolute slackers, and maybe that’s a problem. But I am fairly certain that almost nobody currently working or capable of working a $100K/year job is secretly an absolute slacker who is also absolutely stymied by our economy’s present inflexibility but would totally drop out and play video games all day come the $10K/year UBI. You all would demand at least $30K/year for that.
Unless you actually wish to engage in the hobby independently of its usefulness for getting a job, “have a related hobby when you’re not working” is equivalent to “do some unpaid work while you’re not working”.
Sole-proprietorship businesses have a lot of overhead that doesn’t scale with the number of customers, and tend to fail very often anyway.
It is an oversimplification on both counts though, the issue isn’t people who currently have jobs that pay $100,000 a year, it is the next generation.
If you pass legislation (effectively) limiting the amount that doctors can get paid, pushing overall wages down by 10-20% you probably aren’t going to see a mass exodus of doctors since most current doctors won’t find it profitable to swap careers after the cost of getting the medical degree. Even most students in medical school will have to just eat that loss. 5-10 years down the road however you start to notice that fewer and fewer top students go into medicine and you would start to see a decline either in quantity or the quality (or both) of doctors.
Likewise the issue isn’t necessarily the people who currently have the ability to make $100,000 a year, but the people who are about to take the first steps toward positioning themselves for those jobs where the big impact will be. Study and get a job earning $100,000 a year or don’t study and still have to work to make $30,000 calculation is shifted heavily by the “don’t do shit and get $10,000 a year” option, which is further complicated by the “don’t do shit and get $10,000 a year and if you ever want more get that low wage job and you get $40,000 thanks to UBI”.
People who currently have six-figure jobs, and particularly people who currently have six-figure jobs but claim they’d rather be poor and play video games all day, serve as evidence towards or against the hypothesis that there are lots of potentially-productive people who would really rather hang around playing video games than making lots of money. So the extent to which that trade can be made today, is relevant.
Medicine is something of a stand-alone example, I would say, regarding the length of time it takes to train to enter at a basic level. There are calls to reform this, floating around independent of any UBI type scheme. It is likely that medical training will, in the future become shortened or reformed, at least the way I look at it. The encroachment of PA’s and NP’s in Primary Care is a good example…plus, with the continued automation of medicine, and usage of AI, I would think that the goal of a doctor would be interpretation and judgement best served by experience, not neccesarilly many years of cram school in under-grad and med school.
> fewer and fewer top students go into medicine and you would start to see a decline either in quantity or the quality (or both) of doctors.
To the side of your point, but do we really want the very top students to become doctors? It’s an additive profession, not a multiplicative one (research doctors aside).
As you mentioned already, we have UBI already – just for oldsters.
Why not just bring retirement age down a year as soon as productivity goes up to support it?
If we do that, people will get the option to retire at 64, 63, 50, 45 and so on – eventually UBI will kick in at birth and not too far down the line everyone will be born with a nice fat savings account.
Social Security is already paying out more money than it takes in. How should the retirement age be changing based on that?
Surprised that of the various UBI examples brought up, no one mentioned Macau, which seems to have a quite high payment for Macau natives. Is no one familiar with the system?
Regarding working less:
I’m quite happy with my job, but I’d love to work one day less per week. But there’s a huge stigma around it. Going from full time -> part time is already pretty big, but the way loans are evaluated are also entirely based on your total income, not how much good you are at managing your economy.
Add having to ask your employer for it (is there a better way to signal ‘I’m not really interested in this job’ ?) is also an issue, and it looks bad for future employment (given two otherwise similar choices, you’re going to pick the guy who seems to enjoy work more).
These may not be the reasons other people who want to work less don’t, but it’s the case for me (or at least what I tell myself). I’m afraid I’d be shooting myself in the foot and preventing future opportunities.
Yes, full time employment is a hard fence in many professions. I can’t work 3/4 as much for 3/4 the pay, or even 1/2 the pay. It’s full time, some part-time job that pays more like 1/10 of much per time unit, or contract work. Contract work ends up being more than full time of the sort of work I’m bad at (finding customers) to make less money.
I’m a regular reader of Penelope Trunk’s blog, and she is forever talking about how women with children would prefer to work part-time but mostly can’t because of a combination of no part-time jobs available and career suicide.
I think a lot of people might prefer to work part-time, but don’t have realistic options for expressing that preference, because they’d rather not risk committing career suicide.
In The Netherlands, there are lots of part-time jobs, although mainly in professions with a high percentage of female workers. In large part, this seems to have been a response by employers to women’s preferences. Of course, it is still career suicide and fairly few Dutch women achieve high positions. The part-time culture is so strong, that women without children also often choose to work part-time.
The Dutch example shows that Penelope Trunk’s claim that American women “mostly can’t” work part-time due to career suicide is nonsense. They just don’t want to accept the consequences of working part-time to the same extent that Dutch women do.
In general, what are or are not ‘realistic options’ tends to be highly subjective and culturally determined.
Aren’t those two statements completely contradictory?
My point is that these two statements are not equal:
– American women usually can’t work part-time
– American women usually can’t work part-time and have a career
By equating these, a fairly subjective choice is presented as inevitable, denying the agency that people do have. The different choice of many Dutch women shows that the alternative is actually not considered inevitable everywhere.
PS. It’s actually part of the gender roles that the choices that women make tend to be presented as inevitable, while choices that men make are presented as real choices; even though from my perspective they usually have the same pattern, where choosing differently has high costs. This tendency to undervalue the agency of women and overvalue the agency of men is quite toxic IMO.
My wife used to work full-time as a dental hygienist, and after we had kids now works 25 hours a week. We’ve reached a place of financial security, and I recently asked my supervisor to look into the feasibility and implications (on salary, benefits, leave, etc.) of me working a 4-day work week (9 hour days), reducing my total annual hours by 10%.
There was no stigma for my wife reducing her hours, though she does work in a heavily female occupation where it’s not unusual to work less than full-time. Though my part-time request is unusual, my supervisor is very open to it and is understanding of my desire for better work/life balance. Your particular concerns (loan evaluations and future employment) aren’t concerns for me, but I understand how they could be for other people.
If it keeps trending, which I feel it will, I think supervisors will grow into it
This may be true for many jobs, but if all you’re shooting for is a 10 thousand dollar per year position, you’re probably already looking at companies that staff plenty of part time workers. Many even prefer it. See virtually any major retailer for an example.
I posted in a thread up higher, but I did this for awhile (going from 40 hrs to 30 hrs) and there was not really any stigma in my case. Still got full benefits, with 3/4 salary and vacation time. Not saying it will work for everyone, but it’s also not the impossibility I’m inferring from your comment.
Interesting. If I may ask, what field are you in?
My specific job at the time was “computer stuff” (combination of software development, networking, software and system configuration, occasional sysadmin in the sense of setting up servers but not in the sense of maintaining them (i.e. no “on call” hours or anything)). Industry was “large government contractor”. On one hand since everything in contracting is based on hours, logistically they were set up to have my hours be whatever number without needing to change much. On the other hand the more hours they’re billing the government the better, so there could have been some reluctance. I didn’t encounter any though, and even got one of my better raises while on the 30 hour schedule.
I was not the first person in my office to set up a schedule like that, which helped me be able to know what to ask for and not be a complete pioneer. From a “potential stigma” standpoint I was the first male in my office to do it, that I know of. Again, never heard anything bad though. A few years later I was able to go back to 40 hours and I don’t think it has ever affected my career path. That said, after going back full-time I did move into more customer-visible roles, versus “guy sitting in the back of the office only talking to his computer”, which I think may have been harder to do if I had still been part-time.
This was after my first kid was born, so I was doing it to stay home two extra days a week (so I did three 10 hour days to get 30 hours). It was very hard at first (as dealing with an infant or toddler all day is), though did get a bit easier later. While I did have to go back mainly for financial reasons (when I initially did it, my wife had a high paying job that meant we wouldn’t much miss ~25% of my salary; later she did not have that job anymore and that 25% became more important), I’m still very glad I did it; having the extra time with my kid at the young age was great.
Some anecdata on the programmer thing:
1. I had a friend who had a degree in computer science and a high-paying job at a prestigious software company, which she quit a few years out of college to go on saving-funded funemployment. Then when her money ran out, she got another job in software. Then saved up some money, quit, and screwed around a bit more. Rinse and repeat. Once she got laid off and was pretty blatantly committing unemployment fraud to milk it as long as it lasted (e.g. going off on vacation for a couple of months).
2. Once, while I was at a party, a guy started talking to me. As it turned out, had a degree in computer science. And was unemployed. He went on to offer me totally unsolicited advice on how to commit unemployment fraud: Apply for jobs, go in for interviews when you get them, and totally blow them so you don’t get a job offer.
3. I’m also a programmer. After several years in the industry, I unexpectedly learned out of the blue that, a) my mother was dying, and b) my family is cursed. I didn’t particularly like my job at the time, and I had a lot of money saved up, so I quit and took some time off to deal with the sharp downward revision in my life expectancy. After several months, I realized that I a) wasn’t really making great use of the time off, and b) didn’t have nearly enough money to retire anyway, so I decided to go back to work. In theory, anyway. I ended up taking several months just to update my resume, and several more half-assedly looking for work. I did find a job eventually but not nearly as quickly as I would have if I hadn’t had savings to fall back on. And I might well have taken longer if I’d been getting a UBI to staunch the bleeding of my bank account.
Note that I’m not really a people person. I’m not cherry-picking from thousands of people I personally know. This is a small number of data points, but I don’t think it’s particularly rare for people with very good earnings prospects to take time off, or at least think about it. On the margin, a basic income plus higher marginal tax rates could make a significant difference in the number of high earners who actually exercise this option.
I don’t begrudge people using their savings to take time off, as I did myself, but I don’t think this is a good thing for the government to be subsidizing or for society to be normalizing. I don’t think it’s a huge loss economically if a bunch of people decide to live on the UBI instead of working low-wage jobs. They were never going to have a particularly high marginal product anyway. But I worry about the long-term effects of normalizing and subsidizing the medium chill for talented workers. I worry about the cumulative effects on skill accumulation if someone decides to take five years off five or ten years into his or her career. I worry about people taking a couple years off directly after college, forgetting most of what they learned, and missing the chance to get started in the careers they studied for.
The plural of anecodote is not data, but I also am a software engineer of relatively solid means and I at one point took 9 months off work to just kind of do nothing. I went back to work when, like Brandon here, I decided that “not working” was not in fact doing a lot of good for me.
I have on two occasions found myself with months on my hands with nothing much to do. In both cases I had ambitious plans for how to spend my time, but mostly ended up doing nothing particularly productive. I strongly suspect that if I stopped working I would out of sheer boredom pick up some bad habit that killed me in a decade, tops. Drinking, probably.
I’m not cut out for a life of leisure.
I’m a software engineer, too. I spent six months funemployed, had a great time, and would have kept it up except that I was worried about my ability to get a job if I stayed out of the workforce for too long.
(Also, I had a great time _during the summer_, and winter might have been worse.)
(Also, being unemployed makes it hard to attract a girlfriend.)
But doesn’t your example show that this is already happening? People are already using existing welfare systems to experience ‘medium chill’.
Putting this in another comment, because my last one was longish: I want to talk a bit about tax incentive theory. Taxes have two effects on incentive to work. The first is the substitution effect. If taxes reduce your hourly wage, then the marginal return to sacrificing an hour of leisure to work an hour decreases, which reduces your incentive to work more hours. Conversely, a tax cut means you get more money per hour of leisure sacrificed, so your incentive to work decreases.
The second effect is the income effect. When a tax increase reduces your total income, this increases the marginal utility of money for you (because of diminishing marginal utility), and so you have an incentive to work more. Conversely, a tax cut increases your income, reducing the marginal utility of money, and thus reducing your incentive to work.
When you increase or cut taxes across the board, the income and substitution effects work in opposition. A tax cut will increase your after-tax income, making you want to work less, but also increase your after-tax hourly income, making you want to work more. A tax increase will reduce your after-tax income, making you want to work more, but reduce your after-tax hourly income, making you want to work less.
One of the problems with the tax system prior to the Kennedy tax cuts, and to a lesser extent between the Kennedy and Reagan tax cuts, is that the tax system had very high marginal rates, but also deductions out the wazoo. As a result, the effective tax rate was not particularly high, resulting in a weak income effect, but the high marginal rates resulted in a strong substitution effect.
The great thing about the tax reforms in the 80s is that, while they didn’t really lower effective tax rates much, they broadened the tax base while lowering marginal rates. This weakened the anti-work incentives caused by the substitution effect while keeping the income effect more or less intact, unambiguously increasing the incentive to work. To limit the disincentive to increase earnings, tax policy should be built around a broad tax base and low marginal rates.
We’ve slowly been rolling those reform back over the years, raising high-end marginal rates while narrowing the base with new and expanded deductions and credits, but a UBI dials this up to 11. You’re obliterating the base: If you have a $15,000 per adult UBI and a 30% flat tax rate, a married couple has to earn $100,000 per year just to get their net tax bill up to zero. To offset this, you need to jack up marginal rates. So you’re weakening the income effect (reducing incentive to work) and strengthening the substitution effect (further reducing incentive to work). This is pretty much the opposite of how to design a tax system with good incentives.
Keep in mind that top marginal personal income tax rates are already over 50% in several states, especially since the SALT deduction limitation passed last year, and estimates of the peak of the Laffer curve are around 70-80%, so there’s really not that much more income that can be wrung out of the top 1%. I estimate maybe 3-4% of GDP. Even $10,000 per adult per year is going to run you about $2.5 trillion per year (12.5% of GDP).
People talk about replacing Social Security, which would cover about a third of that. but…come on. Really? The current average Social Security benefit is $17,000 per year, and a lot of people are getting more than that. The AARP is going scorched earth if you try to cut Social Security to a maximum of $10,000 per recipient per year.
I think a lot of people are assuming that there’s some kind of UBI level that can get you both “poor people have enough to survive without taking shitty jobs”, “people still pay enough taxes that the government doesn’t go bankrupt” and “salaries don’t raise enough that everything becomes too expensive”, but I think that’s a form of wishful thinking (like thinking “if I line up these magnets just right, I’ll get unlimited energy out of them!”).
I think if you run any kind of economic simulation where agents are given realistic incentives, the system collapses once you introduce UBI. I’d like to know if anyone has tried running this kind of simulation (in such a way that the simulation gives usueful data and not just the author’s bias); maybe UBI starts to work if you introduce enough mechanization in the simulation.
The real world examples of large UBIs that I’m aware of seem to rely on access to a pool of labor that doesn’t get the UBI. You see this in both Native American casinos, where 75% of jobs created by those casinos are held by non-Natives, and Persian Gulf petrostates (which may not technically have UBIs, but have generous welfare states that effectively amount to the same thing), where a majority of the population consists of migrant workers, for example.
So a First World country might – key word, might – be able to sustain a large UBI if it was paired with a very large guest worker program and the country did not have birthright citizenship. But I’m not aware of anyone that is seriously proposing that particular combination of policies, and it fails completely at the stated goal of liberating people from crappy jobs, since the crappy jobs just end up getting outsourced to migrant workers.
One would more honestly say “magic”. It’s more honest.
Robots are not a way to get freely created labor.
Robots are a way to massively multiply the productivity of fewer and fewer more and more skilled people.
One of the many intractable problems with “robots are the way to UBI!” starry eyed hope, is that you will have to persuade those fewer and fewer more and more skilled people to pay for a larger and larger UBI going to more and more people.
I’ve yet to see that persuasive case made, especially here.
OK, but he didn’t say “freely created” labor, he just said “labor”. So this may be an artifact of definitions.
If, e.g. we define “labor” as something only free men (or only white men) can perform, then we can just as easily say that antebellum slavery was not a way to get cheap labor, it was a way to massively multiply the productivity of whatever subset of Real People we promote from cotton-picker to overseer. But you can lose track of what is really going on with a definition like that if you’re not careful.
If it’s fewer and fewer people, you can probably just find people who are already persuaded, since there will be more people to choose from.
You don’t have to persuade them to pay a UBI by the way. You just have to persuade them that the machines are doing some of the work. That will be a very intuitive belief that anyone without an ideological view of the economy will pick up just by watching with their own eyes how production works.
“If, e.g. we define “labor” as something only free men (or only white men) can perform, then we can just as easily say that antebellum slavery was not a way to get cheap labor, it was a way to massively multiply the productivity of whatever subset of Real People we promote from cotton-picker to overseer. But you can lose track of what is really going on with a definition like that if you’re not careful”.
On the other hand, this example does seem to support the basic point that a society based on unlimited cheap labor will turn out to be highly unequal.
Social security is “good citizen” tested, you had to work and pay taxes to qualify for it.
Also, elderly people are generally culturally stereotyped as more likely to be “good citizens” a priori than others.
I hate to be a negative Nathan or something here, but “captive audience in a world with no ability to increase housing stock” sounds exactly like the experience of living in pretty much all of the large US cities. Like, if we were somehow able to massively increase the housing stock, I think that would go a good way towards solving most of the problems that either of these programs are intended to solve.
To be clear, I don’t have any proposed solutions other than: “prefer investing precious political capital in things like SB 827 than in things like Income/Jobs guarantee.”
One of the things about the UBI that Scott mentioned is how the money would be divorced from where the cities are. Even if every city had heavy restrictions on housing supply, that still leaves rural areas to pick up the slack. From a purely financial perspective, someone subsisting solely on UBI would be more incentived to live out in rural areas than urban because of cheaper cost of living.
I’m curious whether this conversation is largely driven by the frustration of SF and Berkeley residents with the large homeless and poor populations of their cities.
Whether the UBI would solve the problem of poverty or not, perhaps it would compel the less desirable elements to move elsewhere. But coercive measures may also be needed, such as cutting off the UBI of those who refuse to move to wherever it would be rational for them to go to, transportations, and sanctions for the potential destination cities that refuse to accommodate UBI recipients arriving in large numbers.
More realistically, the actual solution will involve paying a hosting fee to some companies to keep these undesirables away. To some extent NY is pioneering this. People are hosted, for a fee much above $10,000/year, in remote places in the outer boroughs, too far to bother residents of Manhattan on a frequent basis. Certainly, being able to relocate them in cheaper and even more remote places would be an improvement.
We could call them poortowns or whatever — the residents wouldn’t have to work, just watch TV all day long and stay out of trouble. Given sufficiently remote locations, confinement may be superfluous.
This may not solve whatever intractable problems are causing these people’s distress (drug addiction, depression, mental illness), but would improve life in most US big cities.
No you can’t work 1 year out of 10 and average $10,000. How many people can show up to an interview with no employment for the last 9 years and land a job? Scratch that, how many can even get an interview with a 9 year gap on their resume.
However there are people who actually do this, there is a small community of people at mrmoneymustach (and others) who are slashing their consumption now for the returns of not having to work in 10 years. The primary reason more people don’t do this is because it is more work, not less, upfront. It takes what used to be called ‘character’ to cut your luxuries down aggressively, to risk alienating those around you while pursuing your goal, and to be independently minded.
What mrmoneymustache and others are doing is indeed difficult. The difficulty being living below your means, in a society where even living within your means (not using credit but spending your entire salary every month) is rare.
But they do seem to be happy after they retire, and a lot of people do not do anything after they retire, at least not something like a full time job.
UBI means you do not have to live below your means while working in a hard job, but within your means. It does seem to me that a lot of people would take this lifestyle if they could.
I also want to quit
My current plan is to save money until I am 35 or so, have 3-4 kids, and quit working to become a SAHM. Then, by the time I am 55-60, I would return to academia and work while I can, because I do love research (if they would hire me after such a long gap). But because the likelihood of being able to get hired back is low, I still need enough money to retire forever. Now, this would be even easier with UBI, and would not require the sacrifices I have to make now. Is this desirable though?
But they have demonstrated motivation and initiative, to be able to earn enough to save and to do so despite temptations. I expect such people to not have too much trouble finding other meaningful things to do with their time, but I’m not sure that says anything about those with poorer impulse control.
Mr. Money Mustache has not somehow cracked some kind of code. He is an advocate for living within your means, whatever those means are. But there is a misunderstanding that he’s found a way to avoid work. His strategy is to become a small-scale rentier and a self-employed ruthless accountant/semiprofessional cyclist/storage unit scavenger. Those are all jobs. Some people find more satisfaction if they do such work for themselves rather than a boss, but if working out a budget and pulling a bike trailer everywhere are not things you enjoy doing, you’re not going to magically start enjoying them because you’re doing them to pinch pennies rather than earn money. Actually, insofar as you’re satisfying loss-aversion tendencies (saving money) rather than getting a hit of dopamine by earning something you didn’t have before (making money), you might actually find it LESS satisfying to live that way.
Plus it requires you to acquire the assets to be a small-scale rentier in the first place, which is out of reach of most of the population.
That’s not his strategy for avoiding regular work; that’s what he chooses to do with his retirement. He’s posted his budget several times; he could afford not to do it if he wanted.
Indeed. Hence, why I don’t follow his advice to dry my clothes on a clothesline, why I bought a car, etc.
A minor concern about that David Friedman’s comment:
Isn’t in a sense pretty much everything you pay for work? McDonalds spends much of its money buying stuff and services from other companies, but those in turn use their money to pay their workers or buy other stuff and services (rinse and repeat).
This suggests me that you have to sum higher-order corrections. Given the cyclical nature of economic interactions, I suppose this makes the answer to the greatly debated question “If I somehow raise the lowest wages, how much would this raise the cost of stuff?” far from easy. Am I wrong?
You are correct that a full calculation would have to look at the effect on the cost of other inputs. But I was considering an increase at the low end of wages, hence much more effect on the cost of labor hired by McDonalds franchisees than on the cost of the labor hired by the people who provide other inputs to them.
You need to take into account the marginal productivity of fixed costs as well, as well as the elasticity of demand. If prices increase by 20% then demand ought to drop, that drop means that the productivity of your investment falls and you have to raise prices to compensate for that (or provide a lesser service).
I don’t follow. What makes you think McDonalds employees are the only low-wage workers involved in the McDonalds’ supply chain, or even most of them?
I don’t know the numbers either, but intuitively, I’d think when you pay for a Big Mac, you pay for McDonalds employees, truck drivers, warehouse workers, slaughterhouse workers, dairy workers, etc, more than for raw materials or white-collar jobs.
Again, I don’t know the numbers, but saying that increasing low-wage salaries by ~100% would increase prices by ~20% seems way too optimistic to me (although I guess it depends a lot on mechanization).
Currently, a bit over one percent of the labor force earns the federal minimum wage. I’m not sure how far above that McDonalds workers are, but I think of it as a job mostly for people at the low end of the wage distribution–say the bottom ten percent. If so, the best guess is that only about a tenth of the workers providing inputs would be that poor, hence affected as much by something that was pushing up low end wages.
Didn’t Mitt Romney get in major trouble during his campaign for pointing out that ~47% of people pay no net income tax and thus weren’t going to vote for him anyways? It seems like we’re already close to that point.
Came down here to post exactly this; thanks! For reference, here’s the clip, and here’s a fact-check (yes politifact, don’t flame me, just check their sources if you’re still skeptical).
The real political dynamics here are guaranteed to be more complicated. Nobody wants to take literal bribes to vote anymore, they haven’t since the days of the city machines, which were populated largely by recent immigrant populations without Americans’ unique psychological scruples. Modern Americans need to feel like they actually believe in the candidate and their values for better or for worse, even if that means tortuously rationalizing your beliefs to suit your interests. (This idea stolen from The Last Psychiatrist.) Point is, interest -> vote doesn’t exactly work, and there’s much more to be said.
Nonetheless, it is suggestive that Scott thought our political economy would work a certain way if politicians were sufficiently opportunistic, and then it turns out that to a first approximation, things do kinda work that way.
Yes. Your problem here isn’t in the reality of Bob, who seems believable enough to me. It’s Alex. Not all men will just sit on their asses watching TV all day. They — at least a small minority — organize themselves to get higher status, by any means necessary. Every society must channel this impulse into positive efforts. This is the genius of capitalism. Men work hard to get ahead. But I don’t think UBI channels the desire for status productively.
The Alexes of your world will know that their entire lifestyle is based on their political power, not their individual value to anyone else. And therefore they will organize into a political advocacy group ferociously devoted to protecting their income, raising it if possible, and also increasing their collective status in any other way that seems feasible. Think of the AARP, except that their average member is not 70/tired/frail, but 30/energetic/robust. What if UBI needs to be cut? Not gonna happen, just as the AARP won’t let anyone touch SS. No, our right to have a decent income is not being honored by the evil and greedy taxpayers! UBI is too stingy! Raise it! State spirals into economic destruction? Not our problem.
There’s also the status problem. Men with jobs must cultivate bourgeois values and norms. Your Bobs don’t cause problems in their spare time because to be the sort of person who does is incompatible with working. Your Alexes are totally removed from any sort of socialization except that they evolve themselves, which will be self-serving only. Based on our current ghetto cultures, I suspect they will develop an honor culture of some sort. Alex is super touchy about being “dissed” and — once the culture evolves a few years — will have to physically fight to maintain his respect. Bob doesn’t feel the need to bust a cap in that guy who his girl looked at. He works — he’s tired, man.
I wonder if you were perhaps unconsciously thinking of this Alex when you named him.
Excellent comment, Leonard.
Also, Alexes will have more time than Bobs to brood upon the emptiness and disgrace of their situation, which tends to attract men in that situation to various elaborate theories about how said emptiness and disgrace are all the fault of Jews or immigrants or women or whoever makes the most convenient scapegoat this week.
To back up your statements about an honor culture developing, that’s the thesis of Martin Daly’s Killing the Competition. It’s not poverty that causes violent crime but inequality. The ghetto is surrounded by wealth for which there is absolutely no access. There are no rungs on the ladder between the ghetto and the penthouses. Since Alex cannot compete on money, different status games are developed, and capacity for violence is an easily accessible and unambiguous status marker.
That’s a very pessimistic view of non-monetary status hierarchies.
Sports, being in a band, dancing well, dressing well (fashion), knowing more about whatever thing is trendy (being a connoisseur), holier-than-thou moral posturing. Anywhere there’s a social group or social “scene” there’s some kind of way to try to be high status within it.
People with dead-end jobs also create non-monetary status hierarchies. And these Alexes probably do have jobs in their lives. Bob and Alex are probably the same person, you’re just looking at him from one month to the next. Sometimes he works in the gas station, sometimes he stocks the shelves at Wal-Mart, and other times he sits on the couch. None of these offer much more status than the other.
I think this will likely be part of the “organize into a political advocacy group ferociously devoted to protecting their income, raising it if possible, and also increasing their collective status in any other way that seems feasible” part that Leonard mentioned.
I can’t figure out how Scott can say something like
and not see immediately what a huge wedge this is the thin end of.
Sure, everybody will be happy getting their $10K unencumbered by the nuisance and stigma associated with Welfare. In a year, they’ll be talking about how unfair it is that all they can afford for that is a shared room with rice and beans, while the rest of us eat steak. And the bleeding hearts and political opportunists among the productive class will make hay. “And what about the children?”
Note, however, that at this point he’s retreating to a non-universal BI– which you’d have to do to have any hope at all of paying for it by raising taxes on the rich. A universal BI at that level costs such a fantastic sum that you’d have to raise taxes on everyone out of whom any additional money could possibly be squeezed; there’d be no question of picking and choosing your victims.
What I think Scott was assuming at that point was that you give the UBI to everyone, then tax it away from everyone but the poor while imposing additional taxes on the rich.
What he was missing was that when you give someone lots of money and then tax it away you are raising his marginal rate in order to get the UBI back, which increases the dead weight burden via the incentive to take leisure instead of income, income in non-taxable forms rather than income in taxable forms.
Re: the idea that UBI will enable a flourishing of self-expression, has anybody argued yet that self-expression is not something most people are terribly good at? The publishing industry has a term–“the slush pile”–for the vast heap of unsolicited manuscripts it receives from random people who know they have a novel in them. Most of the slush pile remains unread indefinitely. It’s not all that hard to write a novel in the sense of sitting down at a PC and typing until you have several tens of thousands of words. The outcome will, for most people who try it, be wretched, because most people are not really creative or articulate and novel-writing, like most other skills, requires a good deal of practice before you get good at it. I spent ten years churning out progressively less-terrible novels before I finally produced one I was happy with, and self-published it last year. And it still has substantial flaws IMO.
But because “good” is somewhat subjective in creative fields, the Dunning-Kruger effect is twice as strong. You can prove that someone’s a crummy programmer or architect; their code crashes, or their buildings fall apart. You can’t prove that a story is bad per se, because there’s no objective standard to point to. Hence the slush pile. CreateSpace et al have made it easy to get a book to market for little cost–but that simply moves the slush pile onto the open market, so that the proportion of basically readable books for sale plummets. The only limiting factor on the flood of awful books onto the market is the time cost of writing the thing, along with formatting and such. Add UBI, and I suspect that free time will not increase the net quality of creative works; it will only amplify the slush pile effect. To some extent, it’s a good thing if creative types have to sacrifice a lot to be creative. It discourages dilettantes.
Agents and publishing houses dread NaNoWriMo. All the ghastly unedited manuscripts that ensue. . . .
Re: surplus of bad books. I frequently make the case that this is a good thing. You can’t trust money as a status signal anymore, because it’s no longer a sign that it was thoroughly edited and vetted, so you will never buy a book for the sake of it existing on the shelves. This effect transfers to less book savvy people, and they switch from using monetary signals other more subjective literary signals (grammar, title and cover quality, and most importantly, recommendations from friends) thus cultivating a sense for literary signals among readers. More savvy readers create niche communities dedicated to searching through the slush for anything marginally meaningful and the good work filters up to the top, forming a mini-canon for whatever niche they’ve settled in. Slush pile authors find these niches and attempt to cater to them, until they get so large and inundated with slush that writing for them is no longer a meaningful signal and the niche fractures again into something smaller. This splits the revenue of writing into smaller pieces as people buy more from their own in-group or pet niche than they would from others. Smash hits get less frequent, but it becomes more reliable to make a living off of writing, because it simply becomes a matter of finding a niche that is underserved.
I’m not sure if this is a real phenomena or if it’s just completely independent from reality, but I have at least some circumstantial evidence that it is correct.
Also, most people are not very good at being independent and autonomous in a broad sense. I get that “human flourishing” is a mostly secondary argument for UBI (the main one being avoiding extreme poverty), but it looks like a very bad point to make. It may apply to many of the commenters on this site, but I don’t think it would be that good for everyone. For each anedocte of a worker that enjoyed a more meaningful and bright life after retirement, I can think of three people who joined crazy pseudoevangelical cults, or went into gambling and heavy drinking – because they had no other purpose. Not everyone is bright enough to learn a new exciting trade, or curious enough to read Wikipedia daylong.
I doubt the amount of flourishing we would see (mostly among the already better off) would comensate for the amount of despair, antissocial behaviour and predatory fraud that would descend among the weakest.
I personally have taken to using the term “human flourishing” to describe the expressions of despair, anti-social behavior and predatory fraud.
And how does this effect not exist already? I understand what you are saying, to an extent, but I fail to see how the UBI issue would be a negative in this manner. I doubt it would unleash a human flourishing to a utopic extent, but neither do I see it as a negative either. IMO, its rather neutral in the “flourishing” dept.
Re: making basic income so high it makes private industry collapse?
Wouldn’t the most likely result of doing that be to cause wage and price inflation until basic income was no longer that high? I don’t see a spiral unless the government indexes UBI to inflation. This would be terrible (especially for those of us with savings, but we seem to be generally looked at as two-legged piggybanks for everyone else anyway), but better than actually collapsing private industry.
One of the things I always wonder about is how this all will affect the cost of signaling.
Suppose you had a UBI that manages to not discourage people from wanting high status/compensation jobs. Okay, how do we sort those out now? Right now we basically award them to people who go to good schools (e.g. the Ivies, Caltech, Michigan, UVA, etc.), who do well on professional tests (e.g. LSAT, MCAT, USMLE, GRE), and who “network” well. Getting into a good school also rewards people for doing “volunteering”, sports, and other time sucks (preferably ones which require sacrifice and/or hard work). The tests suck down time (teach to the test) and resources (test prep is a $12 billion industry and growing). So many of the extracurriculars are simply deadweight losses; how many extracurricular activities survive through the college years unless they are important for the next round of gatekeepers or scholarships? Networking, for those climbing up from the bottom, already involves unhealthy amounts of time working below capacity as the
How does UBI change this? Well right now there are soft limits on how much time people can waste looking good to gatekeepers because only the wealthy can afford to dump years of life into these things. Unpaid internships, SAT prep classes, and Habitat for Humanity can only be done in small doses by the true middle class. Society cannot say that you have to be willing to burn not just four years in college and another year of doing resume padding … at some point the middle cannot competes and revolts.
With UBI, Harvard (or GS or the FBI) can quite reasonably say that you can just take a gap year to “prove” that are as committed, well rounded or whatever BS. Some people will do it. Harvard (or whomever), wanting to maintain selectivity, will then accept a click of the ratchet and do this all over again. I foresee that a lot of the “free time” one might get from UBI will be sucked up by demands to prove oneself worthy.
This is really bad. It means family formation will be delayed (in a world where more women are achieving less total fertility than they desire). It means that our brightest and best will be spending more time hacking the entrance system to elite status positions and less time actually achieving results. It means that we should expect more resources to be spent on distributing positional goods and less spent on all other types of good (e.g. public goods, common goods). We want people to spend less time studying for their USMLE and more time actually treating patients. We want engineers spending more time engineering and less time pretending to like the cello to get into a good school.
The actual value of achieving a positional good like a banking career or entrance into medical school is likely some high fraction of the lifetime differential between it and your next best set of options. If everyone can spend five years doing BS to “prove” they are worthy, then everyone will spend five years. For each individual actor this resource destruction will be rational. The system as a whole suffers and likely suffers in a compounding fashion.
Lest we say this is too unlikely, there was a time when achieving and defending social position consumed the vast bulk of human resources. We called that feudalism. UBI will not take us back, but it seems likely to be a step in the wrong direction.
Great point. This is a corollary of the reason we keep having this debate about automation and 10 hour workweeks and the like: when a labor-saving innovation comes around, we don’t work less, because now the supply of free labor has been increased and the value of each unit of labor is now lower. You have to sell back the hours you saved to break even.
You can’t increase the amount of ANYTHING without changing what people are willing to give in exchange for it.
Your “break even” implies neither a reduction in working hours nor an increase in real income. I don’t think that explains why people in the developed world have real incomes twenty to thirty times as high as average global income over most of history.
A more plausible account is that, as productivity increases, people take part of the increase as a reduction in working hours, part as an increase in real income.
My objection is something of a synthesis of Ninety Three’s (“basic income destroys low paying jobs”) and Aphyer’s (“everyone will quit working if they don’t have to work”).
Scott responds, basically, “You can give raises to attract workers” to Ninety Three, and “No they won’t, because you/I didn’t” to Aphyer. I think those responds don’t quite work when the worry is stated as the sum of both worries.
My worry is, there exist a substantial number of people who work to not starve. They are too honest to feign disability or get themselves to jail, but they slave away at the liquor store or gas station to make their shreds of money. If you give them a working UBI they will quit.
This will destroy all of the businesses that can only exist profitably when they can employ these folks for minimum wage. I find the remedy of “then offer more money” to be unpersuasive, because I think it is projecting Aphyer/Scott onto gas station workers. The dif between 10k and 20k per year is much much less than the dif between 0k and 10k. They will trade 8 hours a day to not starve. The first 10k is, grudgingly, worth a third of their lives. But the next ten k falls way way off in terms of utility. Lose a third of their lives to, what, get a slightly fancier crappy car?
I think Wal Mart couldn’t offer enough to get its employees back once you feed them. More broadly, I think the companies that rely on cheap labor won’t be profitable anymore once ‘cheap’ labor is however much you need to get someone who is fed and housed to give up a third of their lives.
That is, at best, a transitory condition. If we continue to incentivize feigned disability as we have, we cannot help but normalize it. Almost nobody will teach their children that it is wrong to feign disability, and the amount of labor we can count on getting from the chumps will not be sufficient to meet whatever purpose you imagine needs to be served here.
You cannot secure the labor of these people unless you are actually willing to let them starve if they don’t work for you. And you aren’t, at least for the collective “you” of any society capable of making policy in this matter. They’ll see through the bluff around “work or starve”, and find the path you have laid out for people to neither work nor starve.
A minimum cost full nutrition diet costs about $600/year. A UBI at the level is financially possible but will satisfy none of the proponents of UBI.
“Starve” is rhetorically effective, but it isn’t the real issue in a modern developed society.
As a proponent of UBI, I would be in favor of a pilot program of a UBI at that level, if it were paid for by cuts to existing social programs that never amounted to more than $600 for any one current recipient, with tax increases to make up the rest of cost (ideally in the form of eliminating tax deductions, as long as we’re engaged in pie in the sky dream scenarios).
If we do that, might as well take the approach done by Brazil and described by a Brazilian poster in a past article about welfare approaches, and just literally GIVE everyone $25 worth of ten bean soup mix in a bucket every two weeks.
‘Too honest’ might have been me being nice. I’m not used to SSC kind of debates. Really I mean more like “it is too inconvenient and degrading”. Like, presumably anyone who was *actually* in danger of starving can just go and get tossed in jail.
Walter, if you are in danger of starving, you can easily get SNAP (“food stamps”) in the USA. You don’t need to get tossed in jail.
“easily” is debatable, depending on your state and demographics.
Yeah, I worked at the welfare office here in FL for a short time, helping people apply for benefits, and the process can be hellish.
I’ve said before that I’ve seen two different families close to mine try to get food stamps and it’s insane. One reason I’d like to see if we can implement universal food stamps, giving everyone $100 EBT/person/month, no need to file any paperwork. If we can’t manage the politics of that we’ll never get a UBI.
(It was pointed out in the last thread that some states already give too much EBT where the people simply can’t spend any additional money on food. I acknowledge this point but say those states can re-arrange their benefits.)
Andrew Cady, I am going to be blunt here, but that is an ignorant statement of yours
What’s insane? What’s hellish? Specifically, I mean.
From what I’ve read it looks like SNAP benefits are a federal entitlement that states cannot legally deny if you meet the income and asset requirements.
There is also a lower set of requirements for “expedited SNAP benefits” which you are entitled to receive within 7 calendar days of applying.
Are the states breaking the law here? Or is there something hellish and insane about the requirements to prove your income when you don’t have any income? What is it? There isn’t supposed to be a big state-specific barrier to getting SNAP.
The hellish part is the approximately 6,942 pages of paperwork that has to be filled out, to the satisfaction of Vogon bureaucrats, proving that you meet the income and asset requirements (among other things). And if you get any of it wrong, then they can legally deny you and unless you catch them on a very good day they will legally deny you.
They’re not literally working to avoid starvation.
They are literally working to avoid eviction.
And our society is willing to let them be evicted.
Our society, or at least our legal system, is not willing to let them avoid eviction by living in substantially more crowded circumstances. Consider the description in Orwell’s Down and Out in Paris and London of the sleeping accommodations for very poor people–which would be illegal in, I think, most U.S. cities.
Is it illegal even if you call it a homeless shelter or a hostel?
Avoiding eviction by moving somewhere inferior before you get evicted isn’t really the point… that’s basically the same thing as being evicted (though I guess less traumatic because you had more control over timing).
The point is that the major incentive to make money isn’t to buy food, it’s to pay rent.
One hilarious point:
I know a bunch of very well off tech geeks who live in illegally dense housing in Seattle, not to cut their housing costs, but because they like the social opportunities of sufficiently dense shared housing.
(The “Progressives” (spit) of the early 20thC worked to ban boarding housing here, because such housing was run by the Wrong Sorts of people, and occupied by the Wrong Sorts of people. They forced legal caps on the number of unrelated people who can live in the same house. It got to ludicrous micromanagement levels, to the point where there are regulations on the presence and types of locks permitted on the doorknobs on the doors to bedrooms. Those laws are still on the books, and are used today by NIMBYS of all sorts to prevent Density from Impacting their neighborhoods.)
A homeless shelter or hostel would be Occupancy Group R-1 under the IBC, with all of the requirements thereof. These days, most states in the US use the IBC with some modifications. Whether or not you’ll be held to the building code would depend on the Authority Having Jurisdiction (AHJ), and whether they want to drop the hammer on you.
After a bunch of people died in a fire in an illegal structure in Oakland, with the AHJ knowing full well that there were people illegally residing there, things are probably going to get tighter on that over the next few years until everybody forgets about it again.
To expand on CatCube’s point with some specifics that I deal with:
-Lighting systems for that space would be required to have exit signage for the paths of egress and minimum levels of lighting along that path in the case of power loss. That means exit signs and either battery powered lights at regular intervals or backup power. Communal areas must have occupancy sensing devices or automatic controls of some sort. Areas by windows in communal areas must have a separate control from lights not within 15 feet of windows. Lighting must meet certain power per square foot requirements that push you to either high efficiency fluorescent or LED.
-Receptacles are required at every 10 or so feet along all the walls of residential buildings. Depending on what code you fall under, half of these must be controlled by occupancy sensors. Some jurisdictions require individual occupancies have access to their own electrical panel for resetting tripped breakers, although a mass bunk might not be limited by this.
-ADA requirements mean multiple story buildings must have a elevator or similar device along with taller buildings having areas of refuge (areas by the stairs with special communications systems) and/or elevators on backup generator power.
-The fire alarm system must have a visual/audio notification device of a special frequency in all residential rooms. Devices in multi-family residencies must be addressable (meaning wire to each device rather than independent battery operated devices). There are also some calls for smoke partitioning, automatic fire doors, and smoke control that fall on the HVAC side of things so I know less about their minimum requirements. Unless the building is fully sprinklered, there are requirements for smoke or heat detectors in many spaces (not sure when you can get away without a sprinkler system).
-High occupancy rooms must have multiple egress points, with the exit signage and lighting as the egress paths above.
Mark Atwood. Thats my current living situation. It works well if you have the right companions.
@CatCube, @AnarchyDice So these are requirements if the building has a high density of people? So is it legal, but it requires satisfying a number of complicated rules?
@10240, that is approximately right. I would say it isn’t exactly density that determines the exact requirements but the building type and intended purpose. A library has different rules than an assembly hall than a school than a nursing home, etc.
It would be legal to build a communal housing building, although I can’t say whether we don’t see them more commonly due to cost, hassle, tenant issues, return on investment, or some other reason. I do know that they exist anecdotally both in terms of college dorms (private/shared rooms plus communal eatery and bathrooms) and my own alma mater’s fraternity housing had significant bunk space (although people preferred the private rooms in the fraternity house so much that we converted them into lounge/living rooms/study spaces).
It’s hard to say exactly. The model building code used in the US (the International Building Code, or IBC) does seem to contemplate them, but it’s tricky to read because it doesn’t give “recipes” for any building types, it just has a list of requirements organized by building system scattered over a thousand pages. So it’s possible that when you consider (not real citations, just making up an example) detailed requirements in Chapter 4, further requirements for interior spaces in Chapter 12, and requirements for energy efficiency in Chapter 33 it turns out that there’s no high-density housing that can be built that will satisfy all of them. That kind of thing happens all the time.
Also, each state will make modifications to the model code when they enact it into law, so just because your use complies with the model code I’m talking about doesn’t mean that your particular state didn’t make changes that affect that. Further, there are also zoning requirements that might prohibit this kind of high-density housing, that would be completely absent from the building code that I’m familiar with.
I’m a structural engineer, so I’m much more familiar with the structural design provisions of the code, and only passingly familiar with the rest of it. To answer your questions in detail, you’ll need to talk to an architect licensed in your jurisdiction.
This is all very well said.
The thing is, the very clearly laid out argument you make is precisely why I want a UBI! Specifically: “This will destroy all of the businesses that can only exist profitably when they can employ these folks for minimum wage”. Yes! That is the goal!
I consider it deeply immoral for capitalists to promulgate the idea that low-wage workers have bargaining power and are responding to much more than the threat of homelessness.
I specifically want to see a society built on negotiation between capital and laborers whose best alternative to taking a job is reasonable comfort, if low status.
It will absolutely blow up all sorts of labor relationships that exist. But that’s a good thing, from my perspective. In fact, it’s pretty much the whole point for leftists like me!
The argument that providing comfort for young men leads them to become violent is the main argument I understand against this. I happen to think it’s wrong, but it’s certainly a question worth exploring more deeply.
I can’t tell if this is an example of Poe’s Law in action. Which means that it is.
What makes you think unemployed and unhireable workers have any bargaining power whatsoever. Their power would go from little to zero.
Sorry, I’m getting a bit confused about which of two arguments (which are largely in opposition to one another) I’m discussing.
Argument 1: Lots of businesses depend on paying low wages to people to do work that kind of sucks for the laborer
Response 1: Those businesses sound exploitative! Let’s abolish the minimum wage, and give everyone a basic income. If you can’t find labor at the previously-prevailing-minimum-wage or lower, I’m glad your business is now suffering!
Argument 2: Jobs give people “dignity”
Response 2: I think “dignity” is a horrible meme I would like to see combatted. I agree that jobs give people living in Protestant-work-ethic-dominated-cultures *status*, to go along with the exploitative “and you can have a place to live” facet in the prevailing culture, but I don’t have any vested interest in preserving the status relationships in our culture, and would be happy to see disruptions to it. Let’s give everyone a basic income and abolish the minimum wage, then let people do work for low wages if it gives them satisfaction and/or status.
Re Argument #1:
My understanding is that businesses that depend on bottom tier labor currently often have employees who are on some kind of public assistance, and ISTR some articles about Wal-Mart specifically providing their employees information about public assistance for which they were eligible. (Of course, this was “Wal-Mart exploits workers and then sticks the public with the bill!” coverage, rather than “Gee, that seems like a pretty decent thing to do, but it’s a little worrying that even productively employed people need public assistance to make ends meet” coverage. What kind of media do you think we have, anyway?)
Markets work pretty well, so UBI will not mean that crappy bottom-tier jobs go unfilled. It seems likely to mean that crappy bottom-tier jobs have to pay more, but even that’s not 100% clear to me–maybe in some places, the cost of living an acceptable life goes up enough that now you’re working the crappy bottom-tier job for the same amount per hour, but that plus the UBI check just about covers the rent, if you skip a few meals the week before payday and buy all your clothes at Goodwill.
Re Argument #2:
I think the whole question here is what is likely to replace the workplace, as a mechanism for organizing our society. On one side, a future of everyone doing eight hours of crappy make-work a day to get their ration of food and entertainment from the machines sounds utterly awful, so I’m sympathetic to the idea of getting away from this. On the other side, our previous brilliant idea of trying to replace the traditional family as a mechanism for organizing our society hasn’t always worked out well, particularly for the people at the bottom. (The educated middle class still mostly raises their kids in intact two-parent families; the underclass largely is being raised by single mothers.) I can easily believe there are better ways to define meaning and place in our society than the work we do, but I’m not at all confident we can just re-engineer that from the top down and get to a better arrangement.
Could you explain what you mean by “exploitative.”
Suppose hiring someone increased a company’s income by five dollars an hour. Is paying him five dollars an hour exploitative?
What about paying him four dollars an hour? If the answer is “yes,” would paying twenty dollars an hour to an employee who increases the company’s income by twenty-five dollars also be exploitative?
If the answer is “yes,” suppose the worker would be willing to work for fifteen dollars an hour if nobody offered him more. When he is hired for twenty, the job benefits him by five dollars an hour and his employer by five dollars an hour. Are they both being exploitative, each to the other?
I’m going to add this to my list of things that would very likely be done wrong with a UBI. Certainly the spirit and intent of bankruptcy laws, and their crucial purpose, would best be served by allowing a UBI recipient to walk away free of obligation and able to start over. And I expect the legislation implementing a UBI would take the obvious and necessary step of excluding the UBI itself from bankruptcy.
But, given the disdain we have already seen re slackers collecting their dole while the rest of us earn our pay, I expect there is going to be strong pressure to go after any other assets or revenue the slackers might have. Like, for example, their future income from any odd jobs they might take to supplement the UBI. After all, they’ve got a guaranteed UBI so they won’t starve or be thrown out on the streets, why shouldn’t they pay their debts as best they can with the excess? Also, there’s the guy who supplements his $10K/year UBI with $5K/year of odd jobs, and the guy with a $10K UBI under $500K in wages and bonuses as an investment banker, and that second guy definitely needs to pay his debts as best he can even if he goes bankrupt. Since there’s a continuum between the two, rather than a clear line, and since the UBI is advertised as serving bankruptcy’s function of protection against absolute impoverishment, I think it quite likely that the existence of a UBI would be used to justify reshaping bankruptcy law to make future earned income more accessible to creditors.
In which case, the tendency for the UBI to reinforce a strong class divide gets another mechanism. By the time you’ve fallen to the level of UBI-only “unemployed worthless loser”, you’ve probably taken out quite a few loans to postpone that fall. All of which are waiting to be imposed the moment you earn any money above the UBI, so stay down in the gutter where you belong. Or, OK, maybe we’ll only take 75%. See, we’re giving the poor an incentive to better themselves, while still holding them responsible for their actions! And look, they aren’t even trying! Serves them right, and proves we’re better than them, and we should probably buy some razor wire to put around the blocks where all the UBI-affordable housing is.
of which are waiting to be imposed the moment you earn any money above the UBI, so stay down in the gutter where you belong.
UBI fixes (in theory) some problems with poverty traps, but the fact that some people are judgment proof and have negative incentive to earn any money legally remains. How do other countries, with much harsher BK laws, handle this?
This is the same situation we currently have with welfare programs, right? So it is probably a problem, but not a *new* problem.
Here’s my nightmare scenario for UBI: A *lot* of local governments run their police and court system as a revenue source. Many states charge you rent for the time you’re in jail. Basically everyone runs the prison phone system as a profit center (so that inmates or their familes pay some obscene rate per minute for talking to the outside world). And so on. (A lot of the reporting on this came out of the shooting of Michael Brown. While it looks to me like the activists were wrong on the shooting, the reporting on the surrounding stuff was often quite good.)
UBI has the potential to make the poor people who are mostly the easiest targets for this kind of policing-for-revenue into much *juicier* targets. Now, instead of having to satisfy your municipal budget by extracting pennies from the poor people you can give tickets and fines to, you can extract dollars, because once a month, they have dollars to extract. I mean, everyone has to pay their fines, right? I expect that within a couple years of an UBI, we will see traffic fines and court costs and such in many municipalities go up by enough to absorb most of the UBI that the poor people in their area get. Hey, this fine used to be $100 with a $50 court fee, but now it’s $500 with a $300 court fee. But hey, you can come up with the money, since you’ve got an UBI check coming in any day now! And we’ll just keep you in jail until you do (unless you come up with a hefty bail you don’t have), to make sure the incentives to pay us ahead of the rent are clear in your mind….
Policing for a profit is something deeply broken in the US legal/political system. It’s not inherently linked to UBI in any way, except that I think UBI and policing for a profit/fine farming will interact very badly.
Regarding this, the CBO says that the bottom 40% pays about 5% of total federal taxes on 14% of total income, and the bottom 60% pays 13.6% on 28% of income. We aren’t all that far off from the bottom 50 not paying taxes at least at a federal level.
Per the report, the bottom 40% actually don’t pay federal income tax at all. The bottom quintile has an average tax rate of -7.2% and the one above that -1.2%. Even the middle quintile (40%-60%) only pays an average rate of 2.6%.
The bottom 40% only pays net federal taxes because Social Security was intentionally designed to imitate a pension system in order to help safeguard the program politically, and so everyone has to contribute from their first dollar earned. However, the benefits are paid out progressively to offset this. Medicare followed this structure in collecting taxes on the dollar, probably for similar reasons (so all senior voters can say they paid into it).
I’m guessing that Aphyer doesn’t have kids. Once you have those kinds of responsibilities the equation switches from what I want to what my family needs or at least should have. In a world of UBI I imagine you would have a noticeable decrease in single people working with a much smaller effect on those with families to support.
At the same time, I’m sure one parent would decide they would rather take care of the kids than work. And in a single parent household, they would probably work less to take care of the kids more. Either way, the main consideration is the family not the individual.
Three Serious Problems With UBI I Feel Like Scott Is Blowing Off That I Wish He Would Stop Blowing Off:
1. The expense of full-ride welfare versus partial-ride welfare. If we decide the minimum money to live decently or whatever is $22K, and someone is capable of earning only $18K, it’s a lot cheaper for the system to have them provide part of the cost of their existence than take over all of it.
2. The destructive value of not working. Scott has laughed this off as a joke before, “(imagine a world where we had created and calcified a perpetually under-employed stagnant underclass. It sounds awful.)” here. It’s barely tolerable that we have a permanent underclass today, and its maintenance depends upon the fiction that said underclass is just about to get awesome jobs once we finally fund education enough. If we implement a UBI that works fine if 30% of people stop working but it turns out that 60% of people stop working, we can’t just shove those people back into work. They will resist as long as a politician tells them there is a fix that doesn’t require them to work, aka forever. This is a one-way rocket ride and we either hit utopia or collapse.
3. The negative feelings that workers would have about non-workers. Scott addresses this a bit in which he laughs at a poster having those feelings, but those people will be very real, and not all of them are going to show up here on SSC to be lectured to about why their feelings are wrong. The non-workers are tolerated today to some extent because we’ve put all sorts of hoops and lipstick on their non-work. Getting rid of those hoops is a great way of fighting the welfare trap, and good for UBI for doing that, but you can’t simply write off the resentment of other people and hope your system will work. If we learned nothing else from 2016, it should be that assuming people who don’t like your plan simply cease to exist doesn’t work.
Do you mean this bit?
If so, yeah. As one of those people who resents non-workers, I don’t really buy it. For one, I don’t really think basic income will sap meaning and community from the lives of most of those taking it as their only source of income. But more importantly, even if it did, their suffering does not help me, the worker paying for their lives, even a little bit. They are still living their meaningless lives of leisure, requiring me to work that much longer before I can retire to my meaningless life of leisure.
Scott addresses this a bit in which he laughs at a poster having those feelings
Yeah, Scott made a huge withdrawal from the banked up store of years of accumulated “you are worth reading and learning from” credit, and threw it in a bonfire, in those three short sentences. I was surprised, that part did not sound like him at all.
I’ve said it before, but it seems worth repeating that my expectation is that a UBI will increase employment because (i) it will remove poverty traps and (ii) it will remove minimum wage requirements. So I would expect most people who currently don’t work would choose to do some level of work after a UBI is introduced, even if they’re just making $1/hour, because they’re better off having the money than not. I expect only a small number of people will remove themselves from the workforce, and they will be people who hate working, who make their colleagues and customers miserable, and we’ll be better off without them.
The idea that 30% of people might stop working just seems crazy. I think maybe SSC attracts very unworldly readers who would be content with a life of monastic simplicity, but most people just aren’t like that.
What level of UBI are you assuming?
A serious problem with these threads is that people frequently don’t make that clear. An argument that is plausible for a UBI of $15K is a lot less plausible at $1K.
Hardly anyone is going to work for $1/hr. It costs more than $1/hr in ancillary costs just to do my job. The basic income allows everyone to turn up their nose at the offer.
I don’t think 30% of people stop working either because of market effects. If many people stop working, then firms will raise wages in a bid to attract workers as workers are still necessary, and they’ll also raise prices of good produced by lower wage workers which will make it harder to live on just the basic income. Higher rents will also likely capture a part of the basic income.
However, even if labor hours only go down 5%, that would likely cause an economic contraction similar in size to 2008.
Agree that $1/hour is laughable. Unless it’s hooked to a wage subsidy, meaning you have to find someone to pay you $1/hour in order to get the rest of your nut. That’s how the “Uber4Welfare” plan works. (I like some features of U4W but this is not an endorsement as I think it has fatal flaws.)
Note that not everyone wants health care, and not everyone wants college, and so this isn’t bribing people with money (that came from them); this is bribing people with an inferior substitute to money.
I also note that “their own” is weird when talking about redistributive systems; someone who pays more in tax than they receive in UBI will not perceive an increase in the UBI as a bribe, since their total income will decrease (if it’s done in a budget-balancing way).
If the UBI is funded with progressive taxation as Scott suggests, then it will be possible for most voters to receive a larger increase in their UBI check than their tax bill.
For example, if you kept the lowest tax bracket unchanged, increased the next two 1% and all of the rest 2%, and distributed the revenue equally via an increase in the UBI, then most of the middle class receives a net benefit increase, funded largely by the top 10% or so of households.
Huh… I didn’t realize it until reading ec429’s comment that Scott posted above, but a reasonable part of my libertarian gut reaction is at least partially due to the view that an awful lot of people with shitty lives/jobs bullied me and people like me until their early 20’s.
Now, mind you, I’m not libertarian and open to things like UBI, but my gut reaction is contra any sort of handouts.
I’m not much of a grudge-holder, but if I were I’d be totally up for a UBI: the people who bullied me are mostly the sort of middle-class types who’d get hit the hardest by the extra taxes to pay for the UBI.
Even leaving bullying aside, consider that for many high earners today, their salary is in some part compensation for avoiding fun things in the past, like partying before exams and so on. Maybe the exchange between fun now and money later isn’t at an optimal level and they got a great deal that other people wish they could have had but any discussion about the unfairness of inequality needs to at least consider that trade-off.
Now of course that offer wasn’t available to everyone due to inborn traits, disabilities, privileges of birth, whatever, but still…
The system fails to distinguish people who gave up fun to study from the people for whom the studying was the fun.
Not saying this is a bad thing, just pointing it out.
The reason why we can’t live in hunter-gatherer societies is any non-hunter gatherer society would crush you(as they did, historically). This is true even if living in a hunter-gatherer society is more pleasurable than an (early) agricultural one with its horrifying conditions.
What’s stopping a country that doesn’t spend huge amounts of their wealth feeding the needy from crushing your utopian one? Note that this is true for both UBI and basic jobs argument.
I think you guys have forgotten about Moloch.
Are you talking about being crushed economically or being crushed by a military?
I think either one would be quite bad.
The concept that we get invaded because we have a UBI is silly.
I think a UBI is a bad idea, but, no.
I’m not saying you’ll get invaded because you have UBI. That’s a quite uncharitable reading of what I wrote.
The simple fact is while your country is spending huge amounts of resources for UBI/Basic Jobs, others wont(as they’re doing currently). This will cause your country to lag behind economically, unless I’m missing something obvious.
I won’t speculate whether or not this’ll lead to invasions, but historically speaking not-very-good-things happen to economically weak countries.
Regardless of such speculations, I think how to avoid getting outcompeted is a problem we should consider before talking about implementing any major change. As far as I can see, no one even addressed this issue.
How is that different from any kind of safety net/welfare/worker’s rights/health and safety legislation?
If we’re going to be crushed, China will crush us, UBI or no.
Keeping your workers well educated, healthy and safe actually increases their productivity, by a large amount. Which is why many countries spend money on them. Any country that doesn’t depend upon their worker’s productivity to gather wealth tends to not do those things(Google “resource curse” for good examples).
I don’t understand how implementing a basic income guarantee(directly or indirectly by making them work) would increase worker productivity. Every argument I saw seems to argue people won’t have to work in unpleasant jobs, how they can work less hours, how people can spend more time with their families, pursuing hobbies…etc.
In some cases, I agree, but if treating workers well had benefits so readily captured by the employer, the gov’t wouldn’t need to regulate these things in the first place.
I was talking about why governments pay for those things(e.g. education, regulatory agencies), not private corporations.
Of course any corporation would want to spend as little money as possible on their workers. Even if you’re a wonderful employer, when your competition is running a sweatshop and you aren’t you’ll soon go out of business. I know no way that you can solve that problem(Moloch, as our host puts it) without government.
I know of several.
The employer trains the workers in skills useful mostly for that employer. Cost of training is X, increase in productivity is Y>X, employer profits. It depends on there being important skills specific to that employer, since otherwise after the worker is trained other employers bid for him, bidding his wage up until he, rather than the employer, is getting the benefit of the additional skill.
One way around that is for the employee to, in effect, post a bond to guarantee his continued employment–for instance by working at below market wages while he is being trained, with the knowledge that he will more than make the money back through higher wages afterwards. That’s the basic apprenticeship model, historically common.
Another way around, but one inconsistent with current U.S. law, is indentured servitude. In exchange for the training, the employee signs a binding agreement to continue to work for the employer for a specified number of years at a specified wage. That’s equivalent to the way in which a lot of immigrants in the eighteenth and early nineteenth century got to America, with indenture agreement paying their passage.
That’s three different solutions. The fourth is that the employee pays for the training. Common at present, of course.
So far as sweat shops in general, the problem with unpleasant employment is that it makes it more expensive to get workers. What we call sweat shops happened (and happen) in a considerably poorer society, where the increased productivity (and wage) from working harder was worth more to employees than it cost.
The optimistic models for the UBI is that we have a class of workers that keeps on being trained, and a class of uselesses that we don’t need and don’t need trained. The useful group still operates kind of like today.
The bigger risk is brain drain as the useful move off because they don’t think this deal is good for them.
If the UBI is truly universal, the brain drain argument won’t apply. It would be unjust for people to receive the UBI or not (or to receive different levels of UBI in purchasing power terms) depending on where they happen to be.
Also, if we had a national “UBI”, I’m not sure how that would be compatible with open borders. You could restrict the UBI to citizens, but (aside from being nationalist) that would create a class of impoverished guest workers, which is probably not desirable.
The UBI May be universal but the tax burden certainly won’t be. You would need to build a wall to keep your productive citizens in.
Whats to prevent those other countries from falling to internal dissent? Take the cold war example. The US had a much more freed economy than the Soviets. With government investment, the US , harboring refugee scientists from European nations, developed weapons, increased national morale, and survived the cold war stand-off while the Russians stagnated due to Oligarchic rule, and ironically, an over-focus on defense industries at the expense of diversity in the economy. Granted, in the early Cold-War phases, the US had a large number of people working in manufacturing, but the economically diverse, pro-creative capitalism of the US out-competed the USSR. Now, there are many differences with the globilization of the world and the massive growth of the knowledge economy in the modern age, but I would think that using a UBI to simplify welfare, would free up creativity to an extent, and create more potential customers for goods and services.
Regarding why people don’t work less in exchange for less pay, I think insecurity is a big part of it. If you really leave a six-figure job after a year and take nine years off, you’re not likely to find another six-figure job after your hiatus. Those nine years would then be anxiety-filled because you wouldn’t know you’d have money after them. And if you’re investing your money, you could lose money, so people who want to retire on investment income generally need enough wealth to generate an expected income several times greater than what they actually need to spend, meaning they have to work harder in the short-term to build that wealth. A guaranteed basic income would potentially be a greater disincentive to work because it would be guaranteed and thereby remove that insecurity.
OK, whats the point you are trying to make?
Just because most people today do not take the option of working less for less pay, we should not automatically assume the same will be true for a society with UBI, because:
In today’s society, working less includes a risk. Your plan may be to “work only during some years, be free during other years”, but you may find out that actually after taking those few free years no one wants to employ you (because you did an unusual thing which is bad signalling). So maybe those people do not actually have a revealed preference for “working, even if they don’t have to”, but are simply risk-averse. But in a society with UBI, taking UBI will not include this risk, so even the risk-averse people could stay at home.
You could try to avoid the former problem by replacing strategy “work one year, live free a few years, repeat” with strategy “work X years, live free for the rest of your life, no repeat” for an appropriate value of X. This would avoid the problem of trying to find a job after the break. But it’s difficult to find the right value of X, because future is uncertain. For example, many fans of early retirement assume things like “average 4% annual growth of stocks, in long term”, which may or may not be true. So if you are risk-averse, you will try to play it as safe as possible, which increases X a lot… so again you end up working even if in theory you don’t have to.
Scott why do you think your commentariat is such a collection of angry reactionaries? It’s odd.
By the way ec429 clearly you’re already a miserable person in this reality, so there’s not much lost if you’d be miserable in a reality where no one goes to bed hungry. You aren’t actually political; you’re a bitter person who has used politics as a convenient narrative for your unhappiness.
The problem is that a lot of people who claim to support equality through redistribution focus on equality in a single thing—current income. They don’t consider wealth across the life cycle, or the many non-economic resources like social status, leisure time, etc. that are as or more important than income in human happiness. So I can see why someone who happens to have a relatively high current income but is relatively deprived in other aspects of life might be bitter at proposals to redistribute away the one aspect of life where he is doing well while others are allowed to keep their privileged position in other aspects of life.
And people suddenly take on staunch libertarian stances the moment you suggest redistributing resources that they personally have in abundance.
This is exactly something that is currently making it difficult for me to motivate myself to do economically useful work, in fact, even though I have skills that can seemingly earn pretty high pay right now. (I had intended to write a longer comment about this in an open thread, in fact, seeking different kinds of advice, but that’ll have to wait.)
I’ll recap my situation:
There are people of certain unusual types, whom I currently have little in the way of relationships with, when I highly desire more and deeper and more varied such. Developing these relationships requires spending primarily time and not money on them, with an implicit cap based on the other people’s interaction habits (N years of X time-and-energy density is not fungible with N/2 years of 2X time-and-energy density).
If I want to even begin to spend that time with a particular large cluster of such people I know of, I must first increase my income a lot (and, perhaps even moreso, socioeconomic class signifiers on paper) in order to get and retain housing in an expensive area. Many of these people are low-to-middle-income, and share housing to afford it, but I’m pretty sure I can’t be invited into these arrangements unless I’m already better-integrated with them, so that isn’t available to me at least for a long time.
Now, I have some friends in that area who have a great deal of the type of connection I want, and are unable to work economically due to physical disabilities. Something which is aggravating my motivational problem is that from the outside, it looks like their disabilities actually confer an advantage in terms of not having to spend mental energy on both keeping those friends and holding down a day job. If this is true, then even if I push harder and begin to succeed, if I have to keep a high-paying job to survive and they don’t, more of that social energy could just continue to go to them and not me. Another difference is that because they were already physically nearby, the support they receive (from other friends close to the aforementioned cluster, in fact) for sustenance allows them to stay there, while until I do a bunch of extra work (and quite possibly sacrifice more immediate social opportunities to do so), I’m mostly trapped in the different place I live, which is not bad economically but where the social opportunities I want don’t exist for a combination of cultural reasons and luck.
The resultant emotion is along the lines of “so why should I spend all my energy doing this useful thing for society, if society will then give what I really wanted to someone else and not to me except in a delayed, meager form?”.
(I actually believe that the emotion is overly pessimistic and that there are probably other options available which I haven’t truly grasped yet, but that’s a whole other kettle of fish.)
So: my situation actually seems to touch on several of the ongoing UBI arguments here! Relative money versus intangibles like social status, and how the correlations between those vary; differences in cost of living between locations, transitional costs, and ways the “spread out to decrease housing costs” option might not work so well; and a motivational trap where working is disincentivized. I don’t actually know what conclusions if any to draw, but it seemed like it might be interesting.
Do not mistake a conflict of interest for a conflict of principle.
Regardless of the particular dimension or political leaning, the politics of envy require minimizing/ignoring the disadvantages/sacrifices of the outgroup to justify confiscating their assets.
Those who would exploit you with their superior sociopolitical power (and by extension, the threat of force) do not care that this unfair setup demotivates you, and will in fact use every tool from social shaming to government coercion to “incentivize” your continued subservience.
In 99% of the places in the world, “giving everyone free money without working” wouldn’t even be on the table. If anywhere where about half of people are against basic income is too reactionary for you, you’re just going to have to be unhappy everywhere.
You aren’t actually political; you’re a bitter person who has used politics as a convenient narrative for your unhappiness.
Wow, it’s so rare to see such a naked “your politics are wrong because you are mentally ill” so up close and in person.
And also such a naked “you aren’t ACTUALLY X, you are really Y. And I can tell because I’m superior to you lot, and can make confident statements about you lot”.
I pray, please continue…
I think ec429 deserves credit for honesty, and, though I’m personally no libertarian, I think it’s an understandable position. Suppose all forms of cruelty ended tomorrow, bullying, gossip, mean bosses, ect. Would you expect society to be more charitable thereafter? From a socialist perspective, the comparison to charity might be invalid, but a lot of people do view their tax dollars as a form of charity, one they don’t want to share with people they dislike.
And at least what ex429’s complains about actually happened to him personally, it sounds a lot less petty to me than the complaints of some other groups…
Notice how resenting having to work to support yourself is somehow just fine, but resenting having to work to support both yourself and other people is somehow proof of pathology.
The sane description of your attitude that you really believe that some people are superior to others.
If UBI means that X doesn’t have to work to support X, it also means that Y doesn’t have to work to support Y, and it also means that Y doesn’t have to work to support X. Hence “UBI.”
It means that any Y who wants to live at substantially above the minimal standard provided by the UBI has to work to support both himself and X. The money for the UBI isn’t coming from nowhere.
The money comes from the Universe, channeled by the power of positive thinking. Hence “UBI”.
@Viliam — I’m increasingly skeptical of UBI, but this is unworthy of, at least, Scott.
Notice that it’s not an accurate description of the dilemma. The real choices are as follows:
– Work to support yourself, people above you in social hierarchy, and the hierarchy itself.
– Work to support yourself, people below you in social hierarchy, and a social safety net/insurance in case you or people you care about fall on hard times.
I would actually like to reserve the right to call the first choice pathological, especially when it’s coupled with outright contempt for your inferiors (i.e., exactly the same belief “that some people are superior to others” that for some incomprehensible reason you assign to people opposing that worldview). I mean, sure, surviving a different pathological social hierarchy and deciding that you prefer the one where you’re not on the bottom is perfectly understandable. But understandable does not mean not pathological. I’m not going to blame individuals, but on the society’s level the pathosis exists and we should be trying to cure it.
I understand that some people, assumedly including you, disagree with the premise that the current social hierarchy is broken and wages/fortune are not meaningful measures of the worth of work/person to society, or perhaps even with the premise that society has anything to do with the value of work and people. But those would be high-level generators of disagreement, so let’s stop at them.
I don’t know about you, but my management chain generally works even harder than I do, at every job I’ve had since I was 13. (Technology company management in a successful tech company selects very heavily for having lots of energy, lots of cope, lots of resilience, as well as lots of brainpower.). Most of the stockholders in my current employer (beyond the founder, and all of the myriad current and former employees who’ve been paid in RSUs) turn out to be retirement funds and index funds, so literally the proverbial “widows and retirees”.
What do *you* mean by “people above you in social hierarchy”?
You know perfectly well what I mean. People who don’t work and live off rent from their property. People who use their position at work to enrich themselves at the cost of their underlings. I don’t know about you, but my management chain generally earns a lot more than I do. Guess what, you can work hard and still earn more than you deserve. And no, I’m not accusing any individual managers here, I’m sure some work hard and get less than they should, what I claim that it’s common, and common enough to make the entire system visibly tilted in favor of the top layers of money-based social hierarchy, the more ostensibly so, in fact, the higher the layer is.
What’s implausible is that you can know that somebody is doing that. How can you judge how much someone else, doing a different job from yours, deserves?
One complication with evaluating that is deciding how much anyone deserves. Bob makes $500K/year trafficking heroin to US cities, taking considerable personal risk and working very long hours in hard conditions to do so. Carol makes $500K/year inventing medical devices that save thousands of lives per year, working 20-30 hour weeks most of the time in extremely pleasant conditions.
How do we decide which of them is deserving?
I can’t, and I already admitted as much. I don’t think that the question even has a meaningful answer, considering that the worth of work and person is mediated by society, wouldn’t be meaningful and largely wouldn’t exist without society. (Drop anyone alone in the middle of the forest and see how much he can produce. This alone gives society a whole lot of leeway in distributing its wealth.) All I can do is point out there exist pathological cases in which the person demonstrably did no good or even did harm and went away with huge amounts of money, and use them to question the validity of the entire current system.
You are, of course, free to defend such cases, but if you’re trying to defend the system itself by requiring me to provide a rigorous alternative valuation, I’m going to dismiss your demand for rigor as obviously isolated.
And what makes me think you’re trying to do just that are utterances like this one:
It actually does. Literally, from nowhere, like money in general.
Of course that’s not what you mean to say. You mean to say that there exist working members of society whose work must create the means of subsistence for the non-working members of society, and that’s true. But what they create isn’t money, and equating it with money hides away the very possibility of personal wealth not reflecting one’s contribution to society.
Nope, the dilemma is:
– Work to support yourself, people above you in social hierarchy, the hierarchy itself, and a social safety net/insurance in case you or people you care about fall on hard times.
– Work to support yourself, people above you in social hierarchy, the hierarchy itself, people below you in social hierarchy, and a social safety net/insurance in case you or people you care about fall on hard times.
Every minimally developed country already has some social security (some better, some worse), so unless you are living in the 4th world you’re already paying for that. Hierarchy isn’t going anywhere with UBI, and people above you will still get a part of your pie (think politicians). I don’t think you should so quickly assume that UBI would destroy the old bad hierarchy and create a better one instead of just being coopted by the Molochian incentives that created the old rules you condemn.
As for this:
I happen to dislike the current measures of personal worth based on money, but I also don’t believe that removing money would get us better, more humane hierarchies. Just look at Twitter…
Nitpick: Every minimally developed country also has welfare, which makes both choices identical.
Nitpick 2: There exist options to reform the money-based system, or to try not to make the non-money based system a torturous hellscape.
Otherwise, yeah, you’re exactly right.
But note that now we’ve switched back to discussing UBI and particular arrangements in general, whereas my previous comment was mostly about addressing the general sentiment of “I don’t want my work to give people a free ride”, by selecting the exact relevant information that points out that, uh, it already does.
Resenting having to work to support yourself is not fine. Every person has needs that require labor to be met. If you refuse to do it someone else still has to do it. If you declare that others are somehow beholden to you for meeting your needs you have decided they are less valuable than yourself.
How would you characterize your commentariat, Freddie?
Because when you subscribe to the extreme Left, everyone else is to your right and looks like a rabid reactionary.
All the report button does is say “cheating, huh?” so I’m going to instead say here that this is neither nice nor necessary, and it probably isn’t true either. Straight-up name calling is beneath the usual quality of comments here and add nothing to the discussion.
UBI isn’t a very good idea and will likely crash the economy if not destroy the country while making all of the things it claims to help worse. Sometimes people are hostile to bad ideas because they’re bad ideas.
Can you expound? You seem awfully sure of what you write there.
I was thinking this also. I normally greatly enjoy SSC comments sections, but this one seems a bit toxic, but perhaps thats simply due to me being pro UBI. Perhaps that colors my perspective. Im open to counter points, if they are well reasoned.
Why so many reactionaries? Because we have a system that works pretty damned well, creating a society that manages to feed pretty even the poorest of its people far better than earlier societies, and is on a curve toward truly amazing levels of prosperity and accomplishment — and we see a smart, well-meaning, articulate thinker trying to throw it away with both hands.
Why so angry? Because we all like Scott, and really hoped for less nonsense from him.
A doctor invented a cure for which there was no disease. His patients caught the cure and died.
Parts of the UBI discussion feel that way to me. A generous UBI is a cure for a world in which technological progress means that the labor of most people is worth almost nothing and a small fraction of the population plus lots of smart machines can produce abundance for all. We don’t live in that world, and my guess is that we are not going to within the lifetime of anyone here, assuming no cure for aging. Policies based on that model of the world, applied now, are likely to have very serious negative effects.
There are other parts of the discussion that take budget constraints seriously and argue about advantages and disadvantages of a modest UBI relative to either some version of guaranteed employment or the current welfare etc. system.
It seems to me like there are two things going by the name “UBI” in this discussion: UBI.a is a revenue-neutral (or close to it) near-future policy where we end most means-tested welfare, kill off some big ticket tax breaks like the mortgage deduction, and divide up the proceeds equally. UBI.b is a much more expensive proposition where we pay everyone enough money to live a modest life (several times what UBI.a would provide) and presumably pay for it with tax hikes on the wealthy and corporations.
In my experience, most real proposals (with specifics and numbers) seem to be on the UBI.a side, and most hand-wavey thinkpieces about how wonderful/awful UBI would be are discussing something more like UBI.b. Scott seems to be having it both ways by talking about something that starts out like UBI.a and turns in to UBI.b at some indefinite point in the future.
The problem is that they are really not all that similar, and having one label dereference to two different things can produce a never-ending argument. It seems like my UBI.a / UBI.b distinction maps to what you referred to as “modest UBI” and “generous UBI” but I’m not sure about that. I’m also not sure about my belief that most actual proposals tend to look like UBI.a, that’s been my experience but I’m not that well-read on this.
I wish we had generally-agreed-upon labels to address this. Is there already a way of signifying the distinction I’m describing, which I’m unaware of? Or are there a handful of proposals (specific ones, with numbers) that are prominent enough that most people who talk about UBI are referring to them? Or do we need to just invent our own nomenclature, e.g. “I support experimenting with $5k/yr UBI but I think $25K/yr UBI is crazypants”?
You can’t have any kind of meaningful revenue neutral UBI unless you axe Medicare and Medicaid and that’s not going to happen. That’s probably why people don’t make the distinction.
This might be true for UBI.b and is definitely false for UBI.a, which is why we need the labels. (Or you might just be defining “meaningful” to mean “large enough to be UBI.b”? I can’t tell…)
Or, I should’ve added, perhaps you think the very definition “UBI” ought to exclude UBI.a? Perhaps – I’m not here to argue semantics on the internet – but you can see an economist sketching out a UBI.a style proposal here: http://archive.economonitor.com/dolanecon/2014/01/13/could-we-afford-a-universal-basic-income/
You mentioned 5k per year as one choice compared to a higher alternative. If we gave everyone 5k per year, based on a population of 324 million people, that would equal $1.62 trillion per year. Social security in 2017 was $813 billion. You have 800 billion to cut and I already specified not taking it from Medicare and Medicaid. Where are you going to get it from?
Even if you found something and managed a compromise, 5k per year is very little. You can’t raise a kid on that. You can’t live in a city on that. I’m not even sure you can live on that in the middle of nowhere. If you take cuts from other welfare programs, which you almost certainly would have to, then poor people are very likely to be losing money compared to the status quo and if that’s the case, then what’s the point?
I’m not proposing anything, but that link I posted offers one possible answer.
Simplifying the welfare bureaucracy? Again, I’m not arguing that one definition is better than the other, just complaining that the vague labels are causing problems, in that a lot of the comments in this thread seem true for one but not the other UBI, and not all in the same direction.
If the UBI is too small for many to live on, you still have to supplement it with means-tested welfare.
I doubt that the bureaucracy would reduce that much.
Where are you going to get it from?
I recall that Scott did the numbers once, and discovered that you could fund a workable UBI by completely gutting k-12 public education.
Given my experience of the last N years of reading the textbooks, checking homework, reading the syllabuses, and monitoring the social media and press release output of what I have been told are the *better* schools in my city, I might actually consider that a double win.
Current public expenditure on K-12 is $634 billion. The adult population of the U.S. is about 250 million. So if all public expenditure on K-12 was converted to UBI, it would fund a UBI of about $2500/year.
I don’t think many supporters of UBI would consider that a workable level.
$634 billion is a 75% of the $800 billion needed after gutting out the $813 billion for social security, to get to the $1.62 trillion dollars needed to give everyone $5k/yr.
Hmm, how to get the next $200 billion?…. Seizing the mega foundations and the Ivy endowments is something you could sell me on. Closing all the US military bases outside the US you could also probably sell me on.
Scott’s stated goal:
Again I reiterate my wish that we had some clear way to understand who’s talking about what. It seems manifestly uncharitable to complain that “modest” UBI doesn’t provide enough to live on, or that “generous” UBI can’t be implemented tomorrow, but as long as we don’t distinguish, we can all just assume that an individual commenter meant whichever one makes our preferred response easier to justify.
When Scott said that, I’m pretty sure he didn’t have in mind gutting the entire current welfare system to pay for something that won’t even allow a single individual to live off the UBI. That’s why you’re making a distinction where there really isn’t one, because I don’t think anyone, or at least very few people, are advocating that. Charles Murray advocated replacing all welfare(including Medicare) with a UBI that people can live off of. Other people advocate new taxes to varying extents to pay for UBI. But those are different from what you’re talking about.
Yes. Except that I don’t think the generous version is workable under current circumstances, save in the very short term, so I connect it to fantasies of abundance plus mass unemployment.
Is it just me, or is all the work in the Bob vs. Alex example being done by:
1. Arbitrary exclusion of the most obvious answer (“producing value for other people”);
2. The absence of families (i.e., people who depend on Bob and don’t depend on Alex) from the example;
3. Raised-pinky disdain for TV and Cheetos?
Others have mentioned this, but ignoring the likely paths of Bob and Alex into the future is doing a lot of work also. What does the median Bob look like 5, 10, 20 years from now? What about the median Alex?
Suppose you have a 20 year old son, and we institute a poverty-level UBI tomorrow. For whatever reason the best job your son can get today is clerking a gas station. Is it really OK with you if he decides to just be an Alex for the rest of his life instead?
I thought of raising that point as well, but I figured the answer would probably be that 40-year-old Bob the shop foreman’s life is as meaningless as 20-year-old Bob the convenience-store clerk’s, because Cheetos. (Forget it, Matt, it’s Gentrytown.)
I doubt GJ makework is really going to be a springboard into a promising career.
If it’s something that actually gives you skills to make you more employable in the future, that’s different. Right now, the gov’t is paying me to get a degree.
But if you’re just digging holes and filling them back in, that’s where you’re stuck for life.
And I doubt anyone here sees sitting around eating cheetos much differently to eating ryvita, or macrons or whatever it is rich people eat.
The unidentified thing is that Bob is too tired to do anything else so he watches TV for 4 hours, whereas the Alex isn’t actually going to watch TV for 12 Hours, hes also going to watch TV for 4 hours, then go riot for 8 hours (as we see in Europe).
Many ways to cure boredom. From my exposure to people that live these lifestyles, if you give them access to sports, libraries, etc… it counts for a lot. Shit, even going to a park or being in nature for that matter helps.
Boredom comes from not being able to do the things you feel are important. Being offered to do the things that other people think are important, is not an effective substitute. And the belief that e.g. reading books in a library is important and/or boredom-alleviating, is in fact a minority opinion.
You might as well tell middle-school-me that I shouldn’t be bored just because the school won’t let me hang out in the library all day, when there are teachers giving lectures I can listen to and classmates I can play status games with.
If I had to do it over again, I would have GEDed out at 14, and then spent next 2 years in the library, APing out.
I doubt it is all that easy to get a $100k/yr job with a nine year gap on your c.v. and the excuse that you enjoy your leisure time.
If I’m wrong I’d quite like the correction.
(I guess this is basically what a “sabbatical” is, but I suspect the ratio is reversed. 9-off, 1-on is referred to as “coming out of retirement”)
Right, in most careers (aside from academia where there’s the concept of a sabbatical) you’ve got to stay on the treadmill indefinitely. Any significant break will likely cost you more than it is worth. And that cost will likely be felt when it’s too late to do anything about it, e.g. when you find you can’t retire or you run out of money during retirement.
I entirely agree with you.
On the other hand, Ozy also pointed out some other ways to do that (e.g. consulting, not really marketing yourself, and accepting the higher instability.)
“not really marketing yourself” is the same problem, except your explanation for the gap in your work history is “no one really noticed me so far this decade. Don’t worry, I’m totally worth 100k and up to date in my field regardless!”
Self-employment or consulting is a fine answer provided you are in a field where that is applicable.
Consulting is what you do after you have a good career and are looking for part time work.
Except that, if you get enough jobs to pay the bills, you can keep consulting up indefinitely so you’ll theoretically never need to explain the gap.
Also, if you do go for an interview, you can explain it as “I was self-employed,” give a couple client references, and not bother explaining how few clients you had.
There’re other disadvantages, of course, which’s why I’m not going this route personally.
Ozy is wrong
Any job that’s paying $100,000+/year is one where your skills and successes have to be current. Which means you have to be constantly “selling yourself”, constantly working to keep up on what’s latest and greatest.
You’re doing that whether you have 5 hours / week of work, or 50. But if you’re working 40 – 50, odds are you’re doing a lot of your learning on the customer’s dime (as they ask you to build them the greatest new thing).
If you’re working 5 hours / week, you’r working another 5-10, on your own dime, to keep up your skills.
Additionally, to get to the point where you can charge > $100,000/year, you’ve had to put in a bunch of full time years. Maybe you save 90% after taxes, and look and smell like a homeless person when you go to work.
Or, maybe, you get accustomed to the lifestyle that goes with that income. At which point your expect it, and would painfully miss it if you stopped.
Far more than you would “miss” it if you ever had it in the first place.
This notion will not survive much direct experience with programmers. Everyone I work with makes that much and your description might charitably apply to one out of every ten.
I will agree however that taking long stretches off, or consulting for less than 1/2 time, is in my experience very rare. There’s certainly demand for it – if “1/2 time for 1/2 pay” jobs were commonplace in professional careers, it would be incredibly popular among parents of small children – but IME it’s very rare for employers to go along with it.
And the “other nine” have full time jobs as programmers, yes? Not contract jobs that they can take time off from whenever they want, yes?
Which is what I was responding to.
Because I am a programmer, have been a independent contractor, and know people who run their own businesses.
And none of those fields let you simply do a straight line “cut my hours when I want less pay”, not over a multi year haul.
Oh, and your employers won’t let you have a “1/2 time for 1/2 pay” job because there’s a lot of fixed costs to hiring someone (health insurance, training, office space, computer, other equipment), so you’d have to cut the pay well below 1/2 to make it worth the company’s while
I spent the past twenty-three years on a half time for half pay job–a full professor teaching one semester a year. I happened to be with some professors (different part of the same university) today, who mentioned that the university, or at least their part of it, is happy to offer that deal to any professor who wants it.
I don’t know in how many other universities, or other forms of employment, that would be true.
Yes, if what you meant was “Any *consulting* job…” then I misunderstood you. I’m not sure why it’s important, though. I mean, sure you need to hustle if you’re a one-man shop, but I think “I work for an agency that finds the jobs and tells me where to show up” consulting is waaay more common, and you certainly don’t need to be particularly ambitious to do that. (You do need to already have a fair bit of experience in an established, popular niche, and you might need to grow some hustle if that niche gets suddenly unpopular.)
And now that I think of it, that’s probably the best way I can think of to get to Ozy’s idea (working a 1/10 time professional job for $10k/yr) than anything else I can think of. Consulting shops prefer to have people who work can full time or (much) more, but lots of consultants also do half time or month on, month off type stuff too. I’ve never heard of someone doing 10% but I don’t know for certain it couldn’t happen.
1) You’re a full tenured professor in academia, the exception I mentioned and
2) You’re David Friedman. I think you don’t realize how much of a difference this makes. I was on vacation recently and in a bookstore, and idly picked up a book and flipped it open… and there it was, a quote from you. That sort of thing doesn’t happen with most people; there are some here who might show up in academic or specialist articles (which is a much lesser level of fame), and John Schilling might show up in a magazine article on North Korea, but that’s it.
What this means is you provide something unique; you can’t be easily swapped out for another cog in the machine the way most of us can. This gives you a better negotiating position than most of us.
As I mentioned in my comment, someone in a conversation I was in yesterday said that half time for half pay was an option for anyone (I think at the university, perhaps only in the business school, conceivably limited to tenured professors, although he didn’t say so).
On the other hand, that may represent a special situation where the university, or at least the business school, finds itself with an excess supply of professors. It was also mentioned in the same conversation that MBA applications had declined substantially in the past few years.
What would the half time employees receive in benefits? Half the retirement/insurance subsidy? All of it? None of it? That might make the conversion quite different at other ratios.
Converting some of this compensation into cash would help make this kind of arrangement easier on both parties. It would also be consistent with the reduced paternalism of the UBI mindset versus a BJG.
The military has this. It’s called the Reserves. It is almost literally 1/10 work for 1/10 pay. With good/cheap healthcare and a pension to boot. You do run the risk of being deployed for 9-12 months but this is not necessarily bad and you can make A LOT of money (often times more than an Active duty person doing the same job).
I make 12-14k doing my weekend a month/2 weeks a year and this is not far below what my half of household expenses would come out to. Granted, I was previously previously active duty. It is both easier and more lucrative to go from active-> reserve but many people come straight in.
Sabbaticals also aren’t typically a year off to play video games, but are supposed to be for the development of the person taking it. Expectation is that you are either doing research elsewhere, or teaching courses or writing a book, and it is set up within a system where you are already expected to work well without oversight.
Some people take a sabbatical to travel the world. This seems pretty accepted where I live.
Some people take a sabbatical to travel the world, or some people take a sabbatical every 5 years to travel the world?
But then why not work at that wage for ~7-8 years, live a $10K/year lifestyle, and then retire?
I’m not going at it nearly that fast (and most of the people on that site aren’t either), but I’m deviating from the norm in that direction.
That’s exactly what I did. It’s also exactly what mrmoneymustache did.
Worked 7 1/2 years, saved about 85% of my pay during those years. Haven’t worked since (by choice). I highly recommend it for people who don’t particularly enjoy work, which I suspect is most people.
I wish Scott had elaborated further on why he chooses not to work less and make less money. I’m always wondering why people don’t do that in careers where this option exists.
At a slight tangent …
In the hypothetical robot abundance economy, there are two well paid inputs to production–skilled labor of sorts still useful and capital, i.e. robots. You are now living on accumulated capital. One option as societies gradually evolve in that direction is for people to choose to live below their income for a few years, accumulate capital, and then live on it.
At a different tangent …
Consider the relevance of all of this for a future with a cure for aging. Do people work hard for fifty years, live a little below their income, and then retire forever–supported by the labor of the robots paid for with their savings?
In a hypothetical, I expect interest rates to drop. A lot. Its going to be hard to live off the interest of an accumulated savings account when the best money market rate you can find is 0.02% (That’s not 2%, that’s 0.02%).
On the other hand, in a future where capital is a much better substitute for labor than it now is–the robot economy various people here imagine–one would expect interest rates to be higher.
Think of it in physical terms. If the money you save from ten years of income will pay the cost of one robot as productive as you are (net of power requirements etc.), then you can retire and live on the robot’s output.
Is there a difference between a robot as productive as you are, and having independent means?
In any case, I suspect immortality and automation would break enough of the assumptions behind economics that you need to re-derive most of the rules of economics again from first principles.
I think not. The application of the rules changes every time you change the facts the rules are working on, but the underlying principles don’t.
That’s a fine option but seems to differ significantly from what was proposed as “easy”
I love these comments that boil down to:
“Scott, when people ask why anyone would still work in a world where you get free money no matter what, you reply ‘well *I* would’, and that’s not sufficient!” (turns around) “People would DEFINITELY resent giving their tax dollars to layabouts who do nothing, and I know this because *I* would!”
I figured we know this because people already really really (and often very publicly) resent doing that, even to some who have good reasons.
RE: “McDonalds can’t roboticize because that’s hard!”
Really? What if the only thing McDonalds’ sells is Big Macs, Quarter Pounders, McChicken, and fries? A four-item menu with limited customization (double or remove components). You can even automate the drink dispenser. If you want a Happy Meal or the full range of items, go to a “McDonalds’ Classic” which is staffed by people (and is more expensive).
Once you make a robot that can reliably cook a Big Mac, it’s not too hard to make one that can cook Sausage McGriddles. The trouble isn’t that the menu’s too complex, it’s that flipping burgers is exactly the sort of thing that AI is bad at — for a few more years, anyway.
A motivated engineer could probably build a machine that produced a passable Big Mac without any conventional burger-flipping, but it probably wouldn’t look like a robot. And it’s not AI.
They already make automated grills. Basically two burners stacked vertically with conveyer belts above them. Put burger in top, burger gets cooked on one side, flips as it falls to the second belt, gets cooked on the other side, comes out the bottom.
Yeah, I’ve seen those. That’d be one step in a fully automated burger machine — the rest might include toasting buns, squirting ketchup, placing pickle slices and doing final assembly. You’d need something pretty big and expensive to do all that, and probably unreliable enough that you’d need an operator standing by to keep it running smoothly and scrape out the grease deposits. It’s nothing like we don’t do routinely in factory settings, just too clunky and overpowered for a Mickey’s storefront. Easier to just pay a teenager to man the grill.
I don’t think automation looks like replacing all the workers with machines all at once.
It looks like increasing the productivity of each worker until only one is needed.
You know, I expect an operation as big and sophisticated as McD’s has considered increasing automation of their restaurants many times over the years. There’s probably a small library of engineering/accounting studies of various options in a room somewhere at McD HQ. Their current setup is probably their very best stab at some sweet-spot combination of cost, reliablity, product quality, and customer service.
I went into a McDonalds recently, that has a kiosk where you type in your oder, and a large drink dispenser like the ones at Fuddruckers, that gives more drink options than a normal store will offer.
It’s great, especially compared to trying to give a complicated order to an order taker who’s ESL.
So no, McDonalds are not all at the sweet spot, or else the sweet spot varies based on local conditions
I’ve done the order kiosks. I don’t particularly like them. When there’s few customers, the person who takes your order remembers what you ordered and can double-check it before it goes out quickly, and also know who’s coming to pick it up. That gets eliminated with the order kiosks, where the person doing the double-checking has to look at the slip, and then call the number hoping whoever it was heard, but no way to tell if they’re even still in the waiting crowd.
BUT, the live-person scenario gets less and less like that the busier the place gets, so when it’s busy like that, I tend to go with the kiosk if it’s available.
Robots may keep McDonalds afloat and make their owners wealthy enough to afford to pay a UBI. I don’t know why the owners of the McDonalds kiosks wouldn’t just leave the country though.
I worked at Burger King. Their “pride” is that they broil the burgers. That means the person cooking them puts them on a conveyor belt, they go through an oven-like machine (which is not nearly as big as I expected), and come out the other side.
The hard part is the assembling of the burger after the meat is cooked. The assembly line is where things like the ends of pickles get filtered out by people because machines can’t tell the difference between the part of the pickle that people will eat and the part of the pickle that they won’t.
10240 suggests that Basic Jobs be made unpleasant as a gatekeeper. Which (as I mentioned elsewhere) was what they did with the WPA, and it looked suuuuuuuper exploitative and bad. The WPA justified it by the extremely temporary nature of the program–they had reviews every couple of months about whether they still needed it or not–but a JG sort of program would, presumably, go on forever.
And so you really aren’t going to be able to make JG jobs intentionally bad without getting extreme pushback. You’re just exploiting poor people! You’re making people do penance for the crime of Not Having Money / Skills / Experience / Connections! Hey, lots of those people with JG jobs have not-white skin; you’re making JG jobs rotten because you’re RACIST!
Just to clarify, I wouldn’t suggest purposely making them unpleasant. A typical low-end job, paying (minimum wage – ε), would be enough to keep it from being overused.
So, you’re planning on putting the providers of those “typical minimum wage jobs” out of existence?
Yes, it’s a Catch-22
No, we’re not being unfair, we’re giving you reality, and why it’s a bad idea.
1: Produces jobs that are deliberately unpleasant
2: Are total makework
3: Put existing companies out of business, destroying people’s jobs and putting them on JG
Pick at least 2
No, because if public work pay (minimum wage – ε), and it’s perhaps a bit stigmatized, and a regular job pays ≥minimum wage, and perhaps feels more productive, then most people will choose the regular job.
So that’s 1, and probably 2, because you’re claiming it’s not 3, which means they’re not doing anything that someone could make a profit paying people minimum wage to do, no?
You’re the one who’s claiming that it has to be at least two of your 3 points, not me.
Presumably the work would be something that the government needs to get done anyway, or something that’s not necessary, but good to have. Not something private companies currently do.
If it actually needs to get done, people would be paid to do it without an UBI, so you are taking real jobs away.
There is also no clear way to distinguish the jobs that wouldn’t be done otherwise from those that would be & any claim to the contrary is just wishful thinking.
If public work is stigmatized *and* guaranteed then you’ll quickly see people arguing that the stigma is racist, anti-poor, proneurotypical, etcetera. “The only work I can possibly do is the public work,” some cute nonbinary acearo will wail, “and there’s this stigma!”
@Aapje The number of jobs is not fixed. If there is a surplus of workers whose work is worth the minimum wage, private companies are likely to create jobs for many of them. So “taking jobs away” is not necessarily meaningful.
Why is there unemployment at all then?
* Some people’s work is worth less than the minimum wage. Basic jobs may be a politically more feasible way to provide employment below the minimum wage than abolishing the minimum wage altogether. (Note that basic jobs may pay less than the minimum wage, but more than the actual market value of the work.)
* Illiquidity of the labor market. Information asymmetry, where a company may predict the expected value of a worker’s work as below the minimum wage, even if it’s actually above the minimum wage. Restrictions on a company’s rights to fire employees may disincentivize hiring (though AFAIK the US doesn’t have these, apart from its broad anti-discrimination laws). These reasons can be considered equivalent to the previous bullet point, as if work is organized in such a way that any applicant is immediately given a job, it decreases the value of the work per employee to below the minimum wage.
* Some people could get a minimum wage job, but they can afford to live off their savings, or unemployment benefits, until they find a good job. Obviously these people won’t take a basic job.
Also, some people who currently have a (government) job are forced on basic jobs, it’s not necessarily evil either. Let’s say 2% of the population is currently unemployed, but would take a basic job. Public works would be organized in such a way that anyone who applies is employed, and there would be a high turnover, making them less efficient, so more people are needed to do a given amount of work. E.g. 6% of the population would do work that’s currently done by 4%, so 4% is forced on public works, making minimum wage – ε instead of minimum wage, and 2% makes minimum wage – ε instead of 0. That’s not necessarily bad. Basically, ensuring that a part of the labor market operates with perfect liquidity ensures that nobody starves for the lack of a job.
Note that I don’t necessarily support basic jobs, I’m just arguing that it’s more feasible and less damaging than basic income.
@Mike Powers Being on welfare is slightly stigmatized, too (according to the discussion in the original post), yet it continues to exist.
The broad anti-discrimination laws are important. In theory, in most states, in most industries, you can fire anyone at any time for any reason, but if the employee can spin that into a discrimination case you’re in the expensive kind of trouble. A lot of people are covered under those laws, and it may not be apparent that they are at the time of hiring. This probably hashes out mostly into a general reluctance to hire people that look like they might be litigious or drama-prone.
“Being on welfare is slightly stigmatized, too (according to the discussion in the original post), yet it continues to exist.”
Doesn’t actually deny my claim that if Guaranteed Jobs becomes a thing then the present social climate will slant strongly against those jobs being considered Lower Caste.
Or, y’know, maybe I’m wrong, maybe people will accept discrimination against those who’ve got a Guaranteed Job or two in their CV. Which, of course, means that once you get a Guaranteed Job you’ll never have another sort, because hey–if you could have got hired you would have been, right? If you went GJ then it must be all you’re suited for.
And if you say “but there will be laws preventing that sort of discrimination!” then congratulations, you agree with me that there will be legal and social forces that act against the stigmatization of Guaranteed Jobs, and we’re done here.
Does it matter whether “people will accept” such discrimination? It will be virtually impossible to attribute specific hiring decisions to GJ discrimination, and if it is instrumentally rational for employers to discriminate, they are going to do it and not talk about it.
Rather like, if you got a GED it means you obviously couldn’t graduate from a Real High School(tm), probably because you were in jail at the time. And people in our society are almost completely unconcerned with the sort of discrimination that assumption implies, so I’m not optimistic about employers being shamed or boycotted out of roundfiling GJ-stained résumés.
I’d guesstimate an 80% probability that any GJ program, and 60% that any UBI, would if implemented in the real world become a poverty trap in part via economic discrimination against the recipients and a tacit understanding that signing up is a signal of Permanent Loser status.
Wouldn’t the “universal” part of UBI prevent that from happening? How does an employer discriminate on the basis of my having received an UBI check if *everyone* receives an UBI check? For that matter, do employers currently check to see if you’ve ever received public assistance? I’ve never heard such a question at an interview, but I haven’t applied for bottom-tier jobs since I was in college, when the reason I was looking for a crappy fast-food job was obvious from my age.
You don’t have to cash the check. And really, not everyone will receive a UBI check, because you don’t have to fill out the paperwork to tell them where to send the check. It’s not like there is going to be a team of relentless Javerts, Girards, or T-800s sent out by The Bureaucracy to track down everyone who is eligible and staple a check to their forehead. Most likely, at least in the early stages, the process of signing up will be deliberately enhardened as with e.g. SSDI.
They check to see if you’ve been unemployed for any length of time, which is a precondition for most sorts of public assistance, and they usually ask why you were unemployed.
The government could make it impractically difficult to check on whether people are collecting UBI. Or they could pander to the ec429s of the world and make it a publicly-accessible database like e.g. sex offenders. The compromise position is to put it in a secret, triple-encrypted, privacy-enhanced government database that will be hacked fifteen minutes after it goes online and mirrored on a server in Malaysia for one mBC per query or whatever. Data wants to be free, right?
This seems extremely implausible to me. First, because I’d expect a huge number of people to sign up for UBI while they were college students and keep collecting it. Second, because there’s a largish band of incomes where your taxes are going up by about what the UBI payment is, and those people are almost certainly all going to sign up for the UBI to avoid a tax hike.
And most importantly, because there’s no incentive I can see for checking who is getting the UBI on the part of employers *unless* it becomes a marker for being a perpetual f–kup, but there’s not any kind of obvious reason why that would happen. There’s not some coalition of employers who care deeply that you’re getting some unearned federal benefity–they just want to know if you’re going to steal stuff or show up to work drunk or get fired for incompetence and then sue them for discrimination or something. I don’t see why collecting an UBI would turn into that kind of signal. This seems very different from long periods out of work, prison time, or a GED.
 Hey, suddenly tuitions have gone up by $yearly_ubi/year. Who could possibly have forseen such an outcome?
Do you also expect a huge number of people to not bother paying tuition when they are college students, on account of most universities won’t stop them from e.g. sitting through the classes, hanging out in the library, and even talking to the professor during office hours just because they aren’t paying? For many people’s learning styles, that provides approximately the same educational value at hugely less financial cost.
And almost nobody does it, because claiming a college-level education without having the diploma that colleges do demand payment for, is a societally-recognized Signal of Loserdom. People are demonstrably willing to wave bye-bye to tens of thousands of dollars in cash money to avoid that signal. The mere possibility of making that trade, simply isn’t discussed in polite society.
If collecting the UBI becomes a Signal of Loserdom, people won’t do it for the same reason they don’t audit their way through college and pocket the tuition savings. This isn’t certain to happen, but depending on how the UBI is rolled out (e.g. initially as a restricted pilot program that we test on the long-term unemployed), it’s certainly a plausible outcome.
The model for how hard it will be to apply for UBI will be Social Security, not SSDI. Is it hard to get your first SS check?
That is the model, yes. Reality is another matter, and using models to predict outcomes beyond their experimentally-validated range does not have a terribly good track record.
I’m hardly UBI’s biggest fan, but unless the program is being run by people who want it to fail, I don’t know why you would think it would follow the pattern of existing SSDI (which has subjective criteria) versus existing Social Security (which is straightforward to evaluate — either you have the credits or you don’t; UBI will be “are you a citizen of age or not”).
If we’d never had Social Security and SSDI was the closest real-world thing I would get the skepticism on this point. While I’m sure a few stories exist if you search hard for them, I’ve never heard of someone having to fight to get their old-age benefits. (There is fraud related to identity theft and failure to report deaths.)
Seeing as how one of the advertised virtues of the UBI is that it eliminates the need for millions of government bureaucrats to administer a patchwork of social-welfare programs, how would you not expect the people implementing it, being themselves government bureaucrats, to be wanting it to fail in at least some key respects?
Also, I assume you are imagining the society that implements the UBI is something resembling a democracy. You’ve just heard from some of those voters, and an awful lot of them want the UBI to fail from day zero. Are you expecting the proponents of UBI are going to wait until the opponents have been completely, utterly defeated before making their move? Because real political movements and programs don’t do that. They go forward when the balance is 60/40 or 55/45 or sometimes 48/52 but someone called in a favor. And that means they make compromises. The ec429s of the world will have their say in how the UBI works.
And finally, path dependence matters. SSI was not called into existence from the void as a fully-formed trillion-dollar government program; it grew from something much smaller and cheaper and, perhaps most importantly, catering to a very sympathetic population. That legacy is coded into the deep structure of SSI.
UBI, I hope you understand, will not come into existence because some politician says, “Hey, let’s create this nifty new thing from scratch to solve all our problems! It will only cost THREE TRILLION DOLLARS A YEAR, and probably only ten million or so government bureaucrats will lose their job, but I’m putting it to a vote in Congress tomorrow and we’ll roll it out by Christmas!” It will have to start as a pilot program, or something similarly small in scale.
One almost necessarily targeted at unemployed poor people, who most of society suspects of being shiftless lazy bums. And not all unemployed poor people, because that’s too expensive to start with. Only a select few, which means there needs to be a way of filtering out the shiftless lazy bums who don’t belong from the ones that this pilot program is going to maybe take care of.
So, from day zero, coded into the deep structure of the UBI, will be a bureaucracy devoted to filtering out the shiftless lazy bums who don’t belong. And it will still be there if and when the UBI grows to theoretically encompass everyone.
Really, what’s your plan for rolling out a UBI without all this happening?
I think doing UBI as a NIT would avoid most of those problems; you’d have the IRS bureaucracy managing it instead of social welfare.
Getting an NIT passed is still a hard problem, of course. And you’d get all the complaints about people not getting their NIT because they didn’t file/didn’t have a fixed address/etc.
NIT is much more politically palatable than UBI, to be sure. And while they are mathematically equivalent if you assume an otherwise flat income tax, politicians can never keep their hands off tax policy as a tool for social and economic tinkering. Not sure how that plays out with an NIT replacing most of social welfare.
It seems to me that you’re making assumptions that massively tilt the scales toward guaranteed failure of UBI. But while I can imagine that, say, UBI will be sabotaged by its enemies or misimplemented through honest incompetence, I don’t think it’s fair to judge some proposed policy by making whatever assumptions are necessary to doom it. By that logic, you can prove that any government program is a guaranteed failure.
Now, as a practical matter, I would expect UBI to have some bad effects that might wreck the program, and the cost would be huge, but I don’t see why cashing the UBI checks would become a marker for ineptitude or unemployability. If you can show that, say, employers check to see if you’ve ever been on public assistance or if you’ve claimed the Earned Income Tax Credit and exclude potential hires on that basis, I’d think that was some evidence in the direction of what you’re assuming. I’m not 100% sure this never happens, but I’ve sure never heard of it happening.
 I think this is a plausible prediction for guaranteed jobs, since the whole point of guaranteed jobs is that they’re only taken by people who couldn’t get gainful employment elsewhere. But not for UBI.
Heh. Now we’re getting somewhere.
I largely support UBI, but here is another concern that I don’t think I’ve seen addressed yet: Will UBI accidentally incentivize large families and population growth?
I think it all depends on how we handle children. One extreme is to treat everyone as full adults from birth, with everyone receiving the same UBI check. The problem with this is that parents may take advantage of their kids’ UBI allowances for their own purposes and use little of it to actually care for the children, a phenomenon that is known to be a problem in some welfare and foster programs. At worst, some adults may choose to have more children solely for the purpose of boosting their income, overall population growth leading comprised mostly of unwanted children living in near poverty.
At the other extreme, we can decide to give people their UBI checks only after they turn 18 and become legal adults. This has the opposite result, effectively asking parents to pay out of pocket for raising kids making it harder to have children if you are not able to hold a job that generates extra income. Mind you, this is also more or less how the world works right now. However, for many people a desire for UBI comes from the philosophical basis that everyone should be able to live at a decent standard of living. The construction of the UBI-at-eighteen system essentially asks people to take a step backwards into poverty if they wish to become parents.
Overall, I would expect this to disincentivize having large families in the long run, with the pressure disproportionately on those of lower or no additional income. In some aspects this may be good–it could help slow population growth and there is plenty of research that children who come from non-impoverished backgrounds have better outcomes (and after all, the goal of UBI is to minimize and eliminate deep poverty as it is known today, so poor families that choose to have children will already be better off than poor families of today.) However, the fact that these pressures fall so disproportionately on those of lower income gives me moral pause. Because of the demographics of our modern society, a policy that says “we don’t support poor/unable-to-work people having children” sounds a lot like “we don’t support immigrants/blacks/people with disabilities/single parents/etc having children”, which I find very uncomfortable.
Of course, there are many possibilities between these two extremes. I suspect that most people would be in favor of a smaller UBI subsidy for children, perhaps based on age. Politicians can haggle over the exact amount, but I still worry about the effect of parents choosing to have extra children to claim their UBI checks for their own purposes while neglecting the care of the child.
I believe the way that Indian tribes with gaming revenue per-capita payments usually handle it is that a child’s per-cap payments are put into a trust until they turn 18, at which point it is given to the now adult person either in one big check or spread out over a couple of years. I don’t know enough about the subject to say how well that works out for them.
Statistics do indicate that American Indian fertility has fallen off of a cliff in the past 30 years, but I don’t know what percent of American Indians actually do receive significant per-cap payments, so that could well be due to completely unrelated factors.
That doesn’t work very well if the money to support children only arrives eighteen years after the children and associated costs arrive.
““we don’t support poor/unable-to-work people having children” sounds a lot like “we don’t support immigrants/blacks/people with disabilities/single parents/etc having children”, which I find very uncomfortable.”
Have you considered why it is that the latter makes you more uncomfortable than the former?
It’s likely that if the UBI stuff goes anywhere (I don’t think it will), it will come in the form of a child benefit implemented “first.” Since an actual UBI is financially unfeasible without way higher taxes on the upper middle class, that’s where it’ll stay.
I think the easiest solution would be to have a hard cutoff at replacement level, UBI for 4 members of a family and nothing above that. Since families would be making the choice to have extra children, they should be capable of funding them themselves.
Of course, this would inevitably run into political battles, but I reckon it would be one of the better options.
Give the UBI for the kids to the schools. Require the schools to provide free meals, free uniforms, and free school supplies. Allow the kids to spend non-school days at the schools doing extra curricular activities, so they still get their free meals. Extend the time kids stay at the schools to include the after-school extra curricular activities so they get their free dinner.
So, make poor children wards of the State, and remove them from any meaningful relationship with their parents?
Because having kids institutionalized for a significant percentage of the day five days a week for 13 years wasn’t enough.
Only the kids whose parents are unable or unwilling to care for those children themselves.
As skeptical as I am of public education and welfare in the first place, these sorts of conditions are at least going to disincentivize welfare, especially of the multi-generational sort.
Of course, that’s also why this would be a political non-starter, especially once considerations of disparate impact start rolling in.
I heartily disagree. Filtering it through the state apparatus is antagonistic to the simplifying purpose of the program.
I spent a couple years unemployed after graduating university, before getting one of those jobs that people find proverbially bad – minimum wage call centre work, answering calls from angry people whose furnaces were broken and then trying to sell them useless crap they didn’t need. What struck me most about it was how much better the call centre was – I was healthier, happier, more financially stable, better at finding relationships, and overall in a far better place. All my friends commented on it, because it was obvious at a glance.
Alex’s life is more pleasant in the short term, but Bob’s is more pleasant in the long term. On any given day, going into work sucks. But without a job, you have no sense of accomplishing anything, no sense of a future, and no sense that your life has any meaning. You can try to fill the gaps, but it’s BS, and on some level you know perfectly well that it’s BS. There’s a deep feeling of shame, uselessness, and incapacity that goes along with being unemployed. You can put on a brave face, and you can try to find meaning elsewhere(learning French, reading the collected works of Hume, whatever), but it’s not the same as being someone who helps others out on a day-to-day basis. Every culture that’s ever been allowed long-term idleness goes insane as a result – ghettoized minorities, spoiled rich kids, even retirees often show some signs of it despite having earned their reprieve. A UBI probably won’t be any different. And this is true even if Bob does the same things in his idle time that Alex does – it’s not the activity that changes, it’s the general sense of self-worth and dignity.
To be clear, this sucks. I’d much rather that it didn’t work like this – I want to stop going into work and be able to live my life without the need for it. But I don’t think I’d do well if I tried, and I think most people are like me in this.
As Keynes pointed out, in the long term we’re all dead.
Selling lotto tickets is a dead-end job. It’s not going to give you a sense of accomplishment or future or meaning. It’s just looking forward to day after day of selling lotto tickets (and perhaps cheetos).
I rather enjoyed not having a job last time I was unemployed. Actually had choices in my life instead of just grinding to make money that I have little time to spend (but must make and save anyway so I can survive the next time I’m unemployed).
And in the short term we might all die tomorrow.
I’m not sure that selling lotto tickets is as devoid of meaning as you’re suggesting. Relatively few people spend their days swooping heroically through fires rescuing children from alligators (the alligators live in fire). For people whose work is less immediately obviously heroic, most find some satisfaction in it anyway, perhaps by telling themselves useful lies.
If you’re say (as I used to be) writing accounting software for a living, you might say, “I’m helping people who have business ideas make their business more efficient.” And you might say, “I wrote an extremely elegant piece of code for generating the COGS for a physical inventory item.”
I think that a skeptical interlocutor might argue that this is as meaningless as working in a convenience store, perhaps more so. I once bought milk for my hungry baby at 12:00 midnight at a convenience store, when all my other options were closed and I was getting kind of desperate. That convenience store clerk didn’t save lives that day, but he made my life better. My accounting software probably never met nearly as raw or physical a need as that convenience store clerk did that day.
This isn’t to deny that there are gradients of meaning in people’s work. But there are ways that you can take satisfaction in doing a job well, even if the job is simple or menial. And for some people — not everyone, but, I’d argue, a pretty significant percentage of people — that will be something they can take pride in and make their lives feel more meaningful than would taking an income.
This doesn’t mean that UBI is a terrible idea. There are possible futures in which UBI makes it easier for people to find (perhaps simple, perhaps menial, perhaps ultimately not-very-valuable) jobs that they can take pride in that does the present status quo. But I think that the possibility that work has a certain satisfactory quality that leisure doesn’t is not a crazy idea.
This is totally false. The act of selling lotto tickets ITSELF may not be meaningful, but a job selling lotto tickets is more than the transactive act itself. If you work behind a convenience store counter, you receive quite a few benefits:
1. Regular, more or less civilized human interaction where most people will probably treat you with respect and a few people may even be genuinely friendly, strike up a conversation, became a casual friend, or more. Camaraderie with coworkers is included and often inversely proportional to the shittiness of the job.
2. Shows of confidence and trust from people in positions of authority. You will be handling money, keeping the store presentable, locking up at night and opening up in the morning, training new hires, etc.
3. Gaining tacit knowledge and expertise in the job, which enables you to feel a sense of improvement, of doing something better today than yesterday, even if the task is a trivial as the procedure of paying out lotto winnings.
4. The most obvious benefit to working a lotto counter I can imagine is being able to enjoy the pleasure that other human beings take in the good fortune of winning a lot of money.
I could go on. The point is, jobs ABSOLUTELY provide the stuff out of which the foundations of our identity and self-respect are made, even when they seem superficially meaningless. I won’t say that a convenience store job is great, or that I’d take it, but honestly the biggest reasons such work is so unpleasant is that it is so poorly remunerated. If you were paid a living wage to run a 7/11 you could probably find a way to get satisfaction out of it.
By the way this is all just ripped off of Satre but you get the point.
It is also worth mentioning that I observe that most convenience stores appear to be owned by immigrant families, and many of the shop clerks appear to be junior members of the family, or younger members of the same ethnic group.
That itself pulls in all sorts of added “meaningness” to working that job.
I used to work at a convenience store. I have never heard of someone who only sells lotto tickets, so this is the closest I have to your example.
The most meaningful parts of my day were- when someone would come in and it was obvious they had been crying, I would clown around a little to make them smile, if even for a moment. Or when someone would come in frantic, and yes, I did have what they were looking for, or no, we don’t sell that, but if you go ___ they can take care of you. Or someone would come in tired from travel, and I’d help them read the map to figure out where they are trying to go (this was a year before smart phones became huge).
Sure, these things didn’t happen all the time, but one or another did happen a few times a week, which was enough to give my job meaning.
What you’re telling us here is that the most meaningful parts of your day were ones that weren’t actually part of your job. If you’d just been some random person standing around the store, you could have had those same interactions in the same way.
But the people I made the most impact on, they didn’t talk to the other people in the store. The only reason I had a chance to make their day a little better was because they were forced to interact with me to make their purchase.
What you’re telling us here is that the most meaningful parts of your day were ones that weren’t actually part of your job.
Putting a face on a business the moment a member of the public walks in through the door, is PART OF THE JOB.
Otherwise every store would be replaced with an payment card operated oldskool automat.
There’s the old story about the wandering priest who comes across a construction site. He goes to the first bricklayer and asks “what are you doing?” and the bricklayer responds “I’m laying bricks, what does it look like I’m doing?!” He goes to the second bricklayer and asks “what are you doing?” and he responds, “I’m working to feed my family, what does it look like I’m doing?!” Then he goes to the third bricklayer and asks “what are you doing?” And the man pauses, gazes up to the sky, and says “I’m building a cathedral.” 
Most jobs are crap. Make a narrative out of your crappy job that makes you less miserable. Similarly with relationships, “Love the one you’re with.”
 There’s also the fourth bricklayer, who beats the crap out of the priest for asking so many nosy questions.
Self delusion only holds up so long. Even the family feeder will eventually hit a wall where that no longer motivates him to a meaningful extent.
Maybe the first guy just really enjoys laying bricks, and is amazed someone will pay him to do his hobby eight hours a day.
Is he Winston Churchill?
I’ve had quite a few jobs exactly like that, some of which even had pretty decent pay, perks, and coworkers.
“There’s a deep feeling of shame, uselessness, and incapacity that goes along with being unemployed”. This is something of a cultural factor. I was also Unemployed Partially for a year or so after I was no longer in full time school. There were certainly periods of feeling aimless, but there were periods of feeling incredibly free. It was the variety that kept me going, not the existence of a job per se. Of course, the $$$ was needed after a point, and yes I got a full time (rather than gig) job.
“All right, but apart from the sanitation, the medicine, education, wine, public order, irrigation, roads, a fresh water system, and public health, what have the Romans ever done for us?”
This is the strawman. ‘Aside from the thing my opponents say is the primary benefit of their position, what else does it provide?’
I suggest you look around your room. There’s probably a computer. A desk. Some chairs. Carpet, walls etc. Think of the literally millions of people hours that went into building all that. And building the machines that built it. The mines that brought up the minerals. The smelters that refined them. Even the coders who made the web platform you blog on it. None of it would exist except for the work of thousands of people. Not in the distant past, right now. These people are mostly still alive.
And a lot of the work was not fun. If coding is cushy to you, think of the workers who assembled your computer in some random factory. The miners who pulled the rare ores out of Africa. The bored captains running it back on a dull ship voyage. The clerks in stores who probably hated you that smiled winsomely and told you about Macs for the hundredth time that day.
Does anything you own or use make you happier? Do you think their general availability makes people happier? Include things like hospital services, police, and so on in there. Then making people work is necessary. The alternative case is not ‘having all those things but with no work’.
I think you’ve missed Scott’s major argument, which is that most “Basic Guaranteed Jobs” would NOT be producing (much) positive economic value – if there was something economically viable Bob could be paid to do for a legal wage Bob would accept, he’d be doing it and a “Guaranteed Job” would be superfluous.
Scott is not arguing that most work is not economically valuable, he’s countering the anti-UBI argument that “working” is intrinsically valuable, even if it produces nothing of economically measurable value.
I agree with that point. But I don’t think this is what Scott is saying. See this paragraph, which seems (to me) to basically be saying that people shouldn’t be made to work unless it ignites some self-actualization.
Likewise, the original piece ended with Scott talking about liberating people from work altogether.
You keep leaving out the argument Scott is responding to, which is:
In other words, it is being argued that Bob is better off than Alex, even if they both have the same income, because Bob has a job to go to and Alex doesn’t. Scott is merely saying he disagrees with this.
Your are arguing that Bob’s work has value to other people. I don’t think Scott necessarily disagrees. He just doesn’t buy that Bob’s work is inherently valuable to Bob if he could get the same income by not working.
I don’t think that context modifies what Scott said enough to make my reply invalid. You are ignoring what Scott said. Here’s another example:
He does not qualify this statement or any others in a way that implies he is talking in the restricted manner you’re claiming. Further, if I really must, we can go back to his previous thread:
From Scott Sumner’s post:
> In a very diverse country of 325 million people, no single program will work perfectly. The real question is; “Which program is the least bad?”
What about the question of, “should the US be one country?”
edit: “Counterexample: Social Security. As far as I know, every elderly person gets it, whether they’re a good law-abiding citizen or not.”
I wonder if that’s politically feasible because old people vote and have a stereotype (to some extent true) of being peaceful and law-abiding?
The other question is why is it that self identified libertarians have jumped into the “we can’t have the government do nothing here” pool?
A lot of libertarians are more opposed to government micromanagement than to redistribution as such. UBI being a redistributive scheme that requires very little micromanagement, I’d expect it to be attractive to people with that set of priorities.
(I’d have counted myself among them until recently, although I’m not sure I’d call myself a libertarian.)
As has been repeatedly discussed here these proposals are about micromanagement. How much money to give big city dwellers vs small town folk? How much per child? How much for immigrants and when? A self described libertarian economist should be aware of these, and many other, questions.
That’s nothing like the scale of micromanagement implied by our current welfare system. You’d be replacing a system with dozens of different benefits and enough cutoffs and caveats to it that understanding them is literally a full-time job, with a single benefit delineated in probably a small handful of ways.
I don’t see this as a tenable viewpoint as UBI (or jobs or whatever) isn’t going to function in this way. You can’t replace medicare + medicaid with a UBI unless you also have a national health insurance policy that makes coverage affordable. You can’t smooth housing over this way, so you have some other ad hoc fix, and there are dozens of these things to figure out. Do people in Minnesota get an extra $50 a month in the winter for their heating bills? Do Floridians get it for their AC bills? Does one count as a basic necessity and not the other?
The end result, even if everyone just gets a check after all the sausage making is done, is going to be massive effects on all sectors of the economy.
That’s a reasonable take, but also irrelevant to the question of why UBI’s appealing to libertarians. Once you’ve but-what-iffed yourself into paying Floridans for their A/C bills, you don’t have a UBI that’s appealing in that way. Likewise if you keep any of the existing major welfare programs: to a libertarian, getting rid of those and replacing them with a relatively simple system of cash transfers is the whole point.
You could argue that no UBI is going to be both attractively simple and likely to survive contact with real politics, and I’d actually agree with you, but lots of people are attracted to things that don’t work in the real world.
Why is “give everyone the same money” so hard a bullet to bite? Health care is the only place where it seems unavoidable that people will have wildly different involuntary costs, so maybe there you’d need a universal system outside of cash transfer.
But so what if $X a month gets you a private single wide in Podunk, MO, but only a rack in a bunkhouse in Fancytown, CA? Location is a luxury good. The nice thing about a simple cash transfer is that you can decide which you value more: private space or more desirable address.
Then you probably have a huge number of people who end up in a place where there are almost no jobs and who thus have no chance to improve their lot. The children of these people will share that faith. So you’ll have a permanent underclass in Tent City.
You will also rip apart families & communities even more than now.
What Aapje said, plus it is almost certainly a political non starter. People who voted for the UBI candidate are going to be upset that homelessness is still a problem in their fair city, or they will be upset when sections of the city empty out as 1/5th of the population goes to live in those double wide trailers.
If “family and community” or proximity to jobs is so valuable, then they’ll take the bunkhouse – that’s not exactly a human rights violation. That’s my whole point: location has value, and a local cost of living adjustment isn’t “leveling the field” it’s giving more value to some people for a voluntary choice they made, defeating the purpose of a UBI.
Besides, if everyone moves to rural trailer parks, the cost of living in the cities will go down (or the bunkhouses will turn into studio apartments). And businesses will follow the population out to the former sticks to provide services (and jobs) to the new customer base. Net result is a reduction in inequality between the city and rural area.
Subsidizing a positional good is insanity. If you adjust the UBI for city-living it will increase to infinity.
I’m skeptical of UBI, so don’t take this as an endorsement, and I’m avoiding some pitfalls: but the fact that people move to smaller towns will create jobs in those smaller towns, since they will have incomes to spend.
On net? Probably not as it isn’t spending that creates jobs, its productivity. Spending influences where the jobs are, but not how many jobs there are.
Libertarian economists have already identified that “shut everything down, government does nothing” is a political non-starter and often deprives you from a seat at the table describing what does get implemented.
The diversity of the US is too geographically jumbled to draw national borders around. We’ve gone from North/South to urban/rural, and you can hardly secede from the farmland that surrounds you.
Singapore did, and it seems to be working out just fine for them. The US equivalent would be the secession of the Acela Corridor and Greater San Angeles (probably as separate entities), with the remaining urban areas left as enclaves in a rural-dominated nation. This would be unpleasant for people whose decision to live in e.g. Austin or Raleigh-Durham was predicated on New York and Los Angeles voters giving their culture a decisive voice on the national stage, but it is a perfectly workable arrangement.
It isn’t likely to happen, of course, but not because of the intrinsic inseparability of city and farm.
That’s not a great model. Singapore was more different from Malaysia than New York City is from the rural US. Its marriage to Malaysia was always difficult, and the dominant populations weren’t even the same race in a place and era where that was very important. Also, the boundary lines were a lot clearer, as Singapore was a separate polity, and an island. I can’t imagine the Central Valley going happily with Greater San Angeles when it packs up and leaves, and that raises all sorts of interesting questions.
I also struggle with the “universal” part of UBI. OK, let’s say that we give all people living in the USA right now (citizens, Green card holders and legal and ilegal immigrants). Even that is unlikely. I think it would only apply to citizens. And even then, as some others said, criminals and drug addicts would be excluded. But let’s suppose we actually give UBI to everybody in the USA right now, and to their descendants, in perpetuity.
But surely this will not apply to people who come afterwards. Because otherwise you would never have enough money.
So if current recipients quit their Macjobs, Macdonalds will not close, or indeed, innovate. They will hire immigrants. And, because there will be a big class divide between UBI recipients and non recipients, they will become enemies. Recipients will want to keep their fast food place while not working in that place, and to keep it cheap, so they will lobby to give as many visas as needed to keep MacDonalds open. Because if the people are not competing for jobs, it will become in their interest to have a permanent poor underclass of people to work while they get their UBI.
This would create and perpetuate a system of an aristocracy and the lesser people (where UBI recipients will get status from being UBI recipients, and thus superior to the newcomers). I do not think that creating a system like that would be ethical. Wasn’t this the point of the Civil War?
I don’t think illegal immigrants will get UBI. Drug users will get it, just like they get Social Security.
The UBI proponents do need to address immigration. The idea of significant immigration combined with UBI is a disaster in the making. What are their positions on immigrants and enforcement? If we have an idle-UBI class but a bunch of work to do and we can’t pay less than $15/hour, there’s bound to be a bunch of illegal immigrants, either a) forming a real caste system where they can never get UBI, or b) an endless stream of “noone is illegal”s adds them all to the UBI system, or c) pretending to support “a” while hoping for “b”.
This answers to those questions need to be nailed down.
If American Indian tribes with per-capita payments are anything to go by, institution of a UBI would likely be accompanied by increased restrictions on who can become a citizen. Per-capita payments from gaming revenues has reportedly led not only to restrictions on joining tribes through “blood quantums” and the like, but to the use of restrictions to disenroll existing members so that the remaining members of the tribe can get a bigger slice of the pie.
If there’s a UBI, I would think there’s no need for a minimum wage.
That outcome sounds very plausible to me, because it seems to be almost exactly what happened to petrostates such as Qatar and Saudi Arabia. It seems to have worked out pretty well for the native citizens of those countries, but most of them still have oil-dependent economies despite migrant workers now making up a majority of their population, which raises serious questions as to whether a country like the US could afford to do that.
Also, migrant workers in those countries have been subject to myriad abuses, with some working under conditions comparable to slavery. So yes, it looks like this does have the potential to make the McJob problem much worse.
Migrant workers dont migrate into worse conditions. I heartily condemn the exploitation of these workers a la Saudi Arabia, but is Pakistan/Afghanistan /Wherever that much better?
I would argue that the point is not so much that Bob is motivated to turn himself into the wise philosopher-king, as you seem to assume is being implied, but that Bob is tired and has something to do all day. The ghettos and banlieus of the world tend to show that young men with nothing to do with their lives don’t sit around eating cheetos and turning into vegetables, they tend to prefer engaging in physical activity, often violent or otherwise disruptive physical activity. So the question really being asked is “Why would you think work doesn’t elevate Bob and make him a better human being” but “Why do you think Alex hangs out with five of his friends menacing old ladies and Bob doesn’t?”
Part time work
One major problem unaddressed problem is funding. I am not in favor of universal jobs, or UBI, but they both have the same problem of producing no value and needing massive funding mechanisms. To this, all that we get in this post is:
I agree that income tax is worth considering. The “politicians will bribe voters with their own money” thing is plausible, but how come there are still taxes? It would be pretty easy to run the federal government without making the bottom 50% of the wage distribution pay taxes at all; why don’t we? I think the answer is something like “to maintain some fiction that everyone must contribute equally”, but that makes the bribe-voters-with-their-own money strategy look pretty powerless, doesn’t it?
For that matter, free universal health care is an example of bribing voters with their own money – how come it keeps failing? So is universal college – how come no one except Bernie Sanders even pushes it? For all their flaws – and they have many – the average American voter seems remarkably bribery-resistant.
The reason that these bribes work less and less is that it has become apparent to the average voter that these things cannot be funded by “taxing the rich”, they never could be. Social Security and Medicare are the closest programs in America and are funded by the fairly regressive payroll tax. A UBI would have to be funded with either a 3rd payroll tax, a national sales tax, or a VAT (as the expanded welfare states in Europe all are). The dirty secret about “taxing the rich” is that it doesn’t work for all the reasons that people are afraid of a UBI’s impact on low income worker participation. If you tax income at a high rate, they switch income for leisure. If you tax wealth they switch to untaxable means, if you tax land values they will shift to more modest abodes. The reason rich people invest in stocks and real estate is not that they love stocks and real estate, its because those things under the current system are safe ways to preserve wealth while gaining a decent return. If you change the system their behavior will change. And if you do it hamfistedly, no only will there be no money for a UBI, there won’t even be any for a military and courts.
Regarding aristocrats being a lazy bunch of dicks, that’s mostly true. But at this point you have to ask yourself, is some genius who is allowed to work on his passion, improving the lives of possibly millions of people, worth more than potentially not having one lazy bum smooching off the feudal/welfare state? I would argue that genius is probably worth a couple of lazy bums being there. Maybe even more.
I dunno, we went a few hundred years with most of the innovation and learning being done by monks rather than aristocrats. But then I guess it depends on the incentives for said aristocracy, for much of their existence the traditional European aristocracy were there to fight and see to it that their ruler had enough troops to solve whatever disputes with the heathens he had this year. Much of the rest of their time was spent playing status games, feuding over whose land was whose and hunting.
I’d argue that it was only later when their social purpose changed (from “The guys who can clobber the hell out of the king’s enemies” to “The guys who have the wherewithal to be diplomats, generals, politicians and administrators in the apparatus of the state”) that their incentives went from cultivating a martial skill set to a more “civilised” MO. Of course that’s not to say there are no cultural accomplishments from before that early modern transition, but that they tended to be from the aristocracy throwing money around for status games than their own work.
Now admittedly: both groups (monks and aristocrats) were supported by the working peasant who often had no say in the matter and whose productivity was essentially taken and used to provide for others. That’s not dissimilar to UBI but I want to make the case for two key differences:
1) UBI isn’t making you an aristocrat. Aristocrats either patronised people who contributed great works or innovations, or did them themselves, because they had vast reserves of money to burn. Status games played for huge amounts of money often have wider impacts, the kind of status games a person getting paid enough money to subsist will play are unlikely to noticed as anything other than a nuisance. Beyond that apart from maybe writing the next great screenplay they’d largely lack the resources to actually produce anything amazing, unlike the aristocracy of old who were generally very very rich.
2) UBI isn’t actually creating incentives for behaviour the same way that the feudal system did in its upper classes. The early feudal aristocrats had a very clear sense of purpose: they were one of the Three Orders of society “Those who fight”, while clergy where “Those who pray” and peasants were “Those who work”. According to the clergy who wrote this for nobles the first two were every bit as important as the last one and thus the whole system was justified as long as everybody did what was needed of them. So the aristocrats developed martial skills because not only did the king want them for that, but because it was what they were there for.
UBI isn’t creating an aristocracy with any purpose beyond “Keep existing” and “Like, find yourself maaaan”.
Not that vast. Most of us posting here are fabulously well-off by the standards of your average pre-modern aristocrat, in all terms except for social status and land ownership. If you plucked a 15th-century landed knight off his horse with your time machine, handwaved away linguistic barriers, and took him shopping for food or clothes or hand tools or something else he’d understand, you’d blow his mind.
Even famously wealthy people like the Medicis weren’t super-rich by our standards, not in terms of material possessions. What they did have was some money, a need for status goods, and a cultural context where contributing to the advancement of art and learning was high-status.
And servants and underlings. Put that together with land and the aristocrat looks a lot better off. Sure, I have a dishwasher and a stove and power tools. The aristocrat has cooks, dishwashers (people), and perhaps blacksmiths.
That comes out of less local inequality, not less wealth. I don’t know anything about how well-off you are, but if you’re a middle-class Westerner you can afford all the servants that most early modern aristocrats would have had. You just need to move to a third-world country, and tolerate your servants living in early modern-like conditions.
I can’t move to a third-world country and buy a viable estate, and I lose my income if I move there. Those I know who have moved to such places (admittedly relatively rich ones like Costa Rica, but you said “early modern” not “Congo”) do not have servants at all.
Maybe you can’t pull it off in Costa Rica, but there are places where you can. I have relatives that did while they lived overseas, though they’re back in the States now. Experienced it firsthand for a few weeks while visiting (it’s pretty weird to American sensibilities; feels much less, uh, aristocratic than you’d guess from watching Downton Abbey).
Income is a problem, though, yes, if you don’t work for an institution with a local presence. And in many countries it’s difficult to buy land as a foreigner. This is more a “maintain local standards of middle-class living while working for Terrible Marching Powder Exports, LLC” thing than a retirement plan. But I still think it suffices to prove the point about wealth.
I don’t generally refer to the martial prowess of knights and the like when I think of positive contributions of aristocrats to society. Neither was praying and yet monks, who basically were free to do what they wanted in ways peasents weren’t, were doing most innovations and learning, as you said yourself. There weren’t many incentives to do what we would call science and some against it, yet it still happened. It’s worth looking into how many people would contribute nothing of worth to society vs. how many geniusses would do massive contributions which they otherwise wouldn’t have but it seems like it could be a netpositive.
what is the likelihood that we’re actually somehow missing geniuses at a rate of 1 to 10 lazy bums? or 1 to 100? or 1 to 1000? we put kids through 12 years of compulsory education, and then many (most?) states will guarantee admission to state universities if you manage decent test scores, with plenty of scholarships and loans. and if the genius has any proclivity for computers, they can go take short tests online and get lucrative tech jobs. i think there’s an ad for that up in the top right.
and if “locate geniuses, make sure they’re doing productive work” is a significant component of UBI/GJ schemes, are we sure we can’t just do that part better, for cheaper? (permit corporations to give kickbacks to high school teachers for referrals to students?)
There are plenty of criticisms to be thrown at modern, American education. Among those are costs and inequalities unrelated to merit. Say, a guy from a poor household decides to work instead of spending time and effort on education. Don’t tell me he just needs to get his stuff together and he will get into an university of his choice, even if he has the all the required abilities. With UBI his family won’t need to worry about money so much, he can put all his effort into educating himself and end in a much better position to help his family anyway, who in turn might encourage him in this. Then there are just people who will dredge through jobs they themselves and many others see as adding much of worth to society. With UBI they can put time into passion projects, which might be varying degrees of good. It’s not just about getting geniuses out there to do what they’re good at, they could just do something small but nevertheless positive which will weigh against some people doing fuck all.
Don’t tell me he just needs to get his stuff together and he will get into an university of his choice, even if he has the all the required abilities. With UBI his family won’t need to worry about money so much, he can put all his effort into educating himself a
He certainly could do that. Will he? The comment you were replying to was wondering that. Certainly, lots of people who are below the median hate school. I mean, really hate it. They aren’t Waiting for Superman.
Getting the UBI is about getting rid of the make-believe system of hoops we put onto welfare programs to make sure the recipients are “worthy”/”deserving” and pretending they are just about to become incredibly valuable workers as soon as they get some college credits. That’s all a lie we tell ourselves to make the system palatable. Getting rid of that lie gets rid of the welfare trap, but it definitely doesn’t make the lie true.
People do respond to incentives, though. So if you have a welfare system whose incentives discourage people from getting married when they have kids, or taking a second job to make more money, or saving money back for an emergency, then you will get less of all those things. That’s an argument for UBI, but it’s equally an argument for making our existing poverty programs smarter so they don’t create so many perverse incentives.
There are many things people can do, which they don’t because of other reasons than laziness. If the choice is between helping the family out or trying to get an education, which isn’t as much of a guarantee of success as it might have been, I don’t blame anyone who chooses family. Even with scholarships it probably won’t make any money. Sure, there people who wouldn’t work on themselves even if they were given the chance to do so without much more negative consequences than the work they have to put into it. But this is about whether making sure everyone gets the chance will be a net benefit to society, not whether there are any people at all who would lay on their collective asses all day if given the chance.
But this is about whether making sure everyone gets the chance will be a net benefit to society
We already had those goalposts with universal education for the kids. Now we want it for the adults. What’s next if/when this doesn’t work?
not whether there are any people at all who would lay on their collective asses all day if given the chance.
Again, the question isn’t whether there are any people at all. The comment you replied to asked “1 to 10 lazy bums? or 1 to 100? or 1 to 1000?” You are strawmanning by pretending he said there would be none.
If you don’t care about the ratio and it’s worth funding a million UBIs in case one of them decides to pursue a passion, then that’s the answer to his question and it’s good to know.
> It’s not just about getting geniuses out there to do what they’re good at
if it isn’t about geniuses, i think you shouldn’t point at it as a feature. to the extent you suggest they’re a valuable part of it, i think those of you making that suggestion should have to explain where you think these geniuses are hiding untapped, and ballpark how many you think we’re going to uncover.
> There are plenty of criticisms to be thrown at modern, American education.
i went through the second worst school one of the more abysmal education systems in the US, so i’ve got a pretty remarkable number of issues with said system. but i didn’t know anyone who would’ve succeeded academically in college _not_ do well enough on the standardized tests to guarantee admission and loans to the state universities. the bar is just so low that many people don’t even realize it was there.
> Don’t tell me he just needs to get his stuff together and he will get into an university of his choice
i don’t appreciate your suggestion that i said anything of the sort. it’s completely absurd, there’s not even space in the top universities for everyone to get that. (and considering the cost of top universities, you’re going to need free schooling on top of your UBI scheme for these UBI-funded geniuses to get any benefit from mere admission to their top choices.)
however, just getting your stuff together is generally enough to get into state universities. where if you keep your stuff together, and are actually one of these geniuses that we maybe are or maybe are not concerned about, can get very near to the grad school of your choice.
Geniuses working on their passion is a feature of the current, non-imaginary system we have today. UBI optimism seems to be grounded in the belief that there is a huge, untapped pool of genius too busy working very low-skilled jobs to develop fully, which doesn’t pass the smell test to me.
I partially disagree. There are too many figures we now worship as “successful” who came from privileged backgrounds that allowed them to work on passion projects , turned into businesses or inventions etc… not to mention, much of that genius would be cultivated by a encouragement and experimentation of learning and exploration at a young age. Hard to foster that when you have to work and do school and take care of siblings, etc….
How much of our approval of UBI turns on whether we expect people liberated from work by it to either:
a. Do things we find admirable–start businesses, do independent scientific research, write open-source software, produce interesting art and music, raise healthy and happy children, do worthwhile and impressive craft projects, etc.
b. Do things we find not-so-admirable–play video games, watch TV, do lots of drugs, sleep around, get drunk a lot, bum around the country couch-surfing with friends so you can vary your sleeping around/getting drunk/using drugs environment, etc.
I think there’s a lot of moral reaction to UBI that comes from this question. And the hard part is, most people are probably never going to start a new business or produce great art or music or literature or science or software–the choice is between them stamping out plastic forms at the factory, or staying home watching Jerry Springer while drinking cheap beer. For a few people, the freedom of UBI may very well give us more products of genuis, or at least high-quality competent craft. But most people aren’t competent craftsmen at anything we want, and hardly anyone’s a genius, so most people won’t be producing that stuff.
 This is the editorial “we.” Unless I can convince you all to elect me king, in which case it’s the royal “we.”
Speaking for myself, almost none. Unlike Scott, I expect very little of Case 1. I find Case 2 annoying when done by people who could be making more of their lives, but some of them genuinely can’t, there’s no reliable way to tell the difference, and I’m not near annoyed enough to go full Amalric/de Montfort on the lot of them.
If I’m not going to kill them all, or leave them all to starve, I want the cleanest way to keep them out of my way while they do stuff I’d find annoying if I have to pay attention to it. And ideally give the capable ones a chance to change their mind even if not to the extent of going full Case 1. A decent UBI would fit that bill better than most any other proposal I’ve seen.
First, NOT everybody is eligible for social security (or medicare) – in both cases you have to have paid taxes (or had a spouse who did.) As a practical matter it’s about impossible to work anything like a legal career without being eligible for SS or MC, but it IS possible. And often the “bad citizens” will be the ones who did not pay withholding or self employment tax….
Second, the entire UBI and UJ discussion misses a key aspect of human nature. Money is a general claim on the output of the economy, and is generally awarded for doing something of value to other people.
Makework jobs, or a “universal” income, risk creating an entire class of people who in effect prove they’re of no use to the rest of society. The “you are NOT going to make ME pay for that” response is what drives the “tax the rich” nonsense – “tax the rich until they aren’t rich anymore” won’t provide enough money, AND will disemploy all the producers of things the rich stopped consuming.
You think racism and race riots are bad, wait until anti-UBI-ism gets its own version of the KKK and living on UBI becomes a way to get lynched.
UBI and UJ are NOT some kind of “utopia” – they are both forms of dystopia.
Have A Nice Day
And exactly what percent of the economy involves only “wealthy person consumption”? Comparisons with the KKK fall flat. The KKK was formed in reaction to the newly empowered black class in the south, as the whites wanted to enforce control that they had lost in the war.
One quibble here: “Given that the tax load to fund a basic income plan would likely fall on the upper percentiles or deciles…” Sorry, this assumes that the federal government is provisioned by tax revenues. Really? Where do people get the dollars with which to pay those taxes if government doesn’t spend them out into the economy first? Taxes make the dollars valuable, they don’t (and *obviously* don’t) provision governments that are sovereign, fiat currency creators. No more taxes would be needed for a job guarantee.
Besides the fact that Friedman’s economics has been tried and failed in the early ’80s (see Peddling Prosperity by Paul Krugman for the details), his BIG (“basic income guarantee”) is a non-starter too. Check out the British experience with the Speenhamland System.
A job guarantee has been successfully implemented in rural India and Argentina. Many commenters are correct in pointing out that the devil would certainly be in the details, but the idea that it has been tried and failed–especially as Bernie Sanders proposed–is specious.
Besides the hollow argument that the “tax load to fund a basic income plan would likely fall on the upper percentiles or deciles,” there’s some presumption that those upper folks haven’t somehow been the beneficiaries of lots of public policy goodies. Here’s a little factoid of interest in that connection: David Cay Johnston says that the bottom 90% of incomes have received a real annual raise of $59…since 1972. Productivity has risen since ’72, but all of the real income gains have gone to the “upper percentiles.” Johnston says that if that $59 were an inch on a bar graph, the real income gain for the upper 10% would be 141 feet tall. For the upper 0.1% it would be five miles high.
If that doesn’t tell you that the fix is in, I have some swamp land in Florida that would be perfect for your winter house.
If you work at your 100K job one year in ten, you will find yourself permanently shut out of 100K jobs at all frequencies. The gaps in your resume will be Bayseian evidence that there is something wrong with you (even if there isn’t actually anything wrong with you) and you will probably be out of date on the newest technologies anyway, unless you work on them in your spare time for free, and even if you do, “I did X but wasn’t paid for it” doesn’t look very good on a resume compared to being paid.
Aren’t Native Americans basically the least successful population, on many measures, in the US today? And they also happen to be the only ones receiving something like a UBI? Yet the conclusion is it sure seems to help? I mean, I’m sure from the perspective of those receiving it, it seems better than living the exact same life minus that income, but doesn’t there seem to be a significant probability of it being causative (because “I could move off the reservation and pursue a career, but there’s no guarantee I’ll succeed and I might lose my current stable, if meager meal ticket+all my friends and family are on the reservation living off their stable, meager meal tickets”)?
Of course, it is possible that Native Americans actually would be worse off without this. But when the only instance of trying the thing you want correlates to such bad outcomes, it seems it should give you pause.
According to this article, out of 576 Federally recognized tribes, only 238 tribes operate casinos, of those only 72 tribes give per-capita payments, and the size of the per-cap payments varies considerably. So all indications are that only a minority of Native Americans receive a significant basic income.
It would be interesting to try to figure out whether the problems Lambert describes below (brain-drain, etc.) are any worse or better in those communities which do offer something like a UBI as compared to others.
I hear there’s a really bad geographical poverty trap in a positive feedback loop with a brain drain.
All the most productive people leave to get better jobs elsewhere, then all the good jobs leave, which strengthens the pressure for productive people to leave. (source: some Native American person on AskReddit)
I worry that this could be an issue with flat UBI, but in terms of cost of living rather than raw money. Only the highest earners can afford to live in the Big City, where all the good jobs are, leaving the rural population trapped by house prices.
I’ve read that a lot of Native American poverty is caused by poor property rights, with their land managed by the state or the tribe such that individual incentives to improve property are lacking. UBI-like programs may be part of the problem too.
Most of the objections to a BI were leveled when the draft was abolished. Nobody thought anyone would voluntarily choose to serve in the military. It’s funny how that was proven wrong. Modern warfare does not take tons and tons of soldiers. It takes a small, elite core of highly motivated/trained/disciplined troops with some very cool toys… and as time marches on, more and more fighting will be completely unmanned (drones, cyberwarfare, EMPs, etc.)
In 1818, the majority of the public had to be actively involved in generating their own food (i.e. subsistence agriculture). Today, in the developed world at least, something like .2% of the population is capable of growing more than enough food for everyone in the country. David Friedman doesn’t know what he’s talking about. A future where a very small number of people plus machinery/robots/AI can generate almost if not all of everything we need for basic survival is not infinitely far off in the future; it’s basically already here.
The fear that a BI will create or intensify an unsavory underclass subculture that fights for status… well, funny me, last time I looked that already exists in every nation on the planet, with or without jobs within the underclass.
The fear that a BI will cause birthrates to plummet… last time I checked with the state and condition of our planet, quality of life in grossly overpopulated metro areas, etc., that wouldn’t be such a bad thing. Without a BI, whenever people become reproductively educated, they choose to have fewer and fewer children ten times out of ten–even including the very religious. That should tell you something right there.
The fear that a BI will incentivize vices within the new layabout class… last time I checked, PLENTY of destructive vice comes out of people trying to blot out the misery of their work by desperately seeking escapes.
I’m not saying there are no legitimate arguments against a BI (probably the best one, IMO, is that it will lead to severe inflation within the housing market)–but the vast majority of those that are getting promoted in this comment section carry less weight than a baby hummingbird’s down feather on Jupiter.
Just because it’s bad now, doesn’t mean it can’t get worse.
The truly unsavory underclass will do unsavory things for status whether they are dead broke or on top of the world financially… Aaron Hernandez anyone? My guess would be that *overall*, lower-class folks with less fear for their own security will be less tempted to engage in antisocial activities–but even if the exact opposite happens it won’t be the BI’s fault, it will be the fault of the underclass culture.
I’d love to see a comparison of the number of folks that get into alcohol, substance (legal or not) abuse, unhealthy sexual behaviors, etc. because they have all the leisure and idleness they could ever want or need and those that do because their miserable rat-race, child-support, alimony, credit-card-debt, work-injury-caused-chronic pain-addled lives are so wretched that they will seek anything, no matter how damaging, to alleviate some of it. My guess is that the latter far outweighs the former.
If we do go with the “barracks” approach, we need to provide a somewhat increased stipend if you move out, otherwise we have a welfare cliff again. Equivalently, we can just raise the basic income and charge a small amount for a “barracks” apartment.
Because land supply is completely inelastic and many desirable living locations have limited ability (for zoning, NIMBY or space reasons) to build out significant amounts of new housing. People will still want to live in the nicest areas they can, and to do the degree they attempt to do so, increases in nominal incomes means greater nominal dollars spent on rent. We should probably expect lower housing costs for the wealthy (as their taxes rise sharply to support basic income and so their purchasing power will fall) and higher housing costs for the bottom 20% or so of households.
Thanks for the response. I think however it is possible to produce evidence that voters can be bribed with their own money (or at least other voters’ money). I should admit as this point though that bribe here might be interpreted as legitimate or necessary government spending by some readers…
You give us three areas to consider: college, healthcare and taxation. Free college is the hardest sell since a majority of voters will not directly benefit from this. It is also worth noting that there has not been, to the best of my knowledge, any proof that the increase in GDP that people argue would be the result of free college would not simply reflect the benefits of a college education accruing to the recipients with no change for the non-graduates partially paying for their education. Combine this with the reluctance of the university sector to be too tightly controlled by government through state control of fees and you get a difficult case to make to the electorate as a whole.
But there is evidence that for that part of the electorate that would directly benefit from free college there is a susceptibility to being bribed by the offer. Not for the last time here I’ll draw on UK politics for examples. The obvious one here is the 2017 election where the Labour Party made the bold promise to scrap student fees and repay existing debts. Despite the fact that the cost of this plan was challenged as unrealistic, on election night Labour did particularly well in seats with high student population, which looks to be a result of this commitment. The opposite effect to this is visible between the 2010 and 2015 elections. The Liberal Democrats, up to 2015 the third party in UK politics, went into the 2010 election with a promise to reject student fee increases to c. £9,000 a year very much at the front of their campaign. As it turned out the only viable electoral outcome was a coalition of the Liberal Democrats and the largest party in the new Hose of Commons, the Conservatives. As part of the determination of the programme of government for the UK’s first coalition since 1945, the Liberal Democrats effectively agreed to higher student fees in return for a referendum on a different voting system (they lost that…). In the 2015 election, despite being part of a broadly successful government, the Liberal Democrats lost 80% or so of their parliamentary seats. Their ex-voters overwhelmingly cited the student fee issue as a cause, both in polls and anecdotally (I have a close relative who still won’t vote for them on this basis). They had attempted to bribe people and left the voters angry that their promised bribe hadn’t come off. So free college does appear to act as a bribe for some of the electorate.
Free healthcare also seems from a UK perspective to be an area where voters can be bribed. Whilst the UK National Health Service (NHS) is undoubtedly popular with a proportion of the population, logically a system with relatively poor outcomes and some horrendous examples of institutional disdain for consumers should be something that voters would be prepared to challenge. Yet since 1950 at least no-one has entered a UK general election with a position of replacing our centralised free healthcare system with anything else, although some reform has happened anyway. Indeed at every election Labour tend to spend resources trying to convince people the Conservatives will destroy the NHS (oddly, since the Conservatives have been in government twice as much since Labour since the NHS was founded, and we’ve still got it), which since this happened even in the media-savvy and politically astute period of Tony Blair’s three election wins seems to be a strong indicator that they believe free healthcare is an important factor to voters. Unlike free college, free healthcare has not been politically tested in the UK, but I think this stands as an indication that politicians feel they cannot overcome the bribe to voters inherent in the NHS, and I’m inclined to accept that view.
Taxation is a different issue perhaps. As everyone pays taxes, so long as a sales tax is in place, then it’s difficult to produce a body of voters for whom this is in effect an issue where they receive free things, and any attempt to produce such a group will likely unite a larger group of actual or potential tax payers against them. The election of socialist governments might be case for taxation being used as bribery but that analysis is overly simplistic and unfair to socialism (not a line you’ll see from me often). So long as most people pay taxes though its unlikely that taxation can be used to effectively bribe voters: arguably it has to be spending beyond the tax take that does this nowadays. And a proposal to reduce tax payers to the benefit of lower earners would likely be destroyed by an alliance of the aspirational and the successful in society, backed up by the failure of just about every high tax rate for the wealthy plan ever implemented.
As the tax issue proves, voters are not necessarily easily bribed. But as the continued existence of a postwar planned government system in modem Britain in the form of the NHS proves, it can be unthinkable to remove a bribe that is in place. The implementation of UBI would likely fall into this category as well. Considering even the promise of free college had discernable political effects with perceived betrayal punished, I would be cautious in assuming UBI could ever be unwound once implemented. If taxation is the nearest analogy to varying the level of UBI then my fear about this being an effective bribe may be less valid however. But I fear that a UK-centric view of the issue doesn’t allow us to suggest UBI is going to be something that won’t work as a bribe to voters.
More optimistically though, note that the offer of free college was defeated in two of the last three UK elections (it wasn’t on the table that I saw in 2015, although it might still have been Liberal Democrat policy). I think just as Margaret Thatcher won elections on the basis of breaking the regulated economy of the UK a postwar consensus, the right case for reforming the NHS might get a favourable hearing from the electorate here, who live with the NHS but don’t venerate it. And the tax issue does seem to prove voters are not always easily bribed. So I can’t honestly say UBI can’t be tried because I’m sure it will be used to bribe voters, for I don’t believe voters are that simple. However, it still requires caution as some bribes to voters do effectively ensure their own existence and can become unchallengable fixtures of life, for good or ill.
After skimming through this, I see that nobody mentioned the, in my view, historically most likely scenario.
After this measure is passed, most poor people would quit their jobs (here SA is disingenuous: many poor people find their jobs meaningless and unsatisfactory and would quit them at the first opportunity; however, this doesn’t mean that their jobs don’t give their lives meaning, whether they perceive this or not; some people never grow out of the mentality that effort is to be avoided at all costs; these are the people who usually end up doing the most unpleasant jobs in current society).
Due to this and other reasons, there would be a big immigration wave into the US, made of people seeking to qualify for the UBI by becoming privileged American citizens: work some meaningless job for 5, 10 15 years, or be homeless, beg, steal, whatever it takes, then qualify for the UBI and never have to work again.
Both business owners (due to the scarcity of drudge labor) and UBI Americans (“who are these people to think they deserve the same rights as we do”) would be in favor of UBI limits for newcomers. Eventually, US will split into several classes: people who have jobs they themselves consider to be meaningful, UBI people, and 50-100 million lower-caste Americans, the descendants of permanently underprivileged immigrants, doing all the unpleasant jobs.
The UBI people would vote for any politician promising to defend their privileges. Their main occupations would be riots and election-time quarrels. The important thing here is not the size of the subsidy (it may be barely livable), but the fact that UBI holders would be citizens with full rights, hence better than the non-UBI holders doing the actual work.
And what about automation? Somebody still has to run the machines and it won’t be the UBI holders. Indeed, so far the main effect of automation is to move dirty and unpleasant jobs out of sight, where they don’t bother bobo sensibilities (to China, Vietnam, Honduras, and the famous Amazon warehouses). Work will get / is getting a bad reputation again, as something that only slaves, servants, and non-citizens do.
Indeed, UBI beneficiaries would probably derive a lot of satisfaction and meaning from this arrangement. But I wouldn’t necessarily want to live in such a place.
Historical analogues: Athenian democracy, late republican and imperial Rome, Alexandria, Southern US until the 60s.
To what extent is the modern American military already a Basic Jobs guarantee? This isn’t a rhetorical question, I’m nowhere near familiar enough with the military to know how difficult it is to get in. I have heard that it’s a relatively common career path for poor people with no good alternatives, and it seems to pay pretty well considering how many of your needs are paid for, even if you’re stationed somewhere that isn’t a way zone (like Germany, South Korea, bases inside America, etc.). Most military personnel aren’t even getting shot at – some 80% or so, I think, are never anywhere near actual conflict zones.
Anyone with experience here know what the chances are, as of now (with what seems anecdotally to be a demand for military personnel that outstrips supply), of an average 18-year-old getting accepted if they want to join, assuming they aren’t picky with what branch they go in to?
The US military doesn’t take people it thinks are outright stupid (i.e. a low score on the ASVAB, which is about half IQ test and half vocational skills questionnaire), and it has a bunch of other requirements which are in part designed to weed out people from habitually criminal subcultures — highly visible tattoos, for example, can be a problem. Ditto drug use or a criminal record. Exact standards vary somewhat depending on the situation: they tend to be looser in wartime for obvious reasons. Can’t find current numbers for recruitment vs. application, but during the War on Terror the accession-to-application ratio was usually around 0.6:1.
It can be a good option for poor people that have their shit at least minimally together. A lot of my poorer friends from high school went into it. But it’s definitely not open to everyone.
(basis, I have immediate family currently in the US military)
The days of “join the army or go to prison” are long long over.
The US military has many filters, starting with the fact that most of the people who they don’t want won’t apply in the first place, then the recruiters get bad metrics if too many of their recruits don’t meet the bar, standard (and not easy) bars to hit for entry, and higher and harder bars for graduating from basic training.
The levels have been lowered some, especially for basic infantry positions, but if your needed practical and book smarts and discipline are not sufficient, you will be an active risk to the lives of your fellow soldiers, and they are going to know quickly, and will have Opinions that will be hard to ignore.
That said, if you have the necessary baseline health, stamina, brain, and ability to be disciplined, they will love to have you, and it is in fact still a working latter up for 18 year old boys who want to escape from whereever they are from, and have not yet accumulated too much damage from where they are from to get in.
What about women? Is it easy or hard to get into the military as a young woman?
Anything I have to say about that would be both uninformed (all of my family members in the military are married males), and would be unwise to have in print for just anyone to read.
The modern American military is too small as a percentage of the population to act as basic jobs and each service member is too expensive.
There are 1.3 million active duty service members out of a population of 327.8 million, and many of those 1.3 million are people who are in the military out of choice rather than necessity and could easily be working elsewhere. Due in part to its volunteer nature, the military is extremely expensive, costing the taxpayers over a quarter million a year per service member if you include reservists and national guard along with active duty.
I cant join. Wouldnt pass the hearing test. How does that benefit yours truly? Not very universal.
Thanks everyone. “To very little extent” seems to be the answer – and I somehow forgot that older people don’t really have this choice.
My partner can’t join due to health reasons, which don’t prevent him from working pretty much any min wage or office job. (heart issues plus thyroid-induced-obesity)
> In my ideal system, we would propose some sort of inherently progressive tax at some fixed percent
A common assumption is that increasing taxes leads to higher collected tax income. That’s very much not true, as the French and Gerard Depardieu colorfully illustrate. Companies and rich people (or any entities with accountants, for that matter) will simply switch to a different pattern with less costs.
> It would be pretty easy to run the federal government without making the bottom 50% of the wage distribution pay taxes at all;
No it wouldn’t. Work is so heavily taxed not because it’s a good idea (it’s a very bad one) but because it’s relatively easy to tax. Again, the separation between people with and without accountants. And with twice making the same assumption, I have to note that it’s very very dangerous to create a high edifice over a wrong premises.
My experience with both UBI and job guarantees. Well, probably not something new, but it’s right under my nose and painfully relevant. I live in Romania, and right now we have a (mostly corrupt) socialist party in power. Due to a combination of generational change, arrests and internal struggle they ended up not particularly competent at governing – our current prime minister is a very sad joke. However, I predict they will win the next elections in 2.5 years.
Why? They’re pursuing a shameless strategy of killing every investment possible, and redirecting the money in state pensions (UBI) and civil servant salaries (job guarantee). One of the scandals this year was them actually trying to convince the central bank to print money.
Obviously, everybody who got a 50% raise because of them will vote for them again. Almost everybody retired as well. Private sector on the other hand is mostly away due to work migration – some in different cities, quite a lot abroad (economy being shit and taxes high). In legislative elections you need to be in your home town, and a supermajority don’t have their papers in order – elections are pretty much the only reason to do that.
It’s easy to talk about the abstract dangers of “UBI can’t be canceled” and “UBI-dependent people will vote to increase it”, but looking at it when it’s not abstract… let me tell you, it’s bad.
I think a better way to start basic income would be to allocate a limited set of funds in an account, that people can draw on at a certain rate per year. Say $48,000 in total allocated to all adult citizens, and any amount can be withdrawn for any reason, up to $2,000/mo. In terms of cost, if 15 million people are using it at one particular time and drawing an average of $1,250/mo, the total cost is $225 billion or about 1% of GDP. If we use this account to replace unemployment insurance, then the net cost is even lower.
This helps with all sorts of problems people say require a basic income. If your work is terrible but doesn’t pay enough for you to switch, you can transition to the new job by drawing a few hundred bucks from your account. If your car breaks down and you need either $3,000 repair or a $3,000 new car, you can take out $2,000 this month and $1,000 next to cover it without loading up the credit card. If you’re unemployed, you can take out $1,200/mo to help offset the hit to your savings. If you want to stay home for a year or two after childbirth, you and your husband have a source of income. If there are no jobs in your town, you can take out $2,000 for two months and use the proceeds to help move. If you’ve been denied disability, you can withdraw money so that you aren’t completely out of luck while you appeal. If you’ve run out of money, perhaps a friend or relative would be willing to withdraw some to help you.
However, the funds are temporary so there’s no incentive to quit your job. The amount you withdraw is variable so you won’t have instances of people getting more than they need or less than they need (as $2,000/mo is higher than most proposed basic incomes). The cost is low, so no need to drastically increase marginal tax rates. There’s no need for a complex bureaucracy as the program is universal and anyone can withdraw up to $2,000/mo for any reason. It doesn’t provide a reason for landlords to jack up rents.
This program could be expanded over time simply by adding more to people’s accounts after a few years when everything has gone according to plan.
I see a lot of booze and strippers being bought during those two years.
I’m afraid that’s an unavoidable consequence of any basic income scheme.
On the plus side, when compared with a full basic income, it is only two years of waste rather than a lifetime of it.
There was a version called “The Stakeholder Society.” https://www.salon.com/1999/04/28/ackerman/
(I told you guys that UBI concepts were around 20 years ago. This was a popular one that I debated often with friends.)
If it was implemented by an alien on his spaceship orbiting Earth who isn’t worried about being voted out of power, I think it could work. You’d have “the maserati effect” as all the 18-year olds buy something flashy and then they’d have nothing and too bad. But implemented by people who can be voted out of office is something else.
“This definitely sounds like what would happen in the case of a captive audience in a world with no ability to increase housing stock. If you relax some of those assumptions, I fail to see why rent shouldn’t reach a balance between supply and demand the same way other necessities like food, clothing, and gas do”.
One possibility is that the main beneficiaries of the UBI would be those who are currently too stupid, ill-educated, naive, young, disabled, depressed, or mentally ill to avail themselves of the countless opportunities already available: the military (as someone points out), college scholarships, training programs, a flourishing economy, etc.. Then there is no reason such people wouldn’t be taken advantage of by unscrupulous landlords even after they obtain a UBI. Maybe honest landlords would prefer not having to deal with such people and would either sell surplus housing stock to unscrupulous landlords or tear it down. Even if the American economy were twice as prosperous, maybe the outcome would be each average American having twice as much living room — and still the same proportion of homeless people, but the price of drugs would shoot up.
Some social welfare beneficiaries may be a captive audience.
Edit: Same goes for food and clothing, actually: some Americans still suffer from hunger or cold, though there are enough food and enough clothing for everyone.
Plenty of disadvantaged people move apartments when the rent goes up. Having a guaranteed source of money to pay rent seems like it would make it a lot easier to move, or to get an apartment with a decent landlord, because it would be a lot easier to pass a credit check or income check (what with always having income – not that some people wouldn’t still waste it, but it would make things easier).
And, as has been pointed out, if you don’t need a job to not be homeless, you can move somewhere rent is cheaper. This is kind of the mirror of how many people retire, where you no longer have to worry about being close to your job and you move somewhere cheap, stereotypically Florida. Personally, I pay a huge premium in rent to live in a big city where I have a high-paying job so I have a commute under an hour. If I didn’t need to work for wages, I could move thirty miles away and halve my rent and I’d still be living in a city with plenty to do, just a smaller one. If I wanted to move to the country – and for me that’s less than 100 miles away, the East coast is a strange place – I’d probably be able to cut my rent to a third the current price and have twice the living place.
Actually, some math – in the city I’m thinking about as the cheap option is, per a 90-second internet search, you can easily get an apartment with 1 or 2 roommates for $500 a month + utilities, and it’s possible to get that number down to $400 + utilities without much trouble. Say utilities are $100/person/month, which is on the high side but not too high (this is average of heat, electric, and Internet. No cable TV, water is almost always free there). That’s (500+100) *12 = 7,200 a year for living expenses, which leaves almost 8,000 for food, entertainment, travel, training yourself, beer and video games, etc. You could even afford a car, although you’d want to co-own it if possible. Of course, a lot of people would be able to bike or even walk for a lot of the year, or take public transit (which exists but isn’t great in the city I’m thinking of). Sure, this takes longer than driving, but it’s much cheaper, and if you aren’t spending 10 hours a day working and communting, you have the time and energy to walk half an hour to the grocery store and then cook a meal from scratch. A lot of the problems of the working poor are less dire if you give then an extra 10 hours a day.
I think the biggest problem here is that you won’t have health insurance, which is a huge problem if you’re an American. I’m not sure how much decent health insurance costs on the free market, or as free a market as we have for health insurance in the USA, but it’s at least several thousand. This is less of a problem if this is fixed, or in a country with socialized health care (and much lower health care spend).
My objection, and I’m ready to acknowledge some ignorance here, is based on the following two premises:
1. The sort of people who post on SSC aren’t so mentally disadvantaged as to be unable to take advantage of smaller rents, better jobs, etc..
2. The UBI is meant to help those in dire straits — e.g. mentally ill middle-aged men who live in the subway and growl at the passers-by, not temporarily inconvenienced recent college graduates who have to take a job at Starbucks and would rather never have to work again.
Yes, there is some unavoidable friction when moving or finding a new job, but for some people it’s much more than that.
My objection is that in practice the UBI will help those who are quite (if not perfectly) capable of helping themselves, but who could still use an extra $10,000 (and other than a certain happy few, who couldn’t?). The people who seem most enthusiastic about the idea, in this thread, are those stuck in jobs they don’t like, for the sake of the money. Unpleasant, for sure, but do we really need a new welfare program dedicated to them?
In other words, it wouldn’t be the libertarian panacea it’s being sold as, because it won’t solve the issue by itself. It would be just another welfare program on top of all the others.
And it would give rise to a huge new bureaucracy, dedicated to making sure that the recipients (everybody?) aren’t spending their UBI unwisely; even if not from the beginning, this would be put into place after the first few scandals. Also to helping them move to a city with cheaper rent, bullying reluctant landlords into accepting them as tenants, deciding which landlords are good, hence allowed to take UBI holders as tenants, and which landlords are abusive, hence not allowed to get their hands on a slice of the UBI pie, etc.. And this is just concerning lodging; imagine this happening in every field of the UBI holders’ lives.
But it would be a great way of getting votes, though, and I can see that many people would vote for it. Getting free money and feeling virtuous about helping the poor, what’s not to like?
That’s a good question.
Opposition to free college makes sense. Many voters won’t directly benefit from it, there’s resistance to subsidizing a service that benefits a particular person when that particular person could pay for it themselves, much of college education today is a wasteful signaling game, and conservative voters in particular hate how liberal most college professors are these days and the last thing they want to do is to funnel money into organizations they view as leftist propaganda centers.
Health care is a harder question. There is tribalism, as you have pointed out, which is surely part of the answer. Basic income has advocates on both the right and left, whereas free universal health care does not. But I’m sure there are other factors.
There is the impact of various lobbyists for insurance companies, doctors, hospitals, pharmaceutical companies, etc, most of which don’t want the boat rocked unless it is favorable to them – and even if it is favorable to them at first, I don’t think it is lost on these groups that once a Universal Health Care program in place, they are at its mercy.
Another issue that most voters already have a health care plan that works for them. A free Universal Health Care program would require eliminating these plans and replacing them, on paper with a better plan, but some voters might be skeptical. There will be no recourse for them if the government says no to a treatment, as the government will be the only game in town. Conservative voters might fear, for example, that the government will seek to euthanize a sick family member to save money while using their tax dollars to fund sex change operations. People with good insurance now might worry that their own access to care will slip under a universal program.
Another issue is that the benefits and costs are highly skewed at any given point in time, and the benefits are opaque compared with the cost. I’ve heard it expressed this way: the real problem with health care is that it costs 20% of national income but no one wants to spend 20% of their income on health care. Also, I believe the statistic is that 5% of patients account for 50% of total costs at any point in time. A free Universal Health Care plan needs to raise over $3 trillion annually (some from existing funding sources but more than half would be new taxes), and would basically amount to doubling the income tax burden on the country. The sick and the low income will surely benefit, but the middle class and higher earners will likely have to pay more than before to make the numbers work.
And of course there is status quo bias, which admittedly affects basic income as well.
I think there will (and has been) a lot of resistance to creating a basic income, but I think there will be far less opposition to increasing it once it is established. A progressively funded basic income puts dollars directly in every voter’s pocket, and more dollars than it takes out for most, and unlike the program itself, incremental changes will not be radical. Most voters will benefit from increases, and the initial basic income probably won’t be enough to accomplish all of the program’s goals. People with disabilities are getting too little, inequality is still a problem, I can’t live well enough to really quit my job and so I’m still oppressed by it, etc.
You’re missing a large, grey elephant in the room. Probably the largest effective block of voting power in the United States is senior citizens. 15% of the population, strong organization, and high voter turnout. And they’ve already got a single-payer health-care system that they mostly like very much, even if some of them are unclear on how it works.
Something like the ACA, which mostly just tinkers with the way younger Americans get commercial health insurance, they can afford to be mostly agnostic to. Any more comprehensive sort of reform, their two questions are, will this affect my Medicare? (answer, yes, any comprehensive reform must), and, if the part that affects me ain’t broke, why fix it?
Easy solution for that: Wait until the Boomers die; Generation X is small, poorly organized, and much easier to screw over.
It’s worth noting that Medicare isn’t a single payer system, as 35% of health care costs for elderly citizens are privately funded.
They do like it, because right now and for the rest of their life they receive far more in benefits than they have to pay out (and for that matter, they also feel entitled since they paid in during their working career). And yes, they aren’t going to want to downgrade from what they currently have.
And in the UK, 17-20% of all health care costs are privately funded. That doesn’t mean the UK’s National Health Service isn’t a single-payer system, as the term is normally used. Almost all single-payer systems allow people to spend their after-tax income on privately-supplied health care, if they want extra, and many people do.
Medicare’s particular flexibility on this subject (combined with the fact that its recipients are not the ones paying the tax that supports it), makes it a particularly good deal for a big chunk of the US population and so an obstacle to any broader single-payer system.
Medicare doesn’t directly pay for even 65% of total elderly health care spending and leaves out whole categories of care. It does not cover long-term hospital stays or nursing home care, and also excludes certain routine things such as dental and vision.
Medicaid takes care of much of the long term care expenses and VA Health a bit more. The government doesn’t even administer Medicare, contracting it out to various private companies. Further, 18 million beneficiaries enroll in Medicare Advantage for part C in which a capitation payment is made and all of the actual insurance is handled by private companies.
Whatever you want to say about how we handle health care for the elderly in the United States, it isn’t properly described as a single-payer approach. It is multi-payer. That all said, I agree that it is an obstacle to single-payer as people will worry that change will be on net negative to them, either in terms of costs, benefits or access.
The best thing about this post is the restraint Scott exhibited by not rebutting every point. Well played, Scott!
I think the original point (and many UBI advocates) are using a strawman regarding meaningful work. They assume that most jobs suck, therefore most people would prefer to not have jobs. In this view, only the elite 10% or 20% of knowledge workers and entrepreneurs actually have jobs that are meaningful, and everyone is toiling away and would rather just get a basic income.
I think a lot of people derive meaning from shitty pointless work. Working at the box company in The Office isn’t meaningful because you can link your work to some kind of important real world thing. Work is meaningful because you are taking initiative to get a job and go to work every day, and you are bringing home cash to take care of family and contribute to your community. Shitty work can be meaningful in that it allows you to contribute to the sector you actually care about.
People in coal country are almost universally clamoring to have coal jobs back, not to have a basic income. It’s not because the coal jobs are meaningful in and of themselves! The view of elite supporters of UBI that all these people are mistaken in what they want strikes me as patronizing — and ironic, given that UBI supporters claim to be trying to give people more autonomy and choice over how they want to spend their time.
I can think of reasons other than restraint why Scott might not rebut every point.
IMO medical insurance is one obvious place where UBI seems guaranteed to work poorly. The US medical care/insurance market is a tarpit of dysfunction and waste where nobody can tell you what anything will cost, everything is cross-subsidized, the billing is optimized for fraud, and everyone is spending a lot of money playing zero-sum games trying to shift costs between players. We get costs rising faster than inflation every year, which means that (assuming this continues) any UBI that folds in medicare/medicaid will, sooner or later, get eaten just in healthcare costs.
OTOH, without that, we seem to be on schedule to have medicare/medicaid eat the whole budget sooner or later anyway, and in the meantime, a huge chunk of our economy is being eaten by medical care. Maybe
I could not tell how seriously this was meant, but really? Is not our tax structure basically designed to allow those with large assets to keep them? Maybe this is too simplistic, but isn’t conventional wisdom that the Republican party bribes their constituency their own money, while the Democrats bribe with other people’s? This is the caricature in my part of the world. Even if it’s not exactly true in terms of policy, it seems roughly correct in relation to voter perception.
Posts like this remind me that a discussion still needs to be have about what human nature actually requires for “human flourishing” to actually occur within a community. All throughout your replies, Scott, I see what is to me an alien idea: that humans can figure out what will make them happy on their own without a community to help them. By community, I do not mean government, or overlord, or scientific consensus. I mean a group whose members know each other, span 3 generations, and want to propagate, raise children, and generally lookout for one another.
I was looking at poverty rates by age across cities and towns in the Midwest, and I notice that the ages the at which poverty rates are highest, 18 – 24, may also be the ages at which connection to multi-generational social institutions are weakest.
“From a little googling, labor is about 20% of the cost of McDonalds franchisees. Double wages and, if they pay those wages instead of substituting more skilled labor or machinery, and prices go up by about 20%.”
That’s true if you double only McDonald’s wages. If you double wages across the board, then the bakeries that make the buns have their labor cost increase their input cost by 20%, plus their wheat supplier has a 2% increase in labor cost, and fuel for the farm machinery…
Because import prices would remain essentially constant in 2018 dollars, there would be less than a doubling of prices; because higher wage positions wouldn’t double with the same pressure that makes low wages double it wouldn’t be across the board, but raising the cost of labor increases McDonald’s prices by more than McDonald’s cost of labor increases.
And there’s probably a bit more to pricing dynamics than simply across the board price hikes, which we’ll say needs to be 20% for the sake of argument.
First, higher prices mean lower quantity demanded ceteris parabus. Now the basic income might help increase the income of customers and therefore their willingness to spend at McDonalds, but it’s a toss up whether the price effect or the income effect dominates. In any case, it’s possible that the equilibrium price hike might be 25% or 30% instead, to offset lower demand.
Second, there’s the issue of each item having a different rate of profitability. If your family’s typical order which cost $14.99 before basic income is now $17.99, one place you might consider economizing on is soft drinks. These are overpriced at McDonalds and you can get them for less at the grocery store. But McDonalds earns most of its profit from soft drink sales. I’m not saying that’s how customers will respond, but it’s certainly possible, and could complicate how McDonald’s would respond to the introduction of a basic income grant.
Bob is going to have a better life than Alex. This is because he reports to Carl, his boss, who takes a personal interest in making sure that Bob is able to come to work on time. He is also interested in ensuring that Bob is sober enough to do his job during work hours. Debbie, a co-worker, also enhances Bob’s life. She talks to him about his life and shares his difficulties with him. Interacting with Debbie pleases Bob enough that Bob is motivated to come to work sober and make some healthy lifestyle choices. Ed, the local cop, comes in the gas station to buy doughnuts every morning. He becomes acquainted with Bob, and even asks about life in the housing projects.
Alex sits at home, watching TV. Sometimes he plays video games, where his middling scores often make him the target of abuse from Fred.
And Alex’ is going to have a better life than Bob’. That is because Bob’ reports to Carl’, the kind of incompetent lower management that is endemic in business. Carl’ doesn’t care that the only way Bob’ can tolerate working with him is to be constantly buzzed and skive off. Debbie’ mocks Bob’ and his fashion choices.
Ed’, the local cop, mistakenly thought that Bob’ shortchanged him and maced Bob’, because the incentives to be a police officer didn’t change with the economic change.
Meanwhile Alex’ created an online community for nonbinary demiromantic asexual furries with chess Elo ranking between 1400 and 1700 who don’t mind if someone wears 14th century shoes with a 15th century doublet at a Ren Faire. Finally able to interact with people who get them, the group that Alex’ nucleated broadens their skillset and starts solving problems previously thought insoluble, and soon the BART trains always arrive at the station just after you get there and between 60 and 80% of the seats are full at all times.
Fair enough, but what’s the distribution of Bob-Bob’ and Alex-Alex’ in all possible iterations?
I’d like to make a pitch for more aggressive monetary policy. The idea is that the Fed keeps interest rates low, creating higher inflation and higher employment. The labor markets in the late 60s and the late 90s are good examples of the type of environment we would target. High levels of participation, aggressive competition for employees, rapid wage hikes and promotions, every low-end employer looking to hire workers and stretching on who they will take because after a year of training they move on to better paying jobs.
The cost is higher inflation, which you could think of being like the wealth taxes you want to use to pay for UBI. But much, much easier to administer than notoriously difficult wealth taxes.
I think this gets you a lot of the benefits of UBI and BJGs, while avoiding many of the worst effects.
Like BJG it makes it very easy to get a job even if you have the kind of background that can make getting a job difficult. However, it avoids all the make-work problems of the government creating jobs for jobs sake. Like a basic income, it enables you to take time off because in a tight labor market you can always get back in (see earlier comments about programming, which has a very tight labor market). One big appeal of UBI is that it gives an exit option to oppressed workers – but when employers need the workers more than the workers need the job competition will improve the situation.
I’m also very concerned that a generous BJG or UBI would be in conflict with large immigration flows, while a dovish monetary policy doesn’t feel like a handout to poor immigrants. The unique nature of US politics, culture, wealth, and identity that make it particularly well suited to immigration is something we should be careful about losing.
Many UBI proponents are concerned that all of the income in the country is going to flow to the holders of tech capital, and a UBI is necessary to counteract that. Monetary policy is a very natural way to lower the returns to capital and increase the returns to labor.
Why would you expect an economy with high inflation to have either low interest rates or low unemployment? What mechanism are you imagining by which the Fed keeps interest rates low?
Consider a simple answer. We have an economy where the market supply of and demand for capital gives a real interest rate of 2%—that’s the rate at which the amount people other than the Fed want to lend equals the amount others want to borrow. The Fed announces that it will keep the interest rate at one percent. Any time the rate goes above that it will print money and lend it to banks at 1%. The result is an inflation rate of (say) 5%. Once people recognize that and include it in their decisions, the (nominal) market rate goes to 7%, since lenders know they will be repaid in less valuable dollars. At 1% the market demand for loans is much larger than the supply, so the Fed has to print lots more money to create enough to lend out to fill the gap. That drives inflation to 10%, the market nominal rate to 12%, so …
The Fed has actions that affect the interest rate and it can base those actions on what the interest rate is, but it doesn’t control the interest rate, popecon news stories to the contrary.
As a public service, I inform everyone that the word should be parsed “pop-econ” rather than “pope-con”.
So, to start the Fed quite clearly can control some interest rates (Fed Funds, IOER) and has a real, but mixed ability to affect longer end rates (BOJ controlling 10y JGB is the most extreme version). Your argument that the Fed can’t pick a single interest rate and keep it sustainably forever is certainly true.
My point, which I’ve only heard argued by the keep-rates-low crowd, is that the Fed picks an interest rate using a mix of estimating labor market slack, inflationary pressures, forward capital expenditures, and talking to business people about how they feel. And based on how they do that, they should pick a somewhat lower rate. Or raise their inflation target to 3%. Or put more weight on low labor force participation.
Using real rates as a model to think about Fed policy can be quite helpful. But the idea that there is a single correct level divined by thoughtful technocrats gets tough to translate into the real world. There are different inflation and unemployment rates in different sectors, it’s unclear what the impact of Fed policy will have on the economy, inflation itself is a fuzzy concept, and predictions are hard, especially about the future.
Given that level of uncertainty it requires the Fed governors to balance competing concerns and risks. Some prioritize stable inflation more, some prioritize low unemployment more, and given that the Fed has undershot its inflation target and overshot its unemployment target for roughly a decade, I’d say that some prioritize not admitting error.
The other issue with uncertainty is that globally low real rates means we are much closer to zero nominal rates, so the probability that we hit 0 is much higher than it used to be. So even if rates/inflation target are appropriate in the base case scenario it may not be appropriate on a probability weighted basis.
And if I can put my polemic hat on for a minute, the Fed has spent a decade where the economy fueled massive corporate profits by providing cheap labor and cheap debt. Now they are putting the breaks on the economy the minute it appears that Labor might have an increase in bargaining power against Capital (that’s inflationary!). After years of falling employment-to-population ratios and below target inflation, the minute it seems we might be above target inflation the Fed becomes uninterested in seeing if the economy can pull millions of out of work Americans back into the economy.
I stopped reading comments about 60% through, but I just wanted to sign on in different ways to what both Leonard and Edward with scissors spelled badly mention.
“If you want to make the argument for work, you have to argue that it does something other than turning Alex into Bob. ”
No, you really don’t. And whenever I think that someone with these views might be in charge of these policies, I get nervous.
Permanent,non-working underclass communities are horrible things, and spare me the anecdotes about cool people with college degrees who decide to commit fraud/save up money/live off parents/some other absurd thing to not work for a few years.
I am largely uninterested in the mental masturbation involved in UBI or UBJ, but would really like to see dramatically reduced levels of immigration to force employers to figure out how to employ the least employable. We are importing cheap labor, and it’s disastrous.
Just a Job isn’t a bad thing.
“If you want to make the argument for work, you have to argue that it does something other than turning Alex into Bob. ”
The only way someone could even think that way is if they discounted all the forced social interaction that Bob has through his job. How could anyone think that being alone, unwanted, and unneeded would make anyone feel better about themselves?
A lot of these comments bring up healthcare as an unfair/unavoidable cost on those living off of UBI who also have expensive health issues. This to me implies that before anything like a UBI, we’d need to overhaul the health system. Whether that be Medicare for all, single payer, whatever, this seems to need prioritized.