No it shouldn't, as it leads to "rich cities" and "everywhere else". So it's an actual problem, not something that should be left IMO under any basic income proposal.
Get rid of welfare and just give every adult $870/mo
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But if you raise the basic income in the city you're making it even richer, and at the same time you are encouraging depopulation of other cities and rural areas. (Aren't you?)
I find it funny that gasbandit is the one who comes up with a system that involves more government control, complete asset overview, government seizure of property as a matter of course, and eventually some sort of super-powerful judges who can semi-randomly destroy people's lives, all the while nearly eliminating personal freedom.
Not if it deliberately scales away from living there.
So with totally made-up numbers that aren't realistic, let's say that you can "live off of" $500/month in the "cheap" place, and $1000/month in the "expensive" place. So make basic income in "cheap" $900/m, and $1200/m in the expensive one. Make it an incentive not to live where it's expensive. In "real life" this goes the other way somewhat in that you want people where there are jobs too, and it may be better to shove people into cities to make it "cheaper" to offer government services like transportation, but you get the general idea.
I'm really over-simplifying here, but hopefully that gets my point across? I'm not saying that any solution is completely simple, but that you can tweak it to cause incentives, while still remaining in the basic income idea.
Great! I'll be over here, renting mailboxes in Expensive City to people to put as their official residence, while they continue to live in Cheap Town.
I hate people who game the system, but people will game it, so any new system you think of should at least have some basic safe guards...
I hate people who game the system, but people will game it, so any new system you think of should at least have some basic safe guards...
You know the government RIGHT NOW tracks where people actually live right? For tax purposes? Methinks your "cheat" will be detected rather fast. Not to say somebody making lots of money can't have multiple residences, but I would think that their "basic income" would be from the LEAST place on that list, not the greatest.
But you raise a good point about laws: every law should have a public consultation period in which people can submit how they would game the system prior to it passing. Won't catch everything, but could be an interesting result there.
The idea of having an e-sports-ish simulated RPG version of society where people compete for prizes to see who can game the proposed changes for personal advantage is intriguing. Crowdsource your future!
--Patrick
Necronic
Staff member
All of these systems are incredibly ripe for exploitation and corruption. UBI's that don't have any kind of oversight will see the lowest income receivers will be heavily targeted by exploitative company's. Doing stuff like letting people take payday loans on their UBI and whatnot. This is why food stamps are controlled in how they are used. Any system without that is going to have a lot of problems. Same goes with the idea of "Everyone Works". The government is frankly not good at managing large jobs programs anymore. Just look at the management of the occupation of Iraq. MASSIVE amounts of waste and corruption. Plus there's the issue that a lot of people's skill set doesn't really go beyond ditch digger, and there's only so many ditches that need digging.
Moreso than the current systems? Of course, just like the current systems, some checks and limitations will necessarily be put in place, but are you suggesting that these systems are untenable simply because they can be exploited and corrupted? What system doesn't suffer from corruption and exploitation?
Necronic
Staff member
The current systems already have problems with corruption and whatnot, and have a lot more regulations/restrictions on them than what I'm hearing tossed around here. Removing those regulations is just going to attract more predators that have spent years sharpening their talons on the current system.
Well sure, this is a high level discussion. I don't think anyone here is optimistic enough to suggest that such a plan could be implemented as-is without appropriate controls and oversight, but on the flip side there's little point in talking about the controls and oversight needed if the idea itself is bad.
So right now it's a high level discussion - is the plan itself fundamentally flawed, or is it reasonable and a discussion about the actual implementation, including controls and oversight, should commence.
So right now it's a high level discussion - is the plan itself fundamentally flawed, or is it reasonable and a discussion about the actual implementation, including controls and oversight, should commence.
GasBandit
Staff member
Hey, it's just a thought exercise. And really, no more destructive than communism/socialism
I can see employers trying to take advantage of it ("You get $870/mo UBI? That means we can cut your full-time wages by $5.44/hr*! Let the government pay 75%** of your salary!"), but I also see market pressures stabilizing things a bit. Businesses who try to lean too hard on UBI as a way to increase their profit margins will likely fail as their rank and file employees leave for more lucrative positions (barring collusion amongst employers). Also, I could see "minimum wage" being redefined so that it favorably interacts with UBI somehow.
--Patrick
*870 per mo/4 wks/40hrs=5.437
**5.44 would be 75% of the current 7.25 minimum wage
--Patrick
*870 per mo/4 wks/40hrs=5.437
**5.44 would be 75% of the current 7.25 minimum wage
Salaries would obviously go down, in part because employers would be paying part of your previous 'wage' to the state as increased taxes. Minimum wage is not needed anymore in this context (in principle), in part because everyone is supposed to have enough money to get by and in part because, as you say, prospective employees have a very strong tool in negotiating their salaries (hey, I don't need this 100$/mo job, I already get 800! Pay me at least 300 or it's not worth it to me!).
Yup, that's one of the things I like most about UBI--it gets both the socialist arguments in my brain and the eliminate-wage-controls arguments to at least sit down in the same table. For example, my SO really should be making less than minimum wage at most at one of her current jobs (they pay her to babysit a computer lab, a.k.a. do homework and browse the web 90% of the time). If her rent and food were guaranteed, she'd still want the job, even if it only paid a fraction of what it currently does.
At the same time, a UBI is only effective if it actually provides what it needs to EVERYWHERE. Regional inflation is it's undoing, which makes both the very poor and the very rich it's greatest enemies.
Necronic
Staff member
Ok, high level argument fair enough. High level arguments are good up to a point. My problem with that is that when you actually start looking at the nitty gritty I think you end up with something fairly close to the current welfare system. I had all of this written out and I'm still pissed the IT guy closed the dang browser.
Look, the question isn't just what we gain out of the new system we are putting in, but why we're getting rid of the current system. What exactly is wrong with the current system? Here's a few of the big issues it has:
1) Cost - the plans you guys are describing would have costs astronomically higher than the current welfare system which costs something like 1.8k per capita or ~3k/adult. Compare that to the 10k per adult that the 800$/month would cost.
2) Does not encourage people to work - This is admittedly a problem with the current system. There was some pretty dramatic welfare reform in the 90s (Personal Responsibility and Work Oppurtunity Act) that addressed a lot of this. I am not well versed on this law.
One of the only way to alleviate 1) is to increase tax burdens, and we are talking about a MASSIVE increase in tax burdens. This would of course be partially offset by the increased income people saw in their UMI payments. The effective end result of that is that you have just increased the complexity of the tax code by an order of magnitude. Now we have EIC, Exemptions, Deductions, Marginal Tax rates, and UMI payments all at the dinner table. No bueno.
The other way to address the first problem, and to address the issue of expensive cities and whatnot is to create a sliding scale of benefits that are based on your income and where you live and all that stuff. Which...is basically how welfare works right now, except instead of being given controlled resources like food stamps now you're giving them highly liquid and exploitable cash.
And I'm not sure the second issue would actually be addressed by this. If it was a flat rate then the fact is that most people wouldn't actually have enough to live on on their own so they would have to work. Well what if they lived in an area (or time) where work simply wasn't an option, like Detroit? Do they get extra benefits? Because 800$ per month isn't actually enough to even live on. If, on the other hand, it's a sliding scale then you get back to the same issue we have currently with welfare where at some point increasing your personal income decreases your UMI which means that it becomes better to not work more.
I just don't see the benefits. Maybe there are other problems that I'm missing, but UMI seems like another name for welfare when you actually look at it.
X
Look, the question isn't just what we gain out of the new system we are putting in, but why we're getting rid of the current system. What exactly is wrong with the current system? Here's a few of the big issues it has:
1) Cost - the plans you guys are describing would have costs astronomically higher than the current welfare system which costs something like 1.8k per capita or ~3k/adult. Compare that to the 10k per adult that the 800$/month would cost.
2) Does not encourage people to work - This is admittedly a problem with the current system. There was some pretty dramatic welfare reform in the 90s (Personal Responsibility and Work Oppurtunity Act) that addressed a lot of this. I am not well versed on this law.
One of the only way to alleviate 1) is to increase tax burdens, and we are talking about a MASSIVE increase in tax burdens. This would of course be partially offset by the increased income people saw in their UMI payments. The effective end result of that is that you have just increased the complexity of the tax code by an order of magnitude. Now we have EIC, Exemptions, Deductions, Marginal Tax rates, and UMI payments all at the dinner table. No bueno.
The other way to address the first problem, and to address the issue of expensive cities and whatnot is to create a sliding scale of benefits that are based on your income and where you live and all that stuff. Which...is basically how welfare works right now, except instead of being given controlled resources like food stamps now you're giving them highly liquid and exploitable cash.
And I'm not sure the second issue would actually be addressed by this. If it was a flat rate then the fact is that most people wouldn't actually have enough to live on on their own so they would have to work. Well what if they lived in an area (or time) where work simply wasn't an option, like Detroit? Do they get extra benefits? Because 800$ per month isn't actually enough to even live on. If, on the other hand, it's a sliding scale then you get back to the same issue we have currently with welfare where at some point increasing your personal income decreases your UMI which means that it becomes better to not work more.
I just don't see the benefits. Maybe there are other problems that I'm missing, but UMI seems like another name for welfare when you actually look at it.
X
I agree with both points, though not necessarily the rest of the analysis. There are many reasons it's possible in other (more socialist) countries, they already have a higher tax base and they already have so much of their population on welfare that the cost of welfare itself and the bureaucracy to run it cost more than the proposed UBI would, since it should be simpler to administer.
This wouldn't work out so well in the US where the tax base is significantly lower, a much lower percentage of our population is drawing welfare benefits, and they are drawing less per person (partially because cost of living in the US is lower than the country attempting UBI).
The does not encourage people to work is worse under the existing system, as the existing system actively discourages work. The reason the 90's reforms were made was to push people into a corner so they didn't have a choice, they lose their benefits unless certain conditions are met anyway, so they might as well work even though working causes them to lose their benefits.
Honestly, I don't know that this idea has benefits compared to our existing system, but it's interesting to discuss and consider, particularly since we're moving in that direction anyway with forced healthcare and other expanded social services.
This wouldn't work out so well in the US where the tax base is significantly lower, a much lower percentage of our population is drawing welfare benefits, and they are drawing less per person (partially because cost of living in the US is lower than the country attempting UBI).
The does not encourage people to work is worse under the existing system, as the existing system actively discourages work. The reason the 90's reforms were made was to push people into a corner so they didn't have a choice, they lose their benefits unless certain conditions are met anyway, so they might as well work even though working causes them to lose their benefits.
Honestly, I don't know that this idea has benefits compared to our existing system, but it's interesting to discuss and consider, particularly since we're moving in that direction anyway with forced healthcare and other expanded social services.
One way to implement UBI, if we come down to it: a negative income tax for incomes below a threshold. It's relatively simple.
Independently of that, and regarding cost, the larger tax hike should be on the side of the employers. Here in Spain, employers pay taxes on behalf of each worker they have. Obviously that tax could increase a lot, because employers would be spending much less on wages. It also does not need to increase much the complexity of the system. AS a first order approximation (which is obviously naive), just apply a flat % increase to all taxes. In any case, when computing the real cost you should not count $800 per person, because many people, most people even, would not be getting richer with UBI.
Regarding 2), some proponents of UBI actually say that UBI is better than current systems regardin the disincentivation of work. Many countries do not have systems like food stamps and actually give monetary subsidies. It can often happen that if you work (or work more, or get a better job) you go over a threshold in income and lose your subsidies. In any system that's has at least some thought put into it, you will not get poorer due to that BUT it can happen that you see a ridiculous increase in your spending money. Then, why work? In a UBI system, wages would explicitly what you get 'beyond' welfare, everyone would know that, and these situations should disappear.
PS: When considering cost, also consider that UBI partially replaces other areas that may not be explicitly welfare: unemployment benefits, pensions, etc.
Independently of that, and regarding cost, the larger tax hike should be on the side of the employers. Here in Spain, employers pay taxes on behalf of each worker they have. Obviously that tax could increase a lot, because employers would be spending much less on wages. It also does not need to increase much the complexity of the system. AS a first order approximation (which is obviously naive), just apply a flat % increase to all taxes. In any case, when computing the real cost you should not count $800 per person, because many people, most people even, would not be getting richer with UBI.
Regarding 2), some proponents of UBI actually say that UBI is better than current systems regardin the disincentivation of work. Many countries do not have systems like food stamps and actually give monetary subsidies. It can often happen that if you work (or work more, or get a better job) you go over a threshold in income and lose your subsidies. In any system that's has at least some thought put into it, you will not get poorer due to that BUT it can happen that you see a ridiculous increase in your spending money. Then, why work? In a UBI system, wages would explicitly what you get 'beyond' welfare, everyone would know that, and these situations should disappear.
PS: When considering cost, also consider that UBI partially replaces other areas that may not be explicitly welfare: unemployment benefits, pensions, etc.
Regarding location, I don't think that UBI would have as much effect on people currently in the workforce as it would on people who are beginning to enter the workforce. Older folks are already located somewhere, have a home, family, social life, etc. and will be more fixed in location. No, it is the post-teens who this would really affect. Someone who lives in an expensive city would get a small boost from UBI, but little else. However, someone growing up in an expensive city would look at how far their pending UBI would go when they turn 18 next year (or whatever) and be like, "No way, Mom. San Francisco might be great and all, but soon as my UBI kicks in, I'm gonna move to Des Moines where I can get by on 870/mo until I set up a life for myself." Any city which is too expensive would quickly deflate as all the young adults run away to more fiscally fertile areas. A city's importance as the epicenter of trade is already being threatened by the Internet, once you lessen another of its advantages (the pooling of resources to survive), you'll no doubt see cities start to stagnate, a relic of "old, pre-UBI people."
--Patrick
--Patrick
I still don't understand why UBI needs to allow anyone to live anywhere within its territory of effect. I have not heard a good argument why UBI has a moral/economical responsibility to prevent any amount of gentrification.
Alternatively, perhaps high COL cities would become places of status, a Veblen good, while the low COL places would be marked as UBIquitous
$50 lattes and lots of Silicon Valley-level masturbatory economics.I'm not so sure about that. It's already impossibly expensive to live in downtown SF, but people want to do it anyway. As a personal example, I've been getting paid by a state fellowship during my P.h.D. My 'salary' was more or less reasonable for Barcelona, but it's the same for everyone else, and in other places you can live quite comfortably (for instance, you could afford your own place as opposed to sharing, or a change in 'effecty' salary as large as 2x). Do people try and go to other, cheaper cities to live 'better' ? Nope! In fact people still come here from many places to get similar wages in a much more expensive environment.
I don't remember if it was talked about here, but I think that a UBI might be better for class relations than the current welfare system. At least in terms of the downward relation between middle and lower class. The way I figure it, worst case nothing changes ("Those bums getting paid to do nothing all day), but a better case is that you're less upset because you're also getting a check for nothing.
GasBandit
Staff member
Hey, if we're just lyin' on the grass looking at the sky and talkin' what-if, I'm all over the place.
If we're talking about how things actually should be, that's another story.
I would think the person most diametrically opposed to this on the board would be Charlie, since UBI predicates on many capitalist principles, like a monetary system, individual wealth, and a peaceful overhaul of an existing regulatory system (instead of a bloody revolution).
Minimum wage: Government forces businesses to pay a minimum wage. See also: "Unfunded Mandate"
Basic Income: Government supplements incomes with money collected economy-wide.
--Patrick
What if C-A-T... actually spelled... DOG?
GasBandit
Staff member
Sorry, I wasn't clear. I meant what difference does it make to the 'rich cities - poor cities' problem whether you have a ubi or a minimum wage.
Because in order to collect a minimum wage, you have to have hours at some place of employment generating that wage. For UBI, you just have to breathe (and presumably fill out paperwork). People receiving UBI are not tied to a physical location where they collect this money, it comes to them wherever they currently happen to be standing, which means there will be less incentive to remain in any specific location. Hence, population deflation.
--Patrick
--Patrick
Being able to live without spending half of your waking hours doing stupid bullshit for other people would be great.