Guaranteed income

[Omnitheo]

I mentioned previously about some time I spent on welfare. They were some of sucky times. Trying to find a job, but otherwise having nothing to do, no money to do anything. Not at all enjoyable.

[hobbyguy]

Personally I think that Guaranteed income is a rabbit hole. There are too many variables. There is also a feedback loop in guaranteed income that results in it being self defeating.

IF you move incomes up, then prices for fundamentals will follow. IF everybody has say $2,000 for rent, then rents will floor at $2,000 very quickly. In the end, nobody is any better off.

The BC NDP discussion of this is very reminiscent of the 1990s NDP under Mike Harcourt. Jacked up welfare payments a whole bunch in the name of "ending poverty". Then a couple of years later Mikey was cracking down on welfare (as it blew a huge hole in the budget) and making it tough on welfare recipients.

"Harcourt reacted by abandoning his social democratic policy and moving to the right on welfare. He fired Joan Smallwood as Minister of Social Services and replaced her with Joy MacPhail, reduced welfare rates, and made it more difficult for families to claim assistance.[3][5][6] Announcing this policy shift in September 1993, he infamously described it as a crackdown on "cheats, deadbeats and varmints".

Strengthening the social safety nets and society does not necessarily mean that income, per se, is what is needed.

E.G. Better pharmacare would target improving things for sick and disabled folks in very strong way. E.G. Stop sticking our heads in the sand, and provide safe, legal heroin for addicts (then the welfare money doesn't go indirectly from us to scumbag drug dealers).

Aside from that, we do need to look at restructuring the economy to provide opportunities for more people. Part of that is we need to break up the oligarchy that has developed in western economies. (Oligarchy is every bit as bad as Communism). Focus on prosperity - not GDP. "Productivity" as currently defined (essentially lowering the labor cost per item, but then not sharing the benefits) is a false measure. What we need to measure is "Societal Productivity" - how many people's lives were improved.

None of it is simple. All of it is contentious. The balance is that all people need opportunities, and we have allowed a select few to stifle opportunities for everyone else. Prosperity that is not shared is not prosperity at all.

[just popping in]

I mentioned previously about some time I spent on welfare. They were some of sucky times. Trying to find a job, but otherwise having nothing to do, no money to do anything. Not at all enjoyable.

And for many you are like a hamster on a wheel, the harder you try the more difficult it is to become independent.

[Verum]

Personally I think that Guaranteed income is a rabbit hole. There are too many variables. There is also a feedback loop in guaranteed income that results in it being self defeating.

IF you move incomes up, then prices for fundamentals will follow. IF everybody has say $2,000 for rent, then rents will floor at $2,000 very quickly. In the end, nobody is any better off.

...

None of it is simple. All of it is contentious. The balance is that all people need opportunities, and we have allowed a select few to stifle opportunities for everyone else. Prosperity that is not shared is not prosperity at all.

I certainly do not agree with all of what you have said, but you add some interesting perspective to the discussion, more than most. Thanks for the well reasoned opinion.

[Glacier]

The problem with welfare is that it flattens out income distribution up to a certain point. This means people in the lower percentiles have to move a long way to the right before their income exceeds the "welfare line" and they start to benefit from their higher income. This destroys the link between income and total earnings for this low-income bracket, which actively de-incentivises work.

The region to the left of the red dotted line is the "poverty trap". This is the hypothetical region where a realistic move to the right (and increase of income) will not lift the person above the "welfare line". There is a small area to the right of the poverty trap that is still under the welfare line; these are the people that welfare actually benefits, they can realistically raise their income to escape the welfare line and so their welfare payments will not cancel out their efforts. (The actual size of the areas is not important, I only positioned them as they are to fit the text in. This is just explanation of a concept, I'm not making any claims about how significant the problem is.)

UBI doesn't have this problem. Moving to the right by any amount is always beneficial whatever percentile someone finds themself in because the flat rate of UBI given to all citizens simply shifts the income distribution upwards. (The grey parallelogram is purely to illustrate that height shifted is equal across the whole graph, which might not be obvious to the eye because of the curve.)

[hobbyguy]

None of that solves the essential problem we have with income inequality.

However an income guarantee for work performed could help with that. Even Winston Churchill felt that part of government's function was income redistribution. The work performed measure can be adjusted for the available employment.

E.G. IF you work 16 hrs per week, you get the full guaranteed income bonus up to age 65. The full guaranteed income at age 65.

However, to pay for that, our tax structures at the top end in particular have to be fixed. The illegitimate portions of income held offshore for starters. (There are legitimate portions.)

To do THAT we would have to fundamentally restructure how measure monetary wealth. Funds moving out of the country for active investment are one thing, funds moving out of the country for passive investment tax avoidance are another. Yes, that can be tackled, but no government seems willing to take that on, and it would run head on into a number of so called "free trade" deals we have - which are actually "free trade AND investment" agreements. IF we do that, we have to accept a short term lull as the economy restructures itself. I am not sure that in the age of folks wanting "instant gratification" that would be feasible.

Income isn't the whole deal anyway. It does you no good to have a guaranteed basic income if there is nowhere to rent. Which is a real problem. Our urban centers in particular are evolving toward the reality we see around the world where most urban residents are renters. But our policies on rentals, social housing, etc. are stuck in the 1990s and perversely incentivize the destruction of rental housing.

We can do more for average folk by restructuring the tax codes at the top (the rates need not go up - for now at least) and restructuring housing goals and policies (including building social housing with the additional funds recovered) than a guaranteed income would achieve.

[Queen K]

I mentioned previously about some time I spent on welfare. They were some of sucky times. Trying to find a job, but otherwise having nothing to do, no money to do anything. Not at all enjoyable.

Welfare is intended to help motivated people like yourself out. People with a sense of purpose and dignity of self-esteem.
You got out of the poverty trap through further education and striving for something you knew you wanted. But you also possess the enviable IQ to do so. It's those who sadly simply do not who are trapped.

[twobits]

Welfare is intended to help motivated people like yourself out. People with a sense of purpose and dignity of self-esteem.
You got out of the poverty trap through further education and striving for something you knew you wanted. But you also possess the enviable IQ to do so. It's those who sadly simply do not who are trapped.

Valid assessment to a point. I would suggest that the segment of population that is actually and truly disadvantaged is much smaller than you think in being able to contribute to society. Those that truly do fall below that level of contribution ability......our society is well and capable of supporting. Problem is that too many are willing to play the part of disadvantaged because we have given them the resources and means to do so and now it has become an ingrained right. Gone is the desire for too many to better themselves. Generations of welfare recipients have made too many complacent with that standard of living and need and desire to improve their own lot. A guaranteed minimum income will only inevitably increase this "class" of people at the expense of the rest of contributing society.
I am all for supporting people who are truly disadvantaged to a level that is a dignified standard of living. We can do that. I am not however prepared to support those that self identify as disadvantaged when every opportunity to better themselves is also available. And I am certainly not prepared to provide a guaranteed annual income that will only inevitably increase the able bodied and able minded to sit back and be content with what the Gov't and working force taxpayers will have to provide just because they are happy with the lifestyle that a guaranteed income provides.

[twobits]

Edit to add to above post. What kind of IQ is required to pour coffee at Timmies or flip burgers, or make subway sandwiches? They may be min wage jobs but they are higher than welfare rates are they not? Then why are we importing foriegn labour to fill these jobs instead of sending those social service recipients down to these businesses to fill out a job application?? Simple answer would be it is easier to sit at home for a little less money and do nothing! Garantee a min income is going to make things better how?

[Verum]

Edit to add to above post. What kind of IQ is required to pour coffee at Timmies or flip burgers, or make subway sandwiches? They may be min wage jobs but they are higher than welfare rates are they not? Then why are we importing foriegn labour to fill these jobs instead of sending those social service recipients down to these businesses to fill out a job application?? Simple answer would be it is easier to sit at home for a little less money and do nothing! Garantee a min income is going to make things better how?

If Jordan Peterson is to be believed, there really aren't any jobs suitable for people with IQs below 87, which covers about 20% of people. Even assuming that he is somewhat wrong, and I suspect he is, the fact is that the least intelligent few percent are just not going to be particularly good at any job. Add to that the level of competition for jobs and the need for capable workers for the businesses to do well, they're not charities after all, and it does mean that a few percent at the bottom of the IQ range are going to struggle. Bear in mind that mental retardation used to be diagnosed in people with IQ below 70, which is roughly 2% of the population. We've moved on, but people at that level are going to struggle to get a job without some level of subsidy from outside, be it through tax credits, or such.

Now, put someone in a bad situation, such as having emotional, mental or addiction issues, often due to events beyond their control, give them a modest IQ around 80, and a history of poor career decisions, and they are going to struggle to get a job, let alone hold one. At some point we need to accept that people who are not technically disabled might sometimes have similar barriers to employment and while removing such barriers is useful, it is naive to think that we can do so for everyone. Not everyone can get a job in our increasingly mentally challenging world.

The question is, what do we do when we accept that there is a minimum standard needed to get a job and some people may not meet that standard? A guaranteed income, especially a liveable one, would afford them dignity and might even allow them to work for a very low wage and somewhat productively, while still being of a lower standard than a company would have accepted to pay a minimum wage. This of course could be seen as a subsidy for businesses, since they would get the benefit of access to weak workers for very cheap, but it may be more efficient for all for them to be working rather than sitting at home doing nothing. Corporate tax rates and other taxes would need to address the cost of guaranteed income, but since it would essentially mean an increased income for the poorest workers out there, there would have to be taxes from elsewhere in the income distribution and those who probably should pay are going to do their damnedest to not do so, and they are very good at that.

In a way, I'm conflicted about guaranteed income because it insulates people from the consequences of making certain types of poor decisions. If one goes and gets a trade in an industry which then dies, why should I have to fund them while they wallow in self-pity since they don't have employable skills? That said, for efficiency's sake, getting such people back to productivity, at any level, is better than no productivity at all. The problem is often that people who were once gainfully employed often have high expectations and aren't willing to work for what seems to be very little money to them. I guess it is understandable, if they were making $100k/y or more, they aren't going to be too happy going back to $35k/y, no matter what. A guaranteed income might actually be worst of all for these people, since I could see some just refusing to take low wage jobs because the marginal increase in wealth is tiny compared to what they are used to, but with the current system, they would be forced to get back into the labour market and may even develop the skills necessary to succeed in a different career.

Still haven't really made up my mind, but I suspect the devil is in the detail. Some versions of guaranteed income look like communism and some like a form of corporate welfare. Neither of those extremes appeal to me in the least.

Jordan Peterson - IQ and the job market: https://www.youtube.com/watch?v=fjs2gPa5sD0?t=4m19s
Yes, I know that IQ is related to but actually not a good representative of intelligence.

[Gilchy]

a way, I'm conflicted about guaranteed income because it insulates people from the consequences of making certain types of poor decisions. If one goes and gets a trade in an industry which then dies, why should I have to fund them while they wallow in self-pity since they don't have employable skills? That said, for efficiency's sake, getting such people back to productivity, at any level, is better than no productivity at all. The problem is often that people who were once gainfully employed often have high expectations and aren't willing to work for what seems to be very little money to them. I guess it is understandable, if they were making $100k/y or more, they aren't going to be too happy going back to $35k/y, no matter what. A guaranteed income might actually be worst of all for these people, since I could see some just refusing to take low wage jobs because the marginal increase in wealth is tiny compared to what they are used to, but with the current system, they would be forced to get back into the labour market and may even develop the skills necessary to succeed in a different career.

I like the idea of a universal guaranteed income that everyone receives as taxable income, as long as it is enough to cover the very basic essentials, but no luxuries. I don't see the disincentive to go to work, even for low wages, because anything you earn would be added to the UBI. For example (and just for round numbers), if UBI was $1500/m, a person would make $18,000 per year. If they got a job at $12/hr, 30 hrs a week, they would effectively double their gross income, and lifestyle would increase accordingly. The key is that the UBI is taxable, so between tax aid on that income, and savings from eliminating other programs, it should be close to self-funding.

[Omnitheo]

Earlier in the thread we discussed how automation could eliminate a lot of jobs.
There was opposition to this idea, as automation in the past us not had this effect. The following video supports that argument



The argument essentially is that as automation brings prices down, it frees up time and money. That time and money can then be used elsewhere on new services, creating demand for more work.

Indeed, were I a farmer without much free time or revenue, I could not afford to subscribe to YouTube channels and donate to content creators. Because I can though, people have new avenues for wealth generation.

There is however a hiccup to this. And that is that the increased wealth being generated by increased productivity is not being evenly distributed. Indeed those at the top of the wealth scale are benefiting unfairly from the increased productivity. Those at the top of the scale do not re-invest that money into more work generation in the same way those in the low and middle earning brackets do. Should this trend continue, then we very well could run into an issue where automation and job loss is occurring at a faster rate than new opportunities are arising.

With a guaranteed income however, it would guarantee that people could afford to live and eat, and that there would be available income to be invested into more work potential, thus leading to additional tax revenue.

[Gilchy]

That makes sense. People in general (obviously there are exceptions that prove the rule), aren't great at sitting too idle. As automation increasingly handles the "necessities jobs", such as farming, manufacturing, shipping, etc, there will be a natural increase in service and luxury providers.

[Verum]

I like the idea of a universal guaranteed income that everyone receives as taxable income, as long as it is enough to cover the very basic essentials, but no luxuries. I don't see the disincentive to go to work, even for low wages, because anything you earn would be added to the UBI. For example (and just for round numbers), if UBI was $1500/m, a person would make $18,000 per year. If they got a job at $12/hr, 30 hrs a week, they would effectively double their gross income, and lifestyle would increase accordingly. The key is that the UBI is taxable, so between tax aid on that income, and savings from eliminating other programs, it should be close to self-funding.

It's largely pointless taxing guaranteed income as it would be even simpler and less risky to give out less income in the first place. So, using your numbers as above, if you have a 20% tax on the first 30,000 of income, it would be the easier to give out $14,400 and charge 20% tax on all money earned up to $12,000. It has the same effect, but reduces the chance of fraud and complexity of the system.

Your comment about the basic essentials and no luxuries is an interesting one and far less cut and dry than you might think. The problem is that the income needed to be sufficient to meet the needs of disabled people and other high needs individuals is far greater than the amount needed for someone like me. It would be very difficult and somewhat unfair to get the disabled to accept a very low guaranteed income as often their needs are significant. Additionally, what we consider basic essentials is changing. Electricity, heat, water and waste disposal used to be luxuries, but are now considered essential. I would contend that 24/7 Internet access is rapidly becoming essential and I can see that within a few years, having a smart phone would be equally essential. Additionally, for the long term well being of people, they need entertainment and luxuries to some level, otherwise they become an even greater drain on our society. The often maligned luxuries of the poor, such a liquor, cigarettes, and TV are actually far cheaper, especially if not taxed, than many other forms of entertainment. Additionally, families may find it hard to meet the developmental needs of their kids if they don't have enough money. You can say that they shouldn't have kids in the first place if they can't afford them, but that's of little benefit for the kids, who will be less productive in the long run than if we invested in them at an early age.

Honestly, the topic is just too complicated to do it justice here, but I think that most people who support guaranteed income do so with an attitude that it can be used to further their political agenda. That is why it has proponents on the economic far-right to the communist on the far left. I am not sure, though I do suspect that it could be used to push my agenda, which is improving efficiency of the system.

[Glacier]

Here's a good talk with a left-winger, union type and a right-winger, libertarian type BOTH agreeing that guaranteed income is what we need.