Guaranteed basic income?

[countmeout]

Said many times before: Corporations do not provide jobs; customer/consumer demands do.

The rich will not suffer from increased taxation - they have so much comparatively speaking that a million or two here and there will never make an impact on their lives.

Wealthy people will take their money elsewhere then. Wealthy people (most, you know the ones who are self made) are extremely smart, the ones that aren't smart pay smart people to watch their money. Being so smart they always find the best deal for their taxes. Tax them too high, higher then other countries and they will shelter their money outside of Canada if the difference is enough.

Back on topic, the simple idea that a guaranteed basic income will help people who are struggling purchase the necessities they require makes sense. Here's where it breaks down. Everything will go up in value, inflation will take over because when there is extra money to spend, items will cost more. The wealthy will see this money retured because the baseline for poverty will move. People make more at minimum wage today then in 1950 and items cost more and followed this wage. Minimum wage is staying stagnet as prices like homes climb but most other prices are closely related. Some items are even declining in price, such as cars.

Guaranteed income has been tried and fails.

[LTD]

It is also important to realize that any such funding redirected to the under median income groups is extremely high velocity money in the economy. Much more economically effective than silly stuff like tax cuts for the rich. It would recycle very quickly into the economy and boost GDP, support small business etc.

Said many times before: Corporations do not provide jobs; customer/consumer demands do.

The rich will not suffer from increased taxation - they have so much comparatively speaking that a million or two here and there will never make an impact on their lives.

And it certainly shouldn't impact their lives just because someone has the drive and the smarts to make more than someone else doesnt mean they should be supporting the bums who are to lazy to get off their butt and make their own. I just dont get the attitude of some people a million or two here and there wont impact their lives, seriously? how about you go make your own million or two and I will come and take 50% from you then let me know how you feel about that and how it hasn't "impacted" your life, im thinking you will be singing a different tune.

[hobbyguy]

^^ mincome experiments have varied a lot in their success/failure rates.

The recent Finnish trial had mixed results. However, how you judge it depends on perspective. From the perspective of the average citizen it was mostly successful. From a bean counter perspective it was less positive, as bean counting does not capture a lot of the successes.

The inflationary argument is a false one from the perspective of the average citizen. There are several distinct channels of inflation, the two most prevalent are: wage rate induced inflation and the other is monetary induced inflation. There are of course other channels of inflation - such as price fixing.

The one we concerned with here is wage rate induced inflation. (mincomes are a wage equivalent)

Since 1980, the only inflation that has been controlled is wage rate inflation. Monetary and price fixing inflation have very largely been ignored.

Wage rate inflation is actually a good thing for the bulk of the citizenry. Yes, it translates into some price inflation, but it is inflation that the bulk of the citizenry participate in on the benefit side.

An example from a period of wage rate inflation: I purchased a starter home for about $35K. Gross income at the time about $600/month. PIT payments were about $325 - which left diddly doo left over from my after tax income for anything but the bare necessities (couldn't even afford to buy a TV). Wages were inflating fairly quickly at the time, roughly 7% per year. So 5 years later that $600/month in the same job was $840/month. On a gross basis, raising my pretax income after mortgage payments from $275 to $515. Yes, there were some increases in the prices of necessities that offset some of that increase in net disposable income, but not enough to eat up more than half of it. It was enough to go from riding the bus to work to affording a car/insurance etc.

Ah but, you say, what about fixed income seniors? Well, they did not get hurt because OAP and CPP are inflation indexed. Who did get hurt were welfare recipients due to lower than inflation increases.

Mincomes have never been tried across an entire economic jurisdiction. So in cases like the Finnish trial, they did not induce wage rate inflation. In fact, in trial form, the mincome experiment allowed low wage "bottom feeder" industries to hold down wages and take advantage of the increased availability of workers who could afford to take the low wage jobs (as they were receiving government top ups).

That said, it is more than likely that with a mincome across the economic jurisdiction, low wage industries/services could face some shortages of workers. That would be a natural symptom as workers seek decent jobs and would not have nearly the incentive to take "just any job". What the effects of that would be are difficult to read in a global trade context. Would those low wage paying businesses fold up shop or would they pay more to attract workers? Probably a mixed bag.

[twobits]

Mincomes have never been tried across an entire economic jurisdiction. So in cases like the Finnish trial, they did not induce wage rate inflation. In fact, in trial form, the mincome experiment allowed low wage "bottom feeder" industries to hold down wages and take advantage of the increased availability of workers who could afford to take the low wage jobs (as they were receiving government top ups).

That said, it is more than likely that with a mincome across the economic jurisdiction, low wage industries/services could face some shortages of workers. That would be a natural symptom as workers seek decent jobs and would not have nearly the incentive to take "just any job". What the effects of that would be are difficult to read in a global trade context. Would those low wage paying businesses fold up shop or would they pay more to attract workers? Probably a mixed bag.

This is the nutshell unknown that no small experiment will answer. Will people take lower paying jobs just to keep busy when they know govt will backfill? Or, as you suggest, will lower paying industries buck up or fold while mincome allows workers to hold out for a higher paying industry?
What is missing here is skill level. What does a mincome to to motivate skills training if people are very content on the 18/hr mincome?
This is to me, socialism experimentation that is bordering on communism.

[dontrump]

People with money to spend support the basic economy. A guaranteed basic income would stimulate support for more small business. Consumers promote jobs because corporations respond to consumer demand.

We have a over abundance of welfare fraud now I can just imagine if we started a socialist UBI how well that would work out
Iam just not fond of the idea where I work and make 100K per year and pay 25K tax and you don't work and get a part of our tax money

[buckland]

I love this kind of stuff being floated by the NDP and Fed Libs.

You're fake news. The Feds never made a campaign promise of basic guaranteed income. They don't have that power over provinces. The UCP in Alberta did promise to roll back the Minimum wage when they get elected. I wonder how many Albertans realize that a vote for the UPC will be a vote to cut a living wage for their service industry people. How many of these people will need to move back in with Mom and Dad because they can't afford an apartment and food anymore.

[OKkayak]

You're fake news. The Feds never made a campaign promise of basic guaranteed income. They don't have that power over provinces. The UCP in Alberta did promise to roll back the Minimum wage when they get elected. I wonder how many Albertans realize that a vote for the UPC will be a vote to cut a living wage for their service industry people. How many of these people will need to move back in with Mom and Dad because they can't afford an apartment and food anymore.

He didn't say they made a "campaign promise". Any who, here's some more "fake news" for your bedtime reading:

https://nationalpost.com/news/canada/li ... -canadians


If thats not enough for ya, I suggest reading the original article posted on Page 1, third post from the top. Pay particular attention to the very first sentence of said article. M'kay?

[hobbyguy]

Mincomes have never been tried across an entire economic jurisdiction. So in cases like the Finnish trial, they did not induce wage rate inflation. In fact, in trial form, the mincome experiment allowed low wage "bottom feeder" industries to hold down wages and take advantage of the increased availability of workers who could afford to take the low wage jobs (as they were receiving government top ups).

That said, it is more than likely that with a mincome across the economic jurisdiction, low wage industries/services could face some shortages of workers. That would be a natural symptom as workers seek decent jobs and would not have nearly the incentive to take "just any job". What the effects of that would be are difficult to read in a global trade context. Would those low wage paying businesses fold up shop or would they pay more to attract workers? Probably a mixed bag.

This is the nutshell unknown that no small experiment will answer. Will people take lower paying jobs just to keep busy when they know govt will backfill? Or, as you suggest, will lower paying industries buck up or fold while mincome allows workers to hold out for a higher paying industry?
What is missing here is skill level. What does a mincome to to motivate skills training if people are very content on the 18/hr mincome?
This is to me, socialism experimentation that is bordering on communism.

We are on the same page in terms of mincomes and an uncomfortable feeling of it trending toward a communist thingy. In my own case, I try to put aside my ideological bias against that and consider the options against a backdrop of increasing automation, increasing AI intrusion.

So what happens as AI and automation continue their relentless march? The only growth areas for decent jobs are in academically oriented fields. We can not abandon our fellow Canadians who have intelligences that are not academically oriented to be left behind. If we were to contemplate that, it would not only be ethically bankrupt, but it would destroy the prosperity of the country for all. We can not take a "let them eat cake" attitude, as that would be (rightly so) entirely destructive.

I am not sure that mincomes are the correct answer.

The only other answer I come up with is equally intrusive in the economy. Reduced working hours with regulated wages that are increased to compensate for the reduced hours. I think that is a worse alternative. although that could be softened somewhat by instead of regulating the wages, instead make worker guilds (similar to unions, but more carefully designed for flexibility) mandatory. https://www.abc.net.au/news/2019-03-26/small-workplaces-corporate-profit-drive-wage-stagnation/10939564

This is an issue that western liberal democracies around the globe are struggling with. The only way I see to resolve it is income redistribution. Yes, even Winston Churchill supported income redistribution.

The question is how to generate the income redistribution in a globalized setting. The mobility of capital across borders is a major defeating problem, and a major factor in in the real wage stagnation problem, especially in the context of automation/AI. No matter how you slice it, either taxes or costs are going to have to rise for corporations.

There is, however, a methodology from the past that provides an option in a transitional mode. That is to return to antitrust laws. Break up the big powerful oligopoly corporations that have developed. No more M&A nonsense that costs people good jobs. The difficulty in that resides in the globalization and the success of state owned enterprises within that context.

In reality, in the context we see out of China, we are already allowing communism to destroy the prosperity of western liberal democracy countries by allowing such entities to participate. We have made the egregious error of allowing such entities to become dominant in our capitalist system, while at the same time removing all the guard rails through "free trade" agreements (which are in fact less about trade than investment and capital mobility for the very few).

I personally fought for and lost the battle to retain the old GATT system. Turning the clock back to that sort of system simply isn't going to happen. So we have lost all of those mechanisms.

So we have two choices I can see, either go the antitrust route, or go the mincome route with tax increases. Of those two, the antitrust route would be my choice - but it could well spark a trade war.

[twobits]

[quote="buckland"]
You're fake news.

Sorry but you need to keep up with current events a bit better.

[twobits]

In reality, in the context we see out of China, we are already allowing communism to destroy the prosperity of western liberal democracy countries by allowing such entities to participate. We have made the egregious error of allowing such entities to become dominant in our capitalist system, while at the same time removing all the guard rails through "free trade" agreements (which are in fact less about trade than investment and capital mobility for the very few).

Ah yes, the communist capitalist system. The reason they are destroying western economies is that they have learned business from us but are not burdened by ten years of public discussion, road blocks, hunger strikes, or ransom payments for investment approvals. No Tides foundation to deal with either.

[hobbyguy]

In reality, in the context we see out of China, we are already allowing communism to destroy the prosperity of western liberal democracy countries by allowing such entities to participate. We have made the egregious error of allowing such entities to become dominant in our capitalist system, while at the same time removing all the guard rails through "free trade" agreements (which are in fact less about trade than investment and capital mobility for the very few).

Ah yes, the communist capitalist system. The reason they are destroying western economies is that they have learned business from us but are not burdened by ten years of public discussion, road blocks, hunger strikes, or ransom payments for investment approvals. No Tides foundation to deal with either.

That is a sidebar, but an important one. The success of state owned enterprises in not limited to China. Malaysia also uses them very successfully, as does Norway. Canada did so as well in the past with AECL. NASA is essentially a state owned enterprise of the USA. DARPA in the USA gave us the internet beginnings.

In the Chinese system, business is essentially viewed as an instrument of the state, with its primary goal as institutions to serve the interests of China - and with a long term view. Statoil and Petronas have the same outlook. In that context, as institutions, those societies gain rewards that spread downward, and can move more readily to underpin an economy that creates prosperity for all. If and when those institutional companies cease to serve the long term interests of the state, then they are downsized and scaled back. (As we are seeing with NASA.)

We have a similar model with BC Hydro. Providing a strong economic underpinning with only a sustainable minimum profit as a goal.

If we look back to periods when prosperity for the average citizen was growing, we see some evidence of companies acknowledging a duty to serve the interests of the country. Part of that was rule driven, but it also related to the WW2 generation that had a sense of duty to the country.

That has morphed into the silliness we see today, where companies state that there only duty is to the shareholders - and more and more short term profits. Taken to the extreme, that makes those companies nothing more than leaches on society, especially when they close profitable plants in the US or Canada just to squeeze a little extra profit moving them to a low wage jurisdiction. Many of these companies know what they are doing is problematic, but they just keep on doing it. Jamie Dimon of JP Morgan was speechifying about the problem with income inequality, yet the company he is CEO of is extremely profitable and pays their tellers $12/hr. It has been pointed out that JP Morgan could, by reducing their profits, pay all of their employees above the "living wage" standard, and still be enormously profitable.

To paraphrase Confucius: "If you do everything for profit, you will generate great resentment."

Historically, that resentment gave rise to communism and credence to the foolishness of communism. We are seeing that resentment take shape in western liberal democracies with vastly increasing polarization, "yellow vest" protests, Brexit and many other symptoms. I would argue that the balance achieved by folks like WAC Bennett is what we need to avoid lousy outcomes and possibly the loss of western liberal democracy.

No matter how we slice it, ignoring the large segment of society that is increasingly left behind and facing economic anxiety can not have a good outcome. Our models of how we do things must change, and those changes may indeed bring some intellectual discomfort as we all tend to get set in our ways.

Thus I find myself seriously considering mincomes as possible element in the solution. IF that were to be coupled with modernized antitrust laws (ones with teeth) and some strategic government/industry joint ventures, I think we could break the downward spiral of economic anxiety for far too many of our citizens.