The most important thing to study is the effect of UBI on total economy. Saudi Arabia is an interesting example, since their economy pretty much runs on free oil money. Saudi nationals are notorious for having bad work ethics, and they have to import many foreign workers to run the economy. To prepare the country for a post oil world companies are now required to hire a minimum percentage of Saudi nationals.
Tumultuous transition period followed by quiet.
The same wealth that currently placates them also enables them to project power. And when the wealth disappears, infighting is more likely than outward violence.
After the initial period of reorganisation, it will settle into a state similar to other formerly-wealth now-impoverished nations.
UBI, on the other hand, rewards anyone who works on top of the UBI supplement. There is no need to choose between working and getting the "free" money everyone else is getting.
And this is really the most profound part. There isn't an argument to be made against "if people have more money to buy stuff they will be better off". Nobody can argue against that, it is true.
The _entire_ case against that sort of social spending is "but we need normal people to create more than they consume or the resources won't be available" and "this isn't fair on the people who have to support them" argued at varying levels of complexity and indirection.
If you ignore the negative outcomes then any plan is a good plan and only has positive outcomes. Duh.
With UBI, nobody falls through the safety net and ends up with nothing to live on; you don't need an army of people assessing claimants' financial circumstances; and when someone finds a low-paid or part-time job they still keep their UBI, so there's no disincentive to work.
If you argue it's unfair that people pay for UBI, how is that different from arguing that it's unfair that people pay for means-tested social security (or poor people's medical bills)?
I think there is an entirely reasonable argument that having enough money to live on (guaranteed) would make people better off.
If a policy isn't being done to make people better off, why do it? The easiest way to maintain the status quo is to do nothing - rather than finding innovative ways to maintain stasis but with new laws.
> If you argue it's unfair that people pay for UBI, how is that different from arguing that it's unfair that people pay for means-tested social security (or poor people's medical bills)?
Yep. The argument against most social spending boils down to the same two things. Sometimes other arguments do crop up (eg, some truly foolish policies incentivise destructive behaviour).
There's a big difference between a welfare state designed as a form of social insurance to protect people from adverse circumstances and old age, and one designed on the assumption that those who want to work owe those who don't a living, and that the only circumstance that should affect how much people receive is whether they have the right citizenship.
Aside from the fundamental ethical rationale changing from contribution based social insurance to citizenship based entitlement, UBI would also represent a much larger bill, and a lower payout to the neediest.
Nobody 'owes' anybody a living. The situation is, we can give most folks a living, without everyone working. And those that continue to work, of course are better off because they earn money for that. No unfairness at all.
I think its the old Protestant work ethic, this attitude of "folks not working are immoral". We have to get past this, to make UBI a thing.
The literal purpose of UBI is to ensure that taxpayers do owe each citizen a fixed amount set at an average living. Making that a social obligation based on birthright rather than a potential future entitlement based on need is how it's different from social insurance schemes. The assumption if you're able to work and not interested in looking for it you probably don't need the money as much as other people certainly isn't what's wrong with current welfare states.
You don't have to believe that "folks not working are immoral" to believe that helping those fortunate enough to be able to choose not to work at the expense of those that aren't [whether by reduced benefits or higher taxes] isn't what welfare states were for.
Not average. It's Basic. It's just enough to get by. That's the incentive to work: most people want to do more than just get by. Anyone who doesn't want that would be a drag on any system, so that's a separate problem to deal with. But there are a lot of people who can't get ahead with the current system who would do better in a UBI system, and we'd all be better off if we could get those people productive and happy.
There's a massive gap between wanting something and doing what it takes to get it. If you were to ask people vs. watch what they do, you'll see the truth; it's never about what people say but instead what they do.
And I'd welcome any supporting research demonstrating that, based off their actions, "most people want to do more than just get by" as stated. My anecdotal observation is that most of (working age) society actually does just enough to get by for today, this week, or maybe the month...
If that's not done, then UBI would encourage migration from higher cost-of-living areas to lower cost-of-living areas. That might not be a terrible outcome; it would probably lead to balancing the cost-of-living across regions as the populations change.
Under means-tested benefits, how many people without work are discouraged from taking low-paid or part-time work because their social security payments are clawed back, resulting in no financial gain for them?
Well the proportion will probably be smaller than the vast majority, skewed towards the asset rich when state pension ages kick in, but I don't think it'll be zero. Though even if it was zero, you've got the problem that under normal circumstances a full third of the population already doesn't work or seek benefits, and suddenly you've got to find the funds for them.
> Under means-tested benefits, how many people without work are discouraged from taking low-paid or part-time work because their social security payments are clawed back, resulting in no financial gain for them?
Relatively few even without competently-designed tapers and EITC schemes, bearing in mind the number of people receiving benefits contingent on unemployment is normally a relatively tiny fraction of the working age population.
It is a little while since my 'experiment' with benefits, but in the UK benefits are a real poverty trap. If you take a single days work you can lose a month of certain benefits. Housing benefit was the worst. The next cap was a 16 hour a week rule, that after 16 hours work you lost some of your 'working tax credit', which made you worse off unless you could jump straight to near 40 hours.
Seeing the poverty trap for myself, I am a huge fan of UBI
If something like VAT were used, it would change things. Without dis-incentivizing real work. This system is already in use around the world, just not in America at the moment.
I think we can consider the results of just-around-the-corner-for-200-years automation-induced mass unemployment if and when it actually happens, although I'm still unconvinced that delinking benefit income from desire to actually find work or any other kind of demonstrable need would be the best solution.
There's also plenty of information indicating that if given the choice, most people actually want to work...they just don't want to be working shit jobs for shit pay for shit bosses.
I'm not saying finance is all bad, I'm saying when the financial situation is harder to understand than the so-called "real economy"...don't!
Automation means, only the Engineers and Maintenance people need report to work to keep the goods flowing. Its been happening for 20 years, and accelerating.
The UBI may not be quite ready to deploy, but its coming. If we try it too soon, then some goods will indeed become scarcer and thus more expensive. But many things may continue just as they are. We want to make sure that's enough to keep everyone healthy and fed.
I agree the same size is small (I thought it was 525), and I'd also say there is an issue with the length of the study.
But it should still provide some useful stats on how many people give up work or start businesses or go back to school and what the impact is on crime, drug use etc...
And that's the question here: how does this effect people's economic and social behaviour?
Why would "here's an extra $9k across 18 months" tell you anything about how a low income person would respond to being promised a livable income for life?
I'd like to see a 5+ yr study specifically because that would allow people to give up low paying jobs, go get a full degree and then get a new better paying job.
18 months isn't that, obviously.
But it would allow you to go and do something. Instead of going from being a waiter to a programmer, maybe you can go from being a waiter to a basic plumber or a truck driver or start a small business or something?
We can all agree that having more cash will improve people health\community\whatever. The big question is what will people do with the opportunity no-strings-attached cash gives them. How many people will just spend the money? How many people will stop working and do nothing useful? How many people will stop working and do something very very useful?
You only need a small proportion of people to make significant changes like this (and thus pay a lot more tax) and suddenly these programs get very affordable net.
[1]actually you need an implausibly large proportion simply to offset the amount of people who already don't work and aren't entitled to benefit payments who would be eligible to receive UBI
The issue with pensions as an example of UBI is that the only people getting them are old. So they mostly already have the assets they want, they don't have careers they want to improve, they don't want to start business or earn money, they want to retire...
But this experiment which is designed to make it impossible for participants to retire off the money proves even less about people's likelihood of retiring off free money than the natural experiments where they're encouraged to do so.
However, people often want to live in these areas because jobs are there. The trend over the last 40 years has been for the decline of industrial areas as factories close. In most post-industrial countries there's towns and cities with really cheap housing - because there's no high paying jobs nearby. I wonder if UBI would have a longer term effect of injecting money into these areas, increasing prosperity and drawing in people who live in expensive cities but have seen their UBI get inflated to zero.
I don't think food (as in, grains and vegetables and meat) will be subject to the same inflationary problem - there's not the same fundamental supply limit that you get with housing in a city.
I think we should try it though.
That so many people in the US can’t afford housing is a spectacular social failure. It feels similar to California’s water problem; yes it’s possible to run out of the resource but if you actually look at how it’s used it’s just very very poorly allocated.
[1] https://www.cnbc.com/2019/03/07/heres-the-share-of-income-th...
[2] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3282661
Various services are funded out of taxation at present. The higher gross tax rate would be offset by UBI (those in work would get it too), so the mean net tax rate shouldn't change much.
What would happen to the government employees currently working in social welfare if they'd lose their job is that they'd get UBI until they were given or found more productive work.
The book goes into great length of the pathology of the welfare system and its non-profit charity profiteers. Of course that was 27 years ago.
It obviously depends on the UBI. If it covered children, it would be absolutely better for the recipients. If it does not cover children, as in Yang's plan, then it is questionable, but it still could benefit a lot because many do not get it at all:
https://medium.com/basic-income/there-is-no-policy-proposal-...
If UBI were to replace social services like general assistance, housing assistance, SNAP, WIC, CHIP, Medicaid etc, it would cause many people to choose eating over healthcare, or paying rent over seeing a doctor and eating.
In my opinion, general UBI needs to be issued alongside programs that target specific issues that are endemic to our current economic order. That includes programs that fight hunger, and the lack of access to affordable housing, healthcare and education.
We give mothers baby formula because we want babies to have adequate nutrition. If you hand out cash, some percentage of people will buy beer instead.
We have the programs we have now because giving away cash didn’t work. Recipients drank it away and landlords gouged them.
A program like Section 8 for housing balances those issues — the landlord gets paid on time every month, but is on the hook for a minimum standard of maintenance and livability. That’s why we don’t have children in tenements anymore.
Every once in awhile politicians and academics who know everything show up with a magic wand. UBI is no different.
The participants should be voting on how much to take from those among them with the higher incomes. I mean--unless we're assessing how UBI might work in a country without democracy.
We already have the issue today but it's not quite so direct.
A fair experiment would have at least stripped away all the other state funded benefits UBI supposedly replaces, but I guess 'UBI is good for the spending power of single-income couples but leaves the poorest people much worse off' wasn't the headline the advocacy group was shooting for...
They found that giving those 125 people an unconditional monthly allowance helps them survive and has a positive effect on their life.
They did not seem to research at all how to actually fund it, what kind of effect a higher tax to fund it would have, or what would happen to the government employees currently working in social welfare if they'd lose their job.