Mincome: Canada’s 1970s universal basic income experiment(bbc.com)
bbc.com
Mincome: Canada’s 1970s universal basic income experiment
https://www.bbc.com/worklife/article/20200624-canadas-forgotten-universal-basic-income-experiment
101 comments
It won't inflate all prices equally.
Homes might get more expensive. Will they get $10,000 more expensive? Not everywhere.
Potatoes might get more expensive. Will they get $10,000 more expensive? Probably not.
As long as there's a class of products that don't increase in price by as much as the UBI, those products will become more affordable to the people that UBI is intended to help.
Homes might get more expensive. Will they get $10,000 more expensive? Not everywhere.
Potatoes might get more expensive. Will they get $10,000 more expensive? Probably not.
As long as there's a class of products that don't increase in price by as much as the UBI, those products will become more affordable to the people that UBI is intended to help.
No one would say that if you just taxed everyone 10,000 dollars a year that prices would fall in a way such that everything would carry on the same.
The US already has a fairly solid way to transfer money for those in need of food. I'm sure it inflates food prices some but clearly without food stamps more people would be hungry.
The US already has a fairly solid way to transfer money for those in need of food. I'm sure it inflates food prices some but clearly without food stamps more people would be hungry.
I think what’s likely to happen is that the price of the inelastically-supplied products (housing, medical care, services) inflate to the point where there is no money left over to buy more of the elastically-supplied (optional) products. Thus, no net gain from UBI. If there were a net gain, expect UBI to cause service costs to inflate as labor supply is removed from the market, or the labor supply remains constant and the population grows in response to surplus resources which can be used for breeding (which then inflates the costs of inelastic goods, like housing).
Again, in some places this might happen, but not everywhere. For example, do you really think that it won't be possible to rent a room for less than $10k/year ($813 per month), anywhere in the country?
Secondly, if your net income is currently $0, then it's hard to imagine that price inflation alone could be enough to keep your purchasing power from significantly increasing with UBI.
Thirdly, labor supply might not necessarily be removed; there would be less need for a minimum wage, and fewer cases where eg. disability payments or unemployment payments are an active disincentive against working (get a job and get paid less than you earn on unemployment handouts), so there's a reasonable chance the labor supply would increase for many tasks.
Secondly, if your net income is currently $0, then it's hard to imagine that price inflation alone could be enough to keep your purchasing power from significantly increasing with UBI.
Thirdly, labor supply might not necessarily be removed; there would be less need for a minimum wage, and fewer cases where eg. disability payments or unemployment payments are an active disincentive against working (get a job and get paid less than you earn on unemployment handouts), so there's a reasonable chance the labor supply would increase for many tasks.
> do you really think that it won't be possible to rent a room for less than $10k/year
...that's not what they're saying. The 10k/year wouldn't all go to one cost, it would get split across all costs, distributed by peoples' choices. Certain foods may go up only a couple dollars, while rent could increase a few hundred, until in aggregate across all costs that extra 10k is used up with no net gain to quality of life.
...that's not what they're saying. The 10k/year wouldn't all go to one cost, it would get split across all costs, distributed by peoples' choices. Certain foods may go up only a couple dollars, while rent could increase a few hundred, until in aggregate across all costs that extra 10k is used up with no net gain to quality of life.
If your current income and expenses are $X and $Y, there's some X and Y for which that will be true. But it's necessarily greater than X = 0. The resulting increase in prices will not compensate for the increase in income, for sufficiently low income.
It seems like UBI either promotes overrunning the planet with more humans (more resources = more reproduction), or else there are restrictions on where humans can spread, creating housing inflation. Or a mix of both.
That's not the way price economics works.
In competitive markets, goods generally fall in price to the baseline level needed to get a competitive return on assets employed. While anti-market people often claim this doesn't happen, it actually does happen for most goods. Food, consumer goods, most computers, household staples, vehicles, etc., are dominated by fairly thin margin goods that are sold at just a bit above the total cost of production. (See grocery financials to see this in action.)
There are exceptions. Some products have constraints on supply. Some are natural constraints, some are government-created supply constraints.
Housing in big cities is mostly government-created supply constraints through zoning regulation implemented on the behalf of wealthy NIMBY landowners. In this case, yes, you could see some housing price increases, because municipalities restrict the ability of builders to respond to price signals. The price of land is a minor factor as well, but usually density can overcome that, and density is what the city NIMBY monopolists oppose.
However, this would be far less true outside of America's biggest cities. Much of the housing stock in the US is not nearly as exposed to tight restrictions in supply. And so an increase in income would result in increased housing supply, without an increase in price, because housing supply in most areas is restricted only by cost of construction.
The cost of production of all those other items - the household staples that is most of what we buy on a day to day basis - does not change if people receive a check from the government. Their price will still stay near the cost of production. Sellers of oranges still compete with each other on price to sell you fruit. Ford still competes on price with Toyota. If prices were to rise, then Ford would run their production line at a higher output to capture the excess profits, supply would increase, and then price would fall back until Ford no longer wants to run that extra shift.
And so the "prices will increase" argument against UBI is largely illusory. It could occur in certain monopolized areas of the economy, mainly expensive real estate in a few big cities. But most of America is not like that, and people who would benefit most from UBI (i.e., people with low income) mostly do not live in the highest priced real estate areas, so their real estate costs would not increase with the introduction of UBI. That inflation effect would be strongest with the wealthiest.
Perhaps that's why we hear the argument so often.
In competitive markets, goods generally fall in price to the baseline level needed to get a competitive return on assets employed. While anti-market people often claim this doesn't happen, it actually does happen for most goods. Food, consumer goods, most computers, household staples, vehicles, etc., are dominated by fairly thin margin goods that are sold at just a bit above the total cost of production. (See grocery financials to see this in action.)
There are exceptions. Some products have constraints on supply. Some are natural constraints, some are government-created supply constraints.
Housing in big cities is mostly government-created supply constraints through zoning regulation implemented on the behalf of wealthy NIMBY landowners. In this case, yes, you could see some housing price increases, because municipalities restrict the ability of builders to respond to price signals. The price of land is a minor factor as well, but usually density can overcome that, and density is what the city NIMBY monopolists oppose.
However, this would be far less true outside of America's biggest cities. Much of the housing stock in the US is not nearly as exposed to tight restrictions in supply. And so an increase in income would result in increased housing supply, without an increase in price, because housing supply in most areas is restricted only by cost of construction.
The cost of production of all those other items - the household staples that is most of what we buy on a day to day basis - does not change if people receive a check from the government. Their price will still stay near the cost of production. Sellers of oranges still compete with each other on price to sell you fruit. Ford still competes on price with Toyota. If prices were to rise, then Ford would run their production line at a higher output to capture the excess profits, supply would increase, and then price would fall back until Ford no longer wants to run that extra shift.
And so the "prices will increase" argument against UBI is largely illusory. It could occur in certain monopolized areas of the economy, mainly expensive real estate in a few big cities. But most of America is not like that, and people who would benefit most from UBI (i.e., people with low income) mostly do not live in the highest priced real estate areas, so their real estate costs would not increase with the introduction of UBI. That inflation effect would be strongest with the wealthiest.
Perhaps that's why we hear the argument so often.
OK, I could see the impact not being consistent across all areas and all products.
However, if, as per your scenario, we only see housing prices go up in big cities, then we end up in the same place as before - people would need to leave in order to afford a place to live (where previously they would have received gov't housing).
However, if, as per your scenario, we only see housing prices go up in big cities, then we end up in the same place as before - people would need to leave in order to afford a place to live (where previously they would have received gov't housing).
UBI would make it easier to exit the big city. Housing would become much more affordable relative to total income in areas outside the most expensive metros. Suddenly you can take on a job that doesn't quite pay as much, in a lower density area, and with the help of UBI you can have a house and disposable income. Before, maybe you couldn't do that because total income would drop too much.
Ideally, SF/Seattle/NYC would reform zoning, which would help reduce inflationary pressure in those specific areas, but that reform wouldn't be necessary for UBI to still have a big helpful impact on housing affordability for most people.
Ideally, SF/Seattle/NYC would reform zoning, which would help reduce inflationary pressure in those specific areas, but that reform wouldn't be necessary for UBI to still have a big helpful impact on housing affordability for most people.
I agree with all that, but in the recent conversations about homelessness in SF, the very idea of leaving for a cheaper city is pretty much a no go politically.
That probably wont change.
That probably wont change.
Waiting lists for government housing assistance are years long.
...do you write a blog I could subscribe to?
> If you have everyone in the US $10,000, no strings attached
What you are missing is that UBI is supposed to replace all existing entitlement programs, such as unemployment, disability, food stamps, social security, etc.
We already hand out tons of money, UBI is just a different way of handing it out money that is more efficient because there is less bureaucracy involved.
What you are missing is that UBI is supposed to replace all existing entitlement programs, such as unemployment, disability, food stamps, social security, etc.
We already hand out tons of money, UBI is just a different way of handing it out money that is more efficient because there is less bureaucracy involved.
Right, but we don't hand out money to people who don't qualify for it (income > $X), so it's a different situation.
But to your point, I've heard a proposed UBI that gives money to everyone, but effectively claws it back in taxes for higher incomes. Actually it would claw 100% back and more in order to fund UBI.
In that case, I could see the inflationary pressure not being an issue since net-net, you're just giving cash to a set group of people.
But to your point, I've heard a proposed UBI that gives money to everyone, but effectively claws it back in taxes for higher incomes. Actually it would claw 100% back and more in order to fund UBI.
In that case, I could see the inflationary pressure not being an issue since net-net, you're just giving cash to a set group of people.
No it isn't. That's one possible approach for UBI but hardly the one that everyone agrees on.
Goods with enough supply: no inflation even in case of UBI or printed money. This can be observed in present day measures of inflation which are based on cheap goods oversupplied by China
Goods with not enough supply: massive inflation in case of printed money or UBI. Examples are "good investments" with the only safe ones and available for common folks being real estate.
That's in case cities don't get destroyed by rioters and looters and people don't escape to safety out of the cities.
Goods with not enough supply: massive inflation in case of printed money or UBI. Examples are "good investments" with the only safe ones and available for common folks being real estate.
That's in case cities don't get destroyed by rioters and looters and people don't escape to safety out of the cities.
Prices for scarce resources with high marginal costs (eg: desirable housing) rise. You can’t cheaply make more.
Prices for resources with high plant costs and low unit costs do not, to anything like the same degree - medicine, consumer electronics, food.
Prices for resources with high plant costs and low unit costs do not, to anything like the same degree - medicine, consumer electronics, food.
Property prices would be lower if they were not much of an asset. If we taxed land so the value of land was close to zero.
If we don't tax land and amenities and jobs remain concentrated in large urban areas, imho there is a risk ubi will be absorbed into land prices, meaning idle rentiers win yet again.
If we don't tax land and amenities and jobs remain concentrated in large urban areas, imho there is a risk ubi will be absorbed into land prices, meaning idle rentiers win yet again.
The article gives the impression of UBI as some sort of targetted scheme with the money of putting money in the hands of people who need it. At least in India, it is touted as an alternative to government subsidies. Seen that way, it's a system overhaul rather than a way to help all people at an individual level. Government subsidies will always be inefficient, no matter how well-intentioned a particular set of people are. Instead, a simple UBI scheme will dramatically reduce administration costs and plug all leakages.
I'd love for someone to explain how UBI wouldn't just end up replacing part of people's salaries and turning into a wage subsidy for corporations.
Wouldn't this create so many jobs? There are many jobs in Canada that can't exist because of how expensive it is to hire people (which coincides with how expensive it is to live in Toronto). Subsidise that, and many people will be able to be delivery drivers for restaurants and avoid paying rent to Uber, or hire help for their homes instead of having to go to specialized firms.
> There are many jobs in Canada that can't exist because of how expensive it is to hire people (which coincides with how expensive it is to live in Toronto).
Couldn't it be said that those jobs are therefore not valuable enough to exist? Many jobs certainly are, and automation will obsolete many others. I guess we should be providing the basics for most people if we only need a fraction of the population for work though.
Couldn't it be said that those jobs are therefore not valuable enough to exist? Many jobs certainly are, and automation will obsolete many others. I guess we should be providing the basics for most people if we only need a fraction of the population for work though.
There will likely be some of that, but it will also put workers into a stronger negotiating position, so they can demand higher wages.
Prices definitely will go up with UBI, particularly for scarce goods like housing. You are absolutely correct. They did not go up in this experiment because it was just one town.
UBI won’t work unless we deregulate zoning, reduce the cost of higher education, and reduce the cost of healthcare.
UBI won’t work unless we deregulate zoning, reduce the cost of higher education, and reduce the cost of healthcare.
If government just printed this money, then there would be inflation. But this money is taken away from high earners and given to low earners. System is still balanced, just less fair (some may argue).
If there are 9 widgets and 10 people who want widgets then handing out money will cause inflation. The problem is a lack of widgets, and money shuffling games won't help.
If there are 11 widgets, 10 people who want widgets and one person has 3 widgets then UBI might help. It will definitely help if the biggest problem is an uneven distribution of widgets.
"Inflation" is a largely irrelevant metric that provides an accounting measure of how those situations play out. What matters is the production & distribution of goods.
The problem with 30 years mortgages isn't necessarily that they are given to everyone. It is that they create a situation where to own a home people have to agree to give years of their labour to a bank for essentially no reason.
If there are 11 widgets, 10 people who want widgets and one person has 3 widgets then UBI might help. It will definitely help if the biggest problem is an uneven distribution of widgets.
"Inflation" is a largely irrelevant metric that provides an accounting measure of how those situations play out. What matters is the production & distribution of goods.
The problem with 30 years mortgages isn't necessarily that they are given to everyone. It is that they create a situation where to own a home people have to agree to give years of their labour to a bank for essentially no reason.
I'd be inclined to view it more as a social safety net, an investment in society and a means to lubricate the wheels of the economy by facilitating spending.
Competition for the money is what keeps inflation down and also having it be a modest floor. For housing, health care, and higher education, the money floating around is specifically for those sectors. When coupled with limited availability / restricted competition, inflation easily occurs.
But if I can spend my money on a variety of things, then there is a lot more competition for me to figure out the value per dollar of a purchase.
In the specific instance of housing, the increased ability to move helps. What can also help is the ability for banks to be sure that people can pay. In areas with less pricey housing, a $100,000 house can lead to a 30-year mortgage at about $600 a month leaving $400 for other living expenses. This is a guarantee to the lender that the person can pay regardless of employment. And so suddenly a bunch of houses for poor people that are not economically viable because there is no lending for it suddenly become so. Not everyone will support it, but some will and that will ease up on pressures for apartments lowering that rent cost. It also could end the housing blight in many, many places without the truly inflationary process of gentrification.
The UBI is a floor and I would bet that prices would adjust to reflect that. If the floor is set too high, inflation will happen (imagine giving everyone a million dollars a month, it would certainly torpedo the current economy, but, assuming society somehow survived, new prices would probably change so that a minimal lifestyle require a million dollars a month). By setting the UBI at the current poverty threshold, it allows the poor to finally feel secure, it allows for the middle to save a little and feel less anxious/dependent on the good will of their boss, and for the rich, it keeps society stable enough that they won't have a revolution challenging them. All of this without doing too much damage.
Some things could end up with a higher price if the current wages are too low to worth being done by people who can now choose to walk away. This could be the case in industries where there is little profit being made and the workers are being paid very little. If there is a lot of profit, then I would presume the competition pressures would lead to the profits being diverted into wages rather than prices being inflated. Being money that can be used for anything would help keep some competition even in sectors that are monopolized.
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As an alternative approach, think of UBI as a dividend on our prosperity. Imagine that every American had enough ownership of stock to get a dividend pay out per year of $10,000. Would you ban the dividend pay out due to fears of inflation? The argument for the dividend approach is that prosperity comes from all of us contributing and so all of us should get a share of the profits of our society (private ownership is a creation of society and protected by society). And just like investors getting a dividend, the idea is that giving out that money is not only a useful reward for the lending of capital, but it also supports new investments and growth. The Citizen's Dividend does the same allowing each of us to invest in ourselves, and others, in ways to improve all of our lives.
A good narrative is that we are a species willing to be friends with one another and to be helpful to each other if we feel safe, secure, and supported. A CD (UBI) does just that.
But if I can spend my money on a variety of things, then there is a lot more competition for me to figure out the value per dollar of a purchase.
In the specific instance of housing, the increased ability to move helps. What can also help is the ability for banks to be sure that people can pay. In areas with less pricey housing, a $100,000 house can lead to a 30-year mortgage at about $600 a month leaving $400 for other living expenses. This is a guarantee to the lender that the person can pay regardless of employment. And so suddenly a bunch of houses for poor people that are not economically viable because there is no lending for it suddenly become so. Not everyone will support it, but some will and that will ease up on pressures for apartments lowering that rent cost. It also could end the housing blight in many, many places without the truly inflationary process of gentrification.
The UBI is a floor and I would bet that prices would adjust to reflect that. If the floor is set too high, inflation will happen (imagine giving everyone a million dollars a month, it would certainly torpedo the current economy, but, assuming society somehow survived, new prices would probably change so that a minimal lifestyle require a million dollars a month). By setting the UBI at the current poverty threshold, it allows the poor to finally feel secure, it allows for the middle to save a little and feel less anxious/dependent on the good will of their boss, and for the rich, it keeps society stable enough that they won't have a revolution challenging them. All of this without doing too much damage.
Some things could end up with a higher price if the current wages are too low to worth being done by people who can now choose to walk away. This could be the case in industries where there is little profit being made and the workers are being paid very little. If there is a lot of profit, then I would presume the competition pressures would lead to the profits being diverted into wages rather than prices being inflated. Being money that can be used for anything would help keep some competition even in sectors that are monopolized.
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As an alternative approach, think of UBI as a dividend on our prosperity. Imagine that every American had enough ownership of stock to get a dividend pay out per year of $10,000. Would you ban the dividend pay out due to fears of inflation? The argument for the dividend approach is that prosperity comes from all of us contributing and so all of us should get a share of the profits of our society (private ownership is a creation of society and protected by society). And just like investors getting a dividend, the idea is that giving out that money is not only a useful reward for the lending of capital, but it also supports new investments and growth. The Citizen's Dividend does the same allowing each of us to invest in ourselves, and others, in ways to improve all of our lives.
A good narrative is that we are a species willing to be friends with one another and to be helpful to each other if we feel safe, secure, and supported. A CD (UBI) does just that.
At this point of time I seriously think we only have a few conclusions: (Special note to 4, please address)
1) Recognize that we have sufficient "small" scale studies (note the quotes) that are short term, and providing similar results, which necessitate longer term studies. i.e. studies that are ~30 years, so that children can grow up completely under this environment and live through their dependent years (<25 years old) under these conditions.
2) The experiments provide enough evidence and this warrants attempting this on a much larger scale for the presumed future. i.e. institute a UBI (obviously we need to determine WHICH kind of UBI we would institute).
3) There are major flaws in the studies that need to be addressed and we need to refine them. (Personally with the many variations of these I've seen I do not think this is an accurate conclusion, but I am open to being wrong as I am not an expert studying this topic)
4) While the benefits are real, the cost is too much. This is one I'd particularly like to see addressed. Pretty much every time we see UBI experiments come up we see: 1) little to no earning wage increase (which is difficult to say if it is because the short time periods or not) 2) lower hospitalizations 3) higher sense of self worth 4) more children are finishing education 5) more children are reaching their dietary needs. The issue I see is that these have (unclear) economic values tied to them but are not discussed. I ALWAYS see the economic cost discussed, though understandably this is a much easier thing to calculate. But aren't economists supposed to be estimating these difficult concepts? As a voter I would like to know what the economic benefit is to these programs as well as the cost. This will allow me to make better judgments (e.g. even if UBI costs more economically maybe my personal moral utility value makes up the difference between the numbers). It is a shame that this is not discussed.
The issue of UBI and all its variations is complex but I believe that the conversation is frequently being framed in ways that is difficult to make real judgments on. We see the economic costs, but not the economic benefits. But we do see moral benefits, but this isn't enough. Legitimate excuses are given (for and against), but no one is making new experiments that address these concerns. We need a serious conversation with less surjection.
1) Recognize that we have sufficient "small" scale studies (note the quotes) that are short term, and providing similar results, which necessitate longer term studies. i.e. studies that are ~30 years, so that children can grow up completely under this environment and live through their dependent years (<25 years old) under these conditions.
2) The experiments provide enough evidence and this warrants attempting this on a much larger scale for the presumed future. i.e. institute a UBI (obviously we need to determine WHICH kind of UBI we would institute).
3) There are major flaws in the studies that need to be addressed and we need to refine them. (Personally with the many variations of these I've seen I do not think this is an accurate conclusion, but I am open to being wrong as I am not an expert studying this topic)
4) While the benefits are real, the cost is too much. This is one I'd particularly like to see addressed. Pretty much every time we see UBI experiments come up we see: 1) little to no earning wage increase (which is difficult to say if it is because the short time periods or not) 2) lower hospitalizations 3) higher sense of self worth 4) more children are finishing education 5) more children are reaching their dietary needs. The issue I see is that these have (unclear) economic values tied to them but are not discussed. I ALWAYS see the economic cost discussed, though understandably this is a much easier thing to calculate. But aren't economists supposed to be estimating these difficult concepts? As a voter I would like to know what the economic benefit is to these programs as well as the cost. This will allow me to make better judgments (e.g. even if UBI costs more economically maybe my personal moral utility value makes up the difference between the numbers). It is a shame that this is not discussed.
The issue of UBI and all its variations is complex but I believe that the conversation is frequently being framed in ways that is difficult to make real judgments on. We see the economic costs, but not the economic benefits. But we do see moral benefits, but this isn't enough. Legitimate excuses are given (for and against), but no one is making new experiments that address these concerns. We need a serious conversation with less surjection.
I think it could be simpler. Instead for means testing and all the administration that comes with it we could try much simpler schemes. Just give something to everyone, could be a negative tax, but a dividend is even simpler.
Since we are in the middle of various economic transitions where we need to introduce taxes to control over consumption the simpler experiment (instead of finding a region and allocating a budget) would be to introduce those taxes together with a public dividend.
Since we are in the middle of various economic transitions where we need to introduce taxes to control over consumption the simpler experiment (instead of finding a region and allocating a budget) would be to introduce those taxes together with a public dividend.
If curious see also these other Mincome threads:
2016 https://news.ycombinator.com/item?id=11497021
2015 https://news.ycombinator.com/item?id=9004287
2014 https://news.ycombinator.com/item?id=8792192
2016 https://news.ycombinator.com/item?id=11497021
2015 https://news.ycombinator.com/item?id=9004287
2014 https://news.ycombinator.com/item?id=8792192
If say, a liberal state in the US like California wanted to do a useful study on the subject, the way to do it would be to randomly choose a pair of nearby cities/counties with similar composition, then impose both a basic income stipend and the extra taxes needed to pay for it on one of the counties and not on the other, for a minimum period of 10 years. You could even choose the specific city/county pairs from only those that wanted to take part in the experiment and had voted to that effect in a ballot proposition. Then you could answer important questions regarding effects of the increased taxes as well as that of the payments. I'd be particularly interested in 2nd order effects, for example, if the voters can vote to keep increasing the basic income amount, would the increased taxes eventually drive out those who are taxed most heavily? And would that be net negative (reduced tax revenue to fund the program)? Or net positive (e.g. reducing housing prices?)
Manitoba again. If you're paying attention to universal basic income, this is more like the experiment they keep reminding us about.
I feel like there is a specific issue with the methodology of this and various other basic income experiments: it was time-limited.
If one goes into the experiment knowing that the basic income will end after N years, I suspect that may significantly affect one's behavior. For example, this study found that people typically did not quit their jobs (for 4 years of basic income). Would that result replicate with indefinite basic income? I'd like to see a follow-up study to test that.
If one goes into the experiment knowing that the basic income will end after N years, I suspect that may significantly affect one's behavior. For example, this study found that people typically did not quit their jobs (for 4 years of basic income). Would that result replicate with indefinite basic income? I'd like to see a follow-up study to test that.
While I agree with this, is there any long term experiment even in proposal? We'd really need at least 30 years to see how children develop through their dependent years (<25). I see "it was time-limited" often stated in response to UBI criticism (it is a legitimate complaint that these are time limited!) but I have yet to see a proposal that tries to remedy this. Is there one?
They wanted to see whether a guaranteed basic income for those below the poverty line could improve quality of life
This is what drives me crazy about these experiments. Obviously, using straight donations to keep people above a certain poverty line will improve the lives of those particular people. What's always missing is the other half of the equation: the analysis of whether UBI is the most efficient way to spend that money. Every study seems laser-focused on the outcomes of people who received the benefit while ignoring the projected effect on the society as a whole. It's entirely possible UBI is a great choice but its proponents seem bound and determined not to prove it.
This is what drives me crazy about these experiments. Obviously, using straight donations to keep people above a certain poverty line will improve the lives of those particular people. What's always missing is the other half of the equation: the analysis of whether UBI is the most efficient way to spend that money. Every study seems laser-focused on the outcomes of people who received the benefit while ignoring the projected effect on the society as a whole. It's entirely possible UBI is a great choice but its proponents seem bound and determined not to prove it.
Instead of the idea of universal basic income. I like to toy with the idea of somehow making it so people can work less. Such as a person works every other week and where someone else fills the role for the weeks the other person isn't working. I think it would increase job positions and better mental health. I'm unsure how it financially could work out but I assume money can come from somewhere because UBI is basically proposing income for no work at all.
It is not for no work at all. You would be free to work and earn more money, so why wouldn’t you? It just guarantees a minimum income not a comfortable income. And it would encourage people to do exactly what you want, work less.
This only really works for jobs doing more menial tasks - it will not work very well for longer term projects. Instead, we should focus those kinds of efforts on reducing the length of the work day, adding more flexibility to scheduling, and pushing hard to keep work out of home life.
Also read negative incometax. Same thing. At this point economics will make more sense if human cost is acually made quantifiable and counted in profit and loss.
UBI is not the same thing as a negative income tax. I would be sure to get a UBI this month, and next month, and the month after that independent of what I do. With a negative income tax, I might be employed this month, then lose my job and barely scrape by next month, and starve the month after that. And then sometime next year, after filing tax papers, I would get some money to keep me alive... this year.
It's true that in the grand scheme of things, averaged over many years, I would get the same amount from a UBI and a negative income tax. But at critical points in life, where my employment status changes significantly, the delay from the negative income tax would not provide the security that a UBI does.
It's true that in the grand scheme of things, averaged over many years, I would get the same amount from a UBI and a negative income tax. But at critical points in life, where my employment status changes significantly, the delay from the negative income tax would not provide the security that a UBI does.
How much bigger do UBI experiments need to be before we can be confident that these positive small-scale outcomes will also replicate on the scale of a USA-sized country?
There's some longer term unanswered/unanswerable questions as well. How do children do if their parents have never worked?
Which parents that never worked? If unemployment doesn't go up, but remains constant or goes down, and more children complete high school, what kids are you worried about? Right now we have a bunch of kids that don't finish high school and are born in unemployed families, how about we worry about them? We know the effect our current system is causing on them, a cycle of poverty that never goes away. Clearly our current approach is not working.
I don't know where this idea is coming from that UBI will incent people to drop out of the labor force. Any reasonable and currently-feasible UBI would do the opposite. And experiments bear this out - those who seemingly leave the workforce are actually doing something quite different: namely, they're temporarily shifting from formal employment to working towards human capital acquisition, or else providing care for others.
> those who seemingly leave the workforce are actually doing something quite different: namely, they're temporarily shifting from formal employment to working towards human capital acquisition, or else providing care for others.
Providing care for others is a great use of labor. Working towards human capital acquisition sounds great, but then you realize you still need people working the bottom jobs.
Bottom jobs suck. If people have legit UBI, they won't do them. They'd be stupid to do them unless they truly believed they could not do better with self investment. But we need those jobs to be done.
So maybe you raise wages. So prices rise a bit, cheap foreign labor becomes even more enticing where available, and the UBI is not Universal-not-quite-Basic-Income. What do you do when your UBI isn't quite livable?
Providing care for others is a great use of labor. Working towards human capital acquisition sounds great, but then you realize you still need people working the bottom jobs.
Bottom jobs suck. If people have legit UBI, they won't do them. They'd be stupid to do them unless they truly believed they could not do better with self investment. But we need those jobs to be done.
So maybe you raise wages. So prices rise a bit, cheap foreign labor becomes even more enticing where available, and the UBI is not Universal-not-quite-Basic-Income. What do you do when your UBI isn't quite livable?
The thing is, one you've raised those wages enough, the "bottom jobs" are no longer at the bottom. Especially if people are no longer limited to that single source of income. So some people get actively drawn into that sector, and prices stabilize. The whole notion of some jobs being at the "bottom" while others aren't is quite dysfunctional and not really an inherent part of a functioning economy.
BTW, an UBI can be less than "livable" and still be quite useful. Even a baseline subsidy can bring a very welcome increase in flexibility in the seemingly "bottom" sector, which is also often the entry point into the labor market.
BTW, an UBI can be less than "livable" and still be quite useful. Even a baseline subsidy can bring a very welcome increase in flexibility in the seemingly "bottom" sector, which is also often the entry point into the labor market.
If wages rise, then prices rise. The stabilization occurs at the point where people need to do the bottom jobs. It's great if individuals can earn a partial UBI and a higher paid bottom tier job.
However, when you raised the wages, you inevitably caused some of those jobs to be outsourced. So now there's a class of people who bottom tier job doesn't exist anymore and whose UBI isn't enough to live on. Now they're screwed. They could offer to work for cheaper and lower the wages, and let's be fair and acknowledge that even if they do, overall real wages per capita will probably rise net positively. But it's much more difficult to compete with neighbor nations.
However, when you raised the wages, you inevitably caused some of those jobs to be outsourced. So now there's a class of people who bottom tier job doesn't exist anymore and whose UBI isn't enough to live on. Now they're screwed. They could offer to work for cheaper and lower the wages, and let's be fair and acknowledge that even if they do, overall real wages per capita will probably rise net positively. But it's much more difficult to compete with neighbor nations.
Do you realize that arguing we must keep some people impoverished so they will do the work no one wants to do is basically an argument for slavery? If there are jobs in society that are essential that no one wants to do we should automate them or increase the pay to an amount that appropriately reflects their level of crappiness and importance.
I do realize that. It sucks.
If you automate the jobs, then these people have nothing. If you increase they pay, then they get globalized away.
It's a difficult problem. Solutions that sound nice are full of holes.
If you automate the jobs, then these people have nothing. If you increase they pay, then they get globalized away.
It's a difficult problem. Solutions that sound nice are full of holes.
If firms have to raise wages for workers with low bargaining power (i.e. low wage menial workers) that's a positive outcome of the policy.
If they outsource or automate jobs and thus become more profitable we would always have the option to raise the UBI, because after all they can afford it then.
If they outsource or automate jobs and thus become more profitable we would always have the option to raise the UBI, because after all they can afford it then.
> If firms have to raise wages for workers with low bargaining power (i.e. low wage menial workers) that's a positive outcome of the policy.
Agreed. You could also just raise the minimum wage to achieve the same for far less.
> If they outsource or automate jobs and thus become more profitable we would always have the option to raise the UBI, because after all they can afford it then.
That just shifts incentives higher up the chain so we have more labor done by other countries and more dependent people in domestically producing nothing. That's the worst possible outcome. Outsourcing jobs is a bad thing.
Agreed. You could also just raise the minimum wage to achieve the same for far less.
> If they outsource or automate jobs and thus become more profitable we would always have the option to raise the UBI, because after all they can afford it then.
That just shifts incentives higher up the chain so we have more labor done by other countries and more dependent people in domestically producing nothing. That's the worst possible outcome. Outsourcing jobs is a bad thing.
There are people today not returning to work because unemployment plus the $600 extra/week from the COVID-19 program means that it makes more sense to just be unemployed.
I'm not saying this is directly analogous to what might happen with a UBI program but it certainly demonstrates that there is a price point where some people will choose not to work.
I feel like this is one of the major weaknesses of the UBI concept. When people believe the safety net is designed to help people who find themselves in unfortunate circumstances beyond their control, then they can support the idea of taxes to fund the safety net. If on the other hand there are significant number of people who choose not to work, then it is very difficult for those who are working to accept that they should be funding that choice.
I'm not saying this is directly analogous to what might happen with a UBI program but it certainly demonstrates that there is a price point where some people will choose not to work.
I feel like this is one of the major weaknesses of the UBI concept. When people believe the safety net is designed to help people who find themselves in unfortunate circumstances beyond their control, then they can support the idea of taxes to fund the safety net. If on the other hand there are significant number of people who choose not to work, then it is very difficult for those who are working to accept that they should be funding that choice.
On the contrary, this demonstrates the major strength of the UBI concept.
Unemployment is means-tested. If you are paid more to not work than to work, it's economically rational to not work.
It's also against the rules of unemployment to keep collecting it when you've been offered a job, but this is difficult to enforce.
With UBI, this isn't a problem: a temporary bump in UBI in response to some future pandemic crisis would be in addition to any work someone could or couldn't get.
Andrew Yang's proposal of $1000 a month should be enough to survive on... maybe. But if someone could make another $500 on top of it, that's going to be a much higher quality of life. I'm confident most people would take that job if they could get it.
Unemployment is means-tested. If you are paid more to not work than to work, it's economically rational to not work.
It's also against the rules of unemployment to keep collecting it when you've been offered a job, but this is difficult to enforce.
With UBI, this isn't a problem: a temporary bump in UBI in response to some future pandemic crisis would be in addition to any work someone could or couldn't get.
Andrew Yang's proposal of $1000 a month should be enough to survive on... maybe. But if someone could make another $500 on top of it, that's going to be a much higher quality of life. I'm confident most people would take that job if they could get it.
This is a great point, but at the same time how do we answer this question when all our experiments last 5 years or less? To answer this question you have to run an experiment for roughly 30 years, ensuring that people born into this system are taken through college (i.e. the dependent years, which is usually considered <25yrs of age) and that you have enough children being born during this period. We know that influences before the age of 8 have significant factors in establishing things like educational culture for children, and this is highly associated with socioeconomic status.
So if we're saying that an experiment has to run for at least 30 years: 1) why aren't we getting on that? 2) are short term studies enough to warrant bypassing the long term small scale study and precede to a large scale study?
So if we're saying that an experiment has to run for at least 30 years: 1) why aren't we getting on that? 2) are short term studies enough to warrant bypassing the long term small scale study and precede to a large scale study?
A lot of people seem to think that having one stay at home parent is the ideal - surely both parents working and having no time to be involved in their kids' lives is not the solution?
People want to work.
A better question is: why do we actively discourage single parents from marrying and working full time? In many places, full time employment with low skills is a ticket to disaster.
A better question is: why do we actively discourage single parents from marrying and working full time? In many places, full time employment with low skills is a ticket to disaster.
I don't want to work, I have to work.
Let's say that you did not have to work. Imagine being free for decades. What do you think you would actually do for all of that time?
Most people do seem to need to decompress by doing nothing useful for a time; I find a month per year of work turns out to be about right. So let's say you do whatever you need to do to recover (games, videos, books, ...). What can you imagine doing after all that escapism becomes boring? It may not be employed by a boss, but would it be a useful contribution to society?
Most people do seem to need to decompress by doing nothing useful for a time; I find a month per year of work turns out to be about right. So let's say you do whatever you need to do to recover (games, videos, books, ...). What can you imagine doing after all that escapism becomes boring? It may not be employed by a boss, but would it be a useful contribution to society?
Children of rich parents who never work do fine.
Having a child is hard work. It's just not valued by modern liberal society, which doesn't value people, only their value they can sell.
Having a child is hard work. It's just not valued by modern liberal society, which doesn't value people, only their value they can sell.
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I bet that after this recession, at least one western country will try UBI at large scale within 20 years. We'll learn a lot.
So far experiments are one-sided with outside money being used. Nobody is testing how a self-sustained society works in UBI. I'd be more interested in seeing a full-fledged test rather than bigger and bigger cherry picked tests.
This endless discussion of UBI or other programs in isolation is like trying to find treatment for an itchy toe, ignoring that the rest of your body is also itching.
That treatment for an itchy toe managed to reduce hospitalization rates by over 8% and increase high school completion rates (to the point where everyone at least started their final year). There were also indications that small businesses started appearing, presumably because people wanted to keep working yet also wanted more autonomy. The article states that was possible because financing was easier to come by.
There is a possibility that addressing financial insecurity will give people the freedom to address other social ills on their own accord. Yet we will never find out if people keep coming up with excuses to prevent wider scale trials.
There is a possibility that addressing financial insecurity will give people the freedom to address other social ills on their own accord. Yet we will never find out if people keep coming up with excuses to prevent wider scale trials.
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Last I check itching cream worked on most parts of your body. Like UBI, being given any amount of itching cream can cure many itches at once.
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I understand what you're getting at. It's like you're trying to put out a fire in your kitchen when your whole house is on fire. It would work if you could get it all done at once but not when you try to do it piecemeal.
There is UBI in Canada, but it's called welfare.
In order to form the Canada federation, Ontario had to agree to pay residents of Quebec and the Maritime provinces for not working.
"Transfer payments" is the only reason Quebec hasn't become an independent country yet.
How it's handled in Newfoundland is that fishermen agree to fish for a few months, then they get "income support" for the remaining months of the year.
https://en.wikipedia.org/wiki/Canadian_Confederation
In order to form the Canada federation, Ontario had to agree to pay residents of Quebec and the Maritime provinces for not working.
"Transfer payments" is the only reason Quebec hasn't become an independent country yet.
How it's handled in Newfoundland is that fishermen agree to fish for a few months, then they get "income support" for the remaining months of the year.
https://en.wikipedia.org/wiki/Canadian_Confederation
That is an interesting take. I'm not sure I would agree with the way you described it.
This is a more relevant link[0].
Technically, the money comes from the federal government. It is given to the poorer provinces as general revenue and it is used to balance their budgets.
It is not specifically used to pay Maritime fishermen not to work. The wealthier provinces essentially subsidize the poorer ones. It is just like society; wealthier people pay more tax and poorer people use more social services.
I'm not saying it is a perfect solution. But it does ensure a certain baseline level of services across the country.
Quebec is, by far, the largest recipient of equalization payments.
[0] - https://en.m.wikipedia.org/wiki/Equalization_payments_in_Can...
This is a more relevant link[0].
Technically, the money comes from the federal government. It is given to the poorer provinces as general revenue and it is used to balance their budgets.
It is not specifically used to pay Maritime fishermen not to work. The wealthier provinces essentially subsidize the poorer ones. It is just like society; wealthier people pay more tax and poorer people use more social services.
I'm not saying it is a perfect solution. But it does ensure a certain baseline level of services across the country.
Quebec is, by far, the largest recipient of equalization payments.
[0] - https://en.m.wikipedia.org/wiki/Equalization_payments_in_Can...
UBI is more like anti-welfare.
without knowing anything about it I'd think that our system would be working better with UBI if it was randomized and switching between citizens, would make sense to exclude everyone who is already a millionaire or something.
So if you pull it, you get 4-8 years to build a business with the money, or do whatever u want, and then the money goes to someone else.
That way it wouldn't just be hyper inflationary. If you give everybody more money, nobody has more money. Capitalism is built on inequality.
Things are still unequal with UBI - if you get $2k a month, billionaires are still billionaries. It can make being poor less dangerous; e.g. homelessness, car repossession, lack of basic necessities can stop being a thing.
I sometimes think really that a good alternative would be Universal Protected Net Worth. Maybe things would be better if there was some floor of money and assets below which no court or legal proceeding could take from you, including taxes, fines, bail, judgements, seizures, forfeitures, etc. I don't know how that would work in practice.
I sometimes think really that a good alternative would be Universal Protected Net Worth. Maybe things would be better if there was some floor of money and assets below which no court or legal proceeding could take from you, including taxes, fines, bail, judgements, seizures, forfeitures, etc. I don't know how that would work in practice.
The Mosaic law actually has something kind of like this where you can't lose ownership of your allotted farmland. Thus, at minimum, everyone owns a valuable asset and thus some net worth. (Data is sparse on whether this law was every actually followed or the effects.)
Universal Protected Net Worth sounds unbelievably prone to abuse.
One of the best things about UBI is that it is unabusable (except with faking existence of people, which can be used to abuse literally any system).
One of the best things about UBI is that it is unabusable (except with faking existence of people, which can be used to abuse literally any system).
The Austrian Pirate Party's UBI model specifically states (or stated, last time I checked) that the monthly UBI payment should be unseizable.
tldr: If you're worried about the high cost or the efficiency of UBI, you could fix it with taxes.
If we are just talking about giving cash as charitable donations, smaller-scale experiments about giving people cash tell us what we need to know about the effects. But at large scale, yes, we will have to also consider the effect of whatever taxes are used to counter the increase in the money supply. This isn't an immediate concern considering very low inflation, zero interest rates, and a depressed economy, but might eventually become an issue, someday.
The thing is, you could combine UBI with any tax, so that means there are a huge number of possible policies. My favorites are a carbon tax along with making income tax more progressive, but there are others.
If much of the benefit of UBI is earlier in life and the taxes are paid somewhat later (at higher income), then this has similar effects to a loan. If the benefits happen after peak income (in retirement) then it's more like forced savings.
It's also similar to an insurance scheme. On net, some people may never benefit due to always having a good income and paying more in taxes than they get back, but it still reduces your risk if you somehow lose your income.
If we are just talking about giving cash as charitable donations, smaller-scale experiments about giving people cash tell us what we need to know about the effects. But at large scale, yes, we will have to also consider the effect of whatever taxes are used to counter the increase in the money supply. This isn't an immediate concern considering very low inflation, zero interest rates, and a depressed economy, but might eventually become an issue, someday.
The thing is, you could combine UBI with any tax, so that means there are a huge number of possible policies. My favorites are a carbon tax along with making income tax more progressive, but there are others.
If much of the benefit of UBI is earlier in life and the taxes are paid somewhat later (at higher income), then this has similar effects to a loan. If the benefits happen after peak income (in retirement) then it's more like forced savings.
It's also similar to an insurance scheme. On net, some people may never benefit due to always having a good income and paying more in taxes than they get back, but it still reduces your risk if you somehow lose your income.
> you could fix it with taxes
Someone still has to work to produce the food that UBI wastrels consume. Please, explain to me why we should feed everyone for free? What gives them the right to commandeer someone else's labour while they languish?
All of these schemes to shift taxes here and burdens there ultimately just have the effect of making it so that the people who do work and do produce value are shouldering the burden for everyone else. You can print money, but you cannot print calories.
Someone still has to work to produce the food that UBI wastrels consume. Please, explain to me why we should feed everyone for free? What gives them the right to commandeer someone else's labour while they languish?
All of these schemes to shift taxes here and burdens there ultimately just have the effect of making it so that the people who do work and do produce value are shouldering the burden for everyone else. You can print money, but you cannot print calories.
There's nothing about UBI that says you need to work for free, nor does it set prices. If you choose to work, you should have more bargaining power and get better terms. Businesses providing essential goods should see more demand.
Maybe you should ask instead, if there are a lot of people living only on UBI, how will we generate enough demand to keep the whole economy going? If it's a $1000 a month, someone living on that isn't going to be eating out or going on vacation. As we're learning this year, people settling for the essentials (housing and groceries) is not enough. Agriculture and related industry only requires 11% of the workforce in the US.
But anyone with ambition is going to want more in life than just the basics, and so they will keep working, earn more money, and spend more. That doesn't change.
Also, I think you may have missed this: any UBI can be entirely undone by taxing people exactly the same amount. That would be silly, but it shows that a UBI scheme could be an ambitious redistribution, or just a formality, depending on how taxes are set.
Maybe you should ask instead, if there are a lot of people living only on UBI, how will we generate enough demand to keep the whole economy going? If it's a $1000 a month, someone living on that isn't going to be eating out or going on vacation. As we're learning this year, people settling for the essentials (housing and groceries) is not enough. Agriculture and related industry only requires 11% of the workforce in the US.
But anyone with ambition is going to want more in life than just the basics, and so they will keep working, earn more money, and spend more. That doesn't change.
Also, I think you may have missed this: any UBI can be entirely undone by taxing people exactly the same amount. That would be silly, but it shows that a UBI scheme could be an ambitious redistribution, or just a formality, depending on how taxes are set.
I never considered until now combining UBI with regressive taxation to redistribute wealth from the poor to the rich...
Thank you for the thought experiment.
Thank you for the thought experiment.
One example argument I find interesting is that people actually have equal rights to our environment and our commons.
So if we are to have such institutions as private property and similar rights to exclusivity, those excluded should be justly compensated for being excluded.
Edit: To clarify. Take John Locke, he argues that when you mix your labor with nature you should have right to the result of that labor, but that you can only take from nature what is not needed by anyone else.
One could also extend from that argument that one should not have the right to destroy that which is needed either (think pollution). So be it land value taxes or carbon taxes, you can argue that some compensations is just.
So if we are to have such institutions as private property and similar rights to exclusivity, those excluded should be justly compensated for being excluded.
Edit: To clarify. Take John Locke, he argues that when you mix your labor with nature you should have right to the result of that labor, but that you can only take from nature what is not needed by anyone else.
One could also extend from that argument that one should not have the right to destroy that which is needed either (think pollution). So be it land value taxes or carbon taxes, you can argue that some compensations is just.
The main reason why we might want to "feed everyone for free" is that there are strong indications it could improve the health of our society (more innovation, more self-directed time for individuals, more freedom) and reduce things we don't like (crime, homelessness, drug abuse). On top of that, some people just think it's the moral thing to do. No one asked to be born into a poor starving family or a corrupt fucked up world, but the only people around who could possibly stop this from happening to more people in the future are those of us pre-existing humans who set all the policy around here.
> Someone still has to work to produce the food that UBI wastrels consume. Please, explain to me why we should feed everyone for free? What gives them the right to commandeer someone else's labour while they languish?
Right now, tens of millions of people in the US alone are unemployed through no fault of their own. To characterise them as "languishing" is ridiculous (and most unemployment rates only take into account people who are actively looking for work, as a measure to make a government's numbers look better). It is simply a fact that capitalism as a system cannot function with 0% unemployment because there would be no job market. Thus, there will always be people who are willing to work but don't have a job.
To me, it is fundamentally unethical to have an underclass of people who cannot afford food or shelter while their "fellow citizens" have an excess of resources. We are not an island, we live in a society and rising unemployment and homelessness hurts us all. But even if it had no impact on you or me, we should still help people who need it.
Not to mention that the actual producers of foods and products are still being paid with money, so I don't get why you think any aspect of this is related to the "right to commandeer someone else's labour" (in most countries the government actually does have that power, but that's a different topic).
> All of these schemes to shift taxes here and burdens there ultimately just have the effect of making it so that the people who do work and do produce value are shouldering the burden for everyone else. You can print money, but you cannot print calories.
Any economic system has at least some people who generally do not produce things -- babies and the elderly. In capitalism, you also have the unemployed. One of the goals of economic systems is to determine how value created by those who work is distributed to those who don't. Placing a value judgement on the need for this redistribution makes no sense. It's like saying a boulder is lazy because it only chooses to go downhill.
Right now, tens of millions of people in the US alone are unemployed through no fault of their own. To characterise them as "languishing" is ridiculous (and most unemployment rates only take into account people who are actively looking for work, as a measure to make a government's numbers look better). It is simply a fact that capitalism as a system cannot function with 0% unemployment because there would be no job market. Thus, there will always be people who are willing to work but don't have a job.
To me, it is fundamentally unethical to have an underclass of people who cannot afford food or shelter while their "fellow citizens" have an excess of resources. We are not an island, we live in a society and rising unemployment and homelessness hurts us all. But even if it had no impact on you or me, we should still help people who need it.
Not to mention that the actual producers of foods and products are still being paid with money, so I don't get why you think any aspect of this is related to the "right to commandeer someone else's labour" (in most countries the government actually does have that power, but that's a different topic).
> All of these schemes to shift taxes here and burdens there ultimately just have the effect of making it so that the people who do work and do produce value are shouldering the burden for everyone else. You can print money, but you cannot print calories.
Any economic system has at least some people who generally do not produce things -- babies and the elderly. In capitalism, you also have the unemployed. One of the goals of economic systems is to determine how value created by those who work is distributed to those who don't. Placing a value judgement on the need for this redistribution makes no sense. It's like saying a boulder is lazy because it only chooses to go downhill.
> Any economic system has at least some people who generally do not produce things -- babies and the elderly. In capitalism, you also have the unemployed.
There is a big difference between people who are incapable of producing things (perhaps because of circumstances beyond their control) and people who choose to not produce things. This is one weakness of the UBI concept that I haven't seen addressed in a forthright way.
There is a big difference between people who are incapable of producing things (perhaps because of circumstances beyond their control) and people who choose to not produce things. This is one weakness of the UBI concept that I haven't seen addressed in a forthright way.
I first want to point out that neither you nor I know how widespread that behaviour would be. You might argue that a large portion of people would prefer to not work, while I might argue that generally people want to do something fulfilling with their lives and work fills that role for them. Until we see long-term examples of UBI systems, discussions of this question will almost always just be pure conjecture.
However, there are two points to be made:
* Most UBI progrms are designed to fulfill the base requirements to live in society (food and shelter), so if you want to have a better quality of life than the bare minimum you'll need to get a job as you do today. Most people want to improve their life in some way, but being in poverty robs you of opportunities to do so. So the same incentives to work would exist under UBI, it's just that the bottom of the income ladder isn't marked "$0".
* Not fearing unemployment may enable more people in lower-end jobs to leave their jobs to become better-educated and perhaps find better work in the future (perhaps even starting their own businesses). Again, being poor robs you of the freedom to pursue activities which require an up-front time (and thus money) commitment like higher education or other forms of skill development.
These apply to people who would "choose" to not work, there are other arguments for those who cannot work (but I guess we're in agreement on why that would be a good idea).
I want to point out that I'm not really a proponent of UBI. There are many possible ways to solve existing problems of wealth inequality, and UBI is possibly the most "obvious" one, but I personally think job guarantee programs are a better solution. They solve the same issues of unemployment and wealth, but they also (if implemented correctly) can act as trade schools and as national infrastructure programs (they are also a better application of MMT, because you are actually purchasing resources -- physical labour and materials). But you'd still need a strong safety net for people who cannot work.
However, there are two points to be made:
* Most UBI progrms are designed to fulfill the base requirements to live in society (food and shelter), so if you want to have a better quality of life than the bare minimum you'll need to get a job as you do today. Most people want to improve their life in some way, but being in poverty robs you of opportunities to do so. So the same incentives to work would exist under UBI, it's just that the bottom of the income ladder isn't marked "$0".
* Not fearing unemployment may enable more people in lower-end jobs to leave their jobs to become better-educated and perhaps find better work in the future (perhaps even starting their own businesses). Again, being poor robs you of the freedom to pursue activities which require an up-front time (and thus money) commitment like higher education or other forms of skill development.
These apply to people who would "choose" to not work, there are other arguments for those who cannot work (but I guess we're in agreement on why that would be a good idea).
I want to point out that I'm not really a proponent of UBI. There are many possible ways to solve existing problems of wealth inequality, and UBI is possibly the most "obvious" one, but I personally think job guarantee programs are a better solution. They solve the same issues of unemployment and wealth, but they also (if implemented correctly) can act as trade schools and as national infrastructure programs (they are also a better application of MMT, because you are actually purchasing resources -- physical labour and materials). But you'd still need a strong safety net for people who cannot work.
The issue I see with that argument specifically is that the underlying system will always have people not in jobs.
From my reading, economists consider a 100% employment rate bad as it means there's no elasticity in the labour supply. If there's no elasticity in the labour supply, wages go up and the rich can't effectively extract surplus value. We will always have the unemployed, as it's a feature of the economic system we participate in.
If you want to fix the "problem" you need to abandon capitalism. I'm not sure anyone here wants to do that, myself included.
From my reading, economists consider a 100% employment rate bad as it means there's no elasticity in the labour supply. If there's no elasticity in the labour supply, wages go up and the rich can't effectively extract surplus value. We will always have the unemployed, as it's a feature of the economic system we participate in.
If you want to fix the "problem" you need to abandon capitalism. I'm not sure anyone here wants to do that, myself included.
Oh there'll still be inequality, don't worry about it :)
Capitalism is built on private ownership, not inequality.
In Canada anyone who is out of job now unconditionally gets 500/week of Covid money. Pretty much same idea as UBI. The immediate effect that I observed was that all Filipino nannies quit. There is no incentive for them to work any more. I am not sure what they do with all the free time though. Maybe the life was different in rural Winnipeg in 70's (btw 11k was a shitload of money back then), but nowadays the UBI will immediately wipe out the low paying jobs. This may disrupt industries that rely on cheap labor. But what is much worse - it will create a class of people who are entitled to free money and have zero incentive to do anything with their lives, like get education, progress their careers, strive for better live. There is a need for a safety net in a society for those who slipped, but UBI is different. It is designed to make people regress, takes away any motivation.
It sucks that you are now unable to take advantage of poor immigrants because they are not in desperate need of money. It is nice that they have temporarily escaped their cycle of poverty. Instead of complaining about how they are wasting their lives by not working (and reciting the poem The Educated Man's Burden), you should instead pay them their actual worth.
Oh, I was not complaining:) I do not have a nanny neither want one. I clean my own shit. I was just observing. Nanny's salary is based on supply/demand. Until government interferes with Covid payments. When payments stop, nannies will go back to work. And, you are right, I believe that idling on Covid handouts is a waste of time. Any sort of idling is a waste of time.
To me it seems it would be similar to the government intervention into housing - the gov't wanted more people to be able to own homes. So they create 30-year mortgages (for example). This was great because you could spread the payments out over more time, lowering your monthly payment.
Oh wait, the 30-year mortgage is open to everyone. So now everyone has more buying power. Prices rise and you end up in the same spot as before - a big chunk of the population can't afford a house.
Why wouldn't this happen with UBI? If you have everyone in the US $10,000, no strings attached, I would guess prices would generally rise until $10,000 wasn't enough to survive on.