Questions for Minimum Income Proponents

[DC Al Fine]

I'm on the fence about guaranteed minimum incomes and was wondering if you guys could answer some questions about your position:

1) What sort of lifestyle would the minimum income be able to buy? Would you take into account cost of living differences?

2) What, (if any) elements of the welfare state would you retain along with a minimum income?

3) What steps would you take to avoid the social problems associated with a large idle population?

[AggregateDemand]

I'm on the fence about guaranteed minimum incomes and was wondering if you guys could answer some questions about your position:

1) What sort of lifestyle would the minimum income be able to buy? Would you take into account cost of living differences?

2) What, (if any) elements of the welfare state would you retain along with a minimum income?

3) What steps would you take to avoid the social problems associated with a large idle population?

It depends on the minimum income system. In the US, a lot of universal income discussion is negative income tax and flat tax hybrid systems. I'll assume NIT.

1) NIT credit should probably be around 20% of median household income or somewhere between the per capita poverty rate for a family of 4 and the poverty rate for 1-person households (between $6K and $11K). Anything larger than 20% median income requires high tax rates that encourage idleness or educational spendthrift, depending on the recipient.

2) Replace everything, including Pell Grants and FFELP subsidies, but keep Medicare and Medicaid. Write special rules for seniors so NIT mimics social security.

3) NIT encourages work because it suppresses marginal tax and effective marginal tax rates for individuals below the poverty line. People can work to improve their lives without worrying about losing all of their benefits.

The numbers work for negative income tax of $10,000 per majority-age taxpayer with a 30% tax rate. However, the system would raise taxes sharply on the 5th and 4th quintiles of taxpayers. However, if the lower-middle class start working their way out of poverty, the upper classes will receive the biggest tax rebates as well.

Universal income is great, in theory, but many kinks must be worked out.

[TNF]

1) I think that a guaranteed minimum income should ideally pay everyone over the age of majority a lump sum of about $500 per week, with that number adjusted for inflation, of course. I wouldn't make adjustments downward, but yes obviously it would need to adjust upward in urban areas where the rent is too damn high and other necessities are phased out on account of lack of money.

2) All of the existing ones, and then some. A guaranteed minimum income program should act as an addition to the existing welfare state, not a wholescale replacement of it. If I had to eliminate one program, it would probably be food stamps, because a guaranteed minimum income plan would largely cover the same territory there and actually be more progressive in giving people full rein over what they could spend their cash on.

3) I don't think idleness is a social problem in and of itself. Fundamentally a minimum income program would be the first step toward the full scale abolition of work assuming we can also get automation and energy right. Honestly, if we face problems as a result of everyone actually having enough money to live on (whoa) then we could always require everyone to put in some degree of labor in return for receiving said guaranteed income. Like require a four hour shift pushing a button in a factory or something. I'm not sure, but what I am sure of is that in the case of a widespread guaranteed minimum income, we're going to need to develop new outlets for public leisure, because all of us are going to be using more leisure time. So maybe you could require people to help clean up parks or build new ones as part of receiving that income?

[AggregateDemand]

1) ......yes obviously it would need to adjust upward in urban areas where the rent is too damn high and other necessities are phased out on account of lack of money.

If the rent is too damn high, and the federal government is providing a minimum income, people are not captured by rent that is too damn high, unlike the current system of non-monetary compensation. Geographical living expense adjustment is a self-defeating purpose. If the poverty stricken people are able to escape, urban businesses will no longer be able to exploit the droves of poor people.

[DC Al Fine]

3) I don't think idleness is a social problem in and of itself. Fundamentally a minimum income program would be the first step toward the full scale abolition of work assuming we can also get automation and energy right.

Just to clarify, I'm not saying not working is the problem. I'm saying that not doing anything is a problem, whether you're a millionaire playboy or on welfare. It's healthy for everyone to do something for say 20 hours a week, but it doesn't have to be paid employment.

The problem IMO is that a large percentage of the population won't pursue anything once they don't have to work.

[Redalgo]

1) What sort of lifestyle would the minimum income be able to buy? Would you take into account cost of living differences?

Depending on where one lives it would buy a lower or working class lifestyle. I propose fixing the basic income to the estimated minimum cost of living in each respective state, awarding the sum to adults on an individual basis. An additional $2,000 would be sent to one of each minor's legal guardians, annually, with that amount adjusting for inflation. People who live frugally and work would be able to afford life in places where the costs of living are highest but those who persistently have no work should have enough to get by if they move out to an area with average or below-average living expenses in their state.

2) What, (if any) elements of the welfare state would you retain along with a minimum income?

I believe the basic income could provide enough assistance to dismantle our entire liberal welfare regime, provided a couple new policies of social democratic nature get implemented. Social Security, Medicare, Medicaid, SSI, TANF, CHIP, SNAP, WIC, CACFP, the ADMS Block Grant, public sector pensions, and special health programs for public sector workers would be discontinued. Some deregulation of industry could then occur and government could get out of mandating a minimum wage.

Public schools and job service programs should stay, meanwhile, and health care reform revisited with the goal of establishing a Bismarck-style system where providers and supplemental insurers are private but comprehensive insurance provided courtesy of the public sector covers all the most basic matters of physical and mental health. Public housing can be cooperativized, thus being taken out of the hands of government without necessarily evicting current beneficiaries. A state news network would be nice, too, and I would still support limited government involvement in the economy.

Individual states and local governments would be able to decide what else, if anything, ought to be provided. Public police and fire department services, animal shelters, parks, day care centres, libraries, and museums are a few among many possibilities.

3) What steps would you take to avoid the social problems associated with a large idle population?

Most people of working age will not be idle because they are unwilling to settle for living on the basic income alone for long periods of time. Self-interest would compel most individuals to want more income with which to purchase luxury goods and services. Procuring additional income is also conducive to ones efforts to maintain high self-esteem, find romance, save for retirement, and otherwise live a life worth feeling good about in hindsight. We see this in the population already. If people were content to just get by a very large percentage of our workers would try to commit somewhere between 20 and 30 hours of their time per week to work - shy of actual averages of 44 hrs/wk in the U.S. and 36.6 hrs/wk in Canada.

Many people who do not want to work are trapped by their need as a single-parent to look after children, ensnared in substance abuse problems, are inflicted with a disability of some sort, or have health related issues in need of remedy. Is government intervention justified to sort these issues out and promote increased productivity? That is a debate probably worth revisiting at some point. For now though I do not think those issues would worsen with a basic income. I suppose the big risk would be a long-term decay of work ethic causing diminished productivity, fewer hours worked, and an ever-growing need to raise taxes to sustain the redistribution schemes. Not sure what to do about that one yet.

[Sol]

3) I don't think idleness is a social problem in and of itself. Fundamentally a minimum income program would be the first step toward the full scale abolition of work assuming we can also get automation and energy right.

Just to clarify, I'm not saying not working is the problem. I'm saying that not doing anything is a problem, whether you're a millionaire playboy or on welfare. It's healthy for everyone to do something for say 20 hours a week, but it doesn't have to be paid employment.

The problem IMO is that a large percentage of the population won't pursue anything once they don't have to work.

This is my main concern with this too.

[AggregateDemand]

Just to clarify, I'm not saying not working is the problem. I'm saying that not doing anything is a problem, whether you're a millionaire playboy or on welfare. It's healthy for everyone to do something for say 20 hours a week, but it doesn't have to be paid employment.

The problem IMO is that a large percentage of the population won't pursue anything once they don't have to work.

If the minimum income is set at the poverty level for a single person household, people will not be able to find happiness without doing something productive. At the very least, they will have to cultivate a meaningful relationship with another person to raise household minimum income above poverty.

In essence, minimum income is a big tax cut for the 1st and 2nd quintile of taxpayers. They will finally have an incentive to work, and the labor market will have more incentive to hire them.

[DC Al Fine]

3) I don't think idleness is a social problem in and of itself. Fundamentally a minimum income program would be the first step toward the full scale abolition of work assuming we can also get automation and energy right.

Just to clarify, I'm not saying not working is the problem. I'm saying that not doing anything is a problem, whether you're a millionaire playboy or on welfare. It's healthy for everyone to do something for say 20 hours a week, but it doesn't have to be paid employment.

The problem IMO is that a large percentage of the population won't pursue anything once they don't have to work.

Is there any reason to suspect that they would not? Once you've eliminated students, stay-at-home parents, people working at least 20 hours per week, freelancers, and entrepreneurs, how many people would remain?

That assumes a static view of people. Most people would choose not to work if they had sufficient non-employment income. That's why I lean towards Redalgo's approach; set the income high enough to stop suffering but low enough to make sure people don't get too comfortable.

FTR, there's effectively guaranteed minimum incomes for seniors in Canada. Assuming you never worked a day in your life, you'd get $1300/mth as a single and about $1850 for a couple. That'd be enough to get by in most parts of the country, but not in the major metros.