Opinion of Universal Basic Income

[muon2]

As I understand the traditional idea, the public would get an income based on a "social dividend" from government-owned corporations. If so, the best US example is probably the Alaska Permanent Fund which pays to every Alaskan a dividend from the proceeds of the state's petroleum extraction and other natural resources.

[muon2]

To address the implied tax rate for the poor I would think that proponents would give the same basic income to all regardless of earned income. That's what the social dividend would imply. The windfall for the wealthy would be addressed by a conventional progressive income tax. The tax formula would have to collect enough to completely compensate for the basic income grant above the maximum income that would get a benefit.

[muon2]

As far as lifestyle changes go, that's not particularly relevant, is it? Do you actually think that the social problems associated with poverty are the cause of poverty? If so, I suggest you take a few minutes to think about this issue: do you really think it's more plausible that someone was driven to homelessness because they were an alcoholic or that they were driven to alcoholism because of their homelessness?

I have worked with some homeless. If they were both homeless and alcoholic, then the alcoholism was a contributing factor to their homelessness, not the other way around.

[muon2]

I did a brief search of peer-reviewed studies. This one is from 2009.

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So though both directions of causality are found in the study, one direction was statistically preferred. The article also notes that drug abuse is now bigger than alcohol abuse as a factor leading towards homelessness. I suspect my obsrvations from 10-20 years ago are now dated in regards to alcohol.

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[muon2]

There's an certain irony to the lack of stable employment. During the tech boom of the 1990's it became fashionable for tech sector workers to frequently change jobs. My wife, who consults in that field, once described to me that any tech resume where a person worked more than 3 years at their current company was likely to be put at the bottom of the interview pile. The 401K boom could be traced to the the same set of workers who demanded more portability for retirement income and wouldn't stay long enough to vest in a  traditional plan.

Before long many other industries were copying the tech model, especially in companies that had an exposure to the tech sector. But the 2000's started with the dot com bust and ended with the Great Recession while the new trendy employment model got locked in. Unless a new generation of entrepreneurs makes long-term hires fashionable again, I'm not sure how one returns to the model where most workers expect to spend their career at one location.

[muon2]

There's an certain irony to the lack of stable employment. During the tech boom of the 1990's it became fashionable for tech sector workers to frequently change jobs. My wife, who consults in that field, once described to me that any tech resume where a person worked more than 3 years at their current company was likely to be put at the bottom of the interview pile. The 401K boom could be traced to the the same set of workers who demanded more portability for retirement income and wouldn't stay long enough to vest in a  traditional plan.

Before long many other industries were copying the tech model, especially in companies that had an exposure to the tech sector. But the 2000's started with the dot com bust and ended with the Great Recession while the new trendy employment model got locked in. Unless a new generation of entrepreneurs makes long-term hires fashionable again, I'm not sure how one returns to the model where most workers expect to spend their career at one location.

Right, but I'm not sure that it makes much sense to compare the person who's earning $300 per hour as a consulting data architect to the person who's scraping by as an temp doing secretarial work, or an adjunct commuting between three colleges to earn the equivalent of the minimum wage or less. How are they manifestations of the same phenomenon? On one side you have highly skilled professionals who maintain as much autonomy as possible because they can command the best compensation and working conditions, as well as the most interesting work, by avoiding long-term commitments. On the other are people with minimal autonomy and very little leverage.

There's also an interesting contrast to be drawn with other highly paid, highly trained professionals - I'm thinking chiefly of doctors and lawyers - who are less likely than ever to be working independently. Physicians in particular tend to be very anxious about the level of consolidation in health care and the increased difficulty of maintaining an independent practice.

That's why I thought there was a certain irony. The skilled workers of the then new information economy drove much of the rest of the economy towards the work model they preferred. I doubt it's the model that those same skilled workers would have wished on the old economy if they thought about the result 20 years later.

The traditional professions indeed have seen two directions of movement. On one hand there has been consolidation towards larger groups, but I see doctors and lawyers more frequently changing firms for better work, much as in the tech sector.

[muon2]

snip

Fair point. The thing is, I'm not really concerned with "perverse incentives" because, to be honest, I don't want to encourage people to work. I think people should work if they want to, but I don't subscribe to the visions of society wherein employment should be the ultimate goal of an individual. The current economic system makes it perfectly possible to guarantee everyone a comfortable existence even if a significant share of the workforce doesn't participate, provided sufficient redistribution.

Still, if my estimate was too conservative, let's triple it: still less than 5% of the budget. It would require a few changes to pay for it, but would still be far from having a prohibitive cost.

What then is the incentive to work at unskilled or semiskilled positions? If those are not filled, then how does one maintain an economic system that can make that guarantee? Generally those jobs aren't filled out of a sense of personal fulfillment, but to have a better life than one might otherwise have through the income earned. If there is a guarantee of a comfortable existence then what advantage is there to work in a low-paying job that is not personally fulfilling in and of itself?

[muon2]

To Gustaf's post, if the entire US federal government shut down and used all of its revenue to create a UBI it wouldn't be much. $3.25 trillion divided by 319 million people is $10,188/year. That corresponds to a full-time wage of about $5.00/hour, so that is consistent with Gustaf's claim of starvation wages.

By comparison the maximum social security benefit at age 65 is $29,424/year almost three times as much. In other words the US would have to triple its tax income to provide a UBI equal to social security and it would still be shut down and provide no services. Tripling the rates wouldn't work since the top bracket is already 39.6% and that would result in tax rates greater than 100%. So arguably this matches Gustaf's other claim that the alternative would bankrupt the budget and be unsustainable even with higher taxes.

[muon2]

FP but only at $500-2000 a month.

Anything more is excessive and thats considering so many basic income supporters want $5000 which is way too much.

Are there serious supporters that want individual basic income at $5K/mo? The average individual income in the US in 2015 was about $3700/mo so that means if all income were redistributed equally it would be $1300/mo short - ie there isn't enough income to reach that goal even in the most extreme scenario.