I can’t help but think that UBI would distort job markets. Let’s pick an example of a “sucky job” (and I say this as just an example, I realize these guys work hard and are vital). A garbage man. He get’s paid $42k a year because they have to find people who would be willing to do this sucky job and need to pay higher than minimum wage to do so. At some point of income, people would be willing to accept the suckiness.
Now let’s throw UBI into the world. Everyone is getting $2k a month. Now a garbage man says “I’m not gonna be a garbage man anymore, I can do something I love now, like a music teacher that pays $30k”. Now we have no garbage man and the wage would need to increase to find new people. To cover that, taxes go up. Higher taxes are a regressive solution to giving people more money.
Or crappy jobs should have to pay more. Handling stinking garbage all day sounds like a job that should be high paying given how miserable it is. But due to desperation, people without other options are willing to accept very low amounts of money to do it. With UBI, the price of hiring a garbage collector would equal the price necessary to fairly compensate someone for having to pick up garbage.
I pay about $25 a month for my garbage pickup. How much of that is to compensate the garbage man who spends about 30 seconds at my house? If he makes $20 an hour, then it's about 17 cents or so. Let's double his wage to account for benefits, employer-paid payroll taxes, workers' comp, etc. Hell, let's say the all-in labor cost for each garbage truck driver is $50/hour. That's still $0.42 I'm paying as my share of his time. Roughly $2 a month. Let's triple-ish that to account for the other personnel at the landfill and transfer stations.
If my garbage bill goes up by another $5 each month, I'm way ahead with the UBI check.
Unless you can find 399 other things in daily life where wage increases will wipe out the UBI.
Of course a universal income will alter markets. Jobs that suck will have to pay more. That's a feature, not a bug. The alternative is that we enjoy low prices on ditches dug, because those doing the digging are desperate for the work. I'd rather live in a society that doesn't fight to preserve that dynamic.
A nice side effect of UBI is that this scenario you describe, plus the hundreds of other undesirable jobs that people are forced to do now to have shelter that thus subsidize their real costs would be hugely pressured to automate them.
In a UBI economy the economic pressure to get self driving trucks would be an order of magnitude greater, creating financial incentives for Google et al to pour more money into AI research to achieve it because the market value is so much greater when truckers are demanding much higher pay to justify the labor when they have a choice in it.
The same would apply to an automated garbage truck that can use CV to scan refuse and collect it via a standardized bucket system rather than having two impoverished desperate humans cling to the back of the truck being paid dirt to do one of the most dangerous jobs in the country.
UBI would probably be the most beneficial policy to spur the R&D that gets us to singularity the fastest.
If UBI is implemented minimum wage could also be removed.
At present we have a situation where there are probably many very non-sucky jobs that could be done, but it’s not commercially viable to employ people for them at minimum wage.
Maybe some of the existing sucky customer service type jobs are only as bad as they are because companies are forced to extract $x/hour. e.g. if McDonalds could maybe they’d hire more people at a lower rate and make the job less stressful, resulting in happier employees and customers. As things are McDonalds must extract $x/hour or they will not be profitable, this ensures it’s a terrible place to work, and usually understaffed.
Replacing minium wage with UBI is definitely a net good.
Don't buy the "companies will start treating you humanely if only they could pay you less". Corporations, particularly publicly traded ones, are in competition for profit. In most sectors exploiting your employees to the fullest presents a positive return on quarterlies no matter how much or little you pay them. Maximizing return on dollars committed is fundamental to growing revenues.
UBI helps improve worker condition by making the negotiation between labor and capital more equitable. So long as one person comes to the table for their needs and the other comes for their ones the former is always disadvantaged and ripe for exploitation.
But that’s exactly what he’s saying. The crappy jobs will have to pay more in order to attract people, and in order to compensate for the increase in labor costs, the cost of garbage collection goes up.
Basically, increased labor costs drives up cost of goods (inflation), which offsets the benefit of the UBI in the first place.
It also increases mobility. Now any 18-year-old kid can pick up trash and the guy getting paid more can be a supervisor or a technician. Repeat when the 18-year-old goes to college or decides to rise the ranks into waste management management.
I kind of get that, but on the other hand, you could say "Existence is like having a gun to your head. You do what you've got to do."
Because you need food and shelter to survive. There's been no point in time where we didn't have to acquire it. We're just now getting to the point where the production of it requires nominal effort.
You're inferring more than I'm implying. I'm not saying "existence is suffering". I'm saying existence requires maintenance and for all of human history, it's been up to one to do that maintenance on their own.
We've never lived in a time where the majority could exist in the non-working class. Having the majority be in the non-working class raises certain issues. Like, who is going to be in the minority.
I'm not worried about what happens at 100% automation. I'm more worried about what happens when there are too few jobs to reasonably distribute among the people. There's an icky issue of essentially slavery we're going to have to confront.
I wasn't given a vote when we decided to hand out all of the land and resources to them in the first place, so I hardly see how the system as it stands is in any way voluntary.
If we made it voluntary, almost no one would volunteer, certainly not enough to be viable. Taxation and the rule of law aren't opt-in for the same reason.
Because we are not living in an era of such abundance that we have the liberty to do that.
Do the math: 300M people, $2k/mo, 12mo/yr is 7.2 trillion dollars. Even to first order that is unaffordable, and that’s without factoring in that UBI would decimate the tax base that’s supposed to support it, or the consumer price inflation that would result in that $2k not going as far as you’d expect.
> if salaries for essential, dirty jobs must go up, i am all for it
so all goods and services that require said "dirty job" in the supply chain will go up in price. This eventually negates the UBI benefits, because the level of UBI no longer can sustain purchases of all the goods and services that it originally could due to the increases in prices.
So do you increase UBI to counter this? Or do you let it be, and UBI no longer pays enough to maintain the same level of living standard. In which case, people are now once again, forced economically, to work "dirty jobs" despite not wanting it.
>so all goods and services that require said "dirty job" in the supply chain will go up in price. This eventually negates the UBI benefits, because the level of UBI no longer can sustain purchases of all the goods and services that it originally could due to the increases in prices.
Isn't this the same argument that's used to argue against increasing the minimum wage? "if you increased the minimum wage, then the costs will go up for those businesses hiring minimum wage workers, making the goods more expensive for those workers, and canceling everything out!". But empirical evidence has shown this has not been the case[1]. Because of this, I'm wary of any hand-wavy arguments like these that just mention some effects without attempting to quantify the magnitude of those effects.
"Change in employment: -500k" It's not just that costs could go up, it's that jobs could also disappear. What's the hardest part about entering the job market? Proving that your labor is valuable. It's hard to build a resume when the wage floor is set so high.
Unlike UBI, minimum wages don't affect everyone and aren't purely inflationary. Some workers earn more gross income, some get fewer hours and earn less, and some get laid off. I think I support UBI but it clearly cannot be raised to fully compensate for every price increase.
Perhaps partially. But you have no evidence to support your implicit assertion that it happens totally, or that your argument defeats UBI on the merits
You make some interesting points here, but I think your logic is fundamentally limited. There are alternative, imaginative ways to solve this problem that don't necessarily involve capital. In _The Dispossessed_ by Ursula K. LeGuin, for example, able-bodied workers are required to perform essential work like agricultural work and other "dirty jobs". Much like we conscript people in times or war, we could do the same with regards to needed work that isn't getting done.
if garbage person labor shortage is a blocker, i will personally sign up for 1 day per week garbage duty. if that’s the cost to pay for a more equitable society, why not leave the keyboard for a day and perform that noble and necessary duty. i’m sure i’m not the only person on HN who feels this way.
the world isn’t all bad. it’s getting better. but it only gets better insofar as we ourselves become better. it is this striving towards higher harmony that propels us forward.
so do you currently volunteer your time for social work (or any other work for which there is a shortage of people due to low pay and hard to perform)?
Even if you _would_ do as you have proposed above, most people won't. A labour shortage is still likely the result, esp. if said labour is not high paying, but the doing of which is still relatively important to a functioning society.
I'm not against UBI - i would want it, even if it means a higher tax! But i just don't see how it is implementable atm, and also whether there are any negative consequences.
The unemployment benefits that have been paid out in the USA so far has many talking about how it is a disincentive to go back to work - because they are paid more than their original job. I can't see how this won't be the same under a UBI system - so the only way for a worker to _do_ work they wouldn't ordinarily do is to pay more!
To me, it seems like man's constant fight against the brutality of mother nature will never end. As long as we need food, need medicine, and entropy destroys what we create, we will need a lot of people working to solve problems.
Any conception of basic income where we can freely give out $2000 a month to everyone has a net present value roughly equal to giving each person a lump sum payment of $500,000. There's not enough wealth in the world to sustain it.
Sure, give someone 500k and they might try to buy some luxury goods and inflate prices of various things. Give someone enough to not be destitute on a monthly basis and you’ll have a huge boon to the economy - because they’ll buy the essentials. People will always want more than just the basics and thus work.
Money is not equal to wealth, money is a device. That's the first and most common mistake in economics.
UBI is a way to reshuffe the cards of modern economy and hope that'll fix some of the current problems. It certainly won't allow everyone to drive a Ferrari.
As is often the case in economics, the scarcity is not an absolute lack of resources, but a result of inefficient allocation.
The world's mean income is about $18000 adjusted for purchasing power parity so it's not a complete stretch to get to $2000 per month for the whole world https://www.bbc.com/news/magazine-17512040
The USA has a mean income of about $72,000 so in theory UBI could be $6000/mo without bankrupting the country.
It would be very interesting to see what kind of crazy spending-led boom you could achieve by redistributing wealth exactly evenly across every American citizen.
I don't understand what you mean by this. UBI redistributes income - wouldn't it obviously be funded via taxation? USA would be able to afford a much higher UBI than Sierra Leone would because US income is higher. What determines how much UBI can be issued if aggregate income is irrelevant?
If you fund by a 100% income tax, everyone would quit instantly. There would literally be no point in working for money. UBI cannot be funded by the thing UBI would eliminate.
American households own $98 trillion in net worth. Averages to about $340,000 per person. And this is just household wealth. So yes there is enough money out there.
the only wealth that isn't "household wealth" is public assets. I guess there might technically be enough to give everyone $500k (or $2000/month), but do you want the government to provide any services?
$2000 per month is with wealth right now. It will be more than affordable in the future since the country will have more wealth in the future. Pretty much everything in current economics relies on wealth growth (pension funds, 401ks, etc), so adding this into that mix is very reasonable.
the relationship between the two figures is that $2000/month is roughly the safe withdrawal rate for diverse $500k portfolio (ie, the most you can spend without risking that you use up the principal over several decades). if you use the almost all the returns from the nation's capital to pay out $2000/month, there isn't much growth to speak of. of course, it's sort of a naive analysis to treat a nation's wealth like a retirement account, but the idea clearly doesn't pass the "back of the napkin" test. there would have to be some powerful knock-on effects to make it halfway viable.
Growth where? If you "pay out" returns from the nation's wealth to its own citizens, the wealth still stays inside the nation and wealth growth still happens.
It will definitely change job markets. I see driving for Uber as a "UBI" in the sense that it allows you to make money if you have a car and know how to drive (I know not everyone can front that money, point is just for illustration). Now what has happened to the broader labor market? Well, if you don't like your minimum wage job at present, you can always drive Uber (and at any time you want at that). That would make crappy jobs have higher wages (for the sacrifice in flexibility, intensity of labor, etc) and I think that's fine – it's just the market correcting for the alternatives people have to make money. I think actual UBI will help motivate us automate these mundane repetitive tasks in the long run that we currently employ humans for. Although there is still a lot to do, eventually people will have the choice to do repetitive, laborious work. Instead, they can focus higher level creative work everyday for something they enjoy.
People who driver Uber for a living aren't duing it "anytime they want" though. They have to time their working hours to places and times of high demand to actually make money.
The argument against that is base wages may drop as business pay less because people can afford to take lower paying jobs, or as low as minimum wage allows.
My country (NZ) pays most families a weekly amount based on how many kids they have and their household income (Technically it is a tax break and so only applies to people who earn money, but for most people it might as well be a payment).
Some have claimed this has suppressed wages and is a subsidy to businesses from the government. Minimum wage rises counteracts this. I am not sure if this theory can be proven.
Regardless I would expect a wage/price spiral causing inflation initially:
UBIs also have the capacity to expand the workforce. As I age, I find my social circle increasingly includes people who can't work a traditional 9-5 job -- whether that's temporary (caring for an ill family member, early parenthood, etc.) or permanent (illness, disability, harmed on the job).
At least in New Zealand, those who can claim a benefit from the Government end up in a welfare trap, because we reduce welfare payments as you regain an income. There's no immediate financial benefit to you, the welfare recipient, in working 10-20 hours vs. not working at all.
There's a whole philosophical discussion involved in whether those people should have to work, but rightly or wrongly, a lot of societal and personal value is derived from employment. A UBI deletes the welfare trap, and allows people who exist on the margins/are incapable of full-time work to find and immediately benefit from employment again. Maybe the garbagemen will need to be paid more, but we should also see more part-time workers put their hands up.
A UBI would certainly change job markets; I'm not sure whether "distort" is the right word.
It's up to the free market to make jobs attractive to labor. UBI means employers won't be able to press-gang workers into anything just because a job needs to be done or because people need to eat.
The garbage companies would have to pay more, but the result would be that instead of no garbage man, the garbage man now just works 20 hours a week and takes more vacations. And because this vital job is no longer as "sucky", other people have joined the profession too and also put in 10-20 hours a week thereby distributing this type of hard physical labor across a larger pool of people.
Yeah, we don't need people to work. This will incentivize people to automate work where possible. The ideal world is everything is automated and EVERYONE benefits, vs what we have now: much is automated and the rich benefit while others have to work shit jobs or die.
I'll do it. Building robots sounds dope. I'd imagine a good chunk of people on HN would love to live in a post scarcity society where they can spend their time building and repairing robots.
Thanks for volunteering! Gonna need you to come in for a 12 hour day since no once else is available. It’s your spouses birthday? That sucks. Maybe next year!
Most Americans will take the UBI and do good things with it, not quit or change their job. It will boost the lower tiers up a notch and allow people to explore better options, ie Music Teacher, but that is nothing but beneficial. People that dont like heavy work shouldnt be doing it. It will give workers a bit more power of choice, but that isn't something to be scared of. There will always be workers to fill those jobs with good pay, no skill but they may rotate out more frequently. Blue collar workers -like me- normally find certain comfort in their jobs being outdoors, hard labor, and not contained to cubicle (or a room of kids lol).
On the margin, some people will retire earlier or work less. Financial independence becomes feasible for more people at a younger age. These are the same choices you might make if you have money. That doesn't seem like a bad thing, and it would be pretty hypocritical for those of us who can do it to deny it to others.
But it seems like there is some risk that young people who have never worked might not get in the habit of working? The ambitious will want more than just to barely get by, but I don't think we can entirely rule out a slacker lifestyle becoming popular. I think we should still try it and see, but the plan might need to be adjusted.
Or they have to improve the working conditions on those jobs. Garbage workers have been treated poorly for a long time, and so have meat-packing workers, and Amazon fulfillment workers, and other "sucky jobs." If those workers have access to UBI they will have significantly more bargaining power in the workplace and would be less beholden to their employers for daily lives.
Taxation is not necessarily regressive. Where I live, income tax accounts for almost all of the tax I pay, and income tax is very much progressive.
But also where I live, the garbage man is not a public employee, but an employee of a private garbage company. So my taxes don't need to change, instead my garbage bill goes up. That would be regressive, since a garbage bill is a higher percentage of poor people's income. But some poor people just don't pay the garbage man, and instead take their garbage to the landfill themselves, which is way way cheaper.
Incidentally, you can make the same argument about minimum wage increases - the cost of getting low wage work done increases, so prices increase. I don't want to get into an argument about the effectiveness of that, but the evidence generally suggests minimum wage works better than conservative naysayers sometimes claim.
There may also be ways to rearrange the labor if insufficient people wan to step up. For example, there are places where garbage trucks lift trash cans to dump into them. If that is too difficult, one could setup dumpsters at the end of neighborhoods and have a truck that goes dumps that stuff into it. So more work for the individuals.
Similarly, if there were not people to clean offices, then have the office workers do it (assuming there are offices, of course).
For things that are really essential and cannot be done away with, the cost would go up. It seems reasonable to pay more for vital services. That may mean higher taxes or some other payment arrangement, but it is only regressive if the taxes are done in a regressive way.
A UBI would change the job market. But whether it is a distortion or fixing some externality cost that was distorting the market is certainly debatable.
Now a garbage man says “I’m not gonna be a garbage man anymore, I can do something I love now, like a music teacher that pays $30k”
"wait it's gone to $25K... to $15K.. aand it's gone". Other people might have the same idea and if more people want to become music teachers, music teacher salaries go down and garbageman keeps picking garbage.
Garbage men are working one of society's most important jobs. They're deserving of respect for the hard work they do. If UBI results in underpaid people leaving, employers will have to raise wages to match the true value of the job or they'll invest in automation. Either way would be good.
Pretty hard, have to solve self driving trucks first, there's already just 1 person on a truck operating the remote arm in places where roadside bins work (ie basically anywhere other than the urban core).
Ever seen all the kinds of things people put out for the trash, and how dumpsters can be overflowing in various different lots? It won't be easy to automate.
This is a good thing, not a bad thing. I would say it corrects job markets, turns them from slavery due to lack of options, into fair competitive markets on both supply and demand sides.
It will not affect day to day life very much unless you've been underpaying for a vital service (in this case, you're the slave owner). Then all the slave owners will just have to pay more for services that they want.
The problem is that we don't know how many people have no interest in working at all at any salary. Some people would choose to not work than to get paid 62k a year at a job they hate. People who oppose UBI are afraid that no one will fill jobs that they think are essential.
UBI is not about "not working". It's about "here's some basic money so you don't have to worry every day about starving to death". Want to wear clean clothes everyday and drive a car? You're gonna have to work.
Having nearly unlimited free garbage removal is probably more than a problem than people realize.
UBI means you can actually evaluate the system you live in and determine what's necessary (and then pay more for it). At the moment it's all "jobs jobs jobs" - we have entire federal agencies that are essentially jobs programs (Homeland Security is a great example... they've done almost literally nothing).
Funding UBI isn't the issue. A sovereign currency issuer can literally create money out of thin air, taxes aren't necessary. The only real limiting factor is a collapse in productive capacity and the attendant inflation. The problem with paying people to do nothing is that it directly reduces productivity because hey why work if you can get just as much money doing nothing? Arguably most jobs today aren't really productive anyhow though. If 80% of HR Business Professionals were instead paid to watch Netflix and look at Facebook, what would change?
This is something a lot of people just don't understand. Our entire monetary system isn't predicated on exchange or store of value like they teach you in school, it's a system of coercion. That sounds ugly, but it's observably true. Taxes, in particular property and income taxes, impose a requirement on everyone to participate in the state's ledger game. The question becomes is that coercion eucivic or not? A society without coercion isn't an option. Nature abhors a vacuum, and human societies abhor a power vacuum. Given our present level of technology, the alternative to monetary coercion is closer to gulags and plantations than it is to Star Trek.
The coercive aspect of monetization is perhaps most clearly seen in the example of imperial British Kenya. When the Brits rolled in they wanted the local to work in the mines. Local Kenyans, quite reasonably, said screw that we'd rather not. The Brits then imposed a head tax on every Kenyan adult payable in Pounds Sterling. And, in that economy, the only way to get Pounds Sterling was working for the British government. So maybe you could get a job as some kind of functionary, but the vast majority of jobs were, you guessed it, working in the mines. In this way the sovereign currency issuer was able to coerce the behavior it wanted, namely the dirty, dangerous and unpleasant work of mining, without any overt violence.
UBI proposals typically set the value at just enough to live on, or what someone who successfully claims unemployment + housing benefit would be given. At that level, the extra cost of UBI is because it's paid to non-claiming dependants, but there are savings from dismantling the bureaucracy which decides who is entitled to unemployment benefit and investigates fraudulent benefit claims, so it would be close to revenue neutral, so net tax rates shouldn't change much.
Assuming the revenue source is income tax, those already working would, on average, have their higher gross tax rates offset by receipt of UBI. There are other sources of taxation, e.g. corporation tax and a tax on land so a proportion could be taken from those.
The more you tax them, the less they work and save, and the more they make, find, and exploit loopholes and shelters. Top tax rates have been as high as 90% (during the Eisenhower administration) and revenue has never significantly changed as a function of GDP.
So what’s the exact math on this? About 209 million adults in the US times 12k a year, so $2.5 trillion. The current tax revenues look like it’s about $3.3 trillion per year.
I don’t think there’s enough people in the top 5% to get the amount needed without literally taxing them into oblivion. We’d need corporate taxes to pull this off, and those bastards cleverly hang out in tax havens, and I wonder how much more clever they’d be willing to get once we tax them more.
