Current Events > Why a Universal Basic Income would be a calamity

(+) Yeah! (+)

https://www.wsj.com/articles/why-a-universal-basic-income-would-be-a-calamity-1502403580

Finland has been testing a basic income for 2,000 of its unemployed citizens since January, and UBI proponents say the Nordic country is providing an example for the U.S. It will be interesting to see the Finnish results, but Americans shouldn’t read too much into the outcome of a small-scale, early-stage trial. Look instead to Saudi Arabia, which for decades has attempted the wholesale replacement of work with government subsidies. Perhaps more than half of all Saudis are unemployed and not seeking work. They live off payments funded by the country’s oil wealth.

And what has Saudi Arabia’s de facto UBI created? A population deeply resistant to work. Efforts by the Saudi government to diversify the economy have been hamstrung by the difficulty of getting Saudis to trade in their free income willingly for paid labor. Regular citizens lack dignity while the royal family lives a life of luxury. The technocratic elite has embraced relatively liberal values at odds with much of the society’s conservatism. These divisions have made the country a fertile recruiting ground for extremists.

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UBI supporters would counter that their system would free people to pursue self-improvement and to take risks. America’s experience over the past couple of decades suggests that the opposite is more likely. Labor Department data show that at the end of June the U.S. had 6.2 million vacant jobs. Millions of skilled manufacturing and cybersecurity jobs will go unfilled in the coming years.

This problem stems from a lack of skilled workers. While better retraining programs are necessary, too many of the unemployed, or underemployed, lack the motivation to learn new skills. Increasingly, young unemployed men are perfectly content to stay at home playing videogames.

I was going to tag Proudclad's new account, but I can't find it. It was Transcendentia, right? Or something like that?

Anyway, I do think some of these concerns the writer raises are valid, but my understanding of how the Saudi system works does not make it a good comparison to any of the UBI proposals I've seen in the U.S. Though it is true that young men are substituting work for video games even without having any guaranteed income.
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Transcendi-whatever was banned. I don't know if he has a new account yet.
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I like how Phantasy Star 2 was about UBI.
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Transcendentia got banned.

Also, the article seems to imply that Saudis can take this basic income OR work, but not both. If that's the case, that would seem to be the problem.
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Common sense 101
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Balrog0 posted...

I was going to tag Proudclad's new account, but I can't find it. It was Transcendentia, right? Or something like that?

Banned.
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The real solution is America needs more of dat oil money
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whoever wrote that article just is jealous that people will get to stay home playing video games and be paid
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Antifar posted...

Also, the article seems to imply that Saudis can take this basic income OR work, but not both. If that's the case, that would seem to be the problem.

my understanding is that there is a cash transfer program for low-and moderate- income Saudi nationals that goes away if you make a certain amount, but also there is a monthly stipend available for you while you search for a job
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also what did he do this time lol
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What did proud clad get banned for
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Balrog0 posted...

Efforts by the Saudi government to diversify the economy have been hamstrung by the difficulty of getting Saudis to trade in their free income willingly for paid labor.

This implies conditions or means-testing, which means it's not "universal" at all.

The reason UBI is a non-starter in the US, is because writing every adult (approximately 250 million) a check for $12060 (individual FPL) would cost a little over $3 trillion, or essentially 75+% of the current budget.

People wouldn't need to work if they didn't want to in the post-automation, UBI world people advocate for. The Saudi thing sounds more like welfare or unemployment while UBI would be an income in place of needing jobs. UBI will be inevitable some day.
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Balrog0 posted...

also what did he do this time lol

Hmmm I wonder what a NEET who spends every hour of his day shitposting did to get banned?????

And hate it or love it UBI is happening. It's capitalism's endgame.

Questionmarktarius posted...

The reason UBI is a non-starter in the US, is because writing every adult (approximately 250 million) a check for $12060 (individual FPL) would cost a little over $3 trillion, or essentially 75+% of the current budget.

Again, we need to get dat oil money
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I'm kind of conflicted about it, but not because I am against it in theory or think governments wouldn't be able to afford it. It's more that, if automation does lead to mass unemployment, UBI would just be a sticking plaster, and a lot of people, even low-middle earners would actually be worse off. In the event that does come to pass, I think there'd need to be a rethink on the entire economic system.

Questionmarktarius posted...

The reason UBI is a non-starter in the US, is because writing every adult (approximately 250 million) a check for $12060 (individual FPL) would cost a little over $3 trillion, or essentially 75+% of the current budget.

It would cost about a third of that, because not everyone would gain out of it. Some would gain out of it, some would lose out of it and some would be no better/worse off.

I think that's assuming no change in employment though. Depending on how it affects employment, the cost would change.

Broseph_Stalin posted...

And hate it or love it UBI is happening. It's capitalism's endgame.

That or oligarchy.
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Questionmarktarius posted...

The reason UBI is a non-starter in the US, is because writing every adult (approximately 250 million) a check for $12060 (individual FPL) would cost a little over $3 trillion, or essentially 75+% of the current budget.

I wouldn't set it that high, and you can probably shave off about 10% from that number by excluding non-citizens but yeah the cost is always the sticking point
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Broseph_Stalin posted...

And hate it or love it UBI is happening.

I dunno about UBI but the fight against single-payer healthcare is beyond futile at this point
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Balrog0 posted...

my understanding is that there is a cash transfer program for low-and moderate- income Saudi nationals that goes away if you make a certain amount, but also there is a monthly stipend available for you while you search for a job

yeah i feel like what would make UBI work is if you weren't giving it up for paid labor, but rather choosing between whether you trade labor for pay in addition, or just settle for the UBI
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Balrog0 posted...

And what has Saudi Arabia’s de facto UBI created? A population deeply resistant to work. Efforts by the Saudi government to diversify the economy have been hamstrung by the difficulty of getting Saudis to trade in their free income willingly for paid labor.

The US isn't struggling to diversify its economy. its economy will be filled with mainly automated industries in a very short time, thus US has nothing to lose by fewer people looking for work. In fact that will be a desirable outcome. UBI does have the problem in post #12, but it will be necessary in some form eventually due to automation.

Does anyone actually think Saudi Arabia's situation is in any way analogous to Europe or the US? This should occur to anyone immediately. Perhaps this combined with the last bolded statement reveals something about how this article is written to alarm rather than carefully consider something.
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Questionmarktarius posted...

The reason UBI is a non-starter in the US, is because writing every adult (approximately 250 million) a check for $12060 (individual FPL) would cost a little over $3 trillion, or essentially 75+% of the current budget.

yeah this is probably the bigger issue

as our economy grows it will become more viable
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To explain my point before about the gross price tag being wrong: https://medium.com/basic-income/the-cost-of-universal-basic-income-is-the-net-transfer-amount-not-the-gross-price-tag-acb8aa5eab73

Balrog0 posted...

And what has Saudi Arabia’s de facto UBI created? A population deeply resistant to work. Efforts by the Saudi government to diversify the economy have been hamstrung by the difficulty of getting Saudis to trade in their free income willingly for paid labor.

While I still maintain that UBI is a pie in the sky solution that is doomed to fail, I think this would actually be an advantage as far as the labor market is concerned. There are a lot of people who would still want to work regardless of basic income, and removing people from the labor force will make it that much easier for them to get hired. This is especially beneficial for unskilled entry level work, where the jobs are most needed. But there are too many other problems for this to balance out.

Talks posted...

The US isn't struggling to diversify its economy. its economy will be filled with mainly automated industries in a very short time, thus US has nothing to lose by fewer people looking for work. In fact that will be a desirable outcome. UBI does have the problem in post #12, but it will be necessary in some form eventually due to automation.

There is a huge problem with people not working here from my perspective. We probably do need to diversify, too, but that is less of a problem considering the size of our country.

Talks posted...

Does anyone actually think Saudi Arabia's situation is in any way analogous to Europe or the US? This should occur to anyone immediately.

Elements of it could be, sure.

Talks posted...

Perhaps this combined with the last bolded statement reveals something about how this article is written to alarm rather than carefully consider something.

But it is a very serious concern that young men are substituting leisure for labor, even without any special income supports.
http://www.nber.org/papers/w23552

even if it was written to alarm, it is probably worth carefully considering the implication that has
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Darkman124 posted...

Balrog0 posted...

my understanding is that there is a cash transfer program for low-and moderate- income Saudi nationals that goes away if you make a certain amount, but also there is a monthly stipend available for you while you search for a job

yeah i feel like what would make UBI work is if you weren't giving it up for paid labor, but rather choosing between whether you trade labor for pay in addition, or just settle for the UBI

A UBI in addition to paid labor would be an ideal situation, but the taxes required to make it work would have to astronomical at all brackets.
If you're gonna sit on your ass and make $12000, or work your ass off and net maybe $20000 ($7.50 x 40 x 52 x 50%), may as well adopt a Negative Income Tax instead.

Questionmarktarius posted...

A UBI in addition to paid labor would be an ideal situation, but the taxes required to make it work would have to astronomical at all brackets.
If you're gonna sit on your ass and make $12000, or work your ass off and make $15000, may as well adopt a Negative Income Tax instead.

Supposedly an NIT is functionally identical to UBI.

Questionmarktarius posted...

If you're gonna sit on your ass and make $12000, or work your ass off and make $15000

i think this is a bit reductionist

the biggest problem with UBI in the united states is that we have to commit way more of our federal budget to military than other nations
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If you tell your children youll give them an allowance as long as theyre not working most kids wouldnt get a job and lose free money.
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luigi13579 posted...

To explain my point before about the gross price tag being wrong: https://medium.com/basic-income/the-cost-of-universal-basic-income-is-the-net-transfer-amount-not-the-gross-price-tag-acb8aa5eab73

I don't think this makes sense in the context of this situation, though. For one thing, that isn't the way taxes work (we don't have deficits because we divide taxes and then appropriate the money we actually have). I'm not sure it's worth considering the rest once you understand that; unless you raise taxes or lower spending else where then you do need to multiply the credit by the number of people who would get it, right? This only seems to make sense if you assume the way government works is that we all put money in a bag and then take some out.

Annihilated posted...

While I still maintain that UBI is a pie in the sky solution that is doomed to fail, I think this would actually be an advantage as far as the labor market is concerned. There are a lot of people who would still want to work regardless of basic income, and removing people from the labor force will make it that much easier for them to get hired. This is especially beneficial for unskilled entry level work, where the jobs are most needed. But there are too many other problems for this to balance out.

You think so? I sort of wonder how it will impact the decision for people to look for labor. The presumption is that it will push people out, but some proponents claim it can bring people back in as well.
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luigi13579 posted...

Supposedly an NIT is functionally identical to UBI.

It essentially implements a UBI, while still remaining means-based, yet removing the welfare cliff, while also removing any need for a minimum wage.

Balrog0 posted...

There is a huge problem with people not working here from my perspective.

Even though unemployment rates continue to drop
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HylianFox posted...

Even though unemployment rates continue to drop

Yeah, because labor force participation rates are still pretty shitty.
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Questionmarktarius posted...

It essentially implements a UBI, while still remaining means-based, yet removing the welfare cliff, while also removing any need for a minimum wage.

It just smooths it out into a hill.
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LordMarshal posted...

If you tell your children youll give them an allowance as long as theyre not working most kids wouldnt get a job and lose free money.

Only if you continually increase their allowance to a point they wont need to work.
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I was also gonna say something about incentives being important even if mathematically the two things are the same (which I'm not certain of here) but then I noticed that Ed Dolan had commented on this very post about that very subject lmao

The math is right, and in terms of cost to the budget, if you pay a tax of $12,000 and receive a $12,000 transfer, the net budgetary cost is zero. However, there will be opportunity costs of carrying out the transfer. A small part of the opportunity cost is the administrative cost of collecting and disbursing the money. The more significant part is the potential deadweight loss from the incentive effects of the taxes and transfers. If the package is constructed badly, both the tax to collect the money and the disbursement of the money will have a disincentive effect on earning income. These effects can be minimized if the tax and transfer is structured properly. For example, the work incentive effects of a true universal basic income (not means-tested in any way) are unambiguously more favorable than those of a negative income tax.
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If UBI happens, would everyone get it?

If the rich got it too, people would definitely complain. But if only the poor got it or of only they got 100% of the possible total. what motivation would there be to work?
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Damn_Underscore posted...

If UBI happens, would everyone get it?

It's not universal otherwise.

I just don't see how it works financially in this Country. At $1000 per month it would cost the U.S $3.8 trillion per year. I mean how would is that affordable.

Not to mention that intuiting it would probably cause a civil war.
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Questionmarktarius posted...

Damn_Underscore posted...

If UBI happens, would everyone get it?

It's not universal otherwise.

Then who pays for it?
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Nomadic View posted...

Questionmarktarius posted...

Damn_Underscore posted...

If UBI happens, would everyone get it?

It's not universal otherwise.

Then who pays for it?

Presumably, a doubling of all the tax brackets, possibly even adding another bracket or two, if the numbers were to ever work.
The exact moment you draw a line and say "you don't get free money anymore", is the exact moment you create a disaffected population segment, incidentally right in the middle class, who feel used and milked by ungrateful parasites and puppet masters.

In the end, it'll be Obamacare 2: Universal Basicincomeloo. Everyone else is paying twice as much (or more), for the benefit of a tiny few.

The estimated federal tax revenue for 2017 $3.46 trillion

Let's say the UBI was $50k, and everyone in the country gets it (about 325.6 million people)... that would cost $16.28 trillion.

Even if only 100 million people got the universal basic income, it would still cost $5 trillion.

There are ways to increase tax revenue, but that seems totally infeasible.
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Damn_Underscore posted...

$50k

...what?
Did you miss the "basic" part?

$50k annually
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Damn_Underscore posted...

$50k annually

The numbers others have been using is more like 12k annually. It really is basic.
And everyone wouldn't get it, just adults
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It's not really a work ethic thing but more of economic fix for wide spread auomation, just like we have welfare, food stamps, housing and social security - we will combine it all and tax robots.
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emblem boy posted...

Damn_Underscore posted...

$50k annually

The numbers others have been using is more like 12k annually. It really is basic.
And everyone wouldn't get it, just adults

$12k annually? What is the point of that?

It won't even pay a year's rent in a lot of cities.
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