3 ms·

Negative income tax is essentially subsidising companies employing low wage earners.

saalweachter 11y ago
Technically both are. Which I'm actually OK with: I would be perfectly happy to trade UBI for no minimum wage, from a human-welfare point of view. Right now, people choose to work for wages below the cost of living because starving to death slow is better than starving to death fast. With UBI, the "don't accept/stay at low-paying job X" penalty is just a loss of marginal income, not an existential threat. Some people will work for peanuts because the job isn't that hard and the extra marginal income is nice. Other people will feel more empowered to tell employers offering shit pay for terrible, unsafe work to shove it. So you'll get wins on both sides. (On the other hand, the government may need to mandate minimum wages just to ensure there is enough of a tax base to continue funding UBI, which is a different issue.)
- maxerickson 11y ago
  A VAT works without regard to the wages paid.
- toomanybeersies 11y ago
  I think UBI is different in that everyone is given a certain amount of money as a basic human right, and then people can be paid market rate for the work they do. You're right about the security that UBI offers though, and I think that removing the minimum wage would go well with introducing UBI. In some developed countries without a minimum wage, unions set the pay rate for specific jobs, a similar arrangement happens in Australia, where people are paid according to industry agreements on the value of a worker.
CydeWeys 11y ago
That's not any different than what we already have, though. There are numerous entitlements (food stamps, Medicaid, WIC, public housing, etc.) that already do exactly the same thing. By that token UBI is also subsidizing companies employing low wage earners, because it allows people to take low-paid jobs that they otherwise wouldn't since they wouldn't be able to survive on them without UBI. Also, marginal utility of money means that $15K going to someone who is well-compensated isn't that meaningful, but it means a lot to someone working a part-time minimum wage job, so the latter is compensated more (thus, subsidy).

Technically both are. Which I'm actually OK with: I would be perfectly happy to trade UBI for no minimum wage, from a human-welfare point of view. Right now, people choose to work for wages below the cost of living because starving to death slow is better than starving to death fast. With UBI, the "don't accept/stay at low-paying job X" penalty is just a loss of marginal income, not an existential threat. Some people will work for peanuts because the job isn't that hard and the extra marginal income is nice. Other people will feel more empowered to tell employers offering shit pay for terrible, unsafe work to shove it. So you'll get wins on both sides. (On the other hand, the government may need to mandate minimum wages just to ensure there is enough of a tax base to continue funding UBI, which is a different issue.)

maxerickson 11y ago
A VAT works without regard to the wages paid.
toomanybeersies 11y ago
I think UBI is different in that everyone is given a certain amount of money as a basic human right, and then people can be paid market rate for the work they do. You're right about the security that UBI offers though, and I think that removing the minimum wage would go well with introducing UBI. In some developed countries without a minimum wage, unions set the pay rate for specific jobs, a similar arrangement happens in Australia, where people are paid according to industry agreements on the value of a worker.

CydeWeys 11y ago

That's not any different than what we already have, though. There are numerous entitlements (food stamps, Medicaid, WIC, public housing, etc.) that already do exactly the same thing. By that token UBI is also subsidizing companies employing low wage earners, because it allows people to take low-paid jobs that they otherwise wouldn't since they wouldn't be able to survive on them without UBI. Also, marginal utility of money means that $15K going to someone who is well-compensated isn't that meaningful, but it means a lot to someone working a part-time minimum wage job, so the latter is compensated more (thus, subsidy).