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> labor supply dropped by about 10% Isn't this the exact effect you would want, if you are instituting basic income partly as a response to structural unemploy

> labor supply dropped by about 10% Isn't this the exact effect you would want, if you are instituting basic income partly as a response to structural unemployment as a result of automation? > fewer working mothers can find child care, fewer laborers to mow your lawn, fewer nurses, fewer teachers, etc. Maybe these jobs start paying more. How is that bad? With basic income, more mothers would be able to stay home with their kids, more people would care for their own homes, and the nurses and teachers we need would see bigger paychecks. Net, I don't see how society is worse off under that arrangement. It sounds a lot like how life was in this country before huge income disparities made hiring servants normal for people with means. > It's not just wealthier people who will be worse off - it's everyone. You assert this, but your comment doesn't successfully back up your assertion.

yummyfajitas 10y ago
Isn't this the exact effect you would want, if you are instituting basic income partly as a response to structural unemployment as a result of automation? If we don't have robots providing child care, cleaning houses, and all these other services, then "structural unemployment as a result of automation" is not actually a problem we have.
- legutierr 10y ago
  Are you suggesting that workers who are laid off in other industries will all find work as servants working for the other people who haven't been laid off yet? That's not how our economy works. Only a small percentage of the population can afford to hire maids, nannies and gardeners, and even the wealthiest people will only hire a certain number of them. Just using simple logic should show that if 1% of the working population were all able and willing to maintain a staff of 5 full-time servants, this would only be able to absorb 5% of the unemployed population. Structural unemployment has nothing to do with these servant-type jobs, and there is no way that these kinds of jobs can absorb unemployed workers laid off in other industries.
  - yummyfajitas 10y ago
    Only a small percentage of the population can afford to hire maids, nannies and gardeners... This is true because we live in a situation of scarcity. In other economies (e.g. India) where labor is not so scarce, far more people can afford help. If people were actually willing to work, but simply couldn't find work, prices should drop so that a much larger percentage of the population could afford maids and nannies. Also, the unemployment rate in the US is 5.5%, i.e. the natural rate of unemployment. We simply don't have the problem of not enough jobs.
    - legutierr 10y ago
      Yes, the middle class in India can afford help, but those servants live in conditions that in the US would be considered scandalous. India is not a good example at all to support your position, for this and a whole host of other reasons. > We simply don't have the problem of not enough jobs. I would argue that the proof of the emergence of structural unemployment is not in the current rate of unemployment, but in how long it took for us to return to this level after the housing crisis. Structural unemployment will manifest itself in longer and longer recovery times, always returning to near full-employment as the economy adjusts, until the point at which demand collapses and recovery becomes impossible. Like the tipping point that climate scientists talk about with regards to climate change, we have to implement a solution before we get to that point, because it might not be possible after. Basic Income, above all, should be embraced as a mechanism to stabilize consumer demand during the periods of radical realignment in the labor markets that will be brought on by robotics and AI.
      - yummyfajitas 10y ago
        Yes, India is a poor nation. Virtually everyone there - including the software engineers - is poorer than a burger flipper in the US. I would argue that the proof of the emergence of structural unemployment is not in the current rate of unemployment, but in how long it took for us to return to this level after the housing crisis. So your claim isn't that jobs don't exist, but merely that it takes people time to find them. How is a massive labor force disincentive like BI a solution to this problem at all? We already know that unemployment benefits make this problem worse: https://www.nber.org/papers/w20884 https://www.nber.org/papers/w20884 Why would BI - essentially permanent unemployment benefits - help? If anything the solution to this problem is just making labor markets more flexible. E.g., NGDP targeting, making it easier to hire/fire workers, eliminating employer mandate in Obamacare, discouraging home ownership, etc. [edit: here is non-paywalled link: http://econweb.umd.edu/~davis/eventpapers/ManovskiiEntensions.pdf http://econweb.umd.edu/~davis/eventpapers/ManovskiiEntension... ]

yummyfajitas 10y ago

Isn't this the exact effect you would want, if you are instituting basic income partly as a response to structural unemployment as a result of automation? If we don't have robots providing child care, cleaning houses, and all these other services, then "structural unemployment as a result of automation" is not actually a problem we have.

legutierr 10y ago
Are you suggesting that workers who are laid off in other industries will all find work as servants working for the other people who haven't been laid off yet? That's not how our economy works. Only a small percentage of the population can afford to hire maids, nannies and gardeners, and even the wealthiest people will only hire a certain number of them. Just using simple logic should show that if 1% of the working population were all able and willing to maintain a staff of 5 full-time servants, this would only be able to absorb 5% of the unemployed population. Structural unemployment has nothing to do with these servant-type jobs, and there is no way that these kinds of jobs can absorb unemployed workers laid off in other industries.
- yummyfajitas 10y ago
  Only a small percentage of the population can afford to hire maids, nannies and gardeners... This is true because we live in a situation of scarcity. In other economies (e.g. India) where labor is not so scarce, far more people can afford help. If people were actually willing to work, but simply couldn't find work, prices should drop so that a much larger percentage of the population could afford maids and nannies. Also, the unemployment rate in the US is 5.5%, i.e. the natural rate of unemployment. We simply don't have the problem of not enough jobs.
  - legutierr 10y ago
    Yes, the middle class in India can afford help, but those servants live in conditions that in the US would be considered scandalous. India is not a good example at all to support your position, for this and a whole host of other reasons. > We simply don't have the problem of not enough jobs. I would argue that the proof of the emergence of structural unemployment is not in the current rate of unemployment, but in how long it took for us to return to this level after the housing crisis. Structural unemployment will manifest itself in longer and longer recovery times, always returning to near full-employment as the economy adjusts, until the point at which demand collapses and recovery becomes impossible. Like the tipping point that climate scientists talk about with regards to climate change, we have to implement a solution before we get to that point, because it might not be possible after. Basic Income, above all, should be embraced as a mechanism to stabilize consumer demand during the periods of radical realignment in the labor markets that will be brought on by robotics and AI.
    - yummyfajitas 10y ago
      Yes, India is a poor nation. Virtually everyone there - including the software engineers - is poorer than a burger flipper in the US. I would argue that the proof of the emergence of structural unemployment is not in the current rate of unemployment, but in how long it took for us to return to this level after the housing crisis. So your claim isn't that jobs don't exist, but merely that it takes people time to find them. How is a massive labor force disincentive like BI a solution to this problem at all? We already know that unemployment benefits make this problem worse: https://www.nber.org/papers/w20884 https://www.nber.org/papers/w20884 Why would BI - essentially permanent unemployment benefits - help? If anything the solution to this problem is just making labor markets more flexible. E.g., NGDP targeting, making it easier to hire/fire workers, eliminating employer mandate in Obamacare, discouraging home ownership, etc. [edit: here is non-paywalled link: http://econweb.umd.edu/~davis/eventpapers/ManovskiiEntensions.pdf http://econweb.umd.edu/~davis/eventpapers/ManovskiiEntension... ]