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Why a Universal Basic Income Will Not Solve Poverty

109 points by tpatke 10y ago

cat_plus_plus 10y ago
This is nuts. Basic income is not to provide extra spending money for 100% of americans. It's help 10% of the most poor while everyone else ends up paying back the money in taxes. So we are talking about 300 billion. This is half of US military budget and will be instead of, instead of in addition to, current aid programs. It is true that basic income will not directly improve lifestyle of the middle class. It can well result in indirect improvement by poor becoming more productive and government bureaucrats currently running the program getting more useful jobs. But we probably need to other things as well to improve lifestyle for the other 90% of the population.
- fixermark 10y ago
  One of the points the author proffers is that displacing more targeted, conditional aid with UBI may not actually be better. The question of whether---if you just give people money---they spend it wisely enough to maintain their needs is an open question. It's sort of the formalized version of "Don't give that wino a dollar; he's just going to spend it on more booze." (The sense I get is economists lean towards "Yes, people generally look after themselves given the money to do so," but I believe this is an open question policy-wise).
  - cat_plus_plus 10y ago
    So just give money in small daily deposits. If someone spends all money in beer one day, he/she will be hungry the next day and make better choices.
alexchantavy 10y ago
UBI would also provide entrepreneurs and small business owners with a safety net so they'd be able to take risks they wouldn't be able to before.
jcslzr 10y ago
letting politicians keep all the money has not worked either
hirundo 10y ago
Relative poverty is insoluble without totalitarian levels of redistribution to a very low common denominator, and that is unlikely to include the inevitable oligarchs. Absolute poverty is rapidly being solved (https://www.ted.com/talks/hans_rosling_shows_the_best_stats_you_ve_ever_seen?language=en https://www.ted.com/talks/hans_rosling_shows_the_best_stats_...) by markets and globalization, and radical redistribution such as a basic income tends to interfere with that.
- ktRolster 10y ago
  By some measures, poverty already is a solved problem in the United States. Relative poverty is all we have left to solve....
  - jbmorgado 10y ago
    There are quite a lot of people in the USA that consistently starve. I'm quite sure that according to most definitions that's clearly absolute poverty, not a relative one. https://en.wikipedia.org/wiki/Hunger_in_the_United_States https://en.wikipedia.org/wiki/Hunger_in_the_United_States
    - fiatmoney 10y ago
      "Food insecurity" is not remotely the same thing as starvation. I would wager a fair amount that no one in the US has starved to death due to lack of money (ignoring neglect of children, catatonia, etc) in quite a while.
      - sgnelson 10y ago
        I'm pretty sure he was talking about food insecurity and not actual starving to death, though his use of the word in this case is actually quite correct. Starve does not solely imply starvation unto death, Mr. Pedant. And his point still stands, it's an issue in the US that has yet to be solved.
        10y ago
MrJagil 10y ago
I made the same submission here: https://news.ycombinator.com/item?id=11806509 https://news.ycombinator.com/item?id=11806509 Maybe they should be merged.
nullsmack 10y ago
The very first argument in the article is flawed which leads me to wonder how much of it is or isn't flawed. It talks about a Universal Basic Income for everyone over 21.. then it complains that would cost 3 trillion dollars for all of the 300 million Americans. According to the Census Bureau as of 2015 there were 321 million Americans and 24% were under 18. No clue how many were under 21. But that still takes it down to 244 million people. If we left Social Security alone then that would cut another 46 million people out as well. The article doesn't even attempt to explore cost savings by eliminating excessive management of all of the existing programs.
- newacct23 10y ago
  You are arguing about specifics that do not make any difference to the overall argument the author is trying to make. UBI for 244 million is still unfeasible. UBI is just a bad idea, jobs in themselves have nice externalities that UBI wont give. People that have jobs generally don't commit crimes. Also a UBI will disincentivize working jobs that are undesirable but are necessary for a functioning society.
  - otterley 10y ago
    How about people who want to serve society with "jobs" that don't pay well (or at all) but are incredibly valuable, like charity work? Wouldn't a UBI free them up to do that?
  - toomuchtodo 10y ago
    > Also a UBI will disincentivize working jobs that are undesirable but are necessary for a functioning society. That's kinda the point. You drive up the cost of undesirable jobs until you find someone who'll work it. If no one wants to work it, you'll need to automate it or do without.
    - carapace 10y ago
      Yes, this! I hate the "But who will pick up the garbage?" argument so much, the lazy thinker who says this is implying that our society only functions if there's an explicit hell waiting for those who fail it. And that's kinda fucked up, eh? If UBI fixed just that it would be worth it, IMHO. Also, have you ever talked to the people who pick up your garbage?
thesimon 10y ago
>[...] Why not subsidize workers’ wages instead? Sounds like a great idea! Companies get to save money and the tax payer effectively pays the companies profit.
- bpodgursky 10y ago
  Well, corporate income tax is higher that individual income tax for the vast majority of people... so it probably would mean more tax revenue overalll. And no, income earned in the US cannot be kept offshore, so yes, taxes will actually be paid on it either when "earned" by the company or distributed (buybacks, etc).
brador 10y ago
It will absolutely solve poverty, what it won't do is make everyone rich.
- digi_owl 10y ago
  And frankly the world is likely to be better off that way. research have shown over and over that as economic differences grow, social structures deteriorate.
skybrian 10y ago
This article is yet another example of binary thinking. Basic income could be started at any amount. It won't pay the rent, but an extra $100 a month makes a difference for people living on the edge. The first $100/month will make a bigger difference than anything added on top of that.
- 1123581321 10y ago
  The problem is that a very small number of people are on that $100/month edge, a percentage of them will increase their expenses until they are as desperate as they used to be, and the increased taxes to pay this money will put others on the edge. When considering BI, or any large money transfer program, you must consider the entire system, not just the beneficial effects on a small number of people for the first few months.
  - witty_username 10y ago
    Money is correlated with happiness. Sure, people will still yearn for more money, but with the more expenses people will be more happy.
    - 1123581321 10y ago
      That is the least important point, but please keep in mind then that the decreased expenses (alternately, increased tax expenses) to offset the cost of BI will make others unhappy.
      - thesimpsons1022 10y ago
        At this point we are just being handwavy. This is the problem with discussions like this, there aren't any hard facts to support the arguments. Are people being forced to pay .1 pct more of their income or 10 pct more? etc...
        1123581321 10y ago
snicker7 10y ago
It doesn't make to tax citizens only to give the money back to them. Another way to implement a mincome is to have a flat tax rate and give every citizen a large standard deductible. If one's taxable income is negative, then one would receive money from the government, which is interpreted as a negative tax payment. Furthermore, the purpose of a mincome is not to alleviate poverty, but instead to to replace current systems of welfare (food stamps, social security, etc).
- pitaj 10y ago
  > replace current systems of welfare Yes. The broken, trapping, inefficient, bloated, bureaucratic messes that cost way to much and don't help people nearly enough.
lossolo 10y ago
Problem is with capitalism and it's founders that told us all that you can't live without work. In next decades we will need to change the system diametrical because robots will take all not creative jobs out there. If we want basic pay we will need to tax corporations that use robots at around 70-90%, money from tax will go for basic pay, money from people that receive basic pay will go to corporations etc. Thing that needs to be controlled is capital, it can't be taken out of the market like it's done now, companies are gathering billions of dollars which are taken out of the market. Capital taken from the market can not be redistributed again. One thing is for sure, current system need to be changed and adapted to robots revolution.
- sharemywin 10y ago
  maybe people should start owning the robots.
  - grahamburger 10y ago
    I remember thinking this as a kid. "Just make it illegal for a corporation to own a robot, each person only owns one robot and they keep the value it generates." Thought I'd solved the problem ;) I think the reality is that it's not really a 'robot' in the sci-fi sense - it's a thousand automated machines doing one tiny piece of the process, and slowly your factory with 500 employees only needs 5, and output and quality have increased. There isn't really a single robot to 'own', and even there was it would be far too expensive for one regular person to own it.
    - sharemywin 10y ago
      why not own part of one. of course I think the world will reorganize into 3 markets managed by blockchains/oracles: equipment rental, labor/services market, attention market.
      - grahamburger 10y ago
        Would owning a part of the 'robot' be intrinsically different that owning a part of the corporation that owns the robot? Ownership in the companies that we work for is nice, but for most of us it's not enough to live on. We could intentionally try to make automating more expensive so that companies just don't do it. The problem is automating is actually great for everyone else - as a consumer I'd rather buy a car that is better made, safer, and cheaper from an automated factory than one that might be prone to human error and is more expensive.
jbob2000 10y ago
Something that is missing from the basic income/poverty debate is the notion of "learned helplessness"; after a long time in poverty, people get used to the lifestyle and have difficulty adjusting to "regular" life. For example, if you've been homeless your entire life, you've never had to lock your apartment door or carry a key around. My partner (a social worker) had a client who's apartment was always getting robbed because whenever she left, she never locked her door; it was not something she was used to doing. Another client was unable to set an alarm and follow a schedule. 20 years of living on the street, waking up whenever he felt like it, meant that he had completely lost his faculties for time management. He couldn't hold down a job and regularly missed appointments. Part of my partner's job was carrying these people through their journey to "regular" life. She would show up to their apartments and take them to their appointments. She would call the woman who didn't lock her doors every morning to remind her to lock her door on her way out. Etc. Etc. Basic income doesn't solve any of this. It just drops a load of money into a person's lap who has no idea what to do with it.
- mempko 10y ago
  Yes, it does solve these. Because people who lost the faculty for time management or security can learn it again. Putting someone in a house and giving them an alarm clock is a very good start.
- maxxxxx 10y ago
  When I was in my teens I worked summer jobs in a German social welfare agency (Sozialamt). There were many families that had been on welfare for generations and it was noticeable that their kids had no idea how to make progress in school or how to hold a job. They simply didn't know and had nobody who could tell them. They also had no role models. I think with basic income there is a risk that a lot of people will forever be lost for the working world. Especially if the basic income is so low that you can barely survive.
  - kefka 10y ago
    I'm unsure about the German system... I've been on welfare here in the USA. The way it works is dependant on your income. The more you make by hard work, the less assistance you receive. That sounds fair... Until you realize that section 8 (housing) is the same way. Food stamps are the same way. At the time, there was a cutoff for the free clinic (which counted benefits as income).. I made $100 too much. When doing work and getting paid $1 means taking $3 in losses from assistance programs, this grinds people further into poverty. The further I try to dig out, the deeper I get until I hit the point that I can start to survive without any assistance...
partycoder 10y ago
In my country, there was a movement that tried to make education free of charge. One of their arguments was that it was going to be actually cheaper for the government. This is what the logic was: the student loans system has a high interest rate, and when the loan is defaulted, the government needs to pay. So what the government ends up paying is not only the actual loan, but the loan with some accrued interest. Also, the default rate is high. So in this case it makes sense for the government to just pay directly. Now, following the same mindset, how much does the government pay if there is people without a basic income? is it more than just giving away that money directly to people? If there answer is yes, then probably it's not a bad idea after all. Now, of course there will be issues. The food stamps system imposes some restrictions that you will no longer have if you just receive basic income. Also some people might just do the minimum required to get that income and live at the expense of the government. There might be pros and cons that need to be considered.
cousin_it 10y ago
At a minimum, we need free universal healthcare that shouldn't be replaced with basic income, because poor sick people often need more expensive healthcare than a reasonable basic income can pay for. Similar for education, the current system of loans just sucks compared to universal free education which was achieved by the frigging USSR. Also it seems pointless to give basic income to well-off people. On top of free healthcare and education, why don't we just top up everyone's income to the equivalent of the minimum wage? Sure, that will disincentivize jobs that pay close to minimum wage, but such jobs are dying due to automation anyway, and good riddance.
- witty_username 10y ago
  > Also it seems pointless to give basic income to well-off people. Otherwise taking the basic income might be seen as a symbol of being poor. Also, well-off people might be envious of people receiving basic income. (tl;dr people aren't perfectly rational)
- mason240 10y ago
  >why don't we just top up everyone's income to the equivalent of the minimum wage? That's what UBI essentially is, giving everyone about the equivalent of a minimum wage income.
- robotresearcher 10y ago
  > On top of free healthcare and education, why don't we just top up everyone's income to the equivalent of the minimum wage? That strongly incentivizes under-reporting income. One of the strong points of universal income is that it is relatively easy to administer. And well-off people would be taxed more so as to return all or most of their payments. It's not pointless, since it serves as a safety net the instant the large salary goes away, with no application or needs-based investigation that slows the process and costs more money to administer.
  - cousin_it 10y ago
    Yes, fair point.
weatherlight 10y ago
The way you fund it, of course, is to further tax the higher end of the income bracket. It's an innocuous way of redistributing wealth. It helps everyone but the very wealthiest, which are the ones who need it the least. Jobs are not the answer, at least in my mind. A universal basic income would allow people to spend some time possibly developing a passion that they love, not slaving away at a job which is at best given out of pity, and at worst a waste of time which they are obligated to attend at a negative cost to everybody. A universal basic income is upfront and direct about its purpose.
RivieraKid 10y ago
We already have a basic income, at least in Europe, not sure about the USA. Unemployed people get welfare. Changing this system to what BI advocates propose is not a huge change: - Simplification of the welfare system, you get money automatically, no need to ask. - In the current system, if you get employed, you lose benefits, so the jump in your income is small, a disincentive to work. In the BI proposals, income vs income-plus-welfare curve is smooth. That's the main improvement I think. - More money gets redistributed from the wealthy to the poor. Personally I think the current level of redistribution is fine.
jimmytidey 10y ago
An absolutely key feature of basic income is the security it gives someone who is on breadline. I can only describe the situation in the UK - but imagine this generalises. If you are on government benefits, and you accept some money to do a small or casual job, you face a choice. Not declare it, and face court and destitution if you are found out. Declaring the income, on the other hand, is an administrative nightmare. Worse - it might trigger a recalculation, or removal, of your benefits. Most benefit seekers don't fully understand how their benefits are calculated, and, again, they could be destitute if benefits are removed or reduced. So, for any long term unemployed person, it's often best to sit tight and not take any risks. Thus the person is trapped in poverty, plus of course the sense of self worth that comes from doing a job. This is also true for an entrepreneur who decides to quite his job and build a business. Basic income can provide some security while you get that business going. This is not typically true of unemployment benefit. Everything comes back to what unemployment benefits are - a payment conditional on not doing any work. That causes so many problems, and basic income can solve them. On the cost: basic income, at substantial levels, is clearly very expensive. However, you simply tax that money back. This can leave pay after tax absolutely unchanged for everyone, while still delivering the advantages described above.
carapace 10y ago
Keep in mind when discussing UBI, especially in the context of poverty, that it is not a solution to poverty. It is a solution to automation crashing demand by throwing earners permanently out of the economy. Robots take the jobs so people have no money to spend even as the robots make more stuff, cheaper. What to do with the people? Throw them in a volcano? "Hunger Games"? Let's just give them money and see what happens, okay? That's UBI. UBI isn't for the bum. It's for you (okay, well, your cousin. You read HN, you're probably fine.)
mcantelon 10y ago
To the ruling class, it's not about solving poverty, but about postponing insurrection due to lack of work.
grahamburger 10y ago
The biggest concern that I have with UBI is how do we avoid the Basic Income Trap? It's pretty widely accepted that we fell prey to the Two Income Trap [1]. If we institute UBI, how long will it be before a person needs their UBI and another job (or two, or three) just to scrape by? [1] http://www.motherjones.com/politics/2004/11/two-income-trap http://www.motherjones.com/politics/2004/11/two-income-trap
- Grishnakh 10y ago
  If the UBI isn't set high enough to allow someone to survive, then it by definition is not a "basic income". It has to be set high enough for this. This may require some kind of extra government programs and legislation to do things like 1) make sure enough low-cost housing is available, and maybe 2) help people learn to use it effectively, including maybe moving them to low-cost locations if necessary.
  - grahamburger 10y ago
    It's not so much about setting it high enough as keeping it high enough. How do you convince the wealthy and powerful to keep giving up more and more of their income to keep up with inflation so that UBI continues to meet the definition of 'basic income'?
    - Grishnakh 10y ago
      If there's inflation, the wealthy are going to earn more money in absolute dollars (if they don't, that means they're getting poorer). The same tax rate will automatically bring in more money from these people. I don't see the problem. You're making the common mistake of thinking that a given tax rate (as a percentage) equals a fixed amount of revenue, which is just plain wrong. A fixed percentage of a rising amount of income will result in a rising amount of tax revenue.
      - grahamburger 10y ago
        Ok, that's fair - I still see a few problems though. First, if you're right and the wealthy keep making more in absolute dollars and therefore paying more in taxes (IE UBI doesn't make them poorer) then we still have to index the UBI against inflation. And every time UBI goes up, it will be an upstream battle against people who had the same common mistake that you suggest that I made. In other words, in this case at least, perception is reality. Second, what if UBI does make the wealthy less wealthy? Isn't that kind of the point of wealth redistribution? To reduce income inequality?
russelluresti 10y ago
In every debate, there are people on the wrong side of history. Mr. Porter, welcome to that list. Granted, the point that it won't happen today is true enough, but it is an inevitability (assuming we don't blow ourselves up beforehand), so it's important to start thinking about it now. What frustrates me the most with these articles is that they don't base any of their information on actual fact. Take, for example, the argument of disincentivizing work. This is one of things that seems "logical" if you're a pessimist or an asshole, but past experiments with basic income have proven it to be untrue (look at the "Mincome" experiment in Manitoba for proof).
supergeek133 10y ago
I'd be interested to hear more about the last part concerning "subsidizing wages". Welfare for many in this country basically is a subsidy for their wage (cue memes of "walmart welfare"). Take for instance when the big layoffs started in the tech/housing sector, you would hear stories of people staying on unemployment because it paid MORE than a new job in the same field would pay. And we kept extending benefit timeframes which just resulted in a vicious cycle. That's a pretty big incentive to not work.
kazinator 10y ago
> Almost a quarter of American households make less than $25,000. It would be hardly surprising if a $10,000 check each for Mom and Dad sapped their desire to work. Ah, but a transfer payment which targets the poor is worse in this regard. A $10,000 check that you lose if you work saps your desire to work more than a $10,000 check that augments your income.
mamon 10y ago
UBI won't solve poverty for a very simple reason: Every time government starts to subsidise something the price of subsidised goods goes up. I've seen this in Europe with wind farms, "eco" lightbulbs, farming equipment. etc. And UBI is equivalent to subsidising all basic goods at the same time. So the only noticeable effect of UBI will be price increase, so that it would take your salary + UBI to purchase goods that now can be purchased by your salary alone. Net result: increased bureaucracy, increased cash flow for the government (higher taxes), higher profits for corporations (higher prices), no benefit for poor, big hit for middle class (which is most heavily taxed).
serge2k 10y ago
> Where would that money come from? It amounts to nearly all the tax revenue collected by the federal government. Nothing in the history of this country suggests Americans are ready to add that kind of burden to their current taxes Taxes would have to go up, in some cases drastically. It's an easier sell if people immediately get a good chunk back. > A universal basic income has many undesirable features, starting with its non-negligible disincentive to work. Almost a quarter of American households make less than $25,000. It would be hardly surprising if a $10,000 check each for mom and dad sapped their desire to work. Except if they keep working the money just adds up. I certainly wouldn't want to stop working and give up my lifestyle. Maybe instead of working to make enough money to just get by you keep working and put a chunk of that money into savings, or upgrading your lifestyle a bit. Maybe moving to a better area, fixing up some stuff around the house, get your kid a couple toys, etc... Yeah, people in situations that make working hard might quit but maybe they should be allowed to. Or maybe they should quit for a while and come back when it makes more sense.
damptowel 10y ago
Here's a thought experiment I've been been wrestling with... Imagine a dirty low skill job. Something that currently doesn't pay much and is generally considered low status. Assume it's a job no one really wants to do but do because it pays them a living. What would happen to that job under UBI? I would assume that due to vacancies demand for people willing to do this work would go up, and companies would need to lure in applicants by raising pay. Imagine that would indeed attract workers. How would this affect that company? It's costs would rise. Will it become less competitive? Will it raise price? Would the sector have to be subsidized to stay afloat? Would it start some kind of 'moral revolution'? I imagine new coping mechanisms would need to be devised and the economy would morph into something quite unlike what we live under today.
ck425 10y ago
I hope Switzerland votes for UBI, it would be interesting to see actual data rather than just conjecture. The point about people losing the will to work is interesting, as he also makes the point that jobs give us purpose and structure in life. If money is no longer an issue, or less of an issue, people may choose to do jobs because they provide purpose and structure. It could also increase innovation. There have been lots of article on HN recently about the privileges white males have in terms of financial security, that make it safer to start businesses than non-white and non-males. UBI might allow more people to do this. Another interesting aspect would be the economic effect of everyone having a minimum amount of money. I don't know enough about economic to say what the impact would be on basis good vs luxury goods and everything in between but I imagine it would have an effect.
aminorex 10y ago
Of course it will not solve poverty. That's not the point. The point is that it will solve the self-destruction of social wealth. In particular, it will prevent the expansion of poverty to include the vast majority of currently wealthy persons.
anotheryou 10y ago
Any word about where that money goes? Back in to economy!

109 points by tpatke 10y ago

This is nuts. Basic income is not to provide extra spending money for 100% of americans. It's help 10% of the most poor while everyone else ends up paying back the money in taxes. So we are talking about 300 billion. This is half of US military budget and will be instead of, instead of in addition to, current aid programs. It is true that basic income will not directly improve lifestyle of the middle class. It can well result in indirect improvement by poor becoming more productive and government bureaucrats currently running the program getting more useful jobs. But we probably need to other things as well to improve lifestyle for the other 90% of the population.

fixermark 10y ago
One of the points the author proffers is that displacing more targeted, conditional aid with UBI may not actually be better. The question of whether---if you just give people money---they spend it wisely enough to maintain their needs is an open question. It's sort of the formalized version of "Don't give that wino a dollar; he's just going to spend it on more booze." (The sense I get is economists lean towards "Yes, people generally look after themselves given the money to do so," but I believe this is an open question policy-wise).
- cat_plus_plus 10y ago
  So just give money in small daily deposits. If someone spends all money in beer one day, he/she will be hungry the next day and make better choices.

alexchantavy 10y ago

UBI would also provide entrepreneurs and small business owners with a safety net so they'd be able to take risks they wouldn't be able to before.

jcslzr 10y ago

letting politicians keep all the money has not worked either

hirundo 10y ago

Relative poverty is insoluble without totalitarian levels of redistribution to a very low common denominator, and that is unlikely to include the inevitable oligarchs. Absolute poverty is rapidly being solved (https://www.ted.com/talks/hans_rosling_shows_the_best_stats_you_ve_ever_seen?language=en https://www.ted.com/talks/hans_rosling_shows_the_best_stats_...) by markets and globalization, and radical redistribution such as a basic income tends to interfere with that.

ktRolster 10y ago
By some measures, poverty already is a solved problem in the United States. Relative poverty is all we have left to solve....
- jbmorgado 10y ago
  There are quite a lot of people in the USA that consistently starve. I'm quite sure that according to most definitions that's clearly absolute poverty, not a relative one. https://en.wikipedia.org/wiki/Hunger_in_the_United_States https://en.wikipedia.org/wiki/Hunger_in_the_United_States
  - fiatmoney 10y ago
    "Food insecurity" is not remotely the same thing as starvation. I would wager a fair amount that no one in the US has starved to death due to lack of money (ignoring neglect of children, catatonia, etc) in quite a while.
    - sgnelson 10y ago
      I'm pretty sure he was talking about food insecurity and not actual starving to death, though his use of the word in this case is actually quite correct. Starve does not solely imply starvation unto death, Mr. Pedant. And his point still stands, it's an issue in the US that has yet to be solved.
      - 10y ago

MrJagil 10y ago

I made the same submission here: https://news.ycombinator.com/item?id=11806509 https://news.ycombinator.com/item?id=11806509 Maybe they should be merged.

nullsmack 10y ago

The very first argument in the article is flawed which leads me to wonder how much of it is or isn't flawed. It talks about a Universal Basic Income for everyone over 21.. then it complains that would cost 3 trillion dollars for all of the 300 million Americans. According to the Census Bureau as of 2015 there were 321 million Americans and 24% were under 18. No clue how many were under 21. But that still takes it down to 244 million people. If we left Social Security alone then that would cut another 46 million people out as well. The article doesn't even attempt to explore cost savings by eliminating excessive management of all of the existing programs.

newacct23 10y ago
You are arguing about specifics that do not make any difference to the overall argument the author is trying to make. UBI for 244 million is still unfeasible. UBI is just a bad idea, jobs in themselves have nice externalities that UBI wont give. People that have jobs generally don't commit crimes. Also a UBI will disincentivize working jobs that are undesirable but are necessary for a functioning society.
- otterley 10y ago
  How about people who want to serve society with "jobs" that don't pay well (or at all) but are incredibly valuable, like charity work? Wouldn't a UBI free them up to do that?
- toomuchtodo 10y ago
  > Also a UBI will disincentivize working jobs that are undesirable but are necessary for a functioning society. That's kinda the point. You drive up the cost of undesirable jobs until you find someone who'll work it. If no one wants to work it, you'll need to automate it or do without.
  - carapace 10y ago
    Yes, this! I hate the "But who will pick up the garbage?" argument so much, the lazy thinker who says this is implying that our society only functions if there's an explicit hell waiting for those who fail it. And that's kinda fucked up, eh? If UBI fixed just that it would be worth it, IMHO. Also, have you ever talked to the people who pick up your garbage?

thesimon 10y ago

>[...] Why not subsidize workers’ wages instead? Sounds like a great idea! Companies get to save money and the tax payer effectively pays the companies profit.

bpodgursky 10y ago
Well, corporate income tax is higher that individual income tax for the vast majority of people... so it probably would mean more tax revenue overalll. And no, income earned in the US cannot be kept offshore, so yes, taxes will actually be paid on it either when "earned" by the company or distributed (buybacks, etc).

brador 10y ago

It will absolutely solve poverty, what it won't do is make everyone rich.

digi_owl 10y ago
And frankly the world is likely to be better off that way. research have shown over and over that as economic differences grow, social structures deteriorate.

skybrian 10y ago

This article is yet another example of binary thinking. Basic income could be started at any amount. It won't pay the rent, but an extra $100 a month makes a difference for people living on the edge. The first $100/month will make a bigger difference than anything added on top of that.

1123581321 10y ago
The problem is that a very small number of people are on that $100/month edge, a percentage of them will increase their expenses until they are as desperate as they used to be, and the increased taxes to pay this money will put others on the edge. When considering BI, or any large money transfer program, you must consider the entire system, not just the beneficial effects on a small number of people for the first few months.
- witty_username 10y ago
  Money is correlated with happiness. Sure, people will still yearn for more money, but with the more expenses people will be more happy.
  - 1123581321 10y ago
    That is the least important point, but please keep in mind then that the decreased expenses (alternately, increased tax expenses) to offset the cost of BI will make others unhappy.
    - thesimpsons1022 10y ago
      At this point we are just being handwavy. This is the problem with discussions like this, there aren't any hard facts to support the arguments. Are people being forced to pay .1 pct more of their income or 10 pct more? etc...
      - 1123581321 10y ago

snicker7 10y ago

It doesn't make to tax citizens only to give the money back to them. Another way to implement a mincome is to have a flat tax rate and give every citizen a large standard deductible. If one's taxable income is negative, then one would receive money from the government, which is interpreted as a negative tax payment. Furthermore, the purpose of a mincome is not to alleviate poverty, but instead to to replace current systems of welfare (food stamps, social security, etc).

pitaj 10y ago
> replace current systems of welfare Yes. The broken, trapping, inefficient, bloated, bureaucratic messes that cost way to much and don't help people nearly enough.

lossolo 10y ago

Problem is with capitalism and it's founders that told us all that you can't live without work. In next decades we will need to change the system diametrical because robots will take all not creative jobs out there. If we want basic pay we will need to tax corporations that use robots at around 70-90%, money from tax will go for basic pay, money from people that receive basic pay will go to corporations etc. Thing that needs to be controlled is capital, it can't be taken out of the market like it's done now, companies are gathering billions of dollars which are taken out of the market. Capital taken from the market can not be redistributed again. One thing is for sure, current system need to be changed and adapted to robots revolution.

sharemywin 10y ago
maybe people should start owning the robots.
- grahamburger 10y ago
  I remember thinking this as a kid. "Just make it illegal for a corporation to own a robot, each person only owns one robot and they keep the value it generates." Thought I'd solved the problem ;) I think the reality is that it's not really a 'robot' in the sci-fi sense - it's a thousand automated machines doing one tiny piece of the process, and slowly your factory with 500 employees only needs 5, and output and quality have increased. There isn't really a single robot to 'own', and even there was it would be far too expensive for one regular person to own it.
  - sharemywin 10y ago
    why not own part of one. of course I think the world will reorganize into 3 markets managed by blockchains/oracles: equipment rental, labor/services market, attention market.
    - grahamburger 10y ago
      Would owning a part of the 'robot' be intrinsically different that owning a part of the corporation that owns the robot? Ownership in the companies that we work for is nice, but for most of us it's not enough to live on. We could intentionally try to make automating more expensive so that companies just don't do it. The problem is automating is actually great for everyone else - as a consumer I'd rather buy a car that is better made, safer, and cheaper from an automated factory than one that might be prone to human error and is more expensive.

jbob2000 10y ago

Something that is missing from the basic income/poverty debate is the notion of "learned helplessness"; after a long time in poverty, people get used to the lifestyle and have difficulty adjusting to "regular" life. For example, if you've been homeless your entire life, you've never had to lock your apartment door or carry a key around. My partner (a social worker) had a client who's apartment was always getting robbed because whenever she left, she never locked her door; it was not something she was used to doing. Another client was unable to set an alarm and follow a schedule. 20 years of living on the street, waking up whenever he felt like it, meant that he had completely lost his faculties for time management. He couldn't hold down a job and regularly missed appointments. Part of my partner's job was carrying these people through their journey to "regular" life. She would show up to their apartments and take them to their appointments. She would call the woman who didn't lock her doors every morning to remind her to lock her door on her way out. Etc. Etc. Basic income doesn't solve any of this. It just drops a load of money into a person's lap who has no idea what to do with it.

mempko 10y ago
Yes, it does solve these. Because people who lost the faculty for time management or security can learn it again. Putting someone in a house and giving them an alarm clock is a very good start.
maxxxxx 10y ago
When I was in my teens I worked summer jobs in a German social welfare agency (Sozialamt). There were many families that had been on welfare for generations and it was noticeable that their kids had no idea how to make progress in school or how to hold a job. They simply didn't know and had nobody who could tell them. They also had no role models. I think with basic income there is a risk that a lot of people will forever be lost for the working world. Especially if the basic income is so low that you can barely survive.
- kefka 10y ago
  I'm unsure about the German system... I've been on welfare here in the USA. The way it works is dependant on your income. The more you make by hard work, the less assistance you receive. That sounds fair... Until you realize that section 8 (housing) is the same way. Food stamps are the same way. At the time, there was a cutoff for the free clinic (which counted benefits as income).. I made $100 too much. When doing work and getting paid $1 means taking $3 in losses from assistance programs, this grinds people further into poverty. The further I try to dig out, the deeper I get until I hit the point that I can start to survive without any assistance...

partycoder 10y ago

In my country, there was a movement that tried to make education free of charge. One of their arguments was that it was going to be actually cheaper for the government. This is what the logic was: the student loans system has a high interest rate, and when the loan is defaulted, the government needs to pay. So what the government ends up paying is not only the actual loan, but the loan with some accrued interest. Also, the default rate is high. So in this case it makes sense for the government to just pay directly. Now, following the same mindset, how much does the government pay if there is people without a basic income? is it more than just giving away that money directly to people? If there answer is yes, then probably it's not a bad idea after all. Now, of course there will be issues. The food stamps system imposes some restrictions that you will no longer have if you just receive basic income. Also some people might just do the minimum required to get that income and live at the expense of the government. There might be pros and cons that need to be considered.

cousin_it 10y ago

At a minimum, we need free universal healthcare that shouldn't be replaced with basic income, because poor sick people often need more expensive healthcare than a reasonable basic income can pay for. Similar for education, the current system of loans just sucks compared to universal free education which was achieved by the frigging USSR. Also it seems pointless to give basic income to well-off people. On top of free healthcare and education, why don't we just top up everyone's income to the equivalent of the minimum wage? Sure, that will disincentivize jobs that pay close to minimum wage, but such jobs are dying due to automation anyway, and good riddance.

witty_username 10y ago
> Also it seems pointless to give basic income to well-off people. Otherwise taking the basic income might be seen as a symbol of being poor. Also, well-off people might be envious of people receiving basic income. (tl;dr people aren't perfectly rational)
mason240 10y ago
>why don't we just top up everyone's income to the equivalent of the minimum wage? That's what UBI essentially is, giving everyone about the equivalent of a minimum wage income.
robotresearcher 10y ago
> On top of free healthcare and education, why don't we just top up everyone's income to the equivalent of the minimum wage? That strongly incentivizes under-reporting income. One of the strong points of universal income is that it is relatively easy to administer. And well-off people would be taxed more so as to return all or most of their payments. It's not pointless, since it serves as a safety net the instant the large salary goes away, with no application or needs-based investigation that slows the process and costs more money to administer.
- cousin_it 10y ago
  Yes, fair point.

weatherlight 10y ago

The way you fund it, of course, is to further tax the higher end of the income bracket. It's an innocuous way of redistributing wealth. It helps everyone but the very wealthiest, which are the ones who need it the least. Jobs are not the answer, at least in my mind. A universal basic income would allow people to spend some time possibly developing a passion that they love, not slaving away at a job which is at best given out of pity, and at worst a waste of time which they are obligated to attend at a negative cost to everybody. A universal basic income is upfront and direct about its purpose.

RivieraKid 10y ago

We already have a basic income, at least in Europe, not sure about the USA. Unemployed people get welfare. Changing this system to what BI advocates propose is not a huge change: - Simplification of the welfare system, you get money automatically, no need to ask. - In the current system, if you get employed, you lose benefits, so the jump in your income is small, a disincentive to work. In the BI proposals, income vs income-plus-welfare curve is smooth. That's the main improvement I think. - More money gets redistributed from the wealthy to the poor. Personally I think the current level of redistribution is fine.

jimmytidey 10y ago

An absolutely key feature of basic income is the security it gives someone who is on breadline. I can only describe the situation in the UK - but imagine this generalises. If you are on government benefits, and you accept some money to do a small or casual job, you face a choice. Not declare it, and face court and destitution if you are found out. Declaring the income, on the other hand, is an administrative nightmare. Worse - it might trigger a recalculation, or removal, of your benefits. Most benefit seekers don't fully understand how their benefits are calculated, and, again, they could be destitute if benefits are removed or reduced. So, for any long term unemployed person, it's often best to sit tight and not take any risks. Thus the person is trapped in poverty, plus of course the sense of self worth that comes from doing a job. This is also true for an entrepreneur who decides to quite his job and build a business. Basic income can provide some security while you get that business going. This is not typically true of unemployment benefit. Everything comes back to what unemployment benefits are - a payment conditional on not doing any work. That causes so many problems, and basic income can solve them. On the cost: basic income, at substantial levels, is clearly very expensive. However, you simply tax that money back. This can leave pay after tax absolutely unchanged for everyone, while still delivering the advantages described above.

carapace 10y ago

Keep in mind when discussing UBI, especially in the context of poverty, that it is not a solution to poverty. It is a solution to automation crashing demand by throwing earners permanently out of the economy. Robots take the jobs so people have no money to spend even as the robots make more stuff, cheaper. What to do with the people? Throw them in a volcano? "Hunger Games"? Let's just give them money and see what happens, okay? That's UBI. UBI isn't for the bum. It's for you (okay, well, your cousin. You read HN, you're probably fine.)

mcantelon 10y ago

To the ruling class, it's not about solving poverty, but about postponing insurrection due to lack of work.

grahamburger 10y ago

The biggest concern that I have with UBI is how do we avoid the Basic Income Trap? It's pretty widely accepted that we fell prey to the Two Income Trap [1]. If we institute UBI, how long will it be before a person needs their UBI and another job (or two, or three) just to scrape by? [1] http://www.motherjones.com/politics/2004/11/two-income-trap http://www.motherjones.com/politics/2004/11/two-income-trap

Grishnakh 10y ago
If the UBI isn't set high enough to allow someone to survive, then it by definition is not a "basic income". It has to be set high enough for this. This may require some kind of extra government programs and legislation to do things like 1) make sure enough low-cost housing is available, and maybe 2) help people learn to use it effectively, including maybe moving them to low-cost locations if necessary.
- grahamburger 10y ago
  It's not so much about setting it high enough as keeping it high enough. How do you convince the wealthy and powerful to keep giving up more and more of their income to keep up with inflation so that UBI continues to meet the definition of 'basic income'?
  - Grishnakh 10y ago
    If there's inflation, the wealthy are going to earn more money in absolute dollars (if they don't, that means they're getting poorer). The same tax rate will automatically bring in more money from these people. I don't see the problem. You're making the common mistake of thinking that a given tax rate (as a percentage) equals a fixed amount of revenue, which is just plain wrong. A fixed percentage of a rising amount of income will result in a rising amount of tax revenue.
    - grahamburger 10y ago
      Ok, that's fair - I still see a few problems though. First, if you're right and the wealthy keep making more in absolute dollars and therefore paying more in taxes (IE UBI doesn't make them poorer) then we still have to index the UBI against inflation. And every time UBI goes up, it will be an upstream battle against people who had the same common mistake that you suggest that I made. In other words, in this case at least, perception is reality. Second, what if UBI does make the wealthy less wealthy? Isn't that kind of the point of wealth redistribution? To reduce income inequality?

russelluresti 10y ago

In every debate, there are people on the wrong side of history. Mr. Porter, welcome to that list. Granted, the point that it won't happen today is true enough, but it is an inevitability (assuming we don't blow ourselves up beforehand), so it's important to start thinking about it now. What frustrates me the most with these articles is that they don't base any of their information on actual fact. Take, for example, the argument of disincentivizing work. This is one of things that seems "logical" if you're a pessimist or an asshole, but past experiments with basic income have proven it to be untrue (look at the "Mincome" experiment in Manitoba for proof).

supergeek133 10y ago

I'd be interested to hear more about the last part concerning "subsidizing wages". Welfare for many in this country basically is a subsidy for their wage (cue memes of "walmart welfare"). Take for instance when the big layoffs started in the tech/housing sector, you would hear stories of people staying on unemployment because it paid MORE than a new job in the same field would pay. And we kept extending benefit timeframes which just resulted in a vicious cycle. That's a pretty big incentive to not work.

kazinator 10y ago

> Almost a quarter of American households make less than $25,000. It would be hardly surprising if a $10,000 check each for Mom and Dad sapped their desire to work. Ah, but a transfer payment which targets the poor is worse in this regard. A $10,000 check that you lose if you work saps your desire to work more than a $10,000 check that augments your income.

mamon 10y ago

UBI won't solve poverty for a very simple reason: Every time government starts to subsidise something the price of subsidised goods goes up. I've seen this in Europe with wind farms, "eco" lightbulbs, farming equipment. etc. And UBI is equivalent to subsidising all basic goods at the same time. So the only noticeable effect of UBI will be price increase, so that it would take your salary + UBI to purchase goods that now can be purchased by your salary alone. Net result: increased bureaucracy, increased cash flow for the government (higher taxes), higher profits for corporations (higher prices), no benefit for poor, big hit for middle class (which is most heavily taxed).

serge2k 10y ago

> Where would that money come from? It amounts to nearly all the tax revenue collected by the federal government. Nothing in the history of this country suggests Americans are ready to add that kind of burden to their current taxes Taxes would have to go up, in some cases drastically. It's an easier sell if people immediately get a good chunk back. > A universal basic income has many undesirable features, starting with its non-negligible disincentive to work. Almost a quarter of American households make less than $25,000. It would be hardly surprising if a $10,000 check each for mom and dad sapped their desire to work. Except if they keep working the money just adds up. I certainly wouldn't want to stop working and give up my lifestyle. Maybe instead of working to make enough money to just get by you keep working and put a chunk of that money into savings, or upgrading your lifestyle a bit. Maybe moving to a better area, fixing up some stuff around the house, get your kid a couple toys, etc... Yeah, people in situations that make working hard might quit but maybe they should be allowed to. Or maybe they should quit for a while and come back when it makes more sense.

damptowel 10y ago

Here's a thought experiment I've been been wrestling with... Imagine a dirty low skill job. Something that currently doesn't pay much and is generally considered low status. Assume it's a job no one really wants to do but do because it pays them a living. What would happen to that job under UBI? I would assume that due to vacancies demand for people willing to do this work would go up, and companies would need to lure in applicants by raising pay. Imagine that would indeed attract workers. How would this affect that company? It's costs would rise. Will it become less competitive? Will it raise price? Would the sector have to be subsidized to stay afloat? Would it start some kind of 'moral revolution'? I imagine new coping mechanisms would need to be devised and the economy would morph into something quite unlike what we live under today.

ck425 10y ago

I hope Switzerland votes for UBI, it would be interesting to see actual data rather than just conjecture. The point about people losing the will to work is interesting, as he also makes the point that jobs give us purpose and structure in life. If money is no longer an issue, or less of an issue, people may choose to do jobs because they provide purpose and structure. It could also increase innovation. There have been lots of article on HN recently about the privileges white males have in terms of financial security, that make it safer to start businesses than non-white and non-males. UBI might allow more people to do this. Another interesting aspect would be the economic effect of everyone having a minimum amount of money. I don't know enough about economic to say what the impact would be on basis good vs luxury goods and everything in between but I imagine it would have an effect.

aminorex 10y ago

Of course it will not solve poverty. That's not the point. The point is that it will solve the self-destruction of social wealth. In particular, it will prevent the expansion of poverty to include the vast majority of currently wealthy persons.

anotheryou 10y ago

Any word about where that money goes? Back in to economy!