4 ms·

Why should incentivizing the creation of economically unfeasible and unnecessary jobs be a goal? Such a system would be a huge mess of misaligned incentives.

pizza234 10y ago
False dichotomy A job is not either "feasible and necessary" or "unfeasible and unnecessary". Ultimately, the idea is that creating a job at a loss would be preferable to "giving money for free" because it could/would cost less, but not less importantly, it would be a potential for wealth creation. If, stupid example, somebody would be paid for running on a bike to produce electricity, that would create wealth by, say, reducing market prices, which the alternative, staying at home watching TV, wouldn't. Of course, I'm talking about large scale, and I stress that this is a st00pid example. I personally like this idea, but it may be too complex to put in practice - even at a loss, it requires effectively handling a business. But at the same time, would that business be necessarily worse than the (perceived) government efficiency?
- morgante 10y ago
  I realize that "feasible" is a messy word. The problem with such make-work is that you're paying people to do work which shouldn't be done. You're assuming that "staying at home watching TV" doesn't create any value—but it creates entertainment value for the consumer. If it didn't have any value, nobody would buy cable. Let's say we have some totally trivial job. Say, generating electricity from running on a bike. The market wage for this would be $1. In the status quo, we might assume that nobody would do that job. If nobody is willing to do that job, it means that their opportunity cost is greater than $1—ie. that even if they are unemployed, their non-market activity is worth more to them than $1/hr. Let's assume their non-market activity is worth $5/hr to them. Now a government subsidy comes in and pays the employer $5/hr for everyone they employ. So the employer starts advertising bicycle jobs at $6/hr (in practice, they would keep some of the subsidy for themselves). Now the individual is willing to take the job at $6/hr. Somewhat counterintuitively, this has destroyed value. In the status quo, we were paying nothing (no subsidy) and total value was $5/hr (the value the person gains from their leisure time). With a subsidy, we pay $5/hr and gain only $1/hr in total value (the benefit of the person riding the bike). This is obviously worse. The only way that your system makes sense is if you treat leisure time as worthless. But that's clearly false: if leisure time was workless, everyone would work every possible hour and unemployed people would all be walking around the streets looking for pennies.
  - simplify 10y ago
    That's a really good, illustrative example. It seems true that, given a single hour, you're "destroying" the value of the individual's leisure. However, the individual wouldn't have to work away all their leisure time, would they? Assuming a living wage, they would still have the opportunity for leisure. Also, I would imagine that the world is big enough to get a job at company involved with a topic you're at least mildly interested in. I wonder if subsidized wages would better support art studios?
    - morgante 10y ago
      > It seems true that, given a single hour, you're "destroying" the value of the individual's leisure. However, the individual wouldn't have to work away all their leisure time, would they? Sure, but every hour they're working would destroy valuable leisure time. > Also, I would imagine that the world is big enough to get a job at company involved with a topic you're at least mildly interested in. That's a really good point. There are whole classes of jobs which lie on this spectrum, up to "volunteering"—jobs which provide sufficient non-pecuniary benefits to not need a wage at all. It's also a big problem with the current system where jobs and living are inherently coupled. There might be a job which could pay $1/hr which I would gain $7/hr in satisfaction from, but such a job can't exist because of minimum wage laws. A wage subsidy might be a way of encouraging the fulfillment of such jobs, but it's unfortunately also going to end up subsidizing destructive jobs (like the minimum wage Walmart jobs that a sibling comment refers to). A subsidy program is very open to manipulation and also entrenches us in a model where a "job" should be the key determinant of income, even though lots of valuable work can be done through freelance or casual collaborations. In contrast, UBI directly addresses the problem of needing to work to live. So people can do thinks like focus on art studio work (which might be fulfilling enough to require no wage), but can also do slightly less fulfilling work (for example, trail maintenance) at below minimum wage.
- zanny 10y ago
  Walmart today is the greatest example of subsidized jobs in practice. Their employees are underpaid and are given social benefit brochures on their first day working. Townships will give Walmart thousands in subsidies to get a store to move in, just to have all the wealth of the town vacuumed up and shipped to the Walton family while all local businesses wither and die because they cannot compete with the economies of scale at hand. So the state and the taxpayers get to subsidize Walmarts profits, when Walmart could not operate in half the locations it has without corporate welfare to subsidize the costs of their employees. This already happens today, it happens in many industries (including agricultural harvest and food service) using circumstantial employment rules to underpay employees and have the state subsidize their cost of living so the business can be more profitable. It is absolutely dystopian and against everything the UBI movement stands for. It is much more reasonable to liberate peoples time to do what they think is valuable, rather than have some bureaucratic state agency colluding with business interests to determine what is valuable enough to force them to spend their time according to that metric (and hint, their measure of value is going to be shareholder value in all its forms).

pizza234 10y ago

False dichotomy A job is not either "feasible and necessary" or "unfeasible and unnecessary". Ultimately, the idea is that creating a job at a loss would be preferable to "giving money for free" because it could/would cost less, but not less importantly, it would be a potential for wealth creation. If, stupid example, somebody would be paid for running on a bike to produce electricity, that would create wealth by, say, reducing market prices, which the alternative, staying at home watching TV, wouldn't. Of course, I'm talking about large scale, and I stress that this is a st00pid example. I personally like this idea, but it may be too complex to put in practice - even at a loss, it requires effectively handling a business. But at the same time, would that business be necessarily worse than the (perceived) government efficiency?

morgante 10y ago
I realize that "feasible" is a messy word. The problem with such make-work is that you're paying people to do work which shouldn't be done. You're assuming that "staying at home watching TV" doesn't create any value—but it creates entertainment value for the consumer. If it didn't have any value, nobody would buy cable. Let's say we have some totally trivial job. Say, generating electricity from running on a bike. The market wage for this would be $1. In the status quo, we might assume that nobody would do that job. If nobody is willing to do that job, it means that their opportunity cost is greater than $1—ie. that even if they are unemployed, their non-market activity is worth more to them than $1/hr. Let's assume their non-market activity is worth $5/hr to them. Now a government subsidy comes in and pays the employer $5/hr for everyone they employ. So the employer starts advertising bicycle jobs at $6/hr (in practice, they would keep some of the subsidy for themselves). Now the individual is willing to take the job at $6/hr. Somewhat counterintuitively, this has destroyed value. In the status quo, we were paying nothing (no subsidy) and total value was $5/hr (the value the person gains from their leisure time). With a subsidy, we pay $5/hr and gain only $1/hr in total value (the benefit of the person riding the bike). This is obviously worse. The only way that your system makes sense is if you treat leisure time as worthless. But that's clearly false: if leisure time was workless, everyone would work every possible hour and unemployed people would all be walking around the streets looking for pennies.
- simplify 10y ago
  That's a really good, illustrative example. It seems true that, given a single hour, you're "destroying" the value of the individual's leisure. However, the individual wouldn't have to work away all their leisure time, would they? Assuming a living wage, they would still have the opportunity for leisure. Also, I would imagine that the world is big enough to get a job at company involved with a topic you're at least mildly interested in. I wonder if subsidized wages would better support art studios?
  - morgante 10y ago
    > It seems true that, given a single hour, you're "destroying" the value of the individual's leisure. However, the individual wouldn't have to work away all their leisure time, would they? Sure, but every hour they're working would destroy valuable leisure time. > Also, I would imagine that the world is big enough to get a job at company involved with a topic you're at least mildly interested in. That's a really good point. There are whole classes of jobs which lie on this spectrum, up to "volunteering"—jobs which provide sufficient non-pecuniary benefits to not need a wage at all. It's also a big problem with the current system where jobs and living are inherently coupled. There might be a job which could pay $1/hr which I would gain $7/hr in satisfaction from, but such a job can't exist because of minimum wage laws. A wage subsidy might be a way of encouraging the fulfillment of such jobs, but it's unfortunately also going to end up subsidizing destructive jobs (like the minimum wage Walmart jobs that a sibling comment refers to). A subsidy program is very open to manipulation and also entrenches us in a model where a "job" should be the key determinant of income, even though lots of valuable work can be done through freelance or casual collaborations. In contrast, UBI directly addresses the problem of needing to work to live. So people can do thinks like focus on art studio work (which might be fulfilling enough to require no wage), but can also do slightly less fulfilling work (for example, trail maintenance) at below minimum wage.
zanny 10y ago
Walmart today is the greatest example of subsidized jobs in practice. Their employees are underpaid and are given social benefit brochures on their first day working. Townships will give Walmart thousands in subsidies to get a store to move in, just to have all the wealth of the town vacuumed up and shipped to the Walton family while all local businesses wither and die because they cannot compete with the economies of scale at hand. So the state and the taxpayers get to subsidize Walmarts profits, when Walmart could not operate in half the locations it has without corporate welfare to subsidize the costs of their employees. This already happens today, it happens in many industries (including agricultural harvest and food service) using circumstantial employment rules to underpay employees and have the state subsidize their cost of living so the business can be more profitable. It is absolutely dystopian and against everything the UBI movement stands for. It is much more reasonable to liberate peoples time to do what they think is valuable, rather than have some bureaucratic state agency colluding with business interests to determine what is valuable enough to force them to spend their time according to that metric (and hint, their measure of value is going to be shareholder value in all its forms).