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One thing to note about these experiments is that they tend to paper over or ignore both the Universal and the Basic parts of Universal Basic Income. (Those ar
by Falkon1313 10y ago
One thing to note about these experiments is that they tend to paper over or ignore both the Universal and the Basic parts of Universal Basic Income. (Those are the hard parts.) They end up just experiments to see what happens if you give some people a little money. In this case, what if 6,000 out of 45,000,000 people get $1 per day (which is about 1/9th the GDP PPP per capita) for a limited time.
I don't know about the cost of living or employment situation in Kenya, but by GDP PPP per capita, that calculates to about the equivalent of $17.42/day in the U.S, or $522/month ($6,264/year). That's way below poverty level, and not likely to cover housing, utilities, food, and healthcare anywhere in the U.S. Of course, that would be helpful to anyone with low income, but it is not a basic income. The situation may be different in Kenya, but by the math it doesn't sound promising.
If it only affects 1/100 of 1% of the population, there is no way to observe the societal effects of a universal income. That's a long way from universal. Also, because it is an experiment rather than a social contract, there is no way to observe what people will do if they have it as a safety net, because they can't rely on it. To be fair, if it is going to run for 10 years, that's something, but still not representative of lifetime security.
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Regarding the comments about poor people buying TVs and cellphones, etc. - there are many reasons for this, but it really is utility and value. These people aren't stupid. The economy works completely differently when you are poor. Thinking that they should invest their $300 tax refund in a diversified stock portfolio is nonsense. With fees of $10/transaction, they would lose 1/3rd of their money just buying into 10 cheap stocks, and an equivalent amount selling it. They would need > 100% return just to break even.
Likewise, money in the bank is a liability. It detracts from foodstamp allowances etc. But they don't send people around to appraise your TV when they're calculating your foodstamps. And in a pinch, you have things that you can trade, sell, or pawn. If you leave the money in the bank, it will be lost to bills, bank fees, etc. And sure, you could have caviar and shrimp instead of ramen and rice cakes, but it'd be gone as soon as the meal is done. A stereo will still be there tomorrow.
Generally speaking, if you are working poor, trying to save up to improve your position costs you and you lose. Buying things saves you money, maintains the status quo, gets you things which you can sell in an emergency, and makes your life better until then. Consider states of matter - solid, liquid, gas. Things work quite differently depending on the state of matter. Likewise, the economy works quite differently if you are lower class, middle class, or upper class.
Telling someone poor that they should spend their money more wisely is often like telling someone trapped in ice that they should just swim up to the surface. In the latter case, physics just doesn't work that way. In the former case, economics just doesn't work that way.