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Finland's Largest Trade Union Slams Basic Income as ‘Useless’
- stuaxo 10y ago> but the union also suggests that making it easier to refuse unpleasant jobs may create inflationary bottlenecks. Shitty jobs being valued higher in monetary terms doesn't sound like the worst outcome I can think of.
- sharemywin 10y agoI think it's tricky. If prices go up then demand drops. So businesses have to adjust to make things work. So late hours, early hours will be dropped so Revenue/Employee is large enough to be profitable. more self check out lines at groceries.
- ma2rten 10y agoOr the wages go up for these kinds of jobs, leading to inflation, meaning basic income will not be enough to survive.
- mrfusion 10y agoIt would only lead to inflation if those increased wages were paid via increasing the money supply.
- deelowe 10y agoHuh? Increasing wages doesn't cause inflation.
- criddell 10y agoIt can. It depends on the source of the money. If the government just prints more money to increase everybody's bottom line, then it would be an inflationary pressure for sure.
- deelowe 10y agoNot really. In the situation you've described, the printing of money is what causes inflation. Wages may change as a result of that, but then again, they may not. What happens with wages depends on other economic factors.
- criddell 10y ago> the printing of money is what causes inflation Not really. Demand outstripping supply is what causes inflation.
- deelowe 10y agoFair enough.
- sharemywin 10y agoAnd if someone chooses to work less supply is constrained = UBI. if someone chooses to work the same demand goes up = UBI. either way demand is increasing and supply is decreasing. leading to higher prices.
- criddell 10y agoExcept when people are working less because robots are doing the job. Now people are working less and the supply is unchanged.
- logfromblammo 10y agoCurrency is the lubricant for the trade economy, not the fuel for its engine. You cannot create more goods and services by printing more money. In general, a person that holds more currency reserves exerts greater command over future production. So by continually taking money away from rich people and giving it to poor people, in the long run, your economy will tend to produce more of the things poor people want, and less of the things rich people want. Inflation will be a big problem for UBI at first, but prices should eventually stabilize--perhaps after 20 years have passed. Good luck protecting such a system politically for that long, though. In my opinion, you really can't force a work-for-pay, pay-for-goods economy to support a welfare state. It just immediately routes around the damage. You have to establish a parallel work-by-command, goods-by-rationing economy. That's a whole lot easier to do with robotic workers performing all the difficult and nasty work. It might not collapse due to corruption and shortages this time around. Maybe.
- simonh 10y agoIf BI leads to near-full employment, by eliminating poverty traps and subsidizing unskilled jobs, then that's not necessarily a problem. BI doesn't mean entirely dropping all other forms of contingent social support, such as child care allowances, pensions and disability benefits, so if people genuinely have a reason they cannot work that can still be covered.
- staticautomatic 10y agoIt's not necessarily true with respect to jobs that if the price goes up, demand drops.
- markhahn 10y agothe price-demand relation is a curve (which can be nearly flat), not a simple inverse function.
- iaw 10y ago> If prices go up then demand drops That is not a true statement in Economics. Price is a result of the supply & demand functions, the scenario you're thinking of is a reduction in supply with unchanged demand leading to an increase in price. We really don't know if that increase in price will be large or not without more data.
- CPLX 10y agoThose of us with an academic background in economics call this a change in the quantity demanded. That said, outside of a jargon context the way the word is used here is totally fine and understandable.
- the-dude 10y agoIf a side-effect of UBI is the retreat of the 24/7 economy, it would be a plus.
- prostoalex 10y agoIf government revenues are collected mainly from personal income taxes, such retreat would signal a lower UBI check next month.
- Chris2048 10y ago> If prices go up then demand drops demand exists at different price points. Demand will drop, but I think this represents persistent demand. This is a good thing. I demand disappears at a certain cost, maybe it's not really viable? e.g. Is there a point at which we'd no longer to pay for a garbage man, deep-sea fisherman or sewage worker? If yes, maybe we don't really need these jobs. If no, (or the point is high) then maybe these jobs should be higher paid.
- prostoalex 10y agoIn retail this creates an effect of employment driven only by high margins. Shopping center consisting of Whole Foods, Neiman Marcus and organic pour-over coffee shop will survive, small corner bodega selling food and various odds-and-ends will not. This does create additional employment for economists studying origins and dynamics of "food deserts", though.
- guard-of-terra 10y ago- Remove zoning restrictions. - Make it easy for individual enterpreneurs to open small shops. This ought to help. Small corner bodega will survive if operated by its owner.
- jonwachob91 10y agoIt's interesting to understand the primary motivator for UBI around the world. It sounds like the Fins want to use it to take away the minimum wage, while in the US the primary motivator is to take away the rest of the welfare services.
- youdontknowtho 10y agoThat is interesting. I kind of feel like Charlie Brown and the football...If we agree to get rid of the safety net before UBI is implemented, I don't think the conservatives would follow through. I really don't. I don't think that they are interested in co-governance anymore.
- mikeash 10y agoSeems obvious. It's like the current talk of repealing the ACA and then replacing it with something later. If you actually mean to replace it, there's no reason not to figure out the replacement first, and do essentially an atomic swap of the two.
- clarkmoody 10y agoYou guys are forgetting that politics is a greedy-search of the issue-space. The typical politician will say whatever it takes to obtain short-term gains in power. Come election time, that means appealing to the base. Come governance time, it means keeping the lobbyists happy and making deals to advance their own career within the legislature. Why have Republicans never taken meaningful action on abortion? Because they wouldn't be able to campaign on it every 2 years. So when it comes to government benefits / entitlements / welfare, the politician must weigh the cost of taking away goodies from the constituents, keeping campaign promises to the base, and keeping lobbyists happy. The choice will be what yields the most short-term political gain. Nobody's talking about making the real tax-code reforms that will lead to long-term benefits: eliminating the mortgage interest deduction and making healthcare benefits taxable as income. Those will never happen because tax rates would go up on the middle-class voters for both parties. But the long-term economic benefits would be excellent. There are other parts of the tax code that make no sense economically but lots of sense politically.
- nabla9 10y agoThis is because unions think they would lose power if basic income is implemented. Unions in Finland have abandoned part time and low income people and only look after people who have full time jobs (who are members in the unions). Green party in Finland made 560 euro basic income proposal few years ago that was cost neutral. That was verified with microsimulation model that used real world data.
- igravious 10y agoCan you point me towards the micro-simulation model? I'm interested all such attempts to model bits of society.
- nabla9 10y agoIt was the SISU microsimulation model. http://tilastokeskus.fi/tup/mikrosimulointi/index_en.html http://tilastokeskus.fi/tup/mikrosimulointi/index_en.html
- aaron-lebo 10y agoThis makes me wonder if basic income can't get passed in Finland with a constituency that should (in theory) be in favor, what chances does it have in the rest of the world where dynamics are aligned against it? Decades before we see it in the US?
- ajmurmann 10y ago
- ende 10y agoUnion leaders don't like UBI because it empowers individuals, not union leaders.
- toni 10y agoI get what you're saying but it's probably for the best to expand on your point, and not just a one liner.
- ianai 10y agoAny universal income would eliminate or severely diminish the survival factor of work. The reality that the individual must have work to support him/herself. People accept less than optimal, for them, work situations as a result. If people have options - such as a guaranteed ability to survive, no matter how minimally - they have the power to refuse some situations. That would diminish the bargaining power against the individual worker of all who currently employ people at or near the UBI level.
- Chris2048 10y agoYou're saying the individual worker would then have bargaining power of their own, without requiring the collective power of a union? I think this is true, but there is still virtue to unions; they will just have to work harder to justify benefit..
- ianai 10y agoThere would absolutely still be market share/place for unions. My guess is they simply refuse to tolerate anything that could even possibly diminish the status quo.
- simonh 10y agoI don't think this is what will happen though. Rather by eliminating poverty traps and subsidizing low wage unskilled labor, it should lead to near-full employment. In a world like that, BI doesn't even need to provide enough to survive long term and perhaps shouldn't. Ideally BI is not a slacker's charter, it's a subsidy for employment. After all, somebody has to pay the taxes that fund BI in the first place. However I do agree that it could also increase worker's bargaining power. If the increased demand for unskilled labor created by the BI subsidy for employment increases the quality and value of the work available. For example right now it might not be economically viable for a craft carpenter to hire an apprentice, but BI could relieve them of the burden of having to offer a completely livable wage and the resulting job might be more attractive than flipping burgers or janitorial work. It's a complex set of variables. My concern with trials is that by only including a small sample of people in a generally non-BI economy, the effects of BI on the rest of the economy just can't be gauged. In particular the effect by which it subsidizes employment may not become visible at all.
- sharemywin 10y agoI would be much more in favor of a employer of last resort program.
- ZenoArrow 10y agoWouldn't that just result in 'busywork'? https://en.wikipedia.org/wiki/Busy_work https://en.wikipedia.org/wiki/Busy_work Wouldn't it be better to free people from having to work rather than generating a large volume of work for work's sake?
- criddell 10y agoThe military is famous for using busy work to occupy people's time during the long periods of waiting. Do you think in that context busy work has value aside from the actual work? If so, then maybe the same principle applies generally.
- shuntress 10y agoThe military is an entirely different machine based on obedience, mastery-by-repetition, and attention to detail. The military needs to minimize creative thinking and maximize swift adherence to the rules. The value busy works adds in this context is to reinforce that precision and obedience through repetition and consistency.
- Chris2048 10y agoInsist people not working go to the gym/exercise. Either they start working, or they get fitter. win-win?
- ZenoArrow 10y ago>"Do you think in that context busy work has value aside from the actual work?" No, I don't, because I don't think standing armies are a good thing. I'd rather most people in the military were trained (with re-training on a periodic basis) but were otherwise left to pursue their own interests until they were called upon to defend their country. This has been normal in times past.
- markhahn 10y agoUnions want to present themselves as the only possible savior for the downtrodden. But of course! Since when have any two saviors been willing to coexist? Also a bit strange to hear capitalist-incentive reasoning coming from a union...
- amelius 10y agoBI is just a negative form of income tax. So can't we just reduce the relevant income taxes slowly until we start running into problems?
- sp332 10y agoA lot of people at the lower end of the income scale are already paying no taxes. So they can't be reduced without going negative right away.
- jjawssd 10y agoNo, because the people that win with UBI are the poorest people, and they already pay almost no tax.
- mhurron 10y agoThat helps those without an income how exactly?
- snarfy 10y agoAutomation will replace all of those trade union jobs, and then they will find basic income not so useless.
- Rezo 10y ago"Not only does SAK say that the system may reduce the labor force -- for instance by tempting mothers of small children or those close to retirement to take more time off" As long as the unemployment rate is > 0, that sounds like a net benefit for UBI. Someone else who isn't at the same life stage can then fill the freed position. You would only think this is a bad thing if you see workforce participation as the end-goal in itself, while all signs point towards massive societal upheaval due to automation without something like UBI.
- jcon321 10y agoI don't understand the principle behind UBI. If everyone makes +$X amount more doesn't everything just raise by +$Y?
- ashark 10y agoAre you contending that changes in average income (in either direction, presumably) of the lower, say, four quintiles of society, have no real effect on quality of life? Or only when it's achieved via UBI? If the latter, why is that case special?
- jcon321 10y agoHaving a hard time understanding your comment. Are you saying UBI should only be for lower class? Isn't that just a welfare program?
- ralmeida 10y agoDon't think so, they may be referring to the fact that since the UBI is a fixed value, then the increase for the lower income percentiles is percent-wise higher w.r.t the current income.
- Chris2048 10y agoMaybe certain products are sold on the basis on minimal viable profit. This will not change, even if everyone now has more money. Things sold on the basis of what people are able to pay are usually based on something in short supply (not liquid?) such that if people (now with more money) started to compete (by offering more money) they could not just produce more of that good; hence the price rises instead, like in an auction. So UBI should probably be accompanied with some kind of plan for affordable housing (increase housing supply).
- ralmeida 10y agoNot if you assume a fairly free market (not many cartels, etc). If you could buy bread for $10, and now earn 50% more, a merchant could raise the price to $15 to try to grab the 'newly found money'. But they would be just raising their margin, since the cost of producing the bread is the same. A free market then will self-regulate via competition. A new merchant could enter the market charging $14 for the bread, undercutting the $15 guy. And so on, until the price reaches equilibrium based on what the people are willing to pay. Of course, there's value in the discussion on whether UBI changes the costs of production and/or demand, but it's not as simple as 'income raises, price raises'.
- digi_owl 10y agoIn the end it all seems like a no-win situation. basic income, much like housing debt, will just set a new price floor. This any merchant worth their salt will price things at that point plus a markup. Thing is that going the other way and freezing the amount of currency in the economy, like say with a gold standard, will do crap all as well. As that just means things will be prices fractions of fractions, and the pay will be likewise. In the end the only thing that can really solve things is massively, and i mean Star Trek scale massively, crank up supply of goods and services. And unless we have something like Deuterium (aka the handwaved wonderfuel of every space age sci-fi) and replicators to go with, thats not going to happen as we run into an energy crunch sooner than we like to think. Effectively humanity can't win.
- jacquesm 10y agoWell, unlike housing debt this one is more or less un-avoidable. If you add another 20 to 30 years of progress to software and automation in general there will be a lot more people out of job and if they don't have money to spend the whole machine will grind to a halt. Either that or you can welcome a new generation of Luddites.
- recursive 10y agoIf my income is $10, and your income is $100, you can buy 10x the stuff I can buy. If you add a basic income of $20, (ignoring taxes lol) now you can buy 4x the stuff I can. It might not affect high end luxury items, but I can probably afford some staple items like socks now.
- mixmastamyk 10y agoHe's saying the price of socks will rise to eat your new income, no?
- usefulcat 10y agoWhich would require a lack of competition in the sock market.
- ilikeatari 10y agoI cannot recommend enough Kurt Vonnegut's Player Piano as a great thought provoking material on the UBI topic. It made me rethink its potential implications.
- ar0 10y agoAlmost all of the comments here are very dismissive of the trade union's arguments, but I think it is very important to look at the key problem UBI faces IMHO: Proper work is not just a source of money, but also a source of pride and a feeling of purpose / usefulness. And UBI alone cannot replace this. This is not only a problem with UBI but with all welfare-focused policies, regardless of how well-intentioned and useful they might be. Put yourself into the shoes of someone on the receiving end. The story a blue-collar worker you are automating away is hearing is this: "We are sorry, but in our AI-fuelled, robot-driven world you are useless. We have no need for you anymore because you can't program deep neural networks. You just don't have what it takes to be a useful member of our society. But - don't worry! We recognize this is a problem, so we have introduced UBI / <insert other welfare programs here> to make sure you are financially covered and don't have to worry about your mortgage." Is this something you want to hear? No. And that's why people are dismissing UBI and vote Trump - because "You are a hard-working, very capable individual whose job was unfairly stolen by an illegal immigrant" is a much, much better story for your self-esteem. And self-esteem is important [1]! Not all people have a bucket list of things they would want to do in their spare time, like contributing to cool open source programs or writing the next Harry Potter series. Many just want to live a "regular" life and want to feel useful by providing for their families. They benefit from having a job where they feel useful and are accepted and where someone else (their boss) structures their work and tells them what to do. Taking this away and replacing it with UBI cannot be the (whole) answer. [And, no, I don't have the right answer, either.] Money is not everything. [1]: https://en.wikipedia.org/wiki/Self-esteem#Importance https://en.wikipedia.org/wiki/Self-esteem#Importance
- usefulcat 10y agoNot sure why this is downvoted. One can certainly argue that personal identity /shouldn't/ be closely tied to one's occupation, but for better or worse right now for most people it very much is, at least in the US and I'm guessing in many other places as well. To my mind, this is the potentially problematic aspect of UBI for which the solutions are least obvious.
- benibela 10y ago>Proper work is not just a source of money, but also a source of pride and a feeling of purpose / usefulness. And UBI alone cannot replace this. That can also be used as pro-UBI argument to countering the argument "With an UBI everyone would quit there job and society would collapse." >"We are sorry, but in our AI-fuelled, robot-driven world you are useless. We have no need for you anymore because you can't program deep neural networks. You just don't have what it takes to be a useful member of our society Well, if robots actually can run everything one day, that is just what they will be told. UBI or not. >Not all people have a bucket list of things they would want to do in their spare time, like contributing to cool open source programs or writing the next Harry Potter series. If they do not want to do one of these things, they can do something similar to what they do now in their job. Or do they not want to do their job? That is quite a cognitive dissonance. Neither wanting to do it nor wanting to stop doing it. If they want to be told to do something against their will, they can find someone to draft them to something. Most open source projects could draft people to do something (If they can't contribute to an open source projects, they are useless after all in the robot driven world). I have 1800 unread mails about my open source project. I really could draft some people to check them out.
- digitalronin 10y agoHow utterly pointless is it to say "This experiment will fail" - they seem to have missed the point of what an experiment is.
- known 10y agoDoes UBI provide impetus to https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs
- leke 10y agoIt's a bit early to be saying that I think. I was disappointed not to get on it. I would have become self employed in a heartbeat.
- ptaipale 10y agoOne reason for the opinion of this union organisation is, of course, that they're intertwined with the Social Democratic Party (SDP), and to some extent the Leftist League, who both are currently in opposition. So it is rather natural that it is against something that the governing parties (a coalition of centre-right parties with different support bases) has initiated.
- drallison 10y ago"Finland’s basic income experiment is unworkable, uneconomical and ultimately useless." writes the author of the Bloomberg article [emphasis added]. This article is not the concept of a basic income; it is specific to the particular choices made for the Finnish experiment. The content is disappointing. The article collects opinions about the the Finnish experiment primarily from detractors and presents only hearsay anecdotal evidence for strongly held conclusions. The present pilot program is small,selective, and embedded in the existing economy. I suspect that it will work only when scaled up to the economy as a whole.