3 ms·

did they really have to study this? We have decades of welfare to analyze. UBI is dead in the water. Call it a negative tax rate instead.

drcode 8y ago
It's tough... people feel like the US median standard of living has stagnated (the economic evidence is mixed on this subject) and therefore it is tempting to think there must be some shortcuts we can take to leverage our high GPD into a raised standard of living through direct cash transfers. However, I personally feel that these ideas will lead to counterproductive results, that these sorts of transfers can lead to severe inflation and will lead to a higher unemployment rates, thereby dragging down the very GDP they are dependent on. Unfortunately, both sides of this argument have little direct evidence to support their position... aside from tiny, partial studies such as the one in this article, which cannot give any meaningful insights into the complex macroeconomic effects of a larger UBI rollout, which will likely be singificant. Everyone is at an impasse on this question.
gevi99 8y ago
That's what they said about Brexit. We live in times were populists are propped up. To change that the media/social media has to drastically alter. Until it does expect more and more pandering.
erikpukinskis 8y ago
UBI is different from welfare because you don’t have to qualify for it, so it removes any incentives to alter your life to qualify for welfare.
- gambiting 8y ago
  Poland has an interesting example that could be used as UBI experiement. Recently introduced "500+" program pays 500PLN(~$130/£100) for every child after the first one(or all if the family has no other source of income). Now, to you westerners $130/month might sound like nothing, but actually, with 3-4 children you are getting a regular salary for effectively doing nothing, without any extra conditions. And apart from the loss of the benefit for the 1st child if you get a job, nothing stops you from working and yet still collecting the benefit. It has improved the living conditions in Poland considerably, and families with children can now afford a lot more than they could previously. I personally know one company that lost a decent chunk of its staff to it - why work for you while I can get similar amount of money and stay at home? Of course the question of whether Poland can afford such a generous program is a different question altogether, but it cannot be denied that for many people this completely unconditional injection of cash is absolutely equivalent to UBI.
benj111 8y ago
I'm not sure I understand your point. This is different to existing welfare, so it makes sense to actually study how people react to it in practice. A negative tax rate is one way to do it, it all depends what you want to encourage, and the implementation details of course. Negative tax rate would presumably only be paid to workers, so would be good for low paid workers. This particular study was for unemployed people, so wouldn't gain from negative tax. I don't know if this basic income continued to be paid when people got jobs, but if not would tend to disincentivise at least low paid work, it's unclear to me if at scale that would push up wages at the lower end due to lower supply.

drcode 8y ago

It's tough... people feel like the US median standard of living has stagnated (the economic evidence is mixed on this subject) and therefore it is tempting to think there must be some shortcuts we can take to leverage our high GPD into a raised standard of living through direct cash transfers. However, I personally feel that these ideas will lead to counterproductive results, that these sorts of transfers can lead to severe inflation and will lead to a higher unemployment rates, thereby dragging down the very GDP they are dependent on. Unfortunately, both sides of this argument have little direct evidence to support their position... aside from tiny, partial studies such as the one in this article, which cannot give any meaningful insights into the complex macroeconomic effects of a larger UBI rollout, which will likely be singificant. Everyone is at an impasse on this question.

gevi99 8y ago

That's what they said about Brexit. We live in times were populists are propped up. To change that the media/social media has to drastically alter. Until it does expect more and more pandering.

erikpukinskis 8y ago

UBI is different from welfare because you don’t have to qualify for it, so it removes any incentives to alter your life to qualify for welfare.

gambiting 8y ago
Poland has an interesting example that could be used as UBI experiement. Recently introduced "500+" program pays 500PLN(~$130/£100) for every child after the first one(or all if the family has no other source of income). Now, to you westerners $130/month might sound like nothing, but actually, with 3-4 children you are getting a regular salary for effectively doing nothing, without any extra conditions. And apart from the loss of the benefit for the 1st child if you get a job, nothing stops you from working and yet still collecting the benefit. It has improved the living conditions in Poland considerably, and families with children can now afford a lot more than they could previously. I personally know one company that lost a decent chunk of its staff to it - why work for you while I can get similar amount of money and stay at home? Of course the question of whether Poland can afford such a generous program is a different question altogether, but it cannot be denied that for many people this completely unconditional injection of cash is absolutely equivalent to UBI.

benj111 8y ago

I'm not sure I understand your point. This is different to existing welfare, so it makes sense to actually study how people react to it in practice. A negative tax rate is one way to do it, it all depends what you want to encourage, and the implementation details of course. Negative tax rate would presumably only be paid to workers, so would be good for low paid workers. This particular study was for unemployed people, so wouldn't gain from negative tax. I don't know if this basic income continued to be paid when people got jobs, but if not would tend to disincentivise at least low paid work, it's unclear to me if at scale that would push up wages at the lower end due to lower supply.