16 ms·

Stockton extends its monthly $500 UBI payment experiment

97 points by SamWhited 6y ago

fastball 6y ago
It's not really UBI if you're selecting some subset of the population and paying them. You need to be paying everyone in that area otherwise you're gonna have side-affects you can't control.
- whalesalad 6y ago
  It’s an experiment.
  - ethanbond 6y ago
    Experiments are very carefully designed so that you can learn something from them. There is not much that can be learned from an experiment like this. The biggest questions of UBI are not made more answerable by it. Namely, why wouldn't prices/cost of living/rent rise to eat all the stipend, and how will we pay for it at massive scale? Virtually no one disputes that an extra $500-1k/month given to a subset of people is a benefit to the people who receive it.
    - SamWhited 6y ago
      You're ignoring part of the experiment. It's important to figure out what people spend it on and how their spending habits change (which appears to be what this is measuring just judging by the summary of the initial results), the question isn't just "is it nicer for the people who have it?".
      - labcomputer 6y ago
        > It's important to figure out what people spend it on and how their spending habits change But why does that matter? That's their own business. People will spend it on whatever makes them happiest--that's the whole point. It doesn't answer the questions that most people have, such as the question in the post you replied to: "Namely, why wouldn't prices/cost of living/rent rise to eat all the stipend, and how will we pay for it at massive scale?"
        SamWhited 6y ago
        > But why does that matter? Because if people by and large hoard it it has a different impact than if they go spread it around in the local community and keep money flowing throughout the system. It's also good to know if they spend it on luxuries, entertainment, or basic necessities. Do they invest it and does it help them build a better future for their children, or does it just help them pay the bills immediately but doesn't necessarily lift them out of poverty, etc. Otherwise we can't tell if it helps solve the problems people are trying to solve with it (whatever those may be, I am not one of these researchers and am not qualified to speak on the economic specifics, I can just talk to general methodology and what not). > People will spend it on whatever makes them happiest--that's the whole point. Just specifically I want to point out the flaw in this reasoning: for a lot of people a $500 night out with their friends might make them happiest, or a new video game system or whatever it is that they like to do, but they may spend it on groceries or to help pay the rent or to invest a little bit instead. Or maybe not. You can't just assume what people will do with it, or what the whole point is, you have to experiment and prove it. Maybe something entirely different that you haven't thought of happens. Again, that's just how science works. TL;DR this is an important thing to find out. Then we repeat the study in a few communities and see if the results are similar, maybe try it at different wealth levels to compare, etc. this is how science works. > It doesn't answer the questions that most people have, such as the question in the post you replied to: There can be more than one question, and more than one answer. Economists are researching this too and have written a lot about it. Just because you have a question, doesn't mean the science has to answer it right away and every single experiment has to be focused on it. There are lots of questions that will have to be answered before this could be tried more widely, these are just two of them.
        deleted 6y ago
        [deleted]
      - ethanbond 6y ago
        I’m an opponent of UBI and it has literally nothing to do with how they spend it. That’s their business and they know how to spend their own money. This experiment is not answering questions that (reasonable, at least) detractors actually have.
        SamWhited 6y ago
        It's not about it being their business or somebody else's business, it's about good scientific methodology. If they hoard it that does different things to the local economy than if they spend it on luxuries vs if they spend it on rent, etc. Knowing roughly what income brackets spend how much on what is helpful when deciding if this can work and help people, if it's just a waste of money, if it works up to a point but then anything over that point is mostly a waste, etc. this is how science works. See my other longer answer in this thread for slightly more detail.
    - mateusak 6y ago
      Prices wouldn't rise because free market. People seem to forget their own beliefs when UBI is brought up. It would be paid for by wealth tax. UBI is essentially wealth redistribution.
      - Avicebron 6y ago
        Which in theory benefits the entire market because there is more free flowing capital towards business, startups, goods and services, etc.
      - ethanbond 6y ago
        Rents rise as high as the market can sustain. If everyone can sustain higher prices, rent will go up. Thus taxpayers just funded a windfall for landlords. Also, please don’t assume you know my beliefs regarding the free market.
    - Dylan16807 6y ago
      One effect is that if you can depend on a basic income and health care then it becomes vastly easier to move, and even if only some people take advantage of that is puts a lot more competition onto housing to not price gouge. For food and clothes and whatnot there's plenty of competition and those shouldn't rise beyond any mild labor cost increase.
ngold 6y ago
Of all places in the United States, Stockton California. Well if any city could use some love, Stockton is one. It may infect the capital next door in Sacramento. Which would infect the 9th largest economy in the world. That would be great. Trickle up economics for the win.
- VMisTheWay 6y ago
  Today Candy, tomorrow stomach ache.
  - Avicebron 6y ago
    Not necessarily, it's worth at least the experiment.
  - r00fus 6y ago
    Now what does that mean? $500 is candy? For some it's a lifeline.
    - thaumasiotes 6y ago
      It means that getting something you want will not necessarily benefit you.
      - josefresco 6y ago
        Which is insane, because it's "need" not "want".
  - omgwtfbyobbq 6y ago
    As opposed to what? Today no food, today and tomorrow stomach ache?
  - jwilber 6y ago
    Today rent is due, tomorrow a house stays over a family’s head.
- 6y ago
admin_account 6y ago
What is the point of UBI studies this small? Giving a few hundred people extra money each month will improve the well being, no question about it. The issues with UBI only arise when it's done at scale. For example let's say you give every US citizen over 18 a monthly UBI check for $1000. What's stopping prices from rising accordingly? How will the ~$3T yearly UBI bill be paid for? The question of how is this paid for is my biggest issue with UBI. If someone can give a reasonable answer that doesn't require national price fixing, taxing tech companies on their data, or some version of reshuffling the current budget around, I'll happily change my mind. Until then, for me, UBI is nothing more than an economists wet dream.
- Avicebron 6y ago
  The most common explanation given to me is restructuring and siphoning money off of futures and taxing wealthy US companies that previously have not been paying taxes.
  - jandrese 6y ago
    While a great idea in theory, said companies are adept at moving money around to avoid paying taxes. Is it unthinkable that a company would move its HQ down to some island nation to avoid several billion in taxes? I don't think so. And there will be endless arguments about how foreign companies that don't pay into that system are going to be more competitive. One could maybe avoid the problem a bit by implementing a tariff on every import that calculates the man-hours put into a product and adds a fee based on how much UBI that would be if it were made by Americans, but that's hideously complex and still wouldn't help companies that want to export their products worldwide. Ultimately markets don't care about the general welfare of the people and are frequently at odds with schemes like this. Unfortunately we don't really have a better solution. Command economies don't work at scale.
    - Avicebron 6y ago
      It's not impossible that those companies would try, but it's not impossible that strict legal action could prevent it at least in theory. I think that if we just acknowledge markets don't care about the welfare of people than we have a commonly agreed upon problem. Should it be morally acceptable to put our hands up and say, luck of the draw, some will die deep in medical debt and others get to become horrendously wealthy. As a species I hope we have progressed enough to move past that base thinking.
eloff 6y ago
I think Canada is going to be an interesting case study in UBI in the near future as 1/4 of the population has been receiving $2000/month CERB payments for up to 7 months.
11235813213455 6y ago
I think it'd be more interesting to provide free housing, free local organic food and free bikes, than providing money. It'll help people move away from unhealthy consumerist habits, and solve environmental problems, double-win
- chrisulloa 6y ago
  Agreed! I am also concerned about how politicians will use UBI as bartering chips and how they will use it to further their own monetary interests.
- starpilot 6y ago
  You're promoting the conventional view. We've since learned that people's problems are more complex than that. Direct cash disbursements have been shown again and again to be the most effective form of aid.
- toast0 6y ago
  Giving people free X might work where everyone's need for X is very similar, and the cost to organize the purchase and giving is less than providing dollars earmarked for something. But for bikes in particular, this sounds like a disaster. Not everybody wants a bike, but if it's free, they'll probably take it. But bikes come in all sizes, so we have to stock a lot of them, or just have a 'flexible' bike which isn't well suited for anyone. Meanwhile, it's very hard to sell a bike outside the system, because who would buy a bike that isn't free. I like the idea of giving people some money, and let them figure out what's important to them. If you trash your free bike, no big deal, it was free. If you trash your bike that you bought with free money, you're going to wish you spent your free money on something else. If you spend your free money on dumb stuff and have to eat topramen for the rest of the month, maybe you'll do better next month (or maybe you'll get really good at making top ramen).
- chillacy 6y ago
  That sounds like you want to provide everyone with stuff you like. Someone else probably wants free fast food and guns. How do we settle the difference? A bunch of lobbying and political action? Or just give everyone cash and let people make their own choices.
umvi 6y ago
Any studies involving UBI need to have malicious actors as a part of the study. UBI, if it is ever realized, will be a scammer's paradise. Every possible method for getting a slice of people's UBIs will be tried. From fake government calls, to identity theft, to greedy landlords, to you name it. And whose UBI will be most vulnerable to these types of attacks? The poor.
- theduder99 6y ago
  bingo
- mrlala 6y ago
  >Any studies involving UBI need to have malicious actors as a part of the study. Yes, and no. Of course there will be some low form of abuse and whatever.. that is just a given with anything in the entire world. It should NOT be a main reason of any form to be against it. We are trying to help people, so what if it's getting a little bit abused? We as a whole are still better off. It's like a universal healthcare argument.. people might say "well what if someone from mexico sneaks in and get care for free?? I'm paying for that!" If the worst case is that someone gets health treatment... then it's a pretty silly argument in my book.
  - umvi 6y ago
    What if the worst case for UBI is that it, counter-intuitively, increases the income gap between low and middle classes? Is it still worth it then?
    - Dylan16807 6y ago
      That's a tricky one. It depends on how it affects the relationship with the upper class too. Completely unreal example numbers: If the distribution of lower:middle:upper was 2:5:40 and changes to 4:8:25 then that's a big improvement, even though the gap between lower and middle increased from 3 to 4.
    - mrlala 6y ago
      Of course not- and that has nothing to do with the situation I was talking about. I was giving an example where the worst case was still "good" overall. You are giving an example where the worst case is "bad" overall.. so, duh?
ghostwriter 6y ago
How about universally abolished income tax, instead? Let's save on IRS expenses too.
- chillacy 6y ago
  In case you're serious, the point is redistribution. Abolishing the income tax probably just makes income inequality worse. If you're against redistribution in general then that's a different discussion, but at a minimum, in societies with great inequality, even the winners don't win if it all goes the route of the French Revolution.
  - ghostwriter 6y ago
    > In case you're serious, the point is redistribution. That's the statement I'd like to see highlighted bold on every UBI proposal, so that everyone knows exactly what it is about. Isn't it remarkable that at a time of the French Revolution (which one them by the way?) the society was significantly more equal in terms of their income than it is today? Maybe revolutions are caused by other reasons, like the lack of freedom and not being in control of your own life, for example? Especially when more than half of one's productive life is taken away and redistributed by a taxman.
    - chillacy 6y ago
      I think you'll find that to be true in most discussions about UBI, even those backed by conservative economists like Charles Murray. As for economically conservative discussion about redistribution, I think Greg Mankiw had one of the best summaries of the matter in 2013 "Defending the One Percent" https://scholar.harvard.edu/files/mankiw/files/defending_the_one_percent.pdf https://scholar.harvard.edu/files/mankiw/files/defending_the... Ultimately the question of whether to redistribute or not is as normative, just like considering taxes to be inherently immoral. So far societies have enjoyed the former more than the latter, but individuals fall on both sides.
ghufran_syed 6y ago
I work in Stockton, and am glad that some people are better off with this. My real worry about UBI 'at scale' is what would prevent the majority voting for massive increases in the amount every election? If every employee could vote to increase "everybody's" pay equally, why wouldn't they? - right up until the company runs out of money and all the jobs disappear. If you think that high income people generally don't produce enough value to justify their income, then you would probably consider this a feature, not a bug. Otherwise, I worry that it would just lead to highly productive people moving to other parts of the world, as happened with [British musicians in the 60's](https://ultimateclassicrock.com/rock-bands-taxes/ https://ultimateclassicrock.com/rock-bands-taxes/). Again, if you think those people don't produce enough value, it's not a problem. But we might want to consider trying it successfully in a single state first before rolling it out more widely.
angmarsbane 6y ago
Why don’t we just pay people more for the jobs they’re doing (be a little less greedy on top, and value the work of others more) and implement policies that reduce the cost of living?

97 points by SamWhited 6y ago

It's not really UBI if you're selecting some subset of the population and paying them. You need to be paying everyone in that area otherwise you're gonna have side-affects you can't control.

whalesalad 6y ago
It’s an experiment.
- ethanbond 6y ago
  Experiments are very carefully designed so that you can learn something from them. There is not much that can be learned from an experiment like this. The biggest questions of UBI are not made more answerable by it. Namely, why wouldn't prices/cost of living/rent rise to eat all the stipend, and how will we pay for it at massive scale? Virtually no one disputes that an extra $500-1k/month given to a subset of people is a benefit to the people who receive it.
  - SamWhited 6y ago
    You're ignoring part of the experiment. It's important to figure out what people spend it on and how their spending habits change (which appears to be what this is measuring just judging by the summary of the initial results), the question isn't just "is it nicer for the people who have it?".
    - labcomputer 6y ago
      > It's important to figure out what people spend it on and how their spending habits change But why does that matter? That's their own business. People will spend it on whatever makes them happiest--that's the whole point. It doesn't answer the questions that most people have, such as the question in the post you replied to: "Namely, why wouldn't prices/cost of living/rent rise to eat all the stipend, and how will we pay for it at massive scale?"
      - SamWhited 6y ago
        > But why does that matter? Because if people by and large hoard it it has a different impact than if they go spread it around in the local community and keep money flowing throughout the system. It's also good to know if they spend it on luxuries, entertainment, or basic necessities. Do they invest it and does it help them build a better future for their children, or does it just help them pay the bills immediately but doesn't necessarily lift them out of poverty, etc. Otherwise we can't tell if it helps solve the problems people are trying to solve with it (whatever those may be, I am not one of these researchers and am not qualified to speak on the economic specifics, I can just talk to general methodology and what not). > People will spend it on whatever makes them happiest--that's the whole point. Just specifically I want to point out the flaw in this reasoning: for a lot of people a $500 night out with their friends might make them happiest, or a new video game system or whatever it is that they like to do, but they may spend it on groceries or to help pay the rent or to invest a little bit instead. Or maybe not. You can't just assume what people will do with it, or what the whole point is, you have to experiment and prove it. Maybe something entirely different that you haven't thought of happens. Again, that's just how science works. TL;DR this is an important thing to find out. Then we repeat the study in a few communities and see if the results are similar, maybe try it at different wealth levels to compare, etc. this is how science works. > It doesn't answer the questions that most people have, such as the question in the post you replied to: There can be more than one question, and more than one answer. Economists are researching this too and have written a lot about it. Just because you have a question, doesn't mean the science has to answer it right away and every single experiment has to be focused on it. There are lots of questions that will have to be answered before this could be tried more widely, these are just two of them.
      - deleted 6y ago
        [deleted]
    - ethanbond 6y ago
      I’m an opponent of UBI and it has literally nothing to do with how they spend it. That’s their business and they know how to spend their own money. This experiment is not answering questions that (reasonable, at least) detractors actually have.
      - SamWhited 6y ago
        It's not about it being their business or somebody else's business, it's about good scientific methodology. If they hoard it that does different things to the local economy than if they spend it on luxuries vs if they spend it on rent, etc. Knowing roughly what income brackets spend how much on what is helpful when deciding if this can work and help people, if it's just a waste of money, if it works up to a point but then anything over that point is mostly a waste, etc. this is how science works. See my other longer answer in this thread for slightly more detail.
  - mateusak 6y ago
    Prices wouldn't rise because free market. People seem to forget their own beliefs when UBI is brought up. It would be paid for by wealth tax. UBI is essentially wealth redistribution.
    - Avicebron 6y ago
      Which in theory benefits the entire market because there is more free flowing capital towards business, startups, goods and services, etc.
    - ethanbond 6y ago
      Rents rise as high as the market can sustain. If everyone can sustain higher prices, rent will go up. Thus taxpayers just funded a windfall for landlords. Also, please don’t assume you know my beliefs regarding the free market.
  - Dylan16807 6y ago
    One effect is that if you can depend on a basic income and health care then it becomes vastly easier to move, and even if only some people take advantage of that is puts a lot more competition onto housing to not price gouge. For food and clothes and whatnot there's plenty of competition and those shouldn't rise beyond any mild labor cost increase.

ngold 6y ago

Of all places in the United States, Stockton California. Well if any city could use some love, Stockton is one. It may infect the capital next door in Sacramento. Which would infect the 9th largest economy in the world. That would be great. Trickle up economics for the win.

VMisTheWay 6y ago
Today Candy, tomorrow stomach ache.
- Avicebron 6y ago
  Not necessarily, it's worth at least the experiment.
- r00fus 6y ago
  Now what does that mean? $500 is candy? For some it's a lifeline.
  - thaumasiotes 6y ago
    It means that getting something you want will not necessarily benefit you.
    - josefresco 6y ago
      Which is insane, because it's "need" not "want".
- omgwtfbyobbq 6y ago
  As opposed to what? Today no food, today and tomorrow stomach ache?
- jwilber 6y ago
  Today rent is due, tomorrow a house stays over a family’s head.
6y ago

admin_account 6y ago

What is the point of UBI studies this small? Giving a few hundred people extra money each month will improve the well being, no question about it. The issues with UBI only arise when it's done at scale. For example let's say you give every US citizen over 18 a monthly UBI check for $1000. What's stopping prices from rising accordingly? How will the ~$3T yearly UBI bill be paid for? The question of how is this paid for is my biggest issue with UBI. If someone can give a reasonable answer that doesn't require national price fixing, taxing tech companies on their data, or some version of reshuffling the current budget around, I'll happily change my mind. Until then, for me, UBI is nothing more than an economists wet dream.

Avicebron 6y ago
The most common explanation given to me is restructuring and siphoning money off of futures and taxing wealthy US companies that previously have not been paying taxes.
- jandrese 6y ago
  While a great idea in theory, said companies are adept at moving money around to avoid paying taxes. Is it unthinkable that a company would move its HQ down to some island nation to avoid several billion in taxes? I don't think so. And there will be endless arguments about how foreign companies that don't pay into that system are going to be more competitive. One could maybe avoid the problem a bit by implementing a tariff on every import that calculates the man-hours put into a product and adds a fee based on how much UBI that would be if it were made by Americans, but that's hideously complex and still wouldn't help companies that want to export their products worldwide. Ultimately markets don't care about the general welfare of the people and are frequently at odds with schemes like this. Unfortunately we don't really have a better solution. Command economies don't work at scale.
  - Avicebron 6y ago
    It's not impossible that those companies would try, but it's not impossible that strict legal action could prevent it at least in theory. I think that if we just acknowledge markets don't care about the welfare of people than we have a commonly agreed upon problem. Should it be morally acceptable to put our hands up and say, luck of the draw, some will die deep in medical debt and others get to become horrendously wealthy. As a species I hope we have progressed enough to move past that base thinking.

eloff 6y ago

I think Canada is going to be an interesting case study in UBI in the near future as 1/4 of the population has been receiving $2000/month CERB payments for up to 7 months.

11235813213455 6y ago

I think it'd be more interesting to provide free housing, free local organic food and free bikes, than providing money. It'll help people move away from unhealthy consumerist habits, and solve environmental problems, double-win

chrisulloa 6y ago
Agreed! I am also concerned about how politicians will use UBI as bartering chips and how they will use it to further their own monetary interests.
starpilot 6y ago
You're promoting the conventional view. We've since learned that people's problems are more complex than that. Direct cash disbursements have been shown again and again to be the most effective form of aid.
toast0 6y ago
Giving people free X might work where everyone's need for X is very similar, and the cost to organize the purchase and giving is less than providing dollars earmarked for something. But for bikes in particular, this sounds like a disaster. Not everybody wants a bike, but if it's free, they'll probably take it. But bikes come in all sizes, so we have to stock a lot of them, or just have a 'flexible' bike which isn't well suited for anyone. Meanwhile, it's very hard to sell a bike outside the system, because who would buy a bike that isn't free. I like the idea of giving people some money, and let them figure out what's important to them. If you trash your free bike, no big deal, it was free. If you trash your bike that you bought with free money, you're going to wish you spent your free money on something else. If you spend your free money on dumb stuff and have to eat topramen for the rest of the month, maybe you'll do better next month (or maybe you'll get really good at making top ramen).
chillacy 6y ago
That sounds like you want to provide everyone with stuff you like. Someone else probably wants free fast food and guns. How do we settle the difference? A bunch of lobbying and political action? Or just give everyone cash and let people make their own choices.

umvi 6y ago

Any studies involving UBI need to have malicious actors as a part of the study. UBI, if it is ever realized, will be a scammer's paradise. Every possible method for getting a slice of people's UBIs will be tried. From fake government calls, to identity theft, to greedy landlords, to you name it. And whose UBI will be most vulnerable to these types of attacks? The poor.

theduder99 6y ago
bingo
mrlala 6y ago
>Any studies involving UBI need to have malicious actors as a part of the study. Yes, and no. Of course there will be some low form of abuse and whatever.. that is just a given with anything in the entire world. It should NOT be a main reason of any form to be against it. We are trying to help people, so what if it's getting a little bit abused? We as a whole are still better off. It's like a universal healthcare argument.. people might say "well what if someone from mexico sneaks in and get care for free?? I'm paying for that!" If the worst case is that someone gets health treatment... then it's a pretty silly argument in my book.
- umvi 6y ago
  What if the worst case for UBI is that it, counter-intuitively, increases the income gap between low and middle classes? Is it still worth it then?
  - Dylan16807 6y ago
    That's a tricky one. It depends on how it affects the relationship with the upper class too. Completely unreal example numbers: If the distribution of lower:middle:upper was 2:5:40 and changes to 4:8:25 then that's a big improvement, even though the gap between lower and middle increased from 3 to 4.
  - mrlala 6y ago
    Of course not- and that has nothing to do with the situation I was talking about. I was giving an example where the worst case was still "good" overall. You are giving an example where the worst case is "bad" overall.. so, duh?

ghostwriter 6y ago

How about universally abolished income tax, instead? Let's save on IRS expenses too.

chillacy 6y ago
In case you're serious, the point is redistribution. Abolishing the income tax probably just makes income inequality worse. If you're against redistribution in general then that's a different discussion, but at a minimum, in societies with great inequality, even the winners don't win if it all goes the route of the French Revolution.
- ghostwriter 6y ago
  > In case you're serious, the point is redistribution. That's the statement I'd like to see highlighted bold on every UBI proposal, so that everyone knows exactly what it is about. Isn't it remarkable that at a time of the French Revolution (which one them by the way?) the society was significantly more equal in terms of their income than it is today? Maybe revolutions are caused by other reasons, like the lack of freedom and not being in control of your own life, for example? Especially when more than half of one's productive life is taken away and redistributed by a taxman.
  - chillacy 6y ago
    I think you'll find that to be true in most discussions about UBI, even those backed by conservative economists like Charles Murray. As for economically conservative discussion about redistribution, I think Greg Mankiw had one of the best summaries of the matter in 2013 "Defending the One Percent" https://scholar.harvard.edu/files/mankiw/files/defending_the_one_percent.pdf https://scholar.harvard.edu/files/mankiw/files/defending_the... Ultimately the question of whether to redistribute or not is as normative, just like considering taxes to be inherently immoral. So far societies have enjoyed the former more than the latter, but individuals fall on both sides.

ghufran_syed 6y ago

I work in Stockton, and am glad that some people are better off with this. My real worry about UBI 'at scale' is what would prevent the majority voting for massive increases in the amount every election? If every employee could vote to increase "everybody's" pay equally, why wouldn't they? - right up until the company runs out of money and all the jobs disappear. If you think that high income people generally don't produce enough value to justify their income, then you would probably consider this a feature, not a bug. Otherwise, I worry that it would just lead to highly productive people moving to other parts of the world, as happened with [British musicians in the 60's](https://ultimateclassicrock.com/rock-bands-taxes/ https://ultimateclassicrock.com/rock-bands-taxes/). Again, if you think those people don't produce enough value, it's not a problem. But we might want to consider trying it successfully in a single state first before rolling it out more widely.

angmarsbane 6y ago

Why don’t we just pay people more for the jobs they’re doing (be a little less greedy on top, and value the work of others more) and implement policies that reduce the cost of living?