7 ms·

How do you design an unemployment/UBI system that provides an incentive not to use it unless necessary and not to stay on it any longer than is necessary?

lostcolony 6y ago
You don't have to. How many people have you met who were happy doing nothing, living with nothing, AND who made good employees doing anything at all? I've met exactly zero. The ambitious won't want to stay there; the unambitious may "unfairly" get their basic needs met, but they're hardly living the high life, and the lost -useful- labor to society is negligible. Almost certainly more than offset by the ambitious who can now take risks they otherwise couldn't, knowing that if they fail they at least aren't going to end up hungry and homeless.
- deleted 6y ago
  [deleted]
- arcticbull 6y ago
  This is in line with the results of Canada's early UBI experiments; substantially nobody left the workforce except to pursue liberal arts or stay-at-home parenting, both of which have intrinsic value. People are motivated by a combination of intrinsic and extrinsic factors, including their social group at work, finding meaning in their lives through their work, and so on. UBI and unemployment isn't provide enough for a lavish lifestyle, you can achieve that through work. > The ambitious won't want to stay there; the unambitious may "unfairly" get their basic needs met, but they're hardly living the high life, and the lost -useful- labor to society is negligible. Certainly true, and of course, automation will replace the missing labor in the pool, and the continued march of development will lead to even lower birth rates (already well below replacement rate of 2.1 is almost every developed nation), and there will be fewer and fewer of these folks in time. Canada's most recent UBI experiment, cancelled recently (2020) by Ford & co, was showing excellent results [1], and so did the earlier one in 1974 [2]. [1] https://newatlas.com/good-thinking/canada-basic-income-experiment-ontario-report-results https://newatlas.com/good-thinking/canada-basic-income-exper... [2] https://www.bbc.com/worklife/article/20200624-canadas-forgotten-universal-basic-income-experiment https://www.bbc.com/worklife/article/20200624-canadas-forgot...
  - bumby 6y ago
    I think the major fault with these studies is there participants know the benefits will end. I think this biases them towards continued working because they view it as a short term windfall that won’t sustain them rather than a long term solution. It would be incredibly hard to design an experiment to control for this. Conversely, I think the hard part about implementing UBI is that it would be incredibly hard to roll back once people become accustomed to it
    - arcticbull 6y ago
      Indeed, I think the challenge is around committing to a 50 year study that they won't cancel later in a discretionary way. > Conversely, I think the hard part about implementing UBI is that it would be incredibly hard to roll back once people become accustomed to it So we are left with something people like and don't want to give up, and that's bad because... :)
      - bumby 6y ago
        >So we are left with something people like and don't want to give up, and that's bad because... :) Sorry, I should have taken the time to elaborate. There’s certainly a conceivable scenario when the situation is either unsustainable or not providing a net benefit. For the first case, consider a petrostate whose population is heavily subsidized by its oil sales. If oil price drops, whether by lack of demand or over supply, they may not have the funds to continue these benefits without debt, regardless if the populace “likes” them. In the second scenario, it’s possible that it creates unintended consequences (like spikes in drug use, drop in life expectancy, reduced productivity) that become a larger social ill than what it was trying to prevent. Despite society being worse off, it becomes hard to scale it back because of the psychological endowment effect. I’m not saying its likely, just as a counter point that just because people like a benefit it means it should continue. I think it’s important to do a “pre-mortem“ on these kinds of policies to make sure we have the guardrails in place before implementing them.
      - malandrew 6y ago
        > So we are left with something people like and don't want to give up, and that's bad because... :) ... other people are burdened with providing it against their will. A Southern plantation owner in the pre Civil War southeast US had something they liked and didn't want to give up and it was most certainly very very bad.
- throwawayboise 6y ago
  What do you do about unambitious people who live beyond their UBI means and end up being unable to pay the rent?
  - lostcolony 6y ago
    What do you do -now- about the ambitious people who live beyond their salaried means and end up being unable to pay the rent?
    - throwawayboise 6y ago
      So what problem does UBI solve, then?
      - deleted 6y ago
        [deleted]
      - lostcolony 6y ago
        It guarantees a certain level of means. Obviously. It's not intending to address people who live outside their means; there are other controls for that. It's to ensure that a person's means is sufficient to cover their basic needs. A person who is responsible with $10 a month may not be a credit risk, but clearly can't cover their needs; a person spending $10k a month when their job pays them only $8k is clearly a credit risk, living outside their means, despite earning enough to cover far more than their basic needs. You're strawmanning.
  - cycomanic 6y ago
    It's funny how these sort of questions are always being used to counter a safety net for the poor, but at the same time nobody does anything about rampant tax evasion and avoidance, which is much much more money.
    - closeparen 6y ago
      It's an implementation question. It's one of the reasons we give people services instead of cash.
- malandrew 6y ago
  > How many people have you met who were happy doing nothing, living with nothing, AND who made good employees doing anything at all? Several members of my partner's family meet this description. They fit the welfare queen stereotype to a T. That's just immediate family. I've met plenty. Maybe you just don't have contact with people who would? > Almost certainly more than offset by the ambitious who can now take risks they otherwise couldn't, knowing that if they fail they at least aren't going to end up hungry and homeless. This is a completely unsubstantiated claim. How are you measuring this and where's the evidence? Yeah, it sounds great and is something people want to believe is true, but where's the hard evidence?
sammax 6y ago
The whole point of UBI is that everyone gets it, unconditionally. There is no not using it or not staying on it. You just get the UBI, and it should be enough to pay for basic living costs, and most people also want to be able to afford luxuries so the incentive to work is not gone.
liminal 6y ago
The "U" in UBI stands for "universal". Everyone gets it all the time.
jrumbut 6y ago
I would say that while this is a real concern, our current system places way too high a priority on addressing it.
mlac 6y ago
My concern is that lenders will start loaning against it at ridiculously high rates on UBI income streams - "Get 100K today for signing away your UBI payments!" or "just pay us the monthly amount of your UBI payment!". After thinking about it a while, I realized the law would need to protect the UBI payments from being accessible in bankruptcy. That would significantly limit lenders willing to lend on that money. Those who did would be charging very high-interest rates on it and probably limit the total amount backed by it, so someone can't borrow 200k and then declare bankruptcy but have it be protected. Even writing this out now, I'm not sure that this would work because I'm not sure how you prioritize lenders for someone's assets who declares bankruptcy. I also see upward pressure on housing prices - right now, few landlords know what the market can take for pricing. It would be easy to bump everyone's rent by a few hundred dollars when UBI kicks in because you know everyone can afford it. Technology and the market structure are so efficient at extracting value from things that it's hard to design any policy that will effectively achieve the desired outcome of providing food, clothing, and shelter for all citizens without some wonky unintended consequences.
- jessaustin 6y ago
  Congress changes the terms of credit and bankruptcy all the time. See the limitations that lenders bribed Biden into including in his "Bankruptcy Abuse Prevention and Consumer Protection Act". As a part of a UBI law, they could just say that creditors have no right to recover UBI payments. Take everything he owns, but you can't come back next week to take more. It could be that housing rents in certain situations could increase in response to UBI, but in most cases having more money gives one more choice, not less. A family who are now stuck in a rattrap located conveniently with respect to public transport might move to a better cheaper place in a more remote location and buy an old car. They wouldn't have to stay at the mercy of their current landlord. Other people in other situations might respond in other ways.
  - mlac 6y ago
    I hear you, but I still question how long those on UBI could get ahead of the rat traps before the non-rat trap options become their old cost + the cost of UBI, effectively transferring most of the UBI benefit to the landlords and ending us up in a similar place. In my mind, it's about answering the question of how we lower barriers to moving to ownership and getting people out of the poverty cycles. There are two major hurdles I see: - The current structure right now, and incentives that exist, are so good at extracting money that they might quickly eat up the additional money handed out - whether it's through financial instruments or increased prices for basic necessities. - The people that consistently don't have money are bad at earning money, bad at keeping money, or some combination of the two. UBI only helps the people who can't earn money, but doesn't solve the financial literacy problem or the root cause that a group of people is bad at keeping money.
IG_Semmelweiss 6y ago
Naval ravikant put it succinctly , the real issue is that once the 51% know they can vote to redistribute the wealth of the remaining 49%, then that opens the door to...well, the JRE clip goes deeper https://m.youtube.com/watch?v=eHim7CMOZ6U https://m.youtube.com/watch?v=eHim7CMOZ6U
- account42 6y ago
  And this is supposed to be worse than 1% accumulating most of the wealth how?
  - IG_Semmelweiss 6y ago
    Are you ready to argue that the poor are better off when everyone is poor, and inequality is nonexistent ? Because thats called north korea/ussr... and people routinely risked their lives to escape that equality... Here is how i think your point of view becomes stronger: Say inequality exists - but show how did it get there? Is it corrupt wealth? Does inequality persists because movement between wealth levels is becominy stale? For example, did bezos sell slaves or sell missiles? Or did he get rich getting to sell you stuff which you really like? Or, is there a chance your avg 1%er could be wiped out tomorrow? Or is being in the 1% sticky...like it is in the UK, Italy and france, where the same 5 families had the same wealth since the middle ages ? If you have a fair shot at the 1% , and if the road to get there is morally sound, then you wont hear of anyone to complain of inequality. Show which of the 1% is morally corrupt, and where progress in wealth dynamism is stalling, and im there to argue with you that we need to fix it.

lostcolony 6y ago

You don't have to. How many people have you met who were happy doing nothing, living with nothing, AND who made good employees doing anything at all? I've met exactly zero. The ambitious won't want to stay there; the unambitious may "unfairly" get their basic needs met, but they're hardly living the high life, and the lost -useful- labor to society is negligible. Almost certainly more than offset by the ambitious who can now take risks they otherwise couldn't, knowing that if they fail they at least aren't going to end up hungry and homeless.

deleted 6y ago
[deleted]
arcticbull 6y ago
This is in line with the results of Canada's early UBI experiments; substantially nobody left the workforce except to pursue liberal arts or stay-at-home parenting, both of which have intrinsic value. People are motivated by a combination of intrinsic and extrinsic factors, including their social group at work, finding meaning in their lives through their work, and so on. UBI and unemployment isn't provide enough for a lavish lifestyle, you can achieve that through work. > The ambitious won't want to stay there; the unambitious may "unfairly" get their basic needs met, but they're hardly living the high life, and the lost -useful- labor to society is negligible. Certainly true, and of course, automation will replace the missing labor in the pool, and the continued march of development will lead to even lower birth rates (already well below replacement rate of 2.1 is almost every developed nation), and there will be fewer and fewer of these folks in time. Canada's most recent UBI experiment, cancelled recently (2020) by Ford & co, was showing excellent results [1], and so did the earlier one in 1974 [2]. [1] https://newatlas.com/good-thinking/canada-basic-income-experiment-ontario-report-results https://newatlas.com/good-thinking/canada-basic-income-exper... [2] https://www.bbc.com/worklife/article/20200624-canadas-forgotten-universal-basic-income-experiment https://www.bbc.com/worklife/article/20200624-canadas-forgot...
- bumby 6y ago
  I think the major fault with these studies is there participants know the benefits will end. I think this biases them towards continued working because they view it as a short term windfall that won’t sustain them rather than a long term solution. It would be incredibly hard to design an experiment to control for this. Conversely, I think the hard part about implementing UBI is that it would be incredibly hard to roll back once people become accustomed to it
  - arcticbull 6y ago
    Indeed, I think the challenge is around committing to a 50 year study that they won't cancel later in a discretionary way. > Conversely, I think the hard part about implementing UBI is that it would be incredibly hard to roll back once people become accustomed to it So we are left with something people like and don't want to give up, and that's bad because... :)
    - bumby 6y ago
      >So we are left with something people like and don't want to give up, and that's bad because... :) Sorry, I should have taken the time to elaborate. There’s certainly a conceivable scenario when the situation is either unsustainable or not providing a net benefit. For the first case, consider a petrostate whose population is heavily subsidized by its oil sales. If oil price drops, whether by lack of demand or over supply, they may not have the funds to continue these benefits without debt, regardless if the populace “likes” them. In the second scenario, it’s possible that it creates unintended consequences (like spikes in drug use, drop in life expectancy, reduced productivity) that become a larger social ill than what it was trying to prevent. Despite society being worse off, it becomes hard to scale it back because of the psychological endowment effect. I’m not saying its likely, just as a counter point that just because people like a benefit it means it should continue. I think it’s important to do a “pre-mortem“ on these kinds of policies to make sure we have the guardrails in place before implementing them.
    - malandrew 6y ago
      > So we are left with something people like and don't want to give up, and that's bad because... :) ... other people are burdened with providing it against their will. A Southern plantation owner in the pre Civil War southeast US had something they liked and didn't want to give up and it was most certainly very very bad.
throwawayboise 6y ago
What do you do about unambitious people who live beyond their UBI means and end up being unable to pay the rent?
- lostcolony 6y ago
  What do you do -now- about the ambitious people who live beyond their salaried means and end up being unable to pay the rent?
  - throwawayboise 6y ago
    So what problem does UBI solve, then?
    - deleted 6y ago
      [deleted]
    - lostcolony 6y ago
      It guarantees a certain level of means. Obviously. It's not intending to address people who live outside their means; there are other controls for that. It's to ensure that a person's means is sufficient to cover their basic needs. A person who is responsible with $10 a month may not be a credit risk, but clearly can't cover their needs; a person spending $10k a month when their job pays them only $8k is clearly a credit risk, living outside their means, despite earning enough to cover far more than their basic needs. You're strawmanning.
- cycomanic 6y ago
  It's funny how these sort of questions are always being used to counter a safety net for the poor, but at the same time nobody does anything about rampant tax evasion and avoidance, which is much much more money.
  - closeparen 6y ago
    It's an implementation question. It's one of the reasons we give people services instead of cash.
malandrew 6y ago
> How many people have you met who were happy doing nothing, living with nothing, AND who made good employees doing anything at all? Several members of my partner's family meet this description. They fit the welfare queen stereotype to a T. That's just immediate family. I've met plenty. Maybe you just don't have contact with people who would? > Almost certainly more than offset by the ambitious who can now take risks they otherwise couldn't, knowing that if they fail they at least aren't going to end up hungry and homeless. This is a completely unsubstantiated claim. How are you measuring this and where's the evidence? Yeah, it sounds great and is something people want to believe is true, but where's the hard evidence?

sammax 6y ago

The whole point of UBI is that everyone gets it, unconditionally. There is no not using it or not staying on it. You just get the UBI, and it should be enough to pay for basic living costs, and most people also want to be able to afford luxuries so the incentive to work is not gone.

liminal 6y ago

The "U" in UBI stands for "universal". Everyone gets it all the time.

jrumbut 6y ago

I would say that while this is a real concern, our current system places way too high a priority on addressing it.

mlac 6y ago

My concern is that lenders will start loaning against it at ridiculously high rates on UBI income streams - "Get 100K today for signing away your UBI payments!" or "just pay us the monthly amount of your UBI payment!". After thinking about it a while, I realized the law would need to protect the UBI payments from being accessible in bankruptcy. That would significantly limit lenders willing to lend on that money. Those who did would be charging very high-interest rates on it and probably limit the total amount backed by it, so someone can't borrow 200k and then declare bankruptcy but have it be protected. Even writing this out now, I'm not sure that this would work because I'm not sure how you prioritize lenders for someone's assets who declares bankruptcy. I also see upward pressure on housing prices - right now, few landlords know what the market can take for pricing. It would be easy to bump everyone's rent by a few hundred dollars when UBI kicks in because you know everyone can afford it. Technology and the market structure are so efficient at extracting value from things that it's hard to design any policy that will effectively achieve the desired outcome of providing food, clothing, and shelter for all citizens without some wonky unintended consequences.

jessaustin 6y ago
Congress changes the terms of credit and bankruptcy all the time. See the limitations that lenders bribed Biden into including in his "Bankruptcy Abuse Prevention and Consumer Protection Act". As a part of a UBI law, they could just say that creditors have no right to recover UBI payments. Take everything he owns, but you can't come back next week to take more. It could be that housing rents in certain situations could increase in response to UBI, but in most cases having more money gives one more choice, not less. A family who are now stuck in a rattrap located conveniently with respect to public transport might move to a better cheaper place in a more remote location and buy an old car. They wouldn't have to stay at the mercy of their current landlord. Other people in other situations might respond in other ways.
- mlac 6y ago
  I hear you, but I still question how long those on UBI could get ahead of the rat traps before the non-rat trap options become their old cost + the cost of UBI, effectively transferring most of the UBI benefit to the landlords and ending us up in a similar place. In my mind, it's about answering the question of how we lower barriers to moving to ownership and getting people out of the poverty cycles. There are two major hurdles I see: - The current structure right now, and incentives that exist, are so good at extracting money that they might quickly eat up the additional money handed out - whether it's through financial instruments or increased prices for basic necessities. - The people that consistently don't have money are bad at earning money, bad at keeping money, or some combination of the two. UBI only helps the people who can't earn money, but doesn't solve the financial literacy problem or the root cause that a group of people is bad at keeping money.

IG_Semmelweiss 6y ago

Naval ravikant put it succinctly , the real issue is that once the 51% know they can vote to redistribute the wealth of the remaining 49%, then that opens the door to...well, the JRE clip goes deeper https://m.youtube.com/watch?v=eHim7CMOZ6U https://m.youtube.com/watch?v=eHim7CMOZ6U

account42 6y ago
And this is supposed to be worse than 1% accumulating most of the wealth how?
- IG_Semmelweiss 6y ago
  Are you ready to argue that the poor are better off when everyone is poor, and inequality is nonexistent ? Because thats called north korea/ussr... and people routinely risked their lives to escape that equality... Here is how i think your point of view becomes stronger: Say inequality exists - but show how did it get there? Is it corrupt wealth? Does inequality persists because movement between wealth levels is becominy stale? For example, did bezos sell slaves or sell missiles? Or did he get rich getting to sell you stuff which you really like? Or, is there a chance your avg 1%er could be wiped out tomorrow? Or is being in the 1% sticky...like it is in the UK, Italy and france, where the same 5 families had the same wealth since the middle ages ? If you have a fair shot at the 1% , and if the road to get there is morally sound, then you wont hear of anyone to complain of inequality. Show which of the 1% is morally corrupt, and where progress in wealth dynamism is stalling, and im there to argue with you that we need to fix it.