6 ms·

Well, in Denmark we have the equivalent of Basic income and I'd say we have a major problem with peoples willingness to work. Some families are on welfare for g

by lbj 5y ago

Well, in Denmark we have the equivalent of Basic income and I'd say we have a major problem with peoples willingness to work. Some families are on welfare for generations now.

kube-system 5y ago
We don't have UBI in the US and many people here would say the same. I think many are quick to conclude motivation is the cause without considering any less visible underlying reasons that cause people to be in those situations.
- pizza234 5y ago
  Could you elaborate on how would one sustain themselves without UBI in the US (according who those here who would say the same)? Things that I typically read: - the lower class struggle even to sustain themselves for days/weeks in between jobs - in the middle class there is people who fear not having health insurance in between jobs How can one survive in US without any job at all? US's welfare is radically different from Denmark's.
  - kube-system 5y ago
    The US has many fragmented welfare systems, rather than a single universal system. Many people do live on a combination of these benefit programs. This does not mean they do not struggle. People who are out of work for short periods of time may not be familiar with all of the various programs and how to sign up for them, and it may take some time to do so. They may also have budgeted their expenses with their employment income in mind. This is why things are particularly difficult for people who intermittently lose their jobs. But in general, anyone who finds their income unexpectedly unstable or close to the minimum amount necessary to meet their expenses will have a tough time, no matter where that income is coming from, or what value it is.
throwawayffffas 5y ago
One could argue that welfare is the symptom not the cause.
- rabuse 5y ago
  I always tell people, "Life is inherently lazy."
- emteycz 5y ago
  How do you know that, and how do you explain that more people get on welfare as it gets available to them, even though they have good employment options? Moreover, why does that matter at all - how is it fair to those still working, who are forced to pay for those who don't want to? I'm all for welfare - helping people in need. But I'm not going to fund someone's lifestyle.
  - kube-system 5y ago
    To take a market perspective to this: I think there are some costs that people fail to accommodate for when comparing employment vs welfare. We used to consider homemaking an actual profession, because... it really is. Now that we are expecting households to have dual incomes, we are recognizing that income on paper, when in reality it always was there, it just was not formally recognized. With the cost of childcare these days, staying home to earn $28,000 in welfare instead of working a job making $30,000 isn't laziness, it's a no-brainer. You have to consider the non-monetary "income". $28K < $30K is the wrong math. It really is: $28K + 2000 hrs of opportunity cost > $30K And to your second point: being fair is not the only reason to have assistance programs. Even if I don't think assistance programs are not fair I still support them so that there is less crime in my neighborhood, etc.
    - emteycz 5y ago
      Good point about the child care. But I disagree with your comment on the second point. As I said, I'm all for welfare/assistance given generously to those in need, but that's different from funding non-working lifestyle of those who have good working options and simply don't want to work. Some part of UBI might overlap with the welfare part, but it's going to significantly increase the number of people who don't work just because - and it's not fair to fund that from the money made by those who work, and especially not fair to take it from those who must work because UBI is not enough in their situation. UBI could be funded from sources like sovereign funds - why not. But let's not take money from people who need it just so a group of people can quit their job. Classic welfare at least says that those who receive it need it more that the person that pays.
BoumTAC 5y ago
I do agree with this. Here in France I'm currently unemployed and I have a lot of compensation from government welfare. I'm looking for a job and every time I apply to a job, I have a little voice in my head saying : are you sure you want to work there ? You currently have the opportunity to do what you want and learn whatever you want for free, but if you work there it will be boring af and you will not be able to do what you want. So currently I'm reading a lot of books, doing coursera course I'm interested in and doing a lot of sport which is impossible when I have a job because reading takes hours just to read one book.
- jeremyjh 5y ago
  Doesn't it also make a difference that you lose welfare benefits when you start working? Maybe you could just work part time if all earned income was supplemental with no welfare gap.
  - BoumTAC 5y ago
    currently I'm on welfare. (enough to not have to use money put aside) If I work (even part time, I will loose all welfare). If I find a job I will earn only 400-800E more than I earn with welfare.
    - Siecje 5y ago
      E is Euro? 400-800 Euro is a significant amount of money.
      - BoumTAC 5y ago
        Yes, 800 euro would be the max I could hope for I think. But as an average of ~500 euros improvement of my current "salary" and loosing at the same time 40h/week + getting tired and not being able to do intense intellectual things after work I don't know if it's really worth it. And as I said, I "earn" enough money to not have to use my saving.
jeremyjh 5y ago
In Denmark I don't think everyone gets payments from the government regardless of need do they? The welfare system is just for people who are unemployed/disabled right? This doesn't really tell us much about how UBI would work since losing welfare benefits is a disincentive to work that you don't have with UBI. This article says UBI has been controversial for a long time in Denmark but is on the political agenda again recently: https://basisindkomst.dk/basic-income-borgerloen-in-denmark-status-and-challenges-in-2017/ https://basisindkomst.dk/basic-income-borgerloen-in-denmark-...
lordnacho 5y ago
The Danish system has the same problem as all other means-tested systems: massive effective tax rate once you start working.
- augustuspolius 5y ago
  So do you want to have both UBI and a low effective tax?
  - lordnacho 5y ago
    UBI would lower the effective tax, because it wouldn't put off everyone who might be able to work. Denmark having high tax in general is another story, but at least with UBI not everyone who is getting paid will be thinking "hmm I lose all that income if I take a job, plus I can't be at home so much".
    - augustuspolius 5y ago
      Realistically speaking, it sounds like introducing UBI would require a plethora of fundamental reforms (political, taxes, housing, job market) to be successful. While I enjoy thinking about that as a mental exercise, I consider it a complete fantasy - seeing how American politics work.
      - Kim_Bruning 5y ago
        On the other side of the pond in a lot of European countries you already have this concept of "levelling", where progressive taxes control the higher end of the salary band to reduce income inequality. It's not such a large stretch to introduce controls on the lower end as well.
  - rocqua 5y ago
    I would want UBI combined with a marginal tax rate that is much more constant as a function of income. Current welfare systems, if you plot the effective marginal tax rate as a function of gross income (i.e. if you earn one more dollar, what percentage of that dollar does your net income increase including all government systems), have by far the highest marginal rates for the lower incomes. With the marginal tax-rate actually generally decreasing as your income increases. Notably in some broken systems (like the Dutch one) there can be cases where your marginal tax rate is above 100%. Note that the tax burden ratio [(gross income - net income) / gross income] as well as the actual tax burden [gross income - net income] still increases with as gross income increases. If you graph the tax burden as a function of gross income, then the marginal tax rate is essentially the slope of this plot. Importantly, it is the marginal tax-rate that affects a rational actor looking to weigh whether it is worth it work harder to earn more money. Hence very high marginal tax rates are very discouraging to working more / harder / trying to become more productive.
Kim_Bruning 5y ago
Doesn't Denmark have a normal European style "Conditional" welfare system? That has very different dynamics from an UnConditional basic income. Often the way that welfare is implemented is that if you can't work, you get welfare. This seems like a really obvious, logical, good idea. But there's a trap (a welfare trap!). Because on the other side, when you start working again, you stop getting welfare. And your net income might actually go down. A rational actor might therefore end up stuck in this local optimum where they stay on welfare and never start working. One argument for UBI is that it eliminates the drop in income associated with the return to work (because you get it unconditionally: whether you are working or not) . A theoretical prediction might therefore be that more people would work if UBI is available. In practical tests so far this doesn't seem to have quite panned out. This is due to UBI having multiple effects simultaneously. However, I would be most amused to see if in some situations this does became the dominant effect, and the number of working people went up.
rocqua 5y ago
I think a significant difference between the Danish system and UBI is that working people do _not_ get Danish welfare. In the Netherlands we have a very similar system, except with a legal obligation to apply for jobs or do volunteer work in order to keep the welfare. If I guessed correct, then the Danish is significantly different from UBI, because that system discourages working. Starting work means losing your welfare. Or at best every euro you earn from working is subtracted from your welfare. Besides that, in such systems you need a complicated bureaucracy to figure out who should and should not get welfare. This bureaucracy needs to contend with fraud, and is probably rewarded for giving as few people welfare as possible. This leads to a bureaucracy that is somewhat hostile to those it is meant to serve. With Universal basic income, you lose the discouragement to work. You lose the very complicated and hostile bureaucracy (with exceptions for emigrants and immigrants probably). And you lose some of the political pressure to cut welfare, because everyone gets UBI so there is less jealousy. In the Netherlands there have been cases of people on welfare needing to pay back thousands of euros because sometimes their mother did groceries for them. That was officially 'income' they failed to declare, and therefore their welfare was retroactively cut. That is just inhumane, and stupid. It means anyone on welfare who cannot make ends meet cannot ask anyone for financial help, because that would cost them their welfare.

by lbj 5y ago

Well, in Denmark we have the equivalent of Basic income and I'd say we have a major problem with peoples willingness to work. Some families are on welfare for generations now.

kube-system 5y ago

We don't have UBI in the US and many people here would say the same. I think many are quick to conclude motivation is the cause without considering any less visible underlying reasons that cause people to be in those situations.

pizza234 5y ago
Could you elaborate on how would one sustain themselves without UBI in the US (according who those here who would say the same)? Things that I typically read: - the lower class struggle even to sustain themselves for days/weeks in between jobs - in the middle class there is people who fear not having health insurance in between jobs How can one survive in US without any job at all? US's welfare is radically different from Denmark's.
- kube-system 5y ago
  The US has many fragmented welfare systems, rather than a single universal system. Many people do live on a combination of these benefit programs. This does not mean they do not struggle. People who are out of work for short periods of time may not be familiar with all of the various programs and how to sign up for them, and it may take some time to do so. They may also have budgeted their expenses with their employment income in mind. This is why things are particularly difficult for people who intermittently lose their jobs. But in general, anyone who finds their income unexpectedly unstable or close to the minimum amount necessary to meet their expenses will have a tough time, no matter where that income is coming from, or what value it is.

throwawayffffas 5y ago

One could argue that welfare is the symptom not the cause.

rabuse 5y ago
I always tell people, "Life is inherently lazy."
emteycz 5y ago
How do you know that, and how do you explain that more people get on welfare as it gets available to them, even though they have good employment options? Moreover, why does that matter at all - how is it fair to those still working, who are forced to pay for those who don't want to? I'm all for welfare - helping people in need. But I'm not going to fund someone's lifestyle.
- kube-system 5y ago
  To take a market perspective to this: I think there are some costs that people fail to accommodate for when comparing employment vs welfare. We used to consider homemaking an actual profession, because... it really is. Now that we are expecting households to have dual incomes, we are recognizing that income on paper, when in reality it always was there, it just was not formally recognized. With the cost of childcare these days, staying home to earn $28,000 in welfare instead of working a job making $30,000 isn't laziness, it's a no-brainer. You have to consider the non-monetary "income". $28K < $30K is the wrong math. It really is: $28K + 2000 hrs of opportunity cost > $30K And to your second point: being fair is not the only reason to have assistance programs. Even if I don't think assistance programs are not fair I still support them so that there is less crime in my neighborhood, etc.
  - emteycz 5y ago
    Good point about the child care. But I disagree with your comment on the second point. As I said, I'm all for welfare/assistance given generously to those in need, but that's different from funding non-working lifestyle of those who have good working options and simply don't want to work. Some part of UBI might overlap with the welfare part, but it's going to significantly increase the number of people who don't work just because - and it's not fair to fund that from the money made by those who work, and especially not fair to take it from those who must work because UBI is not enough in their situation. UBI could be funded from sources like sovereign funds - why not. But let's not take money from people who need it just so a group of people can quit their job. Classic welfare at least says that those who receive it need it more that the person that pays.

BoumTAC 5y ago

I do agree with this. Here in France I'm currently unemployed and I have a lot of compensation from government welfare. I'm looking for a job and every time I apply to a job, I have a little voice in my head saying : are you sure you want to work there ? You currently have the opportunity to do what you want and learn whatever you want for free, but if you work there it will be boring af and you will not be able to do what you want. So currently I'm reading a lot of books, doing coursera course I'm interested in and doing a lot of sport which is impossible when I have a job because reading takes hours just to read one book.

jeremyjh 5y ago
Doesn't it also make a difference that you lose welfare benefits when you start working? Maybe you could just work part time if all earned income was supplemental with no welfare gap.
- BoumTAC 5y ago
  currently I'm on welfare. (enough to not have to use money put aside) If I work (even part time, I will loose all welfare). If I find a job I will earn only 400-800E more than I earn with welfare.
  - Siecje 5y ago
    E is Euro? 400-800 Euro is a significant amount of money.
    - BoumTAC 5y ago
      Yes, 800 euro would be the max I could hope for I think. But as an average of ~500 euros improvement of my current "salary" and loosing at the same time 40h/week + getting tired and not being able to do intense intellectual things after work I don't know if it's really worth it. And as I said, I "earn" enough money to not have to use my saving.

jeremyjh 5y ago

In Denmark I don't think everyone gets payments from the government regardless of need do they? The welfare system is just for people who are unemployed/disabled right? This doesn't really tell us much about how UBI would work since losing welfare benefits is a disincentive to work that you don't have with UBI. This article says UBI has been controversial for a long time in Denmark but is on the political agenda again recently: https://basisindkomst.dk/basic-income-borgerloen-in-denmark-status-and-challenges-in-2017/ https://basisindkomst.dk/basic-income-borgerloen-in-denmark-...

lordnacho 5y ago

The Danish system has the same problem as all other means-tested systems: massive effective tax rate once you start working.

augustuspolius 5y ago
So do you want to have both UBI and a low effective tax?
- lordnacho 5y ago
  UBI would lower the effective tax, because it wouldn't put off everyone who might be able to work. Denmark having high tax in general is another story, but at least with UBI not everyone who is getting paid will be thinking "hmm I lose all that income if I take a job, plus I can't be at home so much".
  - augustuspolius 5y ago
    Realistically speaking, it sounds like introducing UBI would require a plethora of fundamental reforms (political, taxes, housing, job market) to be successful. While I enjoy thinking about that as a mental exercise, I consider it a complete fantasy - seeing how American politics work.
    - Kim_Bruning 5y ago
      On the other side of the pond in a lot of European countries you already have this concept of "levelling", where progressive taxes control the higher end of the salary band to reduce income inequality. It's not such a large stretch to introduce controls on the lower end as well.
- rocqua 5y ago
  I would want UBI combined with a marginal tax rate that is much more constant as a function of income. Current welfare systems, if you plot the effective marginal tax rate as a function of gross income (i.e. if you earn one more dollar, what percentage of that dollar does your net income increase including all government systems), have by far the highest marginal rates for the lower incomes. With the marginal tax-rate actually generally decreasing as your income increases. Notably in some broken systems (like the Dutch one) there can be cases where your marginal tax rate is above 100%. Note that the tax burden ratio [(gross income - net income) / gross income] as well as the actual tax burden [gross income - net income] still increases with as gross income increases. If you graph the tax burden as a function of gross income, then the marginal tax rate is essentially the slope of this plot. Importantly, it is the marginal tax-rate that affects a rational actor looking to weigh whether it is worth it work harder to earn more money. Hence very high marginal tax rates are very discouraging to working more / harder / trying to become more productive.

Kim_Bruning 5y ago

Doesn't Denmark have a normal European style "Conditional" welfare system? That has very different dynamics from an UnConditional basic income. Often the way that welfare is implemented is that if you can't work, you get welfare. This seems like a really obvious, logical, good idea. But there's a trap (a welfare trap!). Because on the other side, when you start working again, you stop getting welfare. And your net income might actually go down. A rational actor might therefore end up stuck in this local optimum where they stay on welfare and never start working. One argument for UBI is that it eliminates the drop in income associated with the return to work (because you get it unconditionally: whether you are working or not) . A theoretical prediction might therefore be that more people would work if UBI is available. In practical tests so far this doesn't seem to have quite panned out. This is due to UBI having multiple effects simultaneously. However, I would be most amused to see if in some situations this does became the dominant effect, and the number of working people went up.

rocqua 5y ago

I think a significant difference between the Danish system and UBI is that working people do _not_ get Danish welfare. In the Netherlands we have a very similar system, except with a legal obligation to apply for jobs or do volunteer work in order to keep the welfare. If I guessed correct, then the Danish is significantly different from UBI, because that system discourages working. Starting work means losing your welfare. Or at best every euro you earn from working is subtracted from your welfare. Besides that, in such systems you need a complicated bureaucracy to figure out who should and should not get welfare. This bureaucracy needs to contend with fraud, and is probably rewarded for giving as few people welfare as possible. This leads to a bureaucracy that is somewhat hostile to those it is meant to serve. With Universal basic income, you lose the discouragement to work. You lose the very complicated and hostile bureaucracy (with exceptions for emigrants and immigrants probably). And you lose some of the political pressure to cut welfare, because everyone gets UBI so there is less jealousy. In the Netherlands there have been cases of people on welfare needing to pay back thousands of euros because sometimes their mother did groceries for them. That was officially 'income' they failed to declare, and therefore their welfare was retroactively cut. That is just inhumane, and stupid. It means anyone on welfare who cannot make ends meet cannot ask anyone for financial help, because that would cost them their welfare.