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Unconditional Cash Study: first findings available

• steelframe 2y ago
  If you were to hand out $1k a month to everyone in my area an immediate result would likely be that rents would increase by somewhere close to $1k a month. Everyone needs somewhere to live. Everyone wants to live closer to where they work and where there friends and family are. Housing is in limited supply. If everyone had more purchasing power, then everyone's going to collectively bid up what they're willing to pay for housing simply because they can.
  • Brechreiz 2y ago
    That's a good example for why we can't leave housing in the hands of investors.
  • heylook 2y ago
    At the margins, more people would have more ability to try to work around the market power of landlords. More time for political advocacy to rollback NIMBYism, or loosen zoning, or to build their own home, or to make an additional purchase that makes a marginally cheaper rental more acceptable.
  • CTDOCodebases 2y ago
    All the studies on UBI are flawed. The whole point of UBI is that everyone gets the money. When you give a select few extra money they can do things that they otherwise wouldn't. When you give everyone money the value of the money just decreases.
    • globular-toast 2y ago
      That's obvious. The point is inequality is reduced.
      • mucle6 2y ago
        So a progressive tax system like what we have? (ignoring capital gains taxes)
        • travisjungroth 2y ago
          UBI represented as a progressive tax system would be so wildly different from our current brackets it would be qualitatively different. Some brackets would be negative.
          • drekipus 2y ago
            "negative brackets" is a truly great idea and would help many affected by poverty. but that's not what adherence to UBI is about. UBI is about chasing an impossible utopia and burning ourselves in the process so that we have greater net inequality. Stick to the plan. Call out anyone who tries to make UBI work by watering it down from our idealized end-goal as nay-sayers. Clutch to random hypothesis'. It's the only way we can bludgeon them through democratic or revolutionary means.
    • qqqwerty 2y ago
      Negative income tax (NIT) solves this. At this point, when anyone says UBI, I just substitute NIT in my head. It is really the only practical implementation of a UBI scheme. Further, if a UBI-like program is funded with new taxes (or cuts to existing programs), it should have a negligible impact on inflation. It is only when you do deficit spending that you risk inflation.
      • CTDOCodebases 2y ago
        Good points. I think NIT would cause some inflation though as the cost for some things is related to the geography so kind of like what we saw with the pandemic some people would change location so they could afford a better lifestyle and end up driving up the prices of things in other locations. But maybe then they could base the amount on wherever someone is a resident however I’m sure this would be gamed. Maybe a state issued debit card for NIT could solve this though or banks could be required to pass transaction details to government. This could possibly assist government in information gathering for tax compliance.
        • qqqwerty 2y ago
          I think a major feature of a UBI/NIT would be to make it entirely location independent. There are tons of areas in our country that are economically depressed, largely due to a lack of jobs. These areas typically have low cost of living, so someone on UBI would be able to live a lot more comfortably there than they would in a high cost job center. And this in turn would provide some monetary inflows into those areas that could help revitalize them. A lot of these areas are occupied by seniors living off of social security. An influx of younger folks with UBI checks would help balance things a bit better.
  • karaterobot 2y ago
    This is the basic uncertainty I have about UBI, and I've never heard an argument against it that went step by step and explained how that wouldn't happen. It seems intuitively like it would. In response, I've hear the equivalent of "don't worry, they've thought of that already, and the math still works". Maybe, but I'd feel a lot better if somebody could walk me through it.
    • mucle6 2y ago
      I agree, in my opinion, a common misconception I've seen is people saying wealth isn't zero sum. It can be created from thin air, but as long as there are needed and scarse resources (housing, maybe medical, maybe ivy league college), the market will adapt to consume more of the wealth. So wealth can be created but it makes everyone else slightly poorer in different ways
    • knowaveragejoe 2y ago
      The post you responded to leaves out that supply of housing can increase - in the US, we stopped building to meet demand decades ago and are only in the last few years showing signs of reversing that trend in some major metro areas. We also have a "missing middle" of housing density that can be further built in.
    • qqqwerty 2y ago
      - At a macro level, if a program is "paid for" i.e. revenue neutral, it does not result in inflation (at least in aggregate). - UBI/Negative Income Tax (NIT) is not a handout to literally everyone, only the unemployed and lowest income folks will actually net money. Anyone with a modest income or larger will likely either see no changes to their net income or even a reduction in net income (due to higher taxes to pay for the program). - Assuming a UBI of $1k (just making a number up, but it gets tossed around a lot), you would only get that full amount if you were unemployed, so that means you are pulling in $12k a year. Someone making $12k a year isn't really going to be renting an apartment by themselves. They are probably going to crash on a couch, live with relatives, or maybe rent a single room. - As you go higher up the income ladder, the UBI phases out. I am also just making up numbers here, but maybe the phase out starts when you make $1k/month and stops at $3k/month. So someone making $12k a year in income would actually get $24k/year with UBI, but by the time you are making $36k/year you get $0 UBI. There are not a lot of areas in the country where you can rent apartments on these incomes. The places where you can do that, housing is probably not in as much demand and will likely not suffer from much if any inflation. So again, even if you are making a small income and bringing in some UBI, it will be designed to phase out long before someone could afford a one bedroom apartment in a high demand area. - And I think a nice feature of this type of program, is UBI would actually help even out the demand imbalances between VHCOL and LCOL areas. No one living solely off UBI is going to be comfortable in SF or NYC. But there are a lot of regions in our country that have minimal job prospects and could desperately use some revitalization. UBI would go a lot farther in those areas and would create some monetary inflows back into those regions. That in turn could reduce some of the housing pressure on the VHCOL areas (although I am not sure it would be a huge effect). It is worth mentioning that I assume most proponents of UBI are also acutely aware of the housing crises. To solve that, we need to build more housing. For the reasons listed above, I don't think UBI would cause much housing inflation, but even if it did, the solution to that problem is to build more housing, not to forgo welfare programs.
  • scotty79 2y ago
    That's why UBI needs to be financed from wealth/property tax.
  • amadeuspagel 2y ago
    If you were to hand out $1k per month to everyone in a country that has vacant housing in places where there are no jobs, some people would move to and revitalize these places.
• kkfx 2y ago
  Most people fails to understand a thing talking about basic income: it's not for those who get the money but for those who get them from those who get in the first place. Yes, poor tend to be unable to retain money, they spend. Spending means someone else get money from them. So those with a basic income can spend more, making local economy a bit better and still making their life a bit better. Remember a neglect thing: money are unit of measure of various substrate, not a value per se. Exchanging money means moving something else.
• skeledrew 2y ago
  UBI might be an OK stopgap in the beginning when comparatively just a few are losing their jobs. Over time though, in the long run, the core of currency-based systems will need to be replaced as a greater percentage of labor is made valueless by AI, with the resulting increase in bodies not earning anything and decrease in bodies bearing the tax burden. I hardly see any discussion anywhere of what happens when 100% of useful labor is automated to the point that humans have 0 comparative advantage compared to AI+robots in anything of economic value.
  • stephenflanders 2y ago
    As long as energy isn't unlimited, humans will always have some comparative language compared to AI + robots. Favorite metaphor for this is a lawyer and a secretary. The lawyer is better at everything than the secretary, but there's still a role for the secretary because the lawyer's time is better spent actually doing the law. It'll be the same for humans and AI.
    • skeledrew 2y ago
      The sun's energy is "unlimited"; it'll be around for far longer than we will be.
    • tivert 2y ago
      > As long as energy isn't unlimited, humans will always have some comparative <s>language</s> [advantage] compared to AI + robots. The truth of that really depends what you mean by "humans"... All humans? Probably not, as there are a lot of people who aren't especially capable or talented, and every conceivable economic activity they could do can be done by a machine with an AI with a below-average human intelligence and a capable robot body. Also, IIRC, solar panels are already more efficient than plants, so I doubt there's a dystopian "humans are better for manual labor" loophole. Most humans? Still probably no, given that AI seems to be making the most progress against white collar work right now. Some minority of humans? This might be true, as there are people who are extraordinarily smart and talented. It seems most likely that AI will be unable to replace the people at the very tops of their fields, but there are very, very few people in those positions, and most people just plain don't have the ability work at that level.
• TheChaplain 2y ago
  I don't see how UBI can work, on a nationwide scale it means everyone got x% more money and the market would adjust itself accordingly by raising prices? Also UBI is funded by taxes, which if applied to middle class they will vote against you. And if applied to companies, they push it down on the customer, making everything cost more (and therefore negating the UBI effect). What probably would be more effective for society would be improved an ACA, a cap on healthcare costs for all if you will and free yearly health checkups.
  • JoshTriplett 2y ago
    > Also UBI is funded by taxes Some of those taxes are already being paid. We have a lot of social programs that, for what could politely be called "political reasons", include extensive administration whose primary function is gatekeeping and means testing. Often, the administration of those programs costs substantially more than any money "saved", leaving aside that it also has a very high false positive rate, excluding people who actually should have received it. But there is a political faction that would rather see government burn a billion dollars just to make sure a tiny fraction of that isn't paid to someone who didn't "deserve" it. To quote https://www.bitsaboutmoney.com/archive/optimal-amount-of-fraud/ https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra... , "the policy choices available to them impact the user experience of fraudsters and legitimate users alike. They want to choose policies which balance the tradeoff of lowering fraud against the ease for legitimate users to transact." Eliminating entire programs and the massive administrative overhead of those programs, and replacing them with something that merits the label "universal", is much more efficient. Also: > on a nationwide scale it means everyone got x% more money and the market would adjust itself accordingly by raising prices? This is assuming the injected money has zero multiplicative effect on the economy, which is very unlikely to be the case. By way of example, since we're on a site created by a startup accelerator: Many, many people have said that UBI would be a massive boon to the startup ecosystem, by making it possible for many more people to safely try to build a startup without as much personal risk. Analyses vary, but some analyses have suggested that UBI may be a net benefit to the economy. At the very least, economic boosts provided by UBI substantially offset its cost. That's in addition to the offset mentioned above of replacing existing less-efficient programs with UBI. > improved an ACA, a cap on healthcare costs for all if you will and free yearly health checkups. We should do this as well, because healthcare is one of the few things that isn't addressed by UBI (since ultimately it's an insurance mechanism).
• highcountess 2y ago
  Is there anyone else in here that sees UBI is the "left's" equivalent to flat-earth or chemtrails? No matter how much you explain the most basic and fundamental realities that are adjacent to the laws of physics, they simply cannot or appear to be psychologically incapable of accepting the reality of the matter and are baffled. It's like those flat-earth people who did that experiment with the extremely sensitive gyroscope that proved that the earth was rotating and spherical; and were caught on recording saying "well, we clearly cannot accept that" and I think eventually simply deliberately ignored and suppressed it from their minds. Do not ever underestimate certain human's capacity for self-delusion. The bigger problem though is that this UBI cult is very authoritarian and tyrannical at its core, consistently increasing the insistence that they must take and use ever increasing amounts of other people's money to prove that UBI works, coincidentally making the researchers and the common NGO types scam artist operatives huge amounts of money in the process. UBI is simply a con job, a fraud, a lie, theft, and even slavery ... theft of resources and services against their will and under threat of violence and harm in order to support the lives and livelihoods of others. You want UBI? Great, sign up to have your income taxed to pay for it.
  • CuriousSkeptic 2y ago
    UBI doesn’t need to be a “left” idea. See the Libertarian angle f.ex https://en.m.wikipedia.org/wiki/Geolibertarianism https://en.m.wikipedia.org/wiki/Geolibertarianism Or read John Lockes argument on how land, as given by God to all, must be shared fairly. Expanded a bit upon by Thomas Paine https://en.m.wikipedia.org/wiki/Agrarian_Justice https://en.m.wikipedia.org/wiki/Agrarian_Justice
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• bankcust08385 2y ago
  UBI at this time is like topical ointment on a festering wound. Americans first need livable wages and single-payer healthcare that isn't Medicare, which is a Byzantine, confusing maze of dozens of coverage options largely outsourced to for-profit corporations.
  • amadeuspagel 2y ago
    Ointment on a festering wound applies much more to healthcare, which can't fix many problems associated with poverty, like stress, bad nutrition, bad housing and to livable wages, which don't help people who don't have a job, then to UBI.
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• homefree 2y ago
  > "We study the causal impacts of income on a rich array of employment outcomes, leveraging an experiment in which 1,000 low-income individuals were randomized into receiving $1,000 per month unconditionally for three years, with a control group of 2,000 participants receiving $50/ month. We gather detailed survey data, administrative records, and data from a custom mobile phone app. > "The transfer caused total individual income to fall by about $1,500/year relative to the control group, excluding the transfers. The program resulted in a 2.0 percentage point decrease in labor market participation for participants and a 1.3-1.4 hour per week reduction in labor hours, with participants’ partners reducing their hours worked by a comparable amount. The transfer generated the largest increases in time spent on leisure, as well as smaller increases in time spent in other activities such as transportation and finances." > "Despite asking detailed questions about amenities, we find no impact on quality of employment, and our confidence intervals can rule out even small improvements. We observe no significant effects on investments in human capital, though younger participants may pursue more formal education." > "Overall, our results suggest a moderate labor supply effect that does not appear offset by other productive activities." https://www.nber.org/papers/w32719 https://www.nber.org/papers/w32719
  • roughly 2y ago
    So they gave folks $12k per year to see a reduce in working hours by 1.5 hours per week and lower earnings by $1500/yr. I don’t think I’d call that a “moderate” labor supply effect - I’m frankly surprised that’s far enough outside the error bars to support the claim.
• treebeard901 2y ago
  Many might not think about the costs of every day basic items for a minimal level of survival. After seeing the system in use, I think it would be best if general relief type programs like you have in California, do not allow cash withdrawals. It is a factor in the ongoing fentanyl crisis. The pattern of behavior is enabled by the free cash. Instead a debit card that can be used anywhere except for cash is ideal. While many use the money for necessary things this is a factor in what is seen in inner cities.
  • nehal3m 2y ago
    Buy prepaid credit cards with your debit card, cash them. Buy commodities and sell them at a loss. People will find a way around it, especially desperate people with addiction issues. This will just add overhead. If you want to stop the fentanyl crisis then attack the root cause, don’t make life more difficult for the poor for a marginal benefit.
• booleandilemma 2y ago
  I would prefer to have government-sponsored, tax-free housing for all citizens rather than UBI. Forget Universal Basic Income, give me Universal Basic Housing. No US citizen should be homeless, or feel like they could become homeless if they lose their job.
• adolph 2y ago
  Conceptually the flaw is treating cash as a proxy for value. Consider the assertion “Cash is one important piece of the puzzle. The impact may be limited without other resources like health care and child care.” This is paradoxically spot-on in highlighting that money in of itself doesn’t create value, people create value for one another. Taking people out of an underperforming value stream by injecting cash is like confusing palliative and restorative care. Pain meds can keep a person limping along, and it is great as a bridge to get to a cure, but long term use has risks. As an alternative, I would advocate for a government (or other org) facilitation of people strengthening the streams of value between themselves. This doesn’t rule out a cash distribution based on increased taxes, but would focus more on enlisting community cooperation. One might look at wealthy people as tax cows to be milked or as people who have insights into how value is created. Instead of creating an adversarial relationship of tax avoidance, create a mutually beneficial relationship of opportunities to give and serve. The most successful wealthy people serve large orgs in boards of directors. What if there was a similar set of local boards that guided a grant or a loan program for life transformation in the way that student loans or GI Bill works but with an explicit stipulation (as opposed to the implicit stipulation of education) of how the funding would be used to create a better life well after the funding is complete?
• teractiveodular 2y ago
  Interesting to see the largest increase in consumption is "beverages". As far as I can see the commentary completely ignores this, but I presume this includes alcohol?
  • bryan0 2y ago
    If you look at the percentage breakdown it’s much more modest, so it appears to be an indication of how much the participants were already spending on alcohol. Also if you filter by “high income” beverage spending appears to switch to marijuana, and there the % breakdown remains high (no pun intended)
  • scotty79 2y ago
    Alcohol is in separate category along with tobacco and marihuana and it spending on it increased the most in the most affluent group.
• irjustin 2y ago
  Serious question, didn't we have a glimpse into UBI w/ all the stimulus packages? I'm very open to discussion here because I'm quite naive. My current lens is that UBI ultimately inflates prices leaving everyone back where they were before. The problem with openresarchlab's test is it's limited scope. It did increase the spending power of a particular group because the prices around them did not increase. If everyone has more money the "open market" raises prices to simply meet that. The root problem is non-limited capitalism? The price of basic goods cannot be allowed to rise vs cash on hand. I do believe UBI's ultimate goal is to increase "spending power", but simply giving money doesn't change the problem long term and thus UBI is doomed to fail in its current form.
  • amadeuspagel 2y ago
    An UBI that inflates prices doesn't leave everyone back to where they were before. This is most obvious in the case of someone who doesn't have any money at all without UBI. This person can now buy things, and before they weren't able to buy anything. Depending on how much money people make pre-UBI, there's a point where the inflation costs them more then they get.
    • irjustin 2y ago
      Ah fair point, I hadn't considered that, but how is that better than welfare? There is the welfare trap, but I don't really see us in a net positive position vs UBI because I see creating a bunch of inflation only to help the bottom 5%? I imagine there's a better way.
• noJiveplusplus 2y ago
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• exabrial 2y ago
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• habosa 2y ago
  The connection between UBI and Silicon Valley elite (specifically the VC class and, lately, AI people) should give everyone pause. Why does this group of people that are not historically known for their generosity or their sympathy for the unworking poor suddenly want to give everyone a little bit of money for nothing? In my mind, it is to create a permanent underclass. A group of people with just enough money to survive but not enough to participate in the world of the elites (or even the middle class). This underclass will represent a massive user base for the products and services that the VC class wants to sell. And they’ll be stuck there, and easier to target than ever.
• jljljl 2y ago
  It's interesting that the last 2 years of this study happened during a period of increasing inflation and rising interest rates. I wonder how that affected some of the metrics and qualitative surveys from the participants
• scotty79 2y ago
  Result for higher income people is crazy. They used the additional cash to move to where they pay way more for rent and spent more on drugs to the detriment of health, child care and household spending. It seems that more affluent are way more irresponsible with their money than poorer people.
• fasteo 2y ago
  It is shocking that there is no category for Investing/Saving
• Anotheroneagain 2y ago
  UBI wouldn't be needed if we got rid of loans. Loans block the increase in prosperity, as they become hard to pay if the economy improves, and misallocate resources on the bank's whim. The great depression likely wouldn't happen at all (or to a much limited extent, as some people would have to find new jobs) and instead the prices would drop until most people could live off their savings.
• sanp 2y ago
  I think UBI without regulations on pricing will result in inflation that will negate the benefits of UBI. Regulating prices will have unintended consequences (outside of a specific set of goods). Perhaps the Govt needs to take over the provisioning of these basics (production and distribution) and anything outside the basics will be market driven. I know this has been tried in the past and has failed miserably. But, we now have better ways to track these things. So, maybe time to give it another try?
  • perlgeek 2y ago
    > I think UBI without regulations on pricing will result in inflation that will negate the benefits of UBI. I believe that too, and that sounds like a market failure to me. Shouldn't competition keep prices down? I believe we need to investigate why that mechanism doesn't seem to work, and fix it; regulating prices can only be a very narrow and interim solution.
  • HPsquared 2y ago
    That's how it always goes with market interventions. They lean on the scales in one area which causes movement somewhere else, then try to lean on that too. Eventually end up in terrible contortions.
• robinduckett 2y ago
  My feelings are that if the basic income is not enough to cover the same privilege that the older generations have of home ownership and a pension covered lifestyle (food security, housing security, medical security) then it is not basic. And also that if it was only given to some at a sliding scale, it is not universal.
  • chii 2y ago
    what counts as "basic" will continually shift towards more and more. I dont believe basic income is possible until the day humanity discover a source of limitless energy cheaply obtainable.
    • robinduckett 2y ago
      Someone will say their brand of limitless energy is better than the competition, it’s human nature
• luxuryballs 2y ago
  What no pay down debt option?
• bentt 2y ago
  I used to support UBI but after seeing the US stimulus money get socked away into savings and the stock market, leading to rising prices and inflation, I no longer support it. I think all it will do is raise the cost of nearly everything and those that couldn’t afford the basics still won’t be able to since they’ll be more expensive.
  • spdif899 2y ago
    I understand where you're coming from but my perspective is that the two aren't directly comparable. The stimulus money came at a time of fear, and a time when people were primarily stuck inside. It was also known by all to be limited to just one or a couple of payments. All that combined meant for those that didn't have an immediate need, it was effectively like getting a small bonus from work - putting it in savings or an investment made a lot of sense. I also know several friends that were only able to pay rent or bills because of it. That is different than if people who need it were given a base source of income that was predictable and long term. I don't think it would just dump into savings then - it would get spent on a new car, or rent, or to pay off debts.
    • bentt 2y ago
      I don't think it matters where it gets put in terms of inflation. What we learned from the stimulus is that taken in aggregate, the population became less price sensitive because they had more money, and sellers felt the increased money supply. This allowed prices to rise. I don't see how UBI doesn't create a similar outcome, but I'm happy to review a paper or something that shows possibly how after an extended period it levels out. I'd imagine in a similar vein if you deleted overnight Social Security prices would fall because the money supply would be impacted so severely.
  • podgorniy 2y ago
    And then businesses start competition for the customer with pricing pulling that inflation down. No one will start new business or start adjusting existing in context of stimulus money to make prices competitive because they know this spike is just a temporal glitch. Business was rather interested in raising prices to get more in the face of supply shortage. Showed good corporate profit numbers. Stimulus checks are nowhere close to ubi from person's and business perspective, I would not extrapolate observations from one to another.
• Gravityloss 2y ago
  I was wondering for a long time, why do they reduce benefits so easily. Like if you study or do volunteer work. It wasn't like that earlier, but at some point all the farmer families' wives applied for unemployment benefits...
• thenerdhead 2y ago
  Is there a link to the published research so it is easier to read through it without all these buttons to click to expand?
  • setgree 2y ago
    https://www.openresearchlab.org/findings/category/working-papers https://www.openresearchlab.org/findings/category/working-pa...
• code_yogini 2y ago
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• hasbot 2y ago
  Interesting that saving for emergencies isn't one of the options. Having some savings would certainly reduce some stress.
• Eumenes 2y ago
  How about earning your own money?
• nkmnz 2y ago
  The problem with this kind of test is that the people still live in a society where cheap labor is available to the companies around them that provide them with all the goods and services that they like to purchase with those $1000 (or whatever free amount they've gotten). Germany shifted to a system that is as close to a basic income as you can currently imagine. There are some strings attached, but considerably less than in the past. You can easily live from the "Bürgergeld", but the labor market currently takes a third hit after Covid and Russia's full scale invasion on Europe: lots of companies, especially labor intensive services like bars and restaurants, have serious trouble to hire staff. The only way is to offer higher salaries – which, in turn, needs to be paid by the customers. This makes goods and services less affordable for everyone, but especially for those relying on government money...
  • giantg2 2y ago
    That's something that most programs don't even try to explain, and something ive wondered about - how does the money affect competition, both for goods/services and labor? If you're affecting very small percentages of the population, the impacts seem minor. We've seen this with analysis on raising minimum wage to about $10/hr. Most people make over that amount (or work in excluded roles), so the impact is small. Raise it too much too quickly, and some industries experience issues due to costs passed on in their products/services, and inflation can become detrimental to the people at the bottom. I wonder how this sort of thing will work out with something on a nearly universal scale - Social Security. To keep up with inflation, we need higher payouts. To keep the program solved, we need more revenue. This can be achieved with more workers, but relies on ever expanding population to cover the prior generation. Or it can be achieved with higher earning workers, which generally requires higher prices which potentially drives inflation, or though higher consumption (not very competitive on the global market due to cost of living, so not likely). Or we can raise the payroll taxes to cover the payouts. Anything besides the higher output/consumption is likely to result in higher costs to consumers and drive inflation. More money being in more people's pockets also means more competition for constrained resources, also driving inflation.
    • jerf 2y ago
• constantcrying 2y ago
  Completely devastating results for promoting free money. 1k a month and the "benefits" are some minor lifestyle changes. No impact on health. Biggest spending beverages. Slightly less time spent working. Some people start budgeting (presumably to figure out how to spend the money). And black people start businesses. There are 300M people in the US. Giving 1k to each every month is 3.6T a year. And the effects are miniscule. With 3.6T you could do a lot of things. Just reversing the trend of obesity would be a major improvement for the lives of millions.
  • titanomachy 2y ago
    This is the first good data on direct cash transfers in developed countries. The results in developing countries were quite different: https://www.givedirectly.org/2023-ubi-results/ https://www.givedirectly.org/2023-ubi-results/ People in that study were receiving a lot more money, relative to typical local incomes. But it seems like they used it quite differently. I think there are major differences between poor people in rich vs poor countries.
  • jltsiren 2y ago
    That is a common misconception. No serious UBI proposal would be that expensive. UBI is not about free cash to everyone. It's about reforming basic welfare benefits and income taxes to prevent welfare traps. The "U" part is about making basic welfare benefits automatic and unconditional. You don't have to apply for them, and you don't have to do anything specific to qualify for them. The "B" part is fundamentally a tax reform. Everyone gets the automatic welfare benefit, but some common tax credits and deductions would disappear, as would the lowest tax brackets. In the US, the 24% federal income tax bracket might start at $0. For low-income people, the biggest change would be lower effective marginal tax rate, as they would only pay actual taxes. For medium incomes and above, the main change would be that people would have to calculate their taxes in a different way. The necessity of a tax reform also means that testing UBI properly is difficult. A $1000/month benefit with current income taxes would be more money for low-income workers than an actual $1000/month UBI.
    • constantcrying 2y ago
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• djeastm 2y ago
  These discussions always devolve into political diatribes instead of a discussion of the study itself.
• RRWagner 2y ago
  Real question: What is to stop someone with power/money from taking advantage (or just fooling) someone with UBI to sign away their future UBI income? For example, the UBI person wants to buy a car, but has nothing other than UBI, the car dealer says, "no problem, just sign here and all your UBI for the next 5 years will pay for the car. Not our problem if you don't have anywhere to park it or gas to run it". Historically, those with power are able to clip a little extra assets from someone who doesn't have the power. Why wouldn't the UBI just become a new baseline for almost-zero? I hope I'm phrasing this in a way that is understandable.
  • titanomachy 2y ago
    If the income really is guaranteed, competition in UBI-secured lending should eventually drive margins down to the point where the borrowing cost approaches the risk-free interest rate, so at least people are getting a reasonable deal on their loan. Of course, it's still a serious social problem if people borrow against their future earnings to buy expensive things and then go years without enough money for food. It might not even be irrational, for example someone might borrow to pay for a life-saving surgery for a family member.
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• dfgdgf 2y ago
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• setgree 2y ago
  As others have pointed out [0], the summaries have a much more positive spin than the accompanying paper [1]. The paper's abstract: > We study the causal impacts of income on a rich array of employment outcomes, leverag-ing an experiment in which 1,000 low-income individuals were randomized into receiving $1,000 per month unconditionally for three years, with a control group of 2,000 participants receiving $50/month. We gather detailed survey data, administrative records, and data from a custom mobile phone app. The transfer caused total individual income to fall by about $1,500/year relative to the control group, excluding the transfers. The program resulted in a 2.0 percentage point decrease in labor market participation for participants and a 1.3-1.4 hour per week reduction in labor hours, with participants’ partners reducing their hours worked by a comparable amount. The transfer generated the largest increases in time spent on leisure, as well as smaller increases in time spent in other activities such as transportation and finances. Despite asking detailed questions about amenities, we find no impact on quality of employment, and our confidence intervals can rule out even small improvements. We observe no significant effects on investments in human capital, though younger participants may pursue more formal education. Overall, our results suggest a moderate labor supply effect that does not appear offset by other productive activities. [0] https://x.com/Afinetheorem/status/1815413121822896270 https://x.com/Afinetheorem/status/1815413121822896270 [1]https://www.openresearchlab.org/findings/nber-working-paper-employment https://www.openresearchlab.org/findings/nber-working-paper-...
  • kbelder 2y ago
    I think UBI is a horrifically bad idea. However, I don't think good OR bad results from studies like this are remotely relevant. It's like testing air pressure by patching 1% of a hole. The effects from testing a subset of the population could be drastically different from the effect when rolled out to the entire population.
• devonsolomon 2y ago
  Well that’s one less option for when the robots take over…
• mdorazio 2y ago
  Link to the preliminary study results from OpenResearch: https://www.openresearchlab.org/studies/unconditional-cash-study/study https://www.openresearchlab.org/studies/unconditional-cash-s... Note that this was a time-limited study where participants knew they would only receive money for 3 years. Personally, I feel like this leads to different behaviors than if people believe they will receive the income indefinitely.
  • anon291 2y ago
    This is bordering on an unfalsifiable (hence religious claim). If it's only going to work if the money is in perpetuity and then, when that doesn't work, we require the money is in perpetuity for an individual and his descendants, and then, when that doesn't work, require the money is truly perpetual with no hope to end it, then there becomes no way to determine whether or not the policy works in any meaningful way.
    • qqqwerty 2y ago
      Do we really need academic studies on this topic? When Republicans cut taxes on the rich, it is not like they are making sure they have academic consensus on their side. We know welfare works. It is pretty simple. People need to eat, they need shelter, and a few other basic necessities. When they fall on hard times, not having those things can make it infinitely harder to get back on their feet. Our current welfare system is a bit of a bureaucratic nightmare and has a stigma attached to it. The nice thing about UBI is it is universal, and simple. The second your income goes below a threshold, you start getting a little bit of money. The second it goes above, you stop. No fuss, no stigma. They are going to need that money to survive anyway, so might as well just give it to them rather than forcing them to suffer the indignities of poverty. Public policy is a messy business. But I find it odd that this topic is so controversial as it only took me a few minutes of ruminating on it before realizing how good of an idea it is. Maybe it is because I have had a brief encounter with poverty myself, and ever since my anxieties around finances, access to healthcare, etc.. run deep. Or maybe I just realize that a ton of people were born into poverty and due to no fault of their own are now stuck in it. Money might not grow on trees, but it quite literally exists as 1's and 0's in some database. The fact that we could just flip a few bits and instantly make the lives of so many people better, boggles my mind why we wouldn't try that.
• legitster 2y ago
  This is a pretty generous reading of the study. One result they are missing out is that the income actually reduced overall employment compared to the control group, and ended up decreasing household earnings: https://www.nber.org/papers/w32719 https://www.nber.org/papers/w32719 Even with a generous reading, it was an extremely expensive study. And similar proposals like the Negative Income Tax would cost far less money and have none of the presented downsides.
  • bko 2y ago
    I agree that something like a negative income tax would be cheaper with fewer downsides. But it would be spun as "subsidizing Walmart". You see that today when politicians criticize part time Walmart employees for still being eligible for benefits. Imagine if some low wage employer could pay you $10 an hours and government throws in an extra $5. If the market clearing rate is $15 for an employee, giving a subsidy of $5 pushes the wage down to $10 (effectively $10). They could offer $15 (effectively $20), but then you have a misalignment of quantity supplied and quantity demand, which would result in too many applicants and having to select on non-economic terms (e.g. overpaid do-nothing internship going to the CEO's nephew)
  • ericjmorey 2y ago
    Caring for loved ones is a tremendous value enhancement that is entirely missing in any study looking at income and profits. Someone who loves to cook cooking for someone that loves sharing a home cooked meal with the person that cooked it is entirely valueless in any such interpretation of income and profits being the sole measure for evaluating value. Delivery food services are the most valuable forms of sustenance in such measures. So did these people decrease their earnings because they were able to do more of what they value the most? Is that a thing we should try to make more people capable of doing?
  • homefree 2y ago
    Yeah - this suggests the simple explanation is true, if you reduce the incentive to work then people work less. There is a lot of speculation that that's not the case, but it doesn't seem to really hold up. This comes up a lot in lefty politics imo - similar to people arguing (erroneously) that increasing housing supply raises rents or reducing crime enforcement reduces crime. The simpler/dumber causality around incentives seems more true in all of these cases, the complicated second order theories fail to hold up.
• doctorpangloss 2y ago
  The UBI folks were cursed by the pandemic and inflation. You cannot deal with that confounder. They’re not the only ones. Remember Green New Deal? That also evaporated with the end of ZIRP. You can complain relentlessly about these guys, or offer alternative solution with nothing but vibes to vouch for them. The truth is, as long as interest rates are high, the economic contraction is making everyone too scared to try anything in case things “get worse.” Sadly, the best time to make great social change was between 2009 and 2022 and it’s officially over now.
  • verteu 2y ago
    > The UBI folks were cursed by the pandemic and inflation. You cannot deal with that confounder. The study had a control group, who also experienced pandemic & inflation.
    • doctorpangloss 2y ago
      You can do whatever you want during periods of inflation. "It" will fail. The existence of a control group is meaningless. The control group will have bad outcomes too. So what if it does? Nobody can design interventions for periods of inflation, because inflation makes everything look bad: your outcome, control group's outcomes, everyone's outcomes. For example, Brazil created their current public health system in 1988, realizing it in 1990, during inflation that was between 1,000-2,000%. It wasn't really functional then. Looking at it in isolation, at the time it was created, it would look like a failure, but all of Brazil looked like "a failure." Would it be valid to use SUS as implemented during 1,000% inflation as an example of why public health insurance is bad? No way.
  • legitster 2y ago
    > Remember Green New Deal This went along with the death of Modern Monetary Theory.
• reillys 2y ago
  It's such a small amount of money per person that it is hard to see what effects one would expect. I think for the majority of people reading hacker news $1000 per month would be barely noticeable in their bank account (obviously some people out there would notice it, but for say a lowly software dev making $150k it's not going to change much about their lifestyle). So to think it would fundamentally change someones life is a stretch. I mean it's not enough to not have to earn money (and so have the financial security to start a company or restart education) and it's not enough to purchase accommodation (especially cause it's limited to 3 years). Most I would expect is people could pay down some of their debt - so they can tread water a little easier for a few years.
  • reillys 2y ago
    not sure why this is downvoted? It's basically the exact same comment as the top comment
• causi 2y ago
  I don't understand why all of the basic income studies I've seen seek to indicate whether or not giving someone free money improves their quality of life. That it does should be blindingly obvious, but that is not the question which determines whether basic income should be a political goal. That question is whether basic income is the best use of a given amount of public assistance funding. Whether it is more efficient at improving lives than alternatives such as food stamps, rent assistance, childcare assistance, etc. There seem to be no efforts to answer this essential question.
  • jeffbee 2y ago
    But this study is showing no benefits, at least to mental and physical health, educational attainment, and advancement at work. So it seems to sort of moot the latter question.
    • causi 2y ago
      Yes, and that's quite a surprising result, but even if it'd had the opposite results, it wouldn't indicate that UBI is a good idea.
  • Suppafly 2y ago
    >That question is whether basic income is the best use of a given amount of public assistance funding. Whether it is more efficient at improving lives than alternatives such as food stamps, rent assistance, childcare assistance, etc. There seem to be no efforts to answer this essential question. Honestly, it's sorta self evident that replacing a myriad of confusing and contradictory systems with one system is more efficient. We effectively have UBI already for a subset of the population and it not efficient at all because it's provided through a ton of different programs that all different regulations and inclusion parameters.
• superfrank 2y ago
  I'm not sure how to address this, but I always wonder how much we can extrapolate the findings from these studies to a universal basic income situation. I feel like giving a small group of people an extra $12000 a year provides benefits for low income people because their yearly income is now higher compared to the median income. Someone who's income is in the 5th percentile may now be in the 10th or 15th percentile (no idea if those numbers are correct). Once you give everybody an extra $12000 a year, the median income is now $12000 higher. I'm sure there's still some benefit, but relative to others their position hasn't changed. Someone who's yearly income is in the 5th percentile is still earning in the 5th percentile. I'm concerned about a situation similar to college tuition in the US where easy, risk free money leads to price gouging. Once everyone has an extra $XXXXX how quickly does the market realize that the cost of goods can be raised by that amount.
  • aeturnum 2y ago
    > Someone who's yearly income is in the 5th percentile is still earning in the 5th percentile. Isn't this an intended feature of UBI? The idea of UBI is that some level of material support should be guaranteed. It's about bringing "up" the floor, not really re-arranging relative equal and unequal positions. Plenty of people dislike that about it, but it's an intended feature. That said, this is basically inflationary pressure and we have a lot of tools to deal with inflationary pressure. It is a challenge, but I am always struck by how differently people speak about it in this context v.s. when average incomes rise because the labor market is doing better. On some level, average incomes going up across society is the most normal thing in the world for welfare state capitalism and is one of the challenges we are best-equipped to deal with.
    • superfrank 2y ago
      > Isn't this an intended feature of UBI? The idea of UBI is that some level of material support should be guaranteed. It's about bringing "up" the floor, not really re-arranging relative equal and unequal positions. Plenty of people dislike that about it, but it's an intended feature. Absolutely, but I guess I don't see how just giving everyone money brings that floor up. Maybe I'm looking at this naively, but I don't see what's preventing things from just costing more after UBI. If the government gives everyone $1000/mo so landlords raise rent by $1000/mo then the floor is unchanged. I realize it's not that simple and that type of inflation wouldn't happen over night, but it seems like that's the direction it would head. Just looking at the housing aspect of it, it actually seems like the people who would benefit the most from UBI would be the people at the middle to upper end of the wage scale since they are more likely to own a house which means their housing costs are more fixed than someone renting. To me it seems like we need some way to control the cost of basic needs otherwise it's just a constant race between the government raising UBI and the market raising prices (although, admittedly, it seems like the same argument could be made about minimum wage). This is definitely not something I'm super well versed in though, so I might be looking at it wrong and am very open to people showing me what I'm missing.
• ilaksh 2y ago
  $1000 is not enough to quit their jobs or get a nice apartment. They could move slightly closer to work if they have to commute. It's not enough for a real tuition or to support them to study instead of work. I don't think we've ever had a universal basic income test. We have always missed the universal and basic part. It's below basic and not at all universal. I suspect that you need to get international cooperation and a more sophisticated form of money and resource tracking for a real UBI to be feasible.
  • nine_k 2y ago
    $1000 is enough to not be very afraid to lose a job, or to fall seriously ill. It would allow to look for a job for a longer time, or to take a lower-paying but nicer job (as in less strain, easier commute, better growth prospects, etc). It may allow to start saving some money. It's more of a safety net than a comfortable sofa: maybe it's not as nice, but it keeps you from hitting the floor nevertheless.
  • settsu 2y ago
    Certainly not "universal" (targeted to the unhoused) but maybe more towards the "basic" issue you pose: https://www.denverbasicincomeproject.org/research https://www.denverbasicincomeproject.org/research
  • elamje 2y ago
    $1,000/mo in a low income area of Dallas is a lot of money. Going from a $700/mo to a $1,700/mo apartment in Dallas is luxury. Not sure you're seeing this one clearly....
  • Gimpei 2y ago
    One of the selling points of unconditional cash transfers is that they wouldn’t be a disincentive to work. That instead they would help quality of life. And indeed, in high poverty contexts, they don’t disincentivize work. But this result suggests that in the US at least, they do cause people to work less. This is only one study in one context, so I wouldn’t consider anything “proven.” But, it is a big study and a very bad sign.
  • mdgrech23 2y ago
• brotchie 2y ago
  UBI really makes me think of AI-safety-world i-risk. i.e. Ikigai risk (feeling like you have a meaningful purpose in life). Ikigai, or purpose, is a Japanese concept dating back to the Heian period in Japan. The Japanese word “iki” translates to life. Additionally, the “gai” portion of the word comes from the word “kai” meaning shell. Beyond basic needs, Homo Sapiens in their current incarnation need some kind of meaning or purpose in life. Some folks can find this internally, other folks need to operate in an externally imposed value-structure to have meaning. I'm not sure that UBI actually addresses this, and may be counter productive.
  • skeledrew 2y ago
    This would necessarily[0] be a cultural thing, and particularly any mention of Japan means an implicit strong work culture stemming from their geographic situation[1]. And if it does turn out that there are enough people needing some externally imposed structure, something can always be simulated for them. [0] Necessarily because there was a time when this wasn't a thing at all, before the birth of wage labor. Everyone had the opportunity to contribute as they saw fit. [1] Japan is very poor in natural resources (oil, ores, etc), and so in order to participate in the global economy, the only thing they have to rely on is their human labor pool. And so they needed a society of extra hard workers to have a competitive edge in something.
  • __MatrixMan__ 2y ago
    Is it not obvious that people would have more time to seek a meaningful life if they spent less time working? The trick will be figuring out how to get people to actually do that, rather than just using the money to further participate in the same carrot/stick game that they're accustomed to. How to get them to take a risk and start a business doing sobering w important, versus just buying the next larger SUV because that's supposedly going to make them happy.
• rbanffy 2y ago
  Two other studies on slightly different cash transfer programs: https://www.who.int/tools/elena/review-summaries/cash-transfer--the-impact-of-conditional-cash-transfers-on-health-outcomes-and-use-of-health-services-in-low-and-middle-income-countries https://www.who.int/tools/elena/review-summaries/cash-transf... https://epar.evans.uw.edu/blog/long-term-impacts-cash-transfer-programs-what-does-evidence-say#:~:text=The%20majority%20of%20the%20evidence,increasing%20investment%20or%20women's%20savings https://epar.evans.uw.edu/blog/long-term-impacts-cash-transf....
• geor9e 2y ago
  I am not sure how small studies can account for the inflation wide rollout could cause. Consider this hypothetical: If you give 1 of 1000 renters $100, 1 landlord will leave the rent alone because they don't know. If you give 1000 of 1000 renters $100, word will get to 1000 landlords, who will all increase rent $100, because the market will bear it. I'm not saying this will happen, just that a small study enjoys the benefits of anonymity.
  • moduspol 2y ago
    They also don't account for the way these decisions would be made, if done at the government level. Put simply: I'm looking forward to the study where the participants get to vote every year to decide how much money they should be getting from the people running the study.
    • scotty79 2y ago
      For completeness the study should also be financed by wealth tax on the asset owners in the area, who can also vote. If everybody can have one vote per dollar, this system would probably tend to zero UBI. If everybody can have one vote per person then some equitable equilibrium could develop.
      • moduspol 2y ago
        > If everybody can have one vote per person then some equitable equilibrium could develop. Yep. As long as the wealthy can't leave, or keep their wealth / investments elsewhere, it should work pretty well.
        • scotty79 2y ago
          The rich person will have a choice. Either stay and compete for the money that was taken from other rich people with this tax and given to poor people that are way easier to extort or leave and forgo the opportunity and go to some other place where the only money that's available for taking is what poor earned with their work. If I were a skillful rich person I'd stay, because that could help me to raise in ranks of the rich more quickly. If I was skilless rich person I'd get the hell out of there because other rich would be getting my money redistributed through this tax.
• dang 2y ago
  Related: https://www.openresearchlab.org/findings https://www.openresearchlab.org/findings Also https://www.businessinsider.com/sam-altman-basic-income-study-results-2024-7 https://www.businessinsider.com/sam-altman-basic-income-stud... (via https://news.ycombinator.com/item?id=41037226 https://news.ycombinator.com/item?id=41037226, but we merged the comments hither)
• andy_xor_andrew 2y ago
  I'm dumb and have no real education in economics. But even my dumb self makes the correlation that in 2020/2021, we handed out free money to keep people afloat (a very good thing), and then immediately following there was a surge in inflation. So I guess I don't understand, how do you give out free money without devaluing the currency? Am I making an incorrect correlation between the stimulus checks and the subsequent inflation? Again, I don't know anything about this topic and I think the stimulus checks were a good idea that kept a lot of people afloat, but was that not the cause of the subsequent inflation?
  • philipov 2y ago
    The stimulus checks weren't the only thing we did, however. We did a lot of quantitative easing to keep the stock markets from crashing, and I would blame that first.
  • kjkjadksj 2y ago
    The stimulus checks were too small to move the needle any appreciable way. It was basically a larger than usual tax return. Having like $2500 extra isn’t why goods went up so much in price. That was from supply chain disruption.
  • amadeuspagel 2y ago
    Some inflation is worth it, but if it becomes too much of a problem, we can raise taxes.
  • ixwt 2y ago
    The difference is that money was created then for that purpose. In an ideal universal basic income, the money comes from taxes; not just printed on the spot. This to my (probably base and naive understanding of economics) would not result inflation, because it would be a re-circulation/flow of tax money, rather than injecting new money to the economy.
    • heylook 2y ago
      Ding ding ding. We have a winner. It also really matters which people get the money. For example: we printed gazillions of dollars after the 2008 financial crisis, but "inflation" was super low that whole time. What happened? We gave that money to banks and owners of financial assets, so the stuff that they buy more than others was what got inflated aka houses and startup equity (yes, your startup equity!) and the stock market and yachts and stuff. In 2020 we gave a bunch of money either directly to every individual or to their bosses to give to them, so a different set of things got inflated. What do wage workers buy more of with their money? Groceries et al. Home rental prices are through the roof, but home purchase prices are not. My guess is we see home price deflation (or at least lower-than-otherwise inflation) unless interest rates start getting cut again, which they will probably do because the people that get to influence and make that decision all benefit financially or politically from cutting those rates, but I digress. So my (old, bachelors) degree in econ gives me a story that makes sense, but surely a more recent or grad-level or professional economist can probably point out all the ways I'm deluded. One of my physics teachers once told me that every year they start by telling you that everything you learned last year is a gross oversimplification and now they're going to teach you the way it "really" works.
• t0bia_s 2y ago
  UBI is another tool for make citizen obedient to state. Once implemented, like debts, there will be strong voting mass for system that they could benefit from - with price of less independency.
  • __MatrixMan__ 2y ago
    Not all UBI schemes are issued by the state. Consider CirclesUBI for instance: issued by us for us as an alternative to what the state has for us.
  • sjm 2y ago
    That is ultimately a better outcome than we currently have, where the exact same thing happens, except it's only large corporations benefitting. Politicians _should_ be buying votes from the working class and tangibly improving their lives in the process.
    • t0bia_s 2y ago
      Socialism never worked and killed millions in poverty. Centrally planed economics is crippling free market. https://en.m.wikipedia.org/wiki/Gosplan https://en.m.wikipedia.org/wiki/Gosplan Also free money are perfect for make fiat currency more worthless and increase inflation even more. If you want fight against corporate greedeing, stop buying and using their products. Stop work for them.
      • which 2y ago
        Political machines did deliver tangible benefits to their constituents through what could be described as vote buying. In Daley's Chicago, if you there was a pothole on your street or your cousin who was new to the country needed a job, you could go to your alderman who would solve the problem for you. In return you were supposed to vote for the party and get everyone you knew to vote for the party. This worked as long as the machine was unquestioned and there were contractors willing to play ball to finance the whole thing. Now as a series of court decisions limiting the spoils system and incompetent successors have weakened the system, the mayor's approval rating is half of what it once was and overall confidence in the city is much lower. And the city's finances are about as bad as they can get today. So I wouldn't call it socialism and I wouldn't even say that it's worse than the alternatives.
• binary132 2y ago
  Other merits or demerits aside, doesn’t it seem obvious that if the state started distributing $3,600,000,000,000 of cash a year, it could possibly, just maybe, move the needle on inflation just a tiny wee bit? Has anyone ever addressed that challenge, or is it baked into the pie on purpose? If so, is this just a way to redistribute the allocation of assets? If so, why not just be honest and start the conversation there?
• jimt1234 2y ago
  There's been a narrative in the US over the last 40-or-so years that a "job" is the answer to all social problems. At best, that's half-true. Money is the real solution to social problems. And maybe it was the case 40 or 50 years ago, but having a job doesn't provide the same money that it used to, relative to required expenses. My boomer dad got a job right out of high school, with only a diploma, and was able to purchase a house and support my then-stay-at-home mother within 3 months of starting work. That is simply unheard of now. And it's not because people don't have jobs.
  • jopsen 2y ago
    > Money is the real solution to social problems. Money can't fix everything, but a little money can make many problems go away. > That is simply unheard of now. And it's not because people don't have jobs. Could it be that we have higher expectations today? (housing quality, technology access, not cooking ourselves, etc). Part of it could also be that today, like it or not, you're increasing competing in a global market. And the best leverage you can find is having a long education.