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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

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.
deleted 2y ago
[deleted]
drakonka 2y ago
I don't think they missed this - the website does include those findings.
naveen99 2y ago
They should do the experiment in a poor country where a $1000 is near the median income.
cactusplant7374 2y ago
Negative income tax? Does that mean the government pays me to work?
- bell-cot 2y ago
  Yes-ish. But your employer knows. And he might immediately apply "you'll need less money from me, now" logic.
  - hibikir 2y ago
    True, but that part only makes a significant difference if the unemployment rate is quite high. At a time where restaurants have trouble filling their staff in low tip shifts, the salaries are closer to what the employer can pay without serious risk.
  - tejtm 2y ago
    Your employer may already be getting paid by a government for you to work, but that is above your pay grade.
  - exe34 2y ago
    so it's a handout to companies. corporate welfare. probably no worse than currently - a lot of companies in the UK are subsidised via the benefits system because their employees can't afford to live off their wages.
  - rbanffy 2y ago
    That's why it should be enough to provide for basic subsistence.
- boplicity 2y ago
  I think something like this already exists in the U.S. It's called the Earned Income Tax Credit. Low income people may get a tax credit that could result in a bigger refund. Effectively, some people are getting money they woudln't be getting without working. It makes a lot of sense, imo. https://www.irs.gov/publications/p596 https://www.irs.gov/publications/p596
LudwigNagasena 2y ago
NIT and UBI are equivalent if you take income taxes into account.
joe_the_user 2y ago
Why is it some shock-horror thing that people worked less? I think, for those who imagine AI taking a vast swath of jobs (like Altman), the aim for basic income is to get people working less but without this resulting social/work disengagement (whether AI will have that effect is a different matter).
- maerF0x0 2y ago
  > Why is it some shock-horror thing that people worked less? Working less is not so bad, but their income (before transfers) also went down. That means they did not replace poorly paying jobs with better paying ones (or they did with net decrease), nor started a business. The issue is that social safety net is meant for people who's income is seemingly too low. If the net effect is to decrease that even lower, then yes its a concern. (for clarity, I read the link not the paper)
- IshKebab 2y ago
  It's not a surprise to most people, but UBI proponents often explain the unworkable economics by saying it would make people earn more... or something. I don't think realists really needed any evidence that normal people would love to quit their job and play computer games all day, but I guess this study wasn't for them.
- deleted 2y ago
  [deleted]
- MattGrommes 2y ago
  > Why is it some shock-horror thing that people worked less? Exactly. If I have to have 3 jobs, then with this money I "only" work 2 jobs, I'm working less but almost certainly have a better quality of life.
  - jacksnipe 2y ago
    Yeah and what’s more you’re contributing more to society, whether or not you can measure it in money. You have some spare time and energy to help your family, your neighbors, the person you see once a week. I want to live in a society where people have time to actually live.
altruios 2y ago
YES!!!! Not every job is moral, essential or needed, the idea that 'everyone needs to participate with American capitalism as a worker drone' needs to die.
- sulandor 2y ago
  though if you do, it's useful to perpetuate the idea and it probably doesn't make much sense to discourage this, especially if you would not want to do it yourself.
- anticensor 2y ago
  At least America doesn't have an explicit "duty to work" clause in their constitution like Turkey has. It could've been worse.
- ihsw 2y ago
  [dead]
- marcusverus 2y ago
  > everyone needs to participate with American capitalism as a worker drone Working a job you don't like is a leaser evil than mooching off of your neighbors. The level of entitlement required to argue the opposite is absolutely mind boggling. How many people have to work full time to support one able-bodied layabout? UBI may make sense in the event of technology-induced mass unemployment, but folks won't tolerate it otherwise. The incentives are simply and universally too bass-ackwards for society to function. They're backwards for the idle (who will find it easier to cut costs than work), for new graduates (who can split living costs with friends and delay entry into the workforce indefinitely), for workers (who would rather rent a trailer and chill than work 40 hours a week and live in the 'burbs and drive a new truck), and for politicians (who will shamelessly promise endless increases in benefits). IMO UBI is a litmus test for basement dwellers, unserious utopians and plain-old first-order thinkers.
  - 8note 2y ago
    > new graduates (who can split living costs with friends and delay entry into the workforce indefinitely), This one at least, and probably all of them is stuff that already happens, and their time spent not working is instead spent on improving their communities. I think that's still valuable, and maybe more valueable than making a billionaire slightly richer Ubi compensates all work, rather than just what capitalists are willing to pay for. Id expect a good portion of software engineers to quit in a UBI world, so they can do open source projects instead. The second order effect of putting everyone in the workforce is that nobody is having kids, and there's no community support for people on the edge of homelessness, or with mental health issues, or with drug issues.
thomasahle 2y ago
It's literally the second paragraph: > They also worked less on average but remained engaged in the workforce and were more deliberate in their job searches compared with a control group.
- ghufran_syed 2y ago
  so they were more picky? I dont think that’s intrinsically good or bad, but it seems concordant with the finding in unemployment studies that a large proportion of unemployed workers who get a fixed period of unemployment payments end up finding a job in the last month when the payment is about to end. Which raises the question, should you make the period shorter to reduce financial burden of unemployment insurance on workers, or longer to allow workers to be even more “deliberate” about their employment choices?
  - sentrysapper 2y ago
    I'd say that's intrinsically good. What is the alternative to not being able to afford the cost of living?
whakim 2y ago
> And similar proposals like the Negative Income Tax would cost far less money and have none of the presented downsides. It all depends on how you tweak the numbers; in theory a negative income tax and a guaranteed income cost exactly the same amount. A guaranteed income of $1200 taxed at a marginal rate of 50% is just the same as a marginal tax rate of -50% on an income of $400. That being said, there are some pretty big negative externalities to a negative income tax, in the sense that it even further overburdens the tax system with knowing people's exact monthly income (assuming monthly payments), which is not-at-all straightforward for the poorest taxpayers whom presumably such a system would be designed to most help.
- akvadrako 2y ago
  They are mathematically the same, depending on the tax curves. A negative income tax doesn't mean you get -50% of $400, it means your income starts negative. So someone making $0 gets like $1000 back (say by paying 20% over -$5000).
pjerem 2y ago
> One result they are missing out is that the income actually reduced overall employment compared to the control group That’s not something negative or even a surprise. Of all the people on this planet, why do you think Altman payed its with its own money for this study ? That’s the goal of universal income : allowing people to work less because there is/will be less work to do. As for decreasing household earnings, I’m not even surprised : most people would accept a decrease in income in exchange of the certainty of the income. You don’t need to save a lot if your income is guaranteed. It’s not even a bad thing because as we can see in the results, global expenditures increased. One interpretation could be that people felt like they needed less money but that they also spent more. Overall it feels like a net positive for the economy.
- _lyxd 2y ago
  is/will there be less to do? in the future, maybe so, but decreasing employment is surely bad during a labor shortage: you do need workers for a functioning, productive economy. the rise in buying power may look good by the numbers, but doesn't inherently better society -- consumerism doesn't encourage quality goods/services. take AI: it's a lot easier to replace human workers when they've quit, when the positions are already vacant. you don't need to provide on-par performance or quality service(s), just fill the shoes with slop
Willish42 2y ago
> And similar proposals like the Negative Income Tax would cost far less money and have none of the presented downsides. Most people file taxes once a year, meaning they would get this payment once rather than monthly, which makes a huge difference if living on the poverty line. Similarly, many people making less than the minimum for filing [1] likely don't file their taxes. This was an issue with the child tax credit as well -- you want to get resources to the lowest-income households, but doing that with tax credits means you don't actually reach those households, meaning you still have to introduce new programs to reach those people [2]. There were proposals to make that tax credit into a monthly payment but IIRC they did not pass before the child tax credit was ended in 2022. [1] https://www.irs.gov/newsroom/who-needs-to-file-a-tax-return https://www.irs.gov/newsroom/who-needs-to-file-a-tax-return [2] https://www.vox.com/22588701/child-tax-credit-accessibility-irs-portal https://www.vox.com/22588701/child-tax-credit-accessibility-...
- legitster 2y ago
  I understand the pragmatic barriers to onboarding or bi-monthly payments via NIT, but it still seems easier to overcome these barriers than institute a domestic UBI.

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.

deleted 2y ago

[deleted]

drakonka 2y ago

I don't think they missed this - the website does include those findings.

naveen99 2y ago

They should do the experiment in a poor country where a $1000 is near the median income.

cactusplant7374 2y ago

Negative income tax? Does that mean the government pays me to work?

bell-cot 2y ago
Yes-ish. But your employer knows. And he might immediately apply "you'll need less money from me, now" logic.
- hibikir 2y ago
  True, but that part only makes a significant difference if the unemployment rate is quite high. At a time where restaurants have trouble filling their staff in low tip shifts, the salaries are closer to what the employer can pay without serious risk.
- tejtm 2y ago
  Your employer may already be getting paid by a government for you to work, but that is above your pay grade.
- exe34 2y ago
  so it's a handout to companies. corporate welfare. probably no worse than currently - a lot of companies in the UK are subsidised via the benefits system because their employees can't afford to live off their wages.
- rbanffy 2y ago
  That's why it should be enough to provide for basic subsistence.
boplicity 2y ago
I think something like this already exists in the U.S. It's called the Earned Income Tax Credit. Low income people may get a tax credit that could result in a bigger refund. Effectively, some people are getting money they woudln't be getting without working. It makes a lot of sense, imo. https://www.irs.gov/publications/p596 https://www.irs.gov/publications/p596

LudwigNagasena 2y ago

NIT and UBI are equivalent if you take income taxes into account.

joe_the_user 2y ago

Why is it some shock-horror thing that people worked less? I think, for those who imagine AI taking a vast swath of jobs (like Altman), the aim for basic income is to get people working less but without this resulting social/work disengagement (whether AI will have that effect is a different matter).

maerF0x0 2y ago
> Why is it some shock-horror thing that people worked less? Working less is not so bad, but their income (before transfers) also went down. That means they did not replace poorly paying jobs with better paying ones (or they did with net decrease), nor started a business. The issue is that social safety net is meant for people who's income is seemingly too low. If the net effect is to decrease that even lower, then yes its a concern. (for clarity, I read the link not the paper)
IshKebab 2y ago
It's not a surprise to most people, but UBI proponents often explain the unworkable economics by saying it would make people earn more... or something. I don't think realists really needed any evidence that normal people would love to quit their job and play computer games all day, but I guess this study wasn't for them.
deleted 2y ago
[deleted]
MattGrommes 2y ago
> Why is it some shock-horror thing that people worked less? Exactly. If I have to have 3 jobs, then with this money I "only" work 2 jobs, I'm working less but almost certainly have a better quality of life.
- jacksnipe 2y ago
  Yeah and what’s more you’re contributing more to society, whether or not you can measure it in money. You have some spare time and energy to help your family, your neighbors, the person you see once a week. I want to live in a society where people have time to actually live.

altruios 2y ago

YES!!!! Not every job is moral, essential or needed, the idea that 'everyone needs to participate with American capitalism as a worker drone' needs to die.

sulandor 2y ago
though if you do, it's useful to perpetuate the idea and it probably doesn't make much sense to discourage this, especially if you would not want to do it yourself.
anticensor 2y ago
At least America doesn't have an explicit "duty to work" clause in their constitution like Turkey has. It could've been worse.
ihsw 2y ago
[dead]
marcusverus 2y ago
> everyone needs to participate with American capitalism as a worker drone Working a job you don't like is a leaser evil than mooching off of your neighbors. The level of entitlement required to argue the opposite is absolutely mind boggling. How many people have to work full time to support one able-bodied layabout? UBI may make sense in the event of technology-induced mass unemployment, but folks won't tolerate it otherwise. The incentives are simply and universally too bass-ackwards for society to function. They're backwards for the idle (who will find it easier to cut costs than work), for new graduates (who can split living costs with friends and delay entry into the workforce indefinitely), for workers (who would rather rent a trailer and chill than work 40 hours a week and live in the 'burbs and drive a new truck), and for politicians (who will shamelessly promise endless increases in benefits). IMO UBI is a litmus test for basement dwellers, unserious utopians and plain-old first-order thinkers.
- 8note 2y ago
  > new graduates (who can split living costs with friends and delay entry into the workforce indefinitely), This one at least, and probably all of them is stuff that already happens, and their time spent not working is instead spent on improving their communities. I think that's still valuable, and maybe more valueable than making a billionaire slightly richer Ubi compensates all work, rather than just what capitalists are willing to pay for. Id expect a good portion of software engineers to quit in a UBI world, so they can do open source projects instead. The second order effect of putting everyone in the workforce is that nobody is having kids, and there's no community support for people on the edge of homelessness, or with mental health issues, or with drug issues.

thomasahle 2y ago

It's literally the second paragraph: > They also worked less on average but remained engaged in the workforce and were more deliberate in their job searches compared with a control group.

ghufran_syed 2y ago
so they were more picky? I dont think that’s intrinsically good or bad, but it seems concordant with the finding in unemployment studies that a large proportion of unemployed workers who get a fixed period of unemployment payments end up finding a job in the last month when the payment is about to end. Which raises the question, should you make the period shorter to reduce financial burden of unemployment insurance on workers, or longer to allow workers to be even more “deliberate” about their employment choices?
- sentrysapper 2y ago
  I'd say that's intrinsically good. What is the alternative to not being able to afford the cost of living?

whakim 2y ago

> And similar proposals like the Negative Income Tax would cost far less money and have none of the presented downsides. It all depends on how you tweak the numbers; in theory a negative income tax and a guaranteed income cost exactly the same amount. A guaranteed income of $1200 taxed at a marginal rate of 50% is just the same as a marginal tax rate of -50% on an income of $400. That being said, there are some pretty big negative externalities to a negative income tax, in the sense that it even further overburdens the tax system with knowing people's exact monthly income (assuming monthly payments), which is not-at-all straightforward for the poorest taxpayers whom presumably such a system would be designed to most help.

akvadrako 2y ago
They are mathematically the same, depending on the tax curves. A negative income tax doesn't mean you get -50% of $400, it means your income starts negative. So someone making $0 gets like $1000 back (say by paying 20% over -$5000).

pjerem 2y ago

> One result they are missing out is that the income actually reduced overall employment compared to the control group That’s not something negative or even a surprise. Of all the people on this planet, why do you think Altman payed its with its own money for this study ? That’s the goal of universal income : allowing people to work less because there is/will be less work to do. As for decreasing household earnings, I’m not even surprised : most people would accept a decrease in income in exchange of the certainty of the income. You don’t need to save a lot if your income is guaranteed. It’s not even a bad thing because as we can see in the results, global expenditures increased. One interpretation could be that people felt like they needed less money but that they also spent more. Overall it feels like a net positive for the economy.

_lyxd 2y ago
is/will there be less to do? in the future, maybe so, but decreasing employment is surely bad during a labor shortage: you do need workers for a functioning, productive economy. the rise in buying power may look good by the numbers, but doesn't inherently better society -- consumerism doesn't encourage quality goods/services. take AI: it's a lot easier to replace human workers when they've quit, when the positions are already vacant. you don't need to provide on-par performance or quality service(s), just fill the shoes with slop

Willish42 2y ago

> And similar proposals like the Negative Income Tax would cost far less money and have none of the presented downsides. Most people file taxes once a year, meaning they would get this payment once rather than monthly, which makes a huge difference if living on the poverty line. Similarly, many people making less than the minimum for filing [1] likely don't file their taxes. This was an issue with the child tax credit as well -- you want to get resources to the lowest-income households, but doing that with tax credits means you don't actually reach those households, meaning you still have to introduce new programs to reach those people [2]. There were proposals to make that tax credit into a monthly payment but IIRC they did not pass before the child tax credit was ended in 2022. [1] https://www.irs.gov/newsroom/who-needs-to-file-a-tax-return https://www.irs.gov/newsroom/who-needs-to-file-a-tax-return [2] https://www.vox.com/22588701/child-tax-credit-accessibility-irs-portal https://www.vox.com/22588701/child-tax-credit-accessibility-...

legitster 2y ago
I understand the pragmatic barriers to onboarding or bi-monthly payments via NIT, but it still seems easier to overcome these barriers than institute a domestic UBI.