Universal Income.

[Belz...]

If the issue was discussed in another thread, link it. That’s all.

That's a strange way of putting it, then. It almost sounded as if you called it off-topic.

 

[Tippit]

It's more like you pointed out that the money printers would still print money for themselves.

Upon re-reading your post, it could be that you are claiming that UBI would cause the money printers to print even more money for themselves but I don't see the nexus.

When you can create unlimited money, you can never lose, which includes the relative difference between you and the fortunes of everyone else. When the trillionaires are worth a quadrillion, the price of a cheeseburger will be $8,000.


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[Tippit]

You've shifted the goalposts. The post I was replying to was talking about "inflation on everything when everyone has more money", and now it seems you've shifted to one particular trial of one particular system.

Some data on the correlation between a raise in minimum wage and inflation has been presented earlier in the thread. The results of looking at 30-40 years of data on that happening are that there is not a strong correlation between the two.

There is likely to be an even less strong correlation between UBI and inflation, because it will not cause the cost of manufacturing and distributing goods to go up like a raise in the minimum wage does.

So it's not "posters" who disagree with you that people having more money would equal "inflation on everything", but systematic reviews of the data of times when people have been given more money.

Inflation is primarily a monetary problem. UBI payments don’t necessarily have to be monetized. But to the extent that is a net increase in welfare, and absent cuts in government spending and/or significant increases in taxes it will result in higher deficits, which are significantly monetized.

The unknown is how adversely this will affect the real economy. The supply of fiat money is practically infinite. The supply of productive workers to create goods and provide services is finite. What if the vast majority of people decide to quit working, live very modestly, and value their time more than any excess income that a job will provide?

Then services (and goods) will fall off of a cliff, creating supply side inflation. I suspect the rate of UBI will have to be managed according to some employment rate. It could be a potential disaster if this is just a scheme to increase net welfare.


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[psionl0]

When you can create unlimited money, you can never lose, which includes the relative difference between you and the fortunes of everyone else. When the trillionaires are worth a quadrillion, the price of a cheeseburger will be $8,000.

Is your argument that replacing welfare with UBI will cause the money printers to hyper-inflate the UBI away?

 

[psionl0]

I think you've kind of missed my point though. If you don't include them in UBI then you don't make any saving in administering them, if you do include them then you pay them to everyone and it's very expensive.

From memory 2/3 of the DWP budget is related to pensions so if you are still having pensions then you have very little fat to get rid of in the system to fund the UBI.

Replacing part of a pension with UBI is cost neutral. Sure it won't immediately rid us of the bureaucracy but you can't switch to UBI instantly.

 

[dirtywick]

The unknown is how adversely this will affect the real economy. The supply of fiat money is practically infinite. The supply of productive workers to create goods and provide services is finite. What if the vast majority of people decide to quit working, live very modestly, and value their time more than any excess income that a job will provide?

I don’t think this is a realistic concern.

 

[Orphia Nay]

What data?

From my admittedly might be wrong knowledge it has only ever been tried in a sample of 2000 people in one country and no one worked more.

Your knowledge is wrong.

https://en.wikipedia.org/wiki/Universal_basic_income#Pilot_programs_and_experiments

That's a substantial list of pilots and programs.

 

[lionking]

I don’t think this is a realistic concern.

It’s already a concern in Australia. The minimum adult wage is nearly $40k per annum, yet there are labour shortages everywhere. There is the risk that a UBI would make it harder to fill jobs.

 

[arthwollipot]

For those who think I’m making up the job crisis facing Australia:

https://www.smh.com.au/national/aus...really-need-is-good-jobs-20210527-p57vo3.html

Businesses across Australia are battling labour shortages as the economy lifts out of the COVID slowdown. The latest data reveals there are 288,700 unfilled positions in Australia, which translates to the highest job vacancy rate ever recorded.

This has come about despite high minimum wages (compared to other nations) and with our current welfare systems. Offering more incentives for people not to seek work via a UBI will only exacerbate this in my view.

It doesn’t matter how popular a UBI might be, it would be damaging to our economy.

I'm not sure the SMH's numbers are entirely accurate. According to the Bureau of Statistics (which ought to be considered an authority), the number of people in February 2020 who were available for work, actively looking for work, and available to start immediately, was 659,000. Almost 1.4 million people not in the labour force wanted a job, with 70% available within 4 weeks. COVID is an anomalous outlier, which is why I think the pre-COVID numbers should be considered here. The number of job seekers is undoubtedly even higher due to COVID. How can there be a labour shortage of the magnitude reported by the SMH when there is a much larger number of people looking for work?

BTW, according to the above report, "too many applicants" was the main reason people reported having difficulty finding a job.

 

[dirtywick]

It’s already a concern in Australia. The minimum adult wage is nearly $40k per annum, yet there are labour shortages everywhere. There is the risk that a UBI would make it harder to fill jobs.

Although I have no frame of reference for what $40K a year buys in Australia l, UBI making low wage jobs more difficult to fill is a realistic concern. It’s not an insurmountable problem however. But unless that has resulted in the vast majority of Australia is exiting any income generation at all it’s very different than what Tippit was concerned about though.

My concern would be an income supplement for the employed would result in people working a standard 40 hour week instead of overtime that will cost a lot of employers productivity.

 

[arthwollipot]

Although I have no frame of reference for what $40K a year buys in Australia...

A car. A good one, but not a great one.

 

[psionl0]

It’s already a concern in Australia. The minimum adult wage is nearly $40k per annum, yet there are labour shortages everywhere. There is the risk that a UBI would make it harder to fill jobs.

As usual, you are just repeating objections that have been answered over and over again.

there are two issues: It is cheaper to import skilled workers than to train the local population for the job and anybody who does a casual/seasonal unskilled job loses their Centerlink benefits (again not a problem when you can simply import unskilled labour to do those jobs).

 

[psionl0]

My concern would be an income supplement for the employed would result in people working a standard 40 hour week instead of overtime that will cost a lot of employers productivity.

Even if that were a real concern it just means that employers can't say "accept my terms or starve". They have to offer more realistic wages/working conditions.

However, I doubt that people will be quitting or cutting back on working hours in droves. It is still a good deal to earn extra money without losing your UBI. People who have great difficulty finding any sort of work may stop looking though.

 

[dirtywick]

Even if that were a real concern it just means that employers can't say "accept my terms or starve". They have to offer more realistic wages/working conditions.

However, I doubt that people will be quitting or cutting back on working hours in droves. It is still a good deal to earn extra money without losing your UBI. People who have great difficulty finding any sort of work may stop looking though.

Well it is a real concern. I work 4-6 hours of overtime per week by choice because I like having a newer truck. I might stop that if the government started sending me a check instead. Or I might get an even newer truck and keep working. Like you said, the extra money is just a good deal made better by adding to your income.

I know a lot of guys that work extra for their toys that wouldn’t have to do that. Not sure what they’d all do.

But like I said it’s not an insurmountable problem. Just something I think a lot of companies would have to account for. I agree though I don’t think it would be that detrimental to the work force.

 

[lionking]

I'm not sure the SMH's numbers are entirely accurate. According to the Bureau of Statistics (which ought to be considered an authority), the number of people in February 2020 who were available for work, actively looking for work, and available to start immediately, was 659,000. Almost 1.4 million people not in the labour force wanted a job, with 70% available within 4 weeks. COVID is an anomalous outlier, which is why I think the pre-COVID numbers should be considered here. The number of job seekers is undoubtedly even higher due to COVID. How can there be a labour shortage of the magnitude reported by the SMH when there is a much larger number of people looking for work?

BTW, according to the above report, "too many applicants" was the main reason people reported having difficulty finding a job.

I think the main problem is that a “large number of people looking for work” actually means “a large number of people looking for work in an ideal job”.

And good for them, but it doesn’t make the labour shortage problem go away. When younger I had no hesitation in taking cleaning jobs when I needed work. My son, when he arrived home from Europe with covid but without a job and a place to stay, got a job in construction.

Yes anecdotes, and I have a heap more from employers who can’t find staff. And we also have the SMH article.

With the problem already here, I fear a UBI could worsen it.

 

[psionl0]

Well it is a real concern. I work 4-6 hours of overtime per week by choice because I like having a newer truck. I might stop that if the government started sending me a check instead. Or I might get an even newer truck and keep working. Like you said, the extra money is just a good deal made better by adding to your income.

No you wouldn't. The tax scales would be adjusted so that you as an employee won't be better off. So you would still need to work that overtime if you want the truck.

 

[Archie Gemmill Goal]

Replacing part of a pension with UBI is cost neutral.

No it isn't because you have to administer the UBI and still administer the pension. Not to mention that you pay that UBI to everyone not just pensioners.

In any case the argument wasn't that it was cost neutral but that the savings made could fund the UBI. Cost neutral doesn't cut the mustard.

Sure it won't immediately rid us of the bureaucracy but you can't switch to UBI instantly.

You haven't yet shown that it would rid us of the bureaucracy ever. In my experience things that will be paid for through savings elsewhere rarely if ever work out that way.

I'm open minded about UBI as a concept but the idea that it will be funded by savings in welfare seems a bit hand-wavy to me. And so far you have done nothing to convince me otherwise.

 

[Archie Gemmill Goal]

cost a lot of employers productivity.

Not that it would be a bad thing but probably the biggest affect on productivity would be employers no longer fearing starving to death if they lose their jobs. A lot of exploitative employers are going to be told to stick their jobs where the sun don't shine.

 

[Archie Gemmill Goal]

The tax scales would be adjusted so that you as an employee won't be better off.

For all employees?

That doesn't sound thought through either. Or correct tbh.

If UBI doesn't make typical employees at least somewhat better off then it will never get support from the majority.

 

[psionl0]

No it isn't because you have to administer the UBI and still administer the pension.

The cost of administering UBI is minimal compared to the cost of managing pensions and welfare.

For all employees?

Obviously bottom wage earners are going to be better of even if they pay a relatively hefty marginal rate of tax from the first dollar they earn because they are now getting the UBI.

UBI is going to benefit people who get next to nothing now: dumpster divers and bottom wage earners and that is why extra funding will be needed. But since it won't be making people who already get money better off, it is not going to tank the economy.

Whether it can be sold depends on how much misinformation gets spread and whether the "but they got something for nothing!" mentality can be overcome.