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Universal Basic Income vs welfare





Haiku2016
Lately, there's been quite a lot of people suggesting a Universal Basic Income for everyone. I gather the main reason for this is the rise in automation, esp. Artificial Intelligence and robots, and the prediction that many of us will not have a job.

Firstly, there's a very odd phenomenon currently where people with work seems to be working overtime while others can't find a job.

Secondly, computer organisations like Google and Facebook, whose products seem to be self-sustaining (except for helpdesk, which almost doesn't exist from personal experience), are major employers internationally. What do their employees do (besides having a lot of fun, from what I can gather)?

Finally, what's the difference between UBI and welfare? The current welfare system in most countries are cumbersome. So, why not just simplify it and go from there? Proponents of UBI claim that it won't hurt the economy but might actually stimulate it. If so, why isn't the current welfare system doing that? It's a limited form of UBI, no? So, why isn't the money given out in welfare stimulating the economy?

UBI is an old topic here in Frihost (http://www.frihost.com/forums/vt-157385.html). There're lots of good facts and statistics there so we won't have to dig too hard for data.
jajarvin
What is Basic Income?

A basic income is a periodic cash payment unconditionally delivered to all
on an individual basis, without means-test or work requirement.

Free Cash in Finland - Must Be Jobless.
Now, the Finnish government is initiating an experiment in a form of social welfare:
universal basic income. The government select randomly roughly 2,000 unemployed people
from white-collar coders to blue-collar construction workers.
It will give them benefits automatically, absent bureaucratic hassle and
minus penalties for amassing extra income.
loveandormoney
There are some countries in the world who pay that. Is it good working there?
Haiku2016
jajarvin wrote:
The government select randomly roughly 2,000 unemployed people
from white-collar coders to blue-collar construction workers.
It will give them benefits automatically, absent bureaucratic hassle and
minus penalties for amassing extra income.


This is the part I don't get. If you're jobless, doesn't that entitle you to some form of welfare handout in most Western countries? So, what's the diff? I thought that UBI is for everyone, regardless if you're employed or not. The thing is, it won't make much difference to the wealthy (depending on how wealthy you are vs the welfare rate). At the end of the day, I don't see the difference between UBI and just unemployment welfare. I know that currently, those receiving unemployment handouts are not allowed to find part time work. In UBI, that wouldn't be a problem. You'd be allowed to find work. In that sense, UBI is better than welfare.

But will it stimulate the economy? I reckon most people will work if they're given a reasonable job. Work has been given bad press - as something we don't want to do, or that we do only for the money. I reckon that most of us would rather work than not, and actually, most people I know put up with a lot in doing so. It can be rather demeaning if you are stuck in that situation. But that doesn't mean that people are lazy lot who would rather not work if they could.
SonLight
Haiku,

The main difference is that UBI would be handed out without question, presumably to all. Those who earn a lot would still get it, but pay it back in income tax. Right now the welfare system is quite inefficient, probably spending 60% or more of their total budget in overhead, managing and verifying eligibility. It would be necessary to rearrange the tax structure quite dramatically to make it effective though. Presumably those with low to median incomes would benefit, but would pay a much higher marginal tax rate.

Disclaimer: This is very US centric, and I haven't looked at any figures for years. Regardless of long-term benefit to the nation, things can only get passed if they put more money into the 'right' pockets -- those likely to vote, those who influence opinion, etc. While I would love to see simplification of welfare, leading possibly toward the UBI idea in the long run, I don't see it as politically likely.

The important things are that everyone has an incentive to work, but is not in great fear of not having work. If the underground economy became substantially larger as a result, that could break the system also.
Haiku2016
SonLight wrote:
Haiku,

The main difference is that UBI would be handed out without question, presumably to all. Those who earn a lot would still get it, but pay it back in income tax. Right now the welfare system is quite inefficient, probably spending 60% or more of their total budget in overhead, managing and verifying eligibility. It would be necessary to rearrange the tax structure quite dramatically to make it effective though. Presumably those with low to median incomes would benefit, but would pay a much higher marginal tax rate.

Disclaimer: This is very US centric, and I haven't looked at any figures for years. Regardless of long-term benefit to the nation, things can only get passed if they put more money into the 'right' pockets -- those likely to vote, those who influence opinion, etc. While I would love to see simplification of welfare, leading possibly toward the UBI idea in the long run, I don't see it as politically likely.

The important things are that everyone has an incentive to work, but is not in great fear of not having work. If the underground economy became substantially larger as a result, that could break the system also.


Thank you for this, SonLight. OK, so we're supposedly saving money in "overhead, managing and verifying eligibility". That's fine. But I don't see how it will generate work or stimulate the economy. From what I can see, people who wants to work will find some work to do. And it's really quite amazing that some presumably unprofitable work, like caring for the sick, and volunteering, are actually reasonably lucrative and do have people signingup to do this work.

The underlying expectation, I think, is that, if we don't have to work just to pay for the essentials, we will do the work we are more passionate about and the kind of work that are currently "unpopular" like being a homemaker, or the spouse who stays at home to look after the kids and cook/wash/etc, or being a carer, volunteer in charities, etc. will get more helping hands. Maybe more of us will write, paint, and so on.

But, I think people who are passionate about these things are already doing that. And that the incentive (or not) is public acclaim (or recognition). There are lots of books and other forms of artwork being published that are not getting any traction. It's a matter of market forces, not of basic income.

It seems to me that it avoids the basic question as to why people are on welfare. I think it's not about money but that some people, for whatever reason, cannot find the kind of work that suits them. Perhaps it's about social skills, or a free spiritedness that cannot take routine, or mental/physical constraints. I don't think it's about money. Maybe I'm wrong... But if I'm right, that jobless people are often people who can't find a job, rather then people who can't or don't want to work, then the solution is creating work that is satisfying and useful to society. Not dishing out money.

The reason I'm raising this is that I don't see how UBI will solve anything, except reduce unnecessary overheads (and that I doubt, since people will always find ways to abuse the system and we will always have to manage it, any system).
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