7 ms·

$12k per year x 320M people = $3.84 trillion, which is 22.9% of annual GDP. That's a pretty steep price tag for a thousand dollars a month.

by AreaGuy 11y ago

deleted 11y ago
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deleted 11y ago
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- akhatri_aus 11y ago
  I see all the arguments for it, but I always find this to be the argument against it which I believe would be the issue myself. If one had basic income why would they need to work? The incentives favour against the need to work. That income could be saved up and used in countries where the PPP value is much higher. Or just live and not work (which would decrease tax revenues forth). If people started to work less the basic income scheme would not have a source from tax and it spirals down GDP. I keep bringing this up, but no one here likes to give a decent explanation as to why this will not be the case.
  - c22 11y ago
    Why do people work at non entry-level jobs now?
    - akhatri_aus 11y ago
      I'm not looking at it from that point of view, people need to obviously get good jobs. Take away all those 'entry level jobs' and this will decrease GDP no? If the GDP decreases this will decrease tax revenue? And will this not decrease resources available for next years BI? If they have less BI next year there's less spending & less GDP next year too.. and it continues spiralling down. This is far from the claim that BI will have no chance of decreasing GDP It's all well and good to make lives better, what about the long run? This would solve it for a year or two what then?
      - conanbatt 11y ago
        People stopping to work does not necessarily mean GDP reduces. Precisely because they still have money to spend, GDP will almost surely go up. Maybe you are thinking of amount of hours worked, that would go down, but that does not mean productivity, or quality of work, or amount of services and goods. If only 10% stop doing minimum wages and go to school, and pursue a typical corporate carrier, and make 10 times minimum wage, the offset of the 90% not working minimum jobs anymore would be completely offset. Not to mention that people needing to get a job within 2 or 3 days pick terrible jobs with no future, so those that dont go to school will still be able to pick jobs better.
      - learc83 11y ago
        There's no way to answer these questions through thought experiments, you have to look at the available data. There have been several direct basic income experiments, and many other situations that provide relevant data (Native American casino profit distributions for example). Obviously we need more experiments, but the data we have shows that unemployment tends to go down not up. >Take away all those 'entry level jobs' and this will decrease GDP no? Most of the entry level jobs your talking about are being automated away regardless of whether we have a basic income. But lets remove automation from the equation and assume no increased automation over the next few decades. You're ignoring the second order effects of a basic income. People who make less than $12,000 a year will definitely make more money, and people who make less than $50,000 or so (whatever the break even point is) who keep working the same amount will also make more money. People in lower income brackets tend to spend their money directly on consumption--this will directly increase GDP. The data shows that the increase in GDP due to increased spending among the lower income people who make more money each month will likely offset any decreased spending from people who are making less money each month as a result of a basic income plan (either as a result of working less, or paying higher taxes).
    - baddox 11y ago
      Because they are much more enjoyable jobs and because they pay more.
  - conanbatt 11y ago
    THe incentives work against crappy jobs and low paid work, otherwise working is extra money: that's a pretty big incentive. EVeryone that makes more than 1k dollars a month now would keep working to not see their income substantially diminish. Those that get abuse from work, and minimum wage might consider doing something else. Which is a step forward.
    - akhatri_aus 11y ago
      Who would do those jobs? And who would pay for the tax revenue lost when the production those jobs create disappears to fund the BI going forward? Also, because you'll say people will work on better jobs and make more production how do you know they'll do this: If they have the income they need why would someone work and say not save it and spend it in a 3rd world country where everything is cheaper? Its so likely it creates a cycle of poverty.
      - conanbatt 11y ago
        Likely the same people, but with a large salary bonus! If you agree or find reasonable that the incentive to "not work" of BI affects the lowest paying jobs the most, lets go around a few cases. 1) Automatable-minimum wage jobs: today they are not replaced by machinery because its either expensive or through social concern (i.e. Walmart doesnt fire all the cashiers and replace them with automatic ones because of many political, social and some economic measures). In the world today such automation is not pursued because of its consequences and the marginal profit. If these people stop working, we would quikcly start finding automatic solutions. Bartending, cashiers, some construction, product assembly etc. I would expect these jobs to dissapear from human hands. 2) Non-automatable jobs: if the minimum wage people drop jobs that are too hard to automate or require a human touch (retail sales, nannies/child care, cleaning?, Garbage management, etc.) lots of people would drop out, which would reduce supply. So income would increase a lot for those that still do those jobs. TLDR; decreased supply would increase wages and let this work still happen but it would be more expensive for businesses, and it would push automation.
      - c22 11y ago
        It's possible that any jobs that no one would do under these conditions are jobs that are not necessary. If the jobs are necessary and still no one is willing to do them then they're probably currently vastly undervalued.
  - IanCal 11y ago
    > If one had basic income why would they need to work? Because people want more than $12k/year can buy? Many people here do contract work, how many of them stop once they've earned $12k/year? Did you read the article? There is a section on this. You may disagree with the analysis, but we should really start from what's actually being argued.
    - akhatri_aus 11y ago
      I read the article and the reddit posts and follow /r/basicincome. I see how it can help someone this year and next year but I clearly see this vicious cycle it can create over a decade where things get much worse and probably actual poverty instead.
  - fizzbatter 11y ago
    I'm not going to pretend to know the complexities of this type of issue, so don't infer too much from my following comment.. With that said, specifically replying to your comment: I would work, because the income levels i've seen in this thread ($1k/m) would barely be enough to live on. Hell, my existing debt alone (car), and current housing cost, keep me working. The idea of having to sell nearly everything to survive on the base income is not something i enjoy. Furthermore, even if i did end up at the base income after selling most of my more expensive cost-laden possessions, most people enjoy having money to purchase technology, entertainment, etc. With that said, i still love the idea of a base income. Knowing that if you fell out of work, ill, or whatever - you could still live? That you wouldn't go homeless? That really feels like a .. positive, proud of my country sort of thing. Again, i'm not claiming that any of this would work, or that i know anything. I'm simply replying to your question, from a personal standpoint. :)
    - akhatri_aus 11y ago
      I would like basic income too! It is awesome I'd have more money in my pocket. $1000 a month is lots of money to live off elsewhere. It's easy to save by living a bit shabbily for a while. Not everyone will see it that way they should work more. I'm content with very little. I don't want to be homeless or stuck when I'm sick. But I also don't want to be living in poverty in 20-30 years time which is potentially a big problem with BI due to the vicious cycle it would create with decreasing tax revenues.
      - nightski 11y ago
        I'd probably use it to work on personal projects for 12 months at a time after doing consulting rounds.
    - Atropos 11y ago
      The "not going homeless" already exists in European welfare states, you do not need Basic Income for that. The main difference with basic income is that it would be paid to people who could work, but choose not to. This might not make a difference in most cases, but the edge cases could be really expensive: If you are 63 and can retire at 65, wouldn't basic income give you an incentive to travel the world for 2 years? Same for a high school student delaying college for 1 or 2 or 3 years...
  - bandrami 11y ago
    If one had basic income why would they need to work? Why do you want people to work? Is there a stack of widgets going unmade that desperately needs to be made? Are we fighting a two-ocean war and I missed it? Right now half of the country is trying to work and there aren't enough jobs for them. It's 2015. What the hell was the point of the past century of technological improvement if we all still have to have jobs our whole adult lives?
    - spotman 11y ago
      Agreed. more and more jobs are being automated and going away. Both in big ways and smaller ones. Heck sometimes as a programmer I have bad feelings about making things more efficient for humans, thereby requiring less of them. In my career there has many projects that fit that description. This is a complex idea, not without a large amount of challenges. However as a citizen and programmer, I would rather see more things being automated, and instead of more unemployment, people could either not work, or find work they are more passionate about. Just imagine if everyone that decided they want to not sit around all day, actually was working on something they were passionate about.
      - bandrami 11y ago
        That's how I feel too. If there were a social dividend (which I think is a better term for a minimum income), then people would find a lot more useful things to do with their time than either the market or a government program could find. I just completely don't buy the "people wouldn't work" thing. Yes, you'd probably have to pay some menial work more to motivate people to do it (or, even better, spur technological development to automate that), but that's a feature, not a bug.
- IanCal 11y ago
  I don't think we can claim that distributing money amongst people would definitely decrease spending on goods and services.
  - nightski 11y ago
    GDP is value added. If there are less people working, I'd hope that value added would go down.
    - learc83 11y ago
      What about a situation where fewer people are working more productively?
      - nightski 11y ago
        Wouldn't that be orthogonal to basic income? i.e. You'd get that anyways so it would cancel out?
        learc83 11y ago
        No way to know without looking at the data, but I can see a few methods where a basic income would increase productivity. One talked about in the article is that workers who choose to work, tend to work harder/more productively than workers who are forced. The whole point is almost moot though because the data in basic income experiments show that employment rates tend to go up not down.
- hurin 11y ago
  If you'd actually bothered to read the article you'd see that in the pilot project productivity went up. Unemployment dropped as well, from 60% to 45%, and there was a 29% increase in average earned income, excluding the basic income grant. Also from the wiki link posted by OP: As published in a recent report, "All those dollars low-wage workers spend create an economic ripple effec. Every extra dollar going into the pockets of low-wage workers, standard economic multiplier models tell us, adds about $1.21 to the national economy. Every extra dollar going into the pockets of a high-income American, by contrast, only adds about 39 cents to the GDP." There could be statistics that support the argument that you are making as well but I don't think that: > "I'd have to imagine..." without any references to support your statement contribute anything meaningful to the discussion.
  - deleted 11y ago
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vlasev 11y ago
Please take a look at the FAQ[1] on reddit and perhaps at this article[2] about calculating whether USA can afford BI. [1]: http://en.reddit.com/r/basicincome/wiki/index http://en.reddit.com/r/basicincome/wiki/index [2]: http://www.economonitor.com/dolanecon/2014/01/13/could-we-afford-a-universal-basic-income/ http://www.economonitor.com/dolanecon/2014/01/13/could-we-af...
conanbatt 11y ago
Depends on how that income gets taxed. At a certain level of income, the gains of basic income are lost to extra taxation. However you always know that if you get fired you have a safety net, so it provides value to you even if you get 0$ net effect.
IanCal 11y ago
That is a rather trivial analysis that assumes a system where everyone, regardless of income, got $12k more than they would otherwise. It would be easy to set a tax system such that people got $12k as a minimum, but those who earned (say) $20k received $6k and by $50k there was no increase. I'm not suggesting a curve with those figures, that is purely for an example.
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hypersoar 11y ago
First of all, you're only going to pay the adults. That eliminates about a quarter of the population. Second of all, you're still going to collect taxes, so many people will just have the income taxed back. Say, only people below median income end up keeping the money. This cuts the figure down to 1.44 trillion. This is still a lot (we currently spend about $850 billion on social security, which would presumably be replaced by basic income), but it's not unmanageable.
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rmc 11y ago
A lot of that money will be spent, going back into the economy.

$12k per year x 320M people = $3.84 trillion, which is 22.9% of annual GDP. That's a pretty steep price tag for a thousand dollars a month.

by AreaGuy 11y ago

$12k per year x 320M people = $3.84 trillion, which is 22.9% of annual GDP. That's a pretty steep price tag for a thousand dollars a month.

deleted 11y ago

[deleted]

deleted 11y ago

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akhatri_aus 11y ago
I see all the arguments for it, but I always find this to be the argument against it which I believe would be the issue myself. If one had basic income why would they need to work? The incentives favour against the need to work. That income could be saved up and used in countries where the PPP value is much higher. Or just live and not work (which would decrease tax revenues forth). If people started to work less the basic income scheme would not have a source from tax and it spirals down GDP. I keep bringing this up, but no one here likes to give a decent explanation as to why this will not be the case.
- c22 11y ago
  Why do people work at non entry-level jobs now?
  - akhatri_aus 11y ago
    I'm not looking at it from that point of view, people need to obviously get good jobs. Take away all those 'entry level jobs' and this will decrease GDP no? If the GDP decreases this will decrease tax revenue? And will this not decrease resources available for next years BI? If they have less BI next year there's less spending & less GDP next year too.. and it continues spiralling down. This is far from the claim that BI will have no chance of decreasing GDP It's all well and good to make lives better, what about the long run? This would solve it for a year or two what then?
    - conanbatt 11y ago
      People stopping to work does not necessarily mean GDP reduces. Precisely because they still have money to spend, GDP will almost surely go up. Maybe you are thinking of amount of hours worked, that would go down, but that does not mean productivity, or quality of work, or amount of services and goods. If only 10% stop doing minimum wages and go to school, and pursue a typical corporate carrier, and make 10 times minimum wage, the offset of the 90% not working minimum jobs anymore would be completely offset. Not to mention that people needing to get a job within 2 or 3 days pick terrible jobs with no future, so those that dont go to school will still be able to pick jobs better.
    - learc83 11y ago
      There's no way to answer these questions through thought experiments, you have to look at the available data. There have been several direct basic income experiments, and many other situations that provide relevant data (Native American casino profit distributions for example). Obviously we need more experiments, but the data we have shows that unemployment tends to go down not up. >Take away all those 'entry level jobs' and this will decrease GDP no? Most of the entry level jobs your talking about are being automated away regardless of whether we have a basic income. But lets remove automation from the equation and assume no increased automation over the next few decades. You're ignoring the second order effects of a basic income. People who make less than $12,000 a year will definitely make more money, and people who make less than $50,000 or so (whatever the break even point is) who keep working the same amount will also make more money. People in lower income brackets tend to spend their money directly on consumption--this will directly increase GDP. The data shows that the increase in GDP due to increased spending among the lower income people who make more money each month will likely offset any decreased spending from people who are making less money each month as a result of a basic income plan (either as a result of working less, or paying higher taxes).
  - baddox 11y ago
    Because they are much more enjoyable jobs and because they pay more.
- conanbatt 11y ago
  THe incentives work against crappy jobs and low paid work, otherwise working is extra money: that's a pretty big incentive. EVeryone that makes more than 1k dollars a month now would keep working to not see their income substantially diminish. Those that get abuse from work, and minimum wage might consider doing something else. Which is a step forward.
  - akhatri_aus 11y ago
    Who would do those jobs? And who would pay for the tax revenue lost when the production those jobs create disappears to fund the BI going forward? Also, because you'll say people will work on better jobs and make more production how do you know they'll do this: If they have the income they need why would someone work and say not save it and spend it in a 3rd world country where everything is cheaper? Its so likely it creates a cycle of poverty.
    - conanbatt 11y ago
      Likely the same people, but with a large salary bonus! If you agree or find reasonable that the incentive to "not work" of BI affects the lowest paying jobs the most, lets go around a few cases. 1) Automatable-minimum wage jobs: today they are not replaced by machinery because its either expensive or through social concern (i.e. Walmart doesnt fire all the cashiers and replace them with automatic ones because of many political, social and some economic measures). In the world today such automation is not pursued because of its consequences and the marginal profit. If these people stop working, we would quikcly start finding automatic solutions. Bartending, cashiers, some construction, product assembly etc. I would expect these jobs to dissapear from human hands. 2) Non-automatable jobs: if the minimum wage people drop jobs that are too hard to automate or require a human touch (retail sales, nannies/child care, cleaning?, Garbage management, etc.) lots of people would drop out, which would reduce supply. So income would increase a lot for those that still do those jobs. TLDR; decreased supply would increase wages and let this work still happen but it would be more expensive for businesses, and it would push automation.
    - c22 11y ago
      It's possible that any jobs that no one would do under these conditions are jobs that are not necessary. If the jobs are necessary and still no one is willing to do them then they're probably currently vastly undervalued.
- IanCal 11y ago
  > If one had basic income why would they need to work? Because people want more than $12k/year can buy? Many people here do contract work, how many of them stop once they've earned $12k/year? Did you read the article? There is a section on this. You may disagree with the analysis, but we should really start from what's actually being argued.
  - akhatri_aus 11y ago
    I read the article and the reddit posts and follow /r/basicincome. I see how it can help someone this year and next year but I clearly see this vicious cycle it can create over a decade where things get much worse and probably actual poverty instead.
- fizzbatter 11y ago
  I'm not going to pretend to know the complexities of this type of issue, so don't infer too much from my following comment.. With that said, specifically replying to your comment: I would work, because the income levels i've seen in this thread ($1k/m) would barely be enough to live on. Hell, my existing debt alone (car), and current housing cost, keep me working. The idea of having to sell nearly everything to survive on the base income is not something i enjoy. Furthermore, even if i did end up at the base income after selling most of my more expensive cost-laden possessions, most people enjoy having money to purchase technology, entertainment, etc. With that said, i still love the idea of a base income. Knowing that if you fell out of work, ill, or whatever - you could still live? That you wouldn't go homeless? That really feels like a .. positive, proud of my country sort of thing. Again, i'm not claiming that any of this would work, or that i know anything. I'm simply replying to your question, from a personal standpoint. :)
  - akhatri_aus 11y ago
    I would like basic income too! It is awesome I'd have more money in my pocket. $1000 a month is lots of money to live off elsewhere. It's easy to save by living a bit shabbily for a while. Not everyone will see it that way they should work more. I'm content with very little. I don't want to be homeless or stuck when I'm sick. But I also don't want to be living in poverty in 20-30 years time which is potentially a big problem with BI due to the vicious cycle it would create with decreasing tax revenues.
    - nightski 11y ago
      I'd probably use it to work on personal projects for 12 months at a time after doing consulting rounds.
  - Atropos 11y ago
    The "not going homeless" already exists in European welfare states, you do not need Basic Income for that. The main difference with basic income is that it would be paid to people who could work, but choose not to. This might not make a difference in most cases, but the edge cases could be really expensive: If you are 63 and can retire at 65, wouldn't basic income give you an incentive to travel the world for 2 years? Same for a high school student delaying college for 1 or 2 or 3 years...
- bandrami 11y ago
  If one had basic income why would they need to work? Why do you want people to work? Is there a stack of widgets going unmade that desperately needs to be made? Are we fighting a two-ocean war and I missed it? Right now half of the country is trying to work and there aren't enough jobs for them. It's 2015. What the hell was the point of the past century of technological improvement if we all still have to have jobs our whole adult lives?
  - spotman 11y ago
    Agreed. more and more jobs are being automated and going away. Both in big ways and smaller ones. Heck sometimes as a programmer I have bad feelings about making things more efficient for humans, thereby requiring less of them. In my career there has many projects that fit that description. This is a complex idea, not without a large amount of challenges. However as a citizen and programmer, I would rather see more things being automated, and instead of more unemployment, people could either not work, or find work they are more passionate about. Just imagine if everyone that decided they want to not sit around all day, actually was working on something they were passionate about.
    - bandrami 11y ago
      That's how I feel too. If there were a social dividend (which I think is a better term for a minimum income), then people would find a lot more useful things to do with their time than either the market or a government program could find. I just completely don't buy the "people wouldn't work" thing. Yes, you'd probably have to pay some menial work more to motivate people to do it (or, even better, spur technological development to automate that), but that's a feature, not a bug.
IanCal 11y ago
I don't think we can claim that distributing money amongst people would definitely decrease spending on goods and services.
- nightski 11y ago
  GDP is value added. If there are less people working, I'd hope that value added would go down.
  - learc83 11y ago
    What about a situation where fewer people are working more productively?
    - nightski 11y ago
      Wouldn't that be orthogonal to basic income? i.e. You'd get that anyways so it would cancel out?
      - learc83 11y ago
        No way to know without looking at the data, but I can see a few methods where a basic income would increase productivity. One talked about in the article is that workers who choose to work, tend to work harder/more productively than workers who are forced. The whole point is almost moot though because the data in basic income experiments show that employment rates tend to go up not down.
hurin 11y ago
If you'd actually bothered to read the article you'd see that in the pilot project productivity went up. Unemployment dropped as well, from 60% to 45%, and there was a 29% increase in average earned income, excluding the basic income grant. Also from the wiki link posted by OP: As published in a recent report, "All those dollars low-wage workers spend create an economic ripple effec. Every extra dollar going into the pockets of low-wage workers, standard economic multiplier models tell us, adds about $1.21 to the national economy. Every extra dollar going into the pockets of a high-income American, by contrast, only adds about 39 cents to the GDP." There could be statistics that support the argument that you are making as well but I don't think that: > "I'd have to imagine..." without any references to support your statement contribute anything meaningful to the discussion.
- deleted 11y ago
  [deleted]

vlasev 11y ago

Please take a look at the FAQ[1] on reddit and perhaps at this article[2] about calculating whether USA can afford BI. [1]: http://en.reddit.com/r/basicincome/wiki/index http://en.reddit.com/r/basicincome/wiki/index [2]: http://www.economonitor.com/dolanecon/2014/01/13/could-we-afford-a-universal-basic-income/ http://www.economonitor.com/dolanecon/2014/01/13/could-we-af...

conanbatt 11y ago

Depends on how that income gets taxed. At a certain level of income, the gains of basic income are lost to extra taxation. However you always know that if you get fired you have a safety net, so it provides value to you even if you get 0$ net effect.

IanCal 11y ago

That is a rather trivial analysis that assumes a system where everyone, regardless of income, got $12k more than they would otherwise. It would be easy to set a tax system such that people got $12k as a minimum, but those who earned (say) $20k received $6k and by $50k there was no increase. I'm not suggesting a curve with those figures, that is purely for an example.

deleted 11y ago

[deleted]

hypersoar 11y ago

First of all, you're only going to pay the adults. That eliminates about a quarter of the population. Second of all, you're still going to collect taxes, so many people will just have the income taxed back. Say, only people below median income end up keeping the money. This cuts the figure down to 1.44 trillion. This is still a lot (we currently spend about $850 billion on social security, which would presumably be replaced by basic income), but it's not unmanageable.

deleted 11y ago

[deleted]

rmc 11y ago

A lot of that money will be spent, going back into the economy.