Basic income in Finland did not lead to finding work, researchers said • Hacker News Board

Re: Basic income in Finland did not lead to finding work, researchers said

#261

Post by manicdee » Fri, Feb 08, 2019, 9:40 PM UTC

mises wrote: post #48

I still see some big issues with universal basic income, and would appreciate one of its supporters responding to some of them: Cost. $3.8 trillion by many estimates. That's nearly 20% of America's GDP. How is it possible to pull this much money out of the American economy without crashing it? Scope. I am of the opinion that one of the beauties of federalism is that policies can be tested first at the state level bef…

> How is it possible to pull this much money out of the American economy without crashing it?

UBI actually injects money into the economy. Accompanying UBI would be reducing minimum wage to zero, managing inflation by increasing income taxes in higher brackets, and removing deductibles so that more tax is collected. By reducing minimum wages you encourage people to start up new companies — with no salaries to pay, you reduce startup costs significantly (there are still costs such as insurance, legal filings).

The whole point of UBI is to pay everyone the same guaranteed amount. If you start scaling back as income rises, what you are actually doing is a different scheme called Negative Income Tax. UBI basically pushes any wages into the taxable brackets immediately.

A national government would institute a UBI to encourage a mobile workforce, since reducing the cost of switching towns reduces the friction of moving to find better work. A UBI also reduces the level of exploitation of workers, so there would be less workplace induced chronic injury which is a net drain on the country. There will also be improved mental health as people aren't forced to work in dead end jobs just to make ends meet.

For the USA specifically, UBI would need to be accompanied by reformation of the health care system, basically completing the implementation of the Affordable Care Act so that health insurance is actually affordable, and not bound to employment. The USA will also need to implement similar systems of regulation of the cost of health care services and products.

Re: Basic income in Finland did not lead to finding work, researchers said

#262

Post by ThomPete » Fri, Feb 08, 2019, 9:45 PM UTC

cromulent wrote: post #205

dragonwriter wrote: post #189

Earlier quoted context omitted.

> Can I do a few hours work for this guy without losing my unemployment? UBI doesn't really make sense as a replacement for unemployment insurance, unless benefits are really high. If you replace UI with a poverty-support-level UBI, it makes unemployment a lot worse for anyone but the lowest-paid workers. UBI might reduce the perceived need for public funding of additional unemployment benefits in extended downturns…

Yeah, your point is strongly supported by this experiment. The majority of the UBI recipient subjects switched to standard unemployment, which was of greater value.

Which is why ubi mostly make sense if there arent any jobs left not if there still is a substantial jobmarket.

Re: Basic income in Finland did not lead to finding work, researchers said

#263

Post by njarboe » Fri, Feb 08, 2019, 9:47 PM UTC

Frondo wrote: post #236

njarboe wrote: post #142

Earlier quoted context omitted.

Do people really want to have all of their support depend on the government? As an American I know people that don't and even reject government paid food stamps and healthcare, although they are poor enough to qualify for them. I don't think it is very psychologically healthy to be so dependent on things out of your control. A better system would be some system where people can earn a large chunk of capital that basi…

We're all entirely dependent one things outside our control, and it's a worldview that's romanticized to the point of silliness to say anything else. As for the land grant you're talking about, that's a huge, huge give-away right there; and, I'd note, in your hypothetical, you already inverted the sequence of events (be given land => you keep it, work hard => you get $250k). All UBI does is recognize that, given how…

"All UBI does"

UBI is a very specific solution to a very real and difficult problem. I think other solutions to the problem of quick technical advances would be better, that's all. The sequence is , you are given a resource for a period of time, see if you can use it well, if you do you get to keep it. Not sure what a good modern equivalent would be but such a scheme seems like a much better mode to the future than a UBI. Or maybe a combination of things.

Re: Basic income in Finland did not lead to finding work, researchers said

#264

Post by ThomPete » Fri, Feb 08, 2019, 9:48 PM UTC

snarf21 wrote: post #220

rixrax wrote: post #89

Earlier quoted context omitted.

And while doing that, cut the bureaucracy and stigma of having to continuously apply for welfare, food stamps etc. Not that this would offsets the cost of basic income. If we picture a dystopian future where due to the rise of automation, increases in population, lack of education and ability, ~90% of people cannot realistically work in a productive jobs, I think it's a good time to experiment now what and how to kee…

Don't forget that all that bureaucracy is the source of thousands of good paying jobs that now also are worse off even when they get added to UBI. Also, don't forget that now that they have less money, their collective reduced spending means the business they used to patron will have to lay people off. Now those people also need UBI. This doesn't spiral to infinity but their is a huge ripple effect.

The overhead for condional basic income is huge, if most things are done by machine the cost of those will drop quite substantially whichmeans you need much less to get by.

Re: Basic income in Finland did not lead to finding work, researchers said

#265

Post by chillacy » Fri, Feb 08, 2019, 9:51 PM UTC

sakisv wrote: post #116

I think the idea of UBI as it is, makes it an easy target for comments that characterize people as "freeloaders" or trading "something" for "nothing". The problem is that the UBI seems to be coming from the taxes that other people, which may be a good first iteration to try something out, but it will fail in scale. I will assume that the aim of these experiments is to find a way to provide for an ever increasing numb…

I believe some states already do something like a UBI: saudi arabia and alaska both pay out dividends from resource extraction.

Re: Basic income in Finland did not lead to finding work, researchers said

#266

Post by njarboe » Fri, Feb 08, 2019, 9:52 PM UTC

lazyasciiart wrote: post #164

njarboe wrote: post #142

Earlier quoted context omitted.

Do people really want to have all of their support depend on the government? As an American I know people that don't and even reject government paid food stamps and healthcare, although they are poor enough to qualify for them. I don't think it is very psychologically healthy to be so dependent on things out of your control. A better system would be some system where people can earn a large chunk of capital that basi…

I don't think it's psychologically healthy to deny that you are incredibly dependent on things outside your control already.

Sure. Only a psychopath would think such a thing. Thinking UBI is not a good idea is not something only psychopaths might believe.

Re: Basic income in Finland did not lead to finding work, researchers said

#267

Post by dragonwriter » Fri, Feb 08, 2019, 9:52 PM UTC

manicdee wrote: post #261

mises wrote: post #48

I still see some big issues with universal basic income, and would appreciate one of its supporters responding to some of them: Cost. $3.8 trillion by many estimates. That's nearly 20% of America's GDP. How is it possible to pull this much money out of the American economy without crashing it? Scope. I am of the opinion that one of the beauties of federalism is that policies can be tested first at the state level bef…

> How is it possible to pull this much money out of the American economy without crashing it? UBI actually injects money into the economy. Accompanying UBI would be reducing minimum wage to zero, managing inflation by increasing income taxes in higher brackets, and removing deductibles so that more tax is collected. By reducing minimum wages you encourage people to start up new companies — with no salaries to pay, yo…

> UBI actually injects money into the economy.

Not if it is tax funded (EDIT: But, even then, it doesn't pull money out of the economy); it may, however, increase the domestic velocity of money, which has a similar effect to injecting money.

> Accompanying UBI would be reducing minimum wage to zero

Maybe, maybe not. I think it would be more sensible to reduce minimum wage to it's non-UBI target minus (annual UBI/2000hrs); with a $8000 UBI (about right for poverty support given median household size) and a $15 non-UBI minimum wage target, that would be an $11 minimum wage (with the current $7.25 minimum wage as target, it would be a $3.25 minimum wage.)

> managing inflation by increasing income taxes in higher brackets,

Using fiscal policy to manage inflation is probably not a great idea; let the Fed do that with monetary policy, and if you raise taxes (whether by raising rates in higher brackets or by taxing capital gains the same as labor income or both), do it for revenue not inflation control.

Re: Basic income in Finland did not lead to finding work, researchers said

#268

Post by stcredzero » Fri, Feb 08, 2019, 9:53 PM UTC

LarryDarrell wrote: post #157

stcredzero wrote: post #140

Earlier quoted context omitted.

With few exceptions, all societies have Pareto distributions. All societies (of any decent size) are also subject to unrest from relative inequality. All successful societies also managed to engage in some form of distribution of power and some form of redistribution of wealth. Distribution of power: https://www.youtube.com/watch?v=rStL7niR7gs Perception of relative wealth: https://www.youtube.com/watch?v=M3XYHPAwBzE…

Regarding activity in the US... Do you think it's because we have no cultural knowledge/history of peasants vs the aristocracy? I find that Americans are very confused when discussing class issues and any discussion usually devolves into racism or simple consumerist preferences.

Regarding activity in the US... Do you think it's because we have no cultural knowledge/history of peasants vs the aristocracy?

We very much have had class divisions right from the get-go. Class distinctions were codified into voting rights!

I find that Americans are very confused when discussing class issues and any discussion usually devolves into racism or simple consumerist preferences.

1) There is a faction in US society which is actually invested in the sabotage of public discourse. Devolving discussions into terms which have historically caused hate and violence is a very effective tool for doing this. So long as American society has public discourse and the norms and institutions that make us free, US society is strong and unassailable. There is a faction that wants to roll the dice and ruin the qualities and practices which make society great, in order to see if they come out on top.

2) A lot of culture has always expressed itself in material culture preferences. We're just a lot more up-front about it today, and so much more of our culture is wound up in it.

Re: Basic income in Finland did not lead to finding work, researchers said

#269

Post by manicdee » Fri, Feb 08, 2019, 9:54 PM UTC

cheeseomlit wrote: post #178

dragonwriter wrote: post #153

Earlier quoted context omitted.

> There's still no answer to questions like "what if it starts to entrench a permanent underclass and make inter-generational wealth worse, as people who stop working bear a generation of people who have never worked, and they bear children, etc". Why would reducing disincentives to work, as compared to means-tested welfare, rationally be expected to have anything like that effect?

The main incentive to work is that you need to work to make a living. If the government hands you everything you need without working that is a massive disincentive to work

> The main incentive to work is that you need to work to make a living.

No. The main incentive to work is to have something meaningful to do with your time. Every experiment with UBI has shown that — given guaranteed support income — people are generally happier (or less stressed) and have a greater incentive to find work because the disincentive of reporting job-searching efforts is removed.

In addition, under a UBI everyone who has a paying job will have more disposable income than people who don't have a paying job. So while UBI will cover rent and food, if you want a nicer house or other trappings of luxury you'll need a paying job to find the extra money.

Nobody is going to be setting up a real estate empire or discovering the cure for cancer on UBI.

Another thing UBI will achieve is allowing people to move jobs without fear of being trapped in poverty. They won't settle for a low satisfaction, low pay job and will move to optimise their personal benefit.

Finally: UBI is not about "handing you everything you need." Universal Basic Income is there to provide for the basics: food & shelter. That's it. It's not supposed to replace an average wage, it's supposed to provide the minimum cost of living.

Re: Basic income in Finland did not lead to finding work, researchers said

#270

Post by mindslight » Fri, Feb 08, 2019, 9:56 PM UTC

AnthonyMouse wrote: post #239

mindslight wrote: post #219

Earlier quoted context omitted.

Saying that inflation is low is referring to a broken metric. Inflation in housing, healthcare, and education have significantly contributed to the current problem in the US. https://news.ycombinator.com/item?id=19106964 I would say the root problem is all that debt , specifically the ongoing costs of servicing the debt. Staying alive does intrinsically require ongoing expenses for food, energy, shelter upkeep, perso…

There is a very specific reason housing, healthcare and education costs are so high -- the government keeps subsidizing them in particular. Mortgage interest tax deduction, exclusion from capital gains tax, employer health insurance deduction, ACA subsidies, federal student loan interest deduction and subsidies, etc. The problem with all of this is that it doesn't cause general inflation, it only raises the cost of t…

I agree with much of what you said including that costs are high due to government subsidies - I just think that the primary subsidy is keeping general interest rates low. That mortgage interest tax deduction really just further reduces the the effective interest rate for home loans. The primary subsidy isn't even acknowledged as an explicit policy, but obscured by describing it as a mechanical application of a purported economic consensus.

I guess my point of disagreement is that since the low interest subsidy is basically turning any mildly dense area into a rent treadmill, then why isn't the goal to directly address that as the problem? The increasing financialization of most people's lives (pet insurance!!) seems like a much more pressing issue than trying to indirectly prop up rural economy.