Universal Basic Income Is Superior to a $15 Minimum Wage (2019)

Let’s say you are at a family reunion and want to play a game of baseball with everyone. Is it “fair” to have the same rules for the 6 year old child and the 25 year old who used to play on his high school baseball team? More likely you would tweak the rules a little or pitch a little slower to the kid so everyone has fun and can fully participate.

Sometimes fairness means leveling the playing field so everyone can compete equally.

>If your landlord raises your rent by $500, are you not in the same position as you were before without the UBI?

If your landlord raises your rent then it will be more profitable to build housing which then allows construction companies to employ more workers. Of course, the problem with this is that some cities have banned new construction but that's a problem with the specific city, not with the idea itself.

Yes, it would drive inflation and moderate inflation drives jobs growth so everyone would benefit, except those whose net worth is invested in unproductive companies or assets.

Negative income tax has the same problem as the insane creep in income tax allowance the UK has seen since 2010, it’s now double than it was a decade ago and it accounts essentially for the entire growth in the take home pay in the UK over the past decade.

Negative income tax and yearly increases in tax allowances shift the burden on pay increases from the employer to the government and thus to the tax payer.

In the UK employers had no incentive to increase pay when the government increases the tax free allowance year after year, and employees seeing that their take home increases don’t really care where it comes form especially in the lower income brackets.

I personally don’t like UBI either because it’s essentially a transfer of wealth from the middle to the top.

I would much rather see a universal basic services program that guarantees universal free at the point of use access to services such as housing, healthcare and education provided directly by a government body or non for profit enterprises.

>I would much rather see a universal basic services program that guarantees universal free at the point of use access to services such as housing, healthcare and education provided directly by a government body or non for profit enterprises.

I agree that creating such a program creates political incentives for increasing it over time in excess of inflation. That's a real cost that needs to be weighed against alternative approaches.

But consider what happens when you make services "free at the point of use access". The price no longer serves the purpose of summarizing and transmitting information about the good or service. The consumer of the "free" good no longer gets any information about the scarcity or quality of the resource, and the provider no longer gets any information about the demand for their good and consequently how much to produce. Prices are the primary mechanism for coordinating decisions efficiently by summarizing actionable decision making information and economizing on expensive knowledge acquisition, interpretation, and communication costs.

It should hardly be a surprise when demand and consumption of those goods and services with a zero price goes up, and supply and quality goes down. Now suddenly you need to grow large bureaucracies for rationing the resources which will inevitably miss the mark of serving disparate individual needs as efficiently as the price mechanism could in a free market.

It's the classic recipe for degrading quality and creating shortages. I believe it's much more desirable for housing, healthcare, and education to be served by the market precisely because of how important they are to people. Putting cash into people's pockets directly has a much smaller distortive effect on market operations, and allows people to express their preferences in allowing them to vote with their dollars, as opposed to "free at point of service / consumption" goods and services.

It's no accident that UBI was proposed by Friedrich Hayek, and the Negative Income Tax by Milton Friedman. You could hardly accuse either of being in favor of wealth transfers, but they both understood the profound negative consequences of distorting prices, which essentially is lying to economic decision makers about the costs and benefits of taking certain actions, resulting in inevitably less efficient allocation of scarce resources that could possibly have been used more productively elsewhere in the economy.

I'm in favor of instituting demurrage currency, which has the feature of being unable to hide money from taxes.