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Why Should We Support the Idea of an Unconditional Basic Income?

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Re: Why Should We Support the Idea of an Unconditional Basic Income?

#131

Post by MCRed »

SwellJoe wrote: post #80
ekianjo wrote: post #78

Earlier quoted context omitted.

> The increased cost for extending that type of benefit to everyone, while removing the bureaucracy of maintaining the existing programs (eligibility compliance and case workers, etc.), is actually not as dramatic as it first seems. You are missing one part, though. If you start giving cash for everyone, it's very likely this will result in raising prices for all commodities. And there you go for a another downward s…

"Ever heard of minimum wage? Yeah, that one did not work as expected either (and created massive unemployment when the threshold was set too high as well)." Citation needed. Your assertions do not match my understanding of the facts about the result of the minimum wage. (Though I would have agreed with you ten years ago, a better understanding of it has altered my opinion significantly.)

When you raise the minimum wage, you don't change any of the other aspects of the business affected by it. So, say you have 15 employees making $10 an hour to keep your company afloat. (Just to keep things simple ,this is about the logic of it.) Now the minimum wage goes up to $15. What are you going to do? You would be losing money with a %50 increase in your costs. Most likely what you will do is lay off 5 employees (The weakest 5) and keep the remaining 10-- but now they have to do the work of 15. Remember the alternative is closing the business and they all lose their jobs. Plus if some don't like the workload there are many people who just got laid off (you laid off 5) who would happily take their jobs.

When you set a minimum wage- or engage in any kind of price fixing- you distort the market and historically that has always hurt the poorest people the most.

Looked at another way, minimum wage is the wage below which you will be unemployed rather than allowed to work.

A minimum wage is a penalty that keeps workers unemployed if they don't have sufficient marketable skills to overcome it.

Imagine if the minimum wage was $100 an hour. How many of us would be unemployed?

People seem to imagine that there's just a lot of money out there and the only reason that anyone might not have enough is that people are being greedy. This is zero sum theory, and it is not true in economics. It's nice to imagine that you're "foreign the rich people to give up the money they are hoarding"... but you're hitting businesses that are on the margins. What's the average margin for a business? IT's not the %50 that intel enjoys-- a grocery store maybe makes %3.

What do you think a business that is clearing %3 net is going to do when you increase labor costs by %50? (in this example.)

Edit: You can disagree with my position, or even find an error in my argument, but I'm tired of spending time explaining things and giving examples like this only to be downvoted for ideological reasons... constantly. Is a circle jerk what you really want HN to be? I don't think any rational person can say that my comment wasn't a quality explanation for the position.

Re: Why Should We Support the Idea of an Unconditional Basic Income?

#132

Post by learc83 »

tinco wrote: post #122
alkonaut wrote: post #101

Earlier quoted context omitted.

> it's very likely this will result in raising prices for all commodities. Why is that? There wouldn't be any more money in circulation. It's not like a state would print money to supply basic income. It would have to be tax funded, so most likely other public spending would have to be reduced, and taxes would be increased. If the basic income represents a progressive transfer from high-income to low-income (most lik…

Although I really like the idea of minimum income, elkanjos point has to be addressed. Just yesterday there was an article about trailer parks ownership. They will simply increase rent to what their clientele can afford. In the end you'll still be filling the deep pockets. Perhaps instead of providing minimum income or in addition to minimum income government should just compete in basic needs market. I.e. government…

The lack of competition that allowed the trailer park owners to do that was caused by local government restrictions on building new trailer parks. Local governments artificially restricting the supply of affordable housing isn't necessarily going to be fixed by a basic income.

However, in a normal market increased demand will drive up the price, and developers will move in to build more housing. The increase in supply will then drive down prices until they reach an equilibrium.

Re: Why Should We Support the Idea of an Unconditional Basic Income?

#133

Post by [deleted] »

SwellJoe wrote: post #106
deciplex wrote: post #93

Earlier quoted context omitted.

I agree with you, but how do you propose going about giving this underclass the leverage they need to make this happen? Short of encouraging them to kill rich people of course, which anyway would get you killed or neutralized long before you had any hope of success. Our system is simply not set up to reliably make changes for the benefit of people with no leverage over it in the first place.

I have no idea. Systems of oppression do tend to do whatever it takes to maintain the status quo.

[deleted]

Re: Why Should We Support the Idea of an Unconditional Basic Income?

#134

Post by vl »

SwellJoe wrote: post #62

If you'd told me ten years ago I would ever support a basic income, I would have laughed. My thought would have been, "People getting paid without doing anything? Absurd!" But, in the past few years I've thoroughly changed my mind on this, and a number of other fronts. I now fully support a basic income (though I think a debate needs to happen about how much that basic income ought to be and how it ought to be funded…

I supported guaranteed basic income as well, but then I read this article and it suggested to tax me more. I'm firmly in tax less, not more camp.

Re: Why Should We Support the Idea of an Unconditional Basic Income?

#135

Post by MCRed »

conanbatt wrote: post #125
ekianjo wrote: post #105

Earlier quoted context omitted.

> Why is that? Because the market adjust prices based on an equilibrium between what people usually earn and how much they are willing to spend. If you increase the money supply (not talking about nation-wide, but individual base) then there is nothing preventing manufacturers from raising their prices up and take advantage of it, while still being fair ("after all, everyone has minimum income now so they should be a…

Pricing is decided mostly by supply and demand not by will. Your rent doesnt increase when you get a payraise and your landlord finds out about it. Food is a very competitive industry, and unless you are suggesting that to keep it balanced we need some people to not eat, its unlikely that people spending more money on food will raise food prices to a point where it is unattainable. I dont get this "prices go up" argu…

Yes, it's called demand. And inflation is an example of it, you increase the money supply, then there are more dollars chasing a given commodity-- more demand for that commodity per dollar, or looked at the other way, more supply of dollars relate to that commodity.

If we paid for this basic income via inflation -- increasing the money supply-- the result is that, for instance, food would go up. Not so much that it is "unattainable" as you point out, but it will go up a bit more than the net effect of the basic income, wiping it out, plus a bit more due to inefficiencies that always happen when you try to distort the market.

Re: Why Should We Support the Idea of an Unconditional Basic Income?

#136

Post by alkonaut »

tinco wrote: post #122
alkonaut wrote: post #101

Earlier quoted context omitted.

> it's very likely this will result in raising prices for all commodities. Why is that? There wouldn't be any more money in circulation. It's not like a state would print money to supply basic income. It would have to be tax funded, so most likely other public spending would have to be reduced, and taxes would be increased. If the basic income represents a progressive transfer from high-income to low-income (most lik…

Although I really like the idea of minimum income, elkanjos point has to be addressed. Just yesterday there was an article about trailer parks ownership. They will simply increase rent to what their clientele can afford. In the end you'll still be filling the deep pockets. Perhaps instead of providing minimum income or in addition to minimum income government should just compete in basic needs market. I.e. government…

> They will simply increase rent to what their clientele can afford

I may be crazy but wouldn't one of the ideas of basic income be that, for example, more people would afford to not live in freaking trailer parks? Depending on how it was funded, there should be less demand for large houses and more demand for small houses and apartments, meaning more such housing should be built (thereby reducing the demand for trailer parks).

Re: Why Should We Support the Idea of an Unconditional Basic Income?

#137

Post by MCRed »

nothrabannosir wrote: post #127
ekianjo wrote: post #105

Earlier quoted context omitted.

> Why is that? Because the market adjust prices based on an equilibrium between what people usually earn and how much they are willing to spend. If you increase the money supply (not talking about nation-wide, but individual base) then there is nothing preventing manufacturers from raising their prices up and take advantage of it, while still being fair ("after all, everyone has minimum income now so they should be a…

there is nothing preventing manufacturers from raising their prices up and take advantage of it, while still being fair Yes, there is: Competition. Bread is now $1 a loaf. If everyone starts selling bread at $2 a loaf, and I can keep it at $1, I'll be making bank. Sure, for $0.01 to $0.02, that doesn't count. But UBI is not a lot of money; $1k / month, without any other welfare programs. It's not like everyone wins t…

The competition will not need to undercut to make bank... there is increased demand relative to supply, causing prices to rise, and the competition will like the higher prices as well.

If premium breadco sells for $2.10 a loaf now and generic bread for $1.89, then possibly the new equilibrium will result in prices of $3.10 and $2.89. There's competition... but the new price has gone up.

If generic bread kept its old price the demand would be so high that they couldn't supply it--- AND their costs are going to go up as well so they wouldn't be able to keep their old price anyway.

We've seen this over and over as the government has inflated the dollar over the years.

In fact, I think the argument could be made that the entire lack of recovery in the past 8 years is due to the level of inflation wiping out and gains from winding down the housing bubble.

Re: Why Should We Support the Idea of an Unconditional Basic Income?

#138

Post by learc83 »

ekianjo wrote: post #78
SwellJoe wrote: post #62

If you'd told me ten years ago I would ever support a basic income, I would have laughed. My thought would have been, "People getting paid without doing anything? Absurd!" But, in the past few years I've thoroughly changed my mind on this, and a number of other fronts. I now fully support a basic income (though I think a debate needs to happen about how much that basic income ought to be and how it ought to be funded…

> The increased cost for extending that type of benefit to everyone, while removing the bureaucracy of maintaining the existing programs (eligibility compliance and case workers, etc.), is actually not as dramatic as it first seems. You are missing one part, though. If you start giving cash for everyone, it's very likely this will result in raising prices for all commodities. And there you go for a another downward s…

You're forgetting about competition.

Let's say that every low wage worker becomes suddenly 10% more productive so they start making 10% more money. Would prices all suddenly rise 10% so that none of the workers would see any benefit?

This isn't the same as inflation, and will be handled by competitive forces in the market.

Re: Why Should We Support the Idea of an Unconditional Basic Income?

#139

Post by moonchrome »

pg314 wrote: post #126
moonchrome wrote: post #83

Earlier quoted context omitted.

One problem of minimum income is that it will make it very expensive to find people willing to do "dirty" work. Unless you think robots will take care of nursing (which is grueling and dirty when dealing with disabled people and it doesn't pay well), farm work (they already have trouble finding workers), cleaning, etc. Automation isn't nowhere near to eliminating those and I'm guessing it would increase labor costs v…

Maybe the "dirty" work should be better paid. It is convenient to have a large supply of workers that have to take any work to survive, so the "dirty" work gets done cheaply, but that doesn't make it right.

It depends on how you look at it I guess - a large supply of low skilled workers is what allows you to have access to many things you take for granted and removing that means that a lot of products and services aren't going to be accessible to general population.

Overall it would lower the standard of living for anyone not at the bottom of income bracket and not change much for the top.

Re: Why Should We Support the Idea of an Unconditional Basic Income?

#140

Post by SwellJoe »

tinco wrote: post #122
alkonaut wrote: post #101

Earlier quoted context omitted.

> it's very likely this will result in raising prices for all commodities. Why is that? There wouldn't be any more money in circulation. It's not like a state would print money to supply basic income. It would have to be tax funded, so most likely other public spending would have to be reduced, and taxes would be increased. If the basic income represents a progressive transfer from high-income to low-income (most lik…

Although I really like the idea of minimum income, elkanjos point has to be addressed. Just yesterday there was an article about trailer parks ownership. They will simply increase rent to what their clientele can afford. In the end you'll still be filling the deep pockets. Perhaps instead of providing minimum income or in addition to minimum income government should just compete in basic needs market. I.e. government…

"Although I really like the idea of minimum income, elkanjos point has to be addressed. Just yesterday there was an article about trailer parks ownership. They will simply increase rent to what their clientele can afford."

Actually, I think that's one of the arguments for a basic income. It will lift some of those people out of the class that is subject to the whims of slumlords and trailer park owners, decreasing demand for the lowest tier of housing.

And, there are many other reasons for the trailer park situation being what it is (I lived in a trailer park for a little over a year in my motorhome before moving back into a fixed house; I'm actually more familiar with that world than most folks, certainly moreso than most folks on HN). The article you've mentioned even covered a lot of them. There is a poverty trap in the US, and once you're in it, there are a lot of factors that work to keep you in it. A basic income would lift a large number of working class people out of it.

I do think there needs to be conversations, both nationally and at the municipal level, about real property and the rent economy, particularly in major cities. Things are currently highly skewed (possibly dangerously skewed) in favor of capital owners, such that in many major cities, even people who still have decent jobs may have trouble affording home ownership or event renting.

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