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Finland will hand out cash to 2000 jobless people to test universal basic income

nytimes.com

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Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#131

Post by jnicholasp »

briandear wrote: post #96
exstudent2 wrote: post #83

Earlier quoted context omitted.

They don't even have to be raising children or volunteering to benefit society. As long as they spend the money that's given to them, the market benefits.

Not true. The deadweight lose from taxation results in less economic benefit than not taxing and redistributing the money. Keynesian economics doesn't work. Assuming the administrative cost of taxation is non-zero, that cost means that $500 given to someone cost someone else >$500. So we spend $500 + deadweight loss to 'gain' $500 in economic gain. So the benefit of giving that money must provide a gain greater than…

The 'deadweight' administrative cost is itself an economic benefit - it's money paid to some administrator, who will thus have extra money and will be able to return it to the market in turn. It just means that the $500 of benefits isn't actually $500, and doesn't just go the end recipient: it's actually $550 (or whatever) and goes to the end recipient as well as the administrators and other intermediaries who deliver the money to the end user. That extra money doesn't evaporate into the void.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#132

Post by lkbm »

weaksauce wrote: post #121
briandear wrote: post #88

Earlier quoted context omitted.

Explain to me why my tax dollars should pay for other people again? I am not sure I understand why my labor must pay for others against my wishes. If I want to donate to charity, I will. Taxes should be used to pay for shared resources (roads, police, military,) but paying other people's living expenses? No thanks. America has poor and unemployed, yet Democrats seem to have no problem with illegal immigration which r…

In addition to not having an unstable society with high crime: 1. Poor people on welfare wouldn't be dis-incentivized to work more. 2. It reduces the cost of those programs like welfare that cost a lot in bureaucracy for no gain. 3. Lower income people have money velocity that stimulates the rest of the economy. > Democrats seem to have no problem with illegal immigration which reduces the ability for those poor and…

> Charity has been shown to be less efficient than just giving money directly to poor people.

Can you provide sources for this? Also, what do you mean "efficient"? If you mean there's no overhead, sure, so long as you don't spend any time trying to determine where the need is and just hand cash to the homeless guy you see on the street, but I care about effectiveness, and that's very likely not going to be "give money to the guy on the street near my office".

GveDirectly is better than most charities (which is mostly just giving money to poor people, but is a charity that does it intelligently). Additionally, the Against Malaria Foundation probably has a higher effectiveness.

The problem with depending 100% on people giving to charity is not that it's worse than depending on them giving money to the poor. It's that it completely ignores the various externalities that can be corrected through taxes and government spending. Would the world be better off if we cut government spending in half and send that money to AMF, GiveDirectly, and similar programs? Sure. But would the world be better off if we just cut government spending and hoped rich people would become more altruistic? Probably not.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#133

Post by omash »

komodo wrote: post #45
JackFr wrote: post #19

If its only going to jobless people, not UBI. This is not a meaningless distinction -- one of the features of UBI is that it is universal . If this just goes to unemployed people we cannot see the change in behavior with people who are earning close to their reservation wage. Do they stop working? This is streamlined rebranded welfare. Not a paradigm shift.

Why don't we do a basic income lottery? - Anyone except previous winners can enter. - You can only enter once per drawing. - As the pool increases the payout does not, only the number of winners. - Winners get a basic income for life. - As another condition they agree to an amount of monitoring so that we can effectively study how they behave with the basic income. - This one would be hard, but you might have to be m…

I bet winning in a lottery feels a lot different to receiving your regular allowance the same as everyone else. I think this would affect behaviour.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#134

Post by aninhumer »

briandear wrote: post #82
ScottBurson wrote: post #61

Earlier quoted context omitted.

I'm not necessarily opposed to means-testing; for example, progressive income tax rates can be seen as a form of means-testing, and I think they're a good thing. What I care about is that the function from income earned to income (including subsidy) received be monotonic . Again, the income tax system (at least in the US) is carefully designed to have this property: when you make enough more money to move into a high…

That's still a disincentive: my effectively hourly rate decreases the more hours I work. Not sure how that's fair. A flat tax is the only fair tax. You make more, you pay more, but you aren't taking an effective pay cut per hour based on simply working more.

Except no one gets to higher rate tax by working more hours. They get there by working approximately the same hours and being paid more for them. So they're not "taking a pay cut per hour", they're just not getting as much benefit from raising their rates as they would otherwise.

No one is going to refuse a salary bump because it will increase their marginal tax rate.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#135

Post by velodrome »

ScottBurson wrote: post #5

Jobless people generally cannot earn additional income while collecting unemployment benefits or they risk losing that assistance. Worst. Idea. Ever. I know -- it's a common feature of income support systems, including here in the US. I don't know whether UBI is going to prove workable or not. But even if it doesn't, if we could just redesign the systems we do have so they never give recipients a disincentive to work…

https://en.wikipedia.org/wiki/Negative_income_tax

Negative income tax (more emphasis) + basic income (less emphasis) would be a better system. A negative income tax would encourage people to work. Basic income by itself may just remove some barriers to working but may not result in a change (basic income > costs).

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#136

Post by lastyearman »

sampo wrote: post #57
noonespecial wrote: post #11

>It will give them benefits automatically, absent bureaucratic hassle and minus penalties for amassing extra income. That last part is huge. A disincentive to work by cancelling benefits is a feature of nearly every current system. It is extremely important that someone test a system without this in it to see how a people react. This looks like a very important test for the viability of UBI.

> A disincentive to work by cancelling benefits is a feature of nearly every current system. It is extremely important that someone test a system without this in it to see how a people react. One example we can look at are university students in Finland. They get 340€ per month student benefit plus €200 student rent support, a total of 540€ per month. This student benefit is not decreased as long as a student earns l…

Except you can just barely live on student benefit. Either you take debt or work, so I don't think the two can be compared.

For me I was bumping on the limits while on receiving student benefit, so it made no sense for me to work any more hours than I did. Had I worked any more, the pay would have been effectively zero, which is crazy in my opinion.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#137

Post by cmdrfred »

aninhumer wrote: post #134
briandear wrote: post #82

Earlier quoted context omitted.

That's still a disincentive: my effectively hourly rate decreases the more hours I work. Not sure how that's fair. A flat tax is the only fair tax. You make more, you pay more, but you aren't taking an effective pay cut per hour based on simply working more.

Except no one gets to higher rate tax by working more hours. They get there by working approximately the same hours and being paid more for them. So they're not "taking a pay cut per hour", they're just not getting as much benefit from raising their rates as they would otherwise. No one is going to refuse a salary bump because it will increase their marginal tax rate.

If you made $32.05 dollars per hour for 30 hours a week (50K a year) and paid 10% tax on those dollars, you would earn an effective after tax hourly rate of $28.84. If all dollars earned after 50K were then taxed at 15%, your effective after tax hourly rate for working more than 30 hours would be $27.24. A one dollar and six cent reduction. I believe the purpose of time and a half overtime is partly to correct this problem.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#138

Post by readittwice »

thwarted wrote: post #84
readittwice wrote: post #12

Earlier quoted context omitted.

So true, thanks for writing that! Don't give them the money just for two years, but guarantee them the money over their whole life and you will see vastly different results. Another "problem" with this kind of study is that they are giving money only to unemployed people. Because it would be also interesting to see what people with jobs would do. I suspect a lot of people would switch from full-time to part-time jobs…

Don't give them the money just for two years, but guarantee them the money over their whole life and you will see vastly different results. Since people born into wealth are "guaranteed money over their whole life", can't we study what they do with their life compared to what people who are not born into money do with their life? How or how not would this kind of study produce meaningful, legitimate results? Another…

That study wants to shed some light on whether UBI is viable or not, but limits UBI for two years. I suppose people are then less inclined to change anything in there life and just see UBI as a nice, not-life-changing win in the lottery. People are not behaving as with a "real" UBI. Can we agree on that?

There is some aspect of this kind of experiment/study to find out how individuals would perform if they didn't have the guaranteed income in the past but then suddenly do, but that's only meaningful for the transitional generation.

IMHO you can't ignore this that easily. When more people are quitting their jobs or switch to part-time jobs from full-time jobs due to UBI, the government loses taxes but now needs to pay for UBI. This is super-important to see if this whole thing is financially feasible.

IIUC you are arguing that people that grew up with UBI would behave differently compared to people that just switched to UBI? To be honest I don't feel this particular convincing, why should this be the case? There probably isn't any data on it either. Even if it would, the government/state still has to get through the transition period. One could with the same right claim that future generations are less inclined to work/educate than the transitional generation and thus make financing UBI even more difficult.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#139

Post by omash »

muse900 wrote: post #97

What is that gonna achieve exactly? Aren't prices gonna just inflate upwards and things become less affordable? If you just pay everyone X amount of money every month for whatever, it just means that in order to produce something you'll need to pay someone a lot more than that X amount in order to work and produce it and also it means that that item is gonna increase massively in cost in order to pay the items produc…

> in order to produce something you'll need to pay someone a lot more

At some point it becomes worth automating the work and that means no rising pay and fewer humans having to do jobs they dislike.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#140

Post by thwarted »

kLeeIsDead wrote: post #115
thwarted wrote: post #84

Earlier quoted context omitted.

Don't give them the money just for two years, but guarantee them the money over their whole life and you will see vastly different results. Since people born into wealth are "guaranteed money over their whole life", can't we study what they do with their life compared to what people who are not born into money do with their life? How or how not would this kind of study produce meaningful, legitimate results? Another…

People born into wealth aren't guaranteed that. After all, it's their parents' money, not theirs.

While this is true, it is the closest thing that already exists to a basic income, so it should be the first place to go for material to study before/while setting up a more controlled experiment (assuming a highly controlled, completely reproducible experiment actually can be set up in social/economic sciences).

Even in a UBI setup, it's the government's/public's money, not the recipient's, right up until the point where it changes hands. A wealthy family can (and often does) make just as strong of a guarantee for a stipend as a government can.

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