Universal Basic Income Is Superior to a $15 Minimum Wage (2019) • Hacker News Board

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

#41

Post by BurritoAlPastor » Sat, Jan 30, 2021, 7:47 PM UTC

jacob2484 wrote: post #12

sdenton4 wrote: post #7

Earlier quoted context omitted.

Who is 'you?' Capitalism is a social good to the extent that it solves problems and makes people's lives better. But capitalism only solves the problems of people with money: their cash is THE incentive for others to figure out how to solve their problems. If people with problems have no money, they effectively create no demand. Add wealth to the bottom tier of society and we'll generate generate demand to solve prob…

Using post WW2 times as a basis for any argument is wrong. Post WW2, there was no China as a superpower and no globalization. If businesses are forced to pay more for low-skill labor, they can do so easily by taking the jobs elsewhere, which was not the case (or at least as easily done) after WW2.

Offshoring cheap labor already happened everywhere possible. Domestic "low-skill" labor today is overwhelmingly in restaurants, hotels, and retail. I assure you that Taco Bell is not making bean burritos on-site because it's the cheapest place to do so.

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

#42

Post by MaxBarraclough » Sat, Jan 30, 2021, 7:47 PM UTC

azey47 wrote: post #5

I agree UBI is better than a minimum wage, but it seems a Negative Income Tax as advocated for by Milton Friedman would be still better. It would have the desired effect of supporting the poor with guaranteed income (something minimum wage can’t do because of the labor shortage it creates, especially amongst low-skilled employees), but do so a lot more cost effectively than UBI since you wouldn’t be guaranteeing paym…

> do so a lot more cost effectively than UBI since you wouldn’t be guaranteeing payments to people who don’t need them

One of the arguments for UBI is that, as it makes no effort whatsoever to exclude anyone, it is enormously simpler than the alternatives, both in terms of people reasoning about their taxes and in terms of implementing it.

Of course, it would be UBI + lots of other tax codes, but that's meant to be part of the point.

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

#43

Post by RangerScience » Sat, Jan 30, 2021, 7:48 PM UTC

bhupy wrote: post #29

hehehaha wrote: post #25

Earlier quoted context omitted.

With UBI, people will be more selective in their job search. With negative tax rate not so much since you would need to work in order to benefit. I am not a fan of them because they will simply push out cost of living and the poor will be back in same relative economic disadvantage. The only realistic solution I see is free education even into adult age.

I'd argue that this is a feature, and not a bug. It gives the lower-income worker leverage to walk away from a bad job without fear of starvation.

Yup. If all jobs have to compete with the null-job, then there will be no jobs worse than just getting up to your own devices.

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

#44

Post by FrozenVoid » Sat, Jan 30, 2021, 7:48 PM UTC

azey47 wrote: post #5

I agree UBI is better than a minimum wage, but it seems a Negative Income Tax as advocated for by Milton Friedman would be still better. It would have the desired effect of supporting the poor with guaranteed income (something minimum wage can’t do because of the labor shortage it creates, especially amongst low-skilled employees), but do so a lot more cost effectively than UBI since you wouldn’t be guaranteeing paym…

A negative income tax is far more complex, here is an example of contemporary system. https://en.wikipedia.org/wiki/Earned_income_tax_credit ``Millions of American families who are eligible for the EITC do not receive it, essentially leaving billions of dollars unclaimed. The IRS estimates that about 20 percent of eligible taxpayers do not claim $7.3 billion of Earned Income Tax Credit (EITC) each tax year.[43]``

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

#45

Post by grecy » Sat, Jan 30, 2021, 7:48 PM UTC

overton wrote: post #19

Authors like this frame the UBI/minimum wage debate as if we just haven't figured out the right policy mix to fix poverty or precarity -- as if it's a problem of ideas. I propose that it's in fact a question of power -- 1) who benefits from people being poor and how much 2) power do they have? 1) Owners of capital, who don't want to see their labour costs escalate and use firing/the poverty gun as a disciplinary tool…

[flagged]

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

#46

Post by reader_mode » Sat, Jan 30, 2021, 7:48 PM UTC

overton wrote: post #19

Authors like this frame the UBI/minimum wage debate as if we just haven't figured out the right policy mix to fix poverty or precarity -- as if it's a problem of ideas. I propose that it's in fact a question of power -- 1) who benefits from people being poor and how much 2) power do they have? 1) Owners of capital, who don't want to see their labour costs escalate and use firing/the poverty gun as a disciplinary tool…

That's a very narrative driven world view. The problem with UBI is that some jobs suck but need to be done, and if you set a guaranteed income for doing nothing the incentive for doing that job suddenly needs to be a lot higher to compete. Saying that it's just the capital owners is ridiculous - consider for eg. elderly care - good luck living in with your demented mother who needs assistance to perform even the basic tasks - you think capital owners are the ones unable to afford elderly care ? And so on and so forth.

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

#47

Post by spamizbad » Sat, Jan 30, 2021, 7:49 PM UTC

nodesocket wrote: post #31

A12-B wrote: post #10

Earlier quoted context omitted.

> something minimum wage can’t do because of the labor shortage it creates It's important to read economic literature beyond old dead economists because many modern economists disagree with this, or think it doesn't paint a full picture of the situation. Noah Smith comes to mind.

Or how about the big elephant in the room that nobody seems to be bring up; the effect on small businesses that can’t afford to pay employees $15 or $20/hr. So, instead of helping the poor, these policies raise unemployment and actually are a detriment to the overall health of the economy.

The past 25-30 years of research do not show this to be true. The link between the minimum wage and unemployment isn't really a thing. I recognize your position was the conventional wisdom in the 1990s but newer research and analysis (along with tons of states experimenting with minimum wage over the various decades) paint a clear picture that it helps not just low-income workers but can help firms too by boosting productivity.

Sources:

1. https://www.nelp.org/wp-content/uploads/NELP-Data-Brief-Rais...

2. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2705499

3. https://americanprogress.org/wp-content/uploads/kf/minimumwa...

4. https://www.piie.com/blogs/realtime-economic-issues-watch/hi...

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

#48

Post by richwater » Sat, Jan 30, 2021, 7:49 PM UTC

UBI will never work because it's based on the fact that we remove all other forms of welfare, which, will never happen.

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

#49

Post by blackearl » Sat, Jan 30, 2021, 7:49 PM UTC

reaperducer wrote: post #40

overton wrote: post #19

Authors like this frame the UBI/minimum wage debate as if we just haven't figured out the right policy mix to fix poverty or precarity -- as if it's a problem of ideas. I propose that it's in fact a question of power -- 1) who benefits from people being poor and how much 2) power do they have? 1) Owners of capital, who don't want to see their labour costs escalate and use firing/the poverty gun as a disciplinary tool…

Lots of fun catch phrases, but unless you also propose a solution, it comes off like someone standing on a soap box in a campus quad preaching to three people.

I wouldn't expect the solution to world poverty to be easily typed up on an internet message board.

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

#50

Post by cylon13 » Sat, Jan 30, 2021, 7:49 PM UTC

SV_BubbleTime wrote: post #17

cylon13 wrote: post #14

Earlier quoted context omitted.

You're always incentivized to make marginally more money with the negative income tax because it gives you a monotonically increasing effective income vs job income curve, whereas some welfare systems end up with disincentives at various points of income where you'd make overall less by exiting the income level where you're receiving the aid (the same curve gets a negative slope or a downward jump).

I hate to ask, but can you dumb this down? I still don’t really get it. Are you saying that if you have no job that 100% of your income is tax funded, but if you have even a shitty job that you still get more benefit than the job alone but this is sliding scale down to some unknown point which you no longer receive any benefit at all?

Imagine a graph where the x-axis is how much you make at your job, and the y-axis is how much spending money ends up in your bank account after the government gets involved by either giving you welfare money or taxing you. So without the government you just have y = x. At zero income you have zero money, which is not ideal, so we'll try to come up with a system to give the destitute money so they don't die of starvation.

As a first crack at it, let's just give everyone who makes less than say $10k per year a bundle of aid that amounts to the fixed value of $1000 per month. This perhaps an improvement because we aren't ignoring the needs of the poor, but it creates a problem, which is what a welfare trap is. Imagine the graph for this situation. If you're making over $10k per year it's y = x, but if you're making less it's y = x + ($1000/month). So at x = ($1000/month) there's a sharp drop in take-home money. So people who would perhaps like to make a little more money are disincetivized from doing so because they would stop taking home that $1k per month and be exchanging it for a much smaller raise.

The negative income tax proposal attempts to solve this first by just providing cash to poor people instead of various goods that are hard to measure, and then by ensuring that the curve we're talking about never has a negative slope or drop. For instance imagine if you make zero dollars, you're given $1000/month, but then for every additional dollar you make independently, you receive 25 cents less aid. You'll always want to make more independently in this situation even if you don't keep it all.