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Work disincentives hit the near-poor hardest (2022)

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Re: Work disincentives hit the near-poor hardest (2022)

#61

Post by dgoldstein0 »

Chinjut wrote: post #43
hansvm wrote: post #29

Earlier quoted context omitted.

Monotonic is what we have, and it allows cliffs. Suppose, e.g., that you can get $5k/yr in benefits if you make less than $10k/yr in other revenue and $0 otherwise. Unless you have a viable strategy for pushing past $15k/yr it's a strong financial disencentive against actually working, and even then your incremental ROI isn't very good past that cliff (if it takes an extra hundred hours to push to $15.1k/yr, then com…

This doesn't sound monotonic. This sounds like a mapping from pre-benefit income to post-benefit income which sends just under $10k/yr to just under $15k/yr, but sends just over $10k/yr to just over $10k/yr. So it sends a larger input to a smaller output.

Yeah I agree, it sounds like a misunderstanding.

I'll go further and say what we probably want is for the derivative of net income as a function of earned income to be monotonic increasing but max out less than 1. So that there aren't ranges of income where you are receiving very little per dollar earned and then after some point start receiving more per dollar.

But solving benefit cliffs really just means having earned=>net income strictly increasing with the marginal rate reasonable, say at least 30 cents more net income per earned income. Under that constraint, you could have ranged where net income grows slower until you hit some higher dollar amount of earnings, but imo that should also not be desirable.

Re: Work disincentives hit the near-poor hardest (2022)

#62

Post by alephnerd »

jaredklewis wrote: post #58
truelson wrote: post #37

Earlier quoted context omitted.

If someone in the coming years ran on taking down regulatory capture and returning that as social safety net funding, public goods, and lower taxes, and had the chops to actually deliver, they'd do well. Though best to start local government first, obviously. We're reaching breaking points in so many places...

“They’d do well.” That is not the lesson I’ve taken from the past 15 years of politics in the US and abroad. Political candidates actually interested in taking on the very difficult and nuanced task of governing are routinely drubbed by edge lord culture warriors or candidates that simply promise the world without any regard to annoying facts like existing laws, budget deficits, or basic tenets of economics. I defini…

As someone who formerly worked in this space, the issue is administration is orthogonal to legislature.

Administration and implementation is inherently technocratic in nature, but legislation is is often driven by short-term electoral needs.

This isn't to say autocracy is the answer (it isn't), but the dysfunction arises when people assume that every single administrative decision needs to be made by "elected officials" and constantly second guess administrators.

When administration from local to federal becomes politicized (as is increasingly the norm across the democratic world), implementation slows down severely because the "ideal" solution might not be political tenable.

A good example of this is welfare expansion in the US - the assumption is lower income voters who voted for Trump voted irrationally, but in action, the majority of Trump voters tended to be in the 25th-75th percentile income bracket, which in most cases put them outside of the bracket for a number of social services. Those services which were available such as the ACA/Obamacare have been protected by legislators for that very reason because they know they would lose their seats as a result.

You're in Japan so you've probably seen similar decisions being made with regards to Japanese rice protectionism [0] - unpopular with urban voters, but urban voters don't swing elections at scale.

[0] - https://news.ycombinator.com/item?id=41367653

Re: Work disincentives hit the near-poor hardest (2022)

#63

Post by drekipus »

mmooss wrote: post #44
drekipus wrote: post #25

I usually get downvoted on any of my commentary on poverty or welfare, despite my lived and continued experience in it, but I'll punt again. My family, from grandparents downwards (siblings, aunts, uncles, cousins, across 3 family lines) have all relied on government handouts for a majority of their lives, and had their character destroyed by the system. All rely on a meager amount of welfare to stay alive, not healt…

How would that be implemented on an individual basis? Force drug-induced psychosis (obviously not)? Just kick people off of support? That will have obvious, very bad downsides. And then we'll have a bigger problem with homelessness (which will get the same response). While I don't downplay your experience; do you know of research that talks about it? The idea that people need incentives is an old one - Bill Clinton's…

I guess it really is too broad of a sector to think of any clear cut solutions. I'll tap out, but my main shtick is the poverty programming but. I think k that perpetuates.

I would agree with housing first. Definitely something that goes a long way. But it's also not clear cut (IE: too many recovering drug addicts in the same neighbourhood will bring each other down..)

While some people might only be on welfare temporarily, others are long term. And removing it drops the "floor" for everyone at once. Having seen death and evil that happens in poor.. families, societies, etc.. I don't mind the idea of letting certain elements die.

I'll keep the tactical victim hood, it's the only way I get positive responses that takes me on good faith. Otherwise I'm just a "corporate bootlicker who doesn't know anything" or "privileged male(?) with typical survivorship bias"-- I gotta get that out of the way first, this is my learned behaviour. I'm counter-programmed. Hate the game not the player.

Re: Work disincentives hit the near-poor hardest (2022)

#64

Post by ookblah »

having been out of work before and going on benefits the cliffs are hilariously badly calculated, not even sure how they are determined. for someone who knows their potentially salary far outweighs the reduced subsidies it can be a needed life boat. for people at the cutoff it incentivises you to stay under it.

Re: Work disincentives hit the near-poor hardest (2022)

#65

Post by hobs »

NoMoreNicksLeft wrote: post #53
conception wrote: post #23

Earlier quoted context omitted.

They should be. And for the great majority of citizens, they should be calculated automatically along with taxes without the need for filing/paperwork. But we must think of the Intuit shareholders and the harm that that would cause them.

I like my cliff. I earn enough that I and my family are ineligible for most welfare schemes. I do not want even 6 cents worth of SNAP. I spent my entire childhood on that, and it disgusts me. Thus, were this policy ever seriously proposed, I would do what I can to dissuade my legislators from voting it into law. There are others like me, too, I am not unique.

Right, so people who would use their trauma to prevent themselves from thinking logically about the problem and helping those in the middle instead of some arbitrary line your mind made up?

Re: Work disincentives hit the near-poor hardest (2022)

#66

Post by rob74 »

littlestymaar wrote: post #55
rob74 wrote: post #52

Earlier quoted context omitted.

A flat benefit for everyone that doesn't reduce with income level would be universal basic income, which has many supporters in theory, but has never been implemented in practice so far, not even in the most socialist countries of the 20th century...

No it's not. Not all benefit is “income” and not all such income is universal. And it also has nothing to do with socialism (socialism is about forbidding the private property of the means of production ! Please stop calling every kind of public intervention “socialism”, that's as ridiculous as calling all Republicans “fascists”). For the non-income version see countries with free schools or free hospital, and for an…

Ok, those are valid examples (also, how about free roads for everyone? Everyone seems to take that for granted and wouldn't dream about calling it "socialist"), but in your original post you wrote about "a flat benefit for everyone" that doesn't reduce with income level, and the examples you gave are either non-income or not for everyone (e.g. not for families with less than two children, not for people who didn't pay social security taxes for at least 10 years etc.).

Re: Work disincentives hit the near-poor hardest (2022)

#67

Post by [deleted] »

falseprofit wrote: post #20
ternus wrote: post #12

I can't find the original tweet, but someone (half?) jokingly proposed a law that all benefits must be defined as continuously differentiable functions (thus making cliffs impossible). "Yeah, I made $1M last year. Here's my SNAP check for six cents."

I would guess that was not a joke. The benefits could drop all the way to 0 at a reasonable point unless you impose the stronger condition that the function be analytic.

[deleted]

Re: Work disincentives hit the near-poor hardest (2022)

#68

Post by simianparrot »

truelson wrote: post #37
conception wrote: post #23

Earlier quoted context omitted.

They should be. And for the great majority of citizens, they should be calculated automatically along with taxes without the need for filing/paperwork. But we must think of the Intuit shareholders and the harm that that would cause them.

If someone in the coming years ran on taking down regulatory capture and returning that as social safety net funding, public goods, and lower taxes, and had the chops to actually deliver, they'd do well. Though best to start local government first, obviously. We're reaching breaking points in so many places...

DOGE tried, and despite it’s best efforts still couldn’t do more than make a dent

Re: Work disincentives hit the near-poor hardest (2022)

#69

Post by inglor_cz »

sharts wrote: post #40
truelson wrote: post #37

Earlier quoted context omitted.

If someone in the coming years ran on taking down regulatory capture and returning that as social safety net funding, public goods, and lower taxes, and had the chops to actually deliver, they'd do well. Though best to start local government first, obviously. We're reaching breaking points in so many places...

The problem isn’t that such candidates would never accomplish anything let alone get elected due to the insurmountable amount of resistance from so many incumbents with a vested interest in that not happening, ever.

One of the biggest problem of a two-party system is that the two parties are thoroughly captured by lobbyists.

In a PR system, fresh parties do arise over election cycles, and it takes some time for them to be thoroughly infested. These can then push for some reforms that threaten entrenched interests, and sometimes succeed.

Re: Work disincentives hit the near-poor hardest (2022)

#70

Post by paganel »

ternus wrote: post #12

I can't find the original tweet, but someone (half?) jokingly proposed a law that all benefits must be defined as continuously differentiable functions (thus making cliffs impossible). "Yeah, I made $1M last year. Here's my SNAP check for six cents."

If you continue with the idea of transfers, which is, in effect, the current government buying off parts of its constituents, then "democracy", whatever has remained of it in the West, will die for good. What happens if I receive money from the Government but in the same time I'm also actively opposed to said Government's actions? Will I be allowed to speak against the Government that is, as a matter of fact, paying me? Will I have second thoughts of doing it? Will the Government cut off aid to me if I'm too vocal against said Government's actions?

All this to say that all we're doing is turning most of our countries' citizens into de facto slaves, people with no political free-will and who are well-aware that if they were to speak out against the powers that be they risk destitution.

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