
A Basic Income Is Smarter Than a Minimum Wage - joeyespo
http://www.bloombergview.com/articles/2016-04-01/a-basic-income-is-smarter-than-minimum-wages
======
kough
> No one wants to hire them at a high minimum wage, especially when locals are
> readily available

The main drawback to a minimum wage is that it artificially increases the cost
of labor, to the point where it's no longer worth it to an employer to hire a
low-output employee. I think we'd all agree that increasing employment is a
good goal, but an increased minimum wage actually hinders progress on that
front. As the minimum wage increases, robots and other non-human investments
start to look much, much more attractive. Many businesses would be happy to
hire workers for less than minimum wage, but legally cannot, and so do not
hire.

Of course, it's a complicated issue. Look at the employment of those with
disabilities like Down Syndrome [0], for example. Are these employees worth
hiring at $7.50/hour? No, for the most part, they're not. Are some? Sure, but
on average there's no way. But are they worth hiring at $2.00/hour? Yes, and
they and their families are willing for them to work at that wage, because
there are huge benefits to being productively employed.

Recently these programs are coming "under attack" in various states. New
Hampshire just made this practice illegal, for example [1]. We'll see how it
plays out -- my bet is that a) few news outlets will follow up in a few years
and see how many of these disabled workers are able to find new employment,
and b) few disabled workers will be able to do so.

[0] [http://www.witf.org/news/2014/07/thousands-of-disabled-
worke...](http://www.witf.org/news/2014/07/thousands-of-disabled-workers-in-
pa-paid-far-below-minimum-wage.php)

[1] [http://www.care2.com/causes/new-hampshire-bans-subminimum-
wa...](http://www.care2.com/causes/new-hampshire-bans-subminimum-wage-for-
people-with-disabilities.html)

~~~
a3n
> The main drawback to a minimum wage is that it artificially increases the
> cost of labor,

And? Why is that artificial increase a problem. Every law on the books is an
artificial act.

I don't see many people wringing their hands over the mortgage interest
deduction, another of those artificial changes to the economy.

~~~
merpnderp
And? It keeps people who want to work from working. People who would be
willing to work at less than the minimum wage. Subsiding on government relief
can lead to depression, loss of social status, load term mental illness. Not
having a job is a very unhealthy thing for most people.

~~~
jack9
> It keeps people who want to work from working.

That doesn't mean the work (the individual is capable of) is valuable enough
to justify the position, in the locality.

~~~
occamrazor
But what are the alternatives, for the people whose productivity is lower than
minimum wage?

------
zxcvvcxz
> Besides, Sweden has one of the rich world's biggest gaps between native and
> immigrant employment rates. Youth joblessness is 70 percent higher among the
> foreign-born than among Swedes. Lowering the minimum wage could draw more of
> the new, mainly Middle Eastern population, into the workforce and reduce
> social and ethnic tension.

A minimum wage is simply not moral. It prevents me and you from entering into
an employment agreement with which we may both benefit. Instead, the
government is telling me how I have to interact with you.

The left-wing philosophy of a minimum livable wage is ironically hurting the
new immigrants to these countries. The reality is that first-world nations
have higher employment standards because citizens are more educated and
capable. Instead of giving new immigrants, who are almost certainly less
educated and capable (remember, they're trying to move to countries with
better opportunities) the ability to work and gain experience, we leave them
with little options.

And like the quote says, it's just bad for assimilation into the host society.
Being able to work is fantastic for that. You have to learn at least a bit of
the language. Interact with the people. Learn to follow the laws and customs
of the new country. Without work opportunities, immigrants can often wind up
stuck in their segregated ghettos. And high unemployment invariably leads to a
lower quality of life.

Abolish the minimum wage. Give new immigrants the opportunities they want.

~~~
gorpomon
A minimum wage is moral. It ensure that you and I do not enter into an
employment agreement where one side excessively benefits. The government as
third party is ensuring we have minimum amount of fairness in our interaction.

The right-wing philosophy of wage bargaining is ironically hurting the workers
of their countries. The reality is that first-world nations have predatory
labor practices because citizens are systemically and by their own lack of
resources unable to realize what fair wage is or how to effectively bargain
for it. Instead of giving workers, who are almost certainly less educated and
capable the ability live off their wage so they may better their lives
constructively, we indenture them into subsistence living, where the minorest
of life disruption can decimate savings.

It's just bad for the people living in the lower rungs of society. Being able
to work at a living wage is fantastic for mitigating these shortcomings. You
can actually do things like plan for the future and interact with people
without worrying about the next big life problem. You can learn more labor
laws to further advocate for yourself and others, and even the customs of
other cultures, rather than fear someone cutting even your meager floor from
under you. Without fair wage, workers can often find themselves being the
"working poor", people whose jobs won't ever let them save enough money to do
anything meaningful. And fair employment inevitably leads to high quality of
life.

Institute a living wage. Give people the opportunities they want.

~~~
firethief
> [A minimum wage] ensure[s] that you and I do not enter into an employment
> agreement where one side excessively benefits.

I don't see how that is a goal of minimum wage. People can be underpaid at any
pay level, and a lot of jobs just aren't worth very much to the employer. A
sweatshop paying pennies an hour for extremely unskilled labor could be a fair
wage for that work.

Minimum wage serves important functions, but I don't see how they include
preserving work value : pay level equity. Free counseling to help inform
people of an appropriate wage for their skill level and find an employer who
would pay that seems like more of a way to meet that goal.

~~~
vertex-four
> A sweatshop paying pennies an hour for extremely unskilled labor could be a
> fair wage for that work.

Sure - in which case said sweatshop probably shouldn't exist. Sorry, but if
you need to pay people _less than they can live on_ to stay in business, and
it's "not profitable" to replace them with robots, you can damn well go out of
business and be replaced with a company that will automate it, allowing humans
to do things that actually matter (and I'm not talking about "find less
automatable work" here).

That is - in a perfect world, everyone poor would be given enough money to
live on and not have to feel guilty about it. If they find a job that they can
survive on, they can take it and drop their benefits. What would be immoral
would be to force people to take a job that pays less than they can live on to
receive benefits - that's outright punishment for not being able to find a
job.

We tried punishing people for being poor/unskilled in the UK, it's called the
workhouses, and to some degree our Job Centre wants to bring the concept back.

Of course, if you're calling for both a lack of minimum wage _and_ cutting
benefits further than they already are in many places... I think you'll find
most would call you immoral. "Let them die so that my ideology wins."

~~~
firethief
I'm not sure you saw the post that I was replying to. I'm disagreeing with
that post's argument that the function of minimum wage is to ensure people are
paid what the work they do is worth to their employer. Such an argument would
condone sweatshops, which I thought would be understood to be a bad thing but
I guess something like Poe's Law applies.

~~~
vertex-four
I didn't read it as that. "An employment agreement where one side excessively
benefits" includes one where the employer gets to stay in business and make a
healthy profit, but the employee can't survive on their pay.

------
RivieraKid
Negative income tax makes more sense to me. (NIT is a system where you either
get or give money from/to the governement, depending on your income.)

First it's both a simple welfare and tax system in one package. Basic income
as typically understood is only half of the story.

It's also easier to reason about, the money flows are way more obvious, it's
immediately clear whether you are a net contributor or receiver and it's
easier to set the (few) parameters.

~~~
mmanfrin
NIC is analogous to basic income. At a certain point, the taxes you pay in a
basic income scheme are equal to the basic income you earn. Those who earn
less than you are earning a NIC, those above are paying income tax.

It is the same thing.

~~~
randyrand
No its not in practice.

NIC is generally tied to working. A part time employed person will make less
than a full time one.

Under BI it is not tied to working. The incentives are worse.

~~~
mmanfrin
How? A full time employed person will still make more than a part time. Basic
Income is flatly applied, everyone gets it; earning more then means you still
have more. This isn't some cutoff-if-you-make-too-much thing.

~~~
randyrand
> Basic Income is flatly applied

Thats the difference.

Of course it depends on the model used, but generally NIC is applied based on
how much you work. Generally a non-working person makes $0 , and a fully
employed person makes the BI amount. To get the BI you need to work for it.
That's the difference.

To take this argument any further we would need to compare specific models.
But NIC and BI are not the same and have similar but different purposes.

~~~
kr7
> Generally a non-working person makes $0

Not according to Milton Friedman.

[https://youtu.be/xtpgkX588nM?t=191](https://youtu.be/xtpgkX588nM?t=191)

~~~
randyrand
Good source.

That is of course one valid way to implement it and is essentially BI in
calculation.

Still even under miltons NIC, an important difference between NIC and BI is
intended purpose. BI proponents want enough to live on with little hardship,
NIC implies nothing in that regard and most NIC proponents I imagine would be
opposed to that.

I would not be a proponent of BI for that important 'scalar' reason.

~~~
aninhumer
I agree that the main difference between UBI and NIT is framing, and I prefer
UBI for that very reason. It's much simpler to understand, and it separates
the notion of creating a social baseline from the tax system.

Also, this framing could also make a practical difference to the interface. If
the benefit is administrated separately, you don't need to think about tax
until you get a job. Having to submit a tax return to get your money is
potentially intimidating, not to mention somewhat degrading if it says $0.
With UBI, rich and poor alike get the cheque.

>BI proponents want enough to live on with little hardship

Certainly many do, but I feel this is more of an aspiration than a
requirement. I think there are huge economic benefits that will come about
from the stability and freedom that even a smaller UBI provides. In the longer
term, complete sustenance may become trivial.

~~~
randyrand
> In the longer term, complete sustenance may become trivial.

This can already be done easily with the right mindset. We do not need any
more technical advancements to achieve this goal. Water is cheap. Agriculture
technology is already amazing. Food can be as little as a few dollars a day if
you buy cheap foods (beans, rice, bread, ect). Its possible to live rather
well on $300 a month or $3600 a year if you live in the right location, and
live within your means. Heck, most of the world already does this.

But the problem to living like this in in america is our wealth drives up the
cost of certain inherently supply limited resources. The biggest ones being
those resources which are tied to land. And the biggest example being shelter.

Shelter prices are mainly determined by people 'one upping' each other.
Competing with each other.

Given these obstacles, the biggest beneficiary of UBI may not be the common
person, but land owners.

Building skyscrapers is a great partial solution to the problem, but
resistance is everywhere.

------
anexprogrammer
> _some politicians in one of the world 's most socialist countries, Sweden_

I almost stopped reading there. Sweden is _not_ socialist, and never has been.

Public ownership of production, workers control and management, social
equality and a democratic plan of production. Nope, none of those. Just as
much privatisation and market forces as other economies.

They just chose to fund their welfare state, education, prison reform and
pensions rather better than some others. There's been some drawbacks, but you
won't be hearing many renditions of the Red Flag.

~~~
snowwrestler
"Socialism" in Western political discourse no longer means owning the means of
production. It did, once, but that idea was so obviously discredited during
the 20th century that no one takes it seriously anymore.

So "socialism" today (usually used with some variant of "democracy") has been
repurposed to mean a political ideology that values government social support
programs over low taxation.

~~~
anexprogrammer
By Western do you mean US? I have never once heard it used thus in UK and
European news and political discussion. Not even by the Tories attempting to
discredit some aspect of the discussion. Perhaps the Daily Mail might, but
they're bonkers, and have been since inception. :)

You'd probably hear discussion of the Nordic approach use the term "Nordic
Model", or rarely "social democracy". They're seeking to remain strictly
capitalist but promote more economic security at the same time.

------
harryh
$10,000 * US_POPULATION ~= $3.2T ~= The total annual tax revenue of the US
federal government.

Just something to keep in mind when discussing this topic.

~~~
empath75
The top marginal tax rate would have to be dramatically increased to pay for
it. Also, you'd have to increase capital gains and estate taxes.

Make no mistake, basic minimum income would be a _massive_ redistribution of
wealth. I'm in favor of it, but let's not pretend we can pay for it by
shuffling around some social safety net spending.

~~~
alttab
It would completely remove the necessity to be productive. That can't turn out
well.

What's preventing me from having as many babies as I can knowing that they too
will not have to work or find a job to be supported?

I know this won't work at scale, because I understand math.

~~~
thesimon
>It would completely remove the necessity to be productive. That can't turn
out well.

As seen in welfare states in Scandinavia or Germany, where almost no one works
because of the unemployment benefits.

~~~
snerbles
Of course not, but the stability of such a state is becoming a concern with
the current migration situation.

[http://www.theatlantic.com/international/archive/2016/02/wel...](http://www.theatlantic.com/international/archive/2016/02/welfare-
state-refugees-europe/463272/)

~~~
alttab
And it's ignoring culture.

------
leroy_masochist
Bershidsky really drops the ball when he makes the following point:

"One problem with a universal basic income, of course, is that it will make a
country attractive to even more immigrants from poor countries where 550 euros
a month looks like a princely amount. Keeping borders open will hardly be an
option."

What he's missing here is that the UBI _is only payed to citizens_. If you get
rid of the minimum wage (because everyone gets paid the UBI no matter what),
then citizens become much more willing to work for low wages, because their
basic cost of living is already paid-for.

By contrast, UBI would not be paid to immigrants. Non-citizens would still be
working in the US to some extent, but the incentive for people to sneak across
the border would be severely reduced if prevailing low-skill wages fell from
$10 to, say, $5.

It's also worth mentioning that to the extent that deterring undocumented
immigration is the policy of the United States, doing it with economic
incentives is (IMO) a much more ethically sound solution than doing it with
walls, violence, and incarceration.

~~~
kough
Fantastic point, I have to admit I missed the consequences of that, too.

------
yanilkr
A Basic Income from Govt comes at a huge price of loss of individual liberty.

If someone gives you free stuff, they will expect controls like where you are
allowed to spend your money and time.

This model of taking from the productive sources and rewarding everyone else
will have to break at a certain point. how come you get rewarded for enjoying
the gossip column and I spend extra effort doing something else which is
harder and my earnings are taken away? so lets put a control on how many hours
someone else works. The productive people are dragged down and discouraged.

Automation is replacing the labor that humans don't have to do. This frees up
human capital so we can focus our endeavors somewhere else. America already
provides free education up to high school and with this education why should
people of next generation aim for minimum wage jobs?

In a modern capitalistic economy it is very difficult to make money without
adding value to society and this equilibrium is reached naturally due to free
markets despite of politics meddling with it.

~~~
clarkmoody
The Basic Income is the terminal phase of a democracy, wherein people are
rewarded simply for existing, extracting their subsistence from the productive
forces in the economy. It is the final vote-buying mechanism of the political
elite to create a permanent dependent underclass.

Thanks to our democratically-installed public school system, liberty is a
topic which cannot be discussed in polite company. Don't be discouraged when
you get down-voted by the Hacker News progressive/socialist hive mind.

~~~
sievebrain
Your argument could be made about any form of welfare.

"Liberty is not a topic that can be discussed in polite company" seems more
likely to be an issue with your definition of liberty rather than an issue
with the polite company.

------
paulpauper
But what about existing entitlement sending, which keeps growing? A UBI
without preconditions will only compound that problem, because what is to stop
people from wasting their basic income on frivolities while also drawing from
existing welfare programs.

 _Many people may agree to work for less than the current minimum wage, and on
more flexible terms, if they 're supplementing a guaranteed income, not
scrambling to avoid having to beg for food._

But this is not the case. What everyone seems to forget that despite the low
labor force participation rate, the poorest are not starving to death; in
fact, they're more likely to be obese than higher earners.

The assumption that a UBI, on top of existing welfare programs, will make
people more compelled to work seems like a stretch.

~~~
pdabbadabba
I would have thought that a UBI would _replace_ most or all existing
entitlement programs. But perhaps people have different ideas?

And you're right, of course, that the poor in the U.S. generally are not
literally starving. Though their poor health and high obesity rates are
themselves symptoms of their limited access to healthy food, and difficulty
maintaining a healthy lifestyle that may be due to other poverty-induced
stressors.

~~~
aetherson
I think it would be politically difficult to replace most or all existing
entitlement programs with a basic income.

When you get a bunch of disabled people up on stage and they say, "Wait a
minute, we are _genuinely unable_ to work most jobs, and we have special needs
to just get through the day, and you propose to just give us the same amount
of money you do to some 22 year old healthy slacker from a good family who
wants to take a few years to play X-Box?" and you're already trying a very
very contentious policy proposal, is that the hill you want to die on? If not,
we still have disability.

What about the just genuinely irresponsible mother who blows her income on,
whatever, in-app purchases, and then she and her children are homeless and
starving. Do you say, "Well, tough break, you could've been more responsible"
or do you have programs to keep them fed and off the streets? Food stamps and
Section 8 are back.

Healthcare pretty much has to continue to be separately subsidized unless you
want anyone who has enough bad luck to have an expensive health condition that
exceeds the value of basic income to die.

At that point, is there a really significant entitlement program still off the
table?

(Edit: Sorry, yes, of course there is one significant entitlement program not
touched on above: Social Security. I think you might somewhat reasonably make
a basic income essentially "Social Security for everyone," and avoid having a
special carve-out for seniors by saying, "We're not taking away your social
security, we're just giving social security to more and more people.")

~~~
kmonsen
I always thought it would replace existing programs, but you have made me
realize this is not true.

I guess in the end it comes up to do we believe in personal responsibility or
not, and if the state or parents are responsible for children. (It looks like
I am in the camp that does not think children should starve because they have
irresponsible parents).

------
ThomPete
It's not just smarter it's the only possible solution out of the two.

Many people wrongly discuss the premise of basic income in the context of
whether it's a better solution for for the job market. I.e. as a better way to
solve unemployment fluctuations which in this view are still going up.

But the whole point about Basic Income is what we do about there being fewer
and fewer jobs that pay a proper salary.

~~~
paulpauper
Proponents of the UBI make the generous assumption that recipients will be as
careful with money as they (the proponents) are . Choosing between food &
housing credits vs. cash, the former has less room for abuse.

Its like "I would never use my UBI on alcohol"...well you're not "most people"

~~~
Karunamon
Given the frankly despair-inducing statistics of what happens to poor people
when they acquire a sudden cash windfall (and if you're flat broke and living
on the streets, a few hundred every couple weeks is HUGE), I intend to agree.

Most UBI implementations I've seen require gutting existing welfare systems -
okay, fine, but what happens to the person who inevitably squanders their
money?

~~~
empath75
I think probably the only thing that would have to go along with UBI is
_extreme_ restrictions on credit and borrowing for people that are relying on
it. It's not really a huge problem for someone to blow all their UBI money for
a month or two because they'll have more coming in. If they compound that with
high-interest debt, they can dig themselves into a whole they can't get out of
of.

~~~
knodi123
> extreme restrictions on credit and borrowing for people that are relying on
> it

Everyone relies on it. It's an equal amount of cash in pocket for every
person.

If you want to talk about restrictions on borrowing- well, what idiot is
lending this money to a person with minimum income without checking into their
background ? I think we can leave that one up to the banks.

------
ThrustVectoring
There's a non-obvious danger for basic income: rent-seeking behavior.
Landlords charge whatever the market will bear, so there's a huge risk of
funneling money through the recipients without improving their quality of
life. And it isn't just landlords that hold that kind of rentier position -
universities, for instance, would also extract more out of their position as
employment gatekeepers.

Attacking rent-seeking behavior would likely have a bigger impact on the
everyday lives of the poor. Land-value taxes are a good place to start.

~~~
donatj
I think equally a problem with raising the minimum wage as well. If people
make more money on average, I can now charge more for my goods with less
balking. It would be illogical for me not to raise my prices. In the end
quality of life stays the same. Asking people to be illogical is... illogical.

~~~
ThrustVectoring
People can still shop around, which is a balancing economic force. What makes
people balk isn't just how much money they have, but the competing prices in
the market. Less competitive markets will react to GBI to a much greater
extent. I'd expect mobile phone service, internet service, housing, education,
and healthcare to raise prices in response to GBI. I wouldn't expect the price
of rice, steel, concrete, or airplane tickets to change much.

~~~
donatj
> I wouldn't expect the price of rice, steel, concrete, or airplane tickets to
> change much.

Not at first, but the price of everything is connected eventually.

~~~
ThrustVectoring
My point is that price is the balancing point between selling for as much as
you can find a buyer for, and buying for as little as you can find a seller
for. Different goods have a different balance of power between buyers and
sellers. Gasoline, for instance, has highly visible prices and little product
differentiation. Choosing a different gas station is as easy as crossing the
street. Customers will tolerate very little increase in price relative to the
competition, so the price of gasoline is approximately equal to the cost of
selling people gasoline.

------
DickingAround
It makes sense if-and-only-if that basic income isn't being doled out by the
same organization which also runs the military-industrial or prison-industrial
worlds. As an American, I think it's safe to say our federal government can't
be trusted to not turn into a tyranny if it's everyone's primary employer.

We would get even more massive corruption almost instantly. For example, some
people would lobby to get those tax-revenue intended for the basic income to
be redirected to other projects. The people wouldn't fight the loss of a
$1/year/person here or there. There would also be reams of special cases to
give some people more and some people less. And like today, some people would
continue to carve out exceptions so they didn't have to pay those taxes to
feed the basic income. That money would be divvied up every way except as a
basic income and people would spend all their time fighting over who got it
instead of generating the value that backs it.

I don't live in the countries trying this so I can't say if it's safe to give
their government that much power, but I know the US government is no where
near ready for any more power than they already have.

EDIT: Fixed a typo

~~~
Mikeb85
Unfortunately, in the US the alternative to government power is corporate
power.

~~~
merpnderp
Without government power, corporations don't have any power. They only exert
their power through the government. What, is Apple coming to my house to tell
me what to do, how I can work, or to collect a tax? Just like Disney keeps you
from file sharing by using the government, so does the your local health
insurance company keep out the competition by excessive government regulations
they helped write.

~~~
Mikeb85
Without government intervention, corporations control the labour market. With
no minimum wage, no basic income, and increasing automation, do you really
think corporations wouldn't drive wages down to zero?

There are countries with little to no government intervention, and countries
with lots. The latter are objectively much better places.

~~~
merpnderp
This is always the response to any libertarian argument of even mild
government reform "If you don't like it, then go live in Somalia". As if
rolling back government intervention in the economy to something like say the
booming 1950's isn't a rational proposal.

~~~
Mikeb85
It's because history shows that more government intervention, especially in
the domain of education, health and labour, creates better societies.

Two words: New Deal.

Most of the US' prosperity since has been as a result of this. Then in the
1980's it was rolled back and guess what? Things are going to shit again.
Maybe not in NY and California, but large swaths of the US are mired in
poverty, poor employment prospects, crumbling infrastructure and shitty
education.

How about Europe? Here's a bunch of tiny states with different languages,
pretty much zero resources, very little land, who accept unprecedented amounts
of immigration (partially to their detriment), who are still able to provide
their citizens with the highest standards of living in the world.

Show me a single large, prosperous, libertarian state. Not a city-state that
cannibalises their neighbours' resources and acts like a tax haven (Monaco,
Luxembourg, Lichtenstein, Singapore, etc...) - but a large, prosperous,
diverse state that is libertarian. The problem is, there are none.

~~~
merpnderp
Only 6 European countries have a higher GDP than the US's poorest state, and
none are close to the US GDP. And the US GDP has grown significantly faster
than Europe's since the 1980's.

I don't consider my state that rich, but we're 4 places above Germany.

[https://www.aei.org/publication/us-gdp-per-capita-by-
state-v...](https://www.aei.org/publication/us-gdp-per-capita-by-state-vs-
european-countries-and-japan-korea-mexico-and-china-and-some-lessons-for-the-
donald/)

~~~
Mikeb85
GDP divided by # of people doesn't accurately reflect quality of life...
Especially when a good portion of GDP is derived from resources, and not
necessarily spread to the population.

There's plenty of indexes that offer better insight.

[http://www.numbeo.com/quality-of-
life/rankings_by_country.js...](http://www.numbeo.com/quality-of-
life/rankings_by_country.jsp)

[https://www.economist.com/media/pdf/QUALITY_OF_LIFE.pdf](https://www.economist.com/media/pdf/QUALITY_OF_LIFE.pdf)

[http://www.huffingtonpost.co.uk/2015/11/04/these-
countries-h...](http://www.huffingtonpost.co.uk/2015/11/04/these-countries-
have-the-best-quality-of-life_n_8470292.html)

Even indexes that do rate the US highly, generally weight income highly. In
life expectancy, health, education, and metrics which don't take into account
income, the US doesn't do great.

------
Overtonwindow
My primary concern about instituting a basic income is that these things have
a tendency to always want to rise. It then becomes a voting platform for
politicians. Vote for me and I will get your basic income raised. I think
anytime you promise a populous something for nothing, you create dangerous
precedents that can spin out of control. I'm for increased minimum wage and
price caps, but not a minimum income with no commitment.

On the other hand, if the federal government did not give away all of the
profits from American natural resources, and instead took a percentage like
most developed countries - and the state of Alaska - that money could be
turned around into a basic income for all. That I believe is where a basic
income should come from: use a nationally produced commodity sold abroad and
the profits therein to give back to the citizenry.

------
forrestthewoods
On the topic of immigrants and minimum wage/basic income. Brussels provided
free housing, food, health care, and education to immigrants. And yet their
immigrant community was still unable and/or unwilling to integrate.

Basic income and/or higher minimum wage doesn't solve all problems. It even
causes some new ones. Which isn't to say it isn't a good idea. But we probably
don't discuss the problems as much as we should. I don't think it's the silver
bullet many people wish it to be.

~~~
ptaipale
Yep. I think the biggest problem is the assumption that universal basic income
would replace any existing welfare programs. In reality, it seems that this is
not going to happen, because one size doesn't fit all, and existing welfare
programs cover vastly differing cases at vastly differing cost levels
(unemployment, disability, old age, serious and not-so-serious illnesses).

Over here (Finland), the current government is planning a trial for UBI. It
looks like pretty much none of the existing benefits can be cut because they
are "fundamental human rights" or similar.

------
karmacondon
The only way I can see Basic Income working is if the average person has a net
income change of $0. That means someone making the average income of ~$45k/yr
gets a $10k check from the government every year, but also has their taxes go
up by ~$10k. I believe others have referred to this as a negative income tax.

From what I can tell the average salary of a hackernews reader is above $100k.
Each of us would probably end up paying ~$800+ per month in additional taxes,
maybe up to $1,500/mo for those making that BigCo money. [1]

The first question is, does that sound reasonable? Do you want to subtract
$400 from each paycheck for the sake of total strangers? And I guess the
second question is, why aren't we doing that now? How much do each of us
currently give to support other people in various ways?

I think Basic Income is a good idea. If people have more money, they'll be
able to click on internet ads and buy things, and that will help the companies
that many of us work for. But it won't be an even exchange and many people
here will end up with less disposable income. I think that it will be worth it
in the long run, to ensure that the economic engine that produces our
paychecks continues to function. But I don't know if every UBI proponent is
prepared to deal with the short term costs.

[1] I completely made these numbers up. Could be more, could be less.

~~~
marcosdumay
Well, that's the idea. That's what the UI supporters are arguing for.

In exchange of that money, given to "total strangers" we get to live in a
better country, and have the security of knowing we won't end up homeless on
the unlikely case we can't find work anymore (yeah, I pay for that safety
today - both methods can be either added or replaced, replacing is harder).
Here at Brazil the numbers would be lower overall, but the consequences get
bigger.

I think any implementation would need to start with a small value and increase
slowly. It's not certain that the median wage is either viable or optimum, but
might be a sane ceiling.

------
faint_coder
Basic income is dangerous for the society. The basic human being is,
unfortunately, almost like an animal, he likes to sleep, eat, do nothing: you
have to give him/her a "bone", a prize, to make him/her doing things. This
prize is wage. If you give money to human beings for free, nobody will do jobs
anymore. Only those who want to be richer, but are far less. You'll see people
that will choose for a basic income, instead of a basic_insome+N, to clean
dumpsters. Why someone would choose basic_income+N when that N is relatively
small to clean dumpsters instead of staying home doing nothing? Give a basic
income to everyone and NOBODY will clean dumpsters anymore, unless you set
that N relatively high. Or basic income relatively low. Basic income will
destroy the entire society in few months. Don't look at those nordic countries
which applied basic income and the society is "working" well, because it
depends from people, culture, and other factors. I'm from italy, and I can
GUARANTEE that if do give basic income to italians, the society will fall
badly.

~~~
kilotaras
>If you give money to human beings for free, nobody will do jobs anymore

All BI proposals I saw only include housing, utilities, healthcare(through
central system) and food. People would still want to go out, watch movies,
play with the new shiny iPhone, etc.

Most of the society already can get proposed amount from investments. If we
talk $1000 monthly and 5% ROR (less than SP500) you have to have $240k in
investments. That's easily achievable, especially if you already live on $1000
in preparation to doing nothing.

> NOBODY will clean dumpsters anymore, unless you set that N relatively high

And why should cleaning dumpsters be a low paying job? You said it yourself -
it's crucial for society.

And don't forget about elephant in the room - automation. Upward salary
pressure puts pressure on making each individual worker more productive.

------
tryitnow
The problem I have articles like these is that they create a false dichotomy.
It's possible to have both.

These two policies solve very different problems.

The Basic Income supports the notion that it's not cool to force people to
work for food, shelter, etc.

The minimum wage is supported for a bunch of different reasons, most of which
I disagree with. But the one I do agree with is that a minimum wage sets a
floor on the marginal productivity of labor. This will force employees and
employers to improve the productivity of labor - a win all around.

I support the minimum wage because I think low wages are a result of humans
behaving irrationally in the market. Employers usually don't think seriously
enough about productivity improvements and many employees don't invest
sufficiently in training and development to improve their marginal
productivity.

The problem I have with minimum wage legislation is that it too often takes
place in a vacuum. Look even Marxist economists agree raising the minimum wage
can lead to job losses, so let's prepare for that by investing in training
programs (vo-tech and community college seem like good bets).

------
Mz
Gig work that works would be smarter than both. One of the problems with basic
income is that decouples work from income entirely. One of the things paid
work accomplishes is encouraging certain kinds of human behaviors. From what I
have read, every society that ever tried to promise that "we will take care of
everyone, regardless of their contribution or behavior" had to reneg on that
when it backfired on them.

Decoupling income from being the work equivalent of "chained to the stove" is
a great idea. Gig work that is well designed allows both people of low
productivity and of high productivity to participate on their own terms. If
someone who isn't very productive is willing to accept a de facto lower than
minimum wage hourly rate, they should be allowed to make that choice. It
empowers them in ways that welfare programs do not.

~~~
joeyespo
Gig work doesn't go away with BI.

> One of the problems with basic income is that decouples work from income
> entirely

It does, but not entirely. You can still work for _extra_ income. It only
breaks the dependency in the other direction. And that's its strength.

The gig economy, while incredible and empowering, is also unstable and largely
out of your control. You can have an influx of work at one moment, and near
zero another. BI smooths this over by allowing you to survive during the dips.
It also reduces the toxic stress contractors can experience even _during_ a
wave of work. When the gigs run out (and therefore, the income is less under
BI--but not _zero_!), it gives you time to seek out new work without
panicking.

------
esaym
I'm never quite sure what to think about articles (or ideas) like this. I
think of my grandfather who served in the air force for 20 years. When he
needed more money, what did he do? He picked up a paper route early in the
morning. What did he do when the paper route + air force income still wasn't
enough? He started driving a taxi during evening hours. And when those three
jobs weren't enough? He opened up a service station/gas shop to serve the
other taxi drivers, which eventually morphed into a full blown auto service
shop which allowed him to quite all his other jobs.

As a software developer I am doing ok. I crawled my way up the ladder though
from blue collar work. But I still have plenty of friends that never really
went anywhere after high school. Some work fast food, some general labor, but
they all make less than $8/hr. What do they do when then need money? Get a
second job? No. They get on facebook and whine about it or make a gofundme
account. One of my friend's even works at a warehouse 10 hours a day only 4
days a week. On those 3 days off he has does he work another job? No. He just
plays video games all day, as does everyone else I mentioned.

It seems that people nowadays seem to think they only need to work one job,
and if that job doesn't pay enough, it is the job's fault.

Granted, I know working 70+ hours a week at $6hr won't get you any where...
But we all have to learn the climb the ladder. The complete lack of work ethic
and skill sets I see today I don't think we can blame on the public schooling
or government policies. I'd like to think it is the fault of the parents who
never taught their own children to work. Perhaps they don't know how to work
either. Yet I go back to thinking about my Grandfather. He lived out in the
sticks and didn't really go to school. The family spent the money his dad made
(at a brick factory) on buying supplies for gardening so they could have food.
For meat they only had chickens and wild rabbits (both of which he refuses to
eat to this day). So perhaps formal education isn't the magic bullet either.
But something is amiss in our world today.

~~~
chris11
I think there is huge difference between saying someone is personally
responsible for their future and saying the only thing preventing the lower
class from doing well is laziness.

A minimum wage would definitely not be close to a living wage, and a living
wage doesn't include saving for retirement or other less basic expenses.The
average income in 2015 in the U.S. for people with some college was around
$37,000. That's around $18/hr for a 40 hour week. That is definitely livable
in most places, but money would be a little tight.

Sure, maybe most people earning a below average income could improve
themselves and do a lot better financially. But the average wage isn't really
good, and low income workers will always be below average.

You could make the argument that if most of low income workers became a more
valuable by raising their skill level then the average income would also
raise. And you might be right, to a point. But I don't think there are enough
decent jobs available for everyone. Not everyone is a good fit to work in the
medical field or tech. So the increased average skill level would just mean
that businesses could be more selective and even lower their pay.

I worked full-time for a short amount of time in a tech related field. I
remember looking for entry level work, and it was really competitive. I did
get a full-time contract position that was a really good opportunity, but the
pay was very low. The job was good, it was at a good company, and it would
provide me valuable experience. But I ended up going back to school to finish
my degree and change fields. And I ended up applying for internships. And
reviewing my offers I noticed that all of the decent offers were in the same
range as an entry level full-time position in my old company. One offer was
more than my yearly salary in the old field. I could have told my old
coworkers that they would do a lot better changing careers, and it would be
true. But if everyone in the field did that, there would be no-one applying
for entry level work in that field. And I think that indicates a problem with
the job market, not just a problem with laziness.

~~~
evilgenius134
> $37,000

> That is definitely livable in most places, but money would be a little
> tight.

> Average wage isn't really good

I consider livable to be much under $15,000, probably under $10,000 in most
states. I'm not sure how you would spend $37,000 to only consider it livable.

------
sambe
In one of the most flagrantly opportunistic political redefinitions I've ever
seen, the UK recently raised the minimum wage and called it Living Wage:
sufficiently accurate to be arguable but completely co-opting the concept
without even acknowledging the intention.

Several young, intelligent people I know actually believe the fuss about a
basic income they've heard is just a minimum wage increase.

I haven't run the numbers per-country but just the idea seems sufficiently
interesting to be plausible. Allowing BS political branding to dilute it to
"another random budget change" is a total disservice to not just the poorer
part of society but also to the future of the social system.

------
Joeboy
I would think that a requisite for a basic income happening would be tax
revenues growing faster than the cost of living. Is that happening? I'd be
surprised, but maybe somebody who knows better can enlighten me.

------
dools
In addition to universal basic income the government should guarantee a job to
anyone who wants to work, which effectively sets a minimum wage[0]

Also, it's stupid to exclude immigrants or to have a "closed border" policy,
because more people means more labour and more resources. The economy booms
BECAUSE of immigration if handled correctly.

Economics is such a confused profession ... y'all must be embarrassed.

[0]
[http://bilbo.economicoutlook.net/blog/?p=23719](http://bilbo.economicoutlook.net/blog/?p=23719)

------
vinceguidry
To give everyone in the US a basic income of $500 a month would cost ~$2
trillion dollars. Plus the cost of the inevitably humongous bureaucracy that
will be necessary to administer it.

~~~
gknoy
How would there need to be a huge bureaucracy to administer it? The IRS
already handles annual funds-transfer (and validation) for citizens.

Moreover, replacing welfare (which has bureaucracy to check eligibility) with
a flat "everyone gets paid X" would remove the need for the bureaucracy that
_currently_ exists to administer welfare programs.

It seems to me that there would be substantially lower administration costs
for such a plan, since there's no need to verify whether people are eligible,
other than filing tax returns. Perhaps verifying that someone is actually
alive is necessary, but that still seems to be less than the current checks
that exist.

~~~
vinceguidry
> The IRS already handles annual funds-transfer (and validation) for citizens.

The IRS is still going to have to do its job, unless the USGov suddenly
decides to not collect taxes anymore. So we're going to need a new agency. Or
a new department of an existing agency. Either way it's not free.

> since there's no need to verify whether people are eligible, other than
> filing tax returns.

What makes you think there wouldn't inevitably have to be eligibility
requirements? You'd have both politically-necessary requirements, (would
felons be eligible? Even the ones in jail? What about non-citizens?) and also
requirements borne from the need to not create perverse incentives. How old do
you have to be to get basic income? If there aren't any age requirements then
Octomom will be a role model instead of a laughingstock. All of these
requirements, including more that neither me nor anyone else will have thought
about until a year or two into the rollout, will increase the administrative
costs. I don't see why people think it will be easy or free to do this.

The whole thing reminds me of those "Things programmers believe about X"
articles. Basic income is a good idea, but please don't pretend that it's
going to be somehow different than every other welfare program.

Sure, Basic Income is supposed to replace welfare, but has any of the
proponents actually thought through what that actually would entail? There are
a lot of welfare programs that address lots of needs. Not all of them are pure
cash transfers, some of them do things like provide counseling.

Some of them, like the food stamp program, provide greater value to the people
they serve than if you'd just gave them a check. By replacing these programs
with BI, you could be actually lowering their quality of life, like those
people whose lives suddenly get awful after they get a raise at work because
they no longer qualify for government assistance programs they relied on.

I suspect that a few years into replacing welfare with BI, we'll suddenly
start appreciating welfare.

------
ap22213
Someday soon we will have cures for cancers, technology to repair aging,
colonies on Mars, unlimited clean power, and maybe even some strong AI. Yet,
Humans will still be debating economics, taxes, and the morality of work.

Can I ask you amazingly brilliant, creative and tenacious thinkers to put
'ending work' up in that list somewhere? My kids and grandkids really
shouldn't have to work 70-80 hour weeks, should they?

------
partiallypro
Even Milton Friedman argued that a basic income was better than a minimum
wage, but a negative income tax would be better than that. Minimum wages cause
labor misallocation and hurt small businesses. It's often that larger
companies will push for a minimum wage hike because it will destroy the
margins of their small competitors; then they can use their pricing power
later to offset their margin loss.

------
MaricopaAz
(Cross-posted from a similar thread) Has anybody studied the outcomes on
American Indian reservations from having basic income guaranteed for
generations? I'm not an expert or well-read in this field, but I think anybody
advocating basic income would be interested to visit a reservation and observe
the lifestyles, dreams, goals, and successes found there.

------
anonymfus
Why not both?

~~~
aninhumer
Because once someone's needs are met by a Basic Income, it's much harder to
get them to work for exploitative wages, so the minimum wage is redundant.

If someone is accepting $1/hour for a job when their alternative is enjoying
free time, then there's probably a good reason for it. Maybe they're learning
skills, maybe the working is really fulfilling, or maybe they just got bored.

------
elcct
Basic income is the most stupid idea presented here. It is basically a new
zero.

------
dredmorbius
The wages of labour are what _supports_ and _enables_ labour, both in the
present, and the future. It is the _cost_ of labour.

A living wage _pays for the maintenance of labour_. Its feeding, housing,
clothing, and education. It pays for the upkeep of a family, and the raising
and education of children (the next generation of labour).

 _Failing_ to pay a living wage is the same thing as buying _any_ factor of
production below cost. While it may return a short-term advantage, it fails to
ensure the continuation of supply. Worse, it creates a cascade failure in
which ever higher and more skilled ranks of labour find their own wages and
compensation falling, that ripples through society.

An enterprise which _cannot afford_ to pay the full cost of its labour isn't a
productive economic activity. Or perhaps, it is one which faces significant
positive externalities such that its own ability to command compensation is
diminished.

An enterprise which _can_ afford to pay the full cost of provisioning labour
_but which does not_ is doing nothing more than transferring wealth from that
labour pool, or from the public purse if the that purse is then called on to
support the labourers, into its owners pockets as profit.

The words are mine, but the ideas are Adam Smiths, very clearly expressed in
_The Wealth of Nations_.

I mentioned the cascade failure. Smith talks at length of the conditions of
workers in England (middling), the American colonies (quite good), and in
China (exceedingly poor). He notes that it's the _growth_ rather than the
_size_ of the economy which seems to promote high wages, which is interesting
to consider.

Smith _doesn 't_ describe much on how to ensure that labour _does_ earn its
fair share, though suggests that the right to organise would be a benefit.

My thoughts are leaning toward not only that but institution of an employer of
last resort, with a minimum wage established through same. This would act much
as a central bank does as lender of last resourt, but as an endless source of
_labour demand_ rather than _currency_.

The demand might be social projects which cannot themselves command market
compensation, or as a market broker for labour (effectively the Mother of All
Labour Unions), to which companies could bid on work (the difference coming
from the public purse via taxation).

More on this and Smith generally:

Why you should read Smith:
[https://www.reddit.com/r/dredmorbius/comments/4cyroa/adam_sm...](https://www.reddit.com/r/dredmorbius/comments/4cyroa/adam_smiths_lost_legacy_or_why_you_should_read/)

Smith on wages:
[https://www.reddit.com/r/dredmorbius/comments/2311mb/adam_sm...](https://www.reddit.com/r/dredmorbius/comments/2311mb/adam_smith_on_living_wage_national_wealth_growth/)

[https://www.reddit.com/r/dredmorbius/comments/1z5vfb/thought...](https://www.reddit.com/r/dredmorbius/comments/1z5vfb/thoughts_on_minimum_wage_enterprise_viability/)

------
Kenji
Yes, and a fish is smarter than a snail.

We in the west are oblivious to the damage socialism like this does. Go ask
people in former Eastern Bloc countries, they will tell you all you need to
know about socialism.

