Universal Basic Income & Working Less

johnnyskeleton

sligolad1 wrote: »

Would you support a universal basic income set at the current social welfare levels (Children aged 0-17 €32.30, Adults of working age €188, Older people aged 66-80 €230.30, Older people aged 80+ €240.30) combined with a flat rate of income tax at 45%? For more info on the details of the model I'm proposing take a look at this report: http://www.bien2012.de/sites/default/files/paper_253_en.pdf

If it was feasible I might but I don't think it is feasible.

Notionally the payment to employed people replaces tax credits, but that is basically replacing c. 1,650-3,500 in tax credits with c. €10,000 for a single person, rising exponentially with more children. So it's more expensive on that front.

Also, people who are not currently working but not on welfare either currently don't (or at least ought not to) get benefits e.g. students, artists etc but they would be now obtaining benefit from the system.

A 45% flat tax rate is incredibly steep. So someone can have €10,000 and have a life of leisure, but if they take a minimum wage job at €344 they get an extra €190 per week, or €5 per hour. Not a particularly good incentive to work at the lower end.

Currently, a person earning €100k gets about €61k net. If there was a basic income they would get €65k. For €200k they get about 108k, under UBI they get €120k. By contrast a person earning €40-60k currently will get slightly more net income per year (about a grand a year).

So overall, this system will take less tax generally, and disproportionately so for the higher earners. Great if you're a higher earner, but it's harder to see how it works out.

Then there are practical problems. People will be more inclined to work illegally or underdeclare income if there is a flat rate of tax. The incentive to have children is a lot stronger under the UBI so we will have more people to take care of. Does the UBI mean that benefits such as college grants, rent allowance, medical cards etc will all be scrapped or will they stay in the system? Because if there is a threshold for these, it would carry the same disincentives to work as the current system.

I admire the utopian ideals behind the UBI. I also think if it could be shown to work on a pratical level it would be good. But in Ireland, as soon as you bring it in you would have people advocating that the tax part be reduced while the UBI part stay the same. So no one would be happy with it after a while and they would drive the figures down.

sligolad1

johnnyskeleton wrote: »

If it was feasible I might but I don't think it is feasible.

Notionally the payment to employed people replaces tax credits, but that is basically replacing c. 1,650-3,500 in tax credits with c. €10,000 for a single person, rising exponentially with more children. So it's more expensive on that front.

Also, people who are not currently working but not on welfare either currently don't (or at least ought not to) get benefits e.g. students, artists etc but they would be now obtaining benefit from the system.

A 45% flat tax rate is incredibly steep. So someone can have €10,000 and have a life of leisure, but if they take a minimum wage job at €344 they get an extra €190 per week, or €5 per hour. Not a particularly good incentive to work at the lower end.

Currently, a person earning €100k gets about €61k net. If there was a basic income they would get €65k. For €200k they get about 108k, under UBI they get €120k. By contrast a person earning €40-60k currently will get slightly more net income per year (about a grand a year).

So overall, this system will take less tax generally, and disproportionately so for the higher earners. Great if you're a higher earner, but it's harder to see how it works out.

Then there are practical problems. People will be more inclined to work illegally or underdeclare income if there is a flat rate of tax. The incentive to have children is a lot stronger under the UBI so we will have more people to take care of. Does the UBI mean that benefits such as college grants, rent allowance, medical cards etc will all be scrapped or will they stay in the system? Because if there is a threshold for these, it would carry the same disincentives to work as the current system.

I admire the utopian ideals behind the UBI. I also think if it could be shown to work on a pratical level it would be good. But in Ireland, as soon as you bring it in you would have people advocating that the tax part be reduced while the UBI part stay the same. So no one would be happy with it after a while and they would drive the figures down.

Ideally I'd combine it with universal healthcare, living wage, free education etc but that's another discussion.

Don't think there is any extra incentive to have kids as the UBI for children in that example is set at the the child benefit allowance.

As regards rent allowance, think there would have to be some provision for those living in high rent areas like Dublin compared to leitrim let's say.

In this report http://www.bien2012.de/sites/default/files/paper_070_en.pdf they go through examples of how various people would be affected. An individual on 25k would be better off by around 1k, higher than that, it's pretty much the same. Families with 2 earners and 2 kids making combined 25k would be better off by 10k, at 40k they're better off by 5k.

Also, at the lower end, I believe it actually increases the incentives to work for many currently on the dole as often they are worse off if they take up paid work as they'll lose benefits. It would give everyone more flexibility with regards to what type of work they would do. It also gives people the confidence of a safety net to take a risk and set up their own business that they wouldn't usually have done.

For Reals

Above all else, our society is about making money, not the welfare or well being of the people in it.

Until we change that we'll have inequality and social crises.

With very few exceptions, interests are not going to actively lower their profit margin to give employees a higher salary unless they are forced to.
Companies will automate as it becomes economically viable to do so, just as they'll float around the globe to cut production costs.

At the end of the day profit is king. Once a person becomes unemployed or sick they are seen as a burden sucking hard earned taxes from the public coffers. Even if working poor, paying tax/working but unable to get by, they are looked upon with disdain as we funnel grants and subsidies to them less the wheels come off the broken system we regularly oil.
On that point, the profiteers need welfare. Otherwise the curtain falls and that's when you've bigger problems like food riots etc. Wouldn't be long before it's no longer a great little country to do business.

I can't see people, in this society, regularly voting in FG/FF on a rotating basis, buying into UBI unless there's a few shillings in it for them.
If there's no private profit to be made and divvied out, there's no political interest.

The cure isn't communism either by the way. A genuine government led middle ground would be nice though. People fight against raising the minimum wage.
We simply aren't about what may or may not be best for society, even if a positive for everyone.
We're a snake eating itself. Profit drives up costs, people more and more rely on the tax payer, taxes/costs rise, as must profits.

We would need something cataclysmic to open the door to the possibility of UBI.
Some of us naively thought the last big one would finally pave the way to a new way of doing business, but the rattle of the money bags was too strong.

Like any system designed with the intention of being fair, some greedy bunch will come along and ruin it anyway.

blanch152

For Reals wrote: »

Above all else, our society is about making money, not the welfare or well being of the people in it.

Until we change that we'll have inequality and social crises.

.

The quandry is that unless you make money, you can't have welfare or well being. Food can't be conjured out of the air, neither can healthcare or education, therefore you need someone to make money to pay for these.

sligolad1

For Reals wrote: »

I can't see people, in this society, regularly voting in FG/FF on a rotating basis, buying into UBI unless there's a few shillings in it for them.

That's the thing, if you look at the examples in the report above- the largely middle class FG/FF stalwarts would get more money than they do in the current system.

sligolad1

blanch152 wrote: »

The quandry is that unless you make money, you can't have welfare or well being. Food can't be conjured out of the air, neither can healthcare or education, therefore you need someone to make money to pay for these.

The money is being made but just not being distributed fairly. The difference in wages between the top 5% for example and the rest is make. In the future, income inequality will only continue to rise with increased automation and a greater concentration of wealth with the top 5%.

For Reals

blanch152 wrote: »

The quandry is that unless you make money, you can't have welfare or well being. Food can't be conjured out of the air, neither can healthcare or education, therefore you need someone to make money to pay for these.

Of course but that shouldn't mean we go back to the myth that regular folks need the wealthy, when I would suggest the average worker paying tax, paying his way, with little to no money left to save, contributes more to society than someone with an off shore account or foreign residency tax status.
There's a possible middle ground. Designing the way we do business as a society to favour business hasn't worked well.

johnnyskeleton

sligolad1 wrote: »

The money is being made but just not being distributed fairly. The difference in wages between the top 5% for example and the rest is make. In the future, income inequality will only continue to rise with increased automation and a greater concentration of wealth with the top 5%.

On a basic level, isnt a view that someone that makes something should benefit from it fair?

sligolad1

johnnyskeleton wrote: »

On a basic level, isnt a view that someone that makes something should benefit from it fair?

Of course, but it's not just the top 5% that makes things. Many lower earners work a lot harder than some wealthy people who may have just inherited the money (not all but some). People working on production lines and the self employed make plenty of important products and without these society would be very different. Also, the top 5% need people to buy their products etc or a lot wouldn't be making as much money

johnnyskeleton

For Reals wrote: »

Of course but that shouldn't mean we go back to the myth that regular folks need the wealthy, when I would suggest the average worker paying tax, paying his way, with little to no money left to save, contributes more to society than someone with an off shore account or foreign residency tax status.
There's a possible middle ground. Designing the way we do business as a society to favour business hasn't worked well.

Thats undoubtedly true. But the current socialist discourse is not about closing tax loopholes (because they know that wont result in more taxes) but imposing ever more tax on the squeezed middle class. The working poor pay for the unemployed poor and as the demands of the unemployed poor increase the burden on the working poor is increased.

sligolad1

johnnyskeleton wrote: »

Thats undoubtedly true. But the current socialist discourse is not about closing tax loopholes (because they know that wont result in more taxes) but imposing ever more tax on the squeezed middle class. The working poor pay for the unemployed poor and as the demands of the unemployed poor increase the burden on the working poor is increased.

With the UBI I think this pressure on the working poor & middle class could be relieved somewhat. Also, it gives a greater incentive for the unemployed to seek employment or do something else productive that they might not currently do in case they'd lose their benefits.

Water John

In fairness, Willie O'Dea has championed the case for UBI.
Sadly today, we had IBEC whinging about the Living Wage. what happens if a company cannot afford to pay, they ask? Well, I suppose they would be better off too if people gave their labour for free.

For Reals

Water John wrote: »

In fairness, Willie O'Dea has championed the case for UBI.
Sadly today, we had IBEC whinging about the Living Wage. what happens if a company cannot afford to pay, they ask? Well, I suppose they would be better off too if people gave their labour for free.

We cherry pick what suits. To be straight, if a business can't afford to pay it's staff a livable wage, (as deemed by them what know), then the business can't function. Why the tax payer should step in is basically not fair.
Look at the states, you've Walmart staff only surviving with state aide. This enables Walmart to make profits off the back of taxpayers. It's pretty ridiculous.

MayoSalmon

Universal basic income is basically out and out socialism

sligolad1

MayoSalmon wrote: »

Universal basic income is basically out and out socialism

Not at all, actually has large support from many on the right.

https://newint.org/features/2016/11/01/why-a-basic-income-could-be-a-gift-to-the-right/


http://www.cbc.ca/news/business/basic-income-ontario-right-political-economic-1.4083630

Water John

In fairness also, some major retailers, incl the two German ones pay the Living Wage as a min.

UBI is not socialism. You need to do some further study. As above, many on the right also support it.

johnnyskeleton

Water John wrote: »

In fairness, Willie O'Dea has championed the case for UBI.
Sadly today, we had IBEC whinging about the Living Wage. what happens if a company cannot afford to pay, they ask? Well, I suppose they would be better off too if people gave their labour for free.

Would the workers be better off if there was no one able to afford to employ them?

Water John

Well legally, they can't pay less than the minimum wage. The diff here is around €2/hour.
Unless you are arguing that it be done away with?

MayoSalmon

BarcaDen wrote:

Here's an idea thats been getting traction recently - pay everyone a basic income, abolish existing welfare, and legislate for reduced working hours. I've no idea how this would work in practise (I've read many interesting hypotheticals but I think it would probably take 20 years of playing around with before it was done right) I suspect you'd have to take into public ownership the robotics and have the government invest heavily in automation/productivity. But it could be done.

BarcaDen wrote:

Basically we've got the technology and the wealth to work far fewer hours but for inexplicable reasons we have people at one end (the precariat) struggling to get by, and people on the other working insane, radically inefficient and unproductive hours. This is a simple problem that could be fixed in a few months with a little imaginative thinking.

BarcaDen wrote:

Here's an idea thats been getting traction recently - pay everyone a basic income, abolish existing welfare, and legislate for reduced working hours. I've no idea how this would work in practise (I've read many interesting hypotheticals but I think it would probably take 20 years of playing around with before it was done right) I suspect you'd have to take into public ownership the robotics and have the government invest heavily in automation/productivity. But it could be done.

sligolad1 wrote:

Not at all, actually has large support from many on the right.

What do you mean not all all?! It is pure socialism at its finest, redistribution of wealth.

Now I don't deny that technology is going to massively impact the labor force massively in the next 20 to 50 years however to deny that a universal basic income which will be an income received for zero productively is somehow going to solve this problem is nonsense. Pure Marxist ideology at its finest.

Water John

So, Willie O'Dea is a marxsist/socialist!!!

MayoSalmon

Water John wrote: »

So, Willie O'Dea is a marxsist/socialist!!!

No, just as Elon Musk or Mark Zukerberg aren't. All give credence to the possibility of UBI being necessary in the future.


Unconditional income has to be the biggest economic fallacy of all time.

WhiteMemento9

The fact people think the UBI is a socialist concept shows a complete lack of understanding of how it would effect a society. If everyone receives it how does someone think that this benefits the worst off in society? It is about as far removed from socialism as you can get and will only further widen the gaps between the classes.

CroFag

I found this speech by a famous economist Yanis Varoufakis really helpful to understand what a UBI stands for & what it would look like: https://www.youtube.com/watch?v=BvgdtF3y0Ss

Raycyst

The purpose of a universal income would be to make our societies viable.

Without a UBI it seems quite likely our societies will fail.

Topgear on Dave

Raycyst wrote: »

The purpose of a universal income would be to make our societies viable.

Without a UBI it seems quite likely our societies will fail.

How do you mean "our society will fail"?

Quite a broad statement?

Raycyst

I suppose that is hyperbole from me there.
If we have social welfare our societies are ok. If social welfare was to be scrapped I'd expect major social breakdown, and civil disturbance and violence.

The police chief in Hamburg described this weekends violence as 'civil war type conditions'.


I feel in the future there will be huge unemployment, along with huge wealth for some people. If there is no transfer of wealth from the rich to the poor the sheer numbers of poor people could overwhelm the security system.

It doesn't benefit the rich to have society descend into chaos. At some point it makes sense for rich people to pay poor people so that they don't engage in violence.


Unfortunately, I don't think mere money will be enough. Even if people receive free money they will still get bored and feel alienated, and rebel against what they perceive as their oppressors.


The only solution is to have a fair society where most people think they are valued and are wanted. That is simply not going to happen.

Rich people will likely abandon some countries and leave them to their fate.

WhiteMemento9

Topgear on Dave wrote: »

How do you mean "our society will fail"?

Quite a broad statement?

I presume he means as technology continues to replace jobs a tipping point will be reached in which the economy will no longer function correctly as without disposalable incomes to continue driving a consumerism economy the whole thing falls apart.

Raycyst

There will still be people with huge wealth in the future and they can continue to support industry and consumerism.

But the majority of people will find it difficult to find employment. Therefore, they will have to live on a basic income alone, which won't allow them to purchase huge amounts of consumer goods.

Rich people can continue to support corporations which will allow for large profits. But the corporations must provide social welfare within countries, and money to fund security services, otherwise the societies descend into violence and chaos.

The world can't be run by corporations but governments must make the corporations pay tax and the government then decide how the tax is spent within their own country.


Some countries, like Ireland, appear not to want corporations to pay tax. If we don't ensure a proper tax base our government won't be able to provide services or security. Then, the rich will leave and that will make the problem worse.

That is what I mean when I say some countries will be abandoned. Perhaps not on purpuse but through a political failure to secure the countries future.

This process has already begun. Greece I'd give as an example. Perhaps Italy too. Immigration makes these problems much worse.

Water John

A simple example of a modern useful service is Skype. In employment terms, AFAIK, it employs 2 people in Ireland.

recedite

CroFag wrote: »

I found this speech by a famous economist Yanis Varoufakis really helpful to understand what a UBI stands for & what it would look like: https://www.youtube.com/watch?v=BvgdtF3y0Ss

I liked his analogy;
Social welfare is a safety net that is very good at catching people, but then traps them.
UBI is more like a solid floor to stand on, that allows them to reach for the sky.

This is why its neither a left wing, nor a right wing idea. It is "socialist" in the sense that it gives people "something for nothing". But it is also "capitalist" in the sense that it encourages people to get out there and work.

We all know that the asylum seekers are banned from working, but there are also a huge number of social welfare recipients who could be doing something useful, if they were allowed/encouraged to.

There seems to be an attitude in this thread that UBI would be a substitute for a working wage, and therefore society could only afford it if the machines were doing all the work. But that is not the case.

The amount of the UBI payment could be tweaked to suit conditions in society. At low levels it could be barely enough to survive on, thus providing a strong incentive for people to go out and supplement their income with actual tax-paying work.

The people who work long hours and are barely staying afloat, could get some relief in terms of being able to give up some of their hours, which would then be taken up by the former group.

So this whole thing does not depend on "the Rise of the Machines" - although that is a related issue which is also addressed by UBI.

UBI would improve work-life balance for both the employed and the unemployed.