The issue I see with basic income is that most money is spent on housing and health care. These two things are supply constrained so it's more of an auction for who can afford them.
With basic income, we may just raise the cost of those things.
This problem wouldn't appear in a study that distributed to only some individuals.
We need to solve the regulatory or otherwise organizational problems of these things to provide real relief. Throwing money at the problem will just move money to a few hands.
> With basic income, we may just raise the cost of those things.
The problem with this argument is that it proves too much. It's true of anything that causes the poor to have more money. Lower unemployment, higher wages, anything. Heck, it's true of lower healthcare costs, because people would have more money for housing, or vice versa.
Housing costs and healthcare costs are problems, but they're independent problems.
On top of that, you're assuming the UBI actually results in the poor getting more assistance rather than merely different assistance. Right now there are explicit subsidies for housing and healthcare. If they get replaced with a UBI in the same amount, maybe people just use it to buy housing and healthcare anyway -- but maybe some of them don't, and that causes those prices to go down.
Problem is the lack of colloquial objective definition of "poor".
The US "poverty line" is at 80th percentile of world incomes. The US's vast welfare/entitlement system ensures few indeed net less than that line, shoring up their shortfall with trillions of $.
What constitutes "poor" keeps shifting. There will always be a bottom 10%. There is ongoing increase to the standard of living, instilling a sense of "nobody should go without X" (when X didn't exist not long before, broadband internet being the latest). Affordable housing gets overrun by population growth & attracting mobile opportunity-seekers, living space naturally going to the highest bidder; property taxes being a thing, there is no recognized natural right to real estate. Health care relentlessly advances, new lifesaving care objectively costing a great deal ... vs a public sentiment of a right thereto.
We need an objective redefinition of "poor", predicated on a baseline of nutrition, housing floorspace, basic tools (stove, disposal, etc), care (minimum optimistic odds of longevity), information access, etc and an understanding that the baseline cannot be shifted - that those doing better are not poor, that accessibility thereto is largely attainable (whatever the sociopolitical system), and acknowledgement that when/if all are above that line, poverty services are officially out of a job.
As it stands, "poor" is a moving target for which a great number of people have a vested interest in covering a consistent, if not growing, population.
> As it stands, "poor" is a moving target for which a great number of people have a vested interest in covering a consistent, if not growing, population.
Nearly all Kings and Emperors were 'poorer' than most Westerners under the poverty line of today. They had no refrigeration, antibiotics, electricity, etc. But we still agree that there are 'poor' people today, and I think we're correct to say so. Yes, it is a moving target, and thank God that it is such. If 'progress' means that we have to drag the least lucky of us up to levels of decadence that Cesar could never have though of, I'm more than on board for that. Quibbling about the exact definition of poor for all of time is useless. Charge ahead, have the 'poor' of our grandchildren's time be the wealthy of today.
IMO, the big factor that explains why a minimum-wage worker with a smartphone is impoverished but a 16th century king is not, comes down the psychological burden of poverty.
If you're poor in America you live with constant fear of minor financial catastrophes because they will further constrain your opportunity, perpetuating a downwards spiral. Integrated over time this background anxiety drastically reduces one's subjective quality of life, and also leads to physical health issues down the road.
By contrast, if you're a monarch of a medieval European kingdom, you might be dying of syphilis at 43 but with the knowledge that everything possible is being done to save you, and you can call for a roast pheasant or the execution of your meddling cousin on your deathbed.
It's completely subjective, and thus very easy to dismiss, but it contributes the "missing term" for me in thinking about this question.
I find this trope of Kings/Emperors being "poorer" than most people today, to be an extremely annoying trope. This trope is purely a rhetorical device used to justify inequalities, because "look you have a cell phone and infinite McDonald's deliveries on Seamless, you're richer than a King of old!" Meanwhile you're shackled to your job, shackled to your location, shackled to your apartment/mortgage, shackled to your debt, etc.
I find the annoyance annoying, overlooking how "poor" has been lifted to heights unthinkable not long ago - and prompting my earlier comment. Those who have had cellphones for all adulthood don't grasp how limited much was not long ago; methinks many need a reality check on what basic living entails (I grew up with wood heat, no A/C, significant homegrown food, walk 2 miles in a blizzard for help when car slid into a ditch, hand-typed individual copies of resume, etc). Most "shackling" is for want of imagination to do, not resources/opportunities. I'm deeply concerned that so many think they're "poor" when they do in fact have far more resources & opportunities than "rich" (or at least "middle class") did not long ago.
Why would we not want the baseline to improve over time? I genuinely do not understand the attitude that we should establish some extremely low bar like “is not currently at risk of starvation” and then never move the bar, but merely congratulating ourselves when more people pass that bar.
Because humans need an objective minimum to survive. Below that they face slow death. There's a difference between social norm vs existential need, and many people have a vested interest in conflating the two.
There has to be a baseline standard, amounting to triage, above which "your core needs are met, and you have a path to thrive on - up to you to do you now."
Maybe there's another moving standard of minimum standard of living, whereby people don't existentially need X but society at large agrees everyone should have X (or opportunity thereto).
The definition of "not poor" is not supposed to amount to "barely surviving" but to "living and being productive members of society".
> many people have a vested interest in conflating the two.
Just like you are conflating being poor and being a bad person:
> your core needs are met, and you have a path to thrive on - up to you to do you now.
This implicitly suggests that you are only poor because you were too lazy/stupid/<insult> to follow that path. Maybe there are people like that, but many people are poor because being poor is expensive.
At some point it's up to a competent adult to do with their lives what they see fit under the circumstances dealt them by life. They are not automatically the charge of others just because they don't achieve some nebulous whim of strangers. Each has their own dependents to prioritize.
So now they are poor either because they are "incompetent" or because they "saw fit" to be poor. Okay, there is nothing implicit or suggesting about this, you are explicit about it.
No. I'm saying: if they meet an objective baseline of essentials, they're not poor.
And that's the core problem: everyone is tossing around the word "poor" to fit their ulterior motives (yours currently being to demean me for no apparent reason) without any agreed-on definition thereof. You're beating me up for suggesting there be an objective common definition, which happens to not be what you want it to mean (which, apparently, is whatever implication you see fit to win an unprompted argument with a stranger).
> Because humans need an objective minimum to survive.
I don’t even agree with this. Even for starvation there’s no clean dividing line. Malnutrition leads to reduced lifespans and health problems. I think that quality of life both can and should increase as society improves its technology and wealth.
You're bolstering my case. "Malnutrition" is, obviously, below the line I'm trying to draw. Meet the line, and you fundamentally want for nothing, no "reduced lifespan and health problems". Humans have a natural lifespan; what is the minimum necessary to support that (aside from externalities brought on by personal choice or random $#!^)?
I’m not being clear. I mean that as your nutrition gets worse, your expected lifespan decreases and you are at greater risk of health problems. Again there is no clean dividing line between malnutrition and good nutrition. In fact, in the future we might know so much more about nutrition that many common human diets in 2020 will seem like malnutrition.
Then let's err in favor of what we can deem "good nutrition" now, and objectively adjust it later if appropriate. "You'll never meet my whimsical specification of sufficient, so your earnest objective suggestion is wrong" doesn't work.
The simpler solution is to just impose a tax of a given rate and pay out all the money it generates as a UBI. As economic productivity increases over time, more revenue is generated and we can pay out a bigger UBI, which satisfies the intuition that minimum standard of living should increase as overall productivity improves.
If that amount is below some standard of living we wouldn't wish on our worst enemies then we can worry about it (i.e. raise the tax rate). If it's somewhat more than that but nonetheless we have a reasonable tax rate, so what? If the economy is doing better in ten years and that allows someone living on a UBI to be able to afford broadband when they couldn't before, is that supposed to be a problem?
The problem is UBI simply becomes the new $0 per supply-and-demand. If you didn't have to work for $UBI, and everybody has $UBI it has no value. Yes, the math is more complicated than that; upshot is a limited supply of essentials will be priced to take into account that EVERYBODY has $UBI. If I'm poor, limited housing means rent goes to $rent+UBI. If I'm sufficiently above poor, $UBI goes to $0 because I paid for $UBI (xN) in the first place, getting back some of what I paid in taxes.
Someone who couldn't afford broadband before UBI wouldn't be able to afford broadband after (beyond a brief blip where the market sorts pricing out) because rent & broadband just increased price according to everyone now having UBI. If anything, more won't afford essentials and near-essentials precisely because overall prices will rise.
It's the same reason why minimum wage really doesn't work: prices increased to match a baseline income for low productivity, coupled with an increased population unable to earn at all because they simply don't produce $minwage value (and are now marked "poor" and routed to get their needs provided by a bureaucracy).
That would only be true in a world where supply of necessities is immutable. In practice when there is more demand for stuff we can generally make more stuff. It is possible to build additional housing rather than forcing everyone into a zero-sum auction over the existing supply.
Hence "Yes, the math is more complicated than that". The practical tweet-sized outcome is about the same though.
The other thing missed by UBI advocates: money is merely a representation of value, it is not value itself. Someone living on $UBI (and I expect a great many would) has all their basic needs met without their effort ... except that those basic needs are not provided without effort. This badly distorts supply-and-demand. $1 costing a UBI recipient nothing, prices rise by $1 - knowing that the $1 cost nothing to obtain; to wit "easy come, easy go".
> Hence "Yes, the math is more complicated than that". The practical tweet-sized outcome is about the same though.
Only if we do nothing about housing supply constraints and nobody decides they'd rather move to areas without those constraints given a UBI. But we should do something about housing supply constraints, and people would move away from high housing cost areas either way, but moreso if we do nothing about housing costs. Either one invalidates your premise.
> Someone living on $UBI (and I expect a great many would) has all their basic needs met without their effort ... except that those basic needs are not provided without effort.
We already do this for people with disabilities etc. It's not a problem unless the number of such people is large.
Meanwhile most people are not satisfied to live in a studio apartment and eat nothing but rice and beans forever. Anyone with more ambition than not starving to death would still have plenty of incentive to go out and do productive work, so the majority of people would continue to do so.
This is also another reason to fix the amount of the tax. If hypothetically too many people started to live off the UBI and not work, the tax would generate less revenue, the UBI amount would decrease and fewer people would be inclined to live off it.
> This badly distorts supply-and-demand. $1 costing a UBI recipient nothing, prices rise by $1 - knowing that the $1 cost nothing to obtain; to wit "easy come, easy go".
Giving everyone $1 doesn't cause prices to rise by $1. Some people would buy things with elastic supply whose quantity rather than price increases with increasing demand, some people simply wouldn't spend all of the money. (The second is more commonly done by corporations, but it's still very common, and the economic effect of the money being removed from circulation after being spent one time isn't that much different than zero.)
Also, that still only happens if you print the money. If it comes from someone then it doesn't cause price changes unless the two people would have bought different stuff -- which is not the case if they were both buying housing.
> “A linen shirt is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct.”
Interesting (I'll study further), but still fixated on "inequality". I don't care that Elon Musk has billion$ and I don't, I care that I have a "tiny house" bare minimum of nutrition, environment (heat/cool/humidity), waste disposal, energy, mundane medical care, and living space - with which I can be reasonably expected to live an optimal lifespan (within a standard deviation), processing raw resources at minimal cost.
>The problem with this argument is that it proves too much. It's true of anything that causes the poor to have more money.
Lower unemployment would be associated with a greater availability of goods and services, so that would get it out of the trap. Higher wages would also be associated with a supply increase if they came with increased productivity, but if you raised the minimum wage then prices of low-end products might actually go up. Of course, the typical supply and demand picture predicts both an increase in price and an increase in volume if the demand curve gets "richer," so you are not entirely off the mark, although your argument is not valid.
> Lower unemployment would be associated with a greater availability of goods and services, so that would get it out of the trap.
That's assuming the goods and services are locally consumed, which in a global economy they're commonly not.
A jet engine factory that moves in and hires a bunch of people reduces local unemployment, but that doesn't mean any of the local workers are in the market for jet engines.
> Higher wages would also be associated with a supply increase if they came with increased productivity, but if you raised the minimum wage then prices of low-end products might actually go up.
Same problem again. If a jet engine factory opens up in a place with already-low unemployment and pays better wages, people quit their lower paying jobs to take the higher paying ones, but that doesn't mean any of the productivity increase is relevant to local housing markets. The workers still aren't in the market for jet engines, but they'll bid up the local housing stock if zoning constrains any more from being built.
The premise that a UBI would increase housing costs is also basically assuming that the money comes from nowhere. If the money was printed that would be the case -- but that's an instance of "printing money causes inflation" rather than "UBI causes inflation." If it comes from collecting taxes then the people who receive it have more money, but the people who pay the tax have less, which more or less cancels out. (Especially when, as with the people in the middle, they're actually the same people and the UBI and the tax directly cancel out.)
>That's assuming the goods and services are locally consumed, which in a global economy they're commonly not.
But in a global economy that's irrelevant: the greater availability of jet engines where they are used will cascade eventually into a greater availability of bowling balls in the town where they make jet engines.
But in this case "bowling balls" is really "whatever the workers buy with their money" -- if local housing is supply constrained so they have to spend it bidding up housing prices, they don't get so many bowling balls.
This is still a "constraining the housing supply is bad" problem, not a "higher wages are bad" problem.
> If [UBI] comes from collecting taxes then the people who receive it have more money, but the people who pay the tax have less, which more or less cancels out.
It doesn't cancel out because the people receiving the UBI tend to buy different goods than the people paying the tax. Fewer people bidding up prices on yachts and capital, more people bidding up basic goods and services.
Employment cannot solve poverty problems for the disabled, the sick, the people taking care of their children/parents/siblings/etc, or the people who are better served spending the time in getting a degree.
Employment cannot solve poverty problems for the disabled
Of course it can. Why, in the US, almost a million of disabled people stopped being disabled and entered employment in recent few years, because of good economy:
The truth is that millions of people on disability in the US aren't actually so disabled that they cannot work: as the above shows, they will work if they consider the employment conditions good enough. Yes, there are plenty of disabled people who really cannot work, but majority of disability in the US is created, not alleviated by Social Security. One needs to remember that by creating programs to help poor and disabled, along with helping poor and disabled, one also creates more poor and disabled.
The only thing I would want to add is a minimum wage increase would cause employment to decrease holding all else equal, so an increase in supply would not be observed unless something else were at play.
Oh, of course, I was talking about the two separate cases of wage increases due to productivity increases (the guy maintaining the widget machine makes more than the guy who used to hand-stamp widgets) and wage increases due to minimum wage increases (all factories must now pay workers $15/hour for making one $8 widget every two hours).
> The problem with this argument is that it proves too much. It's true of anything that causes the poor to have more money.
"The conclusion of this argument is deeply inconvenient, therefore the argument is wrong."
It's actually true that rising wages result in higher rents. It's plainly obvious that this is the case - otherwise why would anyone care about rent explosion wherever Amazon decides to put HQ2?
> It's actually true that rising wages result in higher rents.
It's true in places with a constrained housing supply, i.e. restrictive zoning. Which is common in urban areas. But what you have there is a zoning problem, not a UBI problem -- evidence being that it's also true of higher wages and lower unemployment etc.
In unconstrained areas higher demand for housing causes more housing to be built, which prevents housing costs from absorbing anywhere near 100% of the new money.
Those less restrictive areas are not always where people want to live. The people advocating for UBI are often not the same people that are OK with poor people being priced out of an area and moving into lower-cost areas.
I think it's more likely we'll see UBI proponents want to factor in a cost of living adjustment based on the place one lives, which will be a nightmare of political administration and unintended consequences.
> Those less restrictive areas are not always where people want to live.
Then remove the restrictions in the places people do want to live.
> I think it's more likely we'll see UBI proponents want to factor in a cost of living adjustment based on the place one lives, which will be a nightmare of political administration and unintended consequences.
Agreed that there's additional margin we can get with less restrictive zoning, but land is ultimately supply constrained. More importantly, high-quality (previously defined as arable, now defined as "close to good jobs/services") is certainly constrained as a matter of physical distance.
Land is supply constrained, which causes housing to cost more in urban areas because constructing taller buildings costs more. But the limit on housing supply even in urban areas, absent restrictive zoning, would be that construction cost at any plausible level of demand.
We know how to build 100 story buildings but there is no place on earth where you can find a hundred square miles of nothing but 100 story buildings.
I don't follow that. HQ2 was about creation of new jobs and immigration of more people into the area.
For a fixed supply, higher rents are caused by a larger number of people demanding housing at the current prices. Higher wages only affect that by (a) causing immigration into the area, or (b) raising people out of poverty so that they can afford housing when they couldn't before.
Hypothetical landlord: “All my tenants are now earning an additional $1k per month and nothing prevents me from raising prices. But I won’t raise rents because... reasons.”
Even where there are housing supply constraints, they still can't raise rents by the full $1000/month because that would give tenants $1000/month more incentive to move to a different city without housing supply constraints.
By how much absolutely does rent go up vs how much the wage has risen? Are the people better off or not? Don't just say rising rents as a catch all. This is all the more case for UBI vs rising minimum wage because in UBI there aren't the unemployed falling through the cracks.
> I empirically analyze the causal impact of the minimum
wage increase on housing rents in the United States and Japan. In both countries, minimum wages hikes increase housing rents in urban areas: 10% minimum wage increase induces 1%-2% increase in the United States and 2.5%-5% increase in Japan.
> 10% minimum wage increase induces 1%-2% increase in the United States
This shows that absolute rent is going up. Relative rent, the proportion of income going to rent, is going down. This frees up folks' money for other things and improves living conditions.
> Now imagine a 10% raise for every earner.
If everybody made the same exact amount, that would be relevant. With a $25k UBI, you'd see folks who previously earned $50k getting a 50% raise and those making $500k getting a 5% raise. Right now, people in poverty are often spending 40-60% of their income on rent. Not so of people making $500k.
>Right now there are explicit subsidies for housing and healthcare. If they get replaced with a UBI in the same amount
Good luck with that. UBI is barely tolerated by the left and progressives but only under the constraint that it doesn't replace any existing social welfare programs. The minute UBI advocates start pushing it as a replacement is the minute that progressives will squash it.
As an exercise, try and advocate for getting rid of Medicare for Seniors in return for increasing the pension payout rate (to whatever reasonable number of you choose). How do you think that will go ... and that's just one program. If you think you can get rid of food stamps and 10,000 other programs, you're dreaming.
Honestly I think public health is so well ingrained into the Australian psyche that it's not really considered to be welfare - it's just a state service like roads or parks. UBI in Australia wouldn't change our healthcare system.
UBI is barely tolerated by the left and progressives but only under the constraint that it doesn't replace any existing social welfare programs.
Where can I read some of these articulated positions for myself? Any particular articles or writers that made a substantial impression on you with these positions that you'd recommend I read?
>Where can I read some of these articulated positions for myself?
Imagine if you were to come up with a policy where you increase senior pension rates by $3000/mo but you get rid of Medicare - do you think Bernie Sanders would go for that deal? I'll tell you right now: ZERO chance he would support it. And that doesn't even take into account that there are hundreds of thousands (millions?) of jobs that support the current entitlement programs. Do you think those employees will just let you lay them off without a fight?
I don't have any links, but I have gone out of my way to find out what different groups think of UBI when I was excited about UBI a few years ago. My excitement has since deflated and I now think UBI isn't a solution to any actual issues with automation. Specially it doesn't solve the following:
- It doesn't get rid of existing entitlement programs.
- It doesn't solve automation issues for the developing world which can't afford to pay its citizens and will be hit especially hit hard by automation.
- It doesn't solve automation issues for the developed world since people derive meaning and self-worth from work (there's a difference between working and supporting yourself and being supported by government handouts). To reinforce this point: communities that are supported by government welfare programs tend to have issues with drug and alcohol abuse and crime. Furthermore, the social welfare programs in the developed world are already extensive enough that healthcare, food, and shelter will always be available regardless of the state of automation.
I imagine he's talking about the response to the Yang campaign, where liberals quite rightly derided his plan to replace all "entitlement" programs with the dramatically smaller $1000/mo UBI. If someone who has been a life-long libertarian looks like he's trying to drive a wedge into social welfare programs, that's probably what is happening.
Was this just general derision in the form of "people on twitter" or had an economist somewhere made a cogent economic rebuttal? It's the latter I was interested and hoping someone could point me in the direction of. Not particularly interested in hearing what twitter person thinks about UBI-I'm rather ignorant to certain economic arguments about UBI myself, and am trying to address this, if that makes sense.
I doubt any serious economist could corral up enough spare tike to waste on a rebuttal of this idea. Not every idea rises to the level of serious discourse. The Yang UBI amount was much smaller than the amount paid by social welfare programs to the people who receive them. That's just arithmetic.
That is because it was proposed with cuts to everything else. That leaves people to fall through the cracks in the meantime. If you transition to UBI without those issues, progressives like the idea.
Right. But this is the unbridgeable gap between Libertarian-types, who see UBI as a way to cut entitlements and progressives who (at best) see it as a supplement to ALL existing programs. What's the compromise here?
Agreed. The momentum of welfare service providers alone would see to that, with somewhere around a million US workers having a vested interest in keeping their jobs as gatekeepers/facilitators, vs "everyone gets a check" covering what they control access to. Should UBI be enacted, the very same system would agitate to provide specialty services on top of UBI for special cases, building pretty much the same bureaucratic structure as exists now.
UBI simply redefines $0 income to a higher number functionally equal to $0.
You're right about the housing. If we have government policy that restrains supply (as we clearly do) and at the same time a government policy that stimulates demand (UBI) rents are guaranteed to increase. That doesn't mean UBI is bad, it means the government needs to adopt a radical supply program for housing. Every landlord in America should be put out of business.
If you are guaranteed income, you aren't bound to specific regions or locations. You can move to places with cheaper land and healthcare systems with less overcrowding. You can work less lucrative jobs in those locations and find customers for your work because everyone including the local residents of those rural areas, will have new money to spend. Local regions would see an influx in cash, allowing for small businesses to be reborn in rural areas and spreading the economy out and away from coastal metro areas.
A lot of people rely on friends as non-monetary resources. If I get locked out of my car right now I'll call a family member to bring me a spare key. If my car is acting up I have a friend that will look at it for me. I do a lot of tech support in return, not necessarily in exchange for other services in a direct way. It's just being part of a community. At least in my world (midwest US) I cannot imagine moving to an unfamiliar area as a form of resource management. I think this probably gets more extreme the more your financial resources are strained.
Having close family nearby is worth a hell of a lot of money by non-FAANG-wage standards. Hundreds to thousands of dollars a year in saved vehicle and equipment rentals or purchases, Ubers (car breaks down, need a ride to work), and so on. If you've got kids and have some nearby family happy to provide child care, we're talking hundreds a year in babysitters on the low end to many thousands if they can replace daycare, before/afterschool care, that kind of thing. That's a lot of money to most people.
But with UBI, maybe larger networks of people could move together. For example, a single mom can't move to a new city to take a job because she relies on her parents for childcare, and her father can't leave his job. But with UBI they could all move together if it made sense for them. Her extended family could move with her and pay for expenses with UBI until they all found new jobs.
I agree, I'm sure there are cases where UBI would enable people to move, I just don't think it's going to be a big paradigm shift/massive migration/stir the melting pot kind of thing.
That's definitely true for those that have networks with some amount of wealth. For instance, if your family member doesn't have a vehicle, or works a job with inflexible hours, they might not be available to bring you a spare key.
My wife and I are friends with a young single mother who, until recently, didn't have such a network (my wife met her through a mentoring program). She grew up in the foster system, suffered abuse, and went to an alternative high school. Her network consisted of family members who were themselves barely scraping by, as well as school friends who were in similar straits. If your network doesn't have the resources to support you, it's not nearly as valuable.
All that being said, I have a similar feeling on moving away from our community; but our network has a lot of people (family, friends, and acquaintances) with money and connections.
This might be a bug rather than a feature for a lot of people. Many people want humanity to concentrate in urban areas because it is better for the environment. Others complain about urbanites' tax dollars paying for rural roads (which is effectively the scenario you're describing, even if those tax dollars are labeled "UBI" and routed through rural citizens' bank accounts first). Still others see rural Americans as their political adversaries.
(Note that this is just an observation; not a value judgment)
> Many people want humanity to concentrate in urban areas because it is better for the environment.
I'm interested in learning more about this. I've never heard of it, are there any sources proving that this is the case? If people spread out more, is that actually more harmful? I can imagine this is an extremely complicated topic
I can't provide numbers for this, but many things are more efficient for dense settlements: transportation, any last-mile distribution (food, water, electricity) and collection (sewage, garbage).
This is the line of reasoning I was referring to. Also urban areas emit (cause?) less carbon per capita than rural areas and both do better than suburban areas.
So provide a basic income, but also shift some (or all) of the costs of those externalities onto the individual. Your basic income stretches farther if you choose a lifestyle that makes more efficient use of it.
This is already true. You make less money but it stretches farther in many areas outside of major cities. Most people live in these cities because they want to, even with all of the drawbacks. Not because they have to.
In the current case, politicians are deciding to route dollars to rural roads because people live there. In the UBI case, tax dollars are given to people who live in rural areas who then pay tax to fix their own roads (or maybe we don't change how rural roads are funded and we just add on UBI?). Seems like you're making a distinction without a (meaningful) difference.
>If you are guaranteed income, you aren't bound to specific regions or locations.
Not disputing this, but there are some caveats that would need to be true for this hypothesis to hold. The main one being that people's reluctance to move comes down largely to career opportunities and moving expenses rather than access to amenities or proximity to family/community.
The primary reason people leave rural areas and move to large metropolitan areas is work. Most people in rural areas are already near their families, that's why they are there to begin with.
I disagree on the housing point. With basic income, people who can’t afford housing in expensive areas would move to towns with cheap housing/land but less lucrative/efficient work. There’s no housing shortage in rural areas.
I have lived in areas that were gentrifying. Everyone knew that rents were going up and would continue to go up, but few were willing to leave. People with small nest eggs preferred to blow it on higher rents than invest it in relocation. The general attitude I saw was 'I have a right to live here so I will, even if I can no longer afford it.'
Not only that but people have an emotional investment; "This is my home", "All my family lives here", "It's all I've ever known", etc. Moving to someplace cheaper may not be an improvement overall. Financially maybe, but what's that worth if all your friends live across the state, or you can't just hop into a nearby pub (if that's your thing) like you used to, or you have to drive for an hour to get to work instead of a 15 minute bike ride?
Because moving to places with lower cost of living, to speak extremely broadly of course, means less income compared to cost of living, meaning a lower standard of living. But with a guaranteed income, a lower cost of living would always mean a benefit to standard of living.
This is true in theory but not in practice in my experience. I presently live in one of the bottom 5 states in terms of population density and there are multiple manufacturing plants that require no experience, are paying 60k+ for new hires, and are in extremely low COL areas. By the way, they can't find enough people to apply and are having to aggressively advertise to fill entry-level spots. I think the issue is more information asymmetry. If people knew the jobs existed and knew what they paid I'm sure at least some % would be willing to move, but no one discloses that out of that gate, unfortunately.
People are not exclusively driven by economics, nor are they immune to economics. For a lot of people, moving to a place with lower COL would mean giving up community and family in their high COL areas. Those networks provide a lot of security that doesn't appear on the books.
These are quality of life trade-offs that are different for everyone.
Of course, the younger or more flexible you are, areas like yours might be a good opportunity, but it's not a obvious win for every entry level job aspirant.
I think the other problem is what happens next. Without the nexus of a city you are stuck at that place or the 4 or 5 similiar places. Good or bad variety can offer more.
Because moving itself is expensive, and you can't just move and automatically have a new job. With basic income, you can afford to move, and don't have to worry too much about the time you'll spend looking for a new job.
If they like their current house they'll work hard to pay for it.
If they can't find a job or don't like their current home that much they can use their UBI to move and make room for a more productive citizen to move into the city. This makes the allocation of housing more efficient.
Because relocating requires a tremendous effort: new housing, job, occupation, acquaintances, etc.
Because a lot of that cheap land is cheap for a reason: low/no data service, harsh weather, insufficient community.
Because "basic income" is free: the whole point of UBI is a basic income which one can get by on - non-zero effort to work at all withers against the prospect of being comfortable doing nothing; there is no imperative incentive to work.
Rural areas are expensive, but heavily subsidized, from roads to Telecom and other utilities. This is only reasonable now because we need people out there growing food. It's crazy to spend money on moving people to the prairie instead of just building more housing in cities where people want to be.
Here in Finland the UBI discussion is completely different from what is in the US. Here UBI hast to come in addition to housing allowance, free healthcare and education.
Realistic UBI would be roughly the size of minimum guaranteed pension.
The cost: Microsimulation models have shown that it can be cost neutral.
In current systems effective marginal tax rates are higher for poor people than they are for the middle class or the rich in both US, Finland and probably most other developed countries. UBI or negative income tax or something similar is needed to solve this problem.
Would not an increase in demand for such things lead to a corresponding increase in supply? Or is there something I don't know about supply restrictions in Canada?
Coming from Germany (not Canada, but maybe closer to Canada than the US in terms of spending): Housing absolutely, health care probably not for most people.
But yeah, if you live on full time minimum wage here that's ~1200€ per month, of which probably 500-800 depending on where you live will go to rent. And if it's 800, it would probably be 1800 if everyone got 1000€ per month. So in that sense, he might be right.
On the other hand some people just might actually quit their job with 1000€ per month and live somewhere further away from cities, since they don't have to live there to work. And maybe that would incentivize employers to try to create more work outside cities. Seems almost impossible to really predict the large scale effects here.
At the bare minimum, if the monthly income from rental properties doubled, I suspect that would have a major impact on housing development.
It all depends on why development isn't happening, but I have a really hard time imagining that supply would not increase even if the major restrictions are due to other factors than development costs.
Well, the thing in Germany is that (1) there is actually a decent amount of new housing being built in cities but (2) there are often strict limits around where you're allowed to build, what you're allowed to demolish, and how high you're allowed to build. And during the past 5 years, demand has vastly outpaced supply. Property prices and rents in cities are absolutely insane, and there is no indication that that is going to stop.
And the reaction to it from people is quite... shortsighted? From my perspective. Often the exact people who would benefit from a better housing market vote for parties who are more restrictive in terms of new buildings. There's this perception that new buildings are only being built for "rich" people, which is true, but it also means the rich people aren't competing for your shitty apartment anymore. But somehow, people don't really think about that.
Yes. Everytime someone says the price will just go up to match it's like some imaginary world where the one thing you can't apply supply/demand is the welfare of people. Housing is not fixed and healthcare is a function of prevention which is best served by proactive measures instead of reactive which are generally more expensive. We can actually save money by not being so inefficient with the capital in the first place.
Canadian here, the supply of housing depends on which part of the country you're talking about. As far as I've heard/seen the supply of housing is generally increasing with demand in most parts of the country - some of my relatives who live in a small town a couple of hours from Toronto were saying the town is getting its first block of apartments.
However, the moment you start looking at Toronto, Vancouver, and to some extent Montreal and Ottawa, the trend no longer holds. The populations of Torcouver are going up far faster than supply is able to increase, for a variety of reasons including the cost of building, regulations, NIMBYism, etc. The problem is further exacerbated by demand-side issues driving it up, such as speculation leading to housing sitting empty and illegal AirBNBs keeping units from being rented.
Health care yes, housing, no. It's possible to build more housing to meet demand, or for people to move to balance supply/demand vs. prevailing wages. Or to have a smaller home or more room mates.
Housing is often constrained because of real estate owners controlling the political process and eliminating new construction to keep the value of their property high. Not due to economics.
>Health care yes, housing, no. It's possible to build more housing to meet demand, or for people to move to balance supply/demand vs. prevailing wages. Or to have a smaller home or more room mates.
Why do you think healthcare is constrained? The same way housing supply is constrained by zoning regulations and stuff, healthcare supply is constrained by slow diffusion of IP, restrictive immigration policies, inadequate numbers of medical school and residency slots, and restrictive occupational licensing for day-to-day medical care.
It is possible to expand access to care to meet demand, but in the USA we have a system that prioritizes high fees for doctors and hospitals, high returns to student loan providers (medical school debt), and high returns to health insurance providers above access and supply.
You are right, this is under-discussed. Look at what happened to higher education with all the "free" money. We don't want slumlords just raising prices to capture this money. It could be that if you if you are in a program like this that the rent have to be regulated based on size and location. In my opinion, UBI can never really work, but there is no reason we can't reduce/eliminate taxes on the poor to increase their standard of living.
Land value tax would be the way to go. Regulating the rent would be about as useful and effective as existing rent control schemes..
With a land value tax, the rent would still go up, but the increase would mostly be recycled back into tax take. (And you can use that tax take to eg finance (part of) the UBI.)
Yes, that's a big part of why rent control doesn't work well.
A land value tax is levied on the value of the unimproved land in a specific plot. Whether you leave the land fallow or build 30 storeys of luxury condominiums on it, the amount of dollars you have to pay in taxes doesn't change.
So the (additional) housing supply is completely untaxed.
What is taxed however is the following:
If the town gets a new highway or airport, and that raises land prices, that gets taxed. Same for a UBI.
(To pre-empt the next discussion: it's not completely trivial to separate the value of the building from the value of the land. But it can be done. Insurance companies do it routinely. And there are a variety of strategies to make the assessment that are hard to game or cheat.)
Wouldn't reducing/eliminating taxes have the same exact effect as an UBI? More money in people's pockets. By following your logic no form of welfare can work.
Tax settlement is done once per year. Monthly UBI both feels different and is practically different in terms of helping people have money throughout the year.
universal more-or-less free _access_ to basic (generally good in my opinion) care. But that doesn't include dental or prescriptions (with some exceptions/subsidies), for most people. It's surprising to see them list it as a significant part of someone's budget though. Perhaps I'm not old and sick enough (yet!) to relate :).
Some do, most are very basic outside of Quebec, and even then, I can't remember the last time a tenant sued an operator because they illegally increased the rent in Quebec (the new tenant would need the old tenants lease, plus proof that the increase wasn't justified).
This isn’t true. Numerous countries have public healthcare systems that service the public successfully, like Singapore.
Sure, you can pay to access the private system, which is a nominal amount compared to what we pay in the US.
The US ranks among the worst of the first world nations in terms of access to and quality of healthcare[0]. Just look at our hospital borne MRSA infection rates.
The idea that the US delivers consistent, quality care across the nation is laughably false.
It seems Americans often believe that, but virtually nobody in Western Europe would even think of going to the US for healthcare. I would assume the same for Canadians.
I have no idea if that's actually true, but the widespread opinion is that the ~free (it depends a lot between countries, it's usually simply affordable, rather than free) healthcare here is much better than what a normal person can afford in the US.
I'm Canadian, it's not nearly as good as paid healthcare in the US (especially high end paid healthcare). Giant wait times for things you can pay to do in the US.
> It seems Americans often believe that, but virtually nobody in Western Europe would even think of going to the US for healthcare. I would assume the same for Canadians.
This is not true. It's just ignored because people would rather believe that universal healthcare is infallible. We moved from Canada to the US precisely because of healthcare for our children. In Canada, care was non-existant and the private services were expensive. In the US, it was the complete opposite.
universal health care has never meant that every possible heath care need is met without cost. It means that access to the covered services is universally available. Which of course isn't true in an absolute sense (residency requirements etc), but is true in most practical senses.
Do your children have special needs? It never even crossed my mind to move to the United States. I imagine given my profession I could get a job with decent benefits, but I can't imagine wanting to move to the states for the health care, unless I had a special requirement.
That doesn't mean what you think it means. There are many things not covered or not covered practically that you would want to pay for private healthcare. e.g. You can wait years for services, or you can pay a few thousand a month and get it sooner. This is critical for things that necessitate early intervention. Wait too long, and when the government does finally come around to being able to provide services, it's already too late, and because the patient is too old, they are no longer eligible for the services they should have received in the first place. I speak from personal experience.
I doubt your experience is the norm. The system isn't perfect - there's definitely gaps or things I think should be covered (eg dental), and I know everyone's experience is different, but as a counter example I've never felt the need or desire to pay for private healthcare either (aside from not-covered dental) on demand or with private insurance, and I don't know any of my family that do either. (BC resident) The system has been there when we've needed it, including access to preventative care like cancer screening programs.
Bennett was referred for surgery on her right hip in November of 2013 and said she’s been told she won’t get in until early in 2016. She said her joint has deteriorated so much she is unable to work or even function without strong narcotic painkillers.
I haven't heard a compelling reason as to why the basic reality you point out wouldn't be true with UBI. It applies more to housing than to healthcare (we'd be delighted to build more hospitals and hire more nurses, but we can't make Manhattan bigger).
Georgism at work.
Places with lower building regulations and higher property taxes would likely fare better with UBI than places with locked housing supply and extreme building regulation, such as San Francisco.
If it was possible to build more housing, then I'd expect more housing to get built with UBI and rents to not go crazy. Otherwise, we're just pumping more steam into a turbine...
So the problem is in a highly unequal society, "what the market will bare" can leave these things out of reach of most people. With basic income, yes some things can cost more, but also yes the spread of what people can pay is less.
Basically, income goes up, and prices go up, but income goes up more, and eventually one reaches a fixed point. For basic goods, this should happen sooner; e.g. the rich aren't going to just buy more flour.
Housing is interesting in that currently being in a decent job market makes the housing luxurious. This is absurd. Basic income doesn't address the cost disease of luxury good, but by breaking "employed <==> surviving", it will make the other housing more attractive. Combine that with carbon tax so we don't just get endless sprawl, and then we should be set.
This is a concern I have as well; if everyone has the same income, nobody has? I'm afraid it would just bump inflation by an X amount. If everyone's base income goes up by 10% due to basic income, wouldn't that just be offset by prices going up 10% because everyone can afford that 10% anyway?
Plus, housing prices are already ridiculous and still climbing; it's at a point now where people need an income in addition to their normal wages to be able to get a house.
It depends if the market is demand-side or supply-side constrained. If everyone had more money and wanted a new TV, TV manufacturers would just spin up production to meet demand over time. If everyone needs a house and housing is restricted by zoning then the price will go up.
One reason basic income might sidestep the housing issue is that unlike city jobs, if a basic income is portable then it makes it easier to avoid living in the city, reducing competition for housing. That's also a good reason against making the basic income dependent on location (e.g. you get paid more in NYC than Reno), since that would just incentivize people to flock to cities.
Also if that seems hand wave-y to you, consider that in Alaska when the oil money goes out, stores usually have sales, lowering their prices to compete for customers.
If people have the money to get care when they need it, it may actually reduce demand for care since we can catch problems and solve them before they end up so critical that people go to the ER.
With basic income you make $4000 + $1000, which removes the discontinuities associated with means testing.
Whether increased taxes used to pay for the UBI end up eating up your UBI depends on the plan and how much you make/spend. Some UBI proposals are paid for with a wealth tax, others with a consumption tax, others by cutting most of the existing programs). They usually end up being redistributive in the grand scheme.
> With basic income you make $4000 + $1000, which removes the discontinuities associated with means testing.
No, you don't. It is completely unrealistic to assume that UBI won't effect salaries in any way. Of course this is hard to test in a small scale study, but "you introduce UBI and everything else stays exactly the same" make no sense.
It's equally unrealistic to assume that UBI will exactly affect salaries by canceling them out. You're right that there will be effects, and they're likely to be dependent on job as well.
For instance basic income may mean salaries go up for the jobs nobody wants to do as people are given an alternative, while salaries go down for jobs that are intrinsically motivating.
I can't say for certainty though. My best guess is that it's going to be better than the hodgepodge of social welfare (and its complex effects) we have today.
With basic income, we may just raise the cost of those things.
This problem wouldn't appear in a study that distributed to only some individuals.
We need to solve the regulatory or otherwise organizational problems of these things to provide real relief. Throwing money at the problem will just move money to a few hands.