We have direct democracy here in Switzerland. Anybody can propose a federal law: just collect 20,000 signatures for it (100,000 for some radical changes). Iron a few wrinkles, and it can be put to vote in one of the next federal referendums (we have one about every two months).
So far, there were about 2 or 3 unconditional income law proposals in the last 10 years, and they were all voted "no". Thankfully. Because "unconditional income" will not magically appear from nowhere, it will be provided from my salary. And my company's income (at this point, I have to pay around 18,000 francs per year even if my company doesn't do anything to finance all social programs already there — so much for "unconditional income"). And I have to pay another 6,000 francs per year for obligatory medical insurance in Switzerland. And I won't be able to receive this "income" anyway, as I am not a Swiss citizen — I just live here and have a company here, and I have to pay _a lot_ for this.
Money don't grow on trees. It always have to be sourced from somewhere. And not from some nameless "rich corporation" — it will be sourced from my already struggling business. And from yours. And from your salary.
> Money don't grow on trees. It always have to be sourced from somewhere. And not from some nameless "rich corporation" — it will be sourced from my already struggling business. And from yours. And from your salary.
Productivity, gained through software and automation, can be used to deliver quality of life improving services at zero marginal cost.
I'm not going to spend this entire comment rehashing the ongoing debate over how much of the world's economy is going to get eaten by this, but suffice it to say I roll my eyes _hard_ now when someone says money doesn't grow on trees.
With enough effort, you can automate every job out of existence. Its just a) how much effort you choose to exert and b) the order in which you do so. Can't these productivity benefits be distributed through consumer excess, and in a roundabout way, be used to deliver a basic income? And if someone complains about their hard earned $fiats, what's to say their job isn't next to be obsoleted?
I don't think this particular comment gets enough coverage
"With enough effort, you can automate every job out of existence."
The example I've used has been self scanning checkout lines at grocery stores. They replace 16 cashiers at $10/hr with one "supervisor" at $16/hr. The additional margin goes to the grocer. If instead the productivity went to a basic income program then, the price of groceries would be the same, the grocer's income would be the same, but now there would be money "appearing out of thin air" for a basic income program. But what is really happening is that you've automated a human job, captured all that GDP in the process.
If you think about it that way, it changes how you see automation, and productivity gains.
The machines also break, use electricity (possibly more than the clerks with their registers and belts and lights), require infrastructure to support (e.g. price changes must now also be updated in their possibly-separate pricing database, also consider stores labeling prices by hand or only on the shelf), and can't immediately replace 100% of cashiers (some customers will prefer human interaction, some states e.g. require that liquor is sold not by a machine, etc).
It does also create needs for different jobs. Instead of 10 cashiers @$10/hr, you now need 1 supervisor @$16/hr + a consulting company to install and integrate the machines @$300/hr + technicians to re-stock the machines and service them @$90/hr + customer support to help with software bugs in the new pricing system etc etc. Of course, you can then go and automate all of those jobs as well, but it seems a bit fractal until we have AI strong enough to build more AI where it's needed and consolidate existing AI, which I guess is what people are supposing leads to the extinction of humans since we're so inefficient.
In Australia we have a supermarket chain called Coles. After they brought in self checkouts, they started bringing in new bakeries, cafes, etc _into_ the stores. I am not sure the number of staff went down by all that much.
That's a red herring. It's not the absolute number of staff in a particular supermarket that we're talking about, but the ratio of people employed to work done. Using their lowered operating costs to expand their business doesn't negate the fact that their checkouts are operating with less human labor.
Productivity gains mainly happen when there is a profit motive to create them. What incentive is there to create self scanning machines if you can't sell them for a profit? Why would a grocery store buy them if they don't gain from the purchase. It's all the same to the store: employ 10 people or use robots and pay more in taxes so those 10 people get basic income and don't work.
Well, the government could increase the tax to levels that force the matter: automate or get no profit. However, I dont think this could be stomached in the US (by both politicians and self-sabotaging voters).
Automation is inevitable, but unfortunately for the American working class, all of the benefits of improved efficiancy will be going to a few (shareholders), just because you were conditioned to think 'socialism' is a bad word. I already see the sentiments being expressed here on HN rehashing the 'welfare queen' argument. I tell you what: a whole lot of you will be arguing for basic income when they automate your job, but it will be too late then. Good luck finding another job that's yet to be automated and pays anything in the same ballpark as your old one.
You are envisioning a world of ultra-rich capitalists (who own every mean of production, both in material and knowledge economy), occasionally giving "bread and circuses" to the rest of the world, who can't produce because their "jobs" are worthless.
Incidentally, this was exactly the reason of demise of the Roman Empire. Instead of robots, there were slaves captured in military conquests (slavery is morally wrong, of course, but it was "sustainable" and there were no significant slave uprisings). But it didn't end well.
> You are envisioning a world of ultra-rich capitalists (who own every mean of production, both in material and knowledge economy), occasionally giving "bread and circuses" to the rest of the world, who can't produce because their "jobs" are worthless.
I am envisioning a world where ultra-generous industrialists give away their wealth to help the world. You cannot say it cannot happen; it has/already is happening.
Indulge me for a moment, but isn't Bill Gates (along with Warren Buffet) giving away almost all their entire net worth in a very results-driven way to help raise the quality of life for the very worse off? And did Elon Musk (no fan boy comment here, just truth) not give away (really, offer to license at a very small cost) the patents necessary for existing vehicle manufacturers to make better electric cars?
Not everyone is greedy. Not everyone is an ultra-rich capitalist.
Bill Gates' fortune (that he hasn't gave off yet, BTW) is around $80 billion. OK, imagine that he actually put all of it to charity, all 80 billion. Say, to finance the basic income in the US. Let's assume $1000 per month will be enough for the US (the Swiss are rich poor bastards). So, for how long it will last?
The answer is ONE WEEK.
Throwing Buffet, Musk, Zuckerberg and all other rich ultra-generous industrialists in the equation will probably extend the runway to several months, perhaps a year. But that would be it.
The bulk of purchasing power in capitalist countries is still produced by working middle class.
When politicians start talking about taxing the rich more, they are really talking about the upper-middle class in the US. Otherwise there just isn't enough money higher up the income ladder to make it work.
I remember the NDP in Canada being asked who the rich were (back in a 1990's election). The said a family of 4 making more than $60,000 per year.
What if its not "taxing the rich more" and instead, is "preventing them from capturing all of the productivity gains the economy is realizing"?
Because then we get into this real uncomfortable argument, don't we? About what ownership is? Because when you're taxed, people will say that's theft of what they've "earned". But the wealthy don't earn like everyone else. They earn as rentiers, of either land, capital, or intellectual property.
I'm suggesting the entire ownership model is going to need to be turned on its head. Otherwise, those who own what the rest of the world needs will continue to siphon wealth out of the economy, to the detriment of everyone else.
The only missing number here is the US population (320 million). Basic income per month of $1000 gives $320 billion per month, or 4 Bill Gates fortunes.
Also interesting because the ~$80bn Gates fortune isn't exactly like tomorrow he could have $80bn cash, with the intent of spending it, like basic income would provide. I don't think there are many billionaires with even $100m cash. So, the effects of 1000 people having $1000 vs 1 person having $1,000,000 are very different, and for this reason I find comparisons of the illiquid wealth of an individual to basic income propositions incongruent.
The US has about 300 million people (well, more, but math is easier if you round it). At $1000 per month, that's a total cost of $300 billion / month, or $3.6 trillion dollars a year.
The US government spent $3.5 trillion in FY2014, according to Wikipedia.
That's assuming there isn't a loss of value in being forced to liquidate $6T in holdings, which there certainly would be. For every seller there has to be a buyer and most eligible buyers would be having their assets seized by the government.
> You are envisioning a world of ultra-rich capitalists (who own every mean of production, both in material and knowledge economy), occasionally giving "bread and circuses" to the rest of the world, who can't produce because their "jobs" are worthless.
Advances like universal health care and basic income enable self-organizing democratically governed means of production. Where the surplus (profit) is shared amongst the participants, vs gobbled up by the executive class.
Ya, legit concern. The race to zero marginal cost worries me. My hope is that people will still value (economically) authenticity, fashion, locally sourced goods, etc. And maybe there's industries which are too small to bother automating.
I agree with you very much on this, but the key is, how can you streamline the process for creating such organizations? And make it easier for autonomous teams to find its participants and collaborate? And ensure the fruits of the activity are shared equitably? (I think Buffer leads in this regard; transparency first).
These are all problems that are going to need to be worked out, but I have hope they will be!
> Future of capitalism is worker owned cooperatives
Oh, please, go run a business with 20+ employees for ten years and then come back to this comment. You'll see juat how ridiculous it actually sounds. Until then, please stop thinking you understand how a business runs, 'cause you don't.
I belive you to be wrong. Nothing you say is anything new. For 200 years people have been repeating 'all the jobs will go away' because of automation. It has never actually happened.
People always find new ways to employ their skills and we are richer because of it.
Im not against basic imcome proposles but you argumnet is still a terrible one. I think basic income would be a easy way to help those who for whatever reason can not provide for themself.
Basic income is a new way of organising the social safty net, and does not alter the fundamentals of the capitlaist society.
The effort often is significantly outweighed by the cost and benefits realized.
The difficulty of fully automating anyone who services your home for instance. Plumbers, electrician, firemen, inspectors, hvac, carpenters, window replacers, roofers, etc etc etc.
Right now we are automating things which are overhead and easily repeatable, not things which require creative solutions and unique problem solving within a specific domain (eg A pipe broke and water is pouring into my basement, how do I fix this as fast as possible with the least property damage, and then ensure cleanup is done properly so dangerous molds dont arise?)
I think automotion is the crux of the basic income argument. If mass automation was going to happen the way many people predict, basic income would make more sense. I don't think it will, and I think most jobs will be difficult to automate than people think. (Most factories are still manned by humans; manual jobs require interacting with the physical world, which machines can't do well at all; most professional jobs have significant non-routine components).
The electronics factories we work with are empty: large buildings filled with (Japanese and German) machines and a handful of people 'operating' them. A few years ago there were many people doing that same work. So sure there are some people manning them but a lot of jobs gone. Automation does not have to replace all jobs but it will and does replace most repetiti ve ones. So sure professional jobs stay for a while yet but what % is that? That is really not what most people do or are able to do. Like the biggest employ in the US is truckdriving: you really think that exists in 50 years? And what can a truckdriver do instead generally?
Most light manufacturing remains human-operated, though - I'm thinking the 200-person widget factories in Shenzhen or 50-person tailoring shops in Vietnam. They don't typically make a small range of products on a mass scale, but many slightly varied products on a small scale, with an irregular schedule of orders. My guess is the electronics factories, car factories and the like, found machines were a worthy investment to improve precision and quality control. For many industries, a semi-skilled human at developing country wages is a better deal than a robot.
Even lower-middle class professions like teaching, nursing, policing, office admin, etc are much less routine than people realise. (Tech is obsessed with the idea of, e.g., replacing teachers with e-learning software, but what usually happens is that the teachers end up using the e-learning software as another tool to do their job).
Vehicle automation is one large area I can genuinely see becoming automated (possibly the success in this area is because the AI doesn't need to manipulate the environment, just navigate through it). There are still many blue collar jobs which are really hard to automate - cleaning, gardening, building maintenance, etc, etc.
(Honestly, I see the most likely outcome being that first world countries develop a grey-market, third-world economy, where low-income people work cash-in-hand, below-minimum-wage jobs running cheap food stalls, cleaning laundry, or offering other convenience services on the cheap. It's not as utopian as everyone getting a basic income and using their unlimited free time to paint watercolours, but it works out as a more robust social safety net).
You underestimate the widespreadness of "creative accounting". If you try to follow all the rules by the book, you will be broke in no time. Same goes for law. So, in fact, these two professions will be one of the last to disappear.
With automation, already, a lot of these jobs have disappeared and will do so more. Not all accountants & lawyers disappear; there are just a lot less of them needed aka one person can do the work of many already and certainly in the future.
Maybe it's different in Switzerland, which I doubt, but in other countries in the EU you don't 'go broke' if you just follow the rules blindly. Many people actually do that with their companies and they do fine. It is true you could be making more with creative accounting but at a risk; going broke if you don't is a bit too strong imho.
Have you tried to run a business? Any business? In any European country or the US?
Probably the only European country that can follow the tax/accounting rules to the book is Denmark. They have high taxes, but very simple tax code. The rest (and the US) are the maze of regulations, exceptions, exceptions to exceptions, applicable limits and human interaction. People are safe from machines here. Sadly.
I ran businesses for the past 25 years in NL, DE, UK, PT and ES. I agree the regulations are a maze if you want to maximize profits when it comes to taxes. I cannot agree you need that to run a healthy company; you do not. Following the base rules (which can be automated and we do) is fine; sure you pay too much compared to navigating the maze but it is clear. The worst countries (paperwork wise) I operate in are Spain and Portugal but even there things can be simple if you overpay a bit (like sometimes just not ask for VAT back because it takes more time to fill the required paperwork than it is worth). None of that is endangering my operations; If it would I would be concerned about my business viability and the margins I am making... Why would I even start such a business in the first place?
Foxconn is replacing as many workers as possible with robotics. As robotics get better, the tipping point for each job (where the economics make sense to automate) comes closer to the present.
If you assume that automation begets more automation exponentially, then the end game of automation is the elimination of all jobs. Assuming this, the question is when, not if. So either we keep inventing fake work faster than we invent automation, or we decouple the idea of work from the idea of being human and let people do what they truly want to do.
Unless Switzerland has no form of welfare already - then you're already paying for it, just through a far less efficient means. This may cost more, definitely - or it may cost less when you're no longer making people jump through the welfare hoops to get what they need (food/shelter/whatever). In the US, the amount of paperwork overhead for things like section 8 housing, food stamps, etc, would probably cover soemthing like this. Or at least start to.
To be perfectly blunt: too bad. At the rate automation is occurring, either a basic wage becomes a thing, or society is going to collapse. Our populations cannot shrink enough to make up the gap between jobs taken by automation and new jobs created in other market segments. IT will be the next industry to get hit, and it's going to get hit HARD.
Do you have any evidence for your 'society is going to collapse' theory? Because the rate of automation was much higher when all the farming jobs were replaced. Since then, many times over jobs were created and destroyed.
I could take a article from a birish newspapers, 200 years ago, replace 'maschines' with 'robots' publish it in the NYT and most us Progressives would not notice it.
The arugment is the exact same, and it has been for 200 years.
Why is it different 'this time'? The computer has existed for a long time, it has replaced many jobs already and society did not collapse.
The pridiction that IT will be crushed is also not knew, I remember the 'all the jobs will move to India' crap. No to mention all the ink spilled on 'runable specifications'.
What's different this time is there may not be any replacement job categories for those automated out of their current job.
Especially not one that produces enough economic value for the employer to be able to offer a living wage from a strictly capitalist valuation.
Where did the majority of farming and manufacturing jobs go after their respective revolutions? The services industry. Do you really think it can hold that many more jobs? And if not there, where? Creative pursuits? Most people just aren't cut out to be artists...
It's already happening. All those "server and tape monkeys" that were getting middle class salaries at large corporations are finding themselves downsized as companies move to more XaaS platforms for their mission critical apps, and the rise of AWS/Azure.
It's the tip of the iceberg at this point (in my opinion). Not to mention, as people move to AWS, what happens to all of the sales reps, sales engineers, implementation engineers, support staff, etc. at all of the major hardware manufacturers? Those jobs just go away...
But you are talking only about one section of the IT industry (Servers and Hardware). The apps that are moved to those saas platforms have to be developed and maintained by someone. What about development? research? security? consulting? etc...? I remain skeptical...
Probably capitalism will collapse (hopefully). Society is strong and resilient, and will likely be just fine. The real question is whether there will be a way to issue in the next iteration of societal order, or if it will regress when the capitalist empires of the world are destroyed.
I think many people naturally see ways that society can be improved and are wiling to work on them.
It's hard to make this point without going into all aspects of socialist thought. However, in basic, the reason most people produce now is to have enough to buy food and housing. The incentive for people to do above and beyond is to get wealthy for a big payout of some sort. However, while that does incentivize entrepreneurship, I think it's hard to argue that most of the ideas that come out of those efforts are socially beneficial.
I would argue it would actually require relatively little work in order to provide a high quality of basic necessities to all people (food, housing, healthcare), which would allow people to spend more time focusing on building out things that would be beneficial for society.
I haven't looked into the details of this referendum but the way it's normally pitched is that this will replace all the other welfare.. in that those old systems will go away.
If it was truly universal - no exceptions, no means-testing, etc - then the "bureaucracy" around this one is negligible.
While I'm intrigued by a Basic Income approach, I don't think the bureaucracies would be willing to give up the power that they have to shape and influence people and society as a whole. It is exceptionally rare in human history that a government has given up power.
I think that is what will kill most of these Basic Income proposals, not even considering the math of taxes.
As a non Citizen, can you propose a law or vote on them? Cause as much as I value your opinion, you don't speak for Swiss if you're not a Citizen. Most form of socialism is generally problematic for external capital, which seems to be the business you're in, having a company in another country. So it's really unsurprising to me to hear you critique this.
Though, external capital is actually a good point to consider. Whatever social program I think a country decides to adopt, it need to consider a structure where it will remain attractive for capital investment. So as long as there is still a win/win situation between investor and the country's Citizens, I think it's fine, but if that's broken, like in full communism, it's generally a bad outcome for the long term prospect of a country.
The price is far higher than it needs to be, though. Historically normal tax rates were around 10%, not the ~40% typical for most industrialised nations today. From around 1910 to 1950, there was a massive push to centralise control of economies, move nations off the gold standard and onto fiat currencies, expand credit as a means to reduce poverty, and massively increase state spending. The "normal" state of affairs now is largely a creation of specific government policies at that time.
Somalia's a crime-ridden hellhole - I'm not an anarcho-capitalist and I believe that freedom requires the rule of law. Hong Kong and Singapore are two places which remain close to the pre-WWI classical liberal ideal of genuinely free economies with the rule of law, and both have income tax rates of around %10 IIRC. I'm strongly considering relocating to the latter if the UK continues on its current trajectory.
Of course I've already read up on Singapore. It's a paternalistic, de-facto one party state, on a model common in East Asia. They make a different set of tradeoffs to Western nations - harsh law enforcement to achieve low crime rates, etc. I've lived in China, which does have a shitty government, but even China's problems are exaggerated in Western media.
The only things on that list I have a real problem with are freedom of speech and LGBT rights. Capital punishment and caning shock Westerners, but Singapore's legal system is actually fair and efficient; it's not like the procedural trainwreck which is the US justice system where countless criminals walk free and countless law-abiding citizens are rotting in jail.
Conscription is pretty much necessary for a micro-state sandwiched between two nations which historically hated their guts. Migrant workers aren't forced to be there (and unlike Qatar or Dubai, they're not generally lured in under false pretences). Even the freedom of expression rules are very similar to the de-facto/de-jure hate speech rules which exist in the West, and they exist for a similar reason - Singapore wants to minimise Chinese/Malay tensions.
As possibly a supporting point, many Americans are unnecessarily on disability(for those outside the US, if you can prove a permanent disability that prohibits you from working, the US government will send you a check every month). They live in low income areas and buy groceries with food stamps. They faked an injury, scammed the system, and now I'm paying for their rent and food. Most people on disability are legitimately disabled, but some are not.
These people are discouraged from working, because, if they are caught working in a manner that is inconsistent with their 'disability', they get in trouble, forfeit their benefits, and possibly jail/prison time for their fraud. But, I see these people routinely trying to work in any way they can get away with. True, some do not, either out of laziness or fear of discovery, but, as a whole, most still try to work.
If that income were replaced with a legal, basic income, I have no doubt more of these people would continue to work and seek work, probably more so since it would not be a risk to their freedom or basic income, and they are the ones currently trying to scam the system. These people are probably at least a subset(or superset) of the demographic that the non-supporters fear most will just leech off the system.
In theory we also would save on the cost of the bureaucracy required to determine who is actually eligible for a particular entitlement. If everyone was getting basic income and we eliminated a bunch of entitlements such as disability and unemployment insurance, then there would be no need for those entire sections of the government payroll.
Of course in order to actually achieve any savings we would need to truly eliminate those other entitlements and fire all of the people that work in the departments that currently oversee them. That is the heavy lift politically.
The same is true for a lot of policies that make sense economically but may not survive contact with the political system. Major tax reform is another obvious example. Everyone knows we could have a variety of different tax systems that are economically better than the one we have today, but in order to get there we need to eliminate some tax carveouts that people love.
The pathway from today to the desired state can't just be hand waved away. If we added universal basic income, what entitlements are we eliminating? How much would that save? What parts of the government are getting shut down, and how much does that save? Who are the winners and losers in the new system?
The government routinely sheds thousands of workers. It's not such a huge change to remove a whole department. It would be cheaper because unlike normal we wouldn't end up rehiring everyone with the domain specific knowledge as contractors.
Some of those people also may have had a disability they recovered from, but no real opportunity to return to the workforce (or no incentive to work towards their recovery). I believe the Social Security office even includes the criteria "could this person get a job?" based on age, skill, and location, and you could remain on disability even though in some theoretical sense you are physically able to work. Such as, you might consider a miner who has some physical reason he is unable to continue in mining; theoretically he might be physically capable of working in some other job, but those jobs don't exist in the community, or he doesn't have the skills and doesn't have enough time left in the workforce to justify retraining.
Which is to say, there are situations where no one is really defrauding the system, but because the rules don't offer any soft landing people have to stay inside a system and can't explore the marginal contributions they are capable of making.
(Still this wouldn't remove the purpose and need for disability insurance, just remove some of the strange structures in it that have developed.)
Maybe I am jaded, living in Santa Cruz, I had a housemate years back on disability and getting money because she couldn't handle scents and some other stuff. She had a handicap placard in her car yet still was able to bike around town for some miles including some slight (50-100') hills. I don't think things are as out of whack as the "Cadillac Welfare Queens" trumpeted up during the years of Reagan, but there are people, maybe only in certain communities, that play up the whole I'm a victim, I'm can't work, you owe me mentality.
Hell, one of the ones locally, managed to get a PhD from the local university some years back but has not had a steady job in over two decades.
The idea of a basic income is interesting, but it would need to be couples with cleaning up some of the able bodied "self proclaimed" victims.
Let's assume for the moment that you're right and there are some people who can work, but chose not to, and use disability as their reason to avoid work, and claim disability benefits.
We can either just give them money, and not care if they label themselves as disabled; or we can make them jump through expensive hoops with complex bureaucracy and end up just giving them the money anyway.
I live in a city and county where I see recent immigrants busting their ass for minimum wage or lesser dollars.
I also see a PhD in CS spending all his time online and playing the victim for some made up disabilities (maybe there is a mental component). I'd like to see a bureaucracy that moves individuals like this into a required work/live support system.
We have a downtown cleaning crew of individuals with Down Syndrome helping out; we have recent immigrants busting their asses in the field, etc. Oh and we also have able bodied, poor mannered, self described disabled white people that refuse to do anything. My favorite was someone I knew through surfing out on "disability" for his back, but he'd still pull into 8-10' waves and was doing ding repair as well.
Personally, I like the idea of a basic wage, but I also know there are people that milk the system and want stop gaps for that too.
Basic Wage means those people aren't "milking the system" - they'll keep doing what they're doing, but it'll cost you less than it costs you now (because you've removed all the expensive bureaucracy between them and the money).
And you're pretty judgemental about mental illness. 20 years ago there was considerable stigma from employers, and less protection in law. Even if he'd wanted to work he would have faced discrimination. That discrimination still exists to some extent, though there are some protections. But now he has learned helplessness. People judging him doesn't seem to be getting him back into work. A programme following the Sainsbury Centre for Mental Health model ("place then train" - get someone a job, then support them and the employer to keep that person in the job) would be better, but those aren't common and they're always over-subscribed.
I recently stumbled on the back story of the 1848 revolution in Paris and realized this idea has been already tried out, even if it was a kind of side effect :)
In short:
1. Implemented a "right to work", everybody should have a work at a 2 francs a day
2. Parisian flocked to the state company so they paid anybody they could not give work to 1.5 francs a day for the "right to idle". Something like half the Parisians got paid like this.
3. People started to hear about this from outside the city and started to move to Paris.
4. As you can predict, it ended up as a collapse and one of the cause of this revolution.
That's actually likely to happen in any country that offers it; it could only work if they exclude immigrants from either the program or the country itself, else half of the world will flock to Switzerland to live there. Although IIRC Switzerland already has a very restrictive immigration policy as it is.
It's amazing anyone would want to move to a place that offers such a steep step up in quality of life. I'd want to move there and I live rather comfortably in the US. Why? 1) I believe in and advocate for basic income and would love to be able to put my money where my mouth is and 2) the security into retirement is huge, and the security offered to my kids when I'm gone is even bigger.
I know people envision flocks of moochers, but how many countries suffer mass-unemployment? So many. How many parents would sacrifice everything for their children to live a better life?
"move to a place that offers such a steep step up in quality of life."
Let's be sure we all agree on the meaning of the expected amount: 2'235euros.
- Average rent: 1'000€ (assuming shared apartment)
- Average base insurance: 350€
- Average public transportation monthly pass: 60€
- Average internet access: 50€
- Average mobile phone access: 30€
- Average income tax: 17% (lower quantile, insurances and transportation deducted): 318€
- Intermediate total: 477€
- 1 restaurant per month with friends: 50€
- 1 movie ticket per month: 15€
- 1 coffee, 2 times per week: 28€
- 1 drink with friends, 1 time weekly: 40€
- Total, remaining: 294€
- Daily wage: 9.40€
Just to give you an idea of what it means living with 9.40€/day in Switzerland:
- Train from Geneva to Lausanne (30 minutes): 35€
- Coffee at Starbucks: 7€
- Big mac meal at McDonald's: 10.50€
- A coffee: 3.50€
Basically speaking, this wage would grant you the real minimal amount required to pay your rent, your most basic insurance, income taxes, have a minimal social life with people (coffees) and get some very basic food at home (rice, milk, bread, etc.).
Forget the idea of buying anything else such as a kitchen appliance, furniture, clothing, books, side-education, holidays, etc.
So yes, it sounds like a very high amount to other countries ears but here, it's lower than the minimal wage. This is a wage to make let people actually "think" by removing the struggle of finding food and shelter. But it is in absolute no way enough to satisfy a normal and well-being person's needs. Finding a job remains necessary.
I get by with less in America with no problem, mostly out of habit since I can afford 'nicer' things. Buy beer at a store (you can get more than one for less money!), cook food with your friends, don't buy overpriced coffee and enjoy the nearly limitless supplies of free/cheap entertainment. Play some music or (if you have the luxury) go hiking or something.
I'd probably be in the camp of someone who would try for a riskier job, art, entertainment or game design if this was a thing. To be honest, it would probably add more value to the world than what I'm currently doing.
I still don't think it would affect most people though; I'd say the majority of people think I'm a bit odd, even some of my friends.
I wanted to chime in and also add that over time basic income would increase the cost of good, whether through taxes or vendors raising prices. The fact is, with all forms of minimum wages or basic incomes inevitably lead to increase in prices. That's pretty much how macro economics works.
That would most probably be the case if people get enough to satisfy current demand for products and at the same time create a surplus of capital to increase demand. If you got your basics covered, just barely, I don't think demand would rise.
I wonder what sort of feedback loop would result if they tied the basic income to something like the CPI[1] in the USA? -- As the price of living increased(due to the surge in demand) the basic income would be increased to retain the same buying power.
I would think some sort of controls on the prices, possibly only on things the basic income is expected to pa(rent, insurance, food, etc...) would be needed to prevent a runaway inflation feedback loop. Maybe that would be enough to prevent runaway inflation?
I like the idea of it but proper implementation would be very difficult.
That's why you move to Switzerland for a decade, subsist on bi and pull a small job (maybe), live on scraps and in a hovel, and send money home in the form of remittances
"Just because an initiative - such as a basic income - gathers enough signatures to trigger a popular referendum in Switzerland, it doesn't mean it will be passed (indeed the national minimum wage initiative was similar - and was heavily defeated). So far it is firmly opposed by the Swiss Federal Government:"
This would cost Switerland about $168B annually, which is equivalent to their total tax receipts today. I assume that they could get rid of a number of governmental services, but seemingly you'd need to increased taxes above the current 40% income tax level. it's hard to see how the economics could work.
That said, it would be interesting to see how basic income might affect entrepreneurship in the US. Entrepreneurs might not have to move to high cost cities like San Francisco and maybe this would encourage more remote work.
Nobody ever factors in the BI in that tax equation. For some (many?) people, they'd just get their additional tax money back again as their BI payment - net zero.
Not necessarily net zero, but net "a lot less than it looks like".
There are a lot of tax breaks that are designed to reduce the tax burden of the middle class -- things like mortgage interest deductions -- that could be eliminated in a "Basic Income" setting.
As a Swiss I second that. I will vote for it, but I expect it to get less than 10% of yes's. It's 10 years too early. Switzerland is progressive in many ways but it is also conservative in many ways - this sort of risky experiment is the kind of thing that will almost certainly not pass for now.
It's true that it will certainly not pass. But the main objective, as for any referendum, it's to put the debate on the public place and just that it's a unique privilege.
It might sound like a lot, but in the Swiss context, it's not that much. It's a really expensive country to live in, especially in the main cities like Zurich and Geneva. For you 2,256€ is great, but in Switzerland, it's considered good income for a student/intern, that's how expensive it is. (compare that to Portugal where they can pay a intern 150€/month).
Yep, I know a couple of senior engineers working at Google in Poland for the same salary (as that min in Switzerland). Not that it's great salary there, but that's the market and big companies like Google use that situation to get cheap labour.
That's shit whats worse is that those companies exploit the EU market even further by moving them around the EU while keep paying them in their home countries even with some extra payments for sustenance it's still several times cheaper than hiring local engineers in the UK, France or Germany.
I lived in Zürich for a year and remember seeing an ad on the train for work at a grocery store that paid 4k CHF ($3910) per month. The college I was attending paid 35CHF ($34) an hour to students who did work for their department. Just to put it in some perspective. The cost of living is also ridiculously high.
That's why when discussing income and things like that the Purchase Price Parity is used. The PPP for Switzerland is 1.6. So even after you convert from Francs to Dollars you have assume everything is 1.6 as expensive in Switzerland.
So 2250 dollars in Switzerland roughly gets you the same purchase power as 1400 in the USA.
Not sure about flipping burgers, but all supermarket chains pay a minimum wage of 4000 CHF (4200-4400 USD) per month, with 4 weeks of paid holidays. Taxes on such a low income would be quite low (15% payroll and 10% income tax). Health insurance is around 200 CHF/month per person, with a 2500 CHF yearly deductible.
Note that rent, food, etc is also scaled accordingly. (Not a bad deal in the end, especially considering the cashier/waiters/etc earn enough to live decently).
Some people do that. You can save more, I guess (but the housing market in fr and de is already going up due to that). (You can also live in CH and go shopping abroad if you're cost sensitive)
I don't think that's a high number at all for Switzerland - infact it would be quite a struggle to live on that amount after paying for rent, health insurance, utilities and food. I think the amount being proposed would still give quite a high incentive to people to work, as the standard of living on the minimum would be basic to say the least.
What if you've paid off your mortgage and now housing is essentially only maintenance and utilities. Removing rent cost would make that money last. I wonder if the people behind this have that notion.
No, this is different from what happens in the US.
Let's say I buy a house in the US and pay cash (no mortgage, no financing). I now own this house and decide to live in it. I will have to pay local property taxes, but I do not have to pay any income tax.
Now, let's say I instead rented out the house to someone else (and lived somewhere else), I would be making income on the rent, and therefore paying income tax on the rental income.
In Switzerland, if you live in the house that you own (the first example), you are considered to be renting it to yourself. So you have to pay income tax on the market rent for your home, even if you are both the tenant and the landlord.
EDIT: For the record, I don't know why you're being downvoted for asking for clarification.
You're missing the point completely. Not having to deal with rent means the money from basic income can go further than for anyone who doesn't own their own housing.
Meaning it's essentially for rich kids who've inherited their own housing, or those with enough dispensable income to pay off their place.
Basic Income in this scenario wouldn't help the poorest, it would help the rich enough to get further with that money.
I am not against Basic Income, but it has to be in a situation where the poor will benefit from it, not the rich enough to make the best out of the money.
This seems like just another shit the modern bourgeois leftist have cooked up for themselves thinking it applies to the poorest. What a joke.
A person rich enough to inherit a house at a young age isn't going to notice the relatively tiny minimal income. They are far more likely to oppose the taxes necessary to support minimum income than they are to be a secret motivating army behind it. It's not productive to invent unreasonable stories of unfairness just to create an internal rage however exciting that may be.
If you're concerned about possible unfairness of minimum income then you would need to look at people whose medical expenses could exceed the minimum income, people who are mentally incapable of buying the right resources, people who have dependent children and unchecked market forces that would allow prices to rise beyond what the minimum income could afford.
The last one is the biggest problem as it would effectively transfer wealth from taxpayers briefly through the poorest people to the wealthy via increased profits and still leave some people unprovided for.
Money is money. How one uses it is up to the individual. If the person took out a mortgage and paid it off after 30 years, there is nothing immoral about it and certainly doesn't prevent another person from doing the same. A paid off home does not need to be a mansion. A modest flat affords the freedom also.
If a given person could not afford a mortgage or a down payment, adding more money to that persons income increases the chance they will save enough to do so, not reduces it.
Home ownership isn't very high in Switzerland (and at least in urban areas there aren't many apartments below 1M). And you have to pay income tax on your rent anyway (even if to yourself).
For those lucky enough to have managed to secure a place without rent/mortage -> essentially those lucky few with ownership <- will get the best out of basic income.
Not necessarily if income tax rates are offset to compensate. Also 2k/mo might not make much of a difference for wealthy people (so they'd still need to earn money to support their lifestyle).
I live close to switzerland's borders, and it's incredible the disparity in terms of salary/cost of living between switzerland and all it's neighbors.
I do not consider myself poor, but there's no way I can afford any sort of holiday in switzerland.
I have friends and some colleagues in switzerland: for them, a year's rent of my house would equal for roughly a single month of their salary. For those living close to Geneve, sometimes less.
Yeah, in Switzerland I live decently but I am not rich by any means. To visit friends I frequently travel to Germany and everytime I realise just how big a difference it is for many things.
In the beginning I always had the feeling of something wrong when going to a supermarket there, because for me the gap was so crazily big.
Switzerland is brutally expensive. If you go to a restaurant for a steak you'll pay like 100 USD just for the steak. If you aren't rich you'll probably become almost vegetarian just from the prices of meat. People often go to France to buy groceries if they live close enough to the border.
Think of the Children! In this case, actually do. Poverty is often exhibited as a cycle. Poor parents, parents with disability, lack of education, or whatever reason someone is poor, will not be able to give it's children a fair opportunity. Chances are the cycle will repeat, the child will be poor too. With a basic reasonable minimum income, I believe that the next generation could turn out better. Hopefully, this could help steer a country away from the cycle of poverty, and benefit society as a whole. Obviously, you'd need to wait 30 years to see such benefit, and you might not care enough to want you wallet to pay for other people's future children and the society you leave behind, but if you do care, I think it's an argument to consider.
Either way, I'm not gonna go ahead and proclaim it's a good idea or not, but I think it's a valid idea that demands thought, and experimentation.
I hope Switzerland has the capacity to both pass this law, and retract it if it doesn't pan out as expected.
Somewhat off topic, but switzerland is ludicrously expensive. I recently visited for a week in Zurich/Bern and the best way to describe the prices is like you are permanently stuck in a theme park or airport. Starbuck Coffee? $7. Can of soda at a convenience store? $3. Any fine dining for two? $300-400
I asked one of the taxi drivers what a cashier makes and he said $80k. With prices that high, It almost feels like a house of cards. I dont understand why exchange rates dont drastically bring these prices into alignment. Seems like importing goods from other countries would completely destroy this ecosystem.
I don't think it's Swiss manufacturing (high value add, high skill) which is the problem -- it's services. And a lot of that isn't exposed to import substitution.
It absolutely does make sense to import high-end high value add products which reduce labor, if you're in an artificially high labor cost environment.
That is a lot of money actually. I think if this happens, Swiss house prices would go up and people would go on 6-month holidays to foreign countries where the cost of living is lower - That's what I would do; though for me it would be a 'working holiday'.
What would that do to the Swiss tax system if people left Switzerland and started paying most of their tax in other countries?
That said, I like the idea of basic income. I just think that the laws around it should be designed very carefully.
The real problem with a proposal by the government to guarantee income is that governments cannot guarantee that they will always have enough money.
What happens if a recession hits and there's 25% unemployment What happens if 25% of the people really decide to stay home and not work? What if unemployment is only 10% but the other 90% become less productive?
Yes, capitalism and "every man for himself" has it's own drawbacks but the positives outweigh the negatives.
How does campaigning for these things work? Are there resources allocated from the state to make sure it is an informed decision, or is it entirely up to private interests to do that?
Both. The voting material everyone gets includes a booklet which informs about the proposed changes and where statements by opposing and approving parties are to be found (this is prepared by the Federal Chancellery as far as I know). This includes a recommandation on each proposal by the respective governement and parlament (respective, because it depends on which organisational level the vote happens, national, cantonal or communal). Which way the recommandation goes is decided by a vote in parliament and the numbers (how many against/in favour) is printed too.
Before that, there is the usual lobbying by different political parties and it depends on the perceived gravitiy of the changes how much you see. There are billboards, discussions in radio, TV and newspapers. Sometimes there are also other groups coming into the public light as happening now eg. with law professors campaigning against the 'Durchsetzungsinitiative' (the discussion about that one is getting more and more heated).
The Law defines the existence of a basic income for all citizens and the conditions it should meet, literally, "to allow any citizen to live with dignity and participate in the social life".
The exact amount of the income is unknown and not part of the Law and any press article is basically reporting based on speculations.
The source of the income is also not part of the initiative. It is the Government's duty to find a way to finance it once the Swiss citizens have decided there should be one.
There are two major suspected targets for collecting the necessary money. First source would be the VAT, through an increase of the current VAT. It is currently set at 8% and it's among the lowest in the world (the Swiss public administration workers are very efficient and working in a public office is not typically the kind of job given to people with personal issues as in many other countries).
The second potential source is a taxation on trading operations. Even the slightest taxation rate on trading operations (aka 0.00001% capped at 0.01$) would immediately solve the issue of funding the revenue.
How could a "slight" financial transaction tax raise 250 billion in revenue? The profits of the entire banking sector in Switzerland is only 20 billion a year. The entire economy of Switzerland (GDP) is only about 800 billion.
Similarly arithmetically impossible claims were made by European politicians arguing for an FTT two years ago - claiming they would raise 100s of billions from an industry (HFT) which only generates 5 billion or so profits a year - worldwide.
No it does not. I don't understand why people beliefe this to be true.
If you shift consumtion from some luxery goods to more low end goods there might be a slight increase in the price of some of the lower end goods but because of the price elasticity it will only be a very small amount.
The avg price level should remain about the same, some relativ price would be effected but not to any overly large degree.
We have to remember that this is not a overly radical proposal most people will still have about the same amount that they have now. Some people on the lower end will somewhat increase their income but not enougth to change prices significantly.
> No it does not. I don't understand why people believe this to be true.
I'm looking at it from the point of view of a landlord / property manager (something I am not). If this law was enacted, I could most positively think that I could raise rents a fair amount knowing that so many more people could now afford my property.
I could also assume the market would get flooded with new renters (demand up), driving prices up.
I don't see how that wouldn't happen in other markets too.
The title of the article is "Switzerland will be the first country in the world to vote on having a national wage of £1,700 a month", and the omission of the word "on" led me to believe that they had actually voted for the proposal, rather than that they will vote on the proposal, which is what the article actually says. It is a minor point, but I think the title as it is is slightly misleading.
This would not necessarily be considered "liberal" in Switzerland, as the Liberal and FDP parties (now merged) are not liberal in the sense that Americans misuse the term.
I'm Canadian, so there's that. The Swiss are pragmatic conservatives, so this might pass if you can convince the bulk of them it makes sense financially, i.e. it will reduce overall costs of aid and social assistance programmes.
Polls, as well as the results of similar initiatives (eg minimum wages). Would need a massive shift to see it pass imo (especially since the small rural cantons have a disproportionate weight and they don't tend to vote in favor of those issues).
So far, there were about 2 or 3 unconditional income law proposals in the last 10 years, and they were all voted "no". Thankfully. Because "unconditional income" will not magically appear from nowhere, it will be provided from my salary. And my company's income (at this point, I have to pay around 18,000 francs per year even if my company doesn't do anything to finance all social programs already there — so much for "unconditional income"). And I have to pay another 6,000 francs per year for obligatory medical insurance in Switzerland. And I won't be able to receive this "income" anyway, as I am not a Swiss citizen — I just live here and have a company here, and I have to pay _a lot_ for this.
Money don't grow on trees. It always have to be sourced from somewhere. And not from some nameless "rich corporation" — it will be sourced from my already struggling business. And from yours. And from your salary.