I'm very predisposed to believe this. In fact, I'll go further and say I'm not sure I can think of a friend of mine who wouldn't do something really cool if you gave them a year's income in cash.
My friends, generally speaking, spent a lot of money on a very good education that's not valued by the labor market. To put that another way: My friends are wildly overqualified for what they do, and many of them are poorer than broke.
Those without a lot of ambition are pretty much the millenial layabouts you imagine. They're working median-wage retail jobs to pay the rent, smoking a lot of weed, and just generally hanging out. They don't want to work more, and they couldn't really work any less, but they seem pretty happy.
Those with ambition aren't living much different. They're working median-wage retail jobs to pay the rent, working second jobs to try to pay down their debt faster, smoking a lot less weed, and using the rest of their time trying hard to find a job in their field of expertise that wouldn't pay much more even if it did exist. These people could easily work a lot less if they wanted to, but they don't. They want to work more, and work harder, but they cannot find work to do. They seem like they're struggling.
So say we gave them all an unconditional grant which erases their debt and provides some capital. (A year's income wouldn't do this for most, but set that aside.) Most of the first group, maybe it wouldn't affect that much. They might quit their jobs or cut down on hours, but actually they don't mind their jobs that much. They might smoke more weed, but that's probably not possible. More likely they'll spring for a car or a house or a home theater and just keep on keepin' on.
For those in the second group, though, this changes everything. They've instantly jumped a decade into their own future. They'll quit their jobs the same day, immediately start planning a move to where they really want to live. They'll immediately open small businesses. They'll collaborate on epic works of art. Some of them will buy boats; some of them will buy farms. They'll travel, volunteer, teach, research, write, direct, design, produce, and make things. And you know what? They'll probably smoke even less weed.
It's just a wishful thought experiment, but it does seem plausible the overall economic effect would be massively positive. The argument against basic income seems to be basically that it would move people from the second category into the first category. Maybe that's the case for people in general, I don't know, but for the poor young people I know it seems far more likely to do the opposite.
"On January 14th 2013, the European Commission accepted our European Citizens’ Initiative hence triggering a one-year campaign involving all countries in the European Union."
"If we collect one million statements of support for Basic Income from the 500 million inhabitants of the European Union, the European Commission will have to examine our initiative carefully and arrange for a public hearing in the European Parliament."
I think this is extremely applicable in inefficient third world economies, but I can think of a few reasons it might not be as applicable in a first world country like the United States.
- Most basic skilled services already have many providers.
- The startup costs for these services are significantly higher in first world countries.
- The expectations of consumers are also (probably) much higher.
So, I want to believe, but I'd like to see some evidence of broader applicability before we leap to conclusions. That brings up another problem, though: this is so much harder to do in a developed country because it is prohibitively expensive.
I the united states, studies have indicated that food stamps produce an economic return of $1.85 for every dollar spent. I would imagine additional cash spending could have a similar effect.
The Yukon isn't what most people think of as Canada, at least not the part of Canada that has ready access to "first world" (urban infrastructure) type services.
Nope, I didn't. Doesn't change too much. Once they try the experiment in all of Canada and make it permanent, then I'll acknowledge the it was tried in Canada. With a city size of just over 8000 (probably 7000 in the 1970s), it isn't likely to have a particularly complex economic environment.
There is a big difference between being broke in the first world and poverty stricken in the 3rd world. Even in developed nations this article isn't talking about breaking the cycle of minimum wage retail, it's talking about breaking the cycle of poverty. Your friends aren't poverty stricken. They might be having a tough time and feeling regrets about over capitalising on an education they can't use but I sorely doubt that giving them an average year's wage would solve their problems because they already have all the opportunities that the years' wage buys the ugandan farmers.
I certainly don't mean to equivocate developed and developing poverty, but I also don't agree with the inverse. Yes, we are not starving or threatened, for the most part. But in both worlds, poverty means dependence. It means not having options, or not having the ability to take opportunities. It means being stuck in a bad situation because anywhere else is worse.
My friend who works at Macy's does have clean water coming out of her tap, and that's something to be very thankful for, but that by itself doesn't make her free.
I want to relate two experiences. Do with them what you will.
The first experience is of being rich. I'm not actually rich, mind you, but I've experienced what it's like to be rich because in early 2009 my good friend opened up an IT school in Ghana and I stayed there for a month to teach a database design course. There's a range of emotions and situations that arose that contribute to the fact that "I now know what it's like to be rich" but one situation really stands out and is, I think, pertinent to your post.
I had been hanging out with a guy and he showed me around a little. When I was leaving he wanted me to buy him a laptop. He thought that getting a laptop would somehow improve his situation. He had seen people with laptops achieve success (somehow) and wanted the same, so he asked me for one. Of course I had the means to provide it, but I knew for a fact it would change nothing. I didn't get him one.
Secondly I was in #startups a couple of years ago and some guy came in talking about his idea for a startup. It was a wikipedia for everything or something ridiculous and he was really excited about it. I've been through this before so I wanted to maybe talk some sense into him about the realities of business and the tech startup world that I wish someone had relayed to me when I was young and stupid.
In a private chat, he said that he just needed $800/month to build this thing, for 6 months. During our discussions I had mentioned I run a software consultancy and do some online marketing for folks and he said "I don't have a consultancy behind me" like as in "I don't have that luxury". I actually laughed out loud. As if I were the model of carefree success. Like I was so blessed to have this thing "behind" me (nevermind I'm in debt up to my eyeballs and only managed to actually start making some money after like 7 years of fumbling about failing left, right and centre).
It was preposterous to me, but seemed perfectly logical to him. I was somehow in a position of advantage, and all he needed was a big break. Again, I was perfectly capable of providing him with everything he thought he needed, but declined.
I appreciate your anecdotes, and I'll respond with one of my own.
I went to college with two people. (More, maybe!) Not people I knew that well, but it was a very small school. They were both written up ("infracted") for marijuana use-- I forget if as part of the same incident or just very close in time. One of these people was a girl from a wealthy family that paid cash in full; the other was a boy from some impoverished corner of the country who had earned a full-ride-plus scholarship. You know how this ends.
Now, marijuana use is not a crime in Massachusetts, so the institutional punishment was as draconian as it was mild. They had both used up their one warning on previous, unrelated infractions, so they both got the same deal: A hundred-dollar fine, a letter to the parents, and social probation.
Well, that's what the wealthy one got. The poor kid also had to deal with the fact that his scholarship had a clause indicating that being placed on probation, being cited for drug use, or some combination of the two (I don't recall preicsely) made him ineligible.
Yes, it was a very expensive school-- It was a very good school, and he had worked hard to prove he deserved to be there despite not being able to pay for it. But it wouldn't really have made a difference if it had been half or a quarter as much. And for all that we who could afford to be in debt were wealthy on paper, it gave us no ability to help him. In fact we were all servants of the same patron; he was just a little closer to going home.
So the slap on the wrist was de facto expulsion. This kid couldn't even afford to go home for the holidays-- somebody had to drive him to the airport. Somebody had to pay for his ticket home. And when he got home...
Well, to be honest, I don't know what happened. I haven't seen him on Facebook lately.
When I think of first-world poverty, I think about the difference between these two people. If one of them is free, the other must be something else.
What you're referring to is more about social injustice as a result of a fiercely meritocratic, free market capitalist society. Yes, I think that healthcare and education should be free (I come from Australia where they both are, and my family was "poor" and I had access to a University education - there's a debt there but it's not as bad as what you guys call student loans).
Incidentally I wonder how many of your college buddies would vote in favour of healthcare or education funding reform? (My guess is very very few but that's beside the point).
This is a completely different problem from what the original article is discussing. The original article is talking about the fact that in areas where the poverty is so absolute, giving people things like access to schools or social programs has virtually no impact, but giving them access to a tractor and a herd of cows generates a huge economic benefit, and creates a position from which they can later do things like build schools and run their own social programs. In other words the people have skills, are willing to work and have a plan to make money and feed themselves predictably and reliably. Giving them cash makes sense.
Now I agree that giving this guy free access to education and not having a double standard for students who pay versus those who don't (which has, incidentally, crept into the Australian system too since Howard fucked everything up) is a good idea. But giving him cash isn't.
First world poverty can and should be solved institutionally, because it is an institutional problem.
There is a fucking huge problem with this idea (excuse my french). The majority of jobs in this country, nobody wants to do- but they need to be done. If we just freely hand out a living wage to everybody, nobody will be working the crappy jobs and our world will fall apart.
Capitalism, hey? The garbage will pile up until somebody is willing to take away the garbage for what you are willing to pay. Then you will know what the real value of garbage removal is to you, when you can no longer use the inhumanities of poverty as a bargaining chip.
Thing is, the system is already stable. I take that as meaning it is a reasonable approximation of where most services belong.
Don't forget that the real value of garbage removal to me is not what defines the fair market price. It is the combination of what it is worth to me, and what someone will do it for. In the case of garbage removal, it is likely the latter is lower than the former, and thus where the market settled.
But again: labor supply levels are not like supply-levels for other commodities. If you want a continuous supply of fresh tomatoes, you give your plant water and sunlight, and if you want a consistent supply of willing labor, you should pay living wages.
Otherwise, you're not talking about bargaining in a fair market but about the religion of arbeit macht frei or karoshi, the worship of self-immolation through work.
(For those surprised by my turn of phrase, yes, this is in fact what "Arbeit macht frei" meant prior to WW2.)
nope, it's the combination of what it is worth to you, and what someone will do it for, when the alternative to doing it is to starve. if you remove that large influencing factor, you would get a lot closer to a fair market price, where the unpleasantness of a job factors more strongly into the value of doing it.
So you believe that not only does money have a diminishing marginal utility, the utility drop-off that comes just after not starving to death on the street is so strong that, should we abolish Slow-Death-by-Poverty, nobody would do certain jobs?
You know, as opposed to low-level employers just having to raise wages and automate more?
You're free to correct me if I'm wrong here, but it doesn't sound like Cushman is advocating giving people the absolute bare minimum simply to avoid starvation. We already have that after a fashion, it's called food stamps, and you can indeed try boostrapping a company while supporting yourself with foodstamps- it's been done. It sounds more like Cushman is advocating a number such as "$30k".
You can't pay down a debt, you can't buy shoes for that interview, you can't get a phone number, move to a better job market, afford first month/lastmonth/security on an apartment on a bus route, etc. And what is and isn't allowed is a constant political issue.
The point is cash lets some one target their own pain points while cutting down the inefficiency of needing a bureaucracy to define the aid packages.
Also a years wage from some shit retail job isn't 30k, it's more like 15k.
Not saying food stamps rock, but my parent approaches the issue as if I/we have royally decreed the poor should continue to starve in ditches. I felt it appropriate to point out that the USA generally (GENERALLY) doesn't let people starve in ditches.
Maybe not that many are starving to death, but many people in the USA don't get the food that they need.
In 2010, 17.2 million households, 14.5 percent of households (approximately one in seven), were food insecure, the highest number ever recorded in the United States [1]
It is completely relevant. The ancestor post was making the argument that we already have a minimal support system in the USA that anyone can take advantage of a pursue their dreams. They just need to take food-stamps/etc. This doesn't seem to be working so instead, we need to give them $30k/year.
My point is that we aren't even providing minimal life support to everyone yet, so to say that it has failed is premature.
Show me a system where healthy food is accessible and free, and safe housing is also accessible, convenient and free where people are still struggling to invest and improve their situation and then I will believe that it doesn't work.
Yes, giving people the minimum to avoid starvation seems to make them dependent on that income. Giving people enough money to effectively take money off the table frees them to make intelligent decisions about how to invest not only that capital, but their remaining time and energy, greatly boosting their productivity.
To be clear, though, I advocate for evidence-based policy, and I've seen encouraging but not conclusive evidence. I've got a hunch on this one, and some notable economists seem to agree with me, but if we're wrong and it would hurt our society then... we shouldn't do that.
I was responding to the sentence, "If we just freely hand out a living wage to everybody, nobody will be working the crappy jobs and our world will fall apart."
I went with the "bare minimum" thing because a sub-living wage is a dying wage.
If they're jobs that need to be done, wages will rise until they're sufficient to either convince labor to allocate itself to the problem or convince capital to be substituted for it.
Yes, they will. Both nominal and real. That's different from the world falling apart because no one wants to clean the toilets.
What will happen to price levels? It depends on the exact level of the basic income, but here's a likely scenario for my preferred level (around $10k-$12k per adult citizen).
The effects are much more strongly seen for things that require low skilled labor than high skilled: those low skilled workers now have an alternative, of not working. Some extra number of them over today would take that option, but most still will work: everyone still has the same incentive--more money!--to work. The big difference would be everyone has a pile of so-called "fuck you" money, which helps eliminate any monopsony power employers at the lower end of the market have.
So those costs would rise, because costs on the supply side have risen. Products and services provided by highly skilled workers would see nary a change in their cost structures: most of us get paid enough in a year to consume a decade at minimum income levels, but we choose not to do that.
The pattern of consumption would also be altered, depending on how the funding tax was structured. A reasonable proposal (perhaps a flat tax on all income over the basic guaranteed one) you'd expect to result in luxuries to be demanded compared to necessities.
Overall you get higher prices and higher consumption of basic necessities, and lower prices and lower consumption of luxuries.
(This is all secondary, in my view, to the core of what a basic income would allow: a grand infusion of both market entrepreneurship and non-easily-monetizable value into the economy. )
Well, I would say we get paid a decade worth of minimum income levels pre-tax and pre-expenses, but after taxes and high cost of living in the areas we generally live in, and after repaying loans to obtain qualifications to work these jobs, I'd say there's only one or two years of minimum income left over.
Nominal prices will rise, but what you're really seeing is the fair valuation of these services when costs aren't massively depressed by the abundance of free labor in a post-industrial society where there is less and less real work to do.
Look how things work out in places with a working social safety net, state unemployment benefits pay for rent, public healthcare and gives enough money for food and basic comforts.
Basically it works pretty well, people want to feel like productive members of society and do something for a living, and employers end up having to treat employees with more respect since the threat of unemployment isn't so terrifying.
Do you mean for me rhetorically, or in my peer group? Rhetorically, the common emotive argument against social welfare programs is that they enable the poor to do drugs all day rather than doing productive work (I suppose this is also an argument against drug use). Personally I feel that contradicts reality, and since marijuana use is a fact of life among the people I went to college with I think it's useful to bring it front and center now and again.
Why weed itself? Well it's an analgesic, euphoric, prosocial, psychedelic, stimulating, sedating, relatively non-addictive plant that will grow in most parts of the world, may actually be healthier for you than not using it, and to top it off has been a cornerstone of youth culture for fifty-odd years. One's mileage may vary, but it is hard for one not to see the appeal.
My friends, generally speaking, spent a lot of money on a very good education that's not valued by the labor market. To put that another way: My friends are wildly overqualified for what they do, and many of them are poorer than broke.
Those without a lot of ambition are pretty much the millenial layabouts you imagine. They're working median-wage retail jobs to pay the rent, smoking a lot of weed, and just generally hanging out. They don't want to work more, and they couldn't really work any less, but they seem pretty happy.
Those with ambition aren't living much different. They're working median-wage retail jobs to pay the rent, working second jobs to try to pay down their debt faster, smoking a lot less weed, and using the rest of their time trying hard to find a job in their field of expertise that wouldn't pay much more even if it did exist. These people could easily work a lot less if they wanted to, but they don't. They want to work more, and work harder, but they cannot find work to do. They seem like they're struggling.
So say we gave them all an unconditional grant which erases their debt and provides some capital. (A year's income wouldn't do this for most, but set that aside.) Most of the first group, maybe it wouldn't affect that much. They might quit their jobs or cut down on hours, but actually they don't mind their jobs that much. They might smoke more weed, but that's probably not possible. More likely they'll spring for a car or a house or a home theater and just keep on keepin' on.
For those in the second group, though, this changes everything. They've instantly jumped a decade into their own future. They'll quit their jobs the same day, immediately start planning a move to where they really want to live. They'll immediately open small businesses. They'll collaborate on epic works of art. Some of them will buy boats; some of them will buy farms. They'll travel, volunteer, teach, research, write, direct, design, produce, and make things. And you know what? They'll probably smoke even less weed.
It's just a wishful thought experiment, but it does seem plausible the overall economic effect would be massively positive. The argument against basic income seems to be basically that it would move people from the second category into the first category. Maybe that's the case for people in general, I don't know, but for the poor young people I know it seems far more likely to do the opposite.