Universal Basic Income

[Mciahel Goodman]

@Mciahel Goodman, the right-wing reference is a good one. In fact, in Canada, the main proponent of UBI has long been a conservative senator who primarily saw it as an efficient tool to reduce government bureaucracy, due to UBI's potential to replace a complex patchwork of benefits.

Ultimately though, whom it appeals most to depends on perspective and implementation. For me, for example, it's obvious that a UBI would have to be accompanied by minimum wage laws that guarantee that people on full-time employment earn as least as much as their UBI would give them. Otherwise, as you say, you can end up with a situation like now, where Walmart in the US pays some people so poorly, that they are eligible for government food stamps. (That they spend at Walmart!)

Another thing to add here is that UBI doesn't have to be seen as a purely financial phenomenon. Having this sort of social security allows people to have greater confidence in their financial situation. For example, they are more likely to take time away from work to pursue further education or retool - as I think the Manitoba pilot showed. It might also augment entrepreneurship, as e.g. Sweden has higher levels of that than the US (yeah, virtually zero of the US's national myths are actually true), precisely because people know that it won't wreck them for life if their project goes wrong.

I guess these last two again economic examples, but just to say that the ramifications of UBI can be quite widespread (and positive).

Good point, I hadn't thought of that. UBI anyway has some complications, as what constitutes a liveable income can vary considerably in different regions of a country. So there would have to be some kind of evergreen table indicating what money buys you in different areas, with top-ups related to children, disability, and possibly other things.

That's not so complicated though. Statistics Canada is already working on something like that, for example (not in a UBI context).

Sorry, I'm not sure what this responds to. I said that I think that UBI should be a priority for every government, and I'm well aware that there don't seem to be a lot of governments agrees with me.

https://taxfoundation.org/short-history-government-taxing-and-spending-united-states

Government spending relative to GDP (as a percentage of GDP) rose, across the board, throughout the neoliberal period. And yet, throughout this same period, public programs were defunded and regulations were largely abandoned (financial regulations, that is). In what universe, then, do Friedman and his followers sanely exist whereby their intervention was successful in limiting the scope of the state (of ending “big government”)? Bluntly, there are two states: one which we all participate in and the other which exists quite apart from this one. The giant corporations are not truly beholden to the first state, in fact, it is merely an instrument which they seek to control to their own benefit (public spending rising is a “good” thing when that money is going to said corporations). And that is the entire point of neoliberalism which is often glossed over: big government is fine if it means socialized risk-taking on the part of the billionaire class, which is what we have today.

“For US multinationals, corporate profit shifting into tax havens has risen from an estimated 5 percent to 10 percent of gross profits in the 1990s to about 25 to 30 percent today (Cobham and Janský 2017)” (IMF). 30-50 trillion exists in offshore tax havens.

And the above is your “fluid” second state. Governments spend money in the private sector (if we are not talking about welfare payments and costs of maintaining a nationalised service) so that public money is outsourced to private firms and maximizes private profit with the most concentrated wealth band availing of this process the most, which is unsurprising. The scandal in England during Covid is a scandal precisely because it lays bare exactly this distinction. Indeed, it has lain it so bare that there is now no pretending the emperor has any clothes. Shell companies created by well-placed individuals to avail of public money. In many cases, these “companies” never dealt within the economic area they were now supposed to deliver.

So, whatever version of UBI does come forward, my primary requirement would be that it is funded by the 0.001% of the shareholding/speculative class. They must take a loss rather than somehow tot it up to public debt (a public which they are distinctly not a part of).

 

[ThehatchetMan]

If this were done in a whole country would it not just cause the price of things to rise?

Prices would increase but I imagine it would still benefit the poorest in society significantly as it will be a substantial increase for them. Whereas the richest in society who already earn big money and likely have their own businesses; I’d imagine the increase would get eaten up mostly by taxes and their costs of running their businesses would increase.

I think it would also bring a bit more power to the workers as they’d have a safety net to fall back on compared to what’s on offer now. So companies offering poor wages, benefits and toxic working environments would find it much more difficult to recruit and retain staff as workers would be less desperate.

Im not an economist though or clued up in this area at all. But I still think it would benefit the poor and be a hinderance to the rich in the grand scheme…. Until they find a loophole as usual.

In my head I see it as:

- Say prices increased by random figure)
- The poorest however may earn 200% more
- The median worker may earn 60% more
- The wealthiest will earn 0.00001% more

So the average man may be better off but the superrich will be impacted by increased costs as well as the above average worker.

Note: Random figures but you get my point.

 

[ThehatchetMan]

There are not that many people that would need this though, and they would likely primarily use it for key needs. So I think fears of inflation are greatly overblown here.

I think he means universal basic income in general for the whole population, which has been discussed many times, rather than rolling out the Welsh scheme to other people in uk who have left care.

 

[711]

Yeah, a blanket check works best, it's the least bureaucracy, and easily gotten back through taxation.

That right-wing point is what @Mciahel Goodman also said - which exactly triggered my point that it would be important to tie minimum wage to the UBI (regionally diversified ideally). Cause yes, otherwise companies are actually transferring their responsability to provide a reasonable wage to the government (which of course many currently do already).

I see, yes I agree, a good minimum wage is also necessary.

 

[Cheimoon]

I think he means universal basic income in general for the whole population, which has been discussed many times, rather than rolling out the Welsh scheme to other people in uk who have left care.

That's what I meant to. UBI would be clawed back through taxation from those with too much income, so it would effectively only be available to a relatively small group, that doesn't have huge buying power. I think their additional income won't change things that much on a national or global scale that it would affect inflation - which after all in isn't (for most countries) an isolated, purely local dynamic.

 

[Mciahel Goodman]

Yeah, a blanket check works best, it's the least bureaucracy, and easily gotten back through taxation.

That right-wing point is what @Mciahel Goodman also said - which exactly triggered my point that it would be important to tie minimum wage to the UBI (regionally diversified ideally). Cause yes, otherwise companies are actually transferring their responsability to provide a reasonable wage to the government (which of course many currently do already).

This could work but my primary point, in calling it right-wing, is that it relies upon government spending to stimulate private profit. When corporations largely escape their responsibility in terms of minimum wages as well as offshore tax assets, this in effect means that "government spending" implies two distinct things to two distinct occupants of two distinct states (one is comprised of the labour market and the other is comprised of the capitalist/billionaire class). So if the government is to pay for UBI, such is right-wing insofar as it means moving money from high-earning labourers to low-earning labourers without taking the cost for such from the capital itself (i.e., the producers/workers will take on debt-as-credit which is simply given over to that [concentrated] class for whom they produce/work as workers already, producing the commodities they would buy but cannot afford and so buy them instead by a system of worker-debt described as progressive economic theory).

A minimum wage index could help but one wonders if inflationary mechanisms would not simply nullify it in the longterm.

Which tl;dr is why I see nationalising certain key basic living industries (energy/transport/etc.) as a more viable solution.

 

[NotThatSoph]

There are not that many people that would need this though, and they would likely primarily use it for key needs. So I think fears of inflation are greatly overblown here.

Inflation is about money, I thought you believed me!

It's not just overblown, unless the UBI is financed by printing (which it won't in any developed country) it would barely impact the price level at all. Depending on the size and the respective tax increase it might both have a slight inflationary effect and change relative prices to the disfavour of ordinary goods (a term I might have made up to contrast luxury goods), but the regular talk about the ubi being eaten up by price inreases is just crazy.

Not that this should be taken as an endorsement. The modern view of an ubi being a panacea is fantasy. This is a policy spearheaded by libertarians like Hayek and Friedman, not because it's great for the working or middle class but because you cut the other shit. Most proposals of UBIs are regressive as feck, and those that aren't could just as easily be replaced by other policies.

 

[Cheimoon]

https://taxfoundation.org/short-history-government-taxing-and-spending-united-states

Government spending relative to GDP (as a percentage of GDP) rose, across the board, throughout the neoliberal period. And yet, throughout this same period, public programs were defunded and regulations were largely abandoned (financial regulations, that is). In what universe, then, do Friedman and his followers sanely exist whereby their intervention was successful in limiting the scope of the state (of ending “big government”)? Bluntly, there are two states: one which we all participate in and the other which exists quite apart from this one. The giant corporations are not truly beholden to the first state, in fact, it is merely an instrument which they seek to control to their own benefit (public spending rising is a “good” thing when that money is going to said corporations). And that is the entire point of neoliberalism which is often glossed over: big government is fine if it means socialized risk-taking on the part of the billionaire class, which is what we have today.

“For US multinationals, corporate profit shifting into tax havens has risen from an estimated 5 percent to 10 percent of gross profits in the 1990s to about 25 to 30 percent today (Cobham and Janský 2017)” (IMF). 30-50 trillion exists in offshore tax havens.

And the above is your “fluid” second state. Governments spend money in the private sector (if we are not talking about welfare payments and costs of maintaining a nationalised service) so that public money is outsourced to private firms and maximizes private profit with the most concentrated wealth band availing of this process the most, which is unsurprising. The scandal in England during Covid is a scandal precisely because it lays bare exactly this distinction. Indeed, it has lain it so bare that there is now no pretending the emperor has any clothes. Shell companies created by well-placed individuals to avail of public money. In many cases, these “companies” never dealt within the economic area they were now supposed to deliver.

So, whatever version of UBI does come forward, my primary requirement would be that it is funded by the 0.001% of the shareholding/speculative class. They must take a loss rather than somehow tot it up to public debt (a public which they are distinctly not a part of).

Yeah, agreed. If people think it's too expensive for the state to finance, then let's first make sure the state gets properly what it's due.

Another thing here is that a blanket distribution of UBI requires a wealth check to be in place as well. Otherwise people who live of their (big) savings would be able to retain their UBI cause they pass the income check. And when that's working, we can start taxing that as well - as indeed we should.

In any case, more generally, I feel these discussions about what the state can afford reverse the discussion we should be having. A lot of countries have plenty of money going round in society to take care of everyone properly. So to me, the order of thinking should be: what's the minimum standard of living (including health and leisure etc.) we want for everyone; what does it cost to make that reality; and what taxation etc. should the state create to raise that money? And then get that done. These discussions about what a jurisdiction currently can or cannot afford really are quite silly. I mean, what makes current levels of taxation anywhere so perfect that they need to guide discussions about state expenditures?

A minimum wage index could help but one wonders if inflationary mechanisms would not simply nullify it in the longterm.

That's why UBI should be tied to cost of living, and minimum wage to UBI - with quarterly updates, or some such frequency.

Which tl;dr is why I see nationalising certain key basic living industries (energy/transport/etc.) as a more viable solution.

I won't disagree with that - although I feel we are moving into your general capitalism thread now. (Which also makes sense, since it's all intertwined.)

 

[Mciahel Goodman]

In any case, more generally, I feel these discussions about what the state can afford reverse the discussion we should be having. A lot of countries have plenty of money going round in society to take care of everyone properly. So to me, the order of thinking should be: what's the minimum standard of living (including health and leisure etc.) we want for everyone; what does it cost to make that reality; and what taxation etc. should the state create to raise that money? And then get that done. These discussions about what a jurisdiction currently can or cannot afford really are quite silly. I mean, what makes current levels of taxation anywhere so perfect that they need to guide discussions about state expenditures?

Yeah I tend to agree. Also discussions about what the state can afford also tend to ignore everything we have just stated: that government spending has risen massively since the "neoliberal" era but that this spending (what "we" can afford) is directed to places which quite often do not serve the public. If UBI can be made to serve the public, via cost of living/minimum wage (commodity prices/labour value) indexes, and it takes into account a comprehensive overview of wealth concentration, then it probably would be a good thing. I just wonder if UBI would be advanced in certain circles if these nuances were actually uttered out loud.

 

[Cheimoon]

Yeah I tend to agree. Also discussions about what the state can afford also tend to ignore everything we have just stated: that government spending has risen massively since the "neoliberal" era but that this spending (what "we" can afford) is directed to places which quite often do not serve the public. If UBI can be made to serve the public, via cost of living/minimum wage (commodity prices/labour value) indexes, and it takes into account a comprehensive overview of wealth concentration, then it probably would be a good thing. I just wonder if UBI would be advanced in certain circles if these nuances were actually uttered out loud.

In terms of actually moving this forward, the COVID-19 welfare programs created by several govenrments are actually a lot like a UBI. Here in Canada, for example, there was basically a wage replacement benefit that anyone could apply for and which was awarded with minimal checks (and of course extensive checks afterwards to claw back what was given to people above some threshold). The pandemic was a special situation, it was expensive, and all that - but it goes to show that, if equity was just enough of a priority, this sort of thing could be implemented pretty much overnight.

(Next question: why isn't equity a top priority? I'll let someone who is better with the sarcasm and cynicism it deserves handle that one.)

 

[Wibble]

You do realise this is research for whether it could be rolled out to wider society, including single parents struggling on £400 a month. It looks like 18 year old (min age) coming out of care (max vulnerable, min support structure) is a way of testing one extreme.

UBI is only really UBI if everyone gets it (as I'm sure you know).

 

[Mciahel Goodman]

In terms of actually moving this forward, the COVID-19 welfare programs created by several govenrments are actually a lot like a UBI. Here in Canada, for example, there was basically a wage replacement benefit that anyone could apply for and which was awarded with minimal checks (and of course extensive checks afterwards to claw back what was given to people above some threshold). The pandemic was a special situation, it was expensive, and all that - but it goes to show that, even equity was just enough of a priority, this sort of thing could be implemented pretty much overnight.

(Next question: why isn't equity a top priority? I'll let someone who is better with the sarcasm and cynicism it deserves handle that one.)

Indeed, the entire OECD more or less came up with similar schemes. One of the interesting things about the pandemic is that it demonstrated just how superfluous so many jobs are. States were stripped down to core economic enterprise (which is basically just healthcare and supply lines for food and basic commodities). A dry run for the kind of thing needed for UBI. And yes, equity was fast-tracked due to the risk of extreme social unrest. If the government mandates that you cannot work, it must provide an alternative. Which, extending the analogy slightly, if the facts indicate that many people who are already in work possess no equity within the economic system, then that system must, via state intervention, seek a remedy. Extreme social unrest is also just around the proverbial corner if equity continues to dwindle and class mobility remains stagnant, which is an argument in favour of UBI which doesn't even take into account the more obvious one (those in most extreme poverty).

 

[Cheimoon]

Indeed, the entire OECD more or less came up with similar schemes. One of the interesting things about the pandemic is that it demonstrated just how superfluous so many jobs are. States were stripped down to core economic enterprise (which is basically just healthcare and supply lines for food and basic commodities). A dry run for the kind of thing needed for UBI. And yes, equity was fast-tracked due to the risk of extreme social unrest. If the government mandates that you cannot work, it must provide an alternative. Which, extending the analogy slightly, if the facts indicate that many people who are already in work possess no equity within the economic system, then that system must, via state intervention, seek a remedy. Extreme social unrest is also just around the proverbial corner if equity continues to dwindle and class mobility remains stagnant, which is an argument in favour of UBI which doesn't even take into account the more obvious one (those in most extreme poverty).

Agreed on all that. But the extension of the analogue is where you run into the ideological difficulties. I mean, someone in the capitalism thread just posted something like, 'I don't see the issue, it works for me'. That may have been tongue in cheek, but it's exactly the kind of attitude that stops UBI from happening. (That, and irrational fears related to costs and laziness.)

 

[largelyworried]

Good point, I hadn't thought of that. UBI anyway has some complications, as what constitutes a liveable income can vary considerably in different regions of a country. So there would have to be some kind of evergreen table indicating what money buys you in different areas, with top-ups related to children, disability, and possibly other things.

UBI really only has two advantages over other social security systems. Simplicity (everyone gets the same amount, lightweight administration) and speed (no need to apply when you need it, you're already getting it). As soon as you introduce variable payments for circumstances, those two strengths are significantly diminished. Given that it's many weaknesses are still there, I always felt like overall the system wasn't really workable in practice as soon as it's speed and simplicity are diminished in this way.

 

[Deery]

You can guarantee that if the government are realistically trialing this for use, then it will be to save money not give people more. Many people on benefits could earn higher than the £1600 a month if taking into consideration the disability benefits, housing executive, child support, tax credits, etc. this will all be done away with.

Then there’s people who have paid into a pension the past 45 years who are entitled to say £2200 a month and will be now cut to £1600 a month.

Landlords will increase rent so tenants will not find they are substantially better off than before, £1600 minus say £800 rent, no housing executive, no child benefits, cost of living, you’d be lucky to have £200 left at the end of the month.

Then there’s the 40% of people that work in the public sector that a lot will lose their jobs because there won’t be need for as many means tested benefits, so more unemployment.

There will be some that may see a small change for the better but I’m sure that will be short lived.

Can they guarantee that anyone working will get £1600 on top of their wages or will it simply be another tax credit situation were they get subsidised some extra money?

 

[balaks]

You can guarantee that if the government are realistically trialing this for use, then it will be to save money not give people more. Many people on benefits could earn higher than the £1600 a month if taking into consideration the disability benefits, housing executive, child support, tax credits, etc. this will all be done away with.

Then there’s people who have paid into a pension the past 45 years who are entitled to say £2200 a month and will be now cut to £1600 a month.

Landlords will increase rent so tenants will not find they are substantially better off than before, £1600 minus say £800 rent, no housing executive, no child benefits, cost of living, you’d be lucky to have £200 left at the end of the month.

Then there’s the 40% of people that work in the public sector that a lot will lose their jobs because there won’t be need for as many means tested benefits, so more unemployment.

There will be some that may see a small change for the better but I’m sure that will be short lived.

Can they guarantee that anyone working will get £1600 on top of their wages or will it simply be another tax credit situation were they get subsidised some extra money?

It's not UBI unless everybody gets exactly the same benefit.

 

[711]

Then there’s people who have paid into a pension the past 45 years who are entitled to say £2200 a month and will be now cut to £1600 a month.

Universal Basic Income is additional to any other income, how have you possibly have concluded that people's private pensions will be taken off them?

Can they guarantee that anyone working will get £1600 on top of their wages or will it simply be another tax credit situation were they get subsidised some extra money?

This thread is about Universal Basic Income, you are describing something else.

Then there’s the 40% of people that work in the public sector that a lot will lose their jobs because there won’t be need for as many means tested benefits, so more unemployment.

I don't know if this is true but it's a great selling point if it is, a huge sum that could be spent on more nurses, teaching assistants, care workers, all manner of public services. Wouldn't happen if you vote Tory of course, so best not.

 

[Cheimoon]

UBI really only has two advantages over other social security systems. Simplicity (everyone gets the same amount, lightweight administration) and speed (no need to apply when you need it, you're already getting it). As soon as you introduce variable payments for circumstances, those two strengths are significantly diminished. Given that it's many weaknesses are still there, I always felt like overall the system wasn't really workable in practice as soon as it's speed and simplicity are diminished in this way.

A flat amount countrywide wouldn't work though. In the UK, for example, London salaries include the London bonus (if that's not disappeared since I was there). If UBI doesn't have that, it would either be very generous everywhere outside London (fine by me, but I don't see that happening), or very stingy inside London (then what's the point).

And it's not that complex. As I said, there are data on the regionally differentiated value of money already. Just plug those into the UBI system with frequent updates, and the regional differentation is done. For example.

Also, simplicity isn't the only advantage of UBI. It's a selling point, sure, but UBI's purpose really is to ensure everyone in all (un)employment circumstances has a liveable income. If that requires a bit more complexity than a flat sum with blanket pay-out, then so be it.

 

[largelyworried]

A flat amount countrywide wouldn't work though. In the UK, for example, London salaries include the London bonus (if that's not disappeared since I was there). If UBI doesn't have that, it would either be very generous everywhere outside London (fine by me, but I don't see that happening), or very stingy inside London (then what's the point).

And it's not that complex. As I said, there are data on the regionally differentiated value of money already. Just plug those into the UBI system with frequent updates, and the regional differentation is done. For example.

That doesn't work for housing costs though, because housing costs are based on the rent you pay not on simple tables. So either you pay everyone in, say, Manchester the same amount (not hard to see why that wouldn't work) or you have variable payments, at which point it isn't UBI.

Also, simplicity isn't the only advantage of UBI. It's a selling point, sure, but UBI's purpose really is to ensure everyone in all (un)employment circumstances has a liveable income. If that requires a bit more complexity than a flat sum with blanket pay-out, then so be it.

This is not an argument for UBI, it’s an argument for a strong social security system. There are many real and hypothetical systems out there that make sure people have enough money to live on, it’s not a feature unique to UBI.

 

[afrocentricity]

I'm hugely sceptical of this having seen the lives of some of the kids that my brother fostered. Many of them come from backgrounds with parents that are drug addicts. They have so many potential negative influences around them. The lad who lived with my brother for the longest period was a really nice kid but now he's a young adult he's been sucked back into that world. I'm not sure how having money for nothing would help that situation, rather it could make it a lot worse.

A lot of the shit people get into it in the pursuit of money.

Many people fall into drug addiction because they see few prospects in life. If this move helps one of the most at risk groups to live a healthy and productive life, then it's probably money well invested.

This too ...

 

[afrocentricity]

But they already do, to some extent. Benefits. All UBI is is a benefits payment that goes to everybody, so eventually inflation will catch it up and potentially make things worse than now, as everybody has it. Not just the poorest.

Why wouldn't the UBI also increase accordingly?

 

[Classical Mechanic]

A lot of the shit people get into it in the pursuit of money.

This too ...

It's a misunderstanding of my point. Whilst I accept that my view may be narrow because of my experience with my brother fostering children, which is a small sample - some of these children come from backgrounds where a number of family members are drug addicted, often the parents hence why they're in care. They're not in danger of falling into it because of economic circumstances. They're already in that world and it's only a small step to them being lost in it. If they have money for nothing, for want of a better phrase, they'll become more vulnerable to exploitation from those negative influences. Some of these kids are exceptionally vulnerable to exploitation which is why they fall prey to grooming and county lines gangs etc.

I'm only expressing some scepticism rather than rubbishing it. The lad I mentioned is already in quite a complex scheme with supported housing and a kind of vocational pathway available to him but it's incentive based. He was put on this after being arrested a few times. If you're being cynical then you can view this as a money saving exercise from the government as a lot of money is spent on these children already, although I guess that depends on the how the scheme is structured through ongoing support.

 

[jeff_goldblum]

Then there’s the 40% of people that work in the public sector that a lot will lose their jobs because there won’t be need for as many means tested benefits, so more unemployment.

I wouldn't worry too much about this. Firstly that 40% number is way out, and secondly, the vast majority of public sector workers have nothing to do with means-testing benefits.

There are 34m+ working age people in the UK and around 5.4m work in the wider public sector (so 16% of the working age population). That figure includes the armed forces, police, NHS workers, teachers, local government (inc. council employees like cleaners, binmen), social workers and so on. Of those 5.4m, less than 500,000 work for the Civil Service (1.5% of the working age population). Of that 500,000, the DWP employs less than 100,000 of them (0.3% of the working age population or 1.8% of public sector workers).

And then, obviously, even something as simple as UBI would still require a degree of admin to manage. You'd still need a management structure, estates and finance teams, tech support, training for new staff and other ancillary functions. There'd be a considerable period of continued management of the legacy pension system as there's no way there'd be a hard cutover. And that's before we get to the parts of the DWP which wouldn't be affected in the slightest, like the Health and Safety Executive.

 

[largelyworried]

And then, obviously, even something as simple as UBI would still require a degree of admin to manage. You'd still need a management structure, estates and finance teams, tech support, training for new staff and other ancillary functions. There'd be a considerable period of continued management of the legacy pension system as there's no way there'd be a hard cutover. And that's before we get to the parts of the DWP which wouldn't be affected in the slightest, like the Health and Safety Executive.

The scale of admin required to run a UBI system tends to get overlooked. While its obviously easier to handle a single UBI claim vs a single means-tested claim, UBI would have around 65 Million claimants vs around 5 Million Universal Credit claimants.

This would need the creation of a unified UK database holding everyone's details & proof of identity, something we don't have at the moment. Needless to say that would be a major endeavour, given our Governments record creating databases (the current UC database has cost £12Bn at last count). Not to mention the privacy concerns - ID cards were rejected by many on both the left and right for this very reason.

You'd also have to have a system that was responsive - children become adults, couples marry and separate, people leave the country, go to prison, etc - there are lots of reasons why payment details or personal entitlements could change. So it would be quite the endeavour to keep it going.

How that would compare to the current system is hard to judge, but there would certainly be a fair bit of admin to deal with.

 

[11101]

Why wouldn't the UBI also increase accordingly?

Then inflation would increase further, and the whole thing spirals into hyperinflation.

 

[afrocentricity]

Then inflation would increase further, and the whole thing spirals into hyperinflation.

I mean, if nothing increased with inflation then what would be the point? For example, don't some benefits increase?

 

[11101]

I mean, if nothing increased with inflation then what would be the point? For example, don't some benefits increase?

Benefits are an isolated thing that not many receive, so it doesn't have an effect.

Inflation is kept in check there because benefits, salaries etc all increase at different times and by different amounts.

Think of it as a group of 10 people, 9 kids and an adult who has 10 sweets to sell to them. 3 of them have no money, 3 of them have 5p, 3 of them have 10p. The price of sweets is 5p. They can only eat a couple each so 6 go to the 10p kids, and the 5p kids get one or two each. What happens with benefits, salary increases etc is that 1 of the 0p kids gets given 5p. Now he is in the running for a sweet. What happens with UBI is everybody gets given 5p. So the 0p kids have 5p, the 5p kids have 10p, and the 10p kids have 15p. The rich kids still want two, and the middle kids want one too. So the price of a sweet is now 10p, and the poor kids miss out again.

 

[jeff_goldblum]

The scale of admin required to run a UBI system tends to get overlooked. While its obviously easier to handle a single UBI claim vs a single means-tested claim, UBI would have around 65 Million claimants vs around 5 Million Universal Credit claimants.

This would need the creation of a unified UK database holding everyone's details & proof of identity, something we don't have at the moment. Needless to say that would be a major endeavour, given our Governments record creating databases (the current UC database has cost £12Bn at last count). Not to mention the privacy concerns - ID cards were rejected by many on both the left and right for this very reason.

You'd also have to have a system that was responsive - children become adults, couples marry and separate, people leave the country, go to prison, etc - there are lots of reasons why payment details or personal entitlements could change. So it would be quite the endeavour to keep it going.

How that would compare to the current system is hard to judge, but there would certainly be a fair bit of admin to deal with.

I certainly think there would be a significant admin challenge, especially in set-up, but I actually think most of the work that would be required is either ongoing or already completed as part of the general push to make the Civil Service more efficient. I'd also say that all the personal data required to make UBI work (and more) is already stored somewhere across the Civil Service for other purposes, and often in multiple places, e.g - if you get married, the DWP, HMRC, Home Office (via both the GRO and the Passport Office) are likely to know sooner or later, not to mention other public bodies like the NHS and your local council.

There's so much overlap in the information departments need to perform their functions that there are already big efforts underway to integrate systems and make it easier to share data. The reason there's still a fair way to go is because of poor decision making by successive governments, firstly in terms of the usual political short-termism and inability to grasp that "a stitch in time saves nine" and secondly in terms of a combination of technological illiteracy and unchecked neoliberal wankery which led to every government department commissioning a different private company to develop and manage their data storage solution, none of which were compatible with each other. In the last decade the Civil Service has finally been allowed to build capability to develop software in-house, and as these contracts with private companies have started to lapse, more and more systems are being replaced with in-house solutions designed to be easy to link together.

Departments like HMRC and DWP already hold the vast majority of the info that would be required to make UBI work and already share information by allowing people in specific roles direct access to records. Stuff like births, deaths, marriages are all recorded by the GRO and I believe they're well on the way to developing a solution by which other government bodies can check their records on demand. So I don't think the technical challenge of UBI would he insurmountable, even now. Universal Credit is probably a good comparison point for a worst case scenario in terms of cocking up the implementation, but in comparison a UBI system would need much less data to operate (and wouldn't at all need financial and medical info the current system does) and any mistakes would likely lead to overpayments, rather than withheld ones which would plunge people into poverty.

On the privacy concern, I'm not sure where the distinction lies between having one massive database which stores all the information as you suggest and having multiple smaller ones that people with the right permissions are able to access which seems to be the current strategy. Either way though, I don't think there's much to fear from Civil Service departments talking to each other as long as the same standards of data protection are adhered to as would be if the date was being shared internally. That's a very different idea to ID cards, which were first and foremost a security document ostensibly designed to combat illegal immigration and terrorism, which would allow an official to immediately know everything about you when scanned. It wasn't about efficiency or providing better public services, you don't need someone's fingerprints or retinal scans to tax them or give them benefits. The fallout from the debacle of ID cards has probably cost the taxpayer billions of lost efficiency as it took years for the idea of data sharing between departments to become palatable again.

 

[NotThatSoph]

Benefits are an isolated thing that not many receive, so it doesn't have an effect.

Inflation is kept in check there because benefits, salaries etc all increase at different times and by different amounts.

Think of it as a group of 10 people, 9 kids and an adult who has 10 sweets to sell to them. 3 of them have no money, 3 of them have 5p, 3 of them have 10p. The price of sweets is 5p. They can only eat a couple each so 6 go to the 10p kids, and the 5p kids get one or two each. What happens with benefits, salary increases etc is that 1 of the 0p kids gets given 5p. Now he is in the running for a sweet. What happens with UBI is everybody gets given 5p. So the 0p kids have 5p, the 5p kids have 10p, and the 10p kids have 15p. The rich kids still want two, and the middle kids want one too. So the price of a sweet is now 10p, and the poor kids miss out again.

Because you printed the money. Your total money supply went from 45p to 90p, a doubling. A UBI would be financed by taxation, not printing, any increase for one person means that another get less.

If we stick with your group, and if the goal is that everyone should have at least 5p, then everyone would get their benefit like you described, but the three richest kids would then pay 10p each in taxes, and the three middle kids would pay 5p. In the end everyone would have 5p, with a total money supply of 45p as before. 45p is paid out as benefits, 45p is taken in as taxation.

 

[11101]

Because you printed the money. Your total money supply went from 45p to 90p, a doubling. A UBI would be financed by taxation, not printing, any increase for one person means that another get less.

If we stick with your group, and if the goal is that everyone should have at least 5p, then everyone would get their benefit like you described, but the three richest kids would then pay 10p each in taxes, and the three middle kids would pay 5p. In the end everyone would have 5p, with a total money supply of 45p as before. 45p is paid out as benefits, 45p is taken in as taxation.

It could not work the way you suggest though or there would be zero incentive to work. We need more representative numbers to make the figures work, so let's add a middle class of 9 more kids and bump their original figures up a bit. So you have 3 poor kids with 0(+5p), 12 middle class kids with 10(+5p), 3 rich kids with 20(+5p). You need to raise 90p to pay all 18 kids 5p UBI. You tax the 3 rich kids 10p each, and the 12 middle kids 5p. The poor now have 5p, the middle have 10p, the rich have 15p.

The sweets have now inflated to cost 10p. The poor kids still cant afford them.

 

[NotThatSoph]

It could not work the way you suggest though or there would be zero incentive to work. We need more representative numbers to make the figures work, so let's add a middle class of 9 more kids and bump their original figures up a bit. So you have 3 poor kids with 0(+5p), 12 middle class kids with 10(+5p), 3 rich kids with 20(+5p). You need to raise 90p to pay all 18 kids 5p UBI. You tax the 3 rich kids 10p each, and the 12 middle kids 5p. The poor now have 5p, the middle have 10p, the rich have 15p.

The sweets have now inflated to cost 10p. The poor kids still cant afford them.

Or use even more representative numbers and look at actual countries. Government spending financed by taxation is not inflationary. A Universal Basic Income is pretty much the same as a Negative Income Tax. Milton Friedman cared quite a bit about inflation, you know, yet he loved it.

It's wealth transfer. Taxing the rich to give money to the poor is not inflationary. Taxing the upper-middle class to give more to the lower-middle class is not inflationary. Taxing the poor to give to the rich isn't inflationary either, for that matter.

 

[afrocentricity]

Benefits are an isolated thing that not many receive, so it doesn't have an effect.

Inflation is kept in check there because benefits, salaries etc all increase at different times and by different amounts.

Think of it as a group of 10 people, 9 kids and an adult who has 10 sweets to sell to them. 3 of them have no money, 3 of them have 5p, 3 of them have 10p. The price of sweets is 5p. They can only eat a couple each so 6 go to the 10p kids, and the 5p kids get one or two each. What happens with benefits, salary increases etc is that 1 of the 0p kids gets given 5p. Now he is in the running for a sweet. What happens with UBI is everybody gets given 5p. So the 0p kids have 5p, the 5p kids have 10p, and the 10p kids have 15p. The rich kids still want two, and the middle kids want one too. So the price of a sweet is now 10p, and the poor kids miss out again.

I don't wanna be doing maths! What is this? School?

Anyway, let's see what happens. I'm not convinced it's doomed to fail...

 

[entropy]

It could not work the way you suggest though or there would be zero incentive to work. We need more representative numbers to make the figures work, so let's add a middle class of 9 more kids and bump their original figures up a bit. So you have 3 poor kids with 0(+5p), 12 middle class kids with 10(+5p), 3 rich kids with 20(+5p). You need to raise 90p to pay all 18 kids 5p UBI. You tax the 3 rich kids 10p each, and the 12 middle kids 5p. The poor now have 5p, the middle have 10p, the rich have 15p.

The sweets have now inflated to cost 10p. The poor kids still cant afford them.

not really a valid argument. It’s more a conservative talking point than anything else.

 

[11101]

Or use even more representative numbers and look at actual countries. Government spending financed by taxation is not inflationary. A Universal Basic Income is pretty much the same as a Negative Income Tax. Milton Friedman cared quite a bit about inflation, you know, yet he loved it.

It's wealth transfer. Taxing the rich to give money to the poor is not inflationary. Taxing the upper-middle class to give more to the lower-middle class is not inflationary. Taxing the poor to give to the rich isn't inflationary either, for that matter.

It's not the same as negative income tax for one reason, everybody receives it. That's where it breaks down.

not really a valid argument. It’s more a conservative talking point than anything else.

In that specific example it would be that way, as everybody gets the exact same amount whether they work for it or not.

 

[NotThatSoph]

It's not the same as negative income tax for one reason, everybody receives it. That's where it breaks down.

It is the same, the tax is just baked in.

Whether you receive a benefit payment of 5k and pay 8k in taxes (UBI) or just pay 3k in taxes (NIT) is irrelevant.

 

[Cheimoon]

In that specific example it would be that way, as everybody gets the exact same amount whether they work for it or not.

It is a conservative talking point though, and one that has been widely debunked at that. It's the same argument that people use against welfare benefits in general. In practice, it has been shown that people derive great personal value from being able to work, and don't want to be unemployed or idle.

Also, UBI is a guaranteed minimum income, not a ticket to careless luxury. Most employed people would make more than a UBI would provide.

 

[largelyworried]

I certainly think there would be a significant admin challenge, especially in set-up, but I actually think most of the work that would be required is either ongoing or already completed as part of the general push to make the Civil Service more efficient. I'd also say that all the personal data required to make UBI work (and more) is already stored somewhere across the Civil Service for other purposes, and often in multiple places, e.g - if you get married, the DWP, HMRC, Home Office (via both the GRO and the Passport Office) are likely to know sooner or later, not to mention other public bodies like the NHS and your local council.

There's so much overlap in the information departments need to perform their functions that there are already big efforts underway to integrate systems and make it easier to share data. The reason there's still a fair way to go is because of poor decision making by successive governments, firstly in terms of the usual political short-termism and inability to grasp that "a stitch in time saves nine" and secondly in terms of a combination of technological illiteracy and unchecked neoliberal wankery which led to every government department commissioning a different private company to develop and manage their data storage solution, none of which were compatible with each other. In the last decade the Civil Service has finally been allowed to build capability to develop software in-house, and as these contracts with private companies have started to lapse, more and more systems are being replaced with in-house solutions designed to be easy to link together.

Departments like HMRC and DWP already hold the vast majority of the info that would be required to make UBI work and already share information by allowing people in specific roles direct access to records. Stuff like births, deaths, marriages are all recorded by the GRO and I believe they're well on the way to developing a solution by which other government bodies can check their records on demand. So I don't think the technical challenge of UBI would he insurmountable, even now. Universal Credit is probably a good comparison point for a worst case scenario in terms of cocking up the implementation, but in comparison a UBI system would need much less data to operate (and wouldn't at all need financial and medical info the current system does) and any mistakes would likely lead to overpayments, rather than withheld ones which would plunge people into poverty.

On the privacy concern, I'm not sure where the distinction lies between having one massive database which stores all the information as you suggest and having multiple smaller ones that people with the right permissions are able to access which seems to be the current strategy. Either way though, I don't think there's much to fear from Civil Service departments talking to each other as long as the same standards of data protection are adhered to as would be if the date was being shared internally. That's a very different idea to ID cards, which were first and foremost a security document ostensibly designed to combat illegal immigration and terrorism, which would allow an official to immediately know everything about you when scanned. It wasn't about efficiency or providing better public services, you don't need someone's fingerprints or retinal scans to tax them or give them benefits. The fallout from the debacle of ID cards has probably cost the taxpayer billions of lost efficiency as it took years for the idea of data sharing between departments to become palatable again.

You can't just mix and match data across databases like that. Not only is it difficult from a pure technical standpoint, but a lot of the data in Government systems isn't verified anyway. Just because two people have the same name, same DOB and same home address in two separate systems, doesn't mean they're the same person. The only way to verify that they are the same individual is to find some way to ask them specifically and get them to confirm, and for the bulk of the country that's never taken place. This is why UC required a brand new database and why everyone going into it had to be a new claim.

Anyway, my best friend is currently on contract with HMRC doing IT consultancy, and he described their data systems as completely hellish an frequently outdated, so I have little faith that a simple transition to a unified database is remotely plausible.

 

[11101]

It is a conservative talking point though, and one that has been widely debunked at that. It's the same argument that people use against welfare benefits in general. In practice, it has been shown that people derive great personal value from being able to work, and don't want to be unemployed or idle.

Also, UBI is a guaranteed minimum income, not a ticket to careless luxury. Most employed people would make more than a UBI would provide.

Not disagreeing with any of that, just saying that in that specific made up example where the net gain from working is exactly zero it would collapse the labour force.

 

[Pexbo]

Not disagreeing with any of that, just saying that in that specific made up example where the net gain from working is exactly zero it would collapse the labour force.

Or, alternatively it will make employers sort their shit out and make work a more attractive prospect?

 

[Cheimoon]

Not disagreeing with any of that, just saying that in that specific made up example where the net gain from working is exactly zero it would collapse the labour force.

But then the example makes no sense. First, most people make more than what UBI would offer. Second, if that weren't true, if people would quit work, employers with people in that wage group would be short of personnel and would start offering higher wages in order to remain in operation (as @Pexbo said). And third, if that weren'tr true either, the point remains that most people don't like being idle (pre-pension, anyway), and wouldn't generally choose to lounge at home doing nothing.

So what's the value of the example?