Universal Basic Income

[Igor Drefljak]

I'd be curious to see how this would play out.

With my little knowledge, I just don't know how this would even work.
For a lot of people, this is more than their monthly wages, especially the further north we go.

For those people alone, it'd be worth quitting their jobs. That'd be most supermarket works, shop workers, etc.
Now you can argue that if they work alongside it, it's even more money, but I don't think you can put a value on free time. Especially with the weather as it has been this last week or so, and continuing, people would rather be outside, not cooking in an office, etc.

I also know of quite a few people who are on benefits right now now and wont work an hour extra as it goes against them. Now I know this UBI would be along side any working time, but a lot of people just don't want to work. I don't even know how a couple with kids only have to work 24 hours a week between them.... Thats not even a working week for a single person.

But moving on from that, wouldn't food, electronics, holidays, fuel, utilities etc just all go up anyway, so then we'd be pretty much were we are, apart from the rich just getting richer.

Either way, I could be way off the mark here, but I'd be curious to see how it plays out in general

 

[Forevergiggs1]

It might be right to say that at it's simplest the employed would gain less, they would gain £1600 less 20% if on basic tax, or less 40% if on higher tax.

That's assuming it is taxable at all, and also assuming it doesn't have a separate tax scale altogether. There are many ways it could be done.

OK thanks. That makes sense. If someone is currently earning £2000 pm and they're paying 20% tax, their take home pay (less other deductions) would be £1600. With the extra £1600, even if it pushes them into the 40% tax bracket they'll still be taking home (less other deductions) £2160 which is substantially more than before.

By paying a higher % on all the rest of your income.

Using the same example as above, according to wibble, if the £1600 isn't taxed then their previous wage of £2000 pm would be taxed at 100% as he's saying the employed won't be any better off than they are now. It here that I can't get my head around.

 

[NotThatSoph]

Using the same example as above, according to wibble, if the £1600 isn't taxed then their previous wage of £2000 pm would be taxed at 100% as he's saying the employed won't be any better off than they are now. It here that I can't get my head around.

The 1600 number is just because this one thinkthank chose that number for their 30 person trial. All a UBI is is a transfer payment that isn't means tested, it can be whatever size, it can be financed in whatever way, and it can be an addition to or instead of other government programs. Do you want to feck over the poor? Design a relatively low UBI, financed by cutting services and a small income tax increase. Do you want to increase spending on lower income people while leaving the middle intact? Either a higher UBI or keep existing benefits, higher tax for the middle that on average evens out with the UBI, and increased taxes on upper income people that brings in more than the transfer payment.

As with basically any policy there will be winners and losers and unaffected people, and you can choose who. There's nothing special or magic about a UBI.

 

[Wibble]

Using the same example as above, according to wibble, if the £1600 isn't taxed then their previous wage of £2000 pm would be taxed at 100% ae's saying the employed won't be any better off than they are n4,000ow. It here that I can't get my head around.

I didn't say anything like that.

As an example (using Australian marginal tax rates) let's say you currently earn $100,000 then you pay almost exactly 25% tax including medicare levy. If there was a UBI of $2000 per month you could increase the tax free threshold from the current amount of $18,000 to $24,000 and adjust the various marginal tax rates upward so someone on $100k gets $24k UBI and pays $24k more tax wheras someone just on UBI isn't taxed.

Or UBI is excluded and everyone pays tax from the first dollar of other income.

 

[dal]

The concept of a true UBI in most peoples mind is probably something where it enables someone to live good and not work, a utopia lets say.

In my eyes this will work if AI progresses in the right way and I am sure it will for the next few years. In the short term, less than 10 years we could see machines building machines themselves with zero human intervention for farming and most jobs being taken over by AI. This isn't even sci-fi anymore.

The only issue here is, when AI takes most jobs and the subsequent tax levels rise to provide this basic income then will companies move abroad to mitigate this, there will be no world co-operation here unless AI becomes dangerous and forces the issue. Managing this will be the key challenge to a true UBI, I can see the basic needs being nationalised though, like food and energy.

 

[Forevergiggs1]

I didn't say anything like that.

As an example (using Australian marginal tax rates) let's say you currently earn $100,000 then you pay almost exactly 25% tax including medicare levy. If there was a UBI of $2000 per month you could increase the tax free threshold from the current amount of $18,000 to $24,000 and adjust the various marginal tax rates upward so someone on $100k gets $24k UBI and pays $24k more tax wheras someone just on UBI isn't taxed.

Or UBI is excluded and everyone pays tax from the first dollar of other income.

The average UK wage is just over £30k, with many earning below that. Their current taxation is 20% meaning their take home pay (less other deductions) is £24k. If UBI goes ahead, rounded up it would add another £20k to their earnings giving them £50k.

We don't know what the tax rate would be but even if it pushes them into the 40% bracket for all overall income they'll still be taking home £30k which would be an overall increase of £6k per annum on their current wage.

For me, however much people juggle around numbers the employee comes out winning every time. For the corporations it's a different matter.

 

[Murder on Zidane's Floor]

I'd be curious to see how this would play out.

With my little knowledge, I just don't know how this would even work.
For a lot of people, this is more than their monthly wages, especially the further north we go.

For those people alone, it'd be worth quitting their jobs. That'd be most supermarket works, shop workers, etc.
Now you can argue that if they work alongside it, it's even more money, but I don't think you can put a value on free time. Especially with the weather as it has been this last week or so, and continuing, people would rather be outside, not cooking in an office, etc.

I also know of quite a few people who are on benefits right now now and wont work an hour extra as it goes against them. Now I know this UBI would be along side any working time, but a lot of people just don't want to work. I don't even know how a couple with kids only have to work 24 hours a week between them.... Thats not even a working week for a single person.

But moving on from that, wouldn't food, electronics, holidays, fuel, utilities etc just all go up anyway, so then we'd be pretty much were we are, apart from the rich just getting richer.

Either way, I could be way off the mark here, but I'd be curious to see how it plays out in general

Well, depends on the person but ref; your bolded part, I would (in that situation), save the £1k per month or however much the UBI is and work for several years, meaning I could then buy a house and get on the ladder etc.

 

[Wibble]

The average UK wage is just over £30k, with many earning below that. Their current taxation is 20% meaning their take home pay (less other deductions) is £24k. If UBI goes ahead, rounded up it would add another £20k to their earnings giving them £50k.

We don't know what the tax rate would be but even if it pushes them into the 40% bracket for all overall income they'll still be taking home £30k which would be an overall increase of £6k per annum on their current wage.

For me, however much people juggle around numbers the employee comes out winning every time. For the corporations it's a different matter.

I don't know why it is confusing. You can adjust tax free thresholds and marginal tax rates so that all fully employed people pay about the same amount of extra tax as they get in UBI. If it end up that the lower paid benefit a bit so what? That is a good thing imo. As is big business paying their fair share.

But in practice the fully employed will broadly be paid the same net of tax.

 

[Cheimoon]

The average UK wage is just over £30k, with many earning below that. Their current taxation is 20% meaning their take home pay (less other deductions) is £24k. If UBI goes ahead, rounded up it would add another £20k to their earnings giving them £50k.

We don't know what the tax rate would be but even if it pushes them into the 40% bracket for all overall income they'll still be taking home £30k which would be an overall increase of £6k per annum on their current wage.

For me, however much people juggle around numbers the employee comes out winning every time. For the corporations it's a different matter.

Apart from all the other points made, it's not helpful to focus on the £1,600 specifically. This is one think tank doing a tiny experiment, it says nothing about how UBI would actually be implemented nation-wide by a government (if ever, but anyway).

 

[Kaush949]

The one critical unintended consequence of UBI that would need to be maneuvered is inflation.

 

[Devil You Know]

UBI is a spoonful of capitalism to help the socialism go down.

It's redistribution of wealth, but without the economies of scale that you'd get if the government was investing into broader schemes themselves.

 

[jeff_goldblum]

Well, depends on the person but ref; your bolded part, I would (in that situation), save the £1k per month or however much the UBI is and work for several years, meaning I could then buy a house and get on the ladder etc.

The vast majority of people would either continue working as they were and make use of the extra income to do something they couldn't have done otherwise (like buy a house, start a family, travel, allow their partner to drop hours to spend time with kids), or they'd drop a day or two of their work week and enjoy being able to live comfortably without the 40-hour weeks.

Those who reckon UBI would lead to loads of people quitting work altogether just don't really understand people (or they're unaware that stuff like childcare costs is already forcing half of many couples to do this). In the short-term you would see a lot of people quitting jobs they hate because they'd no longer be at risk of imminent homelessness, but it wouldn't last. The employment market would have to adapt to not having a captive labour pool and you'd see pay and conditions improve and part-time/job share roles becoming a lot more common.

At that point, very few people would actively choose to get by on ~£20k when they have a chance at living a pretty great life (by current standards) by working even 20-30 hours a week.

 

[Forevergiggs1]

I don't know why it is confusing. You can adjust tax free thresholds and marginal tax rates so that all fully employed people pay about the same amount of extra tax as they get in UBI. If it end up that the lower paid benefit a bit so what? That is a good thing imo. As is big business paying their fair share.

But in practice the fully employed will broadly be paid the same net of tax.

To be honest the only confusing thing is your assumption that the employed won't be any better off. As @Cheimoon pointed out the £1600 is a think tank figure but as it's the only figure we have it's the only guideline we can go by. There must be millions of employed workers earning around the same figure and others less. What incentive do they have going to work knowing they could sit at home,scratching their arses and earn the same or more money? As we're talking millions of people where does the shortfall come from if they decide to take the stay at home option?

 

[Wibble]

To be honest the only confusing thing is your assumption that the employed won't be any better off. As @Cheimoon pointed out the £1600 is a think tank figure but as it's the only figure we have it's the only guideline we can go by. There must be millions of employed workers earning around the same figure and others less. What incentive do they have going to work knowing they could sit at home,scratching their arses and earn the same or more money? As we're talking millions of people where does the shortfall come from if they decide to take the stay at home option?

$1600 is a figure one small, not actually a UBI, study plucked out of thin air. Whatever figure a UBI was set at it will very low, likely barely subsistence level. I seriously doubt anyone will lose whatever motivation they have to work to be better off than that. Why do people take jobs to earn slightly more? Perhaps because it is no fun living in poverty.

Not to mention means tested social payments are often huge disincentives to work unless you can work full time for a decent wage.

 

[pascell]

Theoretically speaking, say if this happened all throughout the UK, isn't this going to drive up house prices above the already over-inflated prices?

More disposable income is going to make more people invest in property, just look at what's happened to the market since COVID.

 

[Murder on Zidane's Floor]

The vast majority of people would either continue working as they were and make use of the extra income to do something they couldn't have done otherwise (like buy a house, start a family, travel, allow their partner to drop hours to spend time with kids), or they'd drop a day or two of their work week and enjoy being able to live comfortably without the 40-hour weeks.

Those who reckon UBI would lead to loads of people quitting work altogether just don't really understand people (or they're unaware that stuff like childcare costs is already forcing half of many couples to do this). In the short-term you would see a lot of people quitting jobs they hate because they'd no longer be at risk of imminent homelessness, but it wouldn't last. The employment market would have to adapt to not having a captive labour pool and you'd see pay and conditions improve and part-time/job share roles becoming a lot more common.

At that point, very few people would actively choose to get by on ~£20k when they have a chance at living a pretty great life (by current standards) by working even 20-30 hours a week.

While people do live off £1600pcm, that people wouldn't self enforce this by quitting work and just relying on this. I always ask people who think people will just quit their jobs and lounge about if they can get by on £1600pcm and they always, without fail, say no.

 

[711]

While people do live off £1600pcm, that people wouldn't self enforce this by quitting work and just relying on this. I always ask people who think people will just quit their jobs and lounge about if they can get by on £1600pcm and they always, without fail, say no.

You always ask people that? They must think you're a complete weirdo.

 

[Murder on Zidane's Floor]

You always ask people that? They must think you're a complete weirdo.

The people who claim that people on UBI will just sit around, I ask them.

 

[Bert_]

Theoretically speaking, say if this happened all throughout the UK, isn't this going to drive up house prices above the already over-inflated prices?

More disposable income is going to make more people invest in property, just look at what's happened to the market since COVID.

House prices have inflated despite the general reduction in disposable income over the last 30 odd years. Covid created a bubble which has pretty much burst (or deflated at least) so that isn't a useful stat. UBI could cause some minor inflation by people profiteering, but the main drivers of inflation are wholesale costs which UBI won't make a dent on.

 

[surf]

1600 a month is like doubling the full state pension (which only those who worked for at least 30 years can get) and extending this minority benefit to the whole population. Most people retire as soon as they can afford to, and living on 1600 a month is affordable on the whole, more so if you have a partner who is also getting the UBI. So what is the incentive for anyone to work and how will the country possibly afford it? The government has a hard enough time with funding pensions as it is - for example, see the agonising over the triple lock.

UBI would have to be set at a much lower level and presumably taxed, like pensions are, if it is to be feasible.

 

[Chief123]

The vast majority of people would either continue working as they were and make use of the extra income to do something they couldn't have done otherwise (like buy a house, start a family, travel, allow their partner to drop hours to spend time with kids), or they'd drop a day or two of their work week and enjoy being able to live comfortably without the 40-hour weeks.

Those who reckon UBI would lead to loads of people quitting work altogether just don't really understand people (or they're unaware that stuff like childcare costs is already forcing half of many couples to do this). In the short-term you would see a lot of people quitting jobs they hate because they'd no longer be at risk of imminent homelessness, but it wouldn't last. The employment market would have to adapt to not having a captive labour pool and you'd see pay and conditions improve and part-time/job share roles becoming a lot more common.

At that point, very few people would actively choose to get by on ~£20k when they have a chance at living a pretty great life (by current standards) by working even 20-30 hours a week.

My concern about this working would be there are a lot of jobs that are needed for society to run smoothly where the majority of employee don’t enjoy their job and the pay is equivalent to the UBI or less. I’m not sure whether those roles would be easy to fill.

 

[Bert_]

My concern about this working would be there are a lot of jobs that are needed for society to run smoothly where the majority of employee don’t enjoy their job and the pay is equivalent to the UBI or less. I’m not sure whether those roles would be easy to fill.

That says a lot about societal issues. Wage slavery is rampant. If you have jobs that are so key to the functioning of society then pay appropriately.

 

[Chief123]

That says a lot about societal issues. Wage slavery is rampant. If you have jobs that are so key to the functioning of society then pay appropriately.

I’m not sure that’s a justifiable reason though. For example stacking shelves in a supermarket shouldn’t really command a higher wage but it’s a necessary job.

 

[Bert_]

I’m not sure that’s a justifiable reason though. For example stacking shelves in a supermarket shouldn’t really command a higher wage but it’s a necessary job.

If it's that necessary then you will pay whatever it takes for someone to do it. Or invest in technology to do it in place of a person.

 

[4bars]

If it's that necessary then you will pay whatever it takes for someone to do it. Or invest in technology to do it in place of a person.

But then is when inflation comes. If you are forced to increase 50% the salaries of the most mineal jobs (i am not saying that is not ok, i wouls support it), this would reflect into the prices, specially services that is a 60-70% of the jobs.

I think UBI is the way to go in the future, but there are many people that dismissed the raise of inflation and that off setting the usefulness of UBI and how it would kill the savings of the people. And i think is the biggest risk that exist. UBI would need to come in some conditions or/and macroeconomic trategies. Which, i dont know

 

[Stack]

But then is when inflation comes. If you are forced to increase 50% the salaries of the most mineal jobs (i am not saying that is not ok, i wouls support it), this would reflect into the prices, specially services that is a 60-70% of the jobs.

I think UBI is the way to go in the future, but there are many people that dismissed the raise of inflation and that off setting the usefulness of UBI and how it would kill the savings of the people. And i think is the biggest risk that exist. UBI would need to come in some conditions or/and macroeconomic trategies. Which, i dont know

What size of inflation increase would you be expecting?

 

[Bert_]

But then is when inflation comes. If you are forced to increase 50% the salaries of the most mineal jobs (i am not saying that is not ok, i wouls support it), this would reflect into the prices, specially services that is a 60-70% of the jobs.

I think UBI is the way to go in the future, but there are many people that dismissed the raise of inflation and that off setting the usefulness of UBI and how it would kill the savings of the people. And i think is the biggest risk that exist. UBI would need to come in some conditions or/and macroeconomic trategies. Which, i dont know

Wage inflation at the lower end of the scale has very little effect on headline inflation. Paying someone more so that they can buy an extra apple each month isn't going to send the economy into an inflationary spiral.

The bigger risk for people in service jobs is that those jobs are disappearing at a rapid rate with the advance of tech. A company that had a 1,000 person service workforce 10 years ago can easily have less than half of that now. Even if they doubled the wage of everyone still there, they are still profiting or at least breaking even. End game is that these kind of jobs will no longer exist, so society will need to deal with that somehow.

 

[Stack]

Wage inflation at the lower end of the scale has very little effect on headline inflation. Paying someone more so that they can buy an extra apple each month isn't going to send the economy into an inflationary spiral.

The bigger risk for people in service jobs is that those jobs are disappearing at a rapid rate with the advance of tech. A company that had a 1,000 person service workforce 10 years ago can easily have less than half of that now. Even if they doubled the wage of everyone still there, they are still profiting or at least breaking even. End game is that these kind of jobs will no longer exist, so society will need to deal with that somehow.

Ive seen that loss of service jobs first hand and it was far far worse than a reduction of a half. Of course that doesnt hold for all but its a real problem.
I did some work about 5 years ago at a Supermarket warehouse facility. At that time it employed around 50 people operating fork lifts to move stock around. Today that facility has robots doing that job. The facility itself also lost a large number of jobs with the data control side of things too. I went back there earlier this year as a follow up to the original job and was told by the management their that there had been about an 80% reduction in human jobs at the facility. UBI seems like a way to help counter this part of the overall problem.

 

[4bars]

What size of inflation increase would you be expecting?

Impossible to predict for experts. Imagine me. And it will depen on many factors. Minimum salary vs UBI, taxation, and whichever other factors involved. Do you think that 1 of the parents of 2 babies will go to work if they earn 20-30% more working than UBI taking in account that they would spend money with baby sitters and other expenses? If you have a kid from 0-2 and then another one, you could find many parents not going to work from 4-5 years easily

 

[4bars]

Wage inflation at the lower end of the scale has very little effect on headline inflation. Paying someone more so that they can buy an extra apple each month isn't going to send the economy into an inflationary spiral.

The bigger risk for people in service jobs is that those jobs are disappearing at a rapid rate with the advance of tech. A company that had a 1,000 person service workforce 10 years ago can easily have less than half of that now. Even if they doubled the wage of everyone still there, they are still profiting or at least breaking even. End game is that these kind of jobs will no longer exist, so society will need to deal with that somehow.

We are not talking about buying an apple. Depending on the UBI (we can bicker around the topic but we dont know yet the quantities), we might be talking about an UBI thatcould cover 70-80% of the minimum salary. Do you know how many students and parents with kids earning minimum salary or just a bit more would opt out to not work bc they have other priorities if they can "survive" with UBI? You would need more than one apple to make them come back to work. There are many positions that AI has little to say yet as they are manual jobs. Mabe they will be covered by the ones that gets push out because AI? So competition will balance out?

You probably know more than macroeconomics than me, but i dont see how UBI will not cause a decent amount of inflation

 

[Stack]

Impossible to predict for experts. Imagine me. And it will depen on many factors. Minimum salary vs UBI, taxation, and whichever other factors involved. Do you think that 1 of the parents of 2 babies will go to work if they earn 20-30% more working than UBI taking in account that they would spend money with baby sitters and other expenses? If you have a kid from 0-2 and then another one, you could find many parents not going to work from 4-5 years easily

When you have lower income people with disposable incomes that are very very low then 20% to 30% added income is absolutely worth it, even with the cost of childcare.

 

[dumbo]

Theoretically - at least in its most popular guise, designed to solve the most en vogue problem - UBI is paid for by the robots doing the now automated jobs. So the shelf stacker, as above, who is replaced by the robot, will still get paid the wage (or similar) because the value of the job is still there and the robot doesn't need to be paid (except the increasingly small maintenence, because tech). The money previously allocated to the manual human for stacking a shelf doesn't go to the robot, and it doesn't go to the business owner, or tech supplier, or shareholders in the tech company that built the robot. It goes to the same replaced human. This money could either be collected through taxing the owners or through public ownership of the technology.

Theoretically it's great, theoretically it is workable and theoretically solves the loss of jobs that looks to be ever increasing. This is the theoretical future of benign tech-human symbiosis.

Issues of inflation, who wants to work, childcare, how to spend your free time, etc. will all become economic trivialities when the surplus wealth created by the technology is shared between all of humanity. Everyone will have enough, we all benefit. Utopia is us.

Automation is a problem for the proletariat and owner alike, it looks to be an increasing problem, an egalitarian UBI is a good solution, violent uprising is another, fully automated authoritarianism another. Pick your poison.

A slightly different approach to UBI (although possibly related) is to see it as a way of fiddling with the existing welfare system. This type of UBI I'm even less qualified to address and even more sceptical/cynical towards.

People talk about UBI in often wildly different ways, each addressing different issues, there isn't a single model that everyone is in agreement with.

 

[jeff_goldblum]

My concern about this working would be there are a lot of jobs that are needed for society to run smoothly where the majority of employee don’t enjoy their job and the pay is equivalent to the UBI or less. I’m not sure whether those roles would be easy to fill.

Pay would have to increase, or they'd have to find a way to make the job less miserable/difficult. If a job is essential for society to run smoothly, it should be paying a lot more than £19,200 anyway. It sounds obvious, but it is not generally a good idea to allow essential jobs to become so undesirable that you're relying on desperation or pure altruism to fill them.

 

[4bars]

When you have lower income people with disposable incomes that are very very low then 20% to 30% added income is absolutely worth it, even with the cost of childcare.

Many people decided not to go back to their jobs after covid causing a serious shortage in many areas in low wages jobs...that without UBI

 

[TwoSheds]

I like the idea of a Universal Basic Dividend myself. Suppose corporation tax was 20% and UBD corporation tax was 5% if the company has a revenue higher than X amount, and then every adult just gets an equal share of that dividend.

 

[limerickcitykid]

Pay would have to increase, or they'd have to find a way to make the job less miserable/difficult. If a job is essential for society to run smoothly, it should be paying a lot more than £19,200 anyway. It sounds obvious, but it is not generally a good idea to allow essential jobs to become so undesirable that you're relying on desperation or pure altruism to fill them.

Or like Canada they can just do neither of those and instead bring in loads of immigrants who are desperate enough to be taken advantage of with miserable jobs and living situations.

 

[Morty_]

Libertarians/tech bros are supporting it at an alarming rate, making me very uncomfortable with the whole thing.

Their idea of it is, of course, to replace all welfare programs with a check each month.

 

[Red in STL]

Libertarians/tech bros are supporting it at an alarming rate, making me very uncomfortable with the whole thing.

Their idea of it is, of course, to replace all welfare programs with a check each month.

And if the check is big enough there shouldn't be any need for welfare programs

 

[Wibble]

Pay would have to increase, or they'd have to find a way to make the job less miserable/difficult. If a job is essential for society to run smoothly, it should be paying a lot more than £19,200 anyway. It sounds obvious, but it is not generally a good idea to allow essential jobs to become so undesirable that you're rely on desperation or pure altruism to fill them.

Loads of essential jobs are undesirable for most which is why things like fruit picking and aged care are often done my migrants in many countries.

 

[Wibble]

Libertarians/tech bros are supporting it at an alarming rate, making me very uncomfortable with the whole thing.

Their idea of it is, of course, to replace all welfare programs with a check each month.

That is the whole point of a UBI. Ideally it replaces just about all social and pension payments, while getting rid of the huge bureaucracy required to administer means and circumstance tested payments.