Universal Basic Income - could it work in the UK?

[bitlancr]

Hi all. The idea of UBI (http://en.wikipedia.org/wiki/Basic_income) has been growing on me lately, so I decided to do some maths:

The number of working age benefit claimants is currently 5.5 million (https://www.gov.uk/government/collections/dwp-statistical-summaries).
The national minimum wage is £6.31/hour, or £12,620/year assuming 250 8-hour working days.
To pay all current benefit claimants this minimum wage would cost around £70 billion, including some slop for government wastage/admin.

Right now, the current DWP bill (excluding pensions) stands at around £90bn (http://www.theguardian.com/news/datablog/2013/jan/08/uk-benefit-welfare-spending).

So we could have UBI set at the minimum wage - a truly egalitarian welfare system - and save £20bn. Am I missing something here?

[1715111397]

1715111397

[1715111397]

1715111397

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[bitlancr]

Thanks for your response.

(1)
I think it's reasonable to assume that we'd see a reduction in fraud with the UBI system, due to the massive reduction in complexity and bureaucracy it would bring.

(2)
This is kind of the point - a more egalitarian system would eliminate a lot of these dubious incentives and disincentives, e.g. with child benefit.

(3)
One would assume that if someone is working and struggling, they would be already claiming benefits (e.g. tax credits / housing benefit). I guess the question is, would UBI be enough for these people? If UBI is paid in addition to any wage, then I suspect it should be.


The Achilles heel of all this could be inflation - wages will clearly need to increase, and prices will follow - but as a libertarian I'm not too concerned about this, for two reasons:

a) Inflation will will take effect over time, possibly a long time if the UBI is trialled and rolled out in phases;
b) Inflation can be used to lower the overall benefit bill over time, weaning claimants off state dependence.

[Lethn]

This kind of thing has been attempted before and would not only cause inflation but hyperinflation, all that money has to come from somewhere and most peoples reaction is to print it out of thin air which just doesn't work. I've become convinced that is not only very unrealistic to think that you can actually enforce completely equal wages ( how are you going to account for the extra cost involved with different types of people for example? ) and it is also mathematically impossible because in order to create a currency equal to the population you would have to increase it periodically through inflation to match the birth rate but that would devalue the currency and mean the people who already exist have less money.

I think Ron Paul said it best, the best thing we can do for poor people is make being poor as comfortable as possible, the only solutions I have ever seen from socialism and communism involve directly or indirectly stealing from people who have more wealth we keep being shown even now that it just isn't working.

Oh and you also aren't taking into account the amount of work everybody would have to do in order to pay off the current debts we owe to other countries.

[bitlancr]

Thanks for your response Lethn. Not sure I follow your arguments though. Could you link me to an article showing where this has been attempted before?

I'm not sure what you bean by "enforce completely equal wages" - this isn't something I suggested.

Why would new money need to be printed? I've shown above that UBI could actually be £20bn cheaper than the current policy.

The current debts are already there - if this saves money, isn't that a good thing?

[jballs]

This kind of thing has been attempted before and would not only cause inflation but hyperinflation, all that money has to come from somewhere and most peoples reaction is to print it out of thin air which just doesn't work. I've become convinced that is not only very unrealistic to think that you can actually enforce completely equal wages ( how are you going to account for the extra cost involved with different types of people for example? ) and it is also mathematically impossible because in order to create a currency equal to the population you would have to increase it periodically through inflation to match the birth rate but that would devalue the currency and mean the people who already exist have less money.

I think Ron Paul said it best, the best thing we can do for poor people is make being poor as comfortable as possible, the only solutions I have ever seen from socialism and communism involve directly or indirectly stealing from people who have more wealth we keep being shown even now that it just isn't working.

Oh and you also aren't taking into account the amount of work everybody would have to do in order to pay off the current debts we owe to other countries.

This is a myth. Inflation of what? Who is going to use more of what because they are on a stipend?

US has 55 MILLION people on social security now. No inflation.

20 years ago if they had said hey let's put 55 million people on the public tit, there would have been epic fighting against it, declaring it would ruin the economy blah blah blah.

Well it is definitely having some impacts but the inflation theory is bunk. Cost of production of everything has declined, productivity skyrockets, and at the end of the day if poor people can buy two loaves of bread instead of one, turn the heat up a little in the winter, no it really makes no difference.

We can endure every trust fund kid who doesn't work and collects his dividends and pisses it into the wind, we can probably make for a universal baseline. However... are we then only raising cattle? Here I side with Ron Paul and say look at the product of the welfare state, it is Kanye. Not the coin.