Universal Basic Income: Ideas on how to make it work?

[NotATether]

Cnut237 and I were having a conversation about wealth distribution in this thread, where he mentions UBI. So rather than derailing that thread I'm going to open it here.

In case you don't know what UBI means it is a program for all citizens of a country, rich and poor, to be paid a fixed amount by their government and the goal of this program is to make sure everyone can pay for what they need. There are obviously many challenges to address before this works out, the most basic ones are:

- How much to pay? Since they're paying millions of people, they need to ensure they have enough money set aside for that, or UBI payments will deplete the government's money.
- What time interval to pay in - If this is not controlled we get the same consequence as paying too much at a time.
- Should people be filtered out based on financial status (EDIT: and employment status as well)? Presumably finance ministries of governments have records of every citizen's earnings (as in profit not balance), and a UBI proposal needs to be crafted meticulously to be very precise in the criteria for organizing everyone into (only a few) financial wellness categories, a vague set of requirements can be challenged by parliaments and get the proposal blocked.
- Corruption: Some of the budget can be stolen and laundered by people in charge of safekeeping it. Look at 1MDB for example, $700million was stolen from them with the help of the prime minister.

Let's assume people will be filtered by status, since giving everyone a fixed amount while keeping withing the budget risks not giving the most needy people enough money, the main hurdle faced here is parliamentary consensus of how to classify everyone in different categories so they can set different incomes for each group. And that's complicated because government budgets decrease and sometimes increase so you have politicians arguing that the income should be raised or lowered accordingly and this just entangles entire proposals.

We basically have nobody in power agreeing with each other on how much money to pay each person.

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[Poker Player]

Not giving it.

If it is really universal (i.e given to everybody) it will create inflation. If it's only given to some, it will not be very different from the existing systems of support for the most disadvantaged, which consist of a redistribution of wealth from the middle class to the poor.

[Coyster]

The major challenge to this is the wealth of a particular nation, how buoyant their economy is and how low their level of unemployment is. UBI is a good initiative, but in a struggling country/third word country it'll be impossible to achieve, a country still struggling with an impoverished economy and writhing debts cannot undertake this program.

A country with a high unemployment rate will also struggle, you'll expect the nation to channel much of their funds into creating more jobs for it's citizens, as that will give them a stable income, rather than paying them a little amount that can hardly meet their needs. There is also the problem of creating inflation by printing more money to fulfil this program, that being said, I'd only expect this sort of program to be possible in first world countries.

[Wexnident]

- How much to pay? Since they're paying millions of people, they need to ensure they have enough money set aside for that, or UBI payments will deplete the government's money.

That would vary, if we were to place a central body that would manage the UBI for the entire world, then varying payments would happen due to different inflations of each country, not to mention that each country has different levels of financial assistance they could provide.

- What time interval to pay in - If this is not controlled we get the same consequence as paying too much at a time.

This also depends on how much pay would one get. If a central body were to set the maximum amount of expenses for each group (high class, middle class and low class) then things would probably be a lot easier, but then again, let's not even mention how some people don't have any proper way to regulate their expenses, there's also disparity when it comes to people from each class.

- Should people be filtered out based on financial status (EDIT: and employment status as well)? Presumably finance ministries of governments have records of every citizen's earnings (as in profit not balance), and a UBI proposal needs to be crafted meticulously to be very precise in the criteria for organizing everyone into (only a few) financial wellness categories, a vague set of requirements can be challenged by parliaments and get the proposal blocked.

Financial status should be more than enough, though changes with employee status may change their financial status at times, so finding a solution for that could be pretty helpful. With this issue, it may be a lot easier if they gave out UBI monthly to avoid issues when people get fired from their jobs abruptly.

- Corruption: Some of the budget can be stolen and laundered by people in charge of safekeeping it. Look at 1MDB for example, $700million was stolen from them with the help of the prime minister.

Nothing we can do about this really. Corruption has and always be somewhere money is.

Let's assume people will be filtered by status, since giving everyone a fixed amount while keeping withing the budget risks not giving the most needy people enough money, the main hurdle faced here is parliamentary consensus of how to classify everyone in different categories so they can set different incomes for each group. And that's complicated because government budgets decrease and sometimes increase so you have politicians arguing that the income should be raised or lowered accordingly and this just entangles entire proposals.

We basically have nobody in power agreeing with each other on how much money to pay each person.

Then how about a fixed amount is obtained from government budget? That, or you could set a sort of tax that varies with wealth which directly goes to UBI funds. Though this makes it look like the rich is supporting the poor, while the poor is making the losses of the rich be at the bare minimum.

[SANihal02]

What is Universal Basic Income? Simply put, this means that every citizen will receive a certain amount of money from the government as income, unconditionally, without question. In our society, many types of work are considered 'inferior' and workers are looked down upon. Such as cleaning toilets, cleaning garbage, skinning dead animals, prostitution, etc. Those who do these things do not seem to do so happily, they do so out of helplessness. If they have a regular income, don't do this anymore. Society will then try to meet those needs in other ways.

[Upgrade00]

- How much to pay? Since they're paying millions of people, they need to ensure they have enough money set aside for that, or UBI payments will deplete the government's money.

This would be dependent on the nation's economy. Emerging markets and developing economies may not be able to carry out this sustainably as their economies are not as robust and they usually have a rapidly growing population.

- What time interval to pay in - If this is not controlled we get the same consequence as paying too much at a time.

This would still be dependent on the above factor as well as the living wages in a particular country.

- Should people be filtered out based on financial status (EDIT: and employment status as well)? Presumably finance ministries of governments have records of every citizen's earnings (as in profit not balance), and a UBI proposal needs to be crafted meticulously to be very precise in the criteria for organizing everyone into (only a few) financial wellness categories, a vague set of requirements can be challenged by parliaments and get the proposal blocked.

If people were filtered out then it will no longer be universal, but rather a selective palliative giving you those who are most in need.

- Corruption: Some of the budget can be stolen and laundered by people in charge of safekeeping it.

This is an issue that should be addressed with or without such a program. Corruption especially at a large scale when left unchecked has limited the growth of many rich economies with enough resources and work force to become a developed nation.

[exstasie]

- How much to pay? Since they're paying millions of people, they need to ensure they have enough money set aside for that, or UBI payments will deplete the government's money.

To be sustainable, it would need to be a function of ongoing tax revenue, so it would differ from country to country based on economic output and tax structure.

What time interval to pay in - If this is not controlled we get the same consequence as paying too much at a time.

Rent and billing cycles are usually due on a monthly basis. That seems reasonable enough if the goal is meeting basic needs.

Should people be filtered out based on financial status (EDIT: and employment status as well)? Presumably finance ministries of governments have records of every citizen's earnings (as in profit not balance), and a UBI proposal needs to be crafted meticulously to be very precise in the criteria for organizing everyone into (only a few) financial wellness categories, a vague set of requirements can be challenged by parliaments and get the proposal blocked.

The strength of UBI is there is no means test or work requirement, so it doesn't suffer from the bureaucratic mess of red tape, government waste, human error, and months of waiting time we see with unemployment and other benefits.

I would view it less as a welfare payment for poor people, and more as a tax on large corporations who are making living wages increasingly unattainable, payable directly to all citizens or residents.

[GeorgeJohn]

Cnut237 and I were having a conversation about wealth distribution in this thread, where he mentions UBI. So rather than derailing that thread I'm going to open it here.

In case you don't know what UBI means it is a program for all citizens of a country, rich and poor, to be paid a fixed amount by their government and the goal of this program is to make sure everyone can pay for what they need. There are obviously many challenges to address before this works out, the most basic ones are:

- How much to pay? Since they're paying millions of people, they need to ensure they have enough money set aside for that, or UBI payments will deplete the government's money.
 how much money to pay each person.

We can't concentrate on government finance I don't think is ideal because politicians can't released any money to the masses because of their selfishness.
Looking out how much government will pay us is not the problem.
The problem should be,has government accepted to pay people?
If yes the money is not going to be circulate properly because their most be atoms of embezzlement.

[jseverson]

- How much to pay? Since they're paying millions of people, they need to ensure they have enough money set aside for that, or UBI payments will deplete the government's money.

Shouldn't the answer to this simply be enough money to lift the poorest of the poor out of the poverty line? I mean, that's kind of the point, right? It depends per country, but each should have their own metric. This should be what's ideal, at least.

- What time interval to pay in - If this is not controlled we get the same consequence as paying too much at a time.

I don't think there's really a sweet spot as far as this is concerned. It simply depends on how it's implemented and how well it's managed.

- Should people be filtered out based on financial status (EDIT: and employment status as well)? Presumably finance ministries of governments have records of every citizen's earnings (as in profit not balance), and a UBI proposal needs to be crafted meticulously to be very precise in the criteria for organizing everyone into (only a few) financial wellness categories, a vague set of requirements can be challenged by parliaments and get the proposal blocked.

By definition, everyone should qualify under UBI. If the goal is simply to provide money for the poor, then all we need to do is look into expanding existing social services like unemployment benefits, etc. True UBI is meant to treat everyone equally, nothing less.

- Corruption: Some of the budget can be stolen and laundered by people in charge of safekeeping it.

I don't think there's a real solution to this. Power can be used and abused, and that's really all there is to it. You can probably go after centralization, but that also means less organization, and an even smaller chance for this to work.

In an ideal world, everyone should be guaranteed at least a comfortable standard of living. UBI can provide that, which is why I like the idea. The devil is in the details, however, and I'm not entirely sure how possible it is for this to be implemented.

[Ucy]

Well, something like that (not necessarily giving out money) should be for the needy (actual needy). But I don't think it's a good idea to give able-bodied people who aren't adding good value to society (when they can) such basic income. There should be something good and valuable most people are good at and talented in that can benefit their society rightly.
So instead of paying people huge amount for doing nothing, get them to do what they are good at and pay them what they deserve. You can only guarantee everyone his/her basic daily needs so they don't die or get into trouble due to not having the basic needs. There should be no condition for having the basic needs. Even prisoners deserve them. And the basic needs do not have to be in "cash" for the needy to spend on things they don't need.
I would prefer a system where those who work hard the right way, get lots of such guaranteed income to help them to continue to produce good value quickly for the good of society. And the needy are helped with the good things they need.

[Cnut237]

The strength of UBI is there is no means test or work requirement, so it doesn't suffer from the bureaucratic mess of red tape [...] I would view it less as a welfare payment for poor people, and more as a tax on large corporations who are making living wages increasingly unattainable, payable directly to all citizens or residents.

Yes, I think that's how it has to work. An equal amount for everyone. Obviously this means that progressive income tax brackets will need to be tweaked accordingly. In part, for example, the removal of an initial tax free allowance; you earn $1 a year, you would be taxed on that $1. And UBI is only partially self-funding; we would probably need a wealth tax or some other taxation of the ultra-rich to make it viable.

Shouldn't the answer to this simply be enough money to lift the poorest of the poor out of the poverty line? I mean, that's kind of the point, right?

The point is to reduce inequality, yes, but UBI is in large part a solution to the current (and coming) wave of automation. Automation in the past has created new jobs in new spheres. People moved from agriculture to industry to offices. What is happening now is automation of office jobs (and skilled jobs in general), and we will soon be at the point where a lot of jobs can be done better and more cheaply by machines. The anticipation is a huge level of unemployment. UBI means a minimum to live on. It means that if there is 1 full-time job available, this can be split between several part-time employees, so that each has a decent standard of living (the alternative being one person gets the full-time job, and the others register for state benefits, which then need to be assessed). Many people will still want full-time jobs, and that's fine, we are just saying that full-time employment will no longer be a necessity. UBI takes away the inefficiency of managing a complex and expensive welfare system. What it also does, is to grant bargaining power to prospective employees. In a country with high unemployment and people desperate for work, the employers can pay a pittance, and someone will still take the job, even if they know they are being exploited. UBI gives prospective employees the option to refuse a job if the conditions are exploitative.

[mu_enrico]

Hmm, here's what I think when I heard about UBI:
The program needs funding, who or what will fund it? Taxing the rich? Will they cooperate?
Or use State-Owned Enterprise's (SOE's) profits? Or both?

If the government uses the ways above, there will be no inflation. But is it enough?

Another easy way is to print more money from thin air that will undoubtedly lead to hyperinflation.

[Hydrogen]

Programs like UBI have existed for decades (if not centuries) and been commented upon by famous economists like Milton Friedman.



Image link in case embed doesn't work:  https://i.imgur.com/weKszn4.jpg

• The first part of the quotation describes how to solve long term unemployment
• The second part of the quote describes how increasingly taxing work to subsidize non work is the opposite of everything he described to fix unemployment

People discuss programs like UBI as if they're new. When in reality, they're virtually identical to social security. Which has existed for awhile now.

What we're lacking is honest and educated commentary upon how effective and efficient these types of programs have been from a historical perspective.

The silence of real commentary on the issue is deafening.

[exstasie]

Programs like UBI have existed for decades (if not centuries) and been commented upon by famous economists like Milton Friedman.

There are lots of means tested welfare programs, especially in western countries, but UBI (unconditional basic income) has never existed before. Switzerland had a national referendum about basic income in 2016; it was rejected. I believe they are the only country to put the matter to a vote.

People discuss programs like UBI as if they're new. When in reality, they're virtually identical to social security. Which has existed for awhile now.

Social security is a social safety net for the retired and disabled. UBI is more intent on delivering payments to the active labor force. In fact, one of the arguments for UBI is that it empowers labor, giving workers more bargaining power regarding wages and workplace standards. It also gives workers freedom to pursue their own small businesses.

[Yey09]

Universal bacis income will make everything worse. People who works will maintain people who too lazy for them

[teosanru]

Cnut237 and I were having a conversation about wealth distribution in this thread, where he mentions UBI. So rather than derailing that thread I'm going to open it here.

In case you don't know what UBI means it is a program for all citizens of a country, rich and poor, to be paid a fixed amount by their government and the goal of this program is to make sure everyone can pay for what they need. There are obviously many challenges to address before this works out, the most basic ones are:

- How much to pay? Since they're paying millions of people, they need to ensure they have enough money set aside for that, or UBI payments will deplete the government's money.
- What time interval to pay in - If this is not controlled we get the same consequence as paying too much at a time.
- Should people be filtered out based on financial status (EDIT: and employment status as well)? Presumably finance ministries of governments have records of every citizen's earnings (as in profit not balance), and a UBI proposal needs to be crafted meticulously to be very precise in the criteria for organizing everyone into (only a few) financial wellness categories, a vague set of requirements can be challenged by parliaments and get the proposal blocked.
- Corruption: Some of the budget can be stolen and laundered by people in charge of safekeeping it. Look at 1MDB for example, $700million was stolen from them with the help of the prime minister.

Let's assume people will be filtered by status, since giving everyone a fixed amount while keeping withing the budget risks not giving the most needy people enough money, the main hurdle faced here is parliamentary consensus of how to classify everyone in different categories so they can set different incomes for each group. And that's complicated because government budgets decrease and sometimes increase so you have politicians arguing that the income should be raised or lowered accordingly and this just entangles entire proposals.

We basically have nobody in power agreeing with each other on how much money to pay each person.

Hey hey no no you are absolutely wrong. Economy doesn't works like this. Otherwise every country would be doing this. It's because of few basic concepts of inflation. Income is equals to purchasing power of any person. The purchasing power in hands of every person would mean that every person in the Economy would be willing to pay higher price for goods. Let me explain this with an example:

For example there is a good named X. There is only one quantity of X. Then there are only two people A & B in the economy having disposable incomes A of $80 and B of $100. Now if both want to buy the good they will bid on the prices which would increase the prices to a certain point but as here A is having merely $80 his purchasing power would end at $80 and B could quote anything above $80 let's say 90 to buy the product. Which would become the price
Now if every person in the Economy gets $100 basic income which means A has $180 and B has $200. the purchasing power would go up they will be willing to take prices upto $180 as after that A can't afford it and B would buy it. Now the same commodity priced at 90 would get priced at $190.
Think of this at the whole economic level because the goods/resources will always be limited. But the wants will always be unlimited. Some here argue the utility of the product doesn't increases with increased income so why would someone pay $180? But it's not because of utility of the product but diminution of currency that X get's a higher price.

I hope I was clear. This makes the idea of Universal basic income useless.

[Cnut237]

Programs like UBI have existed for decades (if not centuries) and been commented upon by famous economists like Milton Friedman.

Yes, Friedman was broadly in favour of UBI:

One of Friedman’s main principles in favor of a basic income was the fact that the welfare system at the time punishes people for working. If someone receives employment and begins getting paid while on welfare, they will eventually lose their benefits.
"You could have a program that would be far superior to the present structure in that it would help people who are poor because they are poor. It would help them in a way which would retain an incentive for them to work," Friedman said. "Maybe a job comes up that looks better than welfare but they’re afraid to take it because if they lose it after a few months, it may be six month or nine months before they can get back onto welfare."
Friedman also thought UBI would increase levels of equality since everyone, no matter the race, class or religion of an individual would receive a guaranteed income.
"It’s a system which would have the effect of eliminating the separation of a society into those who receive and those who pay, a separation that tends to destroy the whole social fabric," Friedman said.

https://heavy.com/news/2019/06/milton-friedman-on-ubi/

The silence of real commentary on the issue is deafening.

Not really. Discussion of UBI is becoming louder and louder. There have been a lot of trials in recent years, and the idea is spreading. It is popular with the left because it reduces social inequality. It is popular with the right because it reduces welfare bureaucracy. It is popular with long-term thinkers who can see it as a solution to the unemployment caused by the ever-increasing automation of jobs.

~

I don't agree with this assessment at all. You are talking about people trying to outbid each other for very limited quantities of products. And we aren't talking about giving everyone extra money; UBI is a form of wealth redistribution. Tax brackets will have to be adjusted accordingly. It may be that if you earn $50k after tax now, you would still earn $50k after tax under UBI, the difference being with say the bottom $10k guaranteed as UBI, and the upper $40k coming from your employment (at a higher tax rate, or without the initial lower-earnings tax-free threshold). UBI is not about magically creating free money.

[teosanru]

~

I don't agree with this assessment at all. You are talking about people trying to outbid each other for very limited quantities of products. And we aren't talking about giving everyone extra money; UBI is a form of wealth redistribution. Tax brackets will have to be adjusted accordingly. It may be that if you earn $50k after tax now, you would still earn $50k after tax under UBI, the difference being with say the bottom $10k guaranteed as UBI, and the upper $40k coming from your employment (at a higher tax rate, or without the initial lower-earnings tax-free threshold). UBI is not about magically creating free money.

Even in that situation the general price level of the economy would rise. What you aren't keeping in mind is that money isn't free. When it's created it reduces the overall credibility of the currency UBI would mean creating more and more currency. Imagine govt aren't able to meet our expenses with 30-50% taxes how much taxes do you want? It would ultimately be a deficit only thereby govt creating more and more currency and increasing general level of economic inflation. Either you are planning to pay 70% taxes it's not a good idea at all.

[exstasie]

Universal bacis income will make everything worse. People who works will maintain people who too lazy for them

Maybe, but I doubt it. I would use every UBI payment I got as capital towards building and maintaining my businesses. For a lot of people, it could mean the difference between staying self-employed and contributing to the small business economy, and being forced to work for a large corporation like Amazon or Uber.

We should be thinking about what kind of economy we want: one ruled by Jeff Bezos and his ilk, or one where small businesses can thrive.

[jseverson]

Shouldn't the answer to this simply be enough money to lift the poorest of the poor out of the poverty line? I mean, that's kind of the point, right?

What it also does, is to grant bargaining power to prospective employees. In a country with high unemployment and people desperate for work, the employers can pay a pittance, and someone will still take the job, even if they know they are being exploited. UBI gives prospective employees the option to refuse a job if the conditions are exploitative.

This still wouldn't be effective if said UBI doesn't lift people out of poverty though. If people only have just enough to put food on the table and not much else, they're still going to need work, and all the power will remain with employers all the same. That's why I think it has to be enough to lift people above the poverty line.

You could maybe get away with a smaller amount -- I mean, something has to be better than nothing, right, especially for the poorest of the poor. It would at least solve the issue of hunger, but the issues you outlined, not as much. If the problem is companies not hiring to protect their bottom line, then it might be easier to address that with legislation over actually implementing UBI. They're shit out of luck either way anyway; you either cripple them with massive taxes to fund UBI, or you force them to spend more on labor.