A lot of good replies here, so let's list them all in one place. We got:
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.
Now the question to ask is what percentage of countries have a high unemployment rate, and it would be better if we split the data by continent. Your first point I highlighted in blue eliminates almost all African, South American and Southeast Asian countries, except for ones like Singapore but countries like that are outliers so I'll omit them from my study. If such a program were to be made for these impoverished countries it would have very different policies for a program to target unemployment, we now have UBI objective of increasing standard of living vs. objective of simulating the economy due to less cash flows to unemployed people (but then, it's not a UBI program anymore, it's a stimulus program).
Good thing is we already have such data, look at
https://worldpopulationreview.com/country-rankings/unemployment-by-country, What's interesting about this data is for many of the developed countries with unemployment rates <5%, they still have thousands of people unemployed so a government that wants to increase cash flow around the economy would make a stimulus program targeting these people.
UBI appears to be suitable only for countries with extremely high unemployment rates >30% as it can be safely assumed that without work, most of the population lives in poverty.
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.
Then it means that different taxes have to be made to make this work. For UBI to work there has to be a source of revenue to fund it and taxes appear to be the only sustainable means to make it happen. But having said that, the last thing working-class people want is more taxes to pay and depending on what is being taxed, it can even cause mass outrage, like Lebanon attempting to tax WhatsApp messages a year or so ago. Which brings us to the next point:
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.
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.
Since we now have the entire population requesting a fixed budget this comes as an additional burden to taxpayers who now have to pay
more taxes to finance this, and in return only get a percentage of their tax back as UBI (a fixed rate, upper class people also get this rate so it's not very useful to them). The higher tax bracket you're in the more you lose. But this strategy hurts the working class people the most because they don't have large savings and whatever savings they do have is now being slowly eaten up by the UBI program, potentially even
lowering their standard of living as they're forced to sell stuff to pay the tax. So while it's good for the poor it looks like it's going to hurt the group of people just above them.
Which leads us to a problem: I just mentioned money is also going to people who have no use for it. So with UBI we are now giving money to people who don't need it, and it's putting the workers, a portion of the people who
are employed at a net loss. So it makes me think UBI only works for poor countries with few rich people.
Also for those countries that can't afford the budget needed for UBI they can set up some kind of welfare system instead.
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.
I should mention though, that UBI is merely a weapon to combat exploitative jobs - it doesn't get rid of the exploitative jobs themselves. As I said a few times before, the companies responsible for allowing these conditions to fester have the option to invest in better conditions or ways to automate the job if it's too dangerous but they choose not to. People can always take advantage of this benefit of UBI and not take an exploitative job, but this is not going to hurt production rates of those companies.
Programs like UBI have existed for decades (if not centuries) and been commented upon by famous economists like Milton Friedman.
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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
Read the 2nd half of the quotation above, carefully.
"We make it costly for employers to employ people; we subsidize people not to work. We have a system that increasingly taxes work and subsidizes non work."
Here Milton Friedman criticizes programs like UBI. What "makes it costly for employers to employ people"? UBI does exactly that through tax hikes on businesses and workers utilized to fund UBI. What increasingly taxes work, to subsidize non work? UBI does. Even if Milton Friedman doesn't mention UBI by name, we can clearly see he would be against the program.
I'm no economist but perhaps taxing non-work to subside work is a good program for
low unemployment rate countries (not the high unemployment rate countries I wrote about above). But this hits the working-class taxing problem above, putting taxes on them while they continue to look for work. The logical solution to this problem is to create more jobs in those areas but I'm not at this time sure how that would be done.
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.
And to further complicate the minimum amount required, different regions of a country have different standards of living, so obeying the fixed amount rule we set above, it's going to be enough for some regions, and maybe even more than enough, but severely lacking for higher standard of living regions. We can't resolve this and keep a fixed payment amount at the same time.
American companies are paying much lower corporate taxes today thanks to the Trump tax cuts, yet the obvious trajectory is still slashing benefits across the board for workers. More part-time workers, more gig workers, more ICs, while wages haven't been increasing once you account for inflation. And this was true long before the pandemic; COVID-19 is just accelerating the trend.
And as long as it continues this way, no social welfare program (forget about UBI at this point) will be able to secure enough funding to give specifically workers a wage buffer for their taxes, let alone the unemployed.
1) Do you agree that if nothing is done, then inequality will worsen and jobs will become increasingly scarce, and that this is a problem that will need fixing?
2) If so, what options other than UBI might be viable?
I am genuinely interested in answers and different opinions. I'm in favour of UBI largely because I think a solution is needed, and I can't think of anything that might be better.
To be honest I'm starting to think we can implement better social welfare programs than UBI, I suggest two different programs for the unemployed and the workers in low tax brackets respectively. The workers program will pay only as much to cover basic benefits. The unemployed program will pay much more money but say half as much as an average job's salary. These amounts are then adjusted for each region or state depending on their standard of living.
I don't know if such programs are being tried now but I think it's better than getting only a few government benefits and then suddenly losing them by policy change.
