Could a Universal Basic Income (UBI) work?

[E27007]

It's basically just the same logic with UBI. If you give people something for free and don't expect anything in return, then human nature being what it is, lots of people will take it. That's why some of us are very concerned that UBI would lead to people just deciding not to work because, why bother if you can get your income anyway. It's not that we're trying to be nasty or judgemental or anything... we're just being realistic about human nature!

Applying your thinking about human nature to my situation, I retired when I decided not to work any longer, though I was perfectly capable of several more years of productive work, and, receiving an income of a state pension, almost a UBI, it is paid to the rich and the poor alike, with no need to work at all, and not expected to offer anything in return for the rest of my years, should I be sent back to work to justify my place in society?

 

[Bletchleyite]

Applying you thinking to my situation, I retired when I decided not to work any longer, though I was perfectly capable of several additional years of productive work, and, receiving an income of a pension, with no need to work at all, and not giving anything back, should I be sent back to work to justify my place in society?

I don't think people are suggesting you should. Rather they're fearing the impact of applying that to a far wider section of the population in a situation like the present where we pretty much have full employment (i.e. everyone who wants a job can get one, even if it might not be the one they'd ideally want).

The only "fix" for that is massive immigration, and I don't think that would be very popular.

 

[Thirteen]

I think it's naive to expect UBI to produce citizens who use the money for creative success, I'm sure they will be a few but there will a number who will use to just sit on their backside and contribute little to nothing to society.

 

[DynamicSpirit]

Applying your thinking about human nature to my situation, I retired when I decided not to work any longer, though I was perfectly capable of several more years of productive work, and, receiving an income of a state pension, almost a UBI, it is paid to the rich and the poor alike, with no need to work at all, and not expected to offer anything in return for the rest of my years, should I be sent back to work to justify my place in society?

I think @Bletchleyite has covered that one for me. I'm not talking about retired people here: I think there's a broad shared understanding that, retirement is something that people have earned by working through their lives. I would however apply the logic if you're choosing to take early retirement. As a general principle (I don't know the details of your situation), I would say taking early retirement is fine if you have built up the savings/made the pension contributions/etc. that you can completely fund your early retirement yourself, but it's not fair on other people if you're expecting people who are themselves working until the actual retirement age to fund your lifestyle choice to stop working below retirement age.

== Doublepost prevention - post automatically merged: 21 Jun 2023 ==

Maybe I'm a bit naïve, but UBI may bring out the best in people who are ordinarily prevented from reaching their true potential, simply because the current system is so rigid and doesn't suit everyone.

No qualifications? You're written off as too stupid, didn't pay enough attention, didn't work hard enough etc. Took a wrong turn in life and perhaps you have a couple of minor convictions? Again, written off.

I don't think it's right to write people off in that way, and I wouldn't approve of that. But at the same time, I think if you want to bring out the best in people, you do have to have a culture that sets expectations. By analogy, think what makes the best teachers at school: In all my experience, the best teachers always encourage - they don't put you down - but that's not all: They also set expectations and gently push you to do your best. In fact, as I'm writing this, I'm thinking of two adult education classes I attended earlier this year. Same subject and similar courses but different organisations. In one, the teachers were always encouraging and positive, but no more. In the other, the teachers were just as encouraging and positive AND at the same time they were very clear about stating what work they expected people to put in outside classes etc. In other words, they set the expectations. No prizes for guessing which course had people generally achieve the most. Funnily enough, I also noticed that the course in which expectations were set also had a lower drop-out rate and people seemed more satisfied at the end of the course.

I know analogies are never perfect, but to my mind, UBI is a bit like offering the encouragement/support but without any expectations. Something like the guaranteed job which I'd favour as an alternative is more like, offering the encouragement/support AND setting the expectations of what people should do to help themselves/contribute in return.

 

[najaB]

I'm sure they will be a few but there will a number who will use to just sit on their backside and contribute little to nothing to society.

So not really any different to today, except they'll be less likely to turn to petty crime to support themselves.

 

[AM9]

I would however apply the logic if you're choosing to take early retirement. As a general principle (I don't know the details of your situation), I would say taking early retirement is fine if you have built up the savings/made the pension contributions/etc. that you can completely fund your early retirement yourself, but it's not fair on other people if you're expecting people who are themselves working until the actual retirement age to fund your lifestyle choice to stop working below retirement age.

So what is early retirement? Retiring before some arbitrary age that the government stipulates (recently raised to 66/67 years), or at the age that an individual that feels that their fitness for work is insufficient either for their own health, or inappropriate for the performance expected of an employee?

 

[Yew]

So you say. Yet I notice you make no attempt to explain why you think they are flawed.

Typically discourse places the onus on the person making the assertion to make the case that it is valid, yet so far you have failed to make the case to disprove the null hypothesis; i.e. these analogies aren't right.

That's great for you. But not everyone would.

I never suggested everyone would? But what is important here is averages, how does that effect the average income/standard of living/other useful metric; whereas you seem only to hyperfixate on a vanishingly small minority. It almost seems like if a detailed study said that this would make everyone better off, but there would be a few people that didn't contribute, you would be against it out of some twisted notion of fairness.

Obviously there'd be a lot of devil in the details of how a guaranteed job system would work. To be fair, you'd need to make sure that people are first consulted about their abilities and what kinds of work they would prefer to do, and then offered a choice of a few different kinds of work that take some account of their preferences.

If it's done right, perhaps given the current state of the media and politicians, it might start off like that, but can you honestly say that it wouldn't devolve? You'd be talking about a level of intervention into the lives of people that even authoritarian "communist" dictatorships rarely acheive.

 

[Bletchleyite]

Obviously there'd be a lot of devil in the details of how a guaranteed job system would work. To be fair, you'd need to make sure that people are first consulted about their abilities and what kinds of work they would prefer to do, and then offered a choice of a few different kinds of work that take some account of their preferences.

There's more or less a guaranteed job now if you're not too fussy about what. We are currently essentially in full employment.

 

[najaB]

There's more or less a guaranteed job now if you're not too fussy about what. We are currently essentially in full employment.

That is, however, a relatively recent phenomenon. And it's unlikely to continue in the long term. Not to mention that, thanks to the gig economy, many of those jobs don't actually pay a liveable wage.

 

[E27007]

Basic human needs are:
Shelter
Food
Warmth.

Are we all so pessimistic and lacking in aspiration, that we can never ever evolve within our society, a system which may or may not be by a UBI, which provides those basic human needs to all?

 

[Magdalia]

That is, however, a relatively recent phenomenon. And it's unlikely to continue in the long term.

It is a recent phenomenon, but it is here for the long term and we have to get used to it. That's because of demography.

many of those jobs don't actually pay a liveable wage.

Allegedly we have a National Living Wage! As I have already said, the elephant in the room here is housing costs.

 

[DynamicSpirit]

Typically discourse places the onus on the person making the assertion to make the case that it is valid, yet so far you have failed to make the case to disprove the null hypothesis; i.e. these analogies aren't right.

To take, as an example, my first analogy: Are you seriously going to deny that, if train TOCs decided to stop doing any ticket checks, that ticketless travel would vastly increase?

I never suggested everyone would? But what is important here is averages, how does that effect the average income/standard of living/other useful metric; whereas you seem only to hyperfixate on a vanishingly small minority. It almost seems like if a detailed study said that this would make everyone better off, but there would be a few people that didn't contribute, you would be against it out of some twisted notion of fairness.

No, if you you could convince me that UBI would on balance make people better off, then I'd accept that as an argument in favour of it. But right now I'm very convinced that there are extremely good reasons for believing that UBI would make us worse off. And one of those arguments is the potential disincentive to work. You keep dismissing it as a minority, but consider that, if UBI causes even - say - 5% of the working population to decide that they no longer need to work because they will get an income anyway, then that's 5% fewer people generating wealth, which could mean up to 5% less wealth being generated. That means that, on average, people would be 5% worse off (because how well off we are in aggregate is fundamentally determined by how much we produce). In practice it may be less than 5% if (plausibly) the people who stop working tend to be people who were less productive in the first place, but even so you hopefully get the idea.

 

[ainsworth74]

Allegedly we have a National Living Wage! As I have already said, the elephant in the room here is housing costs.

Well, one could argue that that was an impressive sleight of hand on the part of George Osborne to borrow the phrase "living wage" and then use it to set a minimum wage that was actually less than a living wage would be whilst gaining the positive coverage of having a so-called "living wage" (and I can feel @DynamicSpirit breathing down my neck as I type that sentence ).

As at 22 September 2022 (which is when it was last reviewed) the Living Wage Foundation considered that the actual living wage outside London was £10.90ph and inside London it was £11.95ph which employers who sign up to that scheme had to roll out by May 2023. Since April 2023 the Government mandated National Living Wage (applicable to those aged 23 and over, there are lower rates for those under 23) was £10.42ph. At the moment, to be fair, they're quite closely aligned at the moment (though that is still around £18 per week for a full time job outside London and £57 per week inside London, which isn't nothing!) but I suspect the next iteration of the Living Wage Foundation's living wage will shoot up as it is set with reference to the cost of household goods and services which have rather gone up since September 2022 when they last set it!

See their website for more info: https://www.livingwage.org.uk/what-real-living-wage

 

[Magdalia]

but consider that, if UBI causes even - say - 5% of the working population to decide that they no longer need to work because they will get an income anyway, then that's 5% fewer people generating wealth, which could mean up to 5% less wealth being generated.

But you are only looking at this from one side.

There will also be people, not working now, who will start to work when they have an unconditional basic income, instead of a conditional benefit income that will get withdrawn at eye watering marginal rates if they start to work.

I think that my lot are bigger than your lot, because there are more people who are out of work because of health issues and caring responsibilities than there are people who are out of work because they choose to. If I'm right, then the economy benefits.

 

[RT4038]

Basic human needs are:
Shelter
Food
Warmth.

Are we all so pessimistic and lacking in aspiration, that we can never ever evolve within our society, a system which may or may not be by a UBI, which provides those basic human needs to all?

We are in that position in our current society. The means of obtaining shelter, food and warmth are there and those with a genuine, evidenced, need unable to obtain these are provided for. The system has its flaws, and there is a tension between interference by the state in people's personal lives, how much support is provided and how much the rest of society have to contribute.

But right now I'm very convinced that there are extremely good reasons for believing that UBI would make us worse off. And one of those arguments is the potential disincentive to work. You keep dismissing it as a minority, but consider that, if UBI causes even - say - 5% of the working population to decide that they no longer need to work because they will get an income anyway, then that's 5% fewer people generating wealth, which could mean up to 5% less wealth being generated. That means that, on average, people would be 5% worse off (because how well off we are in aggregate is fundamentally determined by how much we produce). In practice it may be less than 5% if (plausibly) the people who stop working tend to be people who were less productive in the first place, but even so you hopefully get the idea.

It is not only the disincentive to work, but the disincentive to work productively. There is a state of tension in the jeopardy between work and providing for you and your family needs. It is not a conscious decision to work to the best of your ability to avoid being sacked ( or telling your employer where to stick their job!) and putting your life well being at risk - it is a sub conscious given. Remove that jeopardy by guaranteeing a minimum level of income and this will result in reduced productivity as more and more people take periods on UBI, which they wouldn't dream of doing currently. This is human nature.

Allegedly we have a National Living Wage! As I have already said, the elephant in the room here is housing costs.

With UBI, the housing market as it is presently constituted could not economically work. Housing could not be privately owned paid for by varying mortgage sizes or varying rentals, depending on area etc. as this would require varying UBI levels in accordance with need. We seem to be straying in a communist world with the State providing everything!

 

[PsychoMouse]

with UBI the housing market as it is presently constituted could not economically work

Good.

 

[RT4038]

Good.

And reconstituting it means reducing/confiscating (some) people's wealth, which is a non-starter. Which makes UBI a non-starter.

 

[PsychoMouse]

And reconstituting it means reducing/confiscating (some) people's wealth,

No it doesn't

 

[najaB]

We are in that position in our current society. The means of obtaining shelter, food and warmth are there and those with a genuine, evidenced, need unable to obtain these are provided for. The system has its flaws, and there is a tension between interference by the state in people's personal lives, how much support is provided and how much the rest of society have to contribute.

In theory, yes. However the benefits system is fundamentally broken, so broken that people are literally being driven to suicide by the complexities of getting the assistance they need.

It's time to replace it with something simpler and fairer, and that doesn't punish people for trying to work.

 

[WelshBluebird]

We are in that position in our current society. The means of obtaining shelter, food and warmth are there and those with a genuine, evidenced, need unable to obtain these are provided for.

That isn't the case though. And hasn't been the case since the Tories starting taking the axe to the welfare state in 2010.

 

[ainsworth74]

In theory, yes. However the benefits system is fundamentally broken, so broken that people are literally being driven to suicide by the complexities of getting the assistance they need.

Acceptable losses to make sure a tiny number of people don't sit on their backside. Or something. I dunno what the justification is personally.

 

[DynamicSpirit]

Well, one could argue that that was an impressive sleight of hand on the part of George Osborne to borrow the phrase "living wage" and then use it to set a minimum wage that was actually less than a living wage would be whilst gaining the positive coverage of having a so-called "living wage" (and I can feel @DynamicSpirit breathing down my neck as I type that sentence ).

I'm doing my best to breathe very heavily and scarily...

 

[RT4038]

In theory, yes. However the benefits system is fundamentally broken, so broken that people are literally being driven to suicide by the complexities of getting the assistance they need.

It's time to replace it with something simpler and fairer, and that doesn't punish people for trying to work.

There will always be people who have difficulty coping with life, in one way or another, and more help would be better than throwing money at them. There will always be people who have need for recourse to the welfare system, and those who never do. There are those in the middle who may or may not, and the system should be designed to incentivise as many as possible not to.
Whether the current system maximises this incentive or not is a matter of debate. I expect there are parts of it that do, and parts of it that don't. People's lives are complicated and it is impossible to write rules that cater for every eventuality. There will always be cracks, and there will always be people who play the system to their advantage whichever rule you write.

Acceptable losses to make sure a tiny number of people don't sit on their backside. Or something. I dunno what the justification is personally.

And I can't see any justification for those who don't need welfare, to be receiving it. Of course the definition of need can be endlessly debated too! One of the defining differences between left and right? It is my opinion that the tiny number you refer to would balloon with UBI.

 

[JamesT]

And I can't see any justification for those who don't need welfare, to be receiving it. Of course the definition of need can be endlessly debated too! One of the defining differences between left and right? It is my opinion that the tiny number you refer to would balloon with UBI.

Though the other side of the UBI coin is that there are usually intended to be changes to the tax system to claw back the money from those who don't need it. But rather than a means test to decide if the benefit should be given, it's a higher rate of tax for all.

 

[Yew]

To take, as an example, my first analogy: Are you seriously going to deny that, if train TOCs decided to stop doing any ticket checks, that ticketless travel would vastly increase?

Whether that is or is not true is irrelevant, as we're talking about something significantly different that is not comparable...

 

[DustyBin]

Though the other side of the UBI coin is that there are usually intended to be changes to the tax system to claw back the money from those who don't need it. But rather than a means test to decide if the benefit should be given, it's a higher rate of tax for all.

We’re getting into the detail here but this brings us back to one of the key questions; how would it be funded?

Giving it to people who don’t need it (on paper anyway!) and then taking it back through tax is one thing, increasing tax on their actual earnings is quite another. The danger is that it becomes a “wealth redistribution” tool, as we all know who’s wealth it would be that’s redistributed!

 

[Yew]

Though the other side of the UBI coin is that there are usually intended to be changes to the tax system to claw back the money from those who don't need it. But rather than a means test to decide if the benefit should be given, it's a higher rate of tax for all.

Surely it makes more sense to have one progressive system, rather than having two complicated and interacting systems to keep straight.

The danger is that it becomes a “wealth redistribution” tool, as we all know who’s wealth it would be that’s redistributed!

The unearned wealth of the Capitalist class?

 

[DustyBin]

The unearned wealth of the Capitalist class?

No, it will be the hard-earned wealth of ordinary people who dared to get on in life. But I suspect you knew that.

 

[DynamicSpirit]

The unearned wealth of the Capitalist class?

How do you distinguish between earned and unearned wealth? How do you even define 'unearned'? And which people do you consider to be the 'capitalist class' and therefore subject to having their wealth confiscated?

Sorry, but to me your statement reads like, 'I'll just confiscate the property of the people I don't like'.

But even setting that aside: The reason you can sustainably tax income is because income is recurring. You tax it one year and then there's just as much income the next year to tax. Wealth isn't recurring: Once you've taken it and spent it, it's gone for good. So: Once you've taxed away all the wealth of these horrible evil capitalists and there's no more left, how are you going to carry on paying for UBI in subsequent years?

 

[Magdalia]

How do you distinguish between earned and unearned wealth? How do you even define 'unearned'? And which people do you consider to be the 'capitalist class' and therefore subject to having their wealth confiscated?

Very easily. It is a distinction that has been used for a very long time.

Basically it is the difference between income that is a contribution to value added/GDP, and income that is a transfer of income that was earned by someone else.

Employment income, self employment income and company profits are earned.

Rent, interest and dividends are not earned.