Could a Universal Basic Income (UBI) work?

[DynamicSpirit]

I don’t really see that it should be all or nothing, but a guaranteed minimum standard of living for all shouldn’t be impossible for one of the richest countries on the planet. At some point every developed country is going to have to grasp the nettle of how we live when it’s simply not necessary for everybody to work 35-40 hour weeks.

Clearly it's not necessary for everyone to work 35-40 weeks (after all, retired people and children don't do that) - but, restricting the argument to able-bodied adults of working age, then - what makes you think it's not broadly necessary to have most people working? Consider that you can't consume stuff if you don't produce it first: So if you want everyone to have a decent standard of living, then you have to have people producing sufficient goods and services etc. to make that possible. So if you have more people not producing anything then you inevitably will have a lower standard of living for everyone else: Basic laws of maths and physics tell you that!

I would argue that it's not a coincidence that the UK faces a standard of living crisis at the very same time as more people than ever of working age are choosing, for whatever reason, not to work (although there are other reasons too behind the cost of living crisis too). If you start mass-paying people not to work and the result turns out to be that even more people choose not to work, then that will necessarily hurt standards of living even more for everyone else.

I do wish that we could get rid of the idea that it’s somehow virtuous to spend your waking life doing pointless, repetitive tasks well below your ability, or for the state to redirect tax money into bureaucratic job creation schemes.

Who here arguing against UBI has claimed it's virtuous to do pointless, repetitive, tasks? I certainly haven't so I'm not sure where you get that from?

 

[E27007]

I cannot answer the question of "Will UBI work".
But the question is why is it not in place?
Take the situation, we have an electoral; democracy, one person / one vote , where all votes have the same weight.
In that democracy there are a few rich and many poor people in the electorate
In that democracy, why have the poor people, exrecising their votes, have not elected parliamentarians who pass acts of parliament which trim the wealth of the rich and share that wealth among the poor.
That sharing out of wealth could be called UBI

 

[GusB]

Allowing people to upskill when they wish to do so is a great aim, but if that is the aim, then I don't think it would be hard to come with far more cost effective ways to achieve that than giving a free salary to the entire UK population (the vast majority of whom are probably not at any one time interested in upskilling)!

Who says that people aren't interested in upskilling?

The problem with further education is that it's expensive. Not only that, it's not simply a case of attending evening classes nowadays; many employers expect staff to be "fully flexible" within a wide range of start and finishing times, even if they're part-time. If you have a class every Wednesday and your employer refuses to make allowances for that, it's just tough. UBI would allow people to say "screw you" to employers that refuse to allow any flexibility and those employers would then have to up their game in order to attract quality workers. Free markets don't just work in one direction!

I like the idea of UBI but I do worry that much like benefits, it could easily be abused,

This is a silly point. If it's universal and unconditional, how can it be abused? You're missing the point.

Neither are we generally willing, as a society, to give people a free ride. Yes, there is a massive issue with it - one of equity. There will always be a proportion of free riders, and the current system does well to keep this to a minimum. Likewise there is a section of the population who would be hard workers come what may. In the middle are a group who work because they have to. Aside from the need of their productivity (and they are not all wasters by any means!) , why would society want to be 'buying them off' paying them to sit on their arses?

We absolutely have to tackle those people who think they can get away with a free ride - those with massive investments and property portfolios who make loads of money without lifting a finger, never mind indulging in "hard work". Most of the idiots that bang on about people not working hard enough haven't a clue what work is!

 

[najaB]

No, because it would have unintended consequences, be unaffordable and affect productivity.

Everything has unintended consequences, it's perfectly affordable and I don't see how it would negatively affect productivity.

If anything it would increase it because people would be more able to do the job they want to do, rather than whatever they can get to pay the rent.

 

[Magdalia]

I have been busy the last few days and disappointed that I've not had the opportunity to contribute until now.

I have known about Universal Basic Income since the Thatcher years mainly through newspaper columns in the Financial Times written by Samuel Brittan. I feel sure that I kept copies but right now I can't find them!

This is a silly point. If it's universal and unconditional, how can it be abused? You're missing the point.

This is fundamental. The conditionality of the benefit system is a huge burden both on those claiming and those paying for it. Claimants pay not just through the financial impact but also what it does to their mental and physical health. Taxpayers have to pay for the vast bureaucracy that administers the conditionality, but also lose out because of poorer overall economic performance. The resources deployed in administering conditional benefit could be used more effectively elsewhere.

But that's not the most important point, which is what happens at the margins, and what it does to incentives. Under a conditional benefit system there are huge disincentives to do more work because of the impact of benefit withdrawal. People who whinge about the high marginal tax rate on extra £1 of income for 45% tax payers should look at the eye watering marginal tax rates for low earners when withdrawal of benefit is taken into account. With Universal Basic Income people at the bottom end of the income scale have much more incentive to work because the Universal Basic Income is not going to be withdrawn and they get to keep every extra £1 they earn, apart from what they pay in tax.

Universal Basic Income would also be hugely beneficial to people who have health issues that fluctuate, enabling them to work when they feel able but stay at home when they don't. This also applies to people with caring responsibilities. This sort of flexible approach to work is effectively impossible under conditionality.

When Samuel Brittan was writing about Universal Basic Income the UK economy was in a very different place. Unemployment was high but the economy was doing well. Now we have the reverse, with unemployment low but the economy doing badly. I'm less optimistic now about Universal Basic Income happening now than I was back then. And the elephant in the room is housing: the way the UK has screwed up its housing market in the last 40 years means that Universal Basic Income now has to be big to cover housing costs.

Finally, ever since the 1980s I have thought that Universal Basic Income badly needs rebranding. Sometimes economists and politicians use the analogy of the UK economy as a company, "UK plc". Now, consider that every UK resident is a shareholder in "UK plc". I would replace the Universal Basic Income name with National Dividend, it is each resident's dividend arising from being a shareholder in "UK plc". This expresses the universality in a positive way, and also fosters the link between UK economic performance and what can be paid out as National Dividend.

 

[Tester]

I have been busy the last few days and disappointed that I've not had the opportunity to contribute until now.

I have known about Universal Basic Income since the Thatcher years mainly through newspaper columns in the Financial Times written by Samuel Brittan. I feel sure that I kept copies but right now I can't find them!


This is fundamental. The conditionality of the benefit system is a huge burden both on those claiming and those paying for it. Claimants pay not just through the financial impact but also what it does to their mental and physical health. Taxpayers have to pay for the vast bureaucracy that administers the conditionality, but also lose out because of poorer overall economic performance. The resources deployed in administering conditional benefit could be used more effectively elsewhere.

But that's not the most important point, which is what happens at the margins, and what it does to incentives. Under a conditional benefit system there are huge disincentives to do more work because of the impact of benefit withdrawal. People who whinge about the high marginal tax rate on extra £1 of income for 45% tax payers should look at the eye watering marginal tax rates for low earners when withdrawal of benefit is taken into account. With Universal Basic Income people at the bottom end of the income scale have much more incentive to work because the Universal Basic Income is not going to be withdrawn and they get to keep every extra £1 they earn, apart from what they pay in tax.

Universal Basic Income would also be hugely beneficial to people who have health issues that fluctuate, enabling them to work when they feel able but stay at home when they don't. This also applies to people with caring responsibilities. This sort of flexible approach to work is effectively impossible under conditionality.

When Samuel Brittan was writing about Universal Basic Income the UK economy was in a very different place. Unemployment was high but the economy was doing well. Now we have the reverse, with unemployment low but the economy doing badly. I'm less optimistic now about Universal Basic Income happening now than I was back then. And the elephant in the room is housing: the way the UK has screwed up its housing market in the last 40 years means that Universal Basic Income now has to be big to cover housing costs.

Finally, ever since the 1980s I have thought that Universal Basic Income badly needs rebranding. Sometimes economists and politicians use the analogy of the UK economy as a company, "UK plc". Now, consider that every UK resident is a shareholder in "UK plc". I would replace the Universal Basic Income name with National Dividend, it is each resident's dividend arising from being a shareholder in "UK plc". This expresses the universality in a positive way, and also fosters the link between UK economic performance and what can be paid out as National Dividend.

Excellent post

 

[JamesT]

Everything has unintended consequences, it's perfectly affordable and I don't see how it would negatively affect productivity.

If anything it would increase it because people would be more able to do the job they want to do, rather than whatever they can get to pay the rent.

I’m not sure that “perfectly affordable” is entirely accurate. https://www.bath.ac.uk/publications...rnative-universal-basic-income-schemes-uk.pdf is an academic paper examining the potential costs of UBI at various levels. If you go for a level of someone on benefits plus the savings from losing the personal allowance, you’re doubling the existing benefits budget. That needs some fairly hefty tax rises to make it fiscally neutral.

 

[DustyBin]

Do you think these people are actually adding any value in the workplace though? There are plenty of seat-warmers who manage to get through entire careers without ever achieving anything except adding extra work and unpleasantness into the lives of their co-workers, employers and employer's customers. Frankly they'd be less damaging on benefits, and who knows they might just use the space to achieve something amazing.

True, but I suspect there are also a lot of people who don’t particularly enjoy what they do, but do it competently enough regardless. The danger is that a significant number say “sod it” simply because they can.

We generally aren't willing as a society to let people starve, and nor should we. There are inevitably people who are at any given time unwilling or more often unable to engage in a meaningful way with the system we rather arbitrarily use to distribute resources. Is there really a massive issue with just giving them the money for the basics and letting them get on with it?

I agree with your first sentence. In regard to the rest, we don’t know. That’s the point of the trial (and this discussion!).

I think this is something those who haven't had to interact with the Jobcentre nor the Conditionality aspects of Universal Credit (or the handful still on Jobseekers Allowance) don't actually appreciate. It's a waste of basically everyone's time, effort and money with the only net effect often being the traumatisation of the people that it's supposed to be supporting. The majority of people who come through the Jobcentre's front door break down into three main groups.

Group One: People who are unemployed, can seek work off their own back and will find a job on their own before too long.

Group Two: People who are unemployed, can't seek work due to ill health and therefore need support for a longer period of time.

Group Three: People who are unemployed, can seek work but might struggle to find work either due a lack of appropriate skills, due to ill health (they can do some work, just not a full time job or certain types of job), due to caring responsibilities (of the child or adult variety).

Group One don't require the help of the Jobcentre and, to be frank, the Jobcentre are probably getting in the way of them actually finding work. For instance, when I signed on JSA back in 2012/13(ish) everyone who claimed JSA was sent on a three day skills course to assess their english, maths and IT skills and to help them set up email accounts. As a recent history graduate you can imagine that those three days were rather a waste of my time compared to actually trying to find work.

Group Two shouldn't need to deal with the Jobcentre because they're not fit for work but because of the broken nature of the system will have to jump through a lot of hoops to demonstrate this fact to the DWP and will probably need to regularly prove again that they remain unfit for work. We know that the Work Capability Assessment process has most probably killed people:

DWP ignored ‘hugely alarming’ research that linked WCA with 600 suicides, MPs are told | Disability Rights UK

www.disabilityrightsuk.org

Group Three, meanwhile, the group which might actually benefit the most from some sustained support tend to find that the support offered by the Jobcentre is patchy at best often not especially useful. Either because the Jobcentre and staff aren't actually equipped to help people who actually need skills support (and mostly send them to private contractors who often make money of the taxpayer whilst doing very little to actually show for it) or the benefits system by design isn't well equipped to support them.

For instance say you're ill but you can still do your little part-time job of 10 hours a week, you almost certainly won't be found to have Limited Capability for Work by a Work Capability Assessment which means that you could be subject to full conditionality and required to seek more work or better paying work. But you certainly can't do more work and it's tough to find high paying jobs sufficient to turn off conditionality (which needs to be the equivalent of 35x the minimum wage for your age group, which the DWP could reduce due to your health but, good luck with that). So eventually you'll give up your job so you've got a better chance of passing a Work Capability Assessment because having to actively seek work to avoid a sanction is probably making you more ill.

And, of course, all of this for peanuts. At the moment the standard allowance for someone 25 or over is £368.74 per month (if you're under 25 you'll get £292.11 per month). You'll get at least some help with rent (for private tenants this is capped at the 30th percentile of the average rents in your area though there was no increase this year so despite rents going up the level of support remains the same, and if you're single, under-35 with no children you'll get an even lower shared room rate) and some help with your Council Tax. But any shortfalls in your rent, council tax and then all your other bills have to be met out of this £368.74 per month. If you're mortgaged, best of luck to you because the only help you'll get is towards your interest on up to £200,000 of your loan at a fixed interest rate of 3.03%, which you'll need to pay back when the house is sold or ownership transferred (with interest on top) and only get after 3 months anyway. Hope you got mortgage protection insurance...

The whole system is rotten. The people that don't need any actual support beyond some financial support whilst they sort themselves out are just having their task made more difficult by Jobcentre interference. The people who can't work are just being traumatised whilst the people who might actually benefit from some support are finding that the system is incapable of supporting them with their more complex needs.

As a taxpayer it makes me furious seeing the utter waste of time and money that goes on in the name preventing "idleness" or people "sponging of the state" whilst also traumatising people who desperately need support and proving utterly incapable of effectively helping the people who might actually benefit from some support, guidance and direction!

Thanks, as somebody who isn’t familiar with the workings of the system that’s a really useful insight.

This is why I’m (surprisingly!) not entirely dismissive of the idea of a UBI. The current system is rotten so an alternative could improve things for everyone.

You do realise don't you that UBI pays your rent/ mortgage, council tax, utilities and feeds and clothes you.
It doesn't buy your subscription TV, broadband, tobacco, beer, holidays or days out.

If you want those things, you're also going to have to work for them

That rather depends on how much UBI actually is, surely?

Another question is what do we do if (or more likely when!) people choose the latter over the former?

I do wish that we could get rid of the idea that it’s somehow virtuous to spend your waking life doing pointless, repetitive tasks well below your ability, or for the state to redirect tax money into bureaucratic job creation schemes. We’d do better to encourage a shift to a four day working week within the next ten years and look at what combination of carrots and sticks is going to get people to contribute more to their immediate community and take risks without the fear of failing and losing everything.

That’s not the idea of the current system though; the idea is that through qualifications and/or experience you work to your ability, not below it.

Of course the system isn’t perfect by any means, and as I’ve said previously we really need to do better when it comes to leading the horse to water in this regard. We can’t make it drink, however.

 

[najaB]

That’s not the idea of the current system though; the idea is that through qualifications and/or experience you work to your ability, not below it.

Tell that to the PhD in psychology who was working in the same call centre I was.

 

[DustyBin]

Tell that to the PhD in psychology who was working in the same call centre I was.

As I said, the current system isn’t perfect.

I know someone with a PhD in chemistry who’s in the exact same position, having been made redundant by the oil company they worked for over in the Far East. Because of some questionable decision making on their part they really need the income as well…

These are outlying (and extreme) cases though, as I’m sure you’re aware.

 

[Tetchytyke]

That’s not the idea of the current system though; the idea is that through qualifications and/or experience you work to your ability, not below it.

Where it all falls down is that wages are very often not linked to ability though. Before I moved here I managed a Citizens Advice debt advice team, and the requirements imposed by our government funders were onerous. It was a very challenging job, dealing with the most vulnerable people in society as well as the nightmare DWP systems.

My job now is with a regulator, much less pressured yet I get paid £15,000 a year more for it.

It’s fair to say I couldn’t have afforded to work for Citizens Advice if my wife, a clinical psychologist, earned a fair bit more than I. And that’s not Citizens Advice’s fault, as the government wouldn’t pay enough to in turn pay a decent wage. Other debt charities are the same- StepChange pay their debt advisers little more than minimum wage (rather more cynically, their C-suite execs aren’t on buttons). Perhaps all of that’s just tough luck, market rates in action and all that, but it raises questions about what we want in society.

My experience echoes that of other posters: the benefits system is fundamentally broken, designed to extract revenue for corporate suppliers of “shirker tests”. UBI could be as simple as removing all work-search requirements from Universal Credit. Some people will be content to sit on it, some people won’t have the skills to progress beyond it, but in the grand scheme of things who cares? These people are not the problem. The real problem is billionaires like Bezos paying poverty wages to his staff and treating them like crap.

I’ve said before and I’ll say again: I have no problem with rich people. Where I do have a problem is where these rich people exploit everyone else and don’t pull their weight in society. This cartoon sums it up for me:

(Cartoon shows Rupert Murdoch with a large plate of cookies in front of him, an immigrant with no cookies, and a construction worker with one cookie. Murdoch is saying to the construction worker “careful mate, that foreigner wants your cookie”.)

 

[DynamicSpirit]

As for “contribution to society”, presumably you are measuring this in terms of tax revenue.

Actually, no I'm not, although I can see why you'd think that. I'm thinking in terms of the wealth that you generate by working: In most cases by working, you are creating wealth that then (through the mechanism of the market and to a rough approximation) is available for everyone to enjoy. The taxes that you pay don't generate wealth - they represent a redistribution of wealth from you to the community. (In effect, you are generating wealth, being rewarded for that either through your salary or through your profits, and then consenting to have some of that reward redistributed through taxation).

In contrast, someone who doesn't work and receives benefits (or UBI) is generating nothing but is consuming wealth - which inevitably will be making everyone else slightly poorer in the process.

Corporate tax avoiders are content to take from society- the costs of educating their workforce, keeping their workforce healthy, paying their workforce’s wages when they’re sick- without contributing anything in return.

No. They contribute by producing stuff, thereby increasing the overall wealth of the nation. I don't approve of unethically avoiding tax, but it doesn't change that a company doing business is in most cases increasing the collective wealth of us all - just by not as much as if they would be if they also paid their fair share of taxes.

The economic arguments centre around the lowest paid- nobody is going to do a drudge warehouse job at billionaire-owned tax-avoiding Amazon, getting paid minimum wage and being forced to urinate in a bottle because they’ll be sacked for missing targets otherwise. But is that a terrible thing?

Thank you - you've just pointed out what some UBI supporters here seem very keen to deny: That UBI is likely to disincentivise some people from working. To be clear again, I don't approve of companies treating the workers poorly, whether it's an Amazon warehouse or anywhere else. But the solution to that is surely better enforcement of good working conditions, not introducing something that's likely to (a) be mind-bogglingly expensive and (b) make us all poorer by reducing the total numbers of people who choose to work, thereby reducing GDP.

Ethically, as above. Someone doing nothing is less of a drain on society than Jeff Bezos.

I would say this is incorrect. Jeff Bezos, for all the unethical stuff around Amazon, has overall certainly improved our standards of living by providing a means for us to buy loads of goods either more cheaply, or goods which we wouldn't have been able to buy at all (because of Amazon offering vastly more choice than any high street shop could offer). In effect, Amazon has generated wealth for the nation by making the process of getting stuff to consumers cheaper and more efficient. On the other hand, someone choosing not to work is making everyone else poorer (by consuming wealth that other people have worked to generate while also not producing anything themselves. And note: I'm saying that without any implied judgement of people for various reasons cannot work).

 

[Tetchytyke]

has overall certainly improved our standards of living by providing a means for us to buy loads of goods either more cheaply, or goods which we wouldn't have been able to buy at all (because of Amazon offering vastly more choice than any high street shop could offer). In effect, Amazon has generated wealth for the nation by making the process of getting stuff to consumers cheaper.

Amazon don’t pay tax and they pay poverty wages that end up being topped up by state benefits anyway. And, by not paying tax, they undercut smaller domestic businesses who *do* pay tax. Those businesses ultimately go bust as they can’t compete, the costs of that insolvency then ultimately being picked up by the taxpayer. When a company goes bust the redundancy payments and unpaid wages come out of the National Insurance Fund.

It’s also worth pointing out that retailers do not “produce” anything, they are merely an intermediary. A useful and necessary intermediary, but a middleman nonetheless.

On the other hand, someone choosing not to work is making everyone else poorer (by consuming wealth that other people have worked to generate while not producing anything

Those people will be putting all that money back into the economy. They will be purchasing things that keep retailers and manufacturers going. Consumption taxes like VAT impact the poorest most as a proportion of their income. For someone on Universal credit, a good 15%-20% of that benefit will go straight back to the government as tax anyway.

That UBI is likely to disincentivise some people from working

That’s not quite what I said, I said it would affect the attractiveness of the worst jobs, the sort of awful jobs with exploitative management that you only do because you have to. It’s no wonder the likes of Amazon and Sports Direct would be against something which would turn off the supply of desperate people who will accept being exploited because of a lack of options.

That said, I think some people will be content to sit on their bum and do nothing. I just don’t think it will be many people. I’ve worked with people on benefits for fifteen years, nearly everyone I worked with wanted to work but couldn’t. The idea of the lazy poor is just another of those falsehoods.

 

[najaB]

These are outlying (and extreme) cases though, as I’m sure you’re aware.

If only they were. we had more than one highly-educated person working in the call centre because that was the only job they could get.

 

[Foxhunter]

The administrative costs of the current benefits system are immense - the DWP employs almost 100,000 people and running the department costs on the order of £6B annually.

It wouldn't cost anything close to that to administer UBI, since the entitlement basically boils down to "Are you a citizen/resident? Are you currently/do you intend to be alive?"

I certainly see the attractions in the idea. Though I have had the good fortune to have had few dealings with the welfare/benefits system myself, my wife was employed for several years as a benefits advisor for a charity, and carried on with this as a CAB volunteer after retirement. So I am aware of the complexity of the current system and the chances of someone on their own, in stress and in need, successfully navigating the system that is meant to help them, is very low. She certainly observed many cases of people turning to the benefits system for the first time in their lives when hit by serious illness or tragic family circumstances, and being overwhelmed by the effort of getting what they needed and were entitled to.

Imagine you are the person told by the government to implement UBI. Is a fixed annual amount per person going to work? Clearly someone living in London and the South East is going to get less for their money than someone living in the less wealthy areas of the country. That doesn't seem to be the idea of UBI. Maybe we need some compensation for rents and housing costs as we do now for some benefits and have a degree of local variation? This will require some administration. And the opportunity for fraud will be created by claiming to live in a high cost area while actually living in a low cost one, or on nice beach somewhere in the world. Some checking up will be needed. What if you have a disability that creates extra costs and needs? What if you have children? I have a feeling you are going to have to agree extra payments for these cases, but which parent gets the money? So someone will have to decide and administer all this, and process the consequence of divorce and family breakdown if it happens. And so on.

Now, I want to say that I'm not arguing with najaB here. As so often your quote is among the best argued and succinct, so I used it capture the proposal. My heart would very much like a better system than we have, but I have a feeling that UBI is not going to turn out to be as easy and cheap to administer as it looks at first sight.

 

[duncanp]

Imagine you are the person told by the government to implement UBI. Is a fixed annual amount per person going to work? Clearly someone living in London and the South East is going to get less for their money than someone living in the less wealthy areas of the country. That doesn't seem to be the idea of UBI. Maybe we need some compensation for rents and housing costs as we do now for some benefits and have a degree of local variation? This will require some administration. And the opportunity for fraud will be created by claiming to live in a high cost area while actually living in a low cost one, or on nice beach somewhere in the world. Some checking up will be needed. What if you have a disability that creates extra costs and needs? What if you have children? I have a feeling you are going to have to agree extra payments for these cases, but which parent gets the money? So someone will have to decide and administer all this, and process the consequence of divorce and family breakdown if it happens. And so on.

A fixed annual amount per person would never work, for all the reasons you have outlined.

There would have to be so many supplements, variations and exceptions that you would end up with something similar to the benefits system we have at the moment.

Universal Credit was meant to "simplify" the benefits system, but it hasn't really achieved this aim.

 

[DustyBin]

Where it all falls down is that wages are very often not linked to ability though. Before I moved here I managed a Citizens Advice debt advice team, and the requirements imposed by our government funders were onerous. It was a very challenging job, dealing with the most vulnerable people in society as well as the nightmare DWP systems.

My job now is with a regulator, much less pressured yet I get paid £15,000 a year more for it.

It’s fair to say I couldn’t have afforded to work for Citizens Advice if my wife, a clinical psychologist, earned a fair bit more than I. And that’s not Citizens Advice’s fault, as the government wouldn’t pay enough to in turn pay a decent wage. Other debt charities are the same- StepChange pay their debt advisers little more than minimum wage (rather more cynically, their C-suite execs aren’t on buttons). Perhaps all of that’s just tough luck, market rates in action and all that, but it raises questions about what we want in society.

It is market rates in action, however I’ll concede that some jobs are undervalued, particularly those that look straightforward on paper but aren’t in reality.

The solution is to either make them straightforward by ensuring there are sufficient resources, or offer a package commensurate with the demands of the job. Obviously both require funding, which is where it becomes difficult when we already have a very large public sector.

My experience echoes that of other posters: the benefits system is fundamentally broken, designed to extract revenue for corporate suppliers of “shirker tests”. UBI could be as simple as removing all work-search requirements from Universal Credit. Some people will be content to sit on it, some people won’t have the skills to progress beyond it, but in the grand scheme of things who cares? These people are not the problem. The real problem is billionaires like Bezos paying poverty wages to his staff and treating them like crap.

They are part of the problem though, and could become a larger part should their numbers increase. I’d argue that even as it stands the numbers aren’t so small as to be irrelevant.

I agree with you in regard to Bezos et al, to an extent anyway. When I look at the tax I pay each month as an ordinary higher earner, I find it irksome that there are people so wealthy they can basically “opt out” of the system. I’m with you there. As I’ve said previously however, I don’t believe in punitive taxation or effective wealth caps; just a robust and fair system that isn’t so easily circumvented.

I’ve said before and I’ll say again: I have no problem with rich people. Where I do have a problem is where these rich people exploit everyone else and don’t pull their weight in society. This cartoon sums it up for me:

(Cartoon shows Rupert Murdoch with a large plate of cookies in front of him, an immigrant with no cookies, and a construction worker with one cookie. Murdoch is saying to the construction worker “careful mate, that foreigner wants your cookie”.)

Murdoch could just as easily be saying to the immigrant (or poor person) “look mate, he’s got a cookie but won’t share it”. Because again, as per my comment above, that’s how it works. (I sound like some sort of leftist here; I’m most certainly not, but nor am I blind to reality!).

If only they were. we had more than one highly-educated person working in the call centre because that was the only job they could get.

Define highly educated?

My wife had a spell in a contact centre (running the HR department) and she was surprised at how many graduates worked their. Nearly all of them however had a 2:2 in a subject which was unlikely to lead to well paid (or even relevant) employment. The question for me is whether they went into their studies with their eyes open, or were misled regarding their future prospects. I do think it’s a shame either way.

I certainly see the attractions in the idea. Though I have had the good fortune to have had few dealings with the welfare/benefits system myself, my wife was employed for several years as a benefits advisor for a charity, and carried on with this as a CAB volunteer after retirement. So I am aware of the complexity of the current system and the chances of someone on their own, in stress and in need, successfully navigating the system that is meant to help them, is very low. She certainly observed many cases of people turning to the benefits system for the first time in their lives when hit by serious illness or tragic family circumstances, and being overwhelmed by the effort of getting what they needed and were entitled to.

Imagine you are the person told by the government to implement UBI. Is a fixed annual amount per person going to work? Clearly someone living in London and the South East is going to get less for their money than someone living in the less wealthy areas of the country. That doesn't seem to be the idea of UBI. Maybe we need some compensation for rents and housing costs as we do now for some benefits and have a degree of local variation? This will require some administration. And the opportunity for fraud will be created by claiming to live in a high cost area while actually living in a low cost one, or on nice beach somewhere in the world. Some checking up will be needed. What if you have a disability that creates extra costs and needs? What if you have children? I have a feeling you are going to have to agree extra payments for these cases, but which parent gets the money? So someone will have to decide and administer all this, and process the consequence of divorce and family breakdown if it happens. And so on.

Now, I want to say that I'm not arguing with najaB here. As so often your quote is among the best argued and succinct, so I used it capture the proposal. My heart would very much like a better system than we have, but I have a feeling that UBI is not going to turn out to be as easy and cheap to administer as it looks at first sight.

Surely it would replace (almost) everything else or it’s pointless? No variations or top-ups, this is what you get and you either live on it or work as well. That’s fraught with problems though as you point out; I hadn’t even thought of some of the issues you’ve highlighted!

 

[DynamicSpirit]

If only they were. we had more than one highly-educated person working in the call centre because that was the only job they could get.

But this isn't really relevant to UBI, is it. The call centre employs staff because they need staff to conduct their business. They have employed people whose qualifications (and presumably, career aims) were for a different career - and that most likely indicates a mismatch between the jobs that people chose to qualify themselves for and the jobs that are actually available - a mismatch that is not going to be solved by UBI, but which presumably requires more public awareness of the various job opportunities. If you paid UBI to everyone, maybe some call centre staff will choose not to work, but it doesn't change that the call centre will need to recruit staff from somewhere or suffer a loss of business.

Amazon don’t pay tax and they pay poverty wages that end up being topped up by state benefits anyway. And, by not paying tax, they undercut smaller domestic businesses who *do* pay tax. Those businesses ultimately go bust as they can’t compete, the costs of that insolvency then ultimately being picked up by the taxpayer. When a company goes bust the redundancy payments and unpaid wages come out of the National Insurance Fund.

In the context of this debate, so what? You're describing some unethical practices that one company engages in. That's regrettable, and arguably ought to be fixed by better regulation/enforcement/tax reform/whatever. But it doesn't change that that company is generating wealth by providing a useful service: In this case, getting products to consumers more cheaply and efficiently than would otherwise be the case.

It’s also worth pointing out that retailers do not “produce” anything, they are merely an intermediary. A useful and necessary intermediary, but a middleman nonetheless.

Indeed. Useful and necessary. I hope it's obvious that in this context, when we talk of creating wealth, that doesn't just mean actually manufacturing things, but also encompasses providing all the various services that are necessary for people to ultimately consume things and enjoy a decent life, and retailers are a part of that.

Those people will be putting all that money back into the economy. They will be purchasing things that keep retailers and manufacturers going. Consumption taxes like VAT impact the poorest most as a proportion of their income. For someone on Universal credit, a good 15%-20% of that benefit will go straight back to the government as tax anyway.

I think we need to be clearer about the difference between generating wealth, redistributing wealth, and consuming wealth here. Yes, people on UC are buying things, but that's only possible because they've been given money that other people have to pay in taxes - who therefore can't consume as much. The net effect is that some stuff is being consumed by people who are not working instead of by the people who (by working) created the wealth in the first place. That doesn't really change how much is being consumed, just who consumes it [*]. And if changing from UC to UBI incentivises some people not to work at all, that will reduce the amount of wealth being created, which will ultimately hurt everyone's living standards.

[*] you could argue about poorer people spending a higher proportion of their income, but that will be offset by less money being saved resulting in less money available for businesses to borrow and invest. Also, more spending only helps the economy if there are economic problems caused by people not spending - that has happened at times in the past but doesn't seem to be the case today: Our current economic problems appear more related to lack of production.

 

[AlterEgo]

Pursue whatever you like, just don't expect me to fund it.

You do anyway at the moment through lots of stuff like grants to artists and sportspeople.

 

[PTR 444]

I wonder if a UBI were implemented whether certain people would choose to opt out of such a scheme? Some of the really well off may feel like they don’t need the extra cash and feel they are doing a favour by not putting a burden on others, while others might still feel ashamed about claiming free money even if the concept of everybody receiving it is intended to remove the stigma.

 

[Bletchleyite]

I wonder if a UBI were implemented whether certain people would choose to opt out of such a scheme? Some of the really well off may feel like they don’t need the extra cash and feel they are doing a favour by not putting a burden on others, while others might still feel ashamed about claiming free money even if the concept of everybody receiving it is intended to remove the stigma.

A significant benefit could be some such people donating it to charity.

 

[PTR 444]

A significant benefit could be some such people donating it to charity.

That is true, although the point I was trying to make is that there is going to need to be some method of registering everybody onto UBI, whether that is through paper or online forms. There is the likelihood that a small of the population may choose not to complete the form and hence not receive the UBI that they are entitled to, whether that is intentional or not.

 

[najaB]

That is true, although the point I was trying to make is that there is going to need to be some method of registering everybody onto UBI, whether that is through paper or online forms. There is the likelihood that a small of the population may choose not to complete the form and hence not receive the UBI that they are entitled to, whether that is intentional or not.

I imagine anyone with a NI number would get UBI.

 

[Yew]

As far as I'm concerned it's a simple case of, if you have decided to live your life by not contributing anything to society, then you have no right to expect society to support you - and that argument applies no matter what your circumstances.

Why do you seem to insist that the only way to "contribute to society" is sell your labour?

Yes, it is only a small section because the current system makes it so unpleasant and difficult to do otherwise. However, the prospect of unconditional free money would uncork a genie I am sure.

You are sure?

 

[DynamicSpirit]

Why do you seem to insist that the only way to "contribute to society" is sell your labour?

It's more a case of, being pragmatic about how you take account of 'contributing to society'. Yes, there are other ways that people can and do contribute - doing voluntary work is the obvious one, and I'm sure you can think of others, such as sharing knowledge. But although those are worthy things, the numbers of people who do those activities to such a great extent that it would arguably justify paying them a full salary in recompense is going to be tiny in comparison to the population - so on a pragmatic basis that's not going to be that relevant when you're trying to work out whether paying UBI to the entire population is overall a good idea.

 

[PsychoMouse]

Again, people are not grasping that the whole point of UBI is to cover people when there simply isn't enough work to go around.

 

[DustyBin]

Again, people are not grasping that the whole point of UBI is to cover people when there simply isn't enough work to go around.

That’s only one possible scenario, which may or may not materialise.

 

[DynamicSpirit]

Again, people are not grasping that the whole point of UBI is to cover people when there simply isn't enough work to go around.

If that's the whole point of UBI, why not support the idea of a guaranteed job instead of UBI? That means that in return for your salary, the Government expects you to do some work in the community if they can identify work that needs to be done that you are capable of doing.

That appears to have all the benefits of UBI in terms of (hopefully) ensuring everyone who wants it can get an income, along with the additional advantages that (1) you only pay money to the people who apply for the guaranteed job, which presumably means you're not wasting money paying it to people who already have good jobs, and (2) people only end up sitting around on their backsides if the Government really can't find any useful work for them to do in the community, and (3) if there is work that needs to be done, you're more likely to have people actually doing that work.

 

[Magdalia]

Again, people are not grasping that the whole point of UBI is to cover people when there simply isn't enough work to go around.

This is the main reason why I am less optimistic about the prospects for National Dividend/Universal Basic Income than I was more than 30 years ago.

One of the biggest problems for the UK economy now is that there's lots of work and not enough people to go round. Demography and politics mean that the employment market is going to be like that for the foreseeable future. The situation where there isn't enough work to go round is not something we have to worry about unless Artificial Intelligence really does take out lots of jobs without replacement.

I think that National Dividend/Universal Basic Income would help in this regard, particularly getting people with health issues and people with caring responsibilities back into employment. But it is quite clear from this discussion that there is still a lot of fixation on the benefit scroungers narrative, and that those people have to be got back into work with sticks not carrots.

 

[Yew]

It's more a case of, being pragmatic about how you take account of 'contributing to society'. Yes, there are other ways that people can and do contribute - doing voluntary work is the obvious one, and I'm sure you can think of others, such as sharing knowledge. But although those are worthy things, the numbers of people who do those activities to such a great extent that it would arguably justify paying them a full salary in recompense is going to be tiny in comparison to the population - so on a pragmatic basis that's not going to be that relevant when you're trying to work out whether paying UBI to the entire population is overall a good idea.

That is usually because they are doing voluntary work alongside a full-time job...