Universal Basic Income, post-automation world etc

[EM2]

will probably end up either on the dole or in very very poorly paid work.

Which is the whole point of a UBI. You get paid no matter what, so if you want to work part-time, you can. If you want to set up a small business, you can. If you want to sit on your bum and do nothing, you can.

 

[radamfi]

I'm 43 and fully expected when I was growing up that jobs would be scarce and my skills would be out of date by now. So that was one of the reasons why I saved most of my salary in my first 20 years of work. But there are actually more jobs available now than when I first started work and basic skills like Excel and Word are still useful even now.

In the event of all work being automated there will be much less need for money as robots don't need to be paid.

 

[DynamicSpirit]

The very wealthy don't have any issues with self-worth despite not working.

Are you certain of that? Most people are pretty good at covering up feelings of poor self-worth etc. It's perfectly possible for someone to be wealthy and to outwardly lead what looks like a successful life, but inside to be consumed by insecurity etc.

Work is about control. Feudal peasants worked for their Lord because they had to, not because of the joy of work. Not so very much has changed. The feudal tie is now just called a "mortgage".

Seems a bit cynical. I always thought work was primarily about the fact that most of the nice things we enjoy in life do actually need work put in to create them, otherwise we'd all end up very poor.

That's why a Universal Income will never happen, even though it would make more sense. Giving people freedom? Why do that when you can fill their day, and waste their energy, with monotonous work?

Also very cynical. Not sure that it'll never happen - after all a few countries are running limited trials of the idea. But there is always the basic problem of finance: If you give every single adult £X per year, then to make the books balance, on average, each adult is also going to have to pay £X in tax to pay for it. If £X is to be enough to live on (say, £20K), then that's an awful lot of tax. Even I, as someone who in principle would be happy to be paying a bit more tax in order to get a better society and better public services, can see that that's a bit of a problem! It a universal income is to ever be feasible, it would require either massive changes in our economic system or massive changes around our expectations around tax and finance etc. (or both). I imagine that would take many decades to achieve. Especially when at the moment, it's not even really clear how an economic system that is based around a Universal income, but keeps the benefits and freedoms of the market economy, could work.

Benefits would be cheaper to administer if you didn't have all the pointless conditionality. But then the conditionality keeps people pinned down, and under control. So that's why we have it.

More likely, most benefits have conditions put on them because it would be unaffordable to hand them out to everyone. And to a lesser extent because of a belief by many people that there is value in encouraging people to remain economically active, and the benefits system should therefore be designed to strongly motivate that.

 

[Bromley boy]

Volunteering isn't work, either.

Yes it is. It’s unpaid work, but it is work nonetheless.

There are lots of socially and economically useful activities people undertake for no financial reward, but which are still work by any sensible definition.

Caring for a disabled relative would be one example.

 

[Bromley boy]

Which is the whole point of a UBI. You get paid no matter what, so if you want to work part-time, you can. If you want to set up a small business, you can. If you want to sit on your bum and do nothing, you can.

Unfortunately the bit of your comment I’ve highlighted above demonstrates why UBI won’t work. It doesn’t take account of human nature and the fact that people are fundamentally self interested.

We already have a society where a large proportion of the population are good for nothing, sit on their bums, sustain themselves on benefits and do nothing constructive. If society starts paying a healthy wage to people to do precisely nothing I can guarantee a great many of those currently in work will jack it in.

Many proponents of UBI work in well paid professional jobs and labour under the misapprehension that, like them, all workers choose their field of work because it gives them some kind of higher intellectual fulfilment or purpose in life.

For many people it simply doesn’t. Cleaning vomit from a train floor or scrubbing skidmarks from an office toilet for £7 per hour in the middle of the night isn’t fulfiling for most. They do it for the money. I’m certainly glad I don’t have to do a job like that. As I’m sure most of us are.

Who in their right minds would go out and sweep streets or clean toilets when they can sit at home and earn the same pay for doing nothing?!

 

[jon0844]

it's no coincidence that slavery was abolished at the dawn of the industrial age..

We're not far off using slavery when it comes to manufacturing in some countries, and now you can see the questionable conditions and rights for couriers, taxi drivers (Uber etc) and the latest trend to pay peanuts to cyclists to deliver food (Uber Eats, Deliveroo) that are forced to ride like loons to get food delivered on time.

Of course we want cheap/free delivery and food delivered to our house, so we don't care much for their working conditions.

These businesses are all great for a small number of people at the top that take a cut and don't really care who does the job. And these are likely jobs more and more people will have to take when many traditional jobs go.

I do think that there will be work, but as the years go on, it will become increasingly less skilled and the pay levels will reflect that. We better hope the cost of goods and travel, and housing etc, falls as needed.

 

[jon0844]

Yes it is. It’s unpaid work, but it is work nonetheless.

There are lots of socially and economically useful activities people undertake for no financial reward, but which are still work by any sensible definition.

Caring for a disabled relative would be one example.

Volunteering is fine, except increasingly a lot of businesses are exploiting people by making them work normal jobs, but with the payment being 'experience' or 'exposure'. In media, it's a huge problem because there are so many people willing to work for free in the hope they'll secure a paid job later on.

They don't because those that do pay people see these people as mugs and actually causing problems for others by bringing pay levels and job security down. It's a fantastic race to the bottom that must apply in many industries.

AI also has the ability to get rid of jobs requiring lots of qualifications, such as law, so it won't just hit the lower end of the job market.

 

[Bletchleyite]

Who in their right minds would go out and sweep streets or clean toilets when they can sit at home and earn the same pay for doing nothing?!

Two reasons.

1. Because if they did do it they'd have twice as much money. UBI is not means tested - that is the whole point, it is universal and is paid to everyone without exception - though you can tweak with the tax system to basically take it back from very rich people it negates the point entirely to do that for those whose incomes are not 6 figures and above. (Indeed, arguably income tax is not the optimum way of taxing to fund it anyway; land value and automated productivity taxes are better).

2. You actually want to reduce the number of people in work (without making that cause a social problem) because with increased automation there will *be* less work.

 

[AlterEgo]

I don't think society is ready for UBI. It's a fundamentally good idea, in my opinion, but I genuinely don't see it happening before I'm retired.

 

[Bromley boy]

Because if they did do it they'd have twice as much money. UBI is not means tested - that is the whole point, it is universal and is paid to everyone without exception

But when people discover they can live a perfectly comfortable life without ever lifting a finger or contributing anything to the society they live in they will have little incentive to double their income by doing something they don’t enjoy on someone else’s terms. That in itself may be no bad thing, but it relies on all these new taxes you propose generating sufficient revenue to pay for a welfare state which would presumably be several times its current size. What would happen if they didn’t?

Once companies can automate they will quite easily be able to move to countries where there is no “automation tax”.

Also, at what point do we introduce universal basic income? Automation is a creeping process which will happen over years and decades affecting different parts of the economy at different rates. It’s difficult to imagine it being introduced for one group of workers before another.

It’s an interesting idea but it will require a complete overhaul of the way society currently operates. I’m afraid I don’t share your optimism that it will be achievable in anything approaching a timescale that will prevent the hardships caused by job losses to automation (obviously it remains to be seen if the predictions about AI taking over even highly skilled jobs actually come to pass, and over what timeframe).

 

[Bletchleyite]

But when people discover they can live a perfectly comfortable life without ever lifting a finger or contributing anything to the society they live in they will have little incentive to double their income by doing something they don’t enjoy on someone else’s terms.

Because UBI would only ever allow for a basic life. If you want luxuries, there would still be a need to find a way to gain money for that.

 

[Dai Corner]

Because UBI would only ever allow for a basic life. If you want luxuries, there would still be a need to find a way to gain money for that.

And no doubt some people will decide to do so in ways that avoid tax and/or are illegal.

 

[Tetchytyke]

Yes it is. It’s unpaid work, but it is work nonetheless.

It certainly isn't a job, which is what I thought we meant by "work" in this context. Our volunteers are invaluable and we couldn't operate without them- honestly, our entire service would collapse without them- but equally they can (and do) choose when they come in and can stop at any time.

Volunteering is very very valuable, but it isn't work in the context of employment. Volunteers do, however, work very hard.

Who in their right minds would go out and sweep streets or clean toilets when they can sit at home and earn the same pay for doing nothing?!

You misunderstand the benefit of UBI.

On legacy benefits, if you work more than 16 hours a week your benefit entitlement ends completely. And any money you do earn is taken off you; on JSA it's at a direct £1 for £1 basis and for housing benefit it's a 65% taper (i.e. you lose 65% of everything you earn, subject to a minimum threshold). Universal Credit is slightly better- it's about a 60% taper on everything you earn over that minimum threshold (i.e. you lose 63p of every £1 you earn).

With the means testing, many people are *literally* working for the same pay they'd get sitting at home on the dole.

With UBI, however, everyone gets that money and it's not means tested. So you get to keep your UBI and you get to keep your wages. If your income reaches a certain level you can set income tax rates to recover the UBI, just as they do for child benefit, but you wouldn't do that for someone on minimum wage.

UBI would actively encourage people into work because they get to keep every £1 they earn.

 

[Tetchytyke]

But when people discover they can live a perfectly comfortable life without ever lifting a finger or contributing anything to the society they live in they will have little incentive to double their income by doing something they don’t enjoy on someone else’s terms.

That depends where you set UBI. Personally, I'd set it at the JSA rate now, which is a princely sum of £73.10 per week.

And given I spend half my working day ringing up the Food Bank to make yet another referral, UBI really wouldn't be a life of luxury. It would, however, save a fortune in being able to get rid of all the DWP staff who are targeted on how many people they get to sanction.

 

[Bletchleyite]

And no doubt some people will decide to do so in ways that avoid tax and/or are illegal.

I'm sure they would, but that's nothing new nor does it come with UBI.

It would probably reduce crime, though, as those who take part in crime through desperation would no longer be desperate.

 

[Bletchleyite]

That depends where you set UBI. Personally, I'd set it at the JSA rate now, which is a princely sum of £73.10 per week.

And given I spend half my working day ringing up the Food Bank to make yet another referral, UBI really wouldn't be a life of luxury. It would, however, save a fortune in being able to get rid of all the DWP staff who are targeted on how many people they get to sanction.

£73.10pw is not liveable without other benefits e.g. Housing Benefit. One of the ideas of UBI is that it replaces pretty much every other benefit, reducing administrative costs as you no longer need to do any kind of means testing, just pay it to every adult (and possibly a reduced rate per child). It'd have to be much higher - probably somewhere around the present minimum wage.

 

[radamfi]

But when people discover they can live a perfectly comfortable life without ever lifting a finger or contributing anything to the society they live in they will have little incentive to double their income by doing something they don’t enjoy on someone else’s terms. That in itself may be no bad thing, but it relies on all these new taxes you propose generating sufficient revenue to pay for a welfare state which would presumably be several times its current size. What would happen if they didn’t?

Retiring at a very early age is already technically possible for many people. Searching for "FIRE - financial independence retire early" yields many websites and blogs dedicated to that subject. On such forums you will regularly see the question: "What if everyone did what we do? Wouldn't the economy collapse." The truth is, most people have been long indoctrinated by consumerism and thus are addicted to throwing their money away on houses, kids, cars and expensive gadgets and lifestyle choices. So most people who could have retired in their 40s or earlier continue to work until their 60s or later to pay for their consumerist lifestyles. Therefore, in the event of UBI, most people will want even more money.

 

[underbank]

With UBI, however, everyone gets that money and it's not means tested. So you get to keep your UBI and you get to keep your wages. If your income reaches a certain level you can set income tax rates to recover the UBI, just as they do for child benefit, but you wouldn't do that for someone on minimum wage.

With UBI, you'd almost certainly pay tax on all your wages and other income with no tax free personal allowance. Otherwise how would UBI be financed. It's a pipedream that someone could get UBI and minimum wage on top without paying tax/nic.

 

[Dai Corner]

Let's look at the figures.

There are around 40m people of working age in the UK. If you wanted to give them a UBI equal to the amount they would earn working full time at minimum age that would cost about

40,000,000 x 52 x 40 x 7.5 = £625 billion a year.

Taxes paid in the 2016-17 tax year as follows

Income tax £182 billion
National Insurance £127 billion
VAT £120 billion

Total tax income was £665 billion.

https://www.ifs.org.uk/bns/bn09.pdf
https://www.ons.gov.uk/peoplepopula...s/articles/overviewoftheukpopulation/july2017

 

[EM2]

If you wanted to give them a UBI equal to the amount they would earn working full time at minimum age...

Except UBI is normally nowhere near that much.
The experiment in Finland, for example, pays 800 Euro a month.

 

[The Ham]

Although there's an argument that UBI could result in companies thinking that they can get away with paying their staff less there's then the opposite argument.

That being that with a level of income there'll be less people who will need to work and so the really rubbish jobs would then probably need to pay a lot to get people to do them. As such the less rubbish jobs would also need to pay a reasonable amount so that people would still do those jobs.

 

[deltic]

Let's look at the figures.

There are around 40m people of working age in the UK. If you wanted to give them a UBI equal to the amount they would earn working full time at minimum age that would cost about

40,000,000 x 52 x 40 x 7.5 = £625 billion a year.

Taxes paid in the 2016-17 tax year as follows

Income tax £182 billion
National Insurance £127 billion
VAT £120 billion

Total tax income was £665 billion.

https://www.ifs.org.uk/bns/bn09.pdf
https://www.ons.gov.uk/peoplepopula...s/articles/overviewoftheukpopulation/july2017

Would potentially replace total welfare payments of around £111bn a year but it would depend whether additional child and disability benefits continued to be paid

 

[Dave1987]

We're not far off using slavery when it comes to manufacturing in some countries, and now you can see the questionable conditions and rights for couriers, taxi drivers (Uber etc) and the latest trend to pay peanuts to cyclists to deliver food (Uber Eats, Deliveroo) that are forced to ride like loons to get food delivered on time.

Of course we want cheap/free delivery and food delivered to our house, so we don't care much for their working conditions.

These businesses are all great for a small number of people at the top that take a cut and don't really care who does the job. And these are likely jobs more and more people will have to take when many traditional jobs go.

I do think that there will be work, but as the years go on, it will become increasingly less skilled and the pay levels will reflect that. We better hope the cost of goods and travel, and housing etc, falls as needed.

This is one of my biggest fears for the way the economy is headed. The Uber and Deliveroo model is spreading. There are many "App" based businesses now which work on the "gig" economy way of so called "employment". The biggest problem with these is they pay extremely poorly so the worker has to complete a huge amount of "gigs" to get a decent wage. But worse is that they have to book their time slot that they will be available for bookings but there is no guarantee they will get any work at all. So the business has all the advantages. If this is the shape of the future "modern economy" and how it is going to work with thousands of people in insecure work then the gap between rich and poor will get wider and wider. The fact that Uber tried to wriggle out of being called a taxi firm so it didn't have to comply with taxi regulations shows what kind of businesses these are. Is that the kind of economy we want in the future?

 

[NSEFAN]

lthough there's an argument that UBI could result in companies thinking that they can get away with paying their staff less there's then the opposite argument.

Or charging more for the basic essentials (unless the government starts regulating prices on these too).

 

[SteveP29]

We already have a society where a large proportion of the population are good for nothing, sit on their bums, sustain themselves on benefits and do nothing constructive.

There are many, but it's far from a large proportion. Actual unemployment benefits amount to only 1% of the UK's welfare bill https://www.ons.gov.uk/economy/gove...rticles/howisthewelfarebudgetspent/2016-03-16
Accepted that housing benefits and Income Support are given to the unemployed too, but many in work claim these benefits as well

Who in their right minds would go out and sweep streets or clean toilets when they can sit at home and earn the same pay for doing nothing?!

They wouldn't be doing that, because they'd be getting paid quite a bit more than just their UBI for doing it.
The power will return to the worker as the work needs to be done but the people can choose if they want to do it or not, therefore wages would have to rise to attract people to do the job.
The complete opposite way that capitalism currently deliberately restricts the amount of work available, to keep demand for it higher and depress wages, thereby increasing profits.

They don't because those that do pay people see these people as mugs and actually causing problems for others by bringing pay levels and job security down. It's a fantastic race to the bottom that must apply in many industries.

So its not immigration causing this, like we've been told time and time again by those of a right leaning preference?

 

[Bromley boy]

On legacy benefits, if you work more than 16 hours a week your benefit entitlement ends completely. And any money you do earn is taken off you; on JSA it's at a direct £1 for £1 basis and for housing benefit it's a 65% taper (i.e. you lose 65% of everything you earn, subject to a minimum threshold). Universal Credit is slightly better- it's about a 60% taper on everything you earn over that minimum threshold (i.e. you lose 63p of every £1 you earn).

I agree with your criticism of the current JSA system - it doesn’t incentivise (and actively prevents) the unemployed from taking on even a small part time role which could make a big difference to their lifestyle and potentially lead to better paid work.

Let's look at the figures.

There are around 40m people of working age in the UK. If you wanted to give them a UBI equal to the amount they would earn working full time at minimum age that would cost about

40,000,000 x 52 x 40 x 7.5 = £625 billion a year.

Taxes paid in the 2016-17 tax year as follows

Income tax £182 billion
National Insurance £127 billion
VAT £120 billion

Total tax income was £665 billion.

https://www.ifs.org.uk/bns/bn09.pdf
https://www.ons.gov.uk/peoplepopula...s/articles/overviewoftheukpopulation/july2017

I think we are getting to the heart of the matter and the reason UBI seems to be an unrealistic concept.

Even when being paid at a modest level around NMW level, UBI is going to dwarf the current welfare budget (in fact it will be several multiples of it!).

In reality what is paying minimum wage going to do for people living in expensive areas of the country and for whom we are assuming no paid employment will be available in future due to automation?

Nobody lives on minimum wage in the south east and can raise a family on it without very significant other benefits due to the cost of housing so if we are going to replace all benefits with a minimum wage UBI (we will have to as there won’t be any money left for anything else) we may see a great many people far worse off than under the current benefits system.

Are we assuming automation taxes are going to raise sufficient revenues to pay this enormous cost? Does anyone know how much these are likely to raise (and tax rises have a habit of raising far less than intended).

Unfortunately based even on the rudimentary figures above UBI strikes me as fantasy, pie in the sky economics.

Except UBI is normally nowhere near that much.
The experiment in Finland, for example, pays 800 Euro a month.

It’s not that far away from 35 hours on the minimum wage which is around £1100 month.

 

[Dave1987]

There is a very interesting point that has been made in this thread that I had never thought about. If UBI was introduced so an individual didn’t have to work to gain an income to survive then wages could rise especially at the bottom. If you have a company who needs a job doing which would currently be minimum wage and is dull/uninspiring/grotty then they would probably be forced to pay higher wages to compensate for that fact. People could also spend more time studying or Up Skilling themselves especially if Government subsidised courses. That would also drive up wages as people could demand higher wages for their skill sets. UBI if implemented correctly could be very positive for the economy. It’s just convincing some politicians to vote for giving people money for nothing which some MP’s would probably rather scratch their own eyeballs out than give out money for nothing.....

 

[Dai Corner]

Deleted

 

[Dai Corner]

There is a very interesting point that has been made in this thread that I had never thought about. If UBI was introduced so an individual didn’t have to work to gain an income to survive then wages could rise especially at the bottom. If you have a company who needs a job doing which would currently be minimum wage and is dull/uninspiring/grotty then they would probably be forced to pay higher wages to compensate for that fact. People could also spend more time studying or Up Skilling themselves especially if Government subsidised courses. That would also drive up wages as people could demand higher wages for their skill sets. UBI if implemented correctly could be very positive for the economy. It’s just convincing some politicians to vote for giving people money for nothing which some MP’s would probably rather scratch their own eyeballs out than give out money for nothing.....

Though the more money people demand to do the unattractive jobs the better the case for automating them, or deciding they're not worth doing at all. Eventually you'd run out of low-skilled jobs.

There is one set of politicians who would probably jump at the chance of having as many people as possible dependent on UBI.

 

[jon0844]

So its not immigration causing this, like we've been told time and time again by those of a right leaning preference?

It's not so much immigration, rather the freedom to work for some people who come (came?) to the UK to earn more than they could at home. People who only intend to stay a few months or a year or so aren't worried about mortgages and financial stability for the future, and are likely happy to rent (as is common near me, including my next door neighbours) and share rooms with others doing the same. A 3 bed house could house 10 or more people, and in some cases the bedroom is used by different people (shift workers) so each has the room for 12 hours only.

They can do this because they send the money home and a small amount of pain is worth the gain. We talk about British people being too lazy to take these jobs, but it's probably fair to say that you won't have much of a life if you were to take them. Fine perhaps if you lived with your parents and had no aspiration to leave.

Employers have been exploiting this cheap labour and may have a nasty shock if and when people go home, as is already happening now eastern Europeans are getting less money after converting to Euros or their local currency, and left wondering why they're in a country that seemingly hates them, when they could do similar work for better money in places like Spain that are more welcoming.

The far right does of course seem to want to lump those who are here, quite legally, doing jobs we don't want to do (for whatever reason) with the illegal immigrants and other foreigners, the latter of which leaving Brexit has nothing to do with.

Ironically, the jobs that can't easily be automated, such as cyclist working for Deliveroo and having to risk life and limb to bring food on time to the door, will likely be the jobs we are left with. Who will do this work?