...only if the workers don’t mind lower wages (such as in a Silicon Valley startup). See, among many other benefits, basic income can serve as a permanent strike fund for those who are still employed. These employed strikers would not receive anything from your solution of “unemployed-only.” Furthermore, your targeted solution can be demonized as “lazy-only” and cut by politicians. Look at stigmatized food stamps today. Such drastic cuts are very unlikely with a non-stigmatizing basic income provided to everyone.
On a related note, GiveWell appears to be removing Against Malaria Foundation as their top charity, making GiveDirectly their new top charity. Donating to GiveDirectly may help legitimize the idea of an unconditional basic income. I don’t think basic income is as important as mass cryonics, but I still defend it in my upcoming “cryonics and basic income for everyone” website. Here’s hoping I finish the website someday.
...only if the workers don’t mind lower wages (such as in a Silicon Valley startup).
workers would be getting about the same amount of many whether it came only from their employers or partially from their employers and partially from the state.
If I had a choice between e.g. $3000 monthly for working and $500 for staying at home, it would feel very different from choice between $3000 for working and $0 for staying at home. I could probably translate the “very different feeling” to better position at negotiating either higher salary or better working conditions.
It’s not obvious whether I could translate it exactly to $3500, or whether the additional money would be split between me and my employer. Please note that the labor market behaves a bit differently from typical markets, because when you pay people more, their free time becomes more valuable. For example, if you paid me 10 times more money than I make now, a likely consequence would be that I would work for you only shortly, and then enjoy an early retirement. (An effective altruist would keep working, though.) By increasing the market price, the supply can go down. So in some circumstances it could create a spiral of skilled people demanding more money, then leaving the labor market soon, which would increase the salaries of the remaining ones, etc.
If I had a choice between e.g. $3000 monthly for working and $500 for staying at home, it would feel very different from choice between $3000 for working and $0 for staying at home. I could probably translate the “very different feeling” to better position at negotiating either higher salary or better working conditions.
Right, and that’s the point of unemployment benefits.
Well, yes and no. To get the unemployment benefits, there are some conditions (depending on the country). If I decided I want to stop working now, I probably wouldn’t get the unemployment benefits, unless I had a good excuse. They might just offer me another job, and I would have to take it, or lose the unemployment benefits. Also, I would have to do a huge amount of paperwork. All these inconveniences are big enough for me to not take this option voluntarily. If I tried this for one month, it is likely I would spend a large part of the month just visiting the bureaucrats and doing the paperwork.
With basic income without any conditions and paperwork attached, it would be like taking a vacation.
By “unemployment benefits” I mean benefits which are given to any able person of working age who doesn’t work, for whatever reason.
Some countries have unemployment benefits which have limited duration and/or are conditioned to the requirement to accept any job. That’s not what I’m talking about.
The bureaucratic hassles could be reduced to virtually zero if the government keeps track of who is employed and who isn’t. Yes, there is a risk of fraud: people could work without declaring it (with the complicity of their employers if any) and earn both their wage and the benefits. The judicial system can deal with that.
Is there a specific country having the unemployment benefits in the way you described here?
(The way I described exists in Slovakia, and I would expect it to be in many other countries too, although I have no data about that.)
By the way, if there is a rule of “if you are not employed, you automatically get $X, no questions asked”, I hope there is also a gradual reduction of X instead of jumping from full value to zero when the person makes some money. To avoid situations like: “Sorry, this month your webpage made you $0.01 from adsense, therefore you are not eligible for the $500 from the government.”
Is there a specific country having the unemployment benefits in the way you described here?
I don’t know, possibly not. But that also applies to basic income.
By the way, if there is a rule of “if you are not employed, you automatically get $X, no questions asked”, I hope there is also a gradual reduction of X instead of jumping from full value to zero when the person makes some money. To avoid situations like: “Sorry, this month your webpage made you $0.01 from adsense, therefore you are not eligible for the $500 from the government.”
There are various forms of income which are tax-exempt, I suppose that these should not count as employment.
The important part of my comment about gradual reduction was that people should never be put in a situation where if they make $N, they get additional $500 from the government, but if they make $N+0.01, they get nothing.
Regardless of how big is the $N, and how specifically they received the $0.01. Even if they received the $N using tax-exempt forms and the $0.01 using taxable forms. Or if $N is the limit for the tax-exempt form, and the $0.01 is the first cent above the limit.
Otherwise we get various kinds of crazy situations where people are punished for doing something that would otherwise be rewarded. Especially with poor people these kinds of situations are known to often lead to bad outcomes, both individually and socially.
...and the relevant part for this debate is that if this gradual reduction is implemented, the outcome is more similar psychologically to basic income than to unemployment benefits, because there is not a sharp dividing line between “not working” and “having a low-paying job”.
(A hypothetical example of a gradual reduction of government support which still does not lead to giving money to everyone would be giving people max(0, $500 − 0.2 X) money if they made $X otherwise. Which means that an unemployed person would get $500; a person who made 0.01 from adsense would get $499.99 regardless of whether adsense income belongs to some bureaucratic category or not; a person getting $200 from their job would get $460, which would make their total income $660; a person getting $2500 or more from their job would get nothing; etc.)
when you pay people more, their free time becomes more valuable. For example, if you paid me 10 times more money than I make now, a likely consequence would be that I would work for you only shortly, and then enjoy an early retirement.
Whether your time becomes “more valuable” depends on what your baseline for value is. If your baseline is dollars, then your time hasn’t become more valuable. Rather, your time has the same value, but with more money, it is easier for you to purchase time. Your time becomes more valuable only relative to dollars and for many purposes this situation could more usefully be described as “dollars go down in value” rather than “time goes up in value”.
In particular this matters when comparing to poor people. Time is still valuable to them, but they are forced to use it up in order to get dollars or in order to avoid losing dollars.
Not necessarily. That’s why I brought up the example of basic income serving as a permanent strike fund to help employees demand higher wages. Employers can respond by meeting their demands, and/or automating more quickly, etc. Then society can respond to increased automation by increasing the basic income. Or not. I won’t talk about society’s transition into a gift economy here because that would take too much space.
I know you’re trying to paint Basic Income as a subsidy to employers, but it’s really not like the Earned Income Tax Credit. At all. I’ll continue this in the Luke_A_Somers thread.
...only if the workers don’t mind lower wages (such as in a Silicon Valley startup). See, among many other benefits, basic income can serve as a permanent strike fund for those who are still employed. These employed strikers would not receive anything from your solution of “unemployed-only.” Furthermore, your targeted solution can be demonized as “lazy-only” and cut by politicians. Look at stigmatized food stamps today. Such drastic cuts are very unlikely with a non-stigmatizing basic income provided to everyone.
On a related note, GiveWell appears to be removing Against Malaria Foundation as their top charity, making GiveDirectly their new top charity. Donating to GiveDirectly may help legitimize the idea of an unconditional basic income. I don’t think basic income is as important as mass cryonics, but I still defend it in my upcoming “cryonics and basic income for everyone” website. Here’s hoping I finish the website someday.
workers would be getting about the same amount of many whether it came only from their employers or partially from their employers and partially from the state.
If I had a choice between e.g. $3000 monthly for working and $500 for staying at home, it would feel very different from choice between $3000 for working and $0 for staying at home. I could probably translate the “very different feeling” to better position at negotiating either higher salary or better working conditions.
It’s not obvious whether I could translate it exactly to $3500, or whether the additional money would be split between me and my employer. Please note that the labor market behaves a bit differently from typical markets, because when you pay people more, their free time becomes more valuable. For example, if you paid me 10 times more money than I make now, a likely consequence would be that I would work for you only shortly, and then enjoy an early retirement. (An effective altruist would keep working, though.) By increasing the market price, the supply can go down. So in some circumstances it could create a spiral of skilled people demanding more money, then leaving the labor market soon, which would increase the salaries of the remaining ones, etc.
Right, and that’s the point of unemployment benefits.
Well, yes and no. To get the unemployment benefits, there are some conditions (depending on the country). If I decided I want to stop working now, I probably wouldn’t get the unemployment benefits, unless I had a good excuse. They might just offer me another job, and I would have to take it, or lose the unemployment benefits. Also, I would have to do a huge amount of paperwork. All these inconveniences are big enough for me to not take this option voluntarily. If I tried this for one month, it is likely I would spend a large part of the month just visiting the bureaucrats and doing the paperwork.
With basic income without any conditions and paperwork attached, it would be like taking a vacation.
By “unemployment benefits” I mean benefits which are given to any able person of working age who doesn’t work, for whatever reason.
Some countries have unemployment benefits which have limited duration and/or are conditioned to the requirement to accept any job. That’s not what I’m talking about.
The bureaucratic hassles could be reduced to virtually zero if the government keeps track of who is employed and who isn’t.
Yes, there is a risk of fraud: people could work without declaring it (with the complicity of their employers if any) and earn both their wage and the benefits. The judicial system can deal with that.
Is there a specific country having the unemployment benefits in the way you described here?
(The way I described exists in Slovakia, and I would expect it to be in many other countries too, although I have no data about that.)
By the way, if there is a rule of “if you are not employed, you automatically get $X, no questions asked”, I hope there is also a gradual reduction of X instead of jumping from full value to zero when the person makes some money. To avoid situations like: “Sorry, this month your webpage made you $0.01 from adsense, therefore you are not eligible for the $500 from the government.”
I don’t know, possibly not. But that also applies to basic income.
There are various forms of income which are tax-exempt, I suppose that these should not count as employment.
The important part of my comment about gradual reduction was that people should never be put in a situation where if they make $N, they get additional $500 from the government, but if they make $N+0.01, they get nothing.
Regardless of how big is the $N, and how specifically they received the $0.01. Even if they received the $N using tax-exempt forms and the $0.01 using taxable forms. Or if $N is the limit for the tax-exempt form, and the $0.01 is the first cent above the limit.
Otherwise we get various kinds of crazy situations where people are punished for doing something that would otherwise be rewarded. Especially with poor people these kinds of situations are known to often lead to bad outcomes, both individually and socially.
...and the relevant part for this debate is that if this gradual reduction is implemented, the outcome is more similar psychologically to basic income than to unemployment benefits, because there is not a sharp dividing line between “not working” and “having a low-paying job”.
(A hypothetical example of a gradual reduction of government support which still does not lead to giving money to everyone would be giving people max(0, $500 − 0.2 X) money if they made $X otherwise. Which means that an unemployed person would get $500; a person who made 0.01 from adsense would get $499.99 regardless of whether adsense income belongs to some bureaucratic category or not; a person getting $200 from their job would get $460, which would make their total income $660; a person getting $2500 or more from their job would get nothing; etc.)
Whether your time becomes “more valuable” depends on what your baseline for value is. If your baseline is dollars, then your time hasn’t become more valuable. Rather, your time has the same value, but with more money, it is easier for you to purchase time. Your time becomes more valuable only relative to dollars and for many purposes this situation could more usefully be described as “dollars go down in value” rather than “time goes up in value”.
In particular this matters when comparing to poor people. Time is still valuable to them, but they are forced to use it up in order to get dollars or in order to avoid losing dollars.
Not necessarily. That’s why I brought up the example of basic income serving as a permanent strike fund to help employees demand higher wages. Employers can respond by meeting their demands, and/or automating more quickly, etc. Then society can respond to increased automation by increasing the basic income. Or not. I won’t talk about society’s transition into a gift economy here because that would take too much space.
I know you’re trying to paint Basic Income as a subsidy to employers, but it’s really not like the Earned Income Tax Credit. At all. I’ll continue this in the Luke_A_Somers thread.