Commenting on the basis of lessons from some experience doing UBI analysis for Switzerland/Europe:
The current systems has various costs (time and money, but maybe more importantly, opportunities wasted by perverse incentives) associated with proving that you are eligible for some benefit.
On the one hand, yes, and its a key reason why NIT/UBI systems are often popular on the right; even Milton Friedman already advocated for a NIT. That said, there are also discussions that suggest the poverty trap—i.e. overwhelmingly strong labor disincentives for poor, from outrageously high effective marginal tax rates from benefits fade-out/tax kicking-in—may be partly overrated, so smoothing the earned-to-net income function may not help as much as some may hope. And, what tends to be forgotten, is that people with special needs may not be able to live purely from a UBI, so not all current social security benefit mechanisms can usually be replaced by a standard UBI.
On the other hand, once you have a conditional welfare system that does not have crazily strong/large poverty traps, labor incentives might overall still be mostly stronger than under a UBI (assumed sufficiently generous to allow a reasonable life from it), once you also take into account the high marginal tax rates required to finance that UBI. This seems to hold in even relatively rich countries (we used to calculate it for Switzerland).
Of course, with AI Joblessness all this might change anyway, in line with the underlying topic of the post here.
Plus you need to pay the people who verify all this evidence.
This tends to be overrated; when you look at the stats, this staff cost is really small compared to the total traditional social security or the UBI costs (we looked at #s in Switzerland but I can only imagine it’s exactly similar orders of magnitudes in other developed countries).
That said, there are also discussions that suggest the poverty trap—i.e. overwhelmingly strong labor disincentives for poor, from outrageously high effective marginal tax rates from benefits fade-out/tax kicking-in—may be partly overrated, so smoothing the earned-to-net income function may not help as much as some may hope.
I just skimmed the linked article, but it seems to me that it makes some “spherical cow” assumptions. For example, if you get a job, even low-paying, you should gain more money on the wage than you lose at social benefits. But you also need to consider additional costs of having job, for example the commute. And that’s often the problem in practice, that “wage > benefits”, but “wage—commute < benefits”. The article seems to ignore such things.
I agree that even with UBI, people with special needs should get extra.
Not exceptionally fond of the concept of ‘poverty trap’ as a talking point that tries to discourage social welfare, but I also have to note the very obvious and apparently intentional traps in the U.S. at least around—specifically—long-term disability once that is necessary for self-sustenance; including attempting substantial gainful activity on disability; marrying someone while on disability; accepting gifts of any sort while on disability; and trying to save money on disability. Some of the specifics have thankfully improved, but there’s just a bizarre number of gotchas that do aggressively penalize in some way most improvements in life situation, apparently as fallout from means testing.
(Oh, and you potentially qualify for sub-minimum wage jobs if you have a disability which impairs your ability to do that specific job, which … well, I’m not sure how this changes the equilibrium; it gives options and also makes you more exploitable if the wage decrease is more than the impairment.)
Never heard this mentioned explicitly, but I assume the idea is that you would lose the money, because your spouse has an income, right?
In my country (not USA) we have the concept of “full disability” and “partial disability”, and I know a guy who technically would be eligible for the partial disability, but he doesn’t bother doing the paperwork, because the money he would get would not be enough to survive… and when he gets any extra income, then he loses the partial disability, because apparently this cheater is capable of work. Which is kinda sorta true, but ignores the fact that out of many possible jobs, he must be looking extra hard to find one that is compatible with his specific health problems (no sitting, but also no hard work, accessible by mass transit because of no sitting in a car, etc.), and while such jobs exist, they are quite rare. (Basically, “partial disability” only makes sense for people who are also supported by their family.)
For this guy, UBI even on the “can’t really survive on it” level would be already a huge improvement.
A reasonable rule would be like “a person with health problem X gets Y money”, full stop. Anything else means regulating how people need to live (usually requiring them to make the worse choice) so that they do not lose the support.
Commenting on the basis of lessons from some experience doing UBI analysis for Switzerland/Europe:
On the one hand, yes, and its a key reason why NIT/UBI systems are often popular on the right; even Milton Friedman already advocated for a NIT. That said, there are also discussions that suggest the poverty trap—i.e. overwhelmingly strong labor disincentives for poor, from outrageously high effective marginal tax rates from benefits fade-out/tax kicking-in—may be partly overrated, so smoothing the earned-to-net income function may not help as much as some may hope. And, what tends to be forgotten, is that people with special needs may not be able to live purely from a UBI, so not all current social security benefit mechanisms can usually be replaced by a standard UBI.
On the other hand, once you have a conditional welfare system that does not have crazily strong/large poverty traps, labor incentives might overall still be mostly stronger than under a UBI (assumed sufficiently generous to allow a reasonable life from it), once you also take into account the high marginal tax rates required to finance that UBI. This seems to hold in even relatively rich countries (we used to calculate it for Switzerland).
Of course, with AI Joblessness all this might change anyway, in line with the underlying topic of the post here.
This tends to be overrated; when you look at the stats, this staff cost is really small compared to the total traditional social security or the UBI costs (we looked at #s in Switzerland but I can only imagine it’s exactly similar orders of magnitudes in other developed countries).
I just skimmed the linked article, but it seems to me that it makes some “spherical cow” assumptions. For example, if you get a job, even low-paying, you should gain more money on the wage than you lose at social benefits. But you also need to consider additional costs of having job, for example the commute. And that’s often the problem in practice, that “wage > benefits”, but “wage—commute < benefits”. The article seems to ignore such things.
I agree that even with UBI, people with special needs should get extra.
Not exceptionally fond of the concept of ‘poverty trap’ as a talking point that tries to discourage social welfare, but I also have to note the very obvious and apparently intentional traps in the U.S. at least around—specifically—long-term disability once that is necessary for self-sustenance; including attempting substantial gainful activity on disability; marrying someone while on disability; accepting gifts of any sort while on disability; and trying to save money on disability. Some of the specifics have thankfully improved, but there’s just a bizarre number of gotchas that do aggressively penalize in some way most improvements in life situation, apparently as fallout from means testing.
(Oh, and you potentially qualify for sub-minimum wage jobs if you have a disability which impairs your ability to do that specific job, which … well, I’m not sure how this changes the equilibrium; it gives options and also makes you more exploitable if the wage decrease is more than the impairment.)
Never heard this mentioned explicitly, but I assume the idea is that you would lose the money, because your spouse has an income, right?
In my country (not USA) we have the concept of “full disability” and “partial disability”, and I know a guy who technically would be eligible for the partial disability, but he doesn’t bother doing the paperwork, because the money he would get would not be enough to survive… and when he gets any extra income, then he loses the partial disability, because apparently this cheater is capable of work. Which is kinda sorta true, but ignores the fact that out of many possible jobs, he must be looking extra hard to find one that is compatible with his specific health problems (no sitting, but also no hard work, accessible by mass transit because of no sitting in a car, etc.), and while such jobs exist, they are quite rare. (Basically, “partial disability” only makes sense for people who are also supported by their family.)
For this guy, UBI even on the “can’t really survive on it” level would be already a huge improvement.
Yeah, or even just not also on disability.
https://cdrnys.org/blog/disability-dialogue/the-disability-dialogue-marriage-equality/ discusses some of the issues around here at the time it was written, if you’re curious.
Yeah, that it as stupid situation as I expected.
A reasonable rule would be like “a person with health problem X gets Y money”, full stop. Anything else means regulating how people need to live (usually requiring them to make the worse choice) so that they do not lose the support.