The core question is whether you pay burocrats to keep taps on whether the people who starve write job applications and attempt to get in work or whether you don’t require people to apply for work.
What exactly happens when a bureaucrat tells you: “you will only get money if you can prove me you try to apply for a work”?
If you really want the money and don’t want a job, you can go to a job interview and make a really bad impression. Like, wear some old smelly clothes, pretend to be slightly retarded or drunk. They will reject you on the spot, and then you can go to the bureaucrat and give them a certificate that you applied for a job but were rejected. Doing this once in a month is more or less what they require from you to keep the money flowing.
The only people who get punished by the system are those who play fair. Ironically, the less time you spend unemployed, the less likely you are to get the unemployment benefits if it happens to you, because you don’t know how to play the game. Also, your education works against you, because the better education and work experience you have, the less credible it seems that you can’t find a job.
The only people who get punished by the system are those who play fair.
The system’s goal—at least the official, declared goal—is to get people off welfare and into jobs. Therefore if the system forces someone into a job, it counts as a success.
If you just want to keep on receiving free money, your goals are in opposition to the goals of the system—you are adversaries. In this context, I’m not sure what “playing fair” means. In an adversarial situation if you play by your opponent’s rules, you will lose.
But what if that’s an unrealistic goal. The whole point of UBI is that it’s a lot easier to get people into jobs if you let them keep their ‘welfare’ at the same time, albeit with some phase-out. (I.e. the people who are actually getting money on net are those with low-value jobs)
I don’t understand what that means. You’ll never be able to get everyone off unemployment into a job; you’ll surely be able to get some people off unemployment into a job.
The whole point of UBI is that it’s a lot easier to get people into jobs if you let them keep their ‘welfare’ at the same time
This is entirely not obvious to me, given that the motivation to go get a job will be less.
This is entirely not obvious to me, given that the motivation to go get a job will be less.
Given the way welfare is set up in the US right now, I’d argue, quite strongly, that the motivation to go get a job would be more, given, under many circumstances, that you have to reach upper-middle class levels of income before you reach the same standard of living achievable on welfare. (I’m a staunch libertarian, mind. UBI isn’t my ideal, far from it, but it’s a hell of a lot better than what we have right now.)
I strongly recommend anybody opposing the UBI on general principle grounds run a google search on “Welfare Cliff”, and research exactly how terrible the existing system is. Don’t let the perfect be the enemy of the better.
Yup. Much of the advocacy for UBI can be rephrased as “let’s get rid of welfare cliffs!” given that mostly any sane (cliff-less) welfare system can be rephrased as a UBI plus a marginal tax/phaseout schedule. (Sometimes these are dependent on other factors like the presence of children, but you could also account for such variations in a UBI-based system if you really wanted to.)
If I understand the current US system correctly, if you are a single person who is able to work and simply chooses not to do so, you may not qualify for any welfare whatsoever. If that is correct, a UBI would surely decrease your incentive to work.
Yes, this is the least convenient case. But UBI can still be a win in the longer run since it obviates the case for minimum wages and a lot of onerous regulation in the labor market. And let’s be honest, if there are single folks who would be induced to exit the labor market under a (realistic) UBI, they’re probably not getting much done at work in the first place!
This is entirely not obvious to me, given that the motivation to go get a job will be less.
Not sure what you mean. If you can have a paying job and some of your ‘welfare’ on top of it, the incentive is obviously greater than if getting a paying job meant giving up all welfare. This matters, especially for low-paying jobs which are the kinds welfare recipients are most likely to get.
If you can have a paying job and some of your ‘welfare’ on top of it, the incentive is obviously greater than if getting a paying job meant giving up all welfare.
Not at all. If the UBI is meaningfully large (there is really no point in something like $100/month), you would be able to live on it. If you can live on UBI, the incentive to find a job is less because the alternatives are MUCH more pleasant.
The carrot is slightly larger, but the stick becomes almost non-existent.
Are you comparing UBI recipients to people who get no subsidy/welfare at all? I’m not sure that’s a meaningful comparison. And one can structure the UBI amount such that utility of income is still steeply increasing at the margin—or, phrased differently, such that folks will most likely want to supplement their UBI by doing some work on the side. It’s a lot harder to do that if the premise is that you’re “looking for work at this time” but not actually getting market income.
Are you comparing UBI recipients to people who get no subsidy/welfare at all? I’m not sure that’s a meaningful comparison.
UBI recipients, by the virtue of that “U”, are also known as “the entire population”. I am a bit confused which “comparing” are you talking about.
one can structure UBI such that utility of income is still steeply increasing at the margin
Can you demonstrate? If you increase the marginal utility of earned income at some level, you will by the same token decrease that marginal utility at some different level. Unless you want UBI to monotonously increase with the amount earned, of course...
people will want to supplement their UBI by doing some work
Humans are satisficers. If UBI is sufficient to pay for a room, an internet connection, and enough pizzas, why should I work? Work takes an awful lot of time, is often unpleasant, the bosses are not the nicest people, etc. Much easier to spend time in front of a screen or hanging out with your friends.
And by the time your low-motivation teenager figures out that money is useful and that advancing in life could be worthwhile, he is in his late 20s and basically unemployable—not only because of lack of skills, but also because of lack of work ethic.
I’m not talking about phaseouts or things like that, I’m just saying that the UBI amount can be set at a level where looking for some work on the side has a high utility at the margin.
Humans are satisficers. If UBI is sufficient to pay for a room, an internet connection, and enough pizzas, why should I work? Work takes an awful lot of time, is often unpleasant, the bosses are not the nicest people, etc.
Well, by working, you can pay for a nicer room, a faster connection, and better pizza toppings. Yes, many jobs are unpleasant, but some are not. Especially as the UBI would make things like minimum wages obsolete, so folks would be free to seek better work conditions in exchange for some combination of higher skills and giving up some pay.
There are factors pointing both ways here. If getting a job means giving up benefits for the unemployed, or means-tested welfare that you’ll become ineligible for, that’s a disincentive to get a job. But utility isn’t linear in money, and so a job paying N dollars will always be more attractive to someone making zero dollars than the same job is to someone on UBI worth K dollars—and increasingly so the higher K is. That’s also a disincentive.
Which of these disincentives is bigger depends on the sizes of N and K and the specifics of the welfare system. I think I’d usually expect the incentive landscape on the margins to be friendlier under UBI, but it’s by no means a certainty.
The only people who get punished by the system are those who play fair.
The only people, out of the people who act optimally, who get punished by the system are those who play fair.
Many people don’t act optimally. The type of person who doesn’t want a job is likely to be lazy in a general manner, which will also lead him to not go to interviews at all rather than go to them drunk. Going to an interview drunk in order to keep the money coming in is psychologically difficult to such people for the same reason that actually getting a job is—they act based on a very short time horizon and really don’t want to be doing something that is immediately distasteful for a benefit slightly later.
A common counter-example is people who do not want this job, for example because it pays less than their current lifestyle costs to support. It isn’t lazy, it is making the smart economic decision.
You are also assuming that the trouble of traveling to and from an interview is where the stress and effort lies. I would only credit that as the case if they had a high-demand skill set and were traveling across the country for the in-person interview, which is highly unlikely to apply to someone drawing unemployment benefits. The stress and effort stems from preparation before and performance during an interview, neither of which apply if the goal is to fail at it.
A counterexample is useful to rebut a generalization. But I didn’t say that all people who are punished are people who don’t play fair; I said that some people who are punished are people who don’t play fair. You can’t use a counterexample against a point which says “there are some examples of X”; it’s perfectly consistent for there to be some examples, and some other cases that are not examples.
You are also assuming that the trouble of traveling to and from an interview is where the stress and effort lies.
I am assuming that that stress is enough to discourage some lazy people. It needn’t be a large percentage of the total stress to discourage lazy people; it could be that deliberately failing an interview is only 10% of the stress of a normal interview, but a sufficiently lazy person is unwilling to undergo even 10%.
The core question is whether you pay burocrats to keep taps on whether the people who starve write job applications and attempt to get in work or whether you don’t require people to apply for work.
What exactly happens when a bureaucrat tells you: “you will only get money if you can prove me you try to apply for a work”?
If you really want the money and don’t want a job, you can go to a job interview and make a really bad impression. Like, wear some old smelly clothes, pretend to be slightly retarded or drunk. They will reject you on the spot, and then you can go to the bureaucrat and give them a certificate that you applied for a job but were rejected. Doing this once in a month is more or less what they require from you to keep the money flowing.
The only people who get punished by the system are those who play fair. Ironically, the less time you spend unemployed, the less likely you are to get the unemployment benefits if it happens to you, because you don’t know how to play the game. Also, your education works against you, because the better education and work experience you have, the less credible it seems that you can’t find a job.
The system’s goal—at least the official, declared goal—is to get people off welfare and into jobs. Therefore if the system forces someone into a job, it counts as a success.
If you just want to keep on receiving free money, your goals are in opposition to the goals of the system—you are adversaries. In this context, I’m not sure what “playing fair” means. In an adversarial situation if you play by your opponent’s rules, you will lose.
But what if that’s an unrealistic goal. The whole point of UBI is that it’s a lot easier to get people into jobs if you let them keep their ‘welfare’ at the same time, albeit with some phase-out. (I.e. the people who are actually getting money on net are those with low-value jobs)
I don’t understand what that means. You’ll never be able to get everyone off unemployment into a job; you’ll surely be able to get some people off unemployment into a job.
This is entirely not obvious to me, given that the motivation to go get a job will be less.
Given the way welfare is set up in the US right now, I’d argue, quite strongly, that the motivation to go get a job would be more, given, under many circumstances, that you have to reach upper-middle class levels of income before you reach the same standard of living achievable on welfare. (I’m a staunch libertarian, mind. UBI isn’t my ideal, far from it, but it’s a hell of a lot better than what we have right now.)
I strongly recommend anybody opposing the UBI on general principle grounds run a google search on “Welfare Cliff”, and research exactly how terrible the existing system is. Don’t let the perfect be the enemy of the better.
Yup. Much of the advocacy for UBI can be rephrased as “let’s get rid of welfare cliffs!” given that mostly any sane (cliff-less) welfare system can be rephrased as a UBI plus a marginal tax/phaseout schedule. (Sometimes these are dependent on other factors like the presence of children, but you could also account for such variations in a UBI-based system if you really wanted to.)
If I understand the current US system correctly, if you are a single person who is able to work and simply chooses not to do so, you may not qualify for any welfare whatsoever. If that is correct, a UBI would surely decrease your incentive to work.
Yes, this is the least convenient case. But UBI can still be a win in the longer run since it obviates the case for minimum wages and a lot of onerous regulation in the labor market. And let’s be honest, if there are single folks who would be induced to exit the labor market under a (realistic) UBI, they’re probably not getting much done at work in the first place!
Not sure what you mean. If you can have a paying job and some of your ‘welfare’ on top of it, the incentive is obviously greater than if getting a paying job meant giving up all welfare. This matters, especially for low-paying jobs which are the kinds welfare recipients are most likely to get.
Not at all. If the UBI is meaningfully large (there is really no point in something like $100/month), you would be able to live on it. If you can live on UBI, the incentive to find a job is less because the alternatives are MUCH more pleasant.
The carrot is slightly larger, but the stick becomes almost non-existent.
Are you comparing UBI recipients to people who get no subsidy/welfare at all? I’m not sure that’s a meaningful comparison. And one can structure the UBI amount such that utility of income is still steeply increasing at the margin—or, phrased differently, such that folks will most likely want to supplement their UBI by doing some work on the side. It’s a lot harder to do that if the premise is that you’re “looking for work at this time” but not actually getting market income.
UBI recipients, by the virtue of that “U”, are also known as “the entire population”. I am a bit confused which “comparing” are you talking about.
Can you demonstrate? If you increase the marginal utility of earned income at some level, you will by the same token decrease that marginal utility at some different level. Unless you want UBI to monotonously increase with the amount earned, of course...
Humans are satisficers. If UBI is sufficient to pay for a room, an internet connection, and enough pizzas, why should I work? Work takes an awful lot of time, is often unpleasant, the bosses are not the nicest people, etc. Much easier to spend time in front of a screen or hanging out with your friends.
And by the time your low-motivation teenager figures out that money is useful and that advancing in life could be worthwhile, he is in his late 20s and basically unemployable—not only because of lack of skills, but also because of lack of work ethic.
I’m not talking about phaseouts or things like that, I’m just saying that the UBI amount can be set at a level where looking for some work on the side has a high utility at the margin.
Well, by working, you can pay for a nicer room, a faster connection, and better pizza toppings. Yes, many jobs are unpleasant, but some are not. Especially as the UBI would make things like minimum wages obsolete, so folks would be free to seek better work conditions in exchange for some combination of higher skills and giving up some pay.
There are factors pointing both ways here. If getting a job means giving up benefits for the unemployed, or means-tested welfare that you’ll become ineligible for, that’s a disincentive to get a job. But utility isn’t linear in money, and so a job paying N dollars will always be more attractive to someone making zero dollars than the same job is to someone on UBI worth K dollars—and increasingly so the higher K is. That’s also a disincentive.
Which of these disincentives is bigger depends on the sizes of N and K and the specifics of the welfare system. I think I’d usually expect the incentive landscape on the margins to be friendlier under UBI, but it’s by no means a certainty.
The only people, out of the people who act optimally, who get punished by the system are those who play fair.
Many people don’t act optimally. The type of person who doesn’t want a job is likely to be lazy in a general manner, which will also lead him to not go to interviews at all rather than go to them drunk. Going to an interview drunk in order to keep the money coming in is psychologically difficult to such people for the same reason that actually getting a job is—they act based on a very short time horizon and really don’t want to be doing something that is immediately distasteful for a benefit slightly later.
You have oversimplified to uselessness.
A common counter-example is people who do not want this job, for example because it pays less than their current lifestyle costs to support. It isn’t lazy, it is making the smart economic decision.
You are also assuming that the trouble of traveling to and from an interview is where the stress and effort lies. I would only credit that as the case if they had a high-demand skill set and were traveling across the country for the in-person interview, which is highly unlikely to apply to someone drawing unemployment benefits. The stress and effort stems from preparation before and performance during an interview, neither of which apply if the goal is to fail at it.
A counterexample is useful to rebut a generalization. But I didn’t say that all people who are punished are people who don’t play fair; I said that some people who are punished are people who don’t play fair. You can’t use a counterexample against a point which says “there are some examples of X”; it’s perfectly consistent for there to be some examples, and some other cases that are not examples.
I am assuming that that stress is enough to discourage some lazy people. It needn’t be a large percentage of the total stress to discourage lazy people; it could be that deliberately failing an interview is only 10% of the stress of a normal interview, but a sufficiently lazy person is unwilling to undergo even 10%.
Ah—I appear to have misread your comment, then.
Would I be correct in limiting my reading of your remarks to rebutting the generalization you quoted?