Why do people HATE Basic Income idea?

[Jack89]

What kind of control would people have over Basic Income? It would be kinda obvious if someone got more or less than someone else. Pretty hard system to cheat. You can't lose basic income and the amount is the same for everyone.

If it was truly unconditional and you had a trustworthy government, I could see where you're coming from.  Maybe your government is more responsible that the US government.  But when someone has control of a significant portion of your livelihood, they have some control over you.  Whether they exercise that control is a different matter.  If your government is free of corruption and efficiently run, you would probably be fine.  

As much as I dislike governmental redistribution of wealth, I have to admit that this idea has merit.  It's certainly sounds better than the broken welfare programs that the US is currently propping up.  I think it might be better if we replace all of them with unconditional basic income.  Unfortunately, what I see happening is that even if everyone is provided with their piece of the pie, there will still be cries of inequality, and instead of basic income replacing all those fragmented programs, it will simply be added to them.  

If you gave every adult in the US just 10k a year for their basic income (not enough) that would cost around 2.5 trillion dollars for taxpayers.  If you give them the $2800.00 a month that the Swiss are talking about, that would be a little over 8 trillion a year (I think).  The first one is a revenue challenge, but probably doable if you nix social security, medicare/medicaid and some defense spending, but the Swiss standard seems pretty impossible for the US.  I'm just guessing here, but i would think the taxes you would need to support this would be obscene.

Then again, with technology pushing out jobs... I don't know.

[aileron]

If the Swiss can, the rest of Europe can too!

They don't have oil. They don't have some precious ressources elsewhere. That means if they can do it, everyone can do so!

They do have lots of money laundering and tax evasion revenue though.

I've been a proponent of Basic Income for many years, and I've always come across people who are so strongly against it.

As HBA points out, we continue to automate our labor.  As we progress in our automation of labor we will almost certainly arrive at a time where we will need to distribute wealth without expecting people who are capable of working to do work.  Indeed, we will achieve so much automation that full employment will be nearly impossible without pointless make-work jobs.  We're not there yet.  Any discretionary ability not to work comes at the direct expense of those who do work, and that system will be unstable.  Until we arrive at the point where automation is so omnipresent that we can pay people who are able to work but choose not to work, we should concentrate on programs to increase employment, support people who cannot work, and support workers who are involuntarily unemployed... Pretty much what every developed nation has been doing for decades now.  

I'm not making a moral objection to being paid even if a person chooses not to work, and we are probably going to need to do that in our future.  We're not there yet.  I think a more workable solution in the near term is a negative income tax.  Even the normally retrogressive USA has had a negative income tax since 1975.

[Plu]

If you gave every adult in the US just 10k a year for their basic income (not enough) that would cost around 2.5 trillion dollars for taxpayers. If you give them the $2800.00 a month that the Swiss are talking about, that would be a little over 8 trillion a year (I think). The first one is a revenue challenge, but probably doable if you nix social security, medicare/medicaid and some defense spending, but the Swiss standard seems pretty impossible for the US. I'm just guessing here, but i would think the taxes you would need to support this would be obscene.

Remember that a huge chunk of that money would also be coming off of every other department of government; you can greatly lower the wages of all your employees once basic income exists.

(Also I think 2800 is too much for US norms; it needs to be at the "just enough to have a home and food on the table" level. If you go too far above that, it really does start to take away the motivation to work. Plus it will mess up your economy. So it would probably end closer to 1000 a month. Maybe even less, I don't know the US economy that well.)

[Mister Agenda]

I want to like this. Our current welfare bureacracy IS very inefficient. But...in the USA, there are about 240 million adults (over 18). $2,000 a month for each of them would be about 480 billion a month, or nearly six trillion dollars per year. That's about what our entire budget was in 2012. Over a third of our GDP. That's daunting. To pay for it we would have to increase our welfare spending by about 9 times, so we would need a federal budget about 2.5 times bigger, which means collecting another 5.6 trillion in revenue. However, most of that would go right back into our pockets, it can be done in such a way that the middle class pretty much breaks even...but it's a fantasy to think the average person would have thousands of dollars more a month to spend, which means it winds up being a disincentive to work, which means fewer people making enough money to pay for it all.

If we limited our spending to about 20% of our budget, which is about what we spend on entitlements now, that would be roughly $250.00 per adult per month. In the USA, that's grinding poverty. Worse than what we already have.

I'm glad the Swiss are trying this. I hope it goes well for them and that my reservations turn out to be a result of lack of vision. It sounds like the plan is just to print up the cash...that is, inflate their currency dramatically, which will reduce the buying power of the stipend significantly.

I think that at best, this may be a slight improvement over traditional welfare. At worst, an economy-wrecker.

OTH, the looming robot workforce is a real concern. What will we do when 30 or 40 percent of the population is unemployable because they can't compete with automation? We'll have to do some kind of basic income scheme sooner or later. Later might be much cheaper, though.

[Jason Harvestdancer]

I think that a minimum wage is fixing the wrong end of the problem.

I have heard proposals for a maximum wage that is 10x the minimum wage.

[Jason Harvestdancer]

The shitty jobs need to be available and quite often no jobs at even shitty pay are available. Ever been somewhere with 25% unemployment? Then the 'scarce resources' are allocated to protecting the haves from the have nots and then the resources become allocated to prisons where the shitty jobs become exponentially shittier.

The phrase "protecting the haves from the have nots" is an interesting one.  Government resources are dedicated to protecting the government from the people.  That shows who the real "haves and have nots" are, and it isn't based on income.

[Johan]

I'm guessing wages would go up until we could find somebody who was willing to do it. We'd have to change a few jobs from "you must do this shit job for shit pay because otherwise you'll starve unemployed" to "please do this shit job, we'll reward you handsomely" but if the job needs to be done and the pay is good, you will find somebody who will do it.

And where exactly would the money come from to cover required increased salaries? You would inevitably have to raise the price to the customer. In this case since we're talking about sewer services, you would presumably have to raise the sewage fees.

So if your government pays every citizen $1000/month but then has to raise fees and taxes by $1000/month in order to cover the now exorbitant labor costs, what have you actually accomplished?

[Plu]

So if your government pays every citizen $1000/month but then has to raise fees and taxes by $1000/month in order to cover the now exorbitant labor costs, what have you actually accomplished?

In such an example, nothing. But then I don't think it is anywhere near realistic anyway.

[Jason Harvestdancer]

So if your government pays every citizen $1000/month but then has to raise fees and taxes by $1000/month in order to cover the now exorbitant labor costs, what have you actually accomplished?

In such an example, nothing. But then I don't think it is anywhere near realistic anyway.

True.  The basic income of $1000/month will require fees of $2000/month.

[Plu]

That sounds interesting. I don't think even the US government would be that incompetent.

Also $2000 fees isn't neccesarily an issue, since most of the tax money should be coming in from companies and people making far more than basic income. Of course, if the country fails to properly tax companies and rich people... oh right. Well I guess it's not for the US just yet then  :roll:

[josephpalazzo]

Sorry but this whole thing is NOT sound economic principles. There are two sides to consider: on the demand side, yes, people would have more money to buy goods and services, but you end up with a severe problem on the supply side. Firms would be forced to raise salaries way above whatever the basic income is ( whether $1000/mo or $2000/mo as has been suggested so far in this thread), and this would force all prices to shoot through the roof. In the end, there would be no winners, as people would have more money but they would have to buy goods at much higher prices, doing very little to decrease the poverty line.

[Plu]

Firms would be forced to raise salaries way above whatever the basic income is ( whether $1000/mo or $2000/mo as has been suggested so far in this thread),

Why? I'm not sure I understand why firms would have to raise salaries all that much. You'd expect many of them to actually go down as a result because people would need less money for a complete income. The only salaries that would go up are the jobs that are only done right now because companies are extorting workers into doing them.

[josephpalazzo]

Firms would be forced to raise salaries way above whatever the basic income is ( whether $1000/mo or $2000/mo as has been suggested so far in this thread),

Why? I'm not sure I understand why firms would have to raise salaries all that much. You'd expect many of them to actually go down as a result because people would need less money for a complete income. The only salaries that would go up are the jobs that are only done right now because companies are extorting workers into doing them.

Sorry but economics doesn't work that way. Firms have to compete against each other, and in this case, against the government giving basic incomes. To attract people, firms would have no choice but to offer higher salaries. And if they don't, lots of people will choose not to work, and then you end up like in the former Soviet Union, lots of money in your pocket with nothing to buy, as suppliers have no incentive to produce. You get long line-ups to buy milk, shoes, or anything you would need.

[Plu]

But you don't have to compete with basic incomes... people would get them whether they work or not. Any money a person makes from a job is simply in addition to the basic income. And the basic income would be at the "can survive but barely" level, so that people would still be looking for work so that they actually have money left over to do fun things with their time.

A firm that offers you a dollar per hour still means that at the end of the week, you get an extra $40. They don't have to compete with the government in any way. In fact you can even scrap minimum wage and let them go as long as they can get people to work for them.

[josephpalazzo]

But you don't have to compete with basic incomes... people would get them whether they work or not. Any money a person makes from a job is simply in addition to the basic income. And the basic income would be at the "can survive but barely" level, so that people would still be looking for work so that they actually have money left over to do fun things with their time.

A firm that offers you a dollar per hour still means that at the end of the week, you get an extra $40. They don't have to compete with the government in any way. In fact you can even scrap minimum wage and let them go as long as they can get people to work for them.

Are you ever clueless? You really think that if we would double everyone's salary, we would all be richer?!?? All that would do is shoot prices through the roof. It's an economic fact that if you increase the money supply, which you are doing in this case by giving more money to people with no increase in economic output, what it does is bring inflation up (hint: prices go up). At the end of the day, you are no longer richer, and you haven't solved the poverty problem.