Universal Basic Income

So Odinsblog on tumblr imagined what it might be like if every person in their country had a guaranteed basic income (UBI). I would like to discuss how this might work in Taiwan, and what some of the numbers might look like, i.e., how much should the UBI actually be, how would that affect taxes and corporations and general economic issues, and also personal life. Haha probably we'll only get to the personal life stuff, but let's talk about UBI!

Update: Below the original story I added some more information points from other news sources.

Odinsblog: Can you imagine the changes to the workforce and how we treated workers if no one HAD to work to survive?
Like often I see these complaints about a universal basic income that are like “well then no one would work!” and I think there are lots of people motivated to have more money even when they have enough to get by, but I also I think, that’s kind of true, if regular employment looked and functioned the way it does now.

But with UBI if both employers and society wanted people in certain jobs those jobs would have to offer more than just “you need us to survive”. They’d have to offer satisfaction and community and purpose.

Imagine the changes places like WalMart and McDonalds would have to make to how they run their enterprise if they had to woo and entice their employees into wanting to be there. Imagine the end of “the customer is always right”, both because employers know their workers won’t put up with and because consumers are forced to have a respect for workers choosing to do this with their time to make the community function when they don’t have to.

Imagine the progress to automation and technology now that we don’t have to worry about unemployment as a result. So instead of a store having 40 employees, they have 10 and automated self check out and price scanners and store apps you can pay on, and automated self-driving bots to keep inventory and restock at night. (And that’s when you don’t just order online, shopping in-store is now inherently a Boutique experience).

But those ten remaining employees are So Valued by the company, and so carefully educated and trained and respected as experts in what they do. People go “you could do that when you grow up, help people shop and find what they need and know what products are best for them.” And it wouldn’t be an insult like “you’ll wind up flipping burgers”, but instead a respected option “you can help people have warm fresh food in one of the oldest and most prestigious international groups in the world, and look at their travel programs and free clubs and classes” (McDonalds wins the Fast Food Mario Kart Tournament every year, their team is best in the nation and if you want a good esports program you work at McDonalds).

Evidence shows people would still work. Evidence shows people want to improve their situations and want to have structure in their lives. Evidence shows the only populations who take advantage of a UBI to not work are students who choose to focus more on their studies and new mothers, who choose to spend more time with their kids.

But it would increase the bargaining power and social power of the average employee by so much. They’d have the option to walk away. And employers would know it and consumers would know it and employees would know it. So if we wanted it to keep working, employers would have to start catering to their employees wellbeing and health and happiness as well as their wallet.

And it would be so good.

A Successful Experiment in the 70s
The New Yorker points to a successful experiment run in the 70s
In the mid-nineteen-seventies, the Canadian province of Manitoba ran an unusual experiment: it started just handing out money to some of its citizens. The town of Dauphin, for instance, sent checks to thousands of residents every month, in order to guarantee that all of them received a basic income. The goal of the project, called Mincome, was to see what happened. Did people stop working? Did poor people spend foolishly and stay in poverty? But, after a Conservative government ended the project, in 1979, Mincome was buried. Decades later, Evelyn Forget, an economist at the University of Manitoba, dug up the numbers. And what she found was that life in Dauphin improved markedly. Hospitalization rates fell. More teen-agers stayed in school. And researchers who looked at Mincome’s impact on work rates discovered that they had barely dropped at all. The program had worked about as well as anyone could have hoped.

U.B.I. would make it easier for people to think twice about taking unrewarding jobs.
The U.B.I. is often framed as a tool for fighting poverty, but it would have other important benefits. By providing an income cushion, it would increase workers’ bargaining power, potentially driving up wages. It would make it easier for people to take risks with their job choices, and to invest in education. In the U.S. in the seventies, there were small-scale experiments with basic-income guarantees, and they showed that young people with a basic income were more likely to stay in school; in New Jersey, kids’ chances of graduating from high school increased by twenty-five per cent.
Critics of the U.B.I. argue that handing people cash, instead of targeted aid (like food stamps), means that much of the money will be wasted, and that a basic income will take away the incentive to work, lowering G.D.P. and giving us a nation of lazy, demoralized people. But the example of the many direct-cash-grant programs in the developing world suggests that, as the Columbia economist Chris Blattman puts it, “the poor do not waste grants.” As for the work question, most of the basic-income experiments suggest that the disincentive effect wouldn’t be large; in Manitoba, working hours for men dropped by just one per cent. It’s certainly true that the U.B.I. would make it easier for people to think twice about taking unrewarding jobs. But that’s a good consequence, not a bad one.

Why is Silicon Valley so into the idea of UBI?
First, UBI subsidizes disruptive technologies. “The motivation behind the project is to begin exploring alternatives to the existing social safety net,” Elizabeth Rhodes, the research director for Y Combinator’s UBI project, told Quartz. “If technology eliminates jobs or jobs continue to become less secure, an increasing number of people will be unable to make ends meet with earnings from employment.”
UBI becomes a consolation prize for those whose lives are disrupted. Benefits still accrue to the designers and owners of the technologies, but now with less guilt and pushback about the collateral damage.
Rather than steer technology towards social progress by promoting projects that contribute to public benefit and human flourishing – not just reflect the desires of privileged groups – Silicon Valley elites can shake off critics by pointing to UBI as the solution, and one that does not restrict their profit motive.

Now we can pay our non-employees even less!
UBI can, in some ways, be seen as welfare for capitalists. Now, more people can drive for Uber and work for TaskRabbit – at even lower wages! – because UBI subsidizes the meager paychecks earned by hustling for the sharing economy. The tech companies take home the profit and face even less pressure to pay a living wage to their non-employee employees.

‘Venture Capital for the people’
Second, support for UBI is framed in terms of human capital. Steve Waldman, a well-known programmer and economics writer, praises UBI by referring to it as “VC for the people”. VC, venture capital, invites people to embrace their inner entrepreneurs, he believes. Thus, UBI is not (only) a moral response to economic harms or a political response to social injustice, but a sound financial investment in the startup-of-you. A way of producing more makers, risk-takers, and move-fast-breakers – the type of people that tech culture values above all others.

But the trouble comes when UBI is used as a way of merely making techno-capitalism more tolerable for people, when it is administered like a painkiller that numbs the pain and masks the symptoms of economic injustice without addressing the root causes of exploitation and inequality. We cannot treat UBI like an endpoint; it should be a stepping stone to fixing core issues.
Why do the wealthy and elite support seemingly radical social programs? Have they grown enlightened and concerned with the plight of everyone else? Is this a mea culpa designed to make exploitation more bearable, a bit of comfort to soften the crushing pressure of life?
Or is it a stealthy way for them to backdoor their own politics and values, while also protecting their positions in society?

“the economy can’t be built to provide jobs for everyone”
In the U.S., the new interest in the U.B.I. is driven in part by anxiety about how automation will affect workers. … “People are fearful of becoming redundant, and there’s this sense that the economy can’t be built to provide jobs for everyone.” In the short run, concerns about robots taking all our jobs are probably overstated. But the appeal of a basic income—a kind of Social Security for everyone—is easy to understand. It’s easy to administer; it avoids the paternalism of social-welfare programs that tell people what they can and cannot buy with the money they’re given; and, if it’s truly universal, it could help destigmatize government assistance. As Sunkara puts it, “Universal programs build social solidarity, and they become politically easier to defend.”

The Wall Street Journal worries about the number of prime age men working, as if women working has no economic impact
For all its superficial appeal, however, UBI—also called unconditional or guaranteed income—is a solution in search of a problem. It would consume scarce resources while ignoring the single biggest failing of the current safety net: the declining percentage of men in the prime of their life who work. A new benefit with no strings attached would do nothing to fix the problem, and could in fact make it worse.

…the share of prime-age men (i.e. 25 to 54 years old) either working or looking for work—the participation rate—has fallen from 97% in the 1960s to 88%. For men with just a high school diploma or less, it’s now 83%. With aging already a serious drag on long-term economic growth, the U.S. can’t afford to lose the equivalent of 5 million workers.

The WSJ thinks we can’t pay for it, and that poor people will stop working if they get it
There are two ways to reduce the cost, but both weaken the appeal. First, shrink the payment. To ensure everyone, including the rich and middle class, receive a check, many poor families would receive less than they do now, deepening poverty. Second, phase out benefits as income rises. But then the income is no longer universal and the recipient’s effective marginal tax rate goes up, a disincentive to work. That’s precisely one of the flaws in the current safety net UBI is supposed to eliminate.

What’s the solution? If outside forces are depressing low-skilled wages, that strengthens the case for subsidizing those wages so that they will work for what employers can pay. This can be done by expanding the earned-income tax credit, which tops up poor worker’s salaries, and wage insurance, which pays a laid-off worker to accept a lower-paying job. This can’t be done through UBI, which is paid regardless of whether the recipient works, and, according to some studies, encourages some recipients to quit.