> No one wants to hire them at a high minimum wage, especially when locals are readily available
The main drawback to a minimum wage is that it artificially increases the cost of labor, to the point where it's no longer worth it to an employer to hire a low-output employee. I think we'd all agree that increasing employment is a good goal, but an increased minimum wage actually hinders progress on that front. As the minimum wage increases, robots and other non-human investments start to look much, much more attractive. Many businesses would be happy to hire workers for less than minimum wage, but legally cannot, and so do not hire.
Of course, it's a complicated issue. Look at the employment of those with disabilities like Down Syndrome [0], for example. Are these employees worth hiring at $7.50/hour? No, for the most part, they're not. Are some? Sure, but on average there's no way. But are they worth hiring at $2.00/hour? Yes, and they and their families are willing for them to work at that wage, because there are huge benefits to being productively employed.
Recently these programs are coming "under attack" in various states. New Hampshire just made this practice illegal, for example [1]. We'll see how it plays out -- my bet is that a) few news outlets will follow up in a few years and see how many of these disabled workers are able to find new employment, and b) few disabled workers will be able to do so.
The counter argument is that human labor has an actual cost. That is the cost to keep a human alive and in some level of comfort. Government benefits of many different types have "artificially" lowered this cost. Where employees refuse to pay enough for a human to live on, the government picks up the slack. Raising the minimum wage may be "artificial," but its not the first control placed on some otherwise natural labor market.
> I think we'd all agree that increasing employment is a good goal
I don't agree, and I'm not sure why people would see employment for its own sake would be a good thing. I want to increase some of the things that employments brings (purchasing power, a sense of purpose, etc...) and not others (loss of time, feeling trapped, etc...).
>> Down Syndrome [0] .. are they worth hiring at $2.00/hour? Yes, and they and their families are willing for them to work at that wage, because there are huge benefits to being productively employed.
Realistically, for people with disabilities that aren't being able to be in the regular labor market, there are some societal useful things to do, like volunteering(say in a soup kitchen), helping their community,etc. Those are probably activities that wouldn't be done otherwise, carry a real sense of value, and usually in a custom fit environment.
That is the situation at least in enlightened places with decent government services. I'm not sure about the US.
I wouldn't want that to be replaced with people at the margin being exploited at a shitty factory , where the work is meaningless and often depression inducing, sometimes risky, etc.
Wait, what? Employment is a net-negative, the denominator of economic productivity. If we have the same amount of material wealth, it's better to not work as hard to get it.
"Increase employment" is targeting the wrong measure.
>No one wants to hire them at a high minimum wage, especially when locals are readily available
Tying this in to our own economy, this is what Bernie and the Unions miss (or perhaps they don't). A min wage increase of 50% will entice low skills Americans who were on Snap to enter the workforce, driving out foreign low skills workers.
And I agree with the increase. Too many of our workers possess too few marketable skills that jobs once the province of teenagers and part times have become the jobs for many adult household earning Americans.
> I think we'd all agree that increasing employment is a good goal
I don't think we do. Employment is not a good in and of itself, and a person who is working is not necessarily in a better position than a person who is not. People working for a wage that doesn't support their needs (which then has to be subsidized by the government) are just vehicles for transfer payments from government to garbage business.
> because there are huge benefits to being productively employed.
To make your assumptions explicit here, if you value employment for employment's sake, anything that maximizes the number of people employed is good. Why not negative wages? I suppose a full time job that pays less than it takes to feed and house a person and has to be supplemented with welfare in order to do so is a sort of negative wage...
No, I don't think maximizing employment is a goal in and of itself. It would be better to not employ humans below a certain marginal productivity. Instead, those people need to focus on training/education to enhance their marginal productivity.
And employers should focus on automating those low productivity tasks.
I'm not going to consider the case of people with disabilities - that's fine to have an exception for them. But that's not really what's being discussed in these debates.
I actually think the market wage is socially inefficient because it encourages people to take the short term gain of immediate cash over the long term investment of training/education. It also encourages employers to forego efficiency-enhancing improvements.
Now if humans were rational, 100% responsible, and conscientious, then they would forego low wages, focus on training to achieve higher levels of productivity and enhance the economy by doing so. Instead, there are many people who either through their own lack of judgment or unfortunate circumstances do not seek to optimize their marginal productivity of labor.
That's a market failure and minimum wage is one attempt to solve it.
Even if one simply manages to force employers to hand over more of their profit to workers this will simply force up rents/land prices and ultimately once again all gains pass to the rentier.
Bloomberg don't talk about land value tax. They are happy to talk about basic income because it's not real change.
I generally agree with this, but I think it is often overstated. There are still many domains of employment where there is room to raise the minimum wage significantly before getting anywhere near the margin at which the employer feels it's not worthwhile to hire the additional worker. Food service, for example. There are examples on the other end of the spectrum too, such as cashiers in a major convenience store chain, like CVS or Walgreens. These businesses are more capable of scaling automated cashier technology than others, so workers of this type would be disproportionately affected.
But overall, many types of business have an inefficient profit surplus right now that should rightfully be eaten into by workers claiming more share as wage.
I also think there is a genuine moral argument to be made that society, in some cases, should intervene when a person believes they are willing to sell their labor at an unsustainably low price. It's not quite right to characterize a minimum wage as "denying" them that "opportunity" as much as it is saying that the "opportunity" itself is unhealthy, unrealistic, and a person's reasons for choosing it almost always involve forms of coercion that cannot be dealt with as effectively if the person gets locked into believing they actually must provide their labor so cheaply.
Incidentally, this is perhaps the most common thing I hear about the minimum wage (that it hurts employment due to marginal employment reduction on behalf of employers). A lot of people seem to think it's counter-intuitive and that it somehow shines real economic theory on everyone's pie-in-the-sky dreams of egalitarian wages or something. But really that's not true, this argument is extremely common and is brought up in almost every forum or discussion about minimum wage, whether it's just a bunch of nonsense troll comments on a YouTube video or in a place with a higher signal-to-noise like HN.
It always makes me do a double take because I don't want to end up regurgitating what is effectively "sponsored content" from wealthy libertarian types who spam out this message to ensure it trickles down to all the conversations about minimum wage. Like I said, I mostly agree with this, but with some reservations.
> Besides, Sweden has one of the rich world's biggest gaps between native and immigrant employment rates. Youth joblessness is 70 percent higher among the foreign-born than among Swedes. Lowering the minimum wage could draw more of the new, mainly Middle Eastern population, into the workforce and reduce social and ethnic tension.
A minimum wage is simply not moral. It prevents me and you from entering into an employment agreement with which we may both benefit. Instead, the government is telling me how I have to interact with you.
The left-wing philosophy of a minimum livable wage is ironically hurting the new immigrants to these countries. The reality is that first-world nations have higher employment standards because citizens are more educated and capable. Instead of giving new immigrants, who are almost certainly less educated and capable (remember, they're trying to move to countries with better opportunities) the ability to work and gain experience, we leave them with little options.
And like the quote says, it's just bad for assimilation into the host society. Being able to work is fantastic for that. You have to learn at least a bit of the language. Interact with the people. Learn to follow the laws and customs of the new country. Without work opportunities, immigrants can often wind up stuck in their segregated ghettos. And high unemployment invariably leads to a lower quality of life.
Abolish the minimum wage. Give new immigrants the opportunities they want.
A minimum wage is moral. It ensure that you and I do not enter into an employment agreement where one side excessively benefits. The government as third party is ensuring we have minimum amount of fairness in our interaction.
The right-wing philosophy of wage bargaining is ironically hurting the workers of their countries. The reality is that first-world nations have predatory labor practices because citizens are systemically and by their own lack of resources unable to realize what fair wage is or how to effectively bargain for it. Instead of giving workers, who are almost certainly less educated and capable the ability live off their wage so they may better their lives constructively, we indenture them into subsistence living, where the minorest of life disruption can decimate savings.
It's just bad for the people living in the lower rungs of society. Being able to work at a living wage is fantastic for mitigating these shortcomings. You can actually do things like plan for the future and interact with people without worrying about the next big life problem. You can learn more labor laws to further advocate for yourself and others, and even the customs of other cultures, rather than fear someone cutting even your meager floor from under you. Without fair wage, workers can often find themselves being the "working poor", people whose jobs won't ever let them save enough money to do anything meaningful. And fair employment inevitably leads to high quality of life.
Institute a living wage. Give people the opportunities they want.
>>A minimum wage is simply not moral. It prevents me and you from entering into an employment agreement with which we may both benefit. Instead, the government is telling me how I have to interact with you.
This argument doesn't make any sense. It is often the case that preventing people from entering a contract thy both benefit from is beneficial for society. It's a standard social dilemma example of which is tragedy of commons.
You may argue against minimum wage but "simply not moral" is just a wrong argument. This kind of thinking is what frustrates me about common libertarian arguments. You can't just ignore social dilemma implications when arguing for voluntarily contract being the end of it.
A don't know if you're American or not, but at least in the U.S., we have lots of regulations on what kinds of contracts people can enter into. Contract law is a major part of our legal system (and the legal system it was derived from). You're arguing that any regulations on contracts are not moral. This has far wider reaching implications than you realize.
There are all kinds of things that the government -- and voters by extension -- have deemed it illegal to enter into contractually. You cannot enter into an agreement to be murdered. You cannot enter into an agreement that amounts to slavery. You cannot enter into a work agreement that violates safety law.
We could go on and on about this, but if you're arguing against contract law, you are many hundred years too late. Contracts have always been subject to laws and regulations in place.
This is horrifically naive. The minimum wage exists because there is an inherent power imbalance between employers and employees in today's economy. This distorts the labor market and puts workers and corporations on an unequal footing when it comes to negotiating pay, to the extreme disadvantage of the worker. The minimum wage is an attempt to force a correction to that inequality and unfairness. It is far from perfect, but until other, better systems exist it's one of the best tools available at present.
Paying someone an hourly wage that is below the socially accepted minimum amount is simply not moral. It binds employees to a cycle of poverty where they have neither enough money nor the free time to work for themselves productively. To break this social contract is cruel, whether or not it is legal.
The right-wing philosophy that money-exchanging relationships should not be regulated is ironically destroying the economy, creating an underclass who must produce but cannot consume. New immigrants - who are often educated and productive in their home countries - are forced to enter the underclass rather than using their skills in the capacity most useful to society.
Strengthen the minimum wage. Give everyone a fair chance.
Negative income tax makes more sense to me. (NIT is a system where you either get or give money from/to the governement, depending on your income.)
First it's both a simple welfare and tax system in one package. Basic income as typically understood is only half of the story.
It's also easier to reason about, the money flows are way more obvious, it's immediately clear whether you are a net contributor or receiver and it's easier to set the (few) parameters.
I agree that it would be much better and fairer to have a negative income tax as the only form of social support. One of the worst things about the current social support system in the U.S is the welfare cliffs. There's a gap between $25,000 a year and $80,000 a year where there's a greater than 100% marginal income tax because people lose access to benefits at these income levels. This chart displays it very nicely:
NIC is analogous to basic income. At a certain point, the taxes you pay in a basic income scheme are equal to the basic income you earn. Those who earn less than you are earning a NIC, those above are paying income tax.
I'm not sure how any of the things you said are true. How is negative income tax easier to reason about than "every citizen gets X dollars per month, unconditionally"? How is the money flow more obvious?
Furthermore, why is it important to identify whether someone is a net contributor or receiver?
People respond to incentives, it's been proven time and time again. A negative income tax isn't the worst idea, but it has all the wrong incentives. The more money you earn, the less help you get. Which seems sensible on the surface but can lead to situations where people ask themselves "why should I even bother working a job I hate when I can get the same money without working?"
The advantage of basic income is that no matter what you do you still get that money. You're still incentivized to work because a life on basic income won't exactly be a life of luxury. In fact you might be more incentivized to work for several reasons. One because working will get you money you can spend on stuff you want, not just stuff you need to survive. This is significant from a quality of life aspect. Also, working will enable you to get ahead, instead of just being on a treadmill as so often happens today. You'll be able to have more choice where you work and how much, and you'll be able to set aside some of your time to pursue new careers.
I don't think people understand just how much potential and talent is being wasted and misused in our economy at present. Human beings aren't meant to be drones, that's not our calling. And it's an insult to the human race to imply that a significant portion of the population is somehow genetically fit for nothing other than menial labor. That's never been my observation. In the vast majority of people I've met there is almost always a depth and a potential that is not being tapped by the current economic system. And you see some of this coming out with new economic models enabled by the internet. More freelancing, more startups, more people engaging in their passion projects through crowd funding or what-have-you. More people learning new things and trying new things because the internet makes discovery of knowledge a lot easier. That's true of musicians, artists, inventors, and so many others.
I can only imagine the world we'd have if we could unlock that huge untapped potential.
While negative income tax might be "simple" in theory, in practice I think it would likely turn into the same mess of loopholes and bizarre rules that we have now.
A big benefit of the basic income model is that there's really no room for lawyers, accountants, etc. to pervert the process. If everyone gets the same amount, there's no way to game it that I can see (now, I'm sure someone, somewhere will figure out a way to game it... that's what people do, but at least on the face of it it seems far less gameable than our current tax and welfare setup).
If it were made a part of the FairTax model (which would be easy to do, given that that model already requires cutting everyone a check), then gameability would take another huge hit.
The trouble with negative income tax, or at least the simplest models is, that you have to be very careful with the models. I once tried to calculate an admittedly very simple model and the results were a rather absurdly high tax already at rather low incomes. A slightly larger parameter space then produced a model of taxation with extrema.
Plus there are a lot of very good reasons for tax breaks (for example screen readers for the blind). So while I fully agree that a well engineered tax system would be a lot simpler than what we have now, I am not sure if a basic income should just be dealt with by taxation.
Plus, everyone doesn't need the income and we cannot afford it anyway. I'm partial to trying pro-rated guaranteed minimum income paid weekly or nightly (one can dream). I have seen several proposals that include a clause affecting voting rights of the receivers.
> some politicians in one of the world's most socialist countries, Sweden
I almost stopped reading there. Sweden is not socialist, and never has been.
Public ownership of production, workers control and management, social equality and a democratic plan of production. Nope, none of those. Just as much privatisation and market forces as other economies.
They just chose to fund their welfare state, education, prison reform and pensions rather better than some others. There's been some drawbacks, but you won't be hearing many renditions of the Red Flag.
"Socialism" in Western political discourse no longer means owning the means of production. It did, once, but that idea was so obviously discredited during the 20th century that no one takes it seriously anymore.
So "socialism" today (usually used with some variant of "democracy") has been repurposed to mean a political ideology that values government social support programs over low taxation.
Bershidsky really drops the ball when he makes the following point:
"One problem with a universal basic income, of course, is that it will make a country attractive to even more immigrants from poor countries where 550 euros a month looks like a princely amount. Keeping borders open will hardly be an option."
What he's missing here is that the UBI is only payed to citizens. If you get rid of the minimum wage (because everyone gets paid the UBI no matter what), then citizens become much more willing to work for low wages, because their basic cost of living is already paid-for.
By contrast, UBI would not be paid to immigrants. Non-citizens would still be working in the US to some extent, but the incentive for people to sneak across the border would be severely reduced if prevailing low-skill wages fell from $10 to, say, $5.
It's also worth mentioning that to the extent that deterring undocumented immigration is the policy of the United States, doing it with economic incentives is (IMO) a much more ethically sound solution than doing it with walls, violence, and incarceration.
A Basic Income from Govt comes at a huge price of loss of individual liberty.
If someone gives you free stuff, they will expect controls like where you are allowed to spend your money and time.
This model of taking from the productive sources and rewarding everyone else will have to break at a certain point. how come you get rewarded for enjoying the gossip column and I spend extra effort doing something else which is harder and my earnings are taken away? so lets put a control on how many hours someone else works. The productive people are dragged down and discouraged.
Automation is replacing the labor that humans don't have to do. This frees up human capital so we can focus our endeavors somewhere else. America already provides free education up to high school and with this education why should people of next generation aim for minimum wage jobs?
In a modern capitalistic economy it is very difficult to make money without adding value to society and this equilibrium is reached naturally due to free markets despite of politics meddling with it.
But what about existing entitlement sending, which keeps growing? A UBI without preconditions will only compound that problem, because what is to stop people from wasting their basic income on frivolities while also drawing from existing welfare programs.
Many people may agree to work for less than the current minimum wage, and on more flexible terms, if they're supplementing a guaranteed income, not scrambling to avoid having to beg for food.
But this is not the case. What everyone seems to forget that despite the low labor force participation rate, the poorest are not starving to death; in fact, they're more likely to be obese than higher earners.
The assumption that a UBI, on top of existing welfare programs, will make people more compelled to work seems like a stretch.
It's not just smarter it's the only possible solution out of the two.
Many people wrongly discuss the premise of basic income in the context of whether it's a better solution for for the job market. I.e. as a better way to solve unemployment fluctuations which in this view are still going up.
But the whole point about Basic Income is what we do about there being fewer and fewer jobs that pay a proper salary.
There's a non-obvious danger for basic income: rent-seeking behavior. Landlords charge whatever the market will bear, so there's a huge risk of funneling money through the recipients without improving their quality of life. And it isn't just landlords that hold that kind of rentier position - universities, for instance, would also extract more out of their position as employment gatekeepers.
Attacking rent-seeking behavior would likely have a bigger impact on the everyday lives of the poor. Land-value taxes are a good place to start.
It makes sense if-and-only-if that basic income isn't being doled out by the same organization which also runs the military-industrial or prison-industrial worlds. As an American, I think it's safe to say our federal government can't be trusted to not turn into a tyranny if it's everyone's primary employer.
We would get even more massive corruption almost instantly. For example, some people would lobby to get those tax-revenue intended for the basic income to be redirected to other projects. The people wouldn't fight the loss of a $1/year/person here or there. There would also be reams of special cases to give some people more and some people less. And like today, some people would continue to carve out exceptions so they didn't have to pay those taxes to feed the basic income. That money would be divvied up every way except as a basic income and people would spend all their time fighting over who got it instead of generating the value that backs it.
I don't live in the countries trying this so I can't say if it's safe to give their government that much power, but I know the US government is no where near ready for any more power than they already have.
My primary concern about instituting a basic income is that these things have a tendency to always want to rise. It then becomes a voting platform for politicians. Vote for me and I will get your basic income raised. I think anytime you promise a populous something for nothing, you create dangerous precedents that can spin out of control. I'm for increased minimum wage and price caps, but not a minimum income with no commitment.
On the other hand, if the federal government did not give away all of the profits from American natural resources, and instead took a percentage like most developed countries - and the state of Alaska - that money could be turned around into a basic income for all. That I believe is where a basic income should come from: use a nationally produced commodity sold abroad and the profits therein to give back to the citizenry.
On the topic of immigrants and minimum wage/basic income. Brussels provided free housing, food, health care, and education to immigrants. And yet their immigrant community was still unable and/or unwilling to integrate.
Basic income and/or higher minimum wage doesn't solve all problems. It even causes some new ones. Which isn't to say it isn't a good idea. But we probably don't discuss the problems as much as we should. I don't think it's the silver bullet many people wish it to be.
The only way I can see Basic Income working is if the average person has a net income change of $0. That means someone making the average income of ~$45k/yr gets a $10k check from the government every year, but also has their taxes go up by ~$10k. I believe others have referred to this as a negative income tax.
From what I can tell the average salary of a hackernews reader is above $100k. Each of us would probably end up paying ~$800+ per month in additional taxes, maybe up to $1,500/mo for those making that BigCo money. [1]
The first question is, does that sound reasonable? Do you want to subtract $400 from each paycheck for the sake of total strangers? And I guess the second question is, why aren't we doing that now? How much do each of us currently give to support other people in various ways?
I think Basic Income is a good idea. If people have more money, they'll be able to click on internet ads and buy things, and that will help the companies that many of us work for. But it won't be an even exchange and many people here will end up with less disposable income. I think that it will be worth it in the long run, to ensure that the economic engine that produces our paychecks continues to function. But I don't know if every UBI proponent is prepared to deal with the short term costs.
[1] I completely made these numbers up. Could be more, could be less.
Well, that's the idea. That's what the UI supporters are arguing for.
In exchange of that money, given to "total strangers" we get to live in a better country, and have the security of knowing we won't end up homeless on the unlikely case we can't find work anymore (yeah, I pay for that safety today - both methods can be either added or replaced, replacing is harder). Here at Brazil the numbers would be lower overall, but the consequences get bigger.
I think any implementation would need to start with a small value and increase slowly. It's not certain that the median wage is either viable or optimum, but might be a sane ceiling.
Basic income is dangerous for the society. The basic human being is, unfortunately, almost like an animal, he likes to sleep, eat, do nothing: you have to give him/her a "bone", a prize, to make him/her doing things. This prize is wage. If you give money to human beings for free, nobody will do jobs anymore. Only those who want to be richer, but are far less. You'll see people that will choose for a basic income, instead of a basic_insome+N, to clean dumpsters. Why someone would choose basic_income+N when that N is relatively small to clean dumpsters instead of staying home doing nothing? Give a basic income to everyone and NOBODY will clean dumpsters anymore, unless you set that N relatively high. Or basic income relatively low. Basic income will destroy the entire society in few months. Don't look at those nordic countries which applied basic income and the society is "working" well, because it depends from people, culture, and other factors. I'm from italy, and I can GUARANTEE that if do give basic income to italians, the society will fall badly.
The problem I have articles like these is that they create a false dichotomy. It's possible to have both.
These two policies solve very different problems.
The Basic Income supports the notion that it's not cool to force people to work for food, shelter, etc.
The minimum wage is supported for a bunch of different reasons, most of which I disagree with. But the one I do agree with is that a minimum wage sets a floor on the marginal productivity of labor. This will force employees and employers to improve the productivity of labor - a win all around.
I support the minimum wage because I think low wages are a result of humans behaving irrationally in the market. Employers usually don't think seriously enough about productivity improvements and many employees don't invest sufficiently in training and development to improve their marginal productivity.
The problem I have with minimum wage legislation is that it too often takes place in a vacuum. Look even Marxist economists agree raising the minimum wage can lead to job losses, so let's prepare for that by investing in training programs (vo-tech and community college seem like good bets).
Gig work that works would be smarter than both. One of the problems with basic income is that decouples work from income entirely. One of the things paid work accomplishes is encouraging certain kinds of human behaviors. From what I have read, every society that ever tried to promise that "we will take care of everyone, regardless of their contribution or behavior" had to reneg on that when it backfired on them.
Decoupling income from being the work equivalent of "chained to the stove" is a great idea. Gig work that is well designed allows both people of low productivity and of high productivity to participate on their own terms. If someone who isn't very productive is willing to accept a de facto lower than minimum wage hourly rate, they should be allowed to make that choice. It empowers them in ways that welfare programs do not.
I'm never quite sure what to think about articles (or ideas) like this. I think of my grandfather who served in the air force for 20 years. When he needed more money, what did he do? He picked up a paper route early in the morning. What did he do when the paper route + air force income still wasn't enough? He started driving a taxi during evening hours. And when those three jobs weren't enough? He opened up a service station/gas shop to serve the other taxi drivers, which eventually morphed into a full blown auto service shop which allowed him to quite all his other jobs.
As a software developer I am doing ok. I crawled my way up the ladder though from blue collar work. But I still have plenty of friends that never really went anywhere after high school. Some work fast food, some general labor, but they all make less than $8/hr. What do they do when then need money? Get a second job? No. They get on facebook and whine about it or make a gofundme account. One of my friend's even works at a warehouse 10 hours a day only 4 days a week. On those 3 days off he has does he work another job? No. He just plays video games all day, as does everyone else I mentioned.
It seems that people nowadays seem to think they only need to work one job, and if that job doesn't pay enough, it is the job's fault.
Granted, I know working 70+ hours a week at $6hr won't get you any where... But we all have to learn the climb the ladder. The complete lack of work ethic and skill sets I see today I don't think we can blame on the public schooling or government policies. I'd like to think it is the fault of the parents who never taught their own children to work. Perhaps they don't know how to work either. Yet I go back to thinking about my Grandfather. He lived out in the sticks and didn't really go to school. The family spent the money his dad made (at a brick factory) on buying supplies for gardening so they could have food. For meat they only had chickens and wild rabbits (both of which he refuses to eat to this day). So perhaps formal education isn't the magic bullet either. But something is amiss in our world today.
In one of the most flagrantly opportunistic political redefinitions I've ever seen, the UK recently raised the minimum wage and called it Living Wage: sufficiently accurate to be arguable but completely co-opting the concept without even acknowledging the intention.
Several young, intelligent people I know actually believe the fuss about a basic income they've heard is just a minimum wage increase.
I haven't run the numbers per-country but just the idea seems sufficiently interesting to be plausible. Allowing BS political branding to dilute it to "another random budget change" is a total disservice to not just the poorer part of society but also to the future of the social system.
I would think that a requisite for a basic income happening would be tax revenues growing faster than the cost of living. Is that happening? I'd be surprised, but maybe somebody who knows better can enlighten me.
[+] [-] kough|10 years ago|reply
The main drawback to a minimum wage is that it artificially increases the cost of labor, to the point where it's no longer worth it to an employer to hire a low-output employee. I think we'd all agree that increasing employment is a good goal, but an increased minimum wage actually hinders progress on that front. As the minimum wage increases, robots and other non-human investments start to look much, much more attractive. Many businesses would be happy to hire workers for less than minimum wage, but legally cannot, and so do not hire.
Of course, it's a complicated issue. Look at the employment of those with disabilities like Down Syndrome [0], for example. Are these employees worth hiring at $7.50/hour? No, for the most part, they're not. Are some? Sure, but on average there's no way. But are they worth hiring at $2.00/hour? Yes, and they and their families are willing for them to work at that wage, because there are huge benefits to being productively employed.
Recently these programs are coming "under attack" in various states. New Hampshire just made this practice illegal, for example [1]. We'll see how it plays out -- my bet is that a) few news outlets will follow up in a few years and see how many of these disabled workers are able to find new employment, and b) few disabled workers will be able to do so.
[0] http://www.witf.org/news/2014/07/thousands-of-disabled-worke...
[1] http://www.care2.com/causes/new-hampshire-bans-subminimum-wa...
[+] [-] QuotedForTruth|10 years ago|reply
[+] [-] Nogwater|10 years ago|reply
I don't agree, and I'm not sure why people would see employment for its own sake would be a good thing. I want to increase some of the things that employments brings (purchasing power, a sense of purpose, etc...) and not others (loss of time, feeling trapped, etc...).
[+] [-] petra|10 years ago|reply
Realistically, for people with disabilities that aren't being able to be in the regular labor market, there are some societal useful things to do, like volunteering(say in a soup kitchen), helping their community,etc. Those are probably activities that wouldn't be done otherwise, carry a real sense of value, and usually in a custom fit environment.
That is the situation at least in enlightened places with decent government services. I'm not sure about the US.
I wouldn't want that to be replaced with people at the margin being exploited at a shitty factory , where the work is meaningless and often depression inducing, sometimes risky, etc.
[+] [-] ThrustVectoring|10 years ago|reply
"Increase employment" is targeting the wrong measure.
[+] [-] mc32|10 years ago|reply
Tying this in to our own economy, this is what Bernie and the Unions miss (or perhaps they don't). A min wage increase of 50% will entice low skills Americans who were on Snap to enter the workforce, driving out foreign low skills workers.
And I agree with the increase. Too many of our workers possess too few marketable skills that jobs once the province of teenagers and part times have become the jobs for many adult household earning Americans.
[+] [-] a3n|10 years ago|reply
And? Why is that artificial increase a problem. Every law on the books is an artificial act.
I don't see many people wringing their hands over the mortgage interest deduction, another of those artificial changes to the economy.
[+] [-] pessimizer|10 years ago|reply
I don't think we do. Employment is not a good in and of itself, and a person who is working is not necessarily in a better position than a person who is not. People working for a wage that doesn't support their needs (which then has to be subsidized by the government) are just vehicles for transfer payments from government to garbage business.
> because there are huge benefits to being productively employed.
To make your assumptions explicit here, if you value employment for employment's sake, anything that maximizes the number of people employed is good. Why not negative wages? I suppose a full time job that pays less than it takes to feed and house a person and has to be supplemented with welfare in order to do so is a sort of negative wage...
[+] [-] rmc|10 years ago|reply
That's the point. A floor. Through which people should not have to work below at.
[+] [-] tryitnow|10 years ago|reply
And employers should focus on automating those low productivity tasks.
I'm not going to consider the case of people with disabilities - that's fine to have an exception for them. But that's not really what's being discussed in these debates.
I actually think the market wage is socially inefficient because it encourages people to take the short term gain of immediate cash over the long term investment of training/education. It also encourages employers to forego efficiency-enhancing improvements.
Now if humans were rational, 100% responsible, and conscientious, then they would forego low wages, focus on training to achieve higher levels of productivity and enhance the economy by doing so. Instead, there are many people who either through their own lack of judgment or unfortunate circumstances do not seek to optimize their marginal productivity of labor.
That's a market failure and minimum wage is one attempt to solve it.
[+] [-] superuser2|10 years ago|reply
Nope. Increasing good employment is a good goal; jobs which pay near minimum wage are not that.
[+] [-] branchless|10 years ago|reply
Bloomberg don't talk about land value tax. They are happy to talk about basic income because it's not real change.
[+] [-] p4wnc6|10 years ago|reply
But overall, many types of business have an inefficient profit surplus right now that should rightfully be eaten into by workers claiming more share as wage.
I also think there is a genuine moral argument to be made that society, in some cases, should intervene when a person believes they are willing to sell their labor at an unsustainably low price. It's not quite right to characterize a minimum wage as "denying" them that "opportunity" as much as it is saying that the "opportunity" itself is unhealthy, unrealistic, and a person's reasons for choosing it almost always involve forms of coercion that cannot be dealt with as effectively if the person gets locked into believing they actually must provide their labor so cheaply.
Incidentally, this is perhaps the most common thing I hear about the minimum wage (that it hurts employment due to marginal employment reduction on behalf of employers). A lot of people seem to think it's counter-intuitive and that it somehow shines real economic theory on everyone's pie-in-the-sky dreams of egalitarian wages or something. But really that's not true, this argument is extremely common and is brought up in almost every forum or discussion about minimum wage, whether it's just a bunch of nonsense troll comments on a YouTube video or in a place with a higher signal-to-noise like HN.
It always makes me do a double take because I don't want to end up regurgitating what is effectively "sponsored content" from wealthy libertarian types who spam out this message to ensure it trickles down to all the conversations about minimum wage. Like I said, I mostly agree with this, but with some reservations.
[+] [-] zxcvvcxz|10 years ago|reply
A minimum wage is simply not moral. It prevents me and you from entering into an employment agreement with which we may both benefit. Instead, the government is telling me how I have to interact with you.
The left-wing philosophy of a minimum livable wage is ironically hurting the new immigrants to these countries. The reality is that first-world nations have higher employment standards because citizens are more educated and capable. Instead of giving new immigrants, who are almost certainly less educated and capable (remember, they're trying to move to countries with better opportunities) the ability to work and gain experience, we leave them with little options.
And like the quote says, it's just bad for assimilation into the host society. Being able to work is fantastic for that. You have to learn at least a bit of the language. Interact with the people. Learn to follow the laws and customs of the new country. Without work opportunities, immigrants can often wind up stuck in their segregated ghettos. And high unemployment invariably leads to a lower quality of life.
Abolish the minimum wage. Give new immigrants the opportunities they want.
[+] [-] gorpomon|10 years ago|reply
The right-wing philosophy of wage bargaining is ironically hurting the workers of their countries. The reality is that first-world nations have predatory labor practices because citizens are systemically and by their own lack of resources unable to realize what fair wage is or how to effectively bargain for it. Instead of giving workers, who are almost certainly less educated and capable the ability live off their wage so they may better their lives constructively, we indenture them into subsistence living, where the minorest of life disruption can decimate savings.
It's just bad for the people living in the lower rungs of society. Being able to work at a living wage is fantastic for mitigating these shortcomings. You can actually do things like plan for the future and interact with people without worrying about the next big life problem. You can learn more labor laws to further advocate for yourself and others, and even the customs of other cultures, rather than fear someone cutting even your meager floor from under you. Without fair wage, workers can often find themselves being the "working poor", people whose jobs won't ever let them save enough money to do anything meaningful. And fair employment inevitably leads to high quality of life.
Institute a living wage. Give people the opportunities they want.
[+] [-] bluecalm|10 years ago|reply
This argument doesn't make any sense. It is often the case that preventing people from entering a contract thy both benefit from is beneficial for society. It's a standard social dilemma example of which is tragedy of commons.
You may argue against minimum wage but "simply not moral" is just a wrong argument. This kind of thinking is what frustrates me about common libertarian arguments. You can't just ignore social dilemma implications when arguing for voluntarily contract being the end of it.
[+] [-] pwthornton|10 years ago|reply
There are all kinds of things that the government -- and voters by extension -- have deemed it illegal to enter into contractually. You cannot enter into an agreement to be murdered. You cannot enter into an agreement that amounts to slavery. You cannot enter into a work agreement that violates safety law.
We could go on and on about this, but if you're arguing against contract law, you are many hundred years too late. Contracts have always been subject to laws and regulations in place.
[+] [-] InclinedPlane|10 years ago|reply
[+] [-] jes5199|10 years ago|reply
The right-wing philosophy that money-exchanging relationships should not be regulated is ironically destroying the economy, creating an underclass who must produce but cannot consume. New immigrants - who are often educated and productive in their home countries - are forced to enter the underclass rather than using their skills in the capacity most useful to society.
Strengthen the minimum wage. Give everyone a fair chance.
[+] [-] pharrington|10 years ago|reply
[+] [-] RivieraKid|10 years ago|reply
First it's both a simple welfare and tax system in one package. Basic income as typically understood is only half of the story.
It's also easier to reason about, the money flows are way more obvious, it's immediately clear whether you are a net contributor or receiver and it's easier to set the (few) parameters.
[+] [-] narrator|10 years ago|reply
http://www.zerohedge.com/sites/default/files/images/user9218...
The full study examining this phenomenon is here: http://www.scribd.com/doc/273843288/Welfare-Report-Final
[+] [-] mmanfrin|10 years ago|reply
It is the same thing.
[+] [-] enraged_camel|10 years ago|reply
Furthermore, why is it important to identify whether someone is a net contributor or receiver?
[+] [-] InclinedPlane|10 years ago|reply
People respond to incentives, it's been proven time and time again. A negative income tax isn't the worst idea, but it has all the wrong incentives. The more money you earn, the less help you get. Which seems sensible on the surface but can lead to situations where people ask themselves "why should I even bother working a job I hate when I can get the same money without working?"
The advantage of basic income is that no matter what you do you still get that money. You're still incentivized to work because a life on basic income won't exactly be a life of luxury. In fact you might be more incentivized to work for several reasons. One because working will get you money you can spend on stuff you want, not just stuff you need to survive. This is significant from a quality of life aspect. Also, working will enable you to get ahead, instead of just being on a treadmill as so often happens today. You'll be able to have more choice where you work and how much, and you'll be able to set aside some of your time to pursue new careers.
I don't think people understand just how much potential and talent is being wasted and misused in our economy at present. Human beings aren't meant to be drones, that's not our calling. And it's an insult to the human race to imply that a significant portion of the population is somehow genetically fit for nothing other than menial labor. That's never been my observation. In the vast majority of people I've met there is almost always a depth and a potential that is not being tapped by the current economic system. And you see some of this coming out with new economic models enabled by the internet. More freelancing, more startups, more people engaging in their passion projects through crowd funding or what-have-you. More people learning new things and trying new things because the internet makes discovery of knowledge a lot easier. That's true of musicians, artists, inventors, and so many others.
I can only imagine the world we'd have if we could unlock that huge untapped potential.
[+] [-] Turing_Machine|10 years ago|reply
A big benefit of the basic income model is that there's really no room for lawyers, accountants, etc. to pervert the process. If everyone gets the same amount, there's no way to game it that I can see (now, I'm sure someone, somewhere will figure out a way to game it... that's what people do, but at least on the face of it it seems far less gameable than our current tax and welfare setup).
If it were made a part of the FairTax model (which would be easy to do, given that that model already requires cutting everyone a check), then gameability would take another huge hit.
[+] [-] sharemywin|10 years ago|reply
[+] [-] yk|10 years ago|reply
Plus there are a lot of very good reasons for tax breaks (for example screen readers for the blind). So while I fully agree that a well engineered tax system would be a lot simpler than what we have now, I am not sure if a basic income should just be dealt with by taxation.
[+] [-] protomyth|10 years ago|reply
[+] [-] ThomPete|10 years ago|reply
UBI is based on the premise that there are fewer and fewer jobs to be had which gives a proper salary.
So negative income tax under this premise makes no sense.
[+] [-] philwelch|10 years ago|reply
[+] [-] anexprogrammer|10 years ago|reply
I almost stopped reading there. Sweden is not socialist, and never has been.
Public ownership of production, workers control and management, social equality and a democratic plan of production. Nope, none of those. Just as much privatisation and market forces as other economies.
They just chose to fund their welfare state, education, prison reform and pensions rather better than some others. There's been some drawbacks, but you won't be hearing many renditions of the Red Flag.
[+] [-] snowwrestler|10 years ago|reply
So "socialism" today (usually used with some variant of "democracy") has been repurposed to mean a political ideology that values government social support programs over low taxation.
[+] [-] harryh|10 years ago|reply
Just something to keep in mind when discussing this topic.
[+] [-] leroy_masochist|10 years ago|reply
"One problem with a universal basic income, of course, is that it will make a country attractive to even more immigrants from poor countries where 550 euros a month looks like a princely amount. Keeping borders open will hardly be an option."
What he's missing here is that the UBI is only payed to citizens. If you get rid of the minimum wage (because everyone gets paid the UBI no matter what), then citizens become much more willing to work for low wages, because their basic cost of living is already paid-for.
By contrast, UBI would not be paid to immigrants. Non-citizens would still be working in the US to some extent, but the incentive for people to sneak across the border would be severely reduced if prevailing low-skill wages fell from $10 to, say, $5.
It's also worth mentioning that to the extent that deterring undocumented immigration is the policy of the United States, doing it with economic incentives is (IMO) a much more ethically sound solution than doing it with walls, violence, and incarceration.
[+] [-] yanilkr|10 years ago|reply
If someone gives you free stuff, they will expect controls like where you are allowed to spend your money and time.
This model of taking from the productive sources and rewarding everyone else will have to break at a certain point. how come you get rewarded for enjoying the gossip column and I spend extra effort doing something else which is harder and my earnings are taken away? so lets put a control on how many hours someone else works. The productive people are dragged down and discouraged.
Automation is replacing the labor that humans don't have to do. This frees up human capital so we can focus our endeavors somewhere else. America already provides free education up to high school and with this education why should people of next generation aim for minimum wage jobs?
In a modern capitalistic economy it is very difficult to make money without adding value to society and this equilibrium is reached naturally due to free markets despite of politics meddling with it.
[+] [-] paulpauper|10 years ago|reply
Many people may agree to work for less than the current minimum wage, and on more flexible terms, if they're supplementing a guaranteed income, not scrambling to avoid having to beg for food.
But this is not the case. What everyone seems to forget that despite the low labor force participation rate, the poorest are not starving to death; in fact, they're more likely to be obese than higher earners.
The assumption that a UBI, on top of existing welfare programs, will make people more compelled to work seems like a stretch.
[+] [-] ThomPete|10 years ago|reply
Many people wrongly discuss the premise of basic income in the context of whether it's a better solution for for the job market. I.e. as a better way to solve unemployment fluctuations which in this view are still going up.
But the whole point about Basic Income is what we do about there being fewer and fewer jobs that pay a proper salary.
[+] [-] ThrustVectoring|10 years ago|reply
Attacking rent-seeking behavior would likely have a bigger impact on the everyday lives of the poor. Land-value taxes are a good place to start.
[+] [-] DickingAround|10 years ago|reply
We would get even more massive corruption almost instantly. For example, some people would lobby to get those tax-revenue intended for the basic income to be redirected to other projects. The people wouldn't fight the loss of a $1/year/person here or there. There would also be reams of special cases to give some people more and some people less. And like today, some people would continue to carve out exceptions so they didn't have to pay those taxes to feed the basic income. That money would be divvied up every way except as a basic income and people would spend all their time fighting over who got it instead of generating the value that backs it.
I don't live in the countries trying this so I can't say if it's safe to give their government that much power, but I know the US government is no where near ready for any more power than they already have.
EDIT: Fixed a typo
[+] [-] Overtonwindow|10 years ago|reply
On the other hand, if the federal government did not give away all of the profits from American natural resources, and instead took a percentage like most developed countries - and the state of Alaska - that money could be turned around into a basic income for all. That I believe is where a basic income should come from: use a nationally produced commodity sold abroad and the profits therein to give back to the citizenry.
[+] [-] forrestthewoods|10 years ago|reply
Basic income and/or higher minimum wage doesn't solve all problems. It even causes some new ones. Which isn't to say it isn't a good idea. But we probably don't discuss the problems as much as we should. I don't think it's the silver bullet many people wish it to be.
[+] [-] karmacondon|10 years ago|reply
From what I can tell the average salary of a hackernews reader is above $100k. Each of us would probably end up paying ~$800+ per month in additional taxes, maybe up to $1,500/mo for those making that BigCo money. [1]
The first question is, does that sound reasonable? Do you want to subtract $400 from each paycheck for the sake of total strangers? And I guess the second question is, why aren't we doing that now? How much do each of us currently give to support other people in various ways?
I think Basic Income is a good idea. If people have more money, they'll be able to click on internet ads and buy things, and that will help the companies that many of us work for. But it won't be an even exchange and many people here will end up with less disposable income. I think that it will be worth it in the long run, to ensure that the economic engine that produces our paychecks continues to function. But I don't know if every UBI proponent is prepared to deal with the short term costs.
[1] I completely made these numbers up. Could be more, could be less.
[+] [-] marcosdumay|10 years ago|reply
In exchange of that money, given to "total strangers" we get to live in a better country, and have the security of knowing we won't end up homeless on the unlikely case we can't find work anymore (yeah, I pay for that safety today - both methods can be either added or replaced, replacing is harder). Here at Brazil the numbers would be lower overall, but the consequences get bigger.
I think any implementation would need to start with a small value and increase slowly. It's not certain that the median wage is either viable or optimum, but might be a sane ceiling.
[+] [-] faint_coder|10 years ago|reply
[+] [-] tryitnow|10 years ago|reply
These two policies solve very different problems.
The Basic Income supports the notion that it's not cool to force people to work for food, shelter, etc.
The minimum wage is supported for a bunch of different reasons, most of which I disagree with. But the one I do agree with is that a minimum wage sets a floor on the marginal productivity of labor. This will force employees and employers to improve the productivity of labor - a win all around.
I support the minimum wage because I think low wages are a result of humans behaving irrationally in the market. Employers usually don't think seriously enough about productivity improvements and many employees don't invest sufficiently in training and development to improve their marginal productivity.
The problem I have with minimum wage legislation is that it too often takes place in a vacuum. Look even Marxist economists agree raising the minimum wage can lead to job losses, so let's prepare for that by investing in training programs (vo-tech and community college seem like good bets).
[+] [-] Mz|10 years ago|reply
Decoupling income from being the work equivalent of "chained to the stove" is a great idea. Gig work that is well designed allows both people of low productivity and of high productivity to participate on their own terms. If someone who isn't very productive is willing to accept a de facto lower than minimum wage hourly rate, they should be allowed to make that choice. It empowers them in ways that welfare programs do not.
[+] [-] esaym|10 years ago|reply
As a software developer I am doing ok. I crawled my way up the ladder though from blue collar work. But I still have plenty of friends that never really went anywhere after high school. Some work fast food, some general labor, but they all make less than $8/hr. What do they do when then need money? Get a second job? No. They get on facebook and whine about it or make a gofundme account. One of my friend's even works at a warehouse 10 hours a day only 4 days a week. On those 3 days off he has does he work another job? No. He just plays video games all day, as does everyone else I mentioned.
It seems that people nowadays seem to think they only need to work one job, and if that job doesn't pay enough, it is the job's fault.
Granted, I know working 70+ hours a week at $6hr won't get you any where... But we all have to learn the climb the ladder. The complete lack of work ethic and skill sets I see today I don't think we can blame on the public schooling or government policies. I'd like to think it is the fault of the parents who never taught their own children to work. Perhaps they don't know how to work either. Yet I go back to thinking about my Grandfather. He lived out in the sticks and didn't really go to school. The family spent the money his dad made (at a brick factory) on buying supplies for gardening so they could have food. For meat they only had chickens and wild rabbits (both of which he refuses to eat to this day). So perhaps formal education isn't the magic bullet either. But something is amiss in our world today.
[+] [-] sambe|10 years ago|reply
Several young, intelligent people I know actually believe the fuss about a basic income they've heard is just a minimum wage increase.
I haven't run the numbers per-country but just the idea seems sufficiently interesting to be plausible. Allowing BS political branding to dilute it to "another random budget change" is a total disservice to not just the poorer part of society but also to the future of the social system.
[+] [-] Joeboy|10 years ago|reply