Replacing social welfare with a basic income

Seth Brundle

Niall Keane wrote: »

What will we do in the not so distant decades ahead when technology replaces humans as cheaper and more reliable units of labour?

I'm fairly sure that this has already begun and they sent a machine back in time to kill a someone called Conors.

Suryavarman

ancapailldorcha wrote: »

I wouldn't be so sure of this. Here is a good video by CGP Grey on the subject:

https://www.youtube.com/watch?v=7Pq-S557XQU

While I would say that the current generation of skilled workers should be ok, this is something that will soon become an issue. Ideally, population growth would begin to plateau but that shows little signs of happening given the economic states of Africa and the Middle East.

Automation has never had anything other than a short run impact on employment. There's no particular reason that will change anytime soon. This post from /r/Badeconomics gives a better overview of the topic than I ever could.

BoJack Horseman

Godge wrote: »

Have you done those calculations?

Do you propose eliminating all tax credits?

I can indeed multiply numbers!

The whole point is that the guaranteed income replaces tax credits & other social welfare benefits, otherwise its beyond unaffordable.

There are 2.9m working age adults in Ireland
The rate of dole in Ireland is pro-rated at €814 per month.

2,900,000
x 814 (per month)
= €2,360,600,000 - cost per month
x 12 (months)
= €28,327,200,000 - cost per year

The S/W budget is a little over €19bn... but of that pensioners take €7bn.

This would create a bomb under the governments finances.
And because this income would be the maximum for many, there would be no additions like the various allowances for schooling/uniforms and things like that.

For it to level out, the 'guaranteed income' would need to be close to €500 per month.... or a 1/3rd cut for those on the dole.

Politically impossible

OleRodrigo

I cant see it happening without a EU wide policy. In that case, there wont be any need to figure out where the money comes from through tax revenue, just like there wasn't any need to fund quantitative easing through tax revenue. When the problem is strategic rather than operational, its amazing where the money can come from !

As for the comments about IT based automation being a red-herring, this time it will be different. It has the potential to create much higher amounts of wealth than the Industrial revolution, but currently, there is much less mechanism for redistribution.

Probably, it will be only be when Doctors, lawyers, IT professionals etc, are replaced by systems that do the same job more cost effectively, and create much fewer high skilled jobs than they are downgrading, that we'll see any significant outcry. Unless you think the workforce should have masters degrees and be willing to update their skill sets every 3 to 5 years.

For the moment, its just those in transport, operations and services that will be hit, and who cares about those guys, right? Just look at how people viewed the Luas workers dispute. At the heart of that was the right to a decent standard of living for unskilled/ semi-skilled labor. But the anger against them shows how neo-liberal polices have created inequality and social division. Middle Class and working class? These notions no longer make any sense in a digital economy, as well as being in pretty poor taste.

Just finished Paul Masons ' Post Capitalism '. Really good book on the subject for anyone interested in going beyond soundbites.Great to see the left finally finding an intellectually coherent voice beyond the shortcomings of socialism.

Loafing Oaf

They were talking about UBI on Vincent Browne last night and it was actually Fianna Fail policy going into the last election:
http://www.independent.ie/irish-news/politics/fianna-fil-to-promise-every-citizen-188-every-week-34317330.html

Seems like it's a lot more mainstream than I thought...

ancapailldorcha

KomradeBishop wrote: »

Am I able to post here? I'm technically not banned, as the mods began a clean slate when this forum was created - but they left this 'clean slate' open to fuzzy/arbitrary interpretation, so I don't know if I can actually post.

My personal view of the BI, is that it is a trap, which can be used to consolidate and then destroy the welfare system - it can be transformed from a universal income, into a business subsidy, by slashing wages over time by the same amount as the BI.

I've got much more elaborate/detailed views on that, but will see where forum bans stand, as I don't know if I can contribute more.

You can post because this forum is technically new and you were never banned from it. However, your previous record still applies and you do not have a clean slate. Call it one last chance.

KomradeBishop

I've had that line put to me before, as a pretext for banning me in hair-trigger fashion, so think I'll just not post here.

ancapailldorcha

Suryavarman wrote: »

ancapailldorcha wrote: »

I wouldn't be so sure of this. Here is a good video by CGP Grey on the subject:

https://www.youtube.com/watch?v=7Pq-S557XQU

While I would say that the current generation of skilled workers should be ok, this is something that will soon become an issue. Ideally, population growth would begin to plateau but that shows little signs of happening given the economic states of Africa and the Middle East.

Automation has never had anything other than a short run impact on employment. There's no particular reason that will change anytime soon. This post from /r/Badeconomics gives a better overview of the topic than I ever could.

I'll have to give this a read. Thanks.

Loafing Oaf

And more media coverage:

http://www.independent.ie/opinion/columnists/dan-obrien/replace-welfare-state-with-cash-for-all-radical-but-would-it-work-here-34806138.html

Predictably for a business head Dan is queasy about the idea:

But a guaranteed income could have less welcome consequences. In every society there is a very broad spectrum of people, from those who are workaholics to those who are ardent leisure lovers. A basic income could make more people who prefer leisure over work do more of the former and less of the latter.

At the same time, he's probably on the money here:

While policy experimentation is a good thing, and something we could do more of in Ireland, taking a leap as enormous as the guaranteed basic income would be better done after seeing how it works in other countries first. In this instance, there is a 'late mover' advantage to be had by learning from the mistakes of others, rather than being in the vanguard.

Dohnjoe

There's also the social reaction to this

I begrudgingly support social welfare as a concept because it's a necessary safety net - also the fact that it has to be qualified for and incentivises work

Basic income would do away with those last two crucial points. It would become an entitlement, black market work would explode, people would be going off to live in cheap countries whilst mooching off it, abuse would be rife.. as a result administration to service it would have to increase.

A social welfare system that rewarded not working, not contributing, and funded by a pyramid scheme tax system

No wonder the Swiss overwhelmingly voted to reject the notion - in it's current form it's unworkable. And in it's workable form it's essentially the same as the social welfare.. just worse

Bob24

Dohnjoe wrote: »

There's also the social reaction to this

I begrudgingly support social welfare as a concept because it's a necessary safety net - also the fact that it has to be qualified for and incentivises work

Basic income would do away with those last two crucial points. It would become an entitlement, black market work would explode, people would be going off to live in cheap countries whilst mooching off it, abuse would be rife.. as a result administration to service it would have to increase.

A social welfare system that rewarded not working, not contributing, and funded by a pyramid scheme tax system

No wonder the Swiss overwhelmingly voted to reject the notion - in it's current form it's unworkable. And in it's workable form it's essentially the same as the social welfare.. just worse

Agree with all this, and I would add there also is the question of who would be entitled for it.

If you only give it only to citizens you have a very unfair society where ecomomic migrants are paying tax to fund BI but are not entitled for it (a national and a non-national on the same job and wage will have vastly different incomes), but if on the other hand it applies to all residents it could trigger mass immigration and destabilise the system.

Geuze

Bob24 wrote: »

I think the idea of basic income is flawed at the core.

Wealth can only be determined comparatively to what other people have. So I tend to think that if everyone has that garanteed income, it will end up being worth nothing. To oversimplify and explain what I mean in a sentence: rents and basic need products would gradually increase in price to take into account the fact that everyone has additional purchasing power due to that basic income, to the point were surviving just on that income won't be possible anymore.

Why do you say that people have extra purchasing power?

Pensions, child benefit, welfare. They would be replaced, not increased.

Bob24

Geuze wrote: »

Why do you say that people have extra purchasing power?

Pensions, child benefit, welfare. They would be replaced, not increased.

The key difference is that it is universal and unconditional purchasing power everybody would have. Social welfare is designed to compensate inequalities in society, whereas with UBI since you give the same to everyone you are actually not doing that any-more. One can think the welfare state is not working or not legitimate, but I don't think it is accurate to say UBI would take over its role in full.

Wouldn't some of the worst off (currently) be even worse off in the case of a UBI?

Those who require Home Carers would struggle to afford to pay one, house themselves and feed themselves from €188 pw.

Bass Reeves

A basic income system has both advantages and disadvantages as well as unforeseen pitfalls. The theory behind it is that you pay every person in the state a basic income ( it seems in Ireland that it is proposed that this is set a 800/month) which replaces the majority of the social welfare payments in the state.

I have only seen some details on it but the one I saw was that there would be a top up for OAP's diability, carers and a childern allowance. There was also a proposal that maybe young adults in the 18-25 would have a lower rate to those above that age. The theory behind it that then people then have a choice of whether to work or not and that it would eliminate the income traps associated with social welafre. Allied to this would have to be a revamp of the health service.

The advantages of it are that a lot of subsidary welfare payment and waivers would go. However would it be acceptable to eliminate rent allowance, waivers for bins etc as well as thing like free travel, fuel allowances and TV licience for the OAP's. A basic income to work would mean that all these type of subsdidary allownces would have to go and modest top ups for contributary OAP and disability allownce. You could also see issue regarding paternity and maternity leave. Workers on these would see no benifit on staying ouy of work in the private sector where employers do not make a contribution to wages during these periods compared to protected sectors where employers pay virtually full wages. these are where I see some big issues issue. A basic income policy would be very hard to bring in piecemeal.

The big disadvantage would be that it might again cruify PAYE workers. You would have an issue with the black economy. In reality this would be limited but would drive certain sectors underground such as domestic house maintenace (painting, gradening etc). In gereral however it would have an advantage that there would be no welafre trap to people working part time or taking tempory work. How this would pan out regarding wages. You alos have that those on higher wages would pay a higher rate of tax which again would incentive those in non PAYE sectors to avail of any tax avoidance schemes in an incentive to shelter income. As well it would mean that those that do not qualify for full contributory OAP would still qualify fpr basic income allownce.

This might also cause issue's as workers get older that they would down scale there working week and use the basic payment to support a lower level of working availability. In the self employed sector this could become an issue as well as in physically demanding work. The ability to leave the worforce in your late 50's or ealy sixties might narrow the working population and leave the PAYE sector holding the can again.

On 3rd level Education it would level the playing field and those from the PAYE sector would be winners. As there children would recieve a basic income the same as other students the only barrier would be the registeration fee. It would be intresting to see if a policy maker that bough in a basic income would have the political guts to do away with grants towards fees etc. There could be no excuses that there was barriers within society to education unless colleges started to charge US style college fees as a student with a Basic income and the option to work part time as well should be able to finane college. However I am sure that there on the left would advocate for such exceptions.

FreudianSlippers

Other than the "black economy" point (which I believe is moot) and the slightly odd tangent about college fees, UBI is flawed inherently when compared to flat tax with negative income tax. Same benefit without the pitfalls of UBI.

FreudianSlippers

Deleted User wrote: »

Wouldn't some of the worst off (currently) be even worse off in the case of a UBI?

Those who require Home Carers would struggle to afford to pay one, house themselves and feed themselves from 188 pw.

No. As has been pointed out even by opponents of UBI, there would be top-ups to deal with specific issues as is already the case. The current proposal probably wouldn't scrap the DSP (although it should) and they would continue to dole out money hand over fist.

Geuze

http://www.socialjustice.ie/content/policy-issues/type/basic-income


Here is what Social Justice Ireland have to say about a UBI.


SJI 2012 paper on UBI:

http://www.socialjustice.ie/sites/default/files/attach/policy-issue-article/3318/2012-09-11-bihowandwhyinirelandbiencongressmunich20121.pdf

Geuze

SJI 2012 paper on UBI

Total cost = 36.2 bn, with other payments bringing the net cost to 39.2 bn.


Required taxes = 41 bn, to cover net cost plus provide surplus as provided by current tax/welfare system.


Financed by 45% flat tax on all personal income [36 bn], plus employers PRSI.

Water John

Lady from UBI Ireland on with Moncreiff today was saying it would not mean higher rates income tax but tax on all earned income.

Geuze

Water John wrote: »

Lady from UBI Ireland on with Moncreiff today was saying it would not mean higher rates income tax but tax on all earned income.

Yes, as all tax credits/allowances would be abolished and replaced with the UBI.

The ATR would rise.

Loafing Oaf

UBI official Fianna Fail policy and Willie O'Dea was apparently talking it up the other week.

http://www.politicalirish.com/threads/guaranteed-minimum-income-a-good-fit-for-ireland.11591/#post-87003


Do we think they will actually implement it if as seems highly likely they're leading the next government?

Let's just say it would be very helpful in my current situation.:rolleyes:

Bass Reeves

I am all for it but no rent supplement, no income supplement, no disability, no OAP, no free travel, no single parent allowance or no TV licience, more than likly a children allowance. You get a payment and state absolves itself of any other responsibilities to you. It up to you to manage your money and to workaround supplement it and raise your children

troll_a_roll

I think it's a great idea.

There might be more home carers than exist now as people would be free to volunteer.

People have forgotten that they have lives to live. Our current society is all about work, money and making ends meet.


A universal income could radically change and re-invigorate our society. A universal income would make clear to people that they have the right to choose how to live their lives. They don't need to work.

That's a massive change from what we have now.

Our society would be much more resilent if we had a universal income.

It'd be paid to citizens only, and immigration would have to be seriously curtailed. No problems from me on those fronts; the Irish government and country is supposed to exist for the benefit of Irish people.

blanch152

troll_a_roll wrote: »

I think it's a great idea.

There might be more home carers than exist now as people would be free to volunteer.

People have forgotten that they have lives to live. Our current society is all about work, money and making ends meet.


A universal income could radically change and re-invigorate our society. A universal income would make clear to people that they have the right to choose how to live their lives. They don't need to work.

That's a massive change from what we have now.

Our society would be much more resilent if we had a universal income.

It'd be paid to citizens only, and immigration would have to be seriously curtailed. No problems from me on those fronts; the Irish government and country is supposed to exist for the benefit of Irish people.

If everyone sits at home to collect the universal income, who pays for it?

segosego89

troll_a_roll wrote: »

I think it's a great idea.

There might be more home carers than exist now as people would be free to volunteer.

People have forgotten that they have lives to live. Our current society is all about work, money and making ends meet.


A universal income could radically change and re-invigorate our society. A universal income would make clear to people that they have the right to choose how to live their lives. They don't need to work.

That's a massive change from what we have now.

Our society would be much more resilent if we had a universal income.

It'd be paid to citizens only, and immigration would have to be seriously curtailed. No problems from me on those fronts; the Irish government and country is supposed to exist for the benefit of Irish people.

I think it's the way to go also. Jobs are going to become more and more precarious as the years go by. Especially lower income jobs. Willie O' Dea has done a lot of work researching UBI since the 90's where a green paper was produced on the concept. Although at the time the concept was considered unsuitable, the economy has changed so much in the last 14 years that I think UBI's time has come.

I've contacted a number of TD's who represent Social Welfare for their respective parties and almost all of them are open to UBI whilst some were outright supportive. I even contacted Minister Varadkar and his office said that they're inquiring about the concept even though Fine Gael has traditionally held a low opinion on UBI.
I sent a letter to the Committee On Social Protection in the Oireachtas recently urging them to organize a deliberative discussion regarding the setting up of a UBI commission to ascertain whether it would be an improvement over the current system. Recently a similar committee was set up in the UK parliament last month where they had discourse on the topic.

Social Justice Ireland released a document entitled "Costing a Basic Income for Ireland" a couple of months ago on their website detailing the costs involved in the setting up of the UBI if anyone has any interest in perusing the figures : https://www.socialjustice.ie/content/policy-issues/costing-basic-income-ireland

segosego89

blanch152 wrote: »

If everyone sits at home to collect the universal income, who pays for it?

UBI is only a basic income. You can't get a lot of the nice things in life with that kind of income. Very few people in middle class jobs such as accountants, solicitors etc would quit their professions to sit at home on an income of 188 Euros per week if a UBI was to be hypothetically implemented.
Also one of the great things about a UBI is that it gets rid of the welfare trap meaning that you wont lose your UBI if you started to take up work to supplement your Basic Income.
In some ways it would be an incentive for some people who work in certain sectors that are becoming more precarious as the years go by.

troll_a_roll

Technology is making it very easy for companies to reduce the working hours of their staff.

Work is becoming far more precarious. Employment is offered on ever shortening timescales, of only days and hours in some cases. Social Welfare is not offered on those timescales.

That's a fundamental problem and it'll become worse as technology and the gig economy becomes more widespread.


For the Department of SP to keep track of lots of people who are working short hours here and there would be impossible. A universal income is far more pragmatic to administer.

Bob24

One problem with UBI is outlined by the last few post: it is supported by a strange aggregate of very economically liberal and very left leaning people.

To the first group it is a way to get rid of the social welfare system and replace it by a simpler system which is no more costly (I think the current experiment in Finland even claims there would be cost cutting). This means UBI would be a very low figure and not enough to live decently in a place like Dublin (an by decently I just mean having proper housing and healthy enough food to eat, nothing fancy). To the second group this would be a higher figure and/or a top-up to already existing social welfare benefits. This would allow to live decently but the cost would be unbearable for taxpayers especially if employment levels are going down.

Both group see UBI as an answer to the fact that employment for the lower and middle class is reducing and becoming more precarious in Western countries (the difference is how much wealth redistribution they are expecting from the ones with stable decent jobs to the ones with no jobs or precarious employment); but once they clash their ideas of what UBI should be I don't think they will be able to find a compromise. Also, I personally see UBI more as a painkiller than a cure which doesn't fix the actual problem and will end up letting the patient die with less pain and, but die anyway.

troll_a_roll

With respect Bob, it's not quite clear what points you're making there.

Technology allows companies to produce products much more easily and cheaply than previously. They can use more robots and less people.

These benefits to the companies are provided by technological improvments, not by the sweat and tears of the corporations themselves. Some corporations may engage in research but lots of new technology is received for free from university researchers.

It should be recognised that corporations are gaining huge benefits from receiving new technology effectively for free from our societies. They need to pay back in the form of taxes.

In the future there won't be enough work for everybody in our society but corporations will still be able to produce large quantities of products.

Corporations must pay sufficient tax to support our societies. If they don't we must get used to a system where there isn't enough work and there isn't enough tax being paid.


I think politicians need to start addressing this problem now.

A universal income, paid for by increasing taxes on corporations, is the only sustainable way forward. The alternative is massive societal problems.

Bob24

You are raising real questions around whether technological progress is going to reduce employment opportunities for the mass and whether creative destruction is still a thing.

But my point is that accepting the end of employment as a fact of life and seeing the answer as taxation on corporations who will (why and how?) accept to pay enough tax in every country for a growing unemployed population to live a decent life is - in my opinion - being a fool and missing a lot of the picture.
This is both because assuming those who own and run these corporation will accept a vast transfer of wealth is being very optimistic and because work also does structure society and helps many develop and have a social life, so UBI would only make sense with a completely new model of society and not on top of the one we currently have.

That is why I think left wing supporters of UBI are fooling themselves, whereas the liberal supporters are in my opinion much more pragmatic as they have a much cheaper version of UBI in mind - which is the only workable one in the long term - and see it as a way to tell the masses "take that money and stop complaining", but this is not an approach I personally support.

troll_a_roll

Bob, you say that corporations won't pay 30% tax but individuals seem capable of paying up to 60% tax.

Why do we expect individuals to pay more to society than non-human pseudo-people like corporations?


Don't forget, tax is paid from profits.
It's not wealth transfer, it's normal taxation, and it's intended to make our society viable.


Are the corporations really so greedy that they refuse to share with others?
It seems that they are; and it further seems that politicians will defend their right to be greedy.


We need new politics which delivers for ordinary people.

The end of employment would appear to be a fact of life.


The loss of employment isn't something which should be mourned; rather it is something which should be celebrated. Finally, humans would be free to do what they want.


Of course there are too many humans, so we should also celebrate our falling populations. A falling population is a good thing in the current scenario.

Bob24

troll_a_roll wrote: »

Don't forget, tax is paid from profits.
It's not wealth transfer, it's normal taxation, and it's intended to make our society viable.

Any tax is a wealth transfer: an individual or organisation (which is a proxy for the individuals who own it) gives money to a government either redistributes it to someone else or uses is to pay for infrastructure or services which are not only benefiting the person or entity who paid for that tax.

keane2097

Bob24 wrote: »

You are raising real questions around whether technological progress is going to reduce employment opportunities for the mass and whether creative destruction is still a thing.

But my point is that accepting the end of employment as a fact of life and seeing the answer as taxation on corporations who will (why and how?) accept to pay enough tax in every country for a growing unemployed population to live a decent life is - in my opinion - being a fool and missing a lot of the picture.
This is both because assuming those who own and run these corporation will accept a vast transfer of wealth is being very optimistic and because work also does structure society and helps many develop and have a social life, so UBI would only make sense with a completely new model of society and not on top of the one we currently have.

That is why I think left wing supporters of UBI are fooling themselves, whereas the liberal supporters are in my opinion much more pragmatic as they have a much cheaper version of UBI in mind - which is the only workable one in the long term - and see it as a way to tell the masses "take that money and stop complaining", but this is not an approach I personally support.

It seems like in the end game the corporations would be committing seppuku if they refused, as they would be creating products to sell to an ever dwindling number of people with any money available to buy them.

What happens at the end when Apple, Google and whoever else have gathered up all the money? It probably becomes kind of valueless at that point does it?

I guess that leaves us peering into a future that would seem to demand either that we eternally come up with need jobs that only humans can do, or we have that completely new model of society you mention.

This might take a long time to come to a head of course, but it seems like one or the other has to happen (and the first one doesn't seem possible).

blackwhite

troll_a_roll wrote: »

With respect Bob, it's not quite clear what points you're making there.

Technology allows companies to produce products much more easily and cheaply than previously. They can use more robots and less people.

These benefits to the companies are provided by technological improvments, not by the sweat and tears of the corporations themselves. Some corporations may engage in research but lots of new technology is received for free from university researchers.

It should be recognised that corporations are gaining huge benefits from receiving new technology effectively for free from our societies. They need to pay back in the form of taxes.

In the future there won't be enough work for everybody in our society but corporations will still be able to produce large quantities of products.

Corporations must pay sufficient tax to support our societies. If they don't we must get used to a system where there isn't enough work and there isn't enough tax being paid.


I think politicians need to start addressing this problem now.

A universal income, paid for by increasing taxes on corporations, is the only sustainable way forward. The alternative is massive societal problems.

The notion of companies paying through additional taxation for the benefit they get from developments in state-funded research is severely flawed on one key point.
There's no global taxation pool - and there's no way of stopping a company in one country making use of a technological advance developed in a different country.

What entitlement does the Irish state have to claim additional taxes as "compensation" for research performed and funded in the UK, or the US, or anywhere else outside of Ireland?

Strangely enough - we already have a mechanism to make companies pay for any technological advances that they use, but didn't develop themselves - without resorting to a blunt and flawed taxation approach.
Intellectual property laws, patents and licencing already provide a mechanism whereby companies can be forced to pay for using technologies that they didn't come up with themselves, and in this case the royalties or licence fees actually go back to whatever institution actually developed the tech as well.

Bob24

keane2097 wrote: »

It seems like in the end game the corporations would be committing seppuku if they refused, as they would be creating products to sell to an ever dwindling number of people with any money available to buy them.

What happens at the end when Apple, Google and whoever else have gathered up all the money? It probably becomes kind of valueless at that point does it?

Yes that is a valid point, but unless there is some kind of global governance structure (probably non-democratic as I don't see how global democracy would work) to channel these companies and set the long term goal, they will all follow their own short to medium term interest which is making as much profit as possible (and you can't blame them really as this is capitalism and what shareholders are expecting). Actually if you look at most developed Western countries, they are already doing that: global corporations are automating jobs as much as possible, moving jobs to cheaper locations as much as possible, and avoiding taxation as much as possible in order to maximise profit, but in the long term this is hitting the purchasing power of the lower and middle class as well as weakening nation-states which are getting less tax income while having to spend more and therefore building up unsustainable debt.

This is also getting the "losers" of this process to revolt (and vote for Brexit, Trump, etc) which threatens the system. And I think UBI is seen by some as a way to calm them down (shut them up?). But I don't think it will work once it becomes clear that the UBI some liberal people support is nothing like the UBI some socialist people support, and that only the first one is financially viable whereas only the second one would indeed buy social peace.

troll_a_roll

Bob24 wrote: »

...

This is also getting the "losers" of this process to revolt (and vote for Brexit, Trump, etc) which threatens the system.

And I think UBI is seen by some as a way to calm them down (shut them up?).

But I don't think it will work once it becomes clear that the UBI some liberal people support is nothing like the UBI some socialist people support, and that only the first one is financially viable whereas only the second one would indeed buy social peace.

I can't follow your descriptions of the different types of Universal Basic Income.

What is the second type of UBI which you're referring to?
You admit that it works. Why don't we implement whatever type of UBI that is?
Oh, I see now that you say the second type is financially unviable.
What type of UBI is that and why do you think it's financially unviable?




If you believe that a universal income cannot work, and you also believe that automation is likely to continue and therefore that job losses will continue, do you think our societies are doomed?

Do you think means-tested social welfare is a better model than universal income?

Do you think governments should encourage population growth?

Who's going to buy these corporate's products if most of the population is out of work due to robots taking the jobs?

Basic Income answers that.

Bob24

@troll_a_roll - see my previous post for the 2 types I mention:

Bob24 wrote: »

One problem with UBI is outlined by the last few post: it is supported by a strange aggregate of very economically liberal and very left leaning people.

To the first group it is a way to get rid of the social welfare system and replace it by a simpler system which is no more costly (I think the current experiment in Finland even claims there would be cost cutting). This means UBI would be a very low figure and not enough to live decently in a place like Dublin (and by decently I just mean having proper housing and healthy enough food to eat, nothing fancy). To the second group this would be a higher figure and/or a top-up to already existing social welfare benefits. This would allow to live decently but the cost would be unbearable for taxpayers especially if employment levels are going down.

The cost of UBI as proposed in France as part of the presidential campaign (which is more the socialist version at 750 euros per month) is 470 billions per year (with 90 billions in savings in removed social benefits bringing the final bill to about 380 billions per year). To give an idea of scales, the GDP of France is around 2500 billions. So this proposal alone would swallow 15-20% of the national wealth produced annually and require to significantly increase the tax burden which is already one of the highest in the world both for corporations and individuals (I don't have the exact figure in mind but I think France is already over 50% of GDP in term of taxation levels so if I get that right this UBI proposal would bring it close to 70%). Companies are already leaving the country and salaries stagnating because the tax burden is very high, so taxing it further would not serve French people (corporations would either leave and/or pass the cost to their employees), so the only way to finance this type of UBI would be to massively tax individuals (which are already some of the most heavily taxed in the world). And that is if you assume employment level are not dropping - if they do you have to keep hammering those who are wrong more and more for the rising unemployed class to live on an OK but not so great 750 euros per month. In the logn run I thing this would only implode.



So yes, I think if we don't either manage to maintain employment levels or come up with a completely new model of society, yes our current model is doomed (with UBI or without).

troll_a_roll

Here's a link to a post by another poster on another thread on Boards.
http://www.boards.ie/vbulletin/showpost.php?p=102187224&postcount=479

I'll give some quotes from that post about how much a universal income would cost in Ireland. There's no point in me reinventing the wheel.



The rest of this post from here is copied from the other thread.

I have used some of Social Justice Ireland's figures, from http://www.socialjustice.ie/content/policy-issues/costing-basic-income-ireland
Their presentation, size 429Kb, slides 4, 5 and 6.

What's offered?
We could pay a UBI at the same rates as current social welfare rates.
188 to all adults, except people aged 18 to 24 who get 102 per week as currently.
We'd pay 230 per week to those over 66, and 240 per week to those over 80, and we'd pay child benefit.

We'd also pay approx 3,600 million in additional benefits as listed on Slide 5, of SJI presentation.

That's more benefits than SJI propose so it needs extra money.
7,288 million extra in fact.


How is it paid for?
The shortfall of 7,288 million represents 27% of the current income tax system.
We could increase effective rax rates by 27% and we're done. No other tax changes necessary.

People may not complain as much as you think as many of them are receiving approx 10,000 extra per year.

That extra 10,000 per year will offset the additional tax for most workers. Only the rich would pay more under this system I suspect. Very progressive.

30% effective tax rate would be increased to 37%
48% effective tax rate would be increased to 60%



It is fairer to increase other taxes, in my opinion.

For example, corporation tax in 2015 took in 6,873 million.
Excise took in 5,463 million.


If corporation tax was doubled for example the UBI would more or less be paid for.
Could corporation tax be doubled?

There would certainly be a public appetite to see corporation tax increased, and doubling the tax rate from 12.5% to 25% would be acceptable to the public.
It'd be an easy sell to the public and a very difficult sell to the corporations.



Consider the benefits!

A re-invigorated society which would be very fair and one in which people want to work and in which people are rewarded for working.

Bob24

@troll_a_roll The number are difficult to verify, but I would point out that the proposal you listed there assumes employment level and average salaries will remain the same so that the proposed taxation level of 40% will not need to be increased when a growing part of the population becomes employed or move to partial employment. I think you mentioned before that to you UBI is an answer to the fact that robots will be taking jobs away from people, so how would that model help in that case as robots don't pay tax?

troll_a_roll

It's the corporations that have to pay the tax. Like you say, in the future there aren't enough workers to keep the country afloat by themselves.

There is sufficient wealth and production in the future, but not enough workers to pay tax.

That's the whole point. The only people who can afford to keep our society going are the rich corporations who own the technology and the robots.

Bob24 wrote: »

...
So yes, I think if we don't either manage to maintain employment levels or come up with a completely new model of society, yes our current model is doomed (with UBI or without).

Maintaining employment levels only works if the jobs are real, and the most economic way to perform the task is to use humans. Otherwise it is simply a subsidy in another name.

There's no point in fake jobs or inefficient practices. If it's cheaper and better to use a robot then the rational thing to do is to pay the worker to do nothing and use the robot to do the task.
Everyone should be happy that the worker now no longer has to work. The only problem is taxation, and the fact that the owners of robots don't want to pay tax.

You said robots don't pay tax. Perhaps they should!
That is unworkable as what is a robot? But the point is sound; the owners of robots who displace human employment need to pay taxes.



I fully accept your point that this needs global changes that seem unlikely.
It is possible that corporations could abandon certain countries, and it's very likely that some countries will simply fail.

I want to ensure that Ireland isn't one of the countries that is abandoned and which descends into civil war and violence.

Widdershins

Those figures all represent a serious reduction in income for any social welfare recipients, many of whom cannot cope with that. I find it a very bad idea on that basis.

troll_a_roll

How is that the case Widdershins?

The rates are the same as the current social welfare rates and 3,600 million in additional benefits is also paid out.

Who's losing out?




from post above

What's offered?
We could pay a UBI at the same rates as current social welfare rates.
188 to all adults, except people aged 18 to 24 who get 102 per week as currently.
We'd pay 230 per week to those over 66, and 240 per week to those over 80, and we'd pay child benefit.

We'd also pay approx 3,600 million in additional benefits as listed on Slide 5, of SJI presentation.

Bob24

I'm definitely not talking "fake" jobs made-up just for the sake of keeping people at work. I am saying either we need to think our economic model through so that it keeps providing real jobs or we need a completely new model of society (UBI is just a patch on the current one).

Human labour (USC and income tax) or consumption (VAT or excise) is easy to do as those taxpayers can't evade taxation easily (if you work and buy things in Ireland you can't funnel that through other countries to avoid taxation). If you tax companies or their robots enough to feed a growing unemployed class decently at a national level, they will however increase tax avoidance mechanisms and eventually move to another country which doesn't do that. And the only way to retain them will be hardcore protectionism which would not benefit a country like Ireland whose economy is so dependent on foreign investment.

Since I think we agree the only option to make it work is international governance which imposes global rules to those companies (which I think cannot be democratic, cannot fit the specificities of each country, and be subject to intense lobbying from large corporations), and that it is unlikely to happen, this is why I don't see UBI as the way forward.

starlit

Minimum wage is €9.25 an hour as of this year. It could help the economy more by having basic wage than the current SW payments but they need requirements and conditions such as find work even if part time as there is an exception you can earn a small amount on top of sw. Some are means tested if having a disability but not sure about those on job seekers but it be worth doing so for those on sw. It can only get you so far when it comes to bills, car and food and the just the basics!

Minimum wage is still very basic based on yearly income even though looks better than sw payments a week/per month.

Elemonator

Maybe do it but only for 6 months. That way there is plenty of window for unemployed people seeking work to get back on their feet. After that, back to the basic rate. We shouldn't give dole scroungers nearly 3 times their current rate, it will be abused.

I'm not even sure something like this in Ireland could take off. Finland's national mentality is different to our "ah sure thats grand" attitude to everything.

noodler

BoJack Horseman wrote: »

It would prove to be very expensive.

As an example:
The 2016 social welfare bill is budgeted at €19.6bn.

Excluding the approx 600,000 pensioners & the 1.1 million u18's in Ireland, there are about 2.9 million adults of working age.

A payment of €800 per month for this number of people equates to €27.8 billion.
€8 billion more than is currently expended.

For the model to match current expenditure, the "basic income" paid to everyone would be €570pm.
Now this frankly would very strongly encourage job take-up at any level, however, it would be all but politically impossible as it equates to a 30% reduction in income for those currently on the top rate of JSA/JSB.

In your scenario, why are you applying the basic income to all people of wokring age?

2m people work and wouldn't need this.

Bob24

Widdershins wrote: »

Those figures all represent a serious reduction in income for any social welfare recipients, many of whom cannot cope with that. I find it a very bad idea on that basis.

And it also has to be said that if UBI is meant to compensate for a gradual decrease in employment levels, this model assume that we will have more and more people living on the equivalent of today's social benefits which are considered the bare minimum but nothing to provide a great life (and at an ever rising cost for those who are still working - even if you limit tax increases to corporations, they will eventually pass-on the bill to their employees which will have no choice but accepting it as they will already feel lucky to have a job in a world where less and less people do).

Bob24

noodler wrote: »

In your scenario, why are you applying the basic income to all people of wokring age?

2m people work and wouldn't need this.

Universal in UBI means that everyone gets it including those who have a job. If it is restricted only to some people it is not universal any-more and not very different from our traditional welfare system.