Replacing social welfare with a basic income

K-9

For me there's a difference between an odd nixer and people working for years and claiming Unemployment Assistance.

There are back to work schemes, FIS, claiming while working part time, stuff like that to help people get back to work.

The 2 gaping holes for me are no childcare tax credits and not having a graduated system like some other countries have, say 70% of your last wage for 6 months and then reduce it.

johnnyskeleton

dr.fuzzenstein wrote: »

You cannot make rules to 100% reflect real life. The rules are not the B all and end all in life (imagine a German telling that to an Irish person). "the rules apply 100% without any personal judgement by the person enforcing them" is not something that happens in real life. The person enforcing the rules has to have some leeway in how to interpret and enforce them. Example would be a Gard who sees you doing something you shouldn't, but lets you off with a warning. Otherwise we would be living in North Korea.

Yes, but its a matter for thr garda to decide. If social welfare officers were allowed to permit some people to work while on welfare, so long as its above board and tax is paid and there is no deception, ive no difficulty with that. Indeed, it puzzles me that the back to work allowance and new business start up schemes are only available to people who have been unemployed for more than 12 months. But thats a different issue.

Of course you could be right and everyone will immediately stop doing all and any work and just smoke joints and play PlayStation all day. But I don't believe that.

I never said that!

The dole system here is idiotic and belongs into the 19th century. It forces you to stay on the dole, because if you have any income, you will lose out or be struck off. So in fact the dole system is responsible for nixers and the black market, because it only has ONE thing in mind, that you pick up a regular job

I think thats a bit of a stretch. If we abolished SW in the morning people would still do nixers and sell stuff on the black market. Probably more so.

Under BI people won't have to worry about declaring income, so in fact this would reduce nixers!

How so? Lets say social welfare pays 10k and undeclared work pays 10k to Joe Bloggs. Basic income comes in and anyone earning less than 15k gets a top up to 15k. Joe Bloggs can either declare his 10k pa now and get a top up of 5k or he can continue working illegally and claim the full 15k BI plus keep his 10k. If hes prepared to defraud the welfare system, why wouldnt he defraud basic income? Or am I missing something?

It is a good idea in a changing world. Doing your 9-5 job, then being laid off and being paid unemployment benefit until you get your next 9-5 job just doesn't cover it anymore, any more than a 99% catholic school system covers Ireland's current demographic. It doesn't work in a system where employers have eroded all worker's rights by short-term contracts that are being constantly rolled over, agency work, seasonal work, part-time work, etc... I keep saying it, but Ireland has to be dragged kicking and screaming into the 20th century, nevermind the 21st.

I agree with that and think the idea that you must work for someone is bad for personal development and bad for the economy. Granted, not everyone can set up an innovative new company, but I dont think people should start working for someone and assume they will be taken care of with a job for life. Not sure how basic income helps this though.

johnnyskeleton

K-9 wrote: »

The 2 gaping holes for me are no childcare tax credits and not having a graduated system like some other countries have, say 70% of your last wage for 6 months and then reduce it.

Indeed, and the fact that welfare never stops and you qualify for more assistance (e.g. schemes, allowances) rather than less suggests that Irish welfare payments are he wrong way around!

Strangely, socialists and capitalists should both be against welfare discorages work - the former because "from each in accordance with his ability" and the latter because it should only reward productivity, yet no party in Ireland will take it on.

dr.fuzzenstein

I don't know where you get the idea from that if we bring in BI, everyone would suddenly do nixers. I'm sure undeclared income is not legal, SW or BI.

johnnyskeleton

dr.fuzzenstein wrote: »

I don't know where you get the idea from that if we bring in BI, everyone would suddenly do nixers.

I never said that, I said that the people who are currently claiming money from the state and also working undeclared are not likely to become honest once BI comes in. So I don't agree with you when you say:

Under BI people won't have to worry about declaring income, so in fact this would reduce nixers!

Im not asserting that BI would increase nixers, you areasserting that it would reduce them. This doesnt make sense because I dont see how it would make people who are currently dishonest suddenly become honest. Can you explain your assertion in this regard please?

I'm sure undeclared income is not legal, SW or BI.

Yes. I'm glad we finally agree on this that people who don't declare income, while on welfare or otherwise, are committing crime.

newacc2015

dr.fuzzenstein wrote: »

You cannot make rules to 100% reflect real life. The rules are not the B all and end all in life (imagine a German telling that to an Irish person). "the rules apply 100% without any personal judgement by the person enforcing them" is not something that happens in real life. The person enforcing the rules has to have some leeway in how to interpret and enforce them. Example would be a Gard who sees you doing something you shouldn't, but lets you off with a warning. Otherwise we would be living in North Korea.



You see, that is your interpretation of what would happen with BI. It's not a fact, it's an opinion. If pilot schemes in countries with a lot more forward thinking, guts and imagination than Ireland work out, then it might be implemented here. Of course you could be right and everyone will immediately stop doing all and any work and just smoke joints and play PlayStation all day. But I don't believe that.
The dole system here is idiotic and belongs into the 19th century. It forces you to stay on the dole, because if you have any income, you will lose out or be struck off. So in fact the dole system is responsible for nixers and the black market, because it only has ONE thing in mind, that you pick up a regular job. But if you decide you want something else, it is near impossible to do it by the book. Under BI people won't have to worry about declaring income, so in fact this would reduce nixers! Quite an oversight. So you can have your BI (maybe up to a certain threshold, we just don't know yet) and you don't have to worry about the Filth booting your door down and you being carted off to prison.

It is a good idea in a changing world. Doing your 9-5 job, then being laid off and being paid unemployment benefit until you get your next 9-5 job just doesn't cover it anymore, any more than a 99% catholic school system covers Ireland's current demographic. It doesn't work in a system where employers have eroded all worker's rights by short-term contracts that are being constantly rolled over, agency work, seasonal work, part-time work, etc... I keep saying it, but Ireland has to be dragged kicking and screaming into the 20th century, nevermind the 21st.

Do you have a source for any of this?

The only thing that appears to deter tax evasion in Ireland is random checks from Revenue. Revenue are regularly raiding construction sites, randomly stopping commercial vehicles interviewing people to see if they are evading tax. That is effective and actually works. I dont think that tax evasion will disappear overnight after social welfare is rebranded BI.

If you are German, you must know how Germany's inflexible labour laws are resulting in tons of Germans on never ending temporary contracts? German employers are reluctant to give full time contracts unlike Irish employers due to to the German labour rights after 6 months. We dont have large amounts of agency workers like German, as our labour laws are flexible. Weaker labour laws can be more beneficial to workers, as during a pick up in the economy. Employers have less reluctance to hire workers, as it is easier to let them go.

If Ireland is so horrible to live in regarding welfare and labour laws? Why live here if they are so important to you?

Loafing Oaf

Excellent IT article on UBI here

http://www.irishtimes.com/business/personal-finance/should-everyone-be-paid-752-a-month-for-doing-nothing-1.2683030

Referendum on introducing UBI failed in Switzerland the other day, but apparently mostly because of a fear the country would become a magnet for 'welfare' tourism. If it was brought in across Europe in incremental steps that obstacle hurdle could be surmounted I would have thought. As the NERInguy says in the article, it wouldn't necessarily be much more expensive than or massively different from our current welfare system.

Just to disclose my bias here, I'm hoping a UBI comes in before my job is taken over by robots.:P

Seth Brundle

I read that article a short while ago.
I'd like to see realistic costings for it

kippy

Having thought about this in detail I feel this type of thing would be grossly unfair to the remainder of society - paying people who don't need the money additional money when there are millions of people worldwide who are literally in life or death situations due to poverty etc.
The money could be used far better in other parts of society.

Suryavarman

A universal basic income is a terribly wasteful policy. You end up taxing the wealthy and middle classes just to give the money straight back to them incurring needless deadweight losses.

Another problem with a UBI is that you either end up giving less to the worst off in society or massively increasing the cost of the welfare state. Neither of which is a desirable solution.

Some form of negative income tax would be a far better solution.

Bob24

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.

ancapailldorcha

I don't know if anyone was following it but Switzerland voted by an overwhelming majority (over 76%) against introducing a basic income. I think I'd be against it as well. While it'd be great to simplify the benefits system, handing that kind of money out to everyone in a country is the kind of idea which would need a heck of a lot of money and I don't think it'd be possible in Ireland with the tax structure and government spending the way they are.

Suryavarman

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.

Everyone wouldn't have additional purchasing power. There wouldn't be any additional income, existing income would just be transferred around. AS such there's no reason to think there would be any additional inflation.

Bob24

Suryavarman wrote: »

Everyone wouldn't have additional purchasing power. There wouldn't be any additional income, existing income would just be transferred around. AS such there's no reason to think there would be any additional inflation.

My wording "everyone would have additional power" was poor, I should have said everyone has the same minimum guaranteed purchasing power.

While no new wealth would be created in the country, the fact that minimum income is given could just increase the price of base items in the country and render it useless.

Let me take the example of housing in Dublin: currently rental prices are already quite high and upwards pressure is only limited by the fact that people's incomes are limiting how much they can pay. If tomorrow you were to provide everyone with a rent allowance 100 euros per month to lower the burden (basically a guaranteed universal income restricted to housing purposes), would it not just increase the average rent by 100 euros and make the allowance useless for everyone except landlords?

Suryavarman

Bob24 wrote: »

My wording "everyone would have additional power" was poor, I should have said everyone has the same minimum guaranteed purchasing power.

While no new wealth would be created in the country, the fact that minimum income is given could just increase the price of base items in the country and render it useless.

Let me take the example of housing in Dublin: currently rental prices are already quite high and upwards pressure is only limited by the fact that people's incomes are limiting how much they can pay. If tomorrow you were to provide everyone with a rent allowance 100 euros per month to lower the burden (basically a guaranteed universal income restricted to housing purposes), would it not just increase the average rent by 100 euros and make the allowance useless for everyone except landlords?

It would only result in rents increasing noticeably if new supply of rental properties was constricted. Admittedly that is the case in Dublin at the moment. In such a case though spending will just fall in another area of the economy to offset the increased spending on rent meaning there'll be little to no effect on inflation.

BoJack Horseman

Suryavarman wrote: »

Everyone wouldn't have additional purchasing power.

Except those on social welfare.

If you took the social welfare budget - minus pensions & added the cost of tax credits & then distributed this amongst all working age adults, those on s/w come out worse than the status quo.
Especially those with school age children.

Godge

BoJack Horseman wrote: »

Except those on social welfare.

If you took the social welfare budget - minus pensions & added the cost of tax credits & then distributed this amongst all working age adults, those on s/w come out worse than the status quo.
Especially those with school age children.

Have you done those calculations?

Do you propose eliminating all tax credits?

Niall Keane

What will we do in the not so distant decades ahead when technology replaces humans as cheaper and more reliable units of labour?
We cannot keep exporting more and more of our children indefinitely as seems to be the current Irish solution to unemployment.

I know, I know... this is a class issue.... but see, I cannot help but remember working on a hospital project and bench-marking technologies, and being introduced to the already-existing remote operating theaters, used in the second Iraq war first, where surgeons in Newyork operated via the internet on soldiers in Iraq.
And when I notice Microsoft developing medical artificial intelligence, that will be networked worldwide, and far surpass our current capabilities, for example being able to link symptoms from a disease in Vietnam with others in unrelated areas of medicine in Washington and discovering vastly more accurate and wider range of tailored treatments, linking disparate disorders, currently treated by non-communicative specialist fields... when I notice this, I cannot help but be fairly certain that "human" doctors and surgeons will soon disappear.....

and so with many other now considered "essential" roles... let alone how we are just around the corner from a fully automated administration service in public and private sectors. All those "useless" jobs... you know like that modern boom sector - compliance - where inspectors inspect the inspection tools of other inspectors, will disappear for erroneous humans.

tick, tick, tick....

universal income, derived from a share of the resources we the people own that are exploited for profit, or perhaps, instead, our children and grandchildren can live with us on our pensions?

Of course.... one can see like Stephen Hawkings can, the tendency and reason for the hoarding of wealth and assets, the reason for privatization of public resources... the corporate class aren't interested in "supporting scroungers", let them eat cake they say!" And the house-slaves who rent tiny moments of the corporate dream are in full support.

"Because I'm worth it!"

Suryavarman

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?

Nothing. It isn't going to happen.

ancapailldorcha

Suryavarman wrote: »

Nothing. It isn't going to happen.

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.

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