Universal basic income trial in Finland

06-04-2018 10:49am

Tabnabs wrote: »

It will decimate the public service,

badtoro wrote: »

There's an excellent reason to back it to the hilt.

The public sector -v- private sector battle is a complete false flag, both are very expensive and can be very inefficient or efficient depending on the management.

The only real difference is that public sector profits go back to the government and private sector profits go to shareholders.

It's in the interests of shareholders everywhere that private sector is preferred over public sector.

Ush1 · 06-04-2018 10:51am

badtoro wrote: »

That's one of my concerns as well. "Free money" often comes at a cost.

People thought when the wives started to get jobs as well that they would have all this extra income but of course the economy adjusts if things like that happen on a large scale.

06-04-2018 10:52am

Ush1 wrote: »

If anything is universal, by definition any wealth gained will be cancelled out.

You can work part time and still claim the dole in Ireland, not that it really matters.

No with UBI, any type of work will provide for a significant increase in income, rather than the benefits being reduced as one earns more (a bit like walking up the down escalator).

Ush1 · 06-04-2018 10:55am

Deleted User wrote: »

No with UBI, any type of work will provide for a significant increase in income, rather than the benefits being reduced as one earns more (a bit like walking up the down escalator).

Yes, as I said with UBI, if everybody has it, it's essentially worthless.
I presume Finland will still have progressive taxation, so as one earns more, the "benefits" will still be reduced. But hey, everybody will have some monopoly money to play around with.

This is far from a new idea also.

06-04-2018 11:12am

Ush1 wrote: »

Yes, as I said with UBI, if everybody has it, it's essentially worthless.
I presume Finland will still have progressive taxation, so as one earns more, the "benefits" will still be reduced. But hey, everybody will have some monopoly money to play around with.

This is far from a new idea also.

Not really, it is only social welfare payments that are stopping some people from being completely destitute and dying of starvation.

The UBI is given regardless of income (like child benefit) it makes little difference on the average income earner whether the people on UBI are subsisting on that money or are doing part time work to improve their income.

UBI will be toilet paper to the higher income earners anyway, so why would they care.

topper75 · 06-04-2018 11:15am

Doesn't UBI just move the demand curve upwards a bit?
I fail to see what that achieves beyond prompting a 'wage'-price inflationary spiral.

Ush1 · 06-04-2018 11:19am

Deleted User wrote: »

Not really, it is only social welfare payments that are stopping some people from being completely destitute and dying of starvation.

Fine, I never said that wasn't the case?

Deleted User wrote: »

The UBI is given regardless of income (like child benefit) it makes little difference on the average income earner whether the people on UBI are subsisting on that money or are doing part time work to improve their income.

Yes...

Deleted User wrote: »

UBI will be toilet paper to the higher income earners anyway, so why would they care.

Grand.

That doesn't rebut my point that any "benefit" applied universally will by definition have very little to no effect.

Harika · 06-04-2018 11:22am

Ush1 wrote: »

Yes, as I said with UBI, if everybody has it, it's essentially worthless.
I presume Finland will still have progressive taxation, so as one earns more, the "benefits" will still be reduced. But hey, everybody will have some monopoly money to play around with.

This is far from a new idea also.

To get the money to pay the UBI, taxes would massively raise. Housenumbers: You get paid 2000 monthly, in future you will be paid 1000 UBI and 1000 from the company as the taxes will rise. 1500 become 1000+500 and 10000 become 1000+6000. So high earners will be taxed more.
To add to this, the UBI would allow people taking jobs that are not well paid but be more productive to society. Like I read this old joke recently:

A corporation hired several cannibals that had to promise not to eat anyone. Four weeks later their boss remarked that they were doing a great job, but a cleaner disappeared. The cannibals denied any involvement. After the boss left one of the cannibals asked who the idiot was who ate the cleaners as they were eating managers and no one noticed anything, but the cleaner was doing something.

What is true if you think when looking at today’s job world. Whom would you miss more: Cleaners, nurses or financial managers? One side gets paid peanuts, the other ones a fortune.
In theory with the UBI the wages of cleaners and nurses should increase as they are needed and with the UBI there is no need for them to take the work based on the need to work, but instead of passion. Companies will have to offer better wages to get staff. Fun note and real story, I think the German bank, granted their senior staff a massive bonus, while also having scored a massive financial loss. Their excuse: They cannot find better staff. That in a nutshell is the problem with today’s economy.
The UBI should also enable people to take risks and be creative, start a business or offer their services without the risk of losing all income. And this has be proven already right with trial runs. People didn't stop working.

06-04-2018 11:25am

topper75 wrote: »

Doesn't UBI just move the demand curve upwards a bit?
I fail to see what that achieves beyond prompting a 'wage'-price inflationary spiral.

No, the money in the hands of the unemployed would remain about the same, the real difference will be that it removes the stigma of "being unemployed" and it allows the freedom of working part time without being penalised.

Ultimately, it will mainly benefit minimum wage part time workers.
Those who can't work or can't find work will at least not feel like "scroungers".

It will also allow the natives to lake on work that only migrants currently do as it will supplement their UBI.

Migrants won't be eligible for the first few years in the country or they will have to claim it from their home countries.

Water John · 06-04-2018 11:29am

As it is, one can argue that, everyone over 66 is on a form a UBI. They are not asked to do anything in return for their noncontributory OAP. We have not had chaos or anomie.

BTW UBI is not solely a left wing concept. Some right wing economists and conservative politicians support it.

Ush1 · 06-04-2018 11:30am

Harika wrote: »

To get the money to pay the UBI, taxes would massively raise. Housenumbers: You get paid 2000 monthly, in future you will be paid 1000 UBI and 1000 from the company as the taxes will rise. 1500 become 1000+500 and 10000 become 1000+6000. So high earners will be taxed more.
To add to this, the UBI would allow people taking jobs that are not well paid but be more productive to society. Like I read this old joke recently:

A corporation hired several cannibals that had to promise not to eat anyone. Four weeks later their boss remarked that they were doing a great job, but a cleaner disappeared. The cannibals denied any involvement. After the boss left one of the cannibals asked who the idiot was who ate the cleaners as they were eating managers and no one noticed anything, but the cleaner was doing something.

What is true if you think when looking at today’s job world. Whom would you miss more: Cleaners, nurses or financial managers? One side gets paid peanuts, the other ones a fortune.
In theory with the UBI the wages of cleaners and nurses should increase as they are needed and with the UBI there is no need for them to take the work based on the need to work, but instead of passion. Companies will have to offer better wages to get staff. Fun note and real story, I think the German bank, granted their senior staff a massive bonus, while also having scored a massive financial loss. Their excuse: They cannot find better staff. That in a nutshell is the problem with today’s economy.
The UBI should also enable people to take risks and be creative, start a business or offer their services without the risk of losing all income. And this has be proven already right with trial runs. People didn't stop working.

It sounds a lot like socialist fantasy I'm afraid.

This theory is ignoring that fact that an economy is not a static thing and cost of living will adjust to this extra income, especially if this extra income is guaranteed for everyone.

Here's the problem with trials....they aren't happening universally! They are happening with a select few lucky people. That's selective basic income(the dole), not UBI.

06-04-2018 11:35am

Ush1 wrote: »

That doesn't rebut my point that any "benefit" applied universally will by definition have very little to no effect.

It does to those who want to earn a living but can't because any extra earned will be clawed back in taxation or costs involved in doing the job, for example travelling to and from a low paid job plus the tax and cuts in benefit could make someone worse off.

Owryan · 06-04-2018 11:38am

Think it was social justice Ireland's report that looked at ubi.

It considered that the likes of medical cards, most welfare payments and other social supports would be gone. For doctors/hospital costs there would have to be a form of compulsory insurance but some basic health services would be free.

The onus would be on the individual to work to improve their situation as most of the so-called welfare "freebies" would be gone.

I think the overall cost of such a scheme meant a marginal tax rate of 57% and that would rely on a large workforce paying tax.

Ush1 · 06-04-2018 11:42am

Deleted User wrote: »

It does to those who want to earn a living but can't because any extra earned will be clawed back in taxation or costs involved in doing the job, for example travelling to and from a low paid job plus the tax and cuts in benefit could make someone worse off.

Is the example you are making in Ireland? A significant number pay no income tax.

You can simply adjust the taxation or credits if this was the case anyway which I would imagine would be a fairly small number considering there's plenty of people doing low paid jobs.

Harika · 06-04-2018 11:45am

Ush1 wrote: »

This theory is ignoring that fact that an economy is not a static thing and cost of living will adjust to this extra income, especially if this extra income is guaranteed for everyone.

Income wouldn't really increase for the majority of people, as while you get the extra income of the UBI, you pay higher taxes for working. But you are right, there are lot of issues with it, still it is inevitable to look at models for the future as the way the workforce is structured today will be not sustainable in future.
The machines are coming, and in future machines and AI will take over jobs from the workforce. e.g. there are steel factories that in the 60s employed 3000 people and now only employ 150 people with an output that is tenfold.
In theory this workforce should move into services, and they did. Now the AI is taking over here. A company who once employed 1000 people in services is now employing only 300 people with answering ten times as much service requests. Most of the time you won't even realise that you are dealing only with a machine. So where should those 700 unemployed walk people now? That is where the UBI comes in to solve that issue.
Austria has 500000 unemployed people with 50000 positions open, it should be clear that a harder whip won't work here.

Ush1 · 06-04-2018 11:49am

Harika wrote: »

Income wouldn't really increase for the majority of people, as while you get the extra income of the UBI, you pay higher taxes for working. But you are right, there are lot of issues with it, still it is inevitable to look at models for the future as the way the workforce is structured today will be not sustainable in future.

So tax the rich with nicer lipstick. Fair enough.

Harika wrote: »

The machines are coming, and in future machines and AI will take over jobs from the workforce. e.g. there are steel factories that in the 60s employed 3000 people and now only employ 150 people with an output that is tenfold.
In theory this workforce should move into services, and they did. Now the AI is taking over here. A company who once employed 1000 people in services is now employing only 300 people with answering ten times as much service requests. Most of the time you won't even realise that you are dealing only with a machine. So where should those 700 unemployed walk people now? That is where the UBI comes in to solve that issue.
Austria has 500000 unemployed people with 50000 positions open, it should be clear that a harder whip won't work here.

I agree but this is a very different conversation and a very different problem to solve.

Harika · 06-04-2018 11:53am

Ush1 wrote: »

So tax the rich with nicer lipstick. Fair enough.

And it is in their interest, as history has shown that nothing is more dangerous for them than big parts of a population that have nothing to do.

Ush1 wrote: »

I agree but this is a very different conversation and a very different problem to solve.

I disagree as the UBI is a possible solution to the problem.

Ush1 · 06-04-2018 11:59am

Harika wrote: »

And it is in their interest, as history has shown that nothing is more dangerous for them than big parts of a population that have nothing to do.

I disagree as the UBI is a possible solution to the problem.

History has shown that the rich don't like paying tax, and who defines who is rich is a dangerous thing.

UBI may not solve a problem that may never come, just as much as the current systems in place, so yes I disagree there.

Harika · 06-04-2018 12:02pm

Ush1 wrote: »

History has shown that the rich don't like paying tax, and who defines who is rich is a dangerous thing.

OFC who likes to pay taxes? Still sometimes people have to be forced to their luck.

jimmycrackcorm · 06-04-2018 12:04pm

Harika wrote: »

What is true if you think when looking at today’s job world. Whom would you miss more: Cleaners, nurses or financial managers? One side gets paid peanuts, the other ones a fortune.

All well and good until you go to look to get a mortgage to buy a home, or a loan for a car to travel to work, only to find out that the nurses and cleaners don't know how to process your application.

I remember a carpenter telling me years ago that my job in Software Development was useless in comparison to what he could produce with his hands.

Harika · 06-04-2018 12:19pm

jimmycrackcorm wrote: »

All well and good until you go to look to get a mortgage to buy a home, or a loan for a car to travel to work, only to find out that the nurses and cleaners don't know how to process your application.

I remember a carpenter telling me years ago that my job in Software Development was useless in comparison to what he could produce with his hands.

Funny thing I just read an article about why we don't have flying cars yet. And the (provocative) answer was, because we are busy filling out paperwork. And if you look at the development since the 80s the main advantages here have been made in having more paperwork thrown at us. How often have you filled out your name, DOB and so on this year? 10/20 times?
Last time I was in a bank I was talking with some bank employee 30 minutes who then filled out my paperwork with all information they already had about me, but are not able to link and process it automatically. FML
Especially you in SW Development should see the potential to save time in automatising this processes and stop the waste of our time and with AI this will hopefully go away.
So it depends really what you do in SW development? Are you saving or costing more time? Cause I really like time and a well build house.

06-04-2018 12:52pm

Harika wrote: »

And it is in their interest, as history has shown that nothing is more dangerous for them than big parts of a population that have nothing to do.

I disagree as the UBI is a possible solution to the problem.

It is also in the interests of the wealthy that the general population is getting some kind of income so they can spend it, the share holders in the businesses where that money is spent get dividents based on that spending.

So it is better to have a spending population, that's why they are wealthy.

Harika · 06-04-2018 12:53pm

Deleted User wrote: »

It is also in the interests of the wealthy that the general population is getting some kind of income so they can spend it, the share holders in the businesses where that money is spent get dividents based on that spending.

So it is better to have a spending population, that's why they are wealthy.

An article where a rich one points it out too:
https://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014

Water John · 06-04-2018 12:54pm

Correct, it isn't money that makes an economy rich, it's how often it changes hands. That is the biggest negative of a recession. Everyone stops spending and goes saving.

06-04-2018 12:54pm

Ush1 wrote: »

History has shown that the rich don't like paying tax, and who defines who is rich is a dangerous thing.

UBI may not solve a problem that may never come, just as much as the current systems in place, so yes I disagree there.

The rich either pay taxes or pay for a private army to protect them from the locals, go to just about any country that has no social benefits system at all and look at the guards around the homes of the eliete that live there.

RDM_83 again · 06-04-2018 1:23pm

People don't seem to be getting the idea that UBI would actually result in a fall in income for the people that accumulate benefits, it's beneficial to the part timers who can't get more hours, the low paid and people who are raising kids but need reduced hours. These aren't scroungers the scroungers will be loosing out.

Personally I am massively in favour of the system but it requires at least two provisions.

UBI is it, no additional payments no rent allowance no community welfare handouts nothing extra (disabilities stuff might require a look at).

The benefit has to be extremely restricted in terms of who can gain it otherwise it would be a huge draw for migrants.

Of course in Ireland neither of those two would be applied and the system would fail.

silverharp · 06-04-2018 1:44pm

RDM_83 again wrote: »

People don't seem to be getting the idea that UBI would actually result in a fall in income for the people that accumulate benefits, it's beneficial to the part timers who can't get more hours, the low paid and people who are raising kids but need reduced hours. These aren't scroungers the scroungers will be loosing out.

Personally I am massively in favour of the system but it requires at least two provisions.

UBI is it, no additional payments no rent allowance no community welfare handouts nothing extra (disabilities stuff might require a look at).

The benefit has to be extremely restricted in terms of who can gain it otherwise it would be a huge draw for migrants.

Of course in Ireland neither of those two would be applied and the system would fail.

it certainly wouldnt work with the leaky borders at present, europe and the us would both have to build a wall

Grayson · 06-04-2018 2:31pm

silverharp wrote: »

it certainly wouldnt work with the leaky borders at present, europe and the us would both have to build a wall

People who come here at the moment can't work or even get the dole.

I don't think anyone would be against limiting UBI to people who have lived/worked here for a while.

Harika · 06-04-2018 2:34pm

Grayson wrote: »

People who come here at the moment can't work or even get the dole.

I don't think anyone would be against limiting UBI to people who have lived/worked here for a while.

One of the problem you would face if only Ireland applies it, would be that all EU members would be eligible to get it, as you cannot give Irish people benefits but not e.g. Hungarians.

Malayalam · 06-04-2018 2:40pm

It will probably come due to automation and the need for consumers.

It should be global when it does.

If you want to maintain independent political and philosophical thought and action you should probably ensure you have an income independent of state provision/ UBI

scamalert · 06-04-2018 2:40pm

Water John wrote: »

Correct, it isn't money that makes an economy rich, it's how often it changes hands. That is the biggest negative of a recession. Everyone stops spending and goes saving.

I would call that a smart move, not a negative a lot of people over spend on stuff they cant either afford or if smth was to happen they would be broke within month.

06-04-2018 3:09pm

scamalert wrote: »

I would call that a smart move, not a negative a lot of people over spend on stuff they cant either afford or if smth was to happen they would be broke within month.

There needs to be a balance between saving and spending, recently, there has been too much emphasis on spending which is good for business but bad for personal financial responsibility. But with an economic model that demands growth and "safe" saving schemes cannot provide returns that match the losses caused by inflation, this discourages saving.

Grayson · 06-04-2018 3:25pm

Harika wrote: »

One of the problem you would face if only Ireland applies it, would be that all EU members would be eligible to get it, as you cannot give Irish people benefits but not e.g. Hungarians.

You can refuse benefits. The UK already does it. It's a myth that the EU forces countries to do that.

Plus, UBI would be the equivalent of the dole. We don't have millions turning up here to get the dole.

Grayson · 06-04-2018 3:26pm

Deleted User wrote: »

There needs to be a balance between saving and spending, recently, there has been too much emphasis on spending which is good for business but bad for personal financial responsibility. But with an economic model that demands growth and "safe" saving schemes cannot provide returns that match the losses caused by inflation, this discourages saving.

There's also the question of whether we even need a capitalist system in the future. With AI and automation we may reach a point where no-one really needs to work.

topper75 · 06-04-2018 3:38pm

Deleted User wrote: »

No, the money in the hands of the unemployed would remain about the same, the real difference will be that it removes the stigma of "being unemployed" and it allows the freedom of working part time without being penalised.

Ultimately, it will mainly benefit minimum wage part time workers.
Those who can't work or can't find work will at least not feel like "scroungers".

It will also allow the natives to lake on work that only migrants currently do as it will supplement their UBI.

Migrants won't be eligible for the first few years in the country or they will have to claim it from their home countries.

Every last thing you have typed in this post is underpinned by an assumption that prices remain the same in the economy. When incomes rise - prices rise. That is Economics 101 I should have thought?

The UBI is nonsense, an attempt at some kind of macroeconomic alchemy that cannot work.

Ush1 · 06-04-2018 3:39pm

Harika wrote: »

OFC who likes to pay taxes? Still sometimes people have to be forced to their luck.

Again that's another topic, automation and people being jobless is a completely different discussion to the introduction of UBI now.

Ush1 · 06-04-2018 3:41pm

Deleted User wrote: »

The rich either pay taxes or pay for a private army to protect them from the locals, go to just about any country that has no social benefits system at all and look at the guards around the homes of the eliete that live there.

They already pay progressive taxes, UBI is universal, it's not solving any current issue but very likely will cause inflation.

Ush1 · 06-04-2018 3:44pm

topper75 wrote: »

Every last thing you have typed in this post is underpinned by an assumption that prices remain the same in the economy. When incomes rise - prices rise. That is Economics 101 I should have thought?

The UBI is nonsense, an attempt at some kind of macroeconomic alchemy that cannot work.

Their trump card seems to be, but we will raise taxes on the wealthy! It's very original altogether.

Harika · 06-04-2018 3:45pm

Ush1 wrote: »

They already pay progressive taxes, UBI is universal, it's not solving any current issue but very likely will cause inflation.

Depends on the UBI, if it equals the amount of the dole, it won't cause inflation.

Ush1 · 06-04-2018 3:50pm

Harika wrote: »

Depends on the UBI, if it equals the amount of the dole, it won't cause inflation.

Yes it will because by definition everyone gets it. Otherwise it isn't universal.

topper75 · 06-04-2018 3:56pm

Ush1 wrote: »

Their trump card seems to be, but we will raise taxes on the wealthy! It's very original altogether.

Ha ha - again the macroeconomic equivalent for trying to turn base metals into gold!

These people clearly are macroeconomic illiterates.

topper75 · 06-04-2018 3:58pm

Of course it causes inflation!!!!!!

The availability of goods and services is fixed in the short term.

When more money chases those goods and services.... wait for it ... PRICES RISE!

Harika · 06-04-2018 3:59pm

Ush1 wrote: »

Yes it will because by definition everyone gets it. Otherwise it isn't universal.

What you get more in the UBI, you will lose from taxation. So now you might get 2200 a month from your employer and keep 2000. With the UBI you will get 2200 from your employer, you keep 1000 and add 1000 UBI. So nothing really changes.
Someone at the dole gets 1000 dole now, and in future 1000 UBI. Again no change.

topper75 · 06-04-2018 4:06pm

Really - if no change - then the next obvious question

Why bother?

Ush1 · 06-04-2018 4:09pm

Harika wrote: »

What you get more in the UBI, you will lose from taxation. So now you might get 2200 a month from your employer and keep 2000. With the UBI you will get 2200 from your employer, you keep 1000 and add 1000 UBI. So nothing really changes.
Someone at the dole gets 1000 dole now, and in future 1000 UBI. Again no change.

Two things.

1. That will still cause inflation. I'm not bothering explaining if you don't understand how.
2. If nothing changes, why bother?

Harika · 06-04-2018 4:10pm

topper75 wrote: »

Really - if no change - then the next obvious question

Why bother?

To save money, as atm you need to control who gets the dole, check on them so that they look for jobs and so on. All those people can be fired, what saves money.
That is very simplified and if you want to know more, there is tons of literature out there that have calculations, effects and far more details.

blanch152 · 06-04-2018 4:18pm

Grayson wrote: »

You can refuse benefits. The UK already does it. It's a myth that the EU forces countries to do that.

Plus, UBI would be the equivalent of the dole. We don't have millions turning up here to get the dole.

We cannot afford UBI if it is set at the equivalent of the dole.

_Kaiser_ · 06-04-2018 4:34pm

UBI is inevitable as increased automation and AI starts to replace the lower-skill/manual jobs in the next decade or two - the limiting factor on this happening will be regulatory as Government's try to get ready/adapt rather than technological.

With UBI comes a whole new economic model. A lot of the arguments against it in this thread are based on current models - models which are arguably failing societies in the Western world and elsewhere. The rich get richer, wealth is hoarded and only the relative scraps make it to the majority (trickle-down indeed!).

UBI will not just be a replacement income for the dole/low-skill jobs.. it'll be the start of a fundamental shift away from the capitalist model - but it's coming, and it needs to be prepared for.

badtoro · 06-04-2018 4:57pm

Deleted User wrote: »

The public sector -v- private sector battle is a complete false flag, both are very expensive and can be very inefficient or efficient depending on the management.

The only real difference is that public sector profits go back to the government and private sector profits go to shareholders.

It's in the interests of shareholders everywhere that private sector is preferred over public sector.

TBH I don't much care for Government nor shareholders. I only go on my own experience dealing with civil servants in a particular department. My blood pressure will go up too much if I get into the stuff I know, some of it in the public domain, some not.

RDM_83 again · 06-04-2018 5:08pm

Grayson wrote: »

People who come here at the moment can't work or even get the dole.

I don't think anyone would be against limiting UBI to people who have lived/worked here for a while.

It's technically true that people cant arrive and claim the dole, but people can subsist of various state given benefits until they have accrued enough years of residency to claim unemployment allowance or similar, a good recent example would be the Nigerian identity fraudsters couple that there was a recent thread about.

IMO something like 3 full years PRSI contributions (spread over upto 4 years) or 6 years provable legal residency over the last 10-12 years (in the ROI/island of Ireland depending how you feel about one nation stuff) would be about the right level of requirements.

Now remember under UBI there isn't meant to be any other benefits.

In terms of the PRSI requirement that's long enough to show that a person is capable of finding at least consistent contract work that can sustain themselves under normal circumstances so it will probably be not be the very bottom end of the barrel work.
Nearly every mainland European I know myself would easily satisfy these requirements.

The residency requirements are long enough that it should preclude anyone moving straight from the asylum process to UBI or someone moving from a EU location doing a single long contact them landing on benefits. It also would not preclude most younger Irish people as they would have provable residence from education etc and the fact the 6 years could be spread over a decade or so means that people aren't locked out of the system for going to somewhere like Oz for a while.

A potential issue is that of availability of the UBI to those that are overseas, part of the use of things like this is that a good part of the money returns to the Irish economy, it doesn't do much good if somebody can draw it down in Thailand for multiple decades. A potential solution would be if somebody doesn't pop up on revenue systems via PRSI payments have the UBI time limited unless some level of engagement with social services.

Universal basic income trial in Finland

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