If you run the math, the max financially sustainable UBI for the US is about $1500/month, less for most other countries. Very few people are going to quit their jobs for $1500 a month. Even if you're only making $7/hour, the difference between $1500 and $1500+$7/hour is the difference between rice and beans for every meal and a somewhat normal life.
Those making $7/hour are often working two jobs, UBI would allow them to quit one of them.
Yeah, I'm really surprised how useless this study is. They just gave some money away and that's the end of it. That being said, I do think that it's really hard (if not impossible) to simulate how UBI would work in the real world.
It's funny how UBI is one of the few economic policies that require such rigorous study to be considered for implementation. Pretty much every other aspect of our economic system was just implemented because of economic theory building without much empirical justification.
Yeah, for some things a bit of speculative imagination, thinking through possible outcomes isn't actually that bad compared to more evidence oriented alternatives. You can't really have a control group for community wide effects and without a control group you don't even know if an observed change happened because of what you did out despite of what you did even after the experiment. Sometimes hindsight isn't 20/20 at all but surprisingly blind.
What I think could be a very interesting on-ramp to something more UBIesque, in an environment with lots of need-based social support payments like Germany, would be an opt-in flat taxation mode for earning on the side of receiving aid: taxed high starting with the first cent earned, and in exchange those earnings are explicitly excluded from and need-based considerations or thresholds. That could greatly reduce all "not worth the hassle" considerations and uncertainties. It could be implemented as a special bank account where every incoming transaction is automatically taxed, and every payment or withdrawal certified "I'm allowed to have this without putting anything need-based in question.
What tax rate? The logical first candidate would be wherever the income tax curve tops out for high earners. If that's the highest those can be bothered with before they "stop performing", you should not be surprised if low earners would not want to perform at a higher effective tax rate either. But that tax rate should not be so low that a shift to regular taxation makes no sense in cases sufficiently permanent and wellhpaying that the administrative change isn't just overhead.
Would €1,200/month "for life" inspire you to behave any differently? I suspect relatively few Germans aspire, long-term, to the lifestyle which that income would support. And then there are long-term considerations - like inflation. And gov't spending programs going away after either an election, or a financial crisis.
If it's inflation adjusted and I trust it's forever, I would 100% quit my job and work on something less stressful that I enjoy more. 1200 Euro is slightly below my average monthly expenses; my job pays multiple times this, but I keep at it to save and make sure I won't ever want for money.
It would greatly reduce the barrier between receiving transfer money and earning for yourself that the existing need-based transfer system creates. This is a huge hindrance for jumping off the receiving end. Lump sum transfer also creates an incentive situation where non-standard frugality approaches can thrive (e.g. various shared living concepts), whereas need-based transfer really only just shoves every receiver into a pretend-middle class standard cookie cutter pattern.
It sure would. I was living off of a way smaller stipend for 2 or 3 years (the Austrian "Selbsterhalterstipendium"), and it was the most unproductive time of my life because I got enough to get by with minimal effort, since the conditions for the stipend were ridiculously low. I learned that if I can get money with basically no strings attached, I become lazy. Nowadays I'm not, simply because I have to work for stuff. I enjoy my work, but I wouldnt do it if it wasnt necessary.
It was a great time, but it tought me that people get lazy if they don't have to work. So now I am obviously projecting my own lazyness to the general population, which is why I am against UBI.
One area I would like to see more data on is how UBI will be paid for and the impact of this on worker preferences. If taxes increase on medium-high earners to pay for it, you very well could see a drop-off in labor force participation even if it isn’t directly related to the receipt of UBI.
This seems to be a common thread in articles about UBI experiments: Economists, critics, and others expect the behavior of the recipients to be determined by either (1) "economic rationalist" clockwork, or (2) some laughably simplistic (and very demeaning) stereotype of poor people.
And the results generally bear little resemblance to either (1) or (2).
Napoleon supposedly said "the moral is to the physical as three to one" in reference to the battlefield performance of military units. But the same is true across extremely wide ranges of human behaviors.
The most common thread in these articles is that people treat the discovery that young people don't retire after receiving $10k or €43.2k from a magic money tree as proving UBI is economic panacea but handwave away the issue of paying for it.
Superficially, yeah. I'd read that situation as a combination of (1) "millions of clicks from wanna-feel-happy lefties pay the bills" journalism, and (2) editors wanting "friends" in the "so rich I can afford to be a blinkered ideologue" progressive set.
For those inclined to real-world public policy, the main result I see is that the complex "needs testing" part of existing entitlement and welfare programs is 99% ideological/political bullshit and bureaucratic make-work.
Although I have a masters degree I worked for 10 years, 3 nights each week, as a volunteer psychotherapist, providing free therapy to those that could least afford psychotherapy, those that needed it most.
I obviously had a day job too. I loved working for free, the benefits are huge, less stress and autonomy in how you choose to spend your time and skills and a greater sense of achievement.
If I had CBI I would work for free.
I am all for social devotional work backed with CBI.
CBI and work for free if you want to.
I can definitetely understand the sense of feeling more mentally stable without the daily stresses that come with not enough money to live on.
Most people who earn a decent salary are generally against CBI because of their own values around their own working ethic. There is nothing written anywhere that says that work is beneficial to a human being.
The money for nothing crowd always raises its ugly head when talking about any support that benefits human development especially of the poor.
As a retired therapist the majority of my lower socio-economic clients problems where due in full to the finanacial situation they found themselves in.
All therapists carry a sense of helplessnes when dealing with such clients becaue we cannot help them.
>Most people who earn a decent salary are generally against CBI because of their own values around their own working ethic. There is nothing written anywhere that says that work is beneficial to a human being.
I'm not against UBI, I just don't see how it can be done. It seems fundamentally impossible to finance at scale, which all of these experiments ignore. They are always experiments where a tiny number of people get money generated by a vast majority of people.
Which we have already, in the form of needs-based welfare.
People love meaning and purpose in their life and they typically find that in work as its a complex amalgamation of all sorts of challenges and rewards.
I believe UBI would be a net benefit for society it would enable the poorest to survive better and the rest of us more flexibility in how we life our lives.
>A German experiment has found that people are likely to continue working full-time even if they receive no-strings-attached universal basic income payments.
Surprising only to those who have not read literally any other study on UBI. They all come to this conclusion.
The only reason we don't have nice things like this: universal housing, healthcare, income, food security, is because a handful of dragons sit on and hoard unfathomably sized mountains of gold and convince the uneducated and those ignorant of economics and politics that the real problem is average people getting what they deserve - A dignified life where their basic needs are met and they have the dignified freedom to pursue a fulfilling life rather than spend it enriching aforementioned dragons for exploitative wages.
Capital and ideology by pikkety goes in to great detail in to how consent for gilded age wealth inequality is and has been manufactured. Most effectively, unsurprisingly, in the minds of... people like those replying derisively to my comment and this thread in general.
I greatly enjoy your casting of the existential struggle into fantasy role-playing terms. This is a relatively fresh treatment that is worth celebrating for its own sake.
In this context, what seems missing is the Ecclesiastes realization that 'fulfilling' (for some) is always going to mean becoming a dragon.
That is, the purported us/them separation between 'we' and 'dragons' is a mirage--there is only the full spectrum or humanity in view.
One example of a dragon was Saddam Hussein, who characterized oppression of the marsh Arabs as "being firm".
So it goes. One possible exit from the cycle is the realization the 'fulfilling' is not necessarily measured in materialistic units.
It's not that, dragons hoarding mountains of gold has always historically been an allegory for the rich hoarding wealth.
>'fulfilling' (for some) is always going to mean becoming a dragon.
Luckily we have anti dragon tools, like progressive taxation, wealth taxes, and robust social programs to prevent the dragons from sitting on too much gold.
>One example of a dragon was Saddam Hussein, who characterized oppression of the marsh Arabs as "being firm". So it goes. One possible exit from the cycle is the realization the 'fulfilling' is not necessarily measured in materialistic units.
Yeah, the fulfillment is the downstream byproduct of not having to worry about the difficulty of meeting daily material needs, not the justification for the policy itself.
Not the economy as a whole, but there are some aspects of the economy that are. Indeed, negative externalities can be worse than a zero-sum game to those affected.
To be frank, this whole “the economy is not a zero-sum game” argument is kind of a meme at this point.
>The only reason we don't have nice things like this: universal housing, healthcare, income, food security, is because a handful of dragons sit on and hoard unfathomably sized mountains of gold
This is simply not true. Barring pathologies like dictatorships, Billionaires ("Dragons") are generally not hoarding anything that affects anyone. Their fortunes are not "mountains of gold", but an estimate of how much value they could theoretically get from the rest of society if they sold their company.
It's not money that is "kept away" from the rest of us, in any way at all. We already have it. And if we don't, neither does the Dragon.
A wealthy society will create more billionaires ("Dragons") than a poor one, and a wealthy society also has more hospitals and food to share with the unfortunate than a poor society does.
Bezos, Gates etc are not hoarding hospitals, cheese or apartments. They cause more hospitals, cheese and apartments to exist since their companies employ people that need and can pay for all those things.
Even China has realized this by now. Hundreds of millions of people in China have had immense increase in standard of living the past few decades, while a few hundred billionaires have appeared.
Nobody has figured out how you get one without the other.
>> A German experiment has found that people are likely to continue working full-time even if they receive no-strings-attached universal basic income payments.
That's because this is not basic income but just an additional, lucky source of income, for a limited time. It's effectively landing a contract job on top of a regular job. I'm gonna go to great lengths to keep both since I can save the additional money and they might have quite an impact on my life.
I'm guessing the target people were not the best paid workers in Germany but still, saving €1200 per month is a lot more than the average of €450 ("According to a survey conducted in 2020 in Germany, the average monthly savings among the population amounted to 451 euros."). So if they were an average family that had a job and saved €450, with the "UBI" they just managet to triple their savings over a period of three years! Of course people won't quit their jobs, they're not stupid.
Overall it shows absolutely nothing on UBI but maybe it shows something on human psychology and rational behavior.
One effect it might have, is that employers need to go above and beyond to keep their workers happy. So, so many people have a job which they at the very best tolerate, but would quit on the spot - if they had the economic means to do so.
Some of those jobs are quite critical for society. Just think about healthcare...plenty of people enter healthcare with high morale and a desire to help, but find them completely disillusioned due to overwork, shitty shifts, unappreciation, mediocre pay, and what have you. If half of healthcare workers quit on the spot, that would lead to a societal crisis. But maybe it would also force the employers to fundamentally change the space, in order to not lose their employees.
I also think UBI would give people a "second chance". Lots of people enter the workforce before they know what they want to do, and find themselves lock into the profession or work - due to financial reasons.
I think it would certainly redistribute wealth from going into the pockets of the top 10% since they'd have to make their workers' jobs more enticing or get out there and do it themselves.
I don't understand arguments against UBI that rest on people not working anymore if they get UBI. A society where UBI is possible surely has to be one where humans no longer have to work. Otherwise it's impossible to finance.
I've never seen any explanation for how it's going to be financed that passes even the most rudimentary fact check. There is not enough existing money to pay for it, and if we create new money it will lose value.
As long as necessities are valuable, meaning people actually have to work to make them, we can't pretend that they're worthless by covering their costs with a UBI. I see no way around that.
Before we reach the stage where necessities are free, UBI seems to result in taking thousands from people in need in order to give twenties to everyone including FAANG-programmers and lawyers.
I'd rather see the ones in need get thousands and actually survive.
This could be true. One area I would like to see more data on is how UBI will be paid for. If taxes increase on medium-high earners to pay for it, you very well could see a drop-off in labor force participation even if it isn’t directly related to the receipt of UBI.
> If half of healthcare workers quit on the spot, that would lead to a societal crisis. But maybe it would also force the employers to fundamentally change the space, in order to not lose their employees.
In a capitalist society, wages would rise and conditions will improve as people are willing to pay as much as needed for health care.
The problem is that in the current rent-seeking economy (capital gets all the money while work is worth very little) all that money is redirected to the owners of middleman companies that add nothing to the economy. Produce no services nor products. Our current system is very inefficient and cannot last as it is today.
To increase wages and improve the situation of most workers will assure increased productivity and citizens well-being. It is a no-brainer. But it is not easy to implement as the people in power profits handsomely with the current bad situation.
All this simulations and experiments always have the same problem: They simulate giving people free money, but you are not simulating the other side of the coin: extracting the money from other people to pay for it(a.k.a stealing or "redistributing" euphemis)
The "surprising results" are so surprising to me because I talk to people in Germany and most people believe they pay too much taxes, specially young people. The difference is that middle class Germans are actually paying for the system. No free lunch there.
If robots take over human labor, you can always own robots(privately owning distributed means of production) instead of having a central planning system that never worked but interested people are hell bent designing so they benefit.
I'm not sure about which taxes you're talking about, but employees pay about 50% of the taxes for any of their workers' income. I think this is the same for Germany as a lot of other countries in the EU.
Well, money is just a coordination tool for tracking who is "owed" what. What people are actually consuming is labor and natural resources.
From that point of view, getting "free money" (which in effect may mean for example getting someone else to deliver food to you without you working) is not much different from all kinds of other rent-seeking behaviors.
This experiment, like all similar UBI proposals, is not serious because indeed they are impossible: it is not possible for the state to fund giving €1,200 a month to every adult "for free".
The scary bit is that this seems not to be immediately obvious to many people.
Central planning targets what is good, but inefficiently. Private enterprise targets what is profitable very efficiently. There's a combination of the two that is a happy medium.
Any proper experiment for UBI requires 1) to do it for a whole economy. You can't have 10 or 100 people on UBI where the job market, prices etc aren't affected by UBI. And 2) For life. The small effects on behavior if I'm given UBI for 1, 3 or 5 years are going to be so small as to be uninteresting. The surprising results will just be artifacts of the experiment.
Readit News
That study has shown exactly nothing. Of course I'm not going to quit if I'm out of job and UBI after three years.
Considering that the group on UBI was also happier, felt more financially secure and freer than the control group, this is hardly surprising.
Dead Comment
Those making $7/hour are often working two jobs, UBI would allow them to quit one of them.
Oh and if you own a house $1500/month is easy to live off. You can probably have a car for that.
What I think could be a very interesting on-ramp to something more UBIesque, in an environment with lots of need-based social support payments like Germany, would be an opt-in flat taxation mode for earning on the side of receiving aid: taxed high starting with the first cent earned, and in exchange those earnings are explicitly excluded from and need-based considerations or thresholds. That could greatly reduce all "not worth the hassle" considerations and uncertainties. It could be implemented as a special bank account where every incoming transaction is automatically taxed, and every payment or withdrawal certified "I'm allowed to have this without putting anything need-based in question.
What tax rate? The logical first candidate would be wherever the income tax curve tops out for high earners. If that's the highest those can be bothered with before they "stop performing", you should not be surprised if low earners would not want to perform at a higher effective tax rate either. But that tax rate should not be so low that a shift to regular taxation makes no sense in cases sufficiently permanent and wellhpaying that the administrative change isn't just overhead.
(I live in Spain, not Germany)
It was a great time, but it tought me that people get lazy if they don't have to work. So now I am obviously projecting my own lazyness to the general population, which is why I am against UBI.
Dead Comment
And the results generally bear little resemblance to either (1) or (2).
Napoleon supposedly said "the moral is to the physical as three to one" in reference to the battlefield performance of military units. But the same is true across extremely wide ranges of human behaviors.
Superficially, yeah. I'd read that situation as a combination of (1) "millions of clicks from wanna-feel-happy lefties pay the bills" journalism, and (2) editors wanting "friends" in the "so rich I can afford to be a blinkered ideologue" progressive set.
For those inclined to real-world public policy, the main result I see is that the complex "needs testing" part of existing entitlement and welfare programs is 99% ideological/political bullshit and bureaucratic make-work.
Although I have a masters degree I worked for 10 years, 3 nights each week, as a volunteer psychotherapist, providing free therapy to those that could least afford psychotherapy, those that needed it most.
I obviously had a day job too. I loved working for free, the benefits are huge, less stress and autonomy in how you choose to spend your time and skills and a greater sense of achievement.
If I had CBI I would work for free.
I am all for social devotional work backed with CBI.
CBI and work for free if you want to.
I can definitetely understand the sense of feeling more mentally stable without the daily stresses that come with not enough money to live on.
Most people who earn a decent salary are generally against CBI because of their own values around their own working ethic. There is nothing written anywhere that says that work is beneficial to a human being.
The money for nothing crowd always raises its ugly head when talking about any support that benefits human development especially of the poor.
As a retired therapist the majority of my lower socio-economic clients problems where due in full to the finanacial situation they found themselves in.
All therapists carry a sense of helplessnes when dealing with such clients becaue we cannot help them.
I'm not against UBI, I just don't see how it can be done. It seems fundamentally impossible to finance at scale, which all of these experiments ignore. They are always experiments where a tiny number of people get money generated by a vast majority of people.
Which we have already, in the form of needs-based welfare.
I believe UBI would be a net benefit for society it would enable the poorest to survive better and the rest of us more flexibility in how we life our lives.
Surprising only to those who have not read literally any other study on UBI. They all come to this conclusion.
The only reason we don't have nice things like this: universal housing, healthcare, income, food security, is because a handful of dragons sit on and hoard unfathomably sized mountains of gold and convince the uneducated and those ignorant of economics and politics that the real problem is average people getting what they deserve - A dignified life where their basic needs are met and they have the dignified freedom to pursue a fulfilling life rather than spend it enriching aforementioned dragons for exploitative wages.
It says a lot about how much the ideology that "rich people deserving, poor people are lazy" has affected people's attitudes.
In this context, what seems missing is the Ecclesiastes realization that 'fulfilling' (for some) is always going to mean becoming a dragon.
That is, the purported us/them separation between 'we' and 'dragons' is a mirage--there is only the full spectrum or humanity in view.
One example of a dragon was Saddam Hussein, who characterized oppression of the marsh Arabs as "being firm".
So it goes. One possible exit from the cycle is the realization the 'fulfilling' is not necessarily measured in materialistic units.
It's not that, dragons hoarding mountains of gold has always historically been an allegory for the rich hoarding wealth.
>'fulfilling' (for some) is always going to mean becoming a dragon.
Luckily we have anti dragon tools, like progressive taxation, wealth taxes, and robust social programs to prevent the dragons from sitting on too much gold.
>One example of a dragon was Saddam Hussein, who characterized oppression of the marsh Arabs as "being firm". So it goes. One possible exit from the cycle is the realization the 'fulfilling' is not necessarily measured in materialistic units.
Yeah, the fulfillment is the downstream byproduct of not having to worry about the difficulty of meeting daily material needs, not the justification for the policy itself.
To be frank, this whole “the economy is not a zero-sum game” argument is kind of a meme at this point.
This is simply not true. Barring pathologies like dictatorships, Billionaires ("Dragons") are generally not hoarding anything that affects anyone. Their fortunes are not "mountains of gold", but an estimate of how much value they could theoretically get from the rest of society if they sold their company.
It's not money that is "kept away" from the rest of us, in any way at all. We already have it. And if we don't, neither does the Dragon.
A wealthy society will create more billionaires ("Dragons") than a poor one, and a wealthy society also has more hospitals and food to share with the unfortunate than a poor society does.
Bezos, Gates etc are not hoarding hospitals, cheese or apartments. They cause more hospitals, cheese and apartments to exist since their companies employ people that need and can pay for all those things.
Even China has realized this by now. Hundreds of millions of people in China have had immense increase in standard of living the past few decades, while a few hundred billionaires have appeared.
Nobody has figured out how you get one without the other.
Dead Comment
That's because this is not basic income but just an additional, lucky source of income, for a limited time. It's effectively landing a contract job on top of a regular job. I'm gonna go to great lengths to keep both since I can save the additional money and they might have quite an impact on my life.
I'm guessing the target people were not the best paid workers in Germany but still, saving €1200 per month is a lot more than the average of €450 ("According to a survey conducted in 2020 in Germany, the average monthly savings among the population amounted to 451 euros."). So if they were an average family that had a job and saved €450, with the "UBI" they just managet to triple their savings over a period of three years! Of course people won't quit their jobs, they're not stupid.
Overall it shows absolutely nothing on UBI but maybe it shows something on human psychology and rational behavior.
One effect it might have, is that employers need to go above and beyond to keep their workers happy. So, so many people have a job which they at the very best tolerate, but would quit on the spot - if they had the economic means to do so.
Some of those jobs are quite critical for society. Just think about healthcare...plenty of people enter healthcare with high morale and a desire to help, but find them completely disillusioned due to overwork, shitty shifts, unappreciation, mediocre pay, and what have you. If half of healthcare workers quit on the spot, that would lead to a societal crisis. But maybe it would also force the employers to fundamentally change the space, in order to not lose their employees.
I also think UBI would give people a "second chance". Lots of people enter the workforce before they know what they want to do, and find themselves lock into the profession or work - due to financial reasons.
I've never seen any explanation for how it's going to be financed that passes even the most rudimentary fact check. There is not enough existing money to pay for it, and if we create new money it will lose value.
As long as necessities are valuable, meaning people actually have to work to make them, we can't pretend that they're worthless by covering their costs with a UBI. I see no way around that.
Before we reach the stage where necessities are free, UBI seems to result in taking thousands from people in need in order to give twenties to everyone including FAANG-programmers and lawyers.
I'd rather see the ones in need get thousands and actually survive.
In a capitalist society, wages would rise and conditions will improve as people are willing to pay as much as needed for health care.
The problem is that in the current rent-seeking economy (capital gets all the money while work is worth very little) all that money is redirected to the owners of middleman companies that add nothing to the economy. Produce no services nor products. Our current system is very inefficient and cannot last as it is today.
To increase wages and improve the situation of most workers will assure increased productivity and citizens well-being. It is a no-brainer. But it is not easy to implement as the people in power profits handsomely with the current bad situation.
People also need food, which is a labor-intensive business, and it is one of the main drivers of human trafficking in the US: https://www.ice.gov/news/releases/human-trafficking-forced-l...
The "surprising results" are so surprising to me because I talk to people in Germany and most people believe they pay too much taxes, specially young people. The difference is that middle class Germans are actually paying for the system. No free lunch there.
If robots take over human labor, you can always own robots(privately owning distributed means of production) instead of having a central planning system that never worked but interested people are hell bent designing so they benefit.
100% this. The average worker pays too much indeed. Mega-corporations and the super-rich do not pay anymore their share. It is a shame.
From that point of view, getting "free money" (which in effect may mean for example getting someone else to deliver food to you without you working) is not much different from all kinds of other rent-seeking behaviors.
The scary bit is that this seems not to be immediately obvious to many people.