Author Topic: Finland to Introduce Universal Basic Income  (Read 37455 times)

Bbqmustache

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Re: Finland to Introduce Universal Basic Income
« Reply #50 on: December 08, 2015, 04:30:58 AM »
This is a bad idea that will not do anything to relieve the financial burdens of most Finlands.  Read Mr. Money Mustache's post on Hedonic Adaptation to understand why.

Now, if Finland would add a requirement to read all MMM posts as a condition of income receipt.....

andy85

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Re: Finland to Introduce Universal Basic Income
« Reply #51 on: December 08, 2015, 07:44:24 AM »
On it's face, I am inclined to be strongly opposed to something like this being a small government type of guy.

But, like most things, i need to research it more to form a coherent opinion (as I'd venture to guess, most of us do)

I did find a podcast on the subject by one of my favorite libertarian bloggers/authors/podcasters - Tom Woods. Give it a listen if you're interested.

https://www.youtube.com/watch?v=L0LabBo7Amk
IMO, a small government type of guy should be strongly in favor of a guaranteed income, following in the footsteps of Friedrich Hayek and Milton Friedman
Like I said, I still need to do my own research as I have never really given the subject much study.

This is, however, a debated topic within libertarian circles. While I agree that basic income does appear to be better than the current system of various individual welfare programs, I still cant help but see it as a redistribution of wealth. Taking money from somebody and giving it to somebody else. My opinion is not set in stone though and I am always open to further reading.

https://www.mises.ca/against-the-libertarian-case-for-a-basic-income/

edit: more reading for pros and cons http://www.independent.org/publications/tir/toc.asp?issueID=81

« Last Edit: December 08, 2015, 07:56:30 AM by andy85 »

Financial.Velociraptor

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Re: Finland to Introduce Universal Basic Income
« Reply #52 on: December 08, 2015, 08:54:08 AM »
I spoke to a Facebook friend from Finland and she says the reports are bogus and suspects interference by "Kreml".  They live in fear of Moscow there apparently.

brooklynguy

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Re: Finland to Introduce Universal Basic Income
« Reply #53 on: December 08, 2015, 09:08:54 AM »
I like the idea of basic income, but I can't wait until all the places pop up that can reverse annuitize this (don't know what that's technically called... lump summarize?)

Won't happen for bad PR reasons. When it's a social safety net, and they've sold it and blown the cash, and the person is out on the streets, it looks really bad.

It's one reason why many companies stopped doing reverse mortgages, because when they had to foreclose because people weren't paying the property tax, it looked really bad.

I wonder if Finland would also make these payments non-"lump summarizable" by operation of law, as the United Stated has done with respect to social security payments.

dramaman

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Re: Finland to Introduce Universal Basic Income
« Reply #54 on: December 08, 2015, 09:14:30 AM »
I like the idea of basic income, but I can't wait until all the places pop up that can reverse annuitize this (don't know what that's technically called... lump summarize?)

Won't happen for bad PR reasons. When it's a social safety net, and they've sold it and blown the cash, and the person is out on the streets, it looks really bad.

It's one reason why many companies stopped doing reverse mortgages, because when they had to foreclose because people weren't paying the property tax, it looked really bad.

I wonder if Finland would also make these payments non-"lump summarizable" by operation of law, as the United Stated has done with respect to social security payments.

Good point.

bacchi

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Re: Finland to Introduce Universal Basic Income
« Reply #55 on: December 08, 2015, 09:32:07 AM »
The article says that the current estimated cost exceeds all of the government revenue...


Thankyou for pointing this out. Finland government is projected to pull EUR 49.6 billion in revenue in 2016, and this basic income will cost EUR 52.2 billion per year.

So it leaves nothing for health, education, defence, police, general government business and services, the environment, the arts, sport and culture, disaster relief, aged care..... oh and interest on government debt.

Sounds plainly ridiculous if you ask me.

Wiki shows a revenue in 2011 of $136B.

It'll be a fascinating experiment.

MrMonkeyMustache

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Re: Finland to Introduce Universal Basic Income
« Reply #56 on: December 08, 2015, 03:20:20 PM »
And perhaps the revenue would go up quite a bit when the amount of the basic income ia taxed back to the state for all people receiving a decent wage?

JZinCO

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Re: Finland to Introduce Universal Basic Income
« Reply #57 on: December 08, 2015, 04:23:08 PM »
Just a tidbit. Where basic income has been universal, it has been observed that economic output increases, usually in the form of self-ownership. The risk of self-employment is lower when a net can catch anyone.
Course all of the examples I can think of are in rural, villages.
Ted talk: https://www.youtube.com/watch?v=aIL_Y9g7Tg0

In the former case, funding limits the capacity to increase production from labor. The basic income removes this limit.
In a case where technology's production outpaces that of labor, a different argument could be made for a basic income. It's not hypoerbole to suggest that many humans will be out of a job 100, 200 yrs down the road is. In this case govt revenues might stay at their level, while human income dives. Robots worked us out of a job but there is still economic activity at the aggregate level. So what does the govt do with the windfall of surplus revenue? A negative income tax.
Ted talk: http://www.ted.com/talks/andrew_mcafee_are_droids_taking_our_jobs#t-555873
Article: http://io9.com/how-universal-basic-income-will-save-us-from-the-robot-1653303459

kiwichick

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Re: Finland to Introduce Universal Basic Income
« Reply #58 on: December 08, 2015, 05:16:57 PM »
how come instead of universal income, no one does a universal work program? Can't find a job to pay bills? Fine, go clean the high ways... go repaint the bridges... etc... Same $800/month but you force the person to do labor... maybe if they feel like they don't want to work under the sun, they can find a job on their own? Even if they did a poor job at it, they are still forced to be out in sun, if all they did was sit there, they would still be uncomfortable...

I'm a new deal kind of person

I would love to see a government sit down and decide if employment is a basic human right. If they were to decide it is, then they would be obliged to provide work for those who could not otherwise find employment. If they decide it isn't, then they would need to relax their rules on unemployment benefits as how can you justify refusing someone an unemployment benefit if you agree that a job is not a right and that no-one needs to hire them? In the 30s, didn't the US government start massive road building programmes to employ those left out of work by the great depression?

marty998

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Re: Finland to Introduce Universal Basic Income
« Reply #59 on: December 08, 2015, 11:45:50 PM »
The article says that the current estimated cost exceeds all of the government revenue...


Thankyou for pointing this out. Finland government is projected to pull EUR 49.6 billion in revenue in 2016, and this basic income will cost EUR 52.2 billion per year.

So it leaves nothing for health, education, defence, police, general government business and services, the environment, the arts, sport and culture, disaster relief, aged care..... oh and interest on government debt.

Sounds plainly ridiculous if you ask me.

Wiki shows a revenue in 2011 of $136B.

It'll be a fascinating experiment.

My apologies for not referencing the source that I took that number from. It was reported in our local news website.

http://www.abc.net.au/news/2015-12-07/finland-proposes-to-pay-each-citizen-800-euros-a-month/7006596

I don't know a lot about Finland, but I seem to recall remember there was a time in the early 2000's when Nokia made up more than 55% of the market capitalisation of their stockmarket.

You may not have got a diversification benefit buying an index fund in Finland back then...

TheOldestYoungMan

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Re: Finland to Introduce Universal Basic Income
« Reply #60 on: December 09, 2015, 09:23:42 AM »
I really like the idea of basic income, as an idea.  It is difficult for me to imagine it working given the various existing levers we use for motivation today.  This is one of those, I think it could work, but I also think the implementation requires many things to happen which probably won't happen overnight.

I think it's probably worth considering the whole cultural evolution aspect of this.  This is where I'm coming from:

I have two degrees in engineering from top schools, I am a licensed engineer with a half dozen other credentials and certs.  I've been working since 2001 or 2007 depending on how you count certain types of work (I don't count work I did prior to the second degree as my career, but for this discussion it should be part of it).

I work hard, 90 hour weeks not out of the question if needed.  I'll work weekends, holidays, whatever.  The work I do is important and satisfying.  I protect people, I save lives.  All of this was deliberate.  I wanted a job where my contribution was significant.  I knew early on I was smarter than many, maybe most, so I knew I had a duty to pursue something intellectually difficult.  Had I been stronger I like to think I would have felt the same satisfaction pursuing something that made use of that.  Or beautiful, or musically talented, etc.

All of that, is, to the extent I needed a job in the first place.

If it were up to me, given unlimited resources, I wouldn't work at all.  I wouldn't have pursued the degrees  and I would never have worked a day in my life.  The most satisfying day for me is sitting outside, sipping an ice cold beverage, watching the day pass by.

There was never a summer day of my youth, a holiday since, or a weekend, where I've ever been bored.  I neither need nor actively seek any active stimulation.  I am content to just be. 

And I am not alone.

Without the need to work in order to provide food, I don't have the need to find better work because to the extent I work I want to make as much as possible.

So don't think that "those who can or want will" because there are tons of us who won't.  I don't feel bad about it either.  I would have no problem cashing that check every month either.  For me it was never about any other motivation.

I was raised, and the culture I grew up in right here in the USA, is that you work hard because you have to.  Nobody will hire you if you don't.  Most won't hire you either way, so you also need to get educated.  If you want to eat and have a place to stay you need to work.  That's just how it is son!  Everything else was tacked on, not as a reason to work at all, but as a way of thinking about the need to work so it didn't seem so bad.  The whole status, prestige, contribution, honor part of it.  All secondary, to mitigate the awfulness of work (and therefore unnecessary, if work is out of the picture).

So along with basic income, the culture has to evolve to the point where working and making a contribution is enough to motivate capable people like me to go ahead and work.

I don't see that ever happening.  I'm trying to find the words to describe how utterly uninterested I am in trading my time for money once I have enough money to survive.  I don't think you believe how deep seated it is, and I'm not sure you really grasp how widespread it is.

We are the 99% [citation needed].

The idea of basic income, particularly in place of all other programs, has a simplicity that is appealing.  And it certainly has a structural advantage in that.  I have a voyeuristic joy at another country trying it out, these types of experiments are expensive.  I'm hopeful any problems that arise people are able to come up with a solution (like making it illegal to lend money to someone who's only source of income is that basic income, or making it super easy for people to discharge debts like that in bankruptcy).

But if you need my contribution, then it's probably a bad idea.  So before the civilization goes down that road, make sure the robots are ready, because a bunch of us are going to drop out of the workforce.

I think the transition might not be as painful, because at this point I have so much sunk cost built into my credentials I probably would keep going until I could afford the particular lifestyle I've already worked so hard for, but the equivalent of 800 euro a month combined with my current savings would let me instantly FIRE now.  And if it had been on the table from the beginning I never would have even gone to high school, much less finished.

Just sayin'

arebelspy

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Re: Finland to Introduce Universal Basic Income
« Reply #61 on: December 09, 2015, 10:26:34 AM »
It would let you drop out, yes.

But most people would still work, because they're driven by consumption. By things. Cars. Vacations. Etc.

If they weren't, they'd have massive savings rates and ER anyways.

But what it will do is help those who are willing to live cheaply so they can pursue a passion, like creating art. It will help those who can't work. It will provide a safety net for people to take risks and start businesses.

But most people?  They'll keep working, because the basic low level income doesn't buy their daily lattes, weekend clothes shopping trips, etc.
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PathtoFIRE

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Re: Finland to Introduce Universal Basic Income
« Reply #62 on: December 09, 2015, 11:04:18 AM »
Like many of you, I find the idea of a universal basic income to be interesting. I haven't seen it mentioned, but there are a variety of ways this has been proposed, an even enacted to varying degrees. I'll bring up one that is the darling of a school of economics that I find a lot of agreement with, and that is what's called the Job Guarantee (or JG).

The basic idea, if I may attempt to relay and not misstate, is that the federal government would offer anyone and everyone a job, and that job would pay essentially the minimum living wage. There are different ways it could be administered, like block grants through states, etc., but the basic elements are that some type of full time job is available to anyone at any time, and the pay for those jobs is set. The arguments for this type of basic income approach are that it replaces the minimum wage laws (unlikely private or other government employers could pay less if anyone could instead enroll for one of the JG jobs), many of the social welfare "safety net" programs, and reduces some of the disincentives towards work that other universal basic income. I'm not sure whether any of those aspects of a JG program are better or worse than other UBI programs.

One other point, and a large part of the reason a JG is advocated for, is the observation that those with periods of extended unemployment find it increasingly difficult to eventually find jobs, and you can find academic research showing that increasing periods of unemployment correlate well with increasing odds of not finding an eventual job. The JG, unlike many other UBI programs, seeks to directly address this by providing forms of transitional employment with the hope and expectation that people will be better able to springboard into employment in the private sectors more easily.

I personally would favor maybe some kind of combination, with some basic floor guaranteed to every citizen, then a job guarantee on top of that.

TheOldestYoungMan

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Re: Finland to Introduce Universal Basic Income
« Reply #63 on: December 09, 2015, 11:42:31 AM »

But most people would still work, because they're driven by consumption. By things. Cars. Vacations. Etc.


But most people?  They'll keep working, because the basic low level income doesn't buy their daily lattes, weekend clothes shopping trips, etc.

I think many people might.  I think most people aren't actually buying a daily latte or shopping every weekend.  There are a shit-ton of jobs being done right now that nobody in their right mind would do.  People who right now don't have much.  I don't think it is a given that even a majority would.  And they got there via hedonistic creep.  When you weren't having to justify selling your life away a daily latte didn't seem necessary.  Little kid you drank from the garden hose and played in the dirt.  And he was happy!

If it's true that consumption drives work which drives consumption...then there's the possibility of some real negative consequences over time.  The current engineer doesn't auto-quit, but the next gen produces fewer engineers.  Maybe the next gen produces more authors and musicians, maybe that's OK.

I do agree that many of those not forced into work for survivalist reasons would do something.  I'm not saying it couldn't work, just that it's something to consider.  It's entirely possible that instead of 1-5% of current workers dropping out of the workforce it could come in right at 40-60%.  I don't know, maybe McD's will raise wages.  That could happen.  But having a functional robot-waiter prior to making waiting tables a "life's passion pursuit" is advisable.


iris lily

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Re: Finland to Introduce Universal Basic Income
« Reply #64 on: December 09, 2015, 11:44:54 AM »
how come instead of universal income, no one does a universal work program? Can't find a job to pay bills? Fine, go clean the high ways... go repaint the bridges... etc... Same $800/month but you force the person to do labor... maybe if they feel like they don't want to work under the sun, they can find a job on their own? Even if they did a poor job at it, they are still forced to be out in sun, if all they did was sit there, they would still be uncomfortable...

I'm a new deal kind of person

I really dislike gubmnt make-work jobs, having had hands on supervisory experience with the CETA program. It assumes no skills and no work ethic is peachy keen for public service.

It 's like forced service in the armed services. Ask people in the armed services how much they want draftees in their group.

I say, show me the financials of guaranteed income program, lets put all of those bureaucrats who administer SNAP and Section 8 housing credits out of a job and toss their salaries into the pot for guaranteed income. That would be fun.
« Last Edit: December 09, 2015, 11:47:03 AM by iris lily »

okits

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Re: Finland to Introduce Universal Basic Income
« Reply #65 on: December 09, 2015, 12:26:38 PM »
TheOldestYoungMan - if the U.S. implemented a universal basic income, I imagine many professionals like you would look skeptically and say,

- "the next administration will can the program, it won't last",
- "this isn't sustainable, they'll take it away in my lifetime",
- "we can't depend that the value of this will keep up with inflation; in twenty years it won't even buy a loaf of bread."

Then you'll work OMY (or 2MY or 8MY) so you'll never have to return to the workforce at a lower wage. ;)

I have no prediction regarding how many people would opt out given a universal basic income, but as ARS says, it's human nature to want more things than the basic income will buy (or, simply, more things than the person next to you).  Also, there will be an element of competition for social standing, for mates, for wealth and power.  Ambition or materialism will keep some people interested in work and professional accomplishment.

The option to subsist on welfare is present now.  For people who are content to forego work and live inexpensively, they don't need a universal basic income to do that now if they're able to meet the system qualifications (or willing to lie) to receive that support.  While it may be a common and acceptable choice in certain segments of society, in others it is completely repugnant to eschew work and achievement. 

In your example, perhaps the next generation produces fewer engineers.  But perhaps we attract engineer immigrants to make up the shortfall, we import engineering expertise, or pay increases for engineers, attracting new people to the profession.  There may be negative consequences to the universal income approach, but we won't know what they are (and the extent) until the experiment plays out.  Perhaps Finland has decided that their current system is sufficiently broken that it's worth the risk to try something else.  I am sure the world will watch with interest.

Cassie

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Re: Finland to Introduce Universal Basic Income
« Reply #66 on: December 09, 2015, 08:40:22 PM »
I think most people would still work. I certainly would have still went to college & worked. nOt just for $ but for the personal satisfaction that it gave me.  Sure some will do it for the $ but I bet there is a lot of more reasons.  We will always have some people that can't or won't work-too disabled or no interest, etc. For single adults in the US with no kids there is very little assistance really available which is sad due to the fact that 75% of the homeless are so severely mentally ill that they can't work. A town in Wis is building them tiny houses in a special subdivision and funding it through donations. I donated when I found out about it because I thought it was a great goal.

JZinCO

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Re: Finland to Introduce Universal Basic Income
« Reply #67 on: December 09, 2015, 09:25:27 PM »
I'm just going to bump this video (https://www.youtube.com/watch?v=aIL_Y9g7Tg0) one more time, because I hear alot of 'I think this would happen'. Now, the current observations are not comprehensive because no municipality has expanded basic income past a few thousand individuals. But it behoove speculators to see what has happened to people who receive a basic income before they suggest what will happen.
Anyway, I think the most prudent thing is to wait and see how Finland conducts their experiments and what the results are (http://www.slideshare.net/DylanMatthews2/experimenting-with-basic-income-in-finland)

For those of us, like myself, who were not alive when Nixon was arguing for a means-tested basic income for families to replace most forms of welfare, against Mcgovern who advocated an unconditional basic income for all individuals and families, here is a quote from Nixon:
Quote
What I am proposing is that the Federal Government build a foundation under the income of every American family with dependent children that cannot care for itself—and wherever in America that family may live.

For a family of four now on welfare, with no outside income, the basic Federal payment would be $1,600 a year. States could add to that amount and most States would add to it. In no case would anyone's present level of benefits be lowered. At the same time, this foundation would be one on which the family itself could build. Outside earnings would be encouraged, not discouraged. The new worker could keep the first $60 a month of outside earnings with no reduction in his benefits; and beyond that, his benefits would be reduced by only 50 cents for each dollar earned.
Legislation passed the House of Representatives and the Senate voted down the measure due to debate over the guaranteed amount. Just trying to add in context that the US has flirted with basic income in the past.

TheOldestYoungMan

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Re: Finland to Introduce Universal Basic Income
« Reply #68 on: December 10, 2015, 07:56:31 AM »
Just to reiterate, I am a professional exactly like me, and I wouldn't work.

It's not a hypothetical.  Perhaps I'm an outlier.

But now when you discuss this you can't say you don't know anybody who thinks it would be enough to let them quit work.  Because you do.  It isn't an academic concept.

Here's a guy who would quit.  And yea, I might be the only one, but...

arebelspy

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Re: Finland to Introduce Universal Basic Income
« Reply #69 on: December 10, 2015, 08:01:44 AM »
Ask people around you if they would quit if they had an $800/mo pension from the government as their sole source of income or if they would  keep working (and still get the pension).

You'll discover how much of an outlier you are.
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Psychstache

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Re: Finland to Introduce Universal Basic Income
« Reply #70 on: December 10, 2015, 08:10:57 AM »
Just to reiterate, I am a professional exactly like me, and I wouldn't work.

It's not a hypothetical.  Perhaps I'm an outlier.

But now when you discuss this you can't say you don't know anybody who thinks it would be enough to let them quit work.  Because you do.  It isn't an academic concept.

Here's a guy who would quit.  And yea, I might be the only one, but...

By virtue that you are interested in personal finance and an avid participant on this message board should be enough to remind you that, yes, you are an outlier.

TheOldestYoungMan

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Re: Finland to Introduce Universal Basic Income
« Reply #71 on: December 10, 2015, 08:31:04 AM »
I'm not opposed to the idea.  The Finland thing is an experiment, and I look forward to the results.  I like the simplicity of it, that appeals to the engineer in me.  The shrinking of the bureaucracy appeals to the libertarian sentiments, but I'm too jaded to think that would happen.  No robot is going to take a government job!  I think if anything would have the results people are hoping for, basic income is as likely as anything.  I'm just cautious whenever there doesn't seem to be a willingness to believe the issue might be intrinsic to who we are.  Do we keep trying new things?  Sure.  But it's possible the solution will always be imperfect and messy.

I'm curious if you ever asked that question of your students ABS.  Asking the question of the people around me, who have debts that $800/mo won't even cover, and who have become accustomed to living off of more, of course that's what they would say.  It's a false positive response though.  They aren't answering from a place where they've considered the full implications.  But it is very tied up in what they have already "earned".  There's a guy I work with right now who could stop working, but he'd be "giving up" his pension if he retires "too early".  As far as my friends?  100% would quit.  All of us.  Talked about it last night, everyone agreed that would be enough.  Now, we'd definitely use the opportunity to create a business and see what we could accomplish, because that'd be fun and now relatively risk free.  So maybe that proves the point.

It's a very different question asking someone who lives off of $1200/mo if they would keep that up, or who manages to make $600/mo part time if they would.  The one guy I know living at such a base level looked extremely uncomfortable when I was talking to him about it, and when pressed admitted that he'd have to figure out how to keep his current income off book to get the maximum benefit.  Excited by the idea of more money, not thrilled that he'd have to become a tax cheat.  I love America!  Upon realizing you'd now have an income tax obligation -> instantly decides to try to avoid paying them.

So maybe it would just liberate the true wage slaves.  But I don't see it as truly beneficial until jobs truly become impossible to find, because of robots.

I think the robots are coming, but I'm not sure it's a problem to fix before they get here.  And they aren't that close for most jobs:

https://www.youtube.com/watch?v=8P9geWwi9e0

They are scary close though.  I think we're alot closer to piloted remote vehicles making existing jobs safer/easier, so maybe the next generation in 20 or 30 years needs this.

JZinCO

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Re: Finland to Introduce Universal Basic Income
« Reply #72 on: December 10, 2015, 09:34:43 AM »
Just to reiterate, I am a professional exactly like me, and I wouldn't work.
Yeah, and I'm running around makin babies for the Child Tax Credit...

CTC isn't high enough to incent child rearing. A workable basic income wouldn't provide enough to incent unemployment. All it is, is payments in lieu of welfare, which provide a larger disincentive to work because once one exceeds the mean test, the marginal tax rate is 100%.

If you think you could probably live off of ~$800/mo, I'm sure there are ways you could game welfare to provide that amount. Heck, when I worked seasonal jobs, my supervisors worked 6 mo/yr making 50K, and rode off of $2000/mo unemployment in the winter. Those folks usually aren't skilled enough to find work in the off-season that would pay as much as their unemployment benefits.
« Last Edit: December 10, 2015, 09:39:58 AM by JZinCO »

arebelspy

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Re: Finland to Introduce Universal Basic Income
« Reply #73 on: December 10, 2015, 10:55:50 AM »

I'm curious if you ever asked that question of your students ABS. 

5th graders have no concept of money.  $800/mo. sounds like a fortune when your allowance is $5.  But they don't know what rent is, or the cost of anything.

Even my wife's high school students didn't know what interest was, how credit cards work, etc. so she'd give them a mini-financial crash course over a few days at the end of the year.

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Cassie

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Re: Finland to Introduce Universal Basic Income
« Reply #74 on: December 10, 2015, 11:00:54 AM »
$800/month would not be enough $ for most people. First of all you would need to be part of a couple to have any chance at a decent living arrangement & need to move to a very LCOL.  If you don't own a house outright probably not buying one & many LCOL areas don't have good public transportation so you might need a car or spend entire days trying to do your errands, etc.  Sounds like a great time to me-ugh!

dragoncar

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Re: Finland to Introduce Universal Basic Income
« Reply #75 on: December 10, 2015, 12:31:45 PM »
At the margins it'll drive some to quit.  Like people who are nearing retirement and have a little more to save but the extra income puts them over the edge.

Is it inflation adjusted?  If so how do they handle that?

Milizard

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Re: Finland to Introduce Universal Basic Income
« Reply #76 on: December 10, 2015, 12:51:48 PM »
I'd no longer worry about this current break in working for me while I'm taking care of my mother.  DH and I would probably take turns working for the insurance and to get us over the hump of not enough $ to enough.  We'd also be able to FIRE a lot quicker, and my children's future college expenses would be covered a bit.

Yeah, I think it would be a good thing, possibly even a great thing for families and the middle class.

Matumba

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Re: Finland to Introduce Universal Basic Income
« Reply #77 on: December 10, 2015, 02:54:30 PM »
The article mentions that they would be replacing their existing safety net programs (and associated bureaucracies) with a universal monthly check.

One concern I haven't seen addressed anywhere with such a scheme is what do you do when people rack up enough debt so that their debt payments exceed their basic income?

Just because someone gets enough money to live on doesn't mean they will spend it prudently, and if there are no restrictions on, say, buying only food and shelter, that money could evaporate and leave such a person in dire straits.
The debt problem is the problem of banks and other private lenders unless the government is involved.

If banks are stupid enough to lend too much to the poor,  they will eventually go bankrupt.  The problem will fix itself unless the government is involved in lending.

MrMoogle

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Re: Finland to Introduce Universal Basic Income
« Reply #78 on: December 11, 2015, 06:18:21 AM »
I kind of like the idea.  I think it will make us less dependent on big corporations.  There will be more small businesses if the price for failing isn't so big. 

My issue is that it's government stepping in, which I'm generally against.  This is "spreading the wealth" and similar to forcing savings. 

I think this is a step toward a local optimum, but not the optimum.  But I'm willing to try it out.

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Re: Finland to Introduce Universal Basic Income
« Reply #79 on: December 11, 2015, 06:42:08 AM »
Just to reiterate, I am a professional exactly like me, and I wouldn't work.

It's not a hypothetical.  Perhaps I'm an outlier.

But now when you discuss this you can't say you don't know anybody who thinks it would be enough to let them quit work.  Because you do.  It isn't an academic concept.

Here's a guy who would quit.  And yea, I might be the only one, but...

800$ a month.

That's 9600$ a year.  That means you only need 240,000$ saved for the 4% rule.  I've got more than 240,000$ saved and don't consider myself ready to retire yet . . .

TheOldestYoungMan

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Re: Finland to Introduce Universal Basic Income
« Reply #80 on: December 11, 2015, 03:13:25 PM »

800$ a month.

That's 9600$ a year.  That means you only need 240,000$ saved for the 4% rule.  I've got more than 240,000$ saved and don't consider myself ready to retire yet . . .

Right, but you're looking at it like it has always existed.  It hasn't.

If it went in now, it'd be effectively increasing your current savings by $240,000/yr.  Are you within $240,000 of FIRE?  Because I am.  The monthly spend available to me if this were available right now is higher than what I'll have when I eventually FIRE.  My FIRE number is only 300k.  MMM has said his was what? 600k?  So MMM and Mrs. MMM combined needed to save only an extra 120k to live the life they have now.

You see what I'm saying?  It changes all the calculus, in the same way that social security does once you can get it.

At 18 I was within 240k of FIRE.  That was before I endured college and everything else since.  I didn't dig ditches for years to pay for engineering school to live in a crappy house the rest of my life.  But if it had been on the table...the marginal gain of all of that work is pretty slight, and achievable with a variety of other part time efforts.  That is to say, the amount you need to save to achieve [whatever] is reduced by 240k.

And then this surprised me:

I actually did ask my coworkers today at lunch what they would do if this were enacted tomorrow.  And you're right, none of them said they would stop working.  But they'd all quit this job and take a few months off.  I was pretty surprised by that.  And the consistency was pretty startling.  It seems like all of us could really use about 6 months of vacation.

So I'd encourage phasing it in, because that seems like a real thing that could spike the experiment.  I don't think I'd never do anything for money (now that I know how easy it is to make money), but I'd certainly take some time off.  There are books to read and movies to watch yo!

arebelspy

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Re: Finland to Introduce Universal Basic Income
« Reply #81 on: December 11, 2015, 03:18:19 PM »
And you're right, none of them said they would stop working.  But they'd all quit this job and take a few months off.

Exactly.

And while you may be to the point where the 10k/yr pushes you over the edge to FIRE, the average person's net worth is such that 10k/year is nowhere close to combining with their portfolio to get them a standard of living they're happy with.

So most people, like we said, would keep working (or start working, or however you want to put it).

You are an outlier. :)
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Re: Finland to Introduce Universal Basic Income
« Reply #82 on: December 11, 2015, 04:09:57 PM »
Even my wife's high school students didn't know what interest was, how credit cards work, etc. so she'd give them a mini-financial crash course over a few days at the end of the year.

I just did this for my wife's physics classes this week. It was a bit shocking how little these students (mostly seniors graduating in May) have been taught about how the financial system works. Looking back, I realize I did't know much more about it when I graduated than they do. So, I tried to cover the things I wish someone had told me about then. Some of them were really interested which made it rather enjoyable.

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Re: Finland to Introduce Universal Basic Income
« Reply #83 on: December 12, 2015, 01:19:11 AM »
Most people are too caught in the web for $9600 a year to make it likely they would FIRE.

From birth people are taught that buying things makes them happy, that keeping up with the Jones's  is what life is about, that a continually higher and higher standard of living is not only desirable but a necessity, that no matter how much they have, it isn't enough.

There would be some few people who would quit work and subsist on the basic income.  They would be outliers, just as the ones who game the welfare system now are outliers.  The rest would simply find a way to spend the extra money on shit and go on as they were before.

I think the idea has great merit and look forward to seeing it put into action.  However, I think it is still quite a while away.

Christof

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Re: Finland to Introduce Universal Basic Income
« Reply #84 on: December 12, 2015, 03:32:26 PM »
how come instead of universal income, no one does a universal work program? Can't find a job to pay bills? Fine, go clean the high ways... go repaint the bridges... etc... Same $800/month but you force the person to do labor... maybe if they feel like they don't want to work under the sun, they can find a job on their own? Even if they did a poor job at it, they are still forced to be out in sun, if all they did was sit there, they would still be uncomfortable...

That's what we have in Germany.... If you are on benefits you have that work for 1€ an hour which you keep in addition to your benefits. Highly controversial, highly unpopular...

TheOldestYoungMan

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Re: Finland to Introduce Universal Basic Income
« Reply #85 on: December 14, 2015, 12:44:55 PM »
I had a coworker who used to talk about traveling in some other country, I want to say Singapore, but that might not be right, sometime in the last 30 years.

They had a mandatory job requirement.  Basically, everyone had to have a job.  If you lost your job, a government work crew picked you up at the ass-crack of dawn and you spend your morning doing work around the city, sweeping, cleaning, building roads, whatever.

You'd get off of this job a little earlier than other jobs, so you could go around asking for work, but everyone was required to have a registered place of employment at all times.

I have no idea how it worked for wealthy folks etc, but according to this coworker the place was super clean.

But it was that scary clean, where everyone has shifty eyes and seems slightly fearful.

dramaman

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Re: Finland to Introduce Universal Basic Income
« Reply #86 on: December 15, 2015, 01:50:59 PM »
I would think that a minimum income could be established that took into consideration income from dividends and retirement account disbursements. Thus if you wanted to FIRE comfortably and had these types of income you would probably be exceeding the minimum government income and thus receive no benefits.

Matumba

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Re: Finland to Introduce Universal Basic Income
« Reply #87 on: December 15, 2015, 02:42:35 PM »
How about those who go abroad,  will they keep receiving the income?

If yes,  Thailand and the like will be flooded with dole scum.

dramaman

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Re: Finland to Introduce Universal Basic Income
« Reply #88 on: December 15, 2015, 03:36:20 PM »
I would think that a minimum income could be established that took into consideration income from dividends and retirement account disbursements. Thus if you wanted to FIRE comfortably and had these types of income you would probably be exceeding the minimum government income and thus receive no benefits.
I'd have to go back and read the OP but I believe they said it was a benefit for everyone whether they were working or not, and not income or asset based. So I supposed (maybe wrongly) that would go for those who had retirement income as well.
But if your income (retirement or working) already exceeded the minimum, I would expect that you would get nothing.

arebelspy

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Re: Finland to Introduce Universal Basic Income
« Reply #89 on: December 15, 2015, 03:38:13 PM »

I would think that a minimum income could be established that took into consideration income from dividends and retirement account disbursements. Thus if you wanted to FIRE comfortably and had these types of income you would probably be exceeding the minimum government income and thus receive no benefits.
I'd have to go back and read the OP but I believe they said it was a benefit for everyone whether they were working or not, and not income or asset based. So I supposed (maybe wrongly) that would go for those who had retirement income as well.
But if your income (retirement or working) already exceeded the minimum, I would expect that you would get nothing.

No. Everyone gets a payment, regardless of other income.

Otherwise you disincentivize work.
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TheOldestYoungMan

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Re: Finland to Introduce Universal Basic Income
« Reply #90 on: December 15, 2015, 03:44:21 PM »
Naw the basic income theory requires it to not be means tested for lots of reasons.

You really want to culturally avoid the implication that this is charity or anything like that.

"Citizen's Dividend" I think is the way UBI people want us to think about it.

If you think of not living in abject poverty as a fundamental human right (just pointing that out as a given within this particular argument space, not asserting it as an actual fact), then this is how you provide that right.

The experiment is:  If we remove those aspects of the struggle related to staying alive (food, shelter, clothing) and just guarantee everyone that they have these things, would society still function?  Particularly if the way we provide that guarantee is with money.

Providing housing hasn't worked.
Providing food hasn't worked.
Providing clothing hasn't worked.

Providing money...that seems like it has worked, insofar as anyone has tried it.  And it seems to have worked spectacularly well.

It's a small government argument really.  Rather then decide for people what the money you're going to spend on them should be used for, just give them the money.  Some of them are going to use it for drugs!  But hopefully not all of them and/or not all of it.


Bigger experiments are needed for sure, which is why the Finland thing is exciting.  Maybe it works, maybe it doesn't.  Can the problems it creates be addressed?

Does it become the workers vs. those on the dole?  Or does it just free wage slaves to actually pursue passions?

If you set a floor for failure, you dramatically reduce the risk of trying something.  We did not pursue our dreams of becoming a stand-up comedian or opening our own restaurant because the chance of failure was high and the cost of failure was poverty.  These become retirement dreams instead of normal dreams.  We slave at a corporation until we save up enough so that failing at these others doesn't lead to cardboard abodes.

But how much talent is squandered because of this?

It is possible this could work.  There are solid arguments that it would be vastly superior to the current welfare systems where all help comes with a hefty side of judgement and hassle.

It's also far easier to administer.  If everyone gets a check, you don't have to hire anyone to oversee the program.  100% of the taxes for the program go into paying the benefit.  That right there blows the shit out of every other welfare program.

And if everyone is getting it, you don't have "shame" that makes people that need it not take it, or people that use it facing stigma.

I think all they'd have to do to institute it in the U.S.A. is change the "standard deduction" into the "standard credit" and increase the size.  Then you disband all sorts of government agencies after teaching those employees how to claim the credit.

Maybe, just maybe, out of the group of Fins that gets in this program, nothing really changes.  Maybe one of them creates the next greatest kind of pie!  Maybe we get a new book or genre of music.  Maybe we see all of Finland turn in to a post-apocalyptic nightmare state overnight!  Maybe they all quit their jobs and die of overdose after a 3 week-long party!

(if you have to go...)

Experiments are fun!

dramaman

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Re: Finland to Introduce Universal Basic Income
« Reply #91 on: December 15, 2015, 03:47:20 PM »

I would think that a minimum income could be established that took into consideration income from dividends and retirement account disbursements. Thus if you wanted to FIRE comfortably and had these types of income you would probably be exceeding the minimum government income and thus receive no benefits.
I'd have to go back and read the OP but I believe they said it was a benefit for everyone whether they were working or not, and not income or asset based. So I supposed (maybe wrongly) that would go for those who had retirement income as well.
But if your income (retirement or working) already exceeded the minimum, I would expect that you would get nothing.

No. Everyone gets a payment, regardless of other income.

Otherwise you disincentivize work.

That was one quick reply! :)

I question just how much it would actually disincentivize work. As you've very ably argued, the amount being provided would be considered hardly adequate for most working folks who are addicted to a consumer society.

I think the idea of a minimum income floor guaranteed by government is appealing, but it somehow feels wrong to be giving a hand out to people like myself who have no need for it whatsoever.

arebelspy

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Re: Finland to Introduce Universal Basic Income
« Reply #92 on: December 15, 2015, 04:12:32 PM »
The problem becomes when someone has to work a low paying job that would pay them $801/mo.  Now they are above the income floor, and get nothing. They're working for $1. They quit, and take the $800 minimum.

The basic guaranteed income is a payment to everyone. Millionaires included.

Then you keep whatever you earn on top of it also. But there's an incentive to work, to earn more, even if it's at minimim wage.
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Re: Finland to Introduce Universal Basic Income
« Reply #93 on: December 15, 2015, 05:18:50 PM »
How about those who go abroad,  will they keep receiving the income?

If yes,  Thailand and the like will be flooded with dole scum.

Your comment is disgusting. People on the dole are not "scum". My grandmother worked 3 jobs all her life to support a disabled son and two others, until she had to have a major operation and was no longer able to work (aged 58-60-ish - don't know exact age). She had to go on to the unemployment benefit until eligible for NZ Super, while still supporting her adult disabled son as there was very little support from government services. The vast majority of people on a benefit have genuine need of it. There are very few who don't. You can't tarnish everyone with the same brush.

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Re: Finland to Introduce Universal Basic Income
« Reply #94 on: December 15, 2015, 07:49:26 PM »
I think this is interesting and potentially a good idea.  How many people would stop dealing and taking drugs because they had more dignity in their lives and decisions?  How many people are disabled and truly can't work, or can't work full time?  How many people have mental health issues?  How many people are just plain not smart enough to get a decent paying job?  How many people live in a place that doesn't have good jobs?  How many people grew up going to one of the "bad" schools and therefore just don't have any skills like knowing to turn up on time to work?

In my little town in western PA there would be a huge benefit, and the town to the north of me the difference would be even more striking.  The town to the north is a cesspit, full or poor people, drugs, gangs, mafia (yes, really), etc.  The county as a whole has a 10% vacant housing rate, mostly in that town.  No one who actually cares about their kids lives there unless they have no choice, the schools are so terrible that I know of kids in families that take turns going to school because they only have 1 pair of shoes.  I think that this minimum income would gradually raise the hope level in my county about 300%.  Maybe the cesspit town would improve over time and become once again a nice place to live like it was 50 years ago.

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Re: Finland to Introduce Universal Basic Income
« Reply #95 on: December 16, 2015, 02:59:52 AM »
Welfare services seem to be more fragmented in the US than in Australia, so to determine the impact of a Basic Income I will use Australian figures, Australia being a similar society to the US.

Australian GDP is about A$1500 billion, roughly US$1000 billion. All welfare is handled by the Dept of Human Services, and costs about A$146 billion a year, nearly 10% of GDP, and 35% of Government spending.

There are 23 million Australians, or about 18 million over the age of 18, so if a Basic Income of the same total value as all existing welfare were paid to all Australians over 18, each Australian would receive A$8.1 million a year.

If a Basic Income were raised to A$12K a year, or A$24K per couple, this would increase welfare spending to A$216 billion, an increase of 15% of GDP. A Basic Income will replace nearly all existing welfare.

Australian government spending is now 26% of GDP, so an increase of 15% of GDP to create a Basic Income will increase all Government spending to 41% of GDP. All Government spending. This will hurt, but it is achievable.


The Finland proposal is just that,a proposal. Finland will try a form of Basic Income in parts of the country.

Matumba

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Re: Finland to Introduce Universal Basic Income
« Reply #96 on: December 16, 2015, 06:23:47 AM »
How about those who go abroad,  will they keep receiving the income?

If yes,  Thailand and the like will be flooded with dole scum.

Your comment is disgusting. People on the dole are not "scum". My grandmother worked 3 jobs all her life to support a disabled son and two others, until she had to have a major operation and was no longer able to work (aged 58-60-ish - don't know exact age). She had to go on to the unemployment benefit until eligible for NZ Super, while still supporting her adult disabled son as there was very little support from government services. The vast majority of people on a benefit have genuine need of it. There are very few who don't. You can't tarnish everyone with the same brush.
I pay perhaps 50% taxes including all direct and indirect ones in a hcol area in the US, freezing my balls off and having to go to work and deal with a lot of bs.

If some people manage to live off my taxes and travel to tropical countries,  they are dole scum.

Obviously,  a disabled person, who stays home has to rely on the government,  isn't.

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Re: Finland to Introduce Universal Basic Income
« Reply #97 on: December 16, 2015, 09:00:34 AM »
I pay perhaps 50% taxes including all direct and indirect ones in a hcol area in the US, freezing my balls off and having to go to work and deal with a lot of bs.

If some people manage to live off my taxes and travel to tropical countries,  they are dole scum.

Obviously,  a disabled person, who stays home has to rely on the government,  isn't.

If you truly believe that people who receive welfare have such a great and easy time, why are you working and dealing with BS at all?  It would make more sense to quit your job now and enjoy the tremendous benefits you claim that these people have.

Matumba

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Re: Finland to Introduce Universal Basic Income
« Reply #98 on: December 16, 2015, 09:18:50 AM »
I pay perhaps 50% taxes including all direct and indirect ones in a hcol area in the US, freezing my balls off and having to go to work and deal with a lot of bs.

If some people manage to live off my taxes and travel to tropical countries,  they are dole scum.

Obviously,  a disabled person, who stays home has to rely on the government,  isn't.

If you truly believe that people who receive welfare have such a great and easy time, why are you working and dealing with BS at all?  It would make more sense to quit your job now and enjoy the tremendous benefits you claim that these people have.
This is a strawman argument to which there's no point responding.

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Re: Finland to Introduce Universal Basic Income
« Reply #99 on: December 16, 2015, 10:14:30 AM »
This is a strawman argument to which there's no point responding.

I think GuitarStv's point is apt, and your response illustrates that there are two opposing views of a Basic Income that are arguing on completely different terms, and thus won't likely find reconciliation, at least on an internet forum. The many positive responses detailed above are based on various facts, like government expenditures, overhead, historical return of alternative social programs, etc., as well as a generally optimistic view of human autonomy. Your response and some of the responses of others tend to focus on a sense of justice or even morality. Getting "paid" for nothing invokes a sense of injustice in us all to some extent, frankly, and I don't know that anyone is actually denying that. But the point being made by many others, and I hope by Finland and others willing to try something different, is that there is a balance. We are not trying to set up heavenly paradise on Earth, but rather make things better than we left it, and while we could all grouse about "the dole" and point to "good-for-nothing" people in our lives that will likely take advantage, I do not think it is unfair to plainly state that WHO CARES?! I mean really, the point isn't to right all wrongs in this world through one social program, but rather to achieve a better result with the resources that we have now. What I want from you and others is more detailed and logical detractions, give this idea a real harsh beating so that I can others can make a truly informed decision if/when the time comes. Thanks!