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VC Firm Y Combinator Launches an Experiment In Universal Basic Income (fastcoexist.com)
New submitter Gordon_Shure writes: Silicon Valley startup financer Y Combinator, remembered for successes like Airbnb and Dropbox, is launching an experiment to give people a Universal Basic Income. At present, the plan is for hundreds of participants to get repeated cash payments unconditionally. Then, assessors will record life consequences like changes in work patterns, self-employment, artistic endeavors, or idleness.
Recent focus on UBI in Finland, Switzerland and other countries see proponents claim a basic income will — in a world facing structural unemployment due to jobs taken by automated AI, robotics and machines — combat poverty and work insecurity. Others remain unconvinced. What do you think about the significance of what this kind of small-population study would show?
Recent focus on UBI in Finland, Switzerland and other countries see proponents claim a basic income will — in a world facing structural unemployment due to jobs taken by automated AI, robotics and machines — combat poverty and work insecurity. Others remain unconvinced. What do you think about the significance of what this kind of small-population study would show?
An interesting experiment, to be sure, and I'm glad that someone has the money to try it out.
It's hard to know until you're actually in the situation, of course, but I think that if I had a minimum income in addition to what I make now, I'd drop down to working part time and spend the balance volunteering and pursuing music again.
Love sees no species.
I'm an electrical engineer. I've worked in lots of neat jobs.
A few years ago I realized none of those technical jobs would get me off the hamster wheel; having enough investments so I could eat, pay for basic living expenses, and then make nifty things and services instead. Financial independence. This is not the same thing as being filthy rich; for an accurate number, it involves having about $500k in liquid assets under investment generating income. Assuming you're willing to live someplace cheap. (I am)
I'm not from money, quite the opposite, and am unwilling to risk it all on ability to raise capital. I didn't understand how the rich stayed rich. I know what not having money to buy food feels like. Not going there. Ever again.
I looked at where the money is, and there's lots of it in financial-related industries, particularly if you're good with numbers - and even "advanced" financial math isn't that difficult relative to engineering.
My goal - through a career change and making other investment a life priority - was to get off the hamster wheel. I've devoted 10 years, or a measurable percentage of my life to this so I can enjoy the rest. I'm 6 years into my plan, and on track to make my goals, along with my wife, who shares my ambition to be free. ...but look at this!
Guaranteed income offers everyone that chance. Go do what you want to the net benefit of society. Remove that worry and fear. Remove the stigma. Hell, call it a citizenship dividend.
People will work; it's in our natures. What will change is what and how they work; most (many) jobs are pointless and should be automated. They WILL be automated in short order. Once this happens you can become a prison state, ripe for chaos; or you can adopt a scheme like this one.
We live in the future. This will be interesting.
They will only be paying people for five years. If someone paid me for five years, I would be constantly worried about what would happen at the end of five years. I wouldn't want to re-enter the workforce with degraded skills, etc.
But if I knew I would be getting that money for the rest of my life, it very likely would affect my habits.
"First they came for the slanderers and i said nothing."
I am not intimately familiar with the tax regime where ever you live, but every where I've ever lived, as your income goes up your taxes go up incrementally only on the additional income.
e.g. if you make 10,000 you get taxed, 0$
if you make 30,000 you get taxed 0$ on the first 10, and then 10% of the next 20, for a total of 2k
if you make 50,000 you get taxed 0$ on the first 10, 10% on the next 20k, and then 30% on the next 30k. For a total of ~12k.
In super progressive taxation, it can get up to 60% and beyond. But that rate only starts on the dollars OVER X$.
So you don't "lose money" by reaching a higher tax bracket, you just make progressively less with each additional dollar.
Ie... your first thousand dollars you keep every penny of those dollars, but your 200,000th dollar you keep only 45 cents of that dollar.
So,even if I'm in the top tax bracket, and you give me another 10,000 in income I'll take it. I'll only keep 4,000. But that's still 4,000 more than I had. And if I'm smart, and invest it or shelter it I get to keep more than if I just use it as more walking-around-money.
Making more money and "Paying higher taxes" still means I took home more money than if I hadn't made more money in the first place.
So this all boils down to: "Does the study include some "middle-class" test subjects so see how well they do after paying higher taxes ?"
Why EXACTLY do you see this as a likely issue? Are you just unfamiliar with how taxes actually work? Or bad at math? Or is there some genuine issue that arises where you live if someone gave you a bunch of money that it would somehow ruin your life?
Its true there are some edge cases in tax law, where as your income goes up you no longer qualify for certain deductions or subsidies, but even then its nearly always a zero sum game. And worst case you end up with the same amount you started with despite receiving more money. But these usually only affect the lower/barely middle class.
The only "trap" to suddenly making more money is not being aware what you can keep, and spending more than you actually were entitled to keep, creating a tax bill you don't have money to pay. (e.g. if you make 50,000 a year set aside money to pay a tax bill for someone who makes 50k a year, and someone gives you a new 10k in income, going on a 10k vacation with it is pretty stupid.)
The problem with a UBI is that it is (in theory) supposed to replace the multitude of payments through various government social programs with a single check or debit card given to every recipient every month, at which point the various government agencies that administer housing, food stamps, etc., can be shut down. Government bureaucracies never shutter themselves voluntarily, and it won't happen with a UBI, either.
The UBI operates under the assumption that everyone manages money in a rational manner, which is completely at odds with actual experience. Many people will take their UBI and immediately spend it on drugs, alcohol, gambling, or bling, while ignoring the monthly rent, the electric bill, buying groceries for the children, etc. Others will be cheated out of their money by criminals or even other family members. So do we let those families starve or get evicted because the heads of household are incapable of managing money for themselves or their dependents?
Of course not. Those people will need to be helped (sarcasm intended). So the various government agencies will continue to expand and spend even more money on housing, food, medical care, etc. The UBI won't even make a dent in entitlement budgets. Instead, it will become "free money" to be squandered on a thousand other things besides basic human needs.
Anyone who doesn't think it won't happen need only look at inner city schools in the U.S. In theory, every child should be getting meals at home thanks to government SNAP benefits to their parents or guardians. In practice, schools give many kids a free breakfast and lunch every school day, and even give them food bags to take home for the weekend, because Mom or Dad can't be bothered to buy food for the kids with the SNAP money. Where does the money go? No one knows or even attempts to find out. They just give the kids free food and cross their fingers.
The UBI will not change human nature. It will instead become one of the biggest entitlement boondoggles in the history of civilization.
Automation and AI are for real. I've heard about job replacement by automation my whole life. But now it is seriously happening and not just for menial labor. Professional services and complex tasks are being replaced as fast as the software can be written.
So it is useless to talk about UBI as if it is optional. The only alternative is some form of luddite resistance to automation. UBI is a much better solution. It can be funded by taxing the massive profits coming from the automation. So the only real obstacle is the mindset that resists the idea of not requiring work for survival. Get over it.
"He took a duck in the face at 250 knots." -- William Gibson, Pattern Recognition
I have some savings that earn approx 7% interest per year. You can argue the interest payments are the premium I'm paid for the risk of default, or perhaps that they represent the opportunity cost of spending the money, but it's pretty hard for me to understand how I'm "earning" them in any sense that relates to actual work. I could go into cryogenic suspension and the money would still roll in.
I'd wager that most rich people aren't really rich from earnings; they're rich from renting out their capital.