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Y Combinator Plans To Start Doling Out $60 Million Next Year to Study Universal Basic Income (gizmodo.com)
The research arm of Y Combinator plans to begin a study on universal basic income next year in which it will give unconditional cash payments to 3,000 participants. From a report: The test is partially intended to see if receiving routine payments will quell anxieties around losing jobs to automation. As Wired reports, the study will be called "Making Ends Meet." Under the plan, a thousand people would get $1,000 per month and the other 2,000 would get $50 per month to serve as a control group. Some of the participants would receive monthly payments for three years and some would get paid every month for five years. Sam Altman, CEO of Y Combinator, a highly successful startup accelerator that helped give rise to companies like Dropbox, Airbnb, and Reddit, announced the company's plans to research universal basic income -- or as he put it, "giving people enough money to live on with no strings attached" -- in a January 2016 blog post. Altman explained his belief that universal basic income will eventually be implemented across the nation as more jobs are automated and "massive new wealth gets created."
When a leading VC starts chasing after weird ideas, you know that the end is nigh!
We need immigrants to do the jobs that robots won't do and a program to pay people to not care if they lose their job.
But you will be forced — at gun point, which is how all taxes are collected — to pay for somebody else doing it.
In Soviet Washington the swamp drains you.
When I was 5 years old I figured out that if everyone has $1,000,000 dollars everyone would be rich.
I realized when I was 10 why if everyone had $1,000,000 nobody would be rich.
Sure, this experiment will work because the source of the money isn't other people's money and it isn't inflation.
When the source of the money is inflation or other people's money, that $12,000 a year will be sunk into rent increases and increased home prices, amongst other things.
I think the idea for UBI is that, while you may not be eating out buying filet mignon, you can at least survive on it.
Is $1,000 survivable? It is significantly less than minimum wage, which people already struggle with.
as more jobs are automated and "massive new wealth gets created."
If more jobs are automated that means more people without jobs. Who is going to pay them this income? Those getting massive new wealth?
All you've done is make the masses dependent on a select few continuing to give them money and in doing so create a redistribution of wealth (such that it is ).
I'm not the smartest person in the room, but how is this even remotely feasible and sustainable?
The results aren't relevant anyway, as at its best, $12000/yr isn't enough to live on unless you live under a bridge, so the whole "will people still work" and "what might they do otherwise" bit falls flat on its face. This isn't a UBI test. This is an "auntie Sarah died and left you a tiny bit of money which you can't get at all at once anyway" test.
It's not basic. It's not universal, either. It is income, but so is that $100 bill you got for xmas.
It amazes me how often these "tests" get the whole idea completely wrongheaded... and then people run around saying "test X proves..." when all it really proves is its not a test of UBI at all.
I've fallen off your lawn, and I can't get up.
Same here. And I am sure it will be a very significant tax hit, which I will duly pony up. I like the idea of everyone having enough to live on, a comfortable and climate-controlled place to shelter, food on the table, and medical care.
I've fallen off your lawn, and I can't get up.
This. I've known a few people who didn't pay their taxes and the U.S. government never used a gun to force them to pay taxes. I've never even seen them arrested. What the government did do was to garnish their wages. In one specific case they sold their home to get current; they actually sold it to one of their kids who then rented the home to them. I don't think it's really worked out well for either of them but they did mean well.
The reality is that if a government starts demanding taxes like that then things start to break down and everyone is worse off.
I can tell you my forecast: Someone will figure out that since there are no strings attached, they can offer these people loans at high interest, paid for by the $1k per month. So they'll be just as poor as before, but perhaps have a car for a while, and someone else gets richer.
But you will be forced - at gun point, which is how all taxes are collected - to pay for somebody else doing it.
The implication is that you wouldn't be paying for "somebody else" otherwise, but reality is that you do. Like our little eGamer wacko recently, I bet he didn't have the assets to cover all the medical expenses he caused, much less if he had to pay restitution to everyone from the inconvenienced to the deceased's relatives. Even if there's health insurance and whatnot that just means the costs gets smeared broad and thin. And anything but anarchists wants law and order so somebody's paying cops and judges and prisons and it's not the penniless perp. Heck it could be simple things like theft, or even if not theft then the cost of the anti-theft system you need to keep thieves away. Maybe you think UBI is a poor strategy of appeasement, but taxes is far from the only way you end up with the bill. Less desperate people do less desperate things, of course it's no miracle worker but it helps.
Live today, because you never know what tomorrow brings
You're talking about experiments from 50-60 years ago. Do you realize that the driving force of UBI in today's environment is to actually allow people to survive without working? Automation means fewer workers are needed overall. Unless something major happens, we're going to eventually reach the point where most people will be unable to find work due to it not being available.
There are only two real solutions, less people or a viable welfare system. Any conscionable society would ignore the first option. While encouraging reduction in population growth might be good, actually restricting it would be dangerous from a moral standpoint. That only leaves the second option. UBI alone may not be enough, or even the best way. But, it's better we work towards a solution before it's needed.
That's usually how it goes. You like the idea of everyone having everything they need, so you support a guy who says he can make it happen. Next thing you know you're wiping your ass with worthless $1,000 bills and killing feral dogs in the streets to feed your family for dinner.
And then you wonder how it could possibly have happened when wealth distribution has worked out SO well every other time it's been tried ....
is breaking down! Let's make new chains and keep people dependent on the system forever!
When I was 5 years old I figured out that if everyone has $1,000,000 dollars everyone would be rich.
I realized when I was 10 why if everyone had $1,000,000 nobody would be rich.
Sure, this experiment will work because the source of the money isn't other people's money and it isn't inflation.
When the source of the money is inflation or other people's money, that $12,000 a year will be sunk into rent increases and increased home prices, amongst other things.
When I was 25 years old I figured out that $1,000,000 invested in an index fund would increase in value enough to account for inflation and give an income of $2000 a month in perpetuity.
Also when I was 25, I figured out that any reduction of the workforce would push wages up and make jobs better by way of competition from supply and demand.
Also also, I noted that you don't need to give everyone the income immediately. Having a lottery will take people out of the workforce gradually, which could be funded over time in a reasonable way. Each $1 billion spent this way takes 1,000 people out of the workforce.
I noticed many things when I was 25, including that if you took all the entitlements programs and simply gave the money out with no regulatory oversight, you could have 5 times as many people using entitlements.
Looking at the cost of entitlements, it's clear that we *could* start moving people off of welfare and related services and eventually get to UBI or something close to it, with no increase in taxes.
Individual productivity keeps rising, and it's pretty easy to see that UBI has to happen.
Or if it doesn't, then we're in for a world of hurt as all the goods and services needed by everyone are made by fewer and fewer people, while the people who can't find a job either starve or revolt.
I would argue that the country has to be wealthy enough to support it in the first place. However the USA does have the resources.
Sure UBI may not work but it may we should be willing to try new things. People are complicated, there are just to many factors to take into consideration to be certain of what the outcome would be. A small trial maybe not be perfect but it may give some insights into whether it would work or not.
There are plenty of things about people that are counter intuitive such as paying them more reduces creativity or winning the lottery doesn't make you happier.
But best go with peoples gut feeling that's very scientific.
MONEY DOES NOT GROW ON TREES!
Two possibilities here. You are unfamiliar with fiat currency or you are unfamiliar with lumber as an enterprise.
One certainty: Your mind is made up, and you don't want to consider how you might be wrong.
Please stop believing Fox News and Trump. We are FAR from FULL employment. Many people are under-employed, barely able to keep themselves afloat in the current economy. Millions have yet to back peddle from the crash of '08. Many more, whose numbers are NOT counted, have fallen through the cracks entirely. Speak only for yourself.
I'm curious as to how you think that this could reduce wages. My line of thinking is that with a substantial portion of people looking at just staying home if the pay isn't worth it, that pay will have to increase to lure people out.
As such, businesses that assume they can pay less because of the UBI will discover that said potential employees decide that just staying home is better.
I figure that market forces will tend to adjust such that living on just the UBI sucks enough, and working improves that enough, that most people still end up working.
I don't read AC A human right
If I could count on my rent being made and some or all of my monthly expenses I would start making beef jerky on a more than pastime basis. I'd also volunteer more than 1 day a week at the animal rehab preserve, I specialize in snakes and lizards. I also spend one day a week as a library volunteer reading to kids and indexing the books in their book store. I think most people would not just quit doing things but would find more personally fulfilling things to do with their time that wouldn't normally make enough money to warrant or allow them to devote the effort. Imagine musicians, writers and countless other creative pursuits which could arise.
errr....umm...*whooosh* *whoosh* Is this thing on ?
>People need meaningful work to do which is appreciated in some form by others. Depriving them of that need is part of the current economic problem, and giving them free money does nothing to fix that.
I think you've missed something important. As you say, people need meaningful work to do which is appreciated in some form by others. You can't deprive them of that need - it's inherent. All you can deprive them of is the additional motivation of the fear of starvation and homelessness.
And there's always work to be done - it's just that there's nobody willing to pay for much of it to get done. But if you have a lot of people with a lot of time on their hands, and a lot of work that needs doing that nobody is willing to pay for, but many will appreciate, then you have ample opportunity for people to do meaningful work that will be appreciated.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
A new tax rate on everyone still working.
Domestic spying is now "Benign Information Gathering"
I respectfully disagree. UBI won't change my life. I'm still going to work. However, I work for a company that sells goods and services to other businesses that deal with all walks for life from the .01% to the poorest. By giving my customer's customers more money in their pocket, it all comes back to me in the form of higher wages, higher profitability, and better returns on my stock options.
This is stimulating the economy on the low end. As someone who is a productive member of society, this benefits me in the form of my company's profitability selling goods and services. As an added bonus, there is less incentive for the poorest to commit crime. The homeless, destitute, and drug addicted can afford to get treatment and stop harassing me on the street and scaring my small children. There are less evictions, less repossessions and the economy becomes much smoother. A bolstered middle class benefits everyone in the short term, medium term, and long term.
I will happily pay more taxes for higher wages, less suffering of the poor, less fear of my kids being a victim of violent crime. I'm not even sure UBI would raise my taxes substantially, but I am happy to give it a try. One thing is clear, the current system is failing, income inequality is getting depressingly worse, and while I have a good job, life is getting worse every year for all those around me. I see no future on our current path. I think a well implemented UBI program will protect the masses from the job losses that are coming due to automation and ensure a healthy flow of income to buy goods and services and keep our economy running smoothly. I want people to be able to afford my company's products.
To me, UBI is not a charity program, but an investment that looks like an inevitability.
For the $60M they are spending on these 1000 people getting free income, YC could instead invest their same standard $120k deal on 500 more startups -- $120k*500=60M. They regularly turn away hundreds (thousands?) of hardworking, dedicated entrepreneurs every year with great businesses that just don't fit their model perfectly, who have likely invested all their time, money and lives building their businesses. The startups would in aggregate create actual jobs, likely more than the 1000 people that are just getting free money. This investment would incentivize entrepreneurship and more startups being created and creating more jobs....Even as someone who is open to the idea of UBI someday as a public policy/governmental cost, I just don't understand this move. Instead of giving people free money, why not provide pre-seed capital to people who have a legit plan and want to work?
6k/yr, seriously? Where can you live on 6k/yr? You'd need to increase that at least five fold.
The funding is simple, every share of stock in publicly held companies goes into a non-voting public trust, every new share issued thereafter is duplicated with a share going into public trust. No matter how many layers of paper or indirection are used the same is applied to foreign arms and interests of companies held by US citizens so that folding and reopening in another nation doesn't escape the policy.
In this manner as society phases out work and automated away jobs, centralizes, takes advantage of foreign labor pools, etc. Those who actually built all that technology and processes, efficiencies etc and their children are taken care of and their interests and support remain tied to progress and innovation even if their contribution isn't directly in the form of labor. Additionally, the net result may result in some shift of wealth but maintains proportion of wealth so that it doesn't trample upon the portion of wealth which has followed merit.
benefits cliff makes people not want to work
Well, good thing I had a tax increase to pay for the UBI in the post you replied to, right?
The important point is that, once you eliminate other forms of welfare and plow that money into the BIG, the additional taxes only need to more or less neutralize the BIG for middle class and above income earners.
So, while technically a tax increase, actually revenue neutral to most people.
I don't read AC A human right
6k/yr, seriously? Where can you live on 6k/yr? You'd need to increase that at least five fold.
Very few places. But you have to remember that it is $6k/year per person, not per household. A household of 4 people together, because the BIG is agnostic of that stuff, is $24k/year, which is right on the federal poverty line for a household of 4.
If you're completely unemployed and dependent upon the BIG, living alone is a luxury you don't get.
As for your funding proposal, I agree with the concept of having what amounts to a sovereign wealth fund, but I'd prefer to fund it with a 1% or so income tax. Maybe even a property tax. Anyways, the incoming money is used to purchase stock in companies in an index fund type manner.
Payments would be an average of the last 5 years or so of income from the stock, with some held back to maintain fund value in the face of inflation, etc... Don't bother paying out until the amount hits $500/year per person.
I don't read AC A human right
I'm from Argentina. We don't have universal basic income. But we have high taxes and the previous administration left 22 million "passives" (government employeees, retirees and especially "social plan" benefitiaries). And 8 million "active" workers.
The fiscal hole is so big we're heading to another economic crisis.
The crisis in Venezuela makes people from there come here and easily get a job. People from here don't work. You see them outside the government-owned post and government-owned banks making huge lines. Young people in good shape and health. Perfectly fit to work. But the just, you know, don't.
And inflation is eating away their benefits. Instead of getting jobs, they are now protesting. They demand more free money.
This does not end well. All of the "universal income" programs ignore one simple fact: people are shit and they abuse every system they can abuse.
Really? So Wesley Snipes wasn't in prison for tax evasion?
I unfortunately believe that UBI won't end up being the utopian approach to welfare that many seem to think its aimed at being.
In the UK, since the 1990s there has been a big rise in private landlords who refuse to rent to "DSS recipients" (although its not been called DSS for years, the term these days refers to anyone receiving housing benefit). Yes, its illegal discrimination, but it still happens and its on the increase rather than the decrease.
And you can't really blame the private landlords for doing it, as they have some very good reasons.
Coupled with the rise of refusal to rent to housing benefit recipients is the various changes that successive governments have put in place - and the biggest of them all was the switch from local governments paying housing benefit directly to the landlords to instead paying that benefit to the tenant, who is supposed to pay their rent just like anyone else. It was done as a means of "empowering" those on welfare, to give them more visibility of their money and let them feel more in control.
Unfortunately, it led to a massive rise in evictions for non-payment of rent. A lot of those tenants stopped paying their rent and instead bought big screen TVs, holidays, luxury items etc and then used the courts to stall eviction processes (which can take months), leaving landlords with huge debts that were never going to be cleared.
Housing benefit also hasn't risen in line with other government changes which have made owning property to rent significantly more expensive - for instance, landlords can no longer claim tax relief on income that covers the mortgage payments, so to cover that loss rents have to rise, but housing benefit has stayed stagnant meaning more tenants cannot afford to pay the market rate.
So now its hard to find property to rent if you are on housing benefit, either because no one wants to rent to you or because you are priced out of the market by the very government that is supporting you.
UBI might benefit some astute people, but I think using it to replace normal welfare without checks and balances in place will simply lead to more of the above - a lot of people will treat it as free money for luxury items and we are back to square one.
So the idea is to take the people who are working now, earning 60-150k/yr as middle class citizens and when all their jobs disappear we replace it with taxes on those who have ended up with all the wealth, knowledge, invention, and processes the middle and lower classes have almost exclusively generated over the past couple hundred years set at a rate that fixes them at the federal poverty line?
You'd say fixing them at 0 money due to not having neither a job nor an UBI is better?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Yeah, sure.
Did the free money we pump into banks increase inflation? Or where do you think the bailouts come from? When you deposit 100 bucks with your bank, your bank lends out 1000 of them. Yes, I'm not kidding. Where do you think that money comes from? You don't pay back? No worries, here's a loan of 1100 to cover the 1100 you owe us. Of course you don't get that money, it's just now in your book as debt. And you suddenly owe us 1100 of the 1000 we gave you. Did that free money increase inflation?
Money is numbers on an account. Nothing else. Inflation, like pretty much all in this economy, is artificial. A tool to direct money and its flow. Your economy, like any economy in the developed world, relies mostly on services. Services, like money, can be multiplied at will. At least as long as you have available workforce. So unless your unemployment rate is very close to 0 (and please don't try to bullshit with the "official" numbers, you know as well as I do that the "official" unemployment numbers of the US have nothing to do with how many people are looking for a job), you can easily multiply your service offer ... which only happens of course if there is demand, since you can hardly store services.
Poor people are now also the demographic that gladly and very willingly spends money on services. In other words, here's your chance to drive your economy forward.
Of course, if your goal is just to have a cheap, dependant workforce to maximize your own profit and to hell with the general economy, this would certainly be not in your interest.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
You're not going to continue working when you get about 500 bucks a month? Well... ok, if that's enough for you, great. Where I live this might even allow you to survive. Somewhere outside a town, without infrastructure, without a car, with ... maybe ... electricity and the closest store about 5 miles away. But hey, since you don't have to waste time to work, you have plenty of time to walk there.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
I can tell you my forecast: Someone will figure out that since there are no strings attached, they can offer these people loans at high interest, paid for by the $1k per month. So they'll be just as poor as before, but perhaps have a car for a while, and someone else gets richer.
The only people who'd get $1k extra are the people earning $0 today - not including those already on welfare programs as they'd be reduced/cut - which means they're either dependent on somebody else, living off savings, accumulating debt or hobos living under a bridge. That deadbeat son/daughter you haven't got the heart to kick out? Well now they got money to pay rent or to get a shabby room somewhere else. The stay-at-home mom and dads have a family economy. UBI for retirees would essentially be a public pension program, higher taxes but less need to set off funds for retirement. Students would hopefully exit their education with less debt and they'd probably be expected to pay in full many more places. And I don't think the first thing a hobo will do is buy a car.
If you have low income you'd be expected to pay a lot more taxes because your net income already start at UBI, everything you earn comes on top. Looking at current income tax brackets I'd guess a flat rate somewhere around 35%, like if you earn $100k, pay $35k taxes but get $12k UBI back the net is 23%, for $60k -> 15%, $200k -> 29%. So If you make $17k/year pay ~$6k in taxes, get $12k in UBI for a net $23k/year instead of paying ~$1800 in taxes. for a net $15200/year. That's a pretty good uplift, but then the UBI proponents want to cut all other programs like food stamps etc. so in exchange for those $7800 you're on your own. That program alone averages $1500/year per recipient, so poof it's down to $6300 extra. Medicaid could be another big one. Subsidized housing. There's lots of small programs that would be killed off.
Break-even would be around $35k, $35k * 0.35 = $12250 in, $12000 out. What's the break-even wage today, like how much do you need to earn to make a net contributon? I'm guessing it's not too far off. The only reason question is how many people would like to take some kind of sabbatical or take some kind of leap of faith and those $12k tip the scales. I sure as hell wouldn't try to live off that permanently, but if you have an attractive education/experience and know you can get back into the job market then the difference between a year off with $0 income and $12k is pretty big. Or just $12k/year more to coast into retirement.
Live today, because you never know what tomorrow brings
Nothing is more permanent than 3-5 years because that's how often governments change.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
This. To clarify: in the US, since 1833 we haven't put people in prison just because they can't pay their debts, which used to be a relatively common practice just about everywhere. But if you commit fraud, lie about your situation in order to reduce the amount of taxes you owe, etc. and you get busted, you absolutely can run afoul of multiple Federal and state laws depending on where you live, and you CAN and likely WILL go to jail for that.
Blah blah blah ..Good idea!,, blah blah ..Bad Idea!.. blah blah...
Could someone just post a link where I can sign up to get $1,000 a month?
I already make good money, but an extra grand would certainly help.
The manipulatively named "Fair Tax" is a flat tax, which is always regressive because the poor spends a larger percentage of taxes on necessities. A graduated tax scheme with no loopholes or exceptions is barely more complex to manage than a flat tax scheme. UBI, however, eliminates numerous social programs which are complex to administer, so long as you also have a national health care program. NH is probably mandatory for UBI to work. However, we already have multiple national health care programs; one for veterans, and one for the elderly. We can expand the one for the elderly, and use it to cover everyone including veterans, and still have it come out with lower costs than the Romneycare we've got now.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
This country wasn't built by people who depended on government handouts. It was built on hard work and independence of government.
That is ever so much horse shit. The people who built the country into what it looks like today depended on the government to genocide the natives and subsequently grant their land to those who ultimately profited. Then they depended on the railroads, which were built atop government land grants (and sleazy sales) to transport goods for sale. Later, they depended upon the interstate highway system to enable commerce, which was also built by the government. Absolutely nothing in this country today would be here without government involvement.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"