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Alaska's Universal Basic Income Doesn't Increase Unemployment (businessinsider.com)
With Alaska's gubernatorial election coming up, Business Insider brings up a report from earlier this year which finds that the Alaska Permanent Fund Dividend -- the only large-scale universal basic income program in the U.S. -- doesn't increase unemployment like many feared. An anonymous reader shares the report: The vast majority of Alaska's roughly 740,000 citizens support the dividend, which gives virtually every citizen an annual check of about $1,000 to $2,000 (that's $4,000 to $8,000 for a family of four), and both political parties in the state are in favor. Alaskans' feelings about this universal cash transfer are supported by the findings of a working paper published in February that was written by University of Chicago Harris School of Public Policy professor Damon Jones and University of Pennsylvania School of Public Policy and Practice professor Ioana Marinescu -- the annual dividend does not realize fears that such a program would lead people to quit their jobs, lowering employment.
An additional $8,000 for a family is certainly not going to replace a livable income, but, as Jones and Marinescu noted in their paper, studies around a cash assistance experiment in the 1970s, lottery winnings, and a permanent fund dividend for the Eastern Band of Cherokee Indians reduced earned income, and critics of any universal basic income programs have pointed to such findings as proof that anything on a larger scale would be a disaster. But Jones and Marinescu found instead that the larger scale of the program is what allows it to work, and not dissuade people out of the work force. More specifically, Jones and Marinescu determined that part-time employment increased by 17% only in the non-tradable sector (jobs whose output isn't traded internationally), and that overall employment wasn't affected because more spending money results in more demand, and thus more jobs.
An additional $8,000 for a family is certainly not going to replace a livable income, but, as Jones and Marinescu noted in their paper, studies around a cash assistance experiment in the 1970s, lottery winnings, and a permanent fund dividend for the Eastern Band of Cherokee Indians reduced earned income, and critics of any universal basic income programs have pointed to such findings as proof that anything on a larger scale would be a disaster. But Jones and Marinescu found instead that the larger scale of the program is what allows it to work, and not dissuade people out of the work force. More specifically, Jones and Marinescu determined that part-time employment increased by 17% only in the non-tradable sector (jobs whose output isn't traded internationally), and that overall employment wasn't affected because more spending money results in more demand, and thus more jobs.
Capitalism bad.
Communism good.
Will work this time.
Real communism was never tried.
It will work this time with a new name.
No control group, no before/after, just a bold assertion. No doubt, sociologists.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Wait, people who argue that UBI would increase unemployment aren't arguing that $2,000 a year will do this. They argue that giving someone $2K a month would increase unemployment. $2K a year could net you a nice holiday But I don't even think you could live off that in a tent.
I realize i'm being lazy and not really checking... but where does the money come from? It would make little sense to tax income or sales and then pay it back to everyone, so it must come from something other than income and sales taxes, right?
Outside of the philosophical debate about universal income (which I am sure will inspire some of Slashdot's most endearing and totally-rational discussions), what I - a complete layman - find interesting about Permanent Fund is the way that it ensures that a portion of the profits from Alaska's mineral wealth remain inside their state, within their local communities, rather than being exported outside of the state to be thrown onto the pile of capital interests.
I say this because one need only look no further than West Virginia for a look at what happens when the wealth of ~150 years of mining activity is exported out of the state and into the hands of a few. As far I can tell, it's pretty much the same basic after-effects as of colonialism in Africa.
Alaska's funding comes from oil tax revenue, not taxing society's net "producers" like UBI proposals outlined by any number of recent submissions.
What is the source of this fund???
Can't get something for nothing.
It's Alaska paying the people who live there a dividend from the money the states natural resources (oil) produce in the states coffers. No oil, no dividend.
Free money
No niggas
What else could you want?
is full of holes. A large majority of Alaskans (I see this as well as the local stores - you should see the sales gimmicks at dividend time) simply use the money as disposable income and often blow it quickly on toys (Large Screen TVs, Vacations (my wife and I often use it to fund an out-of-state vacation). Sure, some use it to help offset the necessities at the start of School season (school clothes for your kids, etc), but most folks who are use to paycheck-to-paycheck living simply blow it. The malls are swimming with folks at dividend time. THIS IS NOT BASIC INCOME.
8000 USD per year is the regressive UBI flavor. Of course nobody quits its job, since it is impossible to live on such a low income.
On the other hand, employers will have a good reason to refuse raises: you already had 8000 USD. It will also be possible to hire with salary lower than before but still acceptable by workers, because of UBI help.
In other word, an UBI that is not enough to live on it is just taxpayer money subsiding employers.
Doesn't increase production, or GDP.... Just the opposite.
âoeA democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.â â Elmer Theodore Peterson
Which is why nobody in Alaska ever criticizes the state government, of course. Also, nobody in America who's on food stamps or Social Security ever criticizes the federal government.
So in years when people receive more towards the $1000, or even the $2000 can that really be considered UBI? Has any proposed true UBI ever talked about only giving people $1000-2000 for the entire year?
In too many lives, if you born poor, you might live out the rest of your life poor.
https://www.youtube.com/c/BrendaEM
Ontario was trying one, but Mr Ford II canceled it before we had collected any real data. It was being run for the province by a former candidate for head of the Federal Conservative party, Hugh Siegel. who was very interested in the numbers.
--dave
[Full disclosure: I campaigned for Hugh in the leadership campaign]
davecb@spamcop.net
There is no UBI program in Alaska.
DRM? No thanks, I'll just get it somewhere else...
First off the cost of living in Alaska is extreme. If it wasn't for the oil few would be living there today. Everything costs more. This pittance that Alaskans get doesn't cover the essentials and it isn't coming from other taxpayers either. It's the result of the oil fields and the state or industry's need to attract people to an inhospitable place. It's a neat trick to say the least and can't be compared to any other wealth redistribution scheme where the money is coming from other peoples pockets (and really most frequently ones own pocket even at the poorer end of the spectrum despite socialists misleading the public by failing to account for all sorts of hidden taxes and mandatory 'fees'). When you tax the people to death they end up worse off because of inefficiencies you create in such bureaucratic systems. You force stuff onto people that they don't need which deprives them of income they do need to cover the costs of the essentials. And it is bad because it makes people reliant on the state for handouts. Those handouts come with strings attached. It's also a cycle. It's why people in Europe can't afford babysitters and socialism has gotten to the point in many countries where parents are demanding the government pay for it. But whats worse is that they don't even realize that means they will end up being deprived further of income via taxation which will lead to even less financial resources to keep things going. Now you don't have a choice in which babysitter you get and it's only going to mean it raises the costs. Where I could hire suzzy after school for $10 / hr now the government comes in and pays $15 / hr to someone who works "full time" babysitting, but only babysits kids from from the hours of 4-6PM when the adults are at work. That is socialism.
I've seen socialism in Europe and the United States and it's seriously undermined people at the bottom. My partner was once forced out of his home because he could no longer afford a place to live once the taxes were increased to cover the cost of the socialist health care forced upon him. Now he became sick and when he went to the doctor under this socialist system they didn't even treat him properly. They looked at him and kicked him out. First because the doctors wouldn't see him because the government wasn't paying enough and then later because the doctors who were left would only pretend to do there job. Seeing a patient for 60 seconds doesn't constitute medical coverage in my book. Of course had the government just let him receive his entire income he wouldn't have lost his housing and gotten sick in the first place. The moral of the story is individuals are best apt to make the decisions of what to do with there own money better than some bureaucrat or middle class individual who thinks they know best.
It's *inflation*. They are studying the wrong metrics and also those that cannot be measured over short periods of time. Any benefit is erased when the cost of living outpaces wages and salaries, and once it goes up, it does not come back down barring something like a legitimate depression (which the wealthy are insulated from as well). This has been the result in *every single country* that has attempted socialist government through history up to now. It creates a caste society, plain and simple, just by virtue of the economics, which I'm guessing the poster knows very little about, and it shows.
If the "dividend" were funded by additional income taxes on Alaska citizens (instead of from oil and natural resource royalties and other real investments), there'd be a lot fewer people in favor of it.
It's been known since the end of the 19th century. Without a massive burning of wealth and excess males in wars every generation or two capitalism maximizes efficiency too well and can't create enough jobs. Certain factions of Marxists, non-fascists of pre-Soviet vintage, were writing about this when Stalin was still in the seminary.
UBI sounds like the worse solution except all the others, the alternatives being world wars just small enough that the nukes don't fly and/or the guillotine. Boring socialism or Mad Max; what say you, slashdot libertarian incels?
When do we start drilling for oil in Washington State?
Have gnu, will travel.
... I thought Alaska was just some weird place that barely counted as a state and just had weirdos who elected some idiot woman as governor.
That's what I heard around here anyway.
How can we use that as an example?
So, the money drives the economy, you say?
Mission accomplished, I'd say.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
This is not enough to quit your job so why would they expect $1000 to raise unemployment
trying to explain to Americans about UBI is like trying to explain gun control.
We all know that we need universal health care and UBI.
Yet, a small powerful segment of society will always fight it and postpone it.
As a result of advertising and disinformation, we actually end up fighting ideas that should be very beneficial for us individually and as a society.
We are beyond the talk of why to implement it. We should be talking about how.
"Nobody will go against the will of the government "
People have gone against the will of the government since the country was founded.
The money paid out each year to Alaskan citizens is not a "Universal Basic Income". The money is the result of legislation that provides Alaskan citizens with money generated by the Alaskan oil drilling. It was an attempt to satisfy those who had environmental concerns about allowing oil companies to extract oil.
The bonehead who wrote the article plainly stated that the money paid out was not enough to live on. If it is not enough to live on then why would people quit working? Why would you expect unemployment to grow?
The "Universal Basic Income" will never happen. It would be funded by taxes. The people who would continue working will never put up with their taxes being used to pay for people doing nothing.
Of course they criticize the Federal government... for not giving them even more free stuff from other (productive) peoples pockets.
You can increase demand by cutting taxes or interest rates.
But if supply can't be ramped up, you're just going to create inflation along with the unemployment.
And yes, the UBI amount is too low to be meaningful.
Because that money comes from oil revenues, and burning fossil fuels is causing massive global disruption and, in many cases, regional and sectional unemployment.
There's a fund that distributes profit from natural resource extraction to all residents of Alaska. It's maybe a thousand dollars a year, not enough to live off of and was never intended as a UBI, it's just a way to keep the voters on board with oil drilling and such.
Finally, Alaska is a hellhole with mosquito clouds, months of light/darkness once you go far enough north, and bitter, bitter cold. Usually, people either live there because they're being paid better than they can get elsewhere, or they put up with the misery so that they can be a hundred miles away from the nearest person.
alaska's "UBI" amounts to about ~180 a month.
it's not enough to survive in a nice climate, let alone a shithole like alaska.
OFC it's not going to fucking increase unemployment, Chesus Crust.
It makes perfect sense:
- country has a bunch of buried resources. In a democracy these resources belong to the people of said country.
- company comes along, extracts resources, adds (some) value, and sells for profit.
Logically it would be expected that the people should receive a share of the profits that the company makes from the resources the people/country have generously allowed them to extract. That so many countries seem to think the people should *give their resources away for free* is frankly bizarre.
Only the ridiculously stupid believes that $1000 PER YEAR can be considered "Universal Basic Income"
If the amount of money is that low, why not just cut out the middle man and lower taxes according to family situation?
This is being paid for by the taxpayers, after all. Seems like a big, long and expensive roundabout way of taxing people less.
The people who would continue working will never put up with their taxes being used to pay for people doing nothing.
Instead, people will put up with those same taxes being spent on killing people in far away lands. Not just put up, they actually aspire towards it and hold those who go to do the killing in high regard. You lot need to figure out your base priorities before chiming in about who's money is going where.
My opinion on the matter is that no human should have to die due to lack of money for the primary necessities (food, water, shelter, security) and also should have access to secondary necessities due to living in the 21st century (electricity, education, internet, healthcare). Beyond those, they'll have to work for whatever else they want.
Before you knee jerk react to things like internet being listed as necessities, consider how those jobless people are going to apply for work when they cant even get to see the job adverts. This isn't your grandfather's era
Example: a person who has fallen on hard times should still be able to live in a warm home and be well fed and at the very least have access to transport to go find new employment. If no employment is available this person should be able to go get some training for the sort of work that actually is available. If this person would rather be lazy and do nothing, I'd still prefer that they have a home to do nothing in, instead of being out on the streets costing taxpayer money in other ways (policing them etc). If this person would want to stay home playing video games and smoking weed, they'll have to get a job to pay for those
Once you've figured out what you'd want your own life to become if you should ever end up with no income, you can then consider solutions to achieve said goal.
If your goal is that other people should suffer, well you're already living in that environment
TL;DR: first figure out what sort of society you want to live in before moaning about the details on how to achieve any of it.
At the end of the day, we want people to have more essential goods and services rather than more green pieces of paper. So we want this basic impact to stimulate production of, say, diapers without cutting production of anything else important. Otherwise recepients of basic income will end up paying higher prices, encounter shortages or otherwise end up no better off. This is tricky because regular market economy is already supposed to optimize production.
What idiot thinks that the Permanent Fund dividend is in any way shape or form an example of "Universal Basic Income"? That is totally ridiculous. It shows a complete lack of understanding of what the PFD is and what a "Universal Basic Income" is. They have NOTHING to do with each other. It is like calling your tax return a "Universal Basic Income".
Obviously the writer of the article has a conclusion they want to justify and they are manufacturing a pathway to get there.
Garbage in, garbage out.
When the economy is as white-hot as it has been for the past couple years, largely the only people without jobs are those who don't want them. The unemployment index (UI) measures people who are newly seeking a job but can't find one. Right now the demand for workers is so great, it would surely absorb any signal of upward pressure on the UI resulting from a universal basic income, or a raised minimum wage.
When you take money from hard working people with a skillset and give it to lazy people, you start destroying the motivation of all and the economy. Try the story of the little red hen:
Once upon a time there was a little red hen who scratched about the barnyard until she uncovered some grains of wheat. She called her neighbors and said ‘If we plant this wheat, we shall have bread to eat. Who will help me plant it?’
“Not I, “said the cow.
“Not I,” said the duck.
“Not I,” said the pig.
“Not I,” said the goose.
“Then I will,” said the little red hen. And she did. The wheat grew tall and ripened into golden grain. “Who will help me reap my wheat?” asked the little red hen.
“Not I,” said the duck.
“Out of my classification,” said the pig.
“I’d lose my seniority,” said the cow.
“I’d lose my unemployment compensation,” said the goose.
“Then I will,” said the little red hen, and she did.
At last the time came to bake the bread. “Who will help me bake bread?” asked the little red hen.
“That would be overtime for me,” said the cow.
“I’d lose my welfare benefits,” said the duck.
“I’m a dropout and never learned how,” said the pig.
“If I’m to be the only helper, that’s discrimination,” said the goose.
“Then I will,” said the little red hen.
She baked five loaves and held them up for the neighbors to see.
They all wanted some and, in fact, demanded a share. But the little red hen said, “No, I can eat the five loaves myself.”
“Excess profits,” cried the cow.
“Capitalist leech,” screamed the duck.
“I demand equal rights,” yelled the goose.
And the pig just grunted.
And they painted “unfair” picket signs and marched round and around the little red hen shouting obscenities.
When the government agent came, he said to the little red hen, “You must not be greedy.”
“But I earned the bread,” said the little red hen.
“Exactly,” said the agent. “That’s the wonderful free enterprise system. Anyone in the barnyard can earn as much as he wants. But under our modern government regulations productive workers must divide their products with the idle.”
And so the idle were given a share of what they *could have*, but did not earn.
A university research group, confused by the situation, wondered why she never again baked any more bread.
Russia you had to wait for lines for hours for things like toilet paper. In capitalism multiple people will start producing it to fulfill the need - to gain a profitable reward for their actions. That happens all the way down the supply chain.
You don't make money working for other people. You make money by taking on extra risk and work to supply a need.
Alaska has some of if not the biggest oil reserves in the U.S., and makes money from selling oil to the lower 48 states. Instead of the state keeping those proceeds, it distributes it to Alaskan citizens. That makes it different from a UBI because the money comes from actual productivity. Something of value which belonged to each Alaskan citizen was sold, and they are receiving payment for it. Productive transactions like this are positive-sum (both the buyer and seller benefit), and are what make the economy work.
That makes it different from a UBI where there's no additional productivity. In a UBI, you're just redistributing money among the population - taking from the more productive citizens via taxes, and distributing it to other citizens. That makes it zero-sum (one person wins, another person loses). It can have a positive influence if the people receiving the money were underpaid (what Ford stumbled upon when he paid his workers more) or causes people not to create other costs on society (e.g. not resorting to crime). Or it can have a negative influence if it leads people to decrease their average productivity because they'll get money regardless of whether they work.
Venezuela is the perfect example of the difference between the two. When their oil exports were strong, it generated enough productivity (revenue from outside the country) to support their cushy socialist programs. But when the price of oil fell and that source of productivity dried up, they should've cut back the programs to match their decreased revenue. Instead, they tried to maintain the programs at the previous level. That doesn't work because unlike money, productivity is conserved - everything that's consumed has to be produced. If you try to create the illusion that production and consumption are not equal, the economy usually responds by altering the value of your currency to make the valuations of the two equal.
That's what's driving the tremendous inflation they're experiencing. Basically the country is creating $100 in productivity, but promising its citizens $500 in handouts to consume stuff. When you do that, the currency devalues (suffers inflation) so that it now costs $500 to buy what used to cost $100, thereby keeping production and consumption equal.
Most of you commenting here don't even understand the basics of where money comes from. Banks create money out of THIN AIR every time they make a loan to somebody - most of the money in existence was created by banks (not the Fed - who also create it out of thin air).
https://positivemoney.org/
But some form of socialism to support those which were hit by problems, health, financial, or accident. A form of *gasp* social net to avoid people falling down and not getting up anymore. Practically only the US immediately jump to "communism rahrahrah the red !" every time a form of social net is discussed.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
This.
They want you in welfare, to be powerless and controlled by them. You comply with them or they cut off your peasant survival rations. It can be brought in for former slaves but the descendent's of free people would rather die. Which may well happen.
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Why not just give workers a $1000 tax exemption and then focus the effort on those who can't work for whatever reason? Why does the money have to circulate the government first before going back out?
The ignorance displayed in this is astounding. Alaska's Permanent Fund dividend is reverse taxation, NOT universal basic income! It is the only state that has a surplus of revenue, thanks to the oil taxes, which enables it to not only have no state income tax, but actually to give the state citizens moneys from the revenue. If anyone can show me a Universal Basic Income plan that does not result in higher taxes for anyone else, I will be all for it. Until then, continue your unicorn hunt.
So ask yourself where does the free money come from? IN alaska it comes from oil.. If you state has a huge resource you can sell you might be able to use that money for your people, But if you dont have that cash cow the money is stolen from working people. There is no other choice.
No one is exactly holding up the Alaskan economy on a pedestal; I'd be curious how this would effect a larger economy that isn't locked in the deep freeze 6-8 months of the year and has fairly broad job opportunities.
I do agree that letting the money flow out of a state's finite resources seems pretty stupid in the long run, too.
Alaska has the resources for the payouts to citizens, and the amount is far, far less than what others have been advocating for. It's not a universal basic income by any stretch of the imagination.
In short, the article is bullshit.
That's their problem.
You can't spend 2000$ on a flat screen TV then complain you have nothing to eat. I have zero compassion for those people.
I tend to rant.
The Alaskan payments to all residents aren't a UBI program, it is a direct payment to residents by the state funded by oil production within the state of Alaska. Rather than the state keeping the money for general programs they pass the money on to every resident equally.
Every UBI scheme previously discussed here was a ponzu scheme funded by taxpayers who funded their own payment through taxes, and intended to create a financial cushion in lieu of other social welfare programs.
The Alaska program is 100% funded by oil production companies, and includes $0 taxpayer dollars.
That anyone would even consider calling $1-2K/yr comparable to other programs that dole out $6-12K/year is asinine.
Ken
This is not UBI.
UBI, as a concept, is to provide for an individuals basic needs. And to go further saves society money by removing existing bureaucracies.
This is a profit sharing system. The oil belongs to the people and the profits are shared by the people.
If you're scared of your govt then you need to further restrict its powers
Vote 3rd Party in 2016 and beyond
The PFD is not a Universal Basic Income... at all... not even remotely close.
The money to pay for this comes from oil being gathered in the state.
Alaska's Dividend Fund is NOT a Universal Basic Income program. It is dividends paid to citizens from oil royalties. There is something actually being produced that generates income for parties at interest.
It's not simply a socialist tax-and-spend program that shifts wealth from one party to another, while producing nothing. It is tied to production of value, like all dividends are.
Just because the UBI is administered as a single annual payment doesn't mean it isn't UBI.
The Alaska Department of Revenue, Permanent Fund Dividend Division is responsible for determining applicant eligibility for the distribution of an annual dividend that is paid to Alaska residents from investment earnings of mineral royalties. The annual payment allows for Alaskans to share in a portion of the State minerals revenue in the form of a dividend to benefit current and future generations.
I am confused as to how this study could test their hypothesis. As I understand it, everybody in Alaska gets this money, to whom are you comparing the people who receive this payment so as to see that someone who receives this payment is no less likely to seek a job than someone who does not?
The truth is that all men having power ought to be mistrusted. James Madison
Since Alaskins can have more money I can charge more for rent, clothing, food, etc...
$2,000 a year isn't a "basic income".
Holy Fuck.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
Alaska doesn't have a universal basic income, you ignorant commie fucks.
LoL. That is because of the jobless virgin-thing. It doesn't help.
THIS IS NOT BASIC INCOME.
What? Are you trying to suggest that you and your wife spend more than $4,000 per year?
Wow, look at professor moneybags over here.
"Our two-party system is like a bowl of shit looking at itself in a mirror." - Lewis Black
In other news, Ayn Rand fans have declared reality a conspiracy against their religion, and economists with a brain (all three of them) have sighed with relief that the world actually follows logical rules.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
The idea that people would do nothing if paid is fiction. People have a primal drive to work far greater than for sex, sleep or food.
If you mean people believe in such stuff, sure, but then there are people who believe in the Tooth Fairy and a Microsoft that has their interests at heart.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
"Nobody will go against the will of the government "
You missed a few words there... The people who've gone against their government weren't being fed (kept, actually) by that government; those words you dropped actually were important.
APK quotes people (including myself) without context and should not be trusted. Just thought you should know.
Nice thought. Can't EVER be done. That's a fancier layout of the "Tolerating the Intolerant" paradox. They will NOT do all the work. They will enslave those refusing to "do their part". We already know. Conservatives founded and ran this nation for about 100 years and you see what happened. The minute we gave them a second chance, the fuckers banned alcohol. They've had their chance. NEVER AGAIN.
It's technically an excise and not strictly a tax. But if you don't like the word "tax" you can use "levy" which more general and includes fees, taxes, and fines.
Good to see you bought the MSM propaganda about Venezuela. You really don't have a clue what happened. The only part you got right was "the price of oil fell". You need to know the reason it fell. You need to understand the role the US and Columbia are playing.
Since I'm not a link whoring asshat like Creimer, I'll tell you one place you can find out (there are several). Go to Youtube, search Florida Maquis, watch the Venezuela videos. Ignore the Antarctica ones- no one is perfect- he believes Nephilim are at the South Pole, but the Venezuela stuff has links and citations so you can verify it all you want. Also go figure out what the mystery fleet is off the coast of Grenada. It is only transmitting GPS intermittently and has been there about a month now.
Cayman Islands
Your argument is invalid.
Lazy, stupid non-investor class. This will all end in tears!