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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.
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.
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.
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.
"more spending money results in more demand, and thus more jobs."
There is not "more spending money". The only way a government can do this is to take money from A and give it to B. So the total spent/invested is the same, the only thing that changes is government control over the spendee increases.
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If I have 100 bucks and you have none, I buy dinner and you starve. But I buy dinner for one. Because I only need one.
If you have 50 bucks and so do I, we both buy dinner.
Ask the restaurant if there's a difference.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Guy with $0 goes out and turns raw materials into wealth creating value out of nothing increasing the amount both people have.
Just curious, did this guy "go out" on public roads, protected by public police, legal system, and military? Did he have an education, perhaps from a public school? Did he survive to adulthood thanks in part to safety and health regulations?
The point is that people's spending habits only inflexibly reflect their available purchasing power. The more you earn, the lower the percentage of your expenses compared to your income. Up to a certain level, your expenses keep up with your income, because people like to spend if they can. But at some point it becomes pretty ridiculous, since you can't "sensibly" spend 100k a month. At least without investing some of that money, which is the exact opposite of spending.
But it's spending that drives the economy. If I can't sell my goods and services, I have no business.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
It's not the broken window fallacy, it's pointing out that one of the basic assumptions of modern economics - unlimited demand - does not exist. No matter how rich someone is, they can't eat 100 meals or watch 100 movies a day.
If you remove the middle class, those movies simply won't exist, because at $100 million a pop, even the richest couldn't possibly fund their development for very long. It's only when a movie will be watched millions of times that it makes sense to create them at such a high cost.
The same story gets repeated in just about every industry. Intel spent $13 billion last year in R&D. Boeing spent close to $30 billion to design the 787. Cancer research is $5 billion per year and they're not even close to being done. None of those costs would be justifiable if their entire customer base was 10,000 strong.
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:
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True but if minimum wage part time jobs make up the difference, people no longer have to improve themselves enough to earn a living wage.
You do realize I hope that when the minimum wage was instituted, it was a living wage? And that was in fact the expressed purpose?
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
"We cannot say why communism didn't work."
Sure we can.
Communism ONLY works if everyone's on board with the ideology.
If you get someone dissenting, and refusing to participate in the program, you now have someone demonstrating an option.
With communism, you CANNOT have that.
This is where the guns and killing starts happening.
100+ million people later...
There's also the fact that pretty much every implementation of communism was FORCIBLY IMPOSED, rather than allowed to grow organically.
Communism also kills exceptionalism and achievement.
Everything is subservient to "the good of the people/party".
Combine this with the fact that no matter how well you do, the fruits of your labor aren't yours. They're taken from you and redistributed.
This murders achievement and the drive to excel.
Enlightened self interest works FAR better, but communism can't allow for that...
Top-down control of an entire society only works for social insects.
Humans are NOT social insects.
Chas - The one, the only.
THANK GOD!!!