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Alaska's Universal Basic Income Doesn't Increase Unemployment (businessinsider.com)

Posted by BeauHD on from the friendly-reminder dept.

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.

10 of 342 comments (clear)

  1. Capitalism bad. by Anonymous Coward · · Score: 1, Interesting

    Capitalism bad.

    Communism good.

    Will work this time.

    Real communism was never tried.

    It will work this time with a new name.

    1. Re: Capitalism bad. by Colourspace · · Score: 5, Interesting

      Communism doesn't work for several reasons, as demonstrated by history but no matter what the idealists like to keep trotting it out as a viable solution. Firstly, for communism to work - someone, anyone - needs to be some sort of enforcer - completely incompatible with the whole notion in the first place. Secondly, human nature (as it stands) is still very much tied to betterment of the self, and so ultimately being better than your fellow human will remain a thing until we are all programmed not to do so. Now, who is going to be our equal and yet do that fairly and without bias?

    2. Re: Capitalism bad. by Anonymous Coward · · Score: 3, Interesting

      Almost agree.

      Firstly, for communism to work - someone, anyone - needs to be some sort of enforcer - completely incompatible with the whole notion in the first place.

      The idea was that communism was some utopian end-state which was to be ushered in by a transitional phase of socialism (which is why no nominally 'Communist' party has ever claimed to set up anything beyond ML socialism, eg. Union of Soviet Socialist Republics).

      Communism would come about once the state simply withered away. The closest real-world example of anything resembling communism --defined by: a) people producing according to the abilities; b) people consuming according to their needs; and c) this occurring without any formal state control --is FOSS (I know some people hate admitting this). So your some sort of enforcer need be no more scary than Linus ... no bad example ... than Richard Stallman ... hmm, still you get what I mean. ;)

      Since a generalised communism never came about, we cannot really say why I didn't work. OTOH, the idea that actors, once they have their hands on state power, will simply allow it it wither away strikes me as unlikely (as we can see in China, where despite the introduction of a fairly rabid capitalism, political power remains jealously guarded). So that is more likely why communism wouldn't work, or actually ever come into being in the first place.

      Secondly, human nature (as it stands) is still very much tied to betterment of the self

      "As it stands" is pertinent. One of the insights of Marx, which is not as easily dismissed imo as his dreams of a utopian stateless communism, is that 'human nature' is determined by the concrete nature of the economic system in which those humans are constituted. It may be more than a simple function of economics as Marx held, but I think it's fairly clear that what is often taken for granted as human nature varies across time and culture.

      As to the betterment of self, the idea again was that humans express our self in what we produce, and it would be this need for self expression which would motivate the "from each according to their ability" part of the equation (again cf FOSS). But who expresses their selves by collecting garbage?

      Which kind of comes back to your original point, the reason communism wouldn't work is because it envisages a system where there is no enforcer, but HumanNature(tm), "as it stands," requires enforcers (or is that an unimaginative view of the nature humans are potentially capable of?)

    3. Re:Capitalism bad. by Opportunist · · Score: 2, Interesting

      You may not have noticed it, but we do not lack money on the supply side. We have an incredible amount of money waiting for something worthwhile to invest in. What we lack is money on the demand side that could create the demand for an endeavor to invest in.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    4. Re: Capitalism bad. by c6gunner · · Score: 5, Interesting

      A single person doesn't HAVE $100B to spend.

      I swear it's as if the commies seem to believe that reach people just keep billions of dollars under their mattress. The vast majority of "money" which billionaires have isn't money but rather control over large businesses. If CompanyX is worth $40 billion and I own half of it's stock, I "have" $20 billion ... but I am never going to see that money, let alone spend it. I don't have $20 billion in bills shoved into a piggy-bank; I have $20 billion in assets which are actively involved in actually doing things in the real world. Money at that level isn't money; it's control.

    5. Re:Capitalism bad. by tsqr · · Score: 3, Interesting

      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?

      Sure he did. So did the guy who created nothing of value. Of course, all of those things were paid for by the guy who created the wealth, and others like him who came before. Where did you think they came from?

  2. UBI, regressive flavor by manu0601 · · Score: 5, Interesting

    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.

  3. What UBI? by MeNeXT · · Score: 4, Interesting

    There is no UBI program in Alaska.

    --
    DRM? No thanks, I'll just get it somewhere else...
  4. Re:Being an Alaska Resident in Anchorage, the arti by Opportunist · · Score: 5, Interesting

    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.
  5. WTH? by Gription · · Score: 5, Interesting

    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.