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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.
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.
That fund is basically dividends paid to the citizens of Alaska with money raised from the extraction of minerals. Think of it as profit sharing you get for living in a place its dark half the year and you canâ(TM)t buy liquor in the winter. It isnâ(TM)t meant to âoereplaceâ income, but is meant as a âoethank you for living here so we can claim its a stateâ
Yeah, it comes from investment earnings off of the fund itself. Initially it was funded from oilfield royalties and instead of letting the politicians just have their way with it, most people were all "yeah ... that's a bad idea" and added an amendment to Alaska's constitution to set it up as a fund for all current and future residents.
And holy balls are the mid-terms between the two main gubernatorial candidates, Begich & Dunleavy, all nutballs crazy over what to do (and keep doing) with it.
Disclaimer: I live in Alaska and receive a PFD.
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.
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.
True, true, (initially) thanks to that asshat Walker. I'd wager it's one of, if not the contributing reason why he dropped out (well, that and the whole LNG thing).
you canâ(TM)t buy liquor in the winter.
Why can't you buy liquor in the winter?
Ethanol doesn't freeze until the temp hits -173F. Even Alaska doesn't get that cold.
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?
A Summer.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
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.
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.
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.
Yes, it's hard for most Americans to understand a system where everyone is owed a living and nobody has to work.
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.
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.
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 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.
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.
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
Why not just give workers a $1000 tax exemption and then focus the effort on those who can't work for whatever reason? Why does the money have to circulate the government first before going back out?
Alaska has the resources for the payouts to citizens, and the amount is far, far less than what others have been advocating for. It's not a universal basic income by any stretch of the imagination.
In short, the article is bullshit.
That's their problem.
You can't spend 2000$ 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.
And that is a UBI. If Hawaii had a UBI it'd probably be based on taxing their tourism industry. UBI doesn't have to come from the same source everywhere. For much of the USA UBI would be funded, sometimes more directly than others, by the extraction or use of natural resources.
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.
There are many towns/villages in Alaska that are dry. I hear some of them are seasonally so due to the increased risk of suicide during the winter as a result of lack of sunlight and the bitter cold, among other associated problems. I heard this from a friend who lived up there for a while ~10+ years ago, working on the system and administers the project in TFA. Last time I was in Alaska, I was 14 so liquor wasn't any of my concern (and it was the summer anyway).
LNG thing? My impression is that the LNG project is proceeding, if somewhat slowly. Why would an "LNG thing" contribute to his withdrawal from the race? Honestly, I thought that it had more to do with polls and Mallot's antics.
No, we get a summer. We just call it "Construction Season" and it only lasts for three months. Then the fucking darkness comes.
A lot of people (at least from what I've gleaned from the ADN comments section), consider the LNG to be a pipe dream with little chance of actually being profitable. Last I knew of, there weren't any signed buyers for it. There was that Chinese company at one point, but they never actually committed so far as I know.
The only upside of Walker "saving the PFD" (I wanna punch the PR person who coined that) is that everyone felt the pain. Alaska needs to balance its budget, and not by raiding the PFD or an income tax.
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
A similar failure to see rising unemployment happened in Washington State, which isn't based on oil.
They increased minimum wage, despite fears of mass unemployment.
Unemployment fell faster than the national all average.
Conclusion: More people with money doesn't lead to unemployment.
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)
The characters in Star Trek live off welfare. Yes, it's fictional, but I'll bet you a toasted cheese sandwich that a lot of people would love to live in such a universe.
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)
Ah. The agreements among the consortium that will own, operate and finance the pipeline and the chinese gas company that intends to buy the bulk of the gas should be finalized within two months. I suppose that we'll have more information then.
"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.
And I'm honored to have my 3rd "0, Troll" in over a decade and a half on this site. It tells me I'm probably right.
APK quotes people (including myself) without context and should not be trusted. Just thought you should know.