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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.
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.
"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.
while (sig==sig) sig=!sig;
There is no UBI program in Alaska.
DRM? No thanks, I'll just get it somewhere else...
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.
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.
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?
I believe you are arguing in support of some form of the broken window fallacy.
I'll join in support of your argument if everyone that earns something is taxed a small amount to support public infrastructure and social programs for public schools, etc.
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." - H. G. Wells
"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.
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?)
Yes, it's hard for most Americans to understand a system where everyone is owed a living and nobody has to work.
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.
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.
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.
No, he's arguing for velocity of money, which isn't a fallacy.
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
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.
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?
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?
Yeah, no one with zero dollars is turning anything into anything. You need tools and energy to acquire any raw material, let alone turn it into something, unless you’re an artist working with found-objects. Sounds like Ayn Rand’s fantasy.
-- sudon't
Air-ride Equipped
Where did you think they came from?
Like all things, they came from the efforts of the laborers, and were derived from the natural resources of the land.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
The problem with using FOSS as an example of communism is that consumption isn't limited. The method only works for "intellectual property". If I decide to code for free it doesn't matter of 1 person uses the software or half the planet does - my work was still fixed in scope.
On the other hand, if we're talking about vegetables rather than code, as each person consumes, what they consumed must be replaced, and that entails work.
I'm sure if there was some way that we could plant a field harvest it once and nobody would ever go hungry again, you'd have plenty of volunteers. Sadly, that just isn't the case.
That aside, this whole premise is laughable. This isn't UBI - $1000 per person annually is basically less than a lot of people get as a tax refund each year. It doesn't increase unemployment because IT'S NOT ENOUGH TO LIVE ON (this is also side-stepping the issue that generally unemployment is a measure of the people without jobs who are LOOKING for a job - so it's not a good metric anyways since the fear with UBI is that people wouldn't even want to look anymore, leading to them technically not be "unemployed").
"People who think they know everything are very annoying to those of us who do."-Mark Twain
"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!!!
Yet more pedantry. When it's all you got, it's the only type of argument you can make, isn't it?
Technically correct is the best kind of correct; not only on a site for nerds, who love tech, but also when making decisions in the real world.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Communism was the single greatest evil of the 20th century, with a solid lead on capitalism, but I have to disagree that it kills excellence or achievement. It certainly isn't economically efficient, but Soviet scientists and mathematicians made enormous strides, some of which remarkably outpaced what we had in the West. Their performance in that regard is, in fact, one of the best counterpoints to the idea that people only work for wealth.
Guns and killing are prevalent the world over.
The US has more legally owned firearms than PEOPLE. If legally owned firearms were the problem, you'd see a LOT more gun violence deaths than .004% of the population (Based off CDC numbers for 2016 (38,658 total firearm deaths, 22,983 of which were SUICIDES.)
The problem I have with the US's current social safety net is the waste. You have people opting not to work and subsisting on nothing BUT the social safety net.
You also have illegal immigrants, who aren't supposed to benefit from it, still doing so.
And I never said ANYTHING was communism.
I simply outlined why Communism will always fail and will always hurt and kill lots of people on it's way to failure.
Chas - The one, the only.
THANK GOD!!!
You didn't zoom out to see the full picture.
This gets the money moving, which is good for the government (taxes), but it doesn't benefit the rich at all;
It does benefit the rich, but for some reason, outside essentially Warren Buffet, they don't see it. For them to enjoy the society they do, they need that society to exist. Take your hundred million dollars and move to Somalia, and I guarantee it's not going to be as pleasant as the Bay Area, Manhattan, or Miami.
For that society to exist, there needs to be a functioning economy. Trapping most of the economic potential in the stagnant wealth of the top 1% cripples the economy for most poor and middle-class individuals. That in turn drags the whole system down, and it's not good for the poor or rich. The difference is that the rich can buy their way around the problems for a lot longer than the poor can. Eventually, however, even that won't be sufficient.
Taxing the rich who then expend resources to produce goods shifts that money (generally) from their wealth to income. That's good, because to get there it tends to go through a bunch of poor and middle-class people, who then contribute to the economy more. As they fuel the economy that funds the government more who thus can afford roads and power and water and food distribution networks and the telecom industry and the military and all the other stuff the rich absolutely can't live without, but who think someone else should be in charge of maintaining.
In the end, they trade some of their wealth for slightly less reliable income, and the net change is a vibrant society for them to enjoy. That doesn't sound like the worst thing to most of us.
Velociraptor = Distiraptor / Timeraptor