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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.
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?
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.
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.
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.
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.'"