RE: Universal Basic Income as an Alternative to Higher Minimum Wages
All great points, Scott. As I read your article, I also recalled stories I read about wage theft, too. Then I see the struggle over health care benefits, promotions, raises, etc.
Employer behavior seems to be laser focused on shifting burdens onto employees to the greatest extent possible. The game of the current system is killing the golden goose, American productivity.
When employers use their money to influence public policy to reduce the bargaining power of employees, it's for short term gain. The long term effect is that employees cannot afford to buy the products they create.
UBI provides a strong disincentive to cost or burden shifting the way that most employers are doing today. No matter how the burdens shift, everyone pays into it and everyone gets a sort of dividend from increases in productivity due to automation. It's like Alan Watts said, the robots will pay for it and everyone should benefit from the robots, not just the people who own the robots or the patents on robotics.
One final point is that the current system assumes that people lack motivation to work. It's like employers and governments think that if they apply just enough discipline and dangle enough rewards, that they will find a sweet spot where employees will continue to work for cheap, while millionaires and billionaires can still get their second or third vacation home.
I believe that most people want to work and that in most cases, motivation is not a factor. The most important factor is skillsets. I see it in job ads all the time. They list the skills they're looking for an it's a mountain, like some superman is going to do the job. And since the market is evolving and public policy reduces bsargaining power, few people have the resources to keep up with changing skill requirements.
Anyway, your article gets the gears moving as usual. Thanks.
You raised some good points @digitalfirehose. With the technological growth we are experiencing these days, UBI may actually become a feasible system. It is all about getting the incentives right and taking into account human nature.
UBI has been feasible and required IMO since the birth of private property. Even as far back as the founding of the US, Thomas Paine supported a version of it funded by essentially a land value tax for the same reasoning. Decades ago we even almost passed a version of it under Nixon, thanks to Milton Friedman himself. We could have afforded it then in 1970 when it passed the House of Representatives. Our economy has more than doubled since then, so it would make no sense at all to suggest that it was feasible in 1970 but not in 2017.
As for "getting the incentives right", the incentives of UBI are better than any form of conditional assistance that is pulled away with income. As described in this post, conditional welfare creates welfare cliffs. The highest marginal tax rates of all are applied to those on welfare, which makes no sense at all to be doing if our goal is to incentivize employment. No one in their right mind would accept a job where they lose $1.20 in benefits for every $1 earned. A UBI however could be done in a way that subtracts 40 cents for every $1 earned, no matter if it's one dollar or one billion of them. That would be the flat 40% income tax method. It's not my favorite version, but it's an option.
In regards to "human nature", we greatly are a result of our environment. UBI is about improving our environments. By covering everyone's basic needs as a given, that's a guarantee of security in addition to making sure people are able to get enough to eat, stay off the streets, and live healthier lives. The evidence is strongly in favor of basic income with reduced hospitalization rates, lower crime rates, healthier birth weights, lower stress, more entrepreneurship, greater social cohesion, and more. Definitely look into the growing body of evidence. It's the data that convinced me about UBI more than anything.