Universal Income - Freedom Dividends

[dd564]

I assume we are talking the distant future here?

I think the people in this forum probably feel that UBI would not be impactful to them, but reality is to pay for this gov't would have to revoke Roth privileges, and tax all SS, etc to pay for it. Not palatable I don't believe, especially for the that worked very hard to ER.

If by distant future you mean the year 2030, then yes.
Now maybe automated semis come a bit slower than that but the financials behind getting automated semis in transportation is huge, so it will happen.

Of course on this forum which likely has a higher percentage of wealth than a typical forum, most people might not consider this to be impactful, but the impact will be large as automation in the next 10-20 years takes over many jobs which we highly value right now.

[/B]

Trucking jobs don't exist anymore? Have you traveled on an American interstate recently? There are trucks as far as the eye can see (and usually in both the right and left lanes!). Further, I have friends who team drive a truck for a large retailer, and they gross $150,000/year. Not so "lousy," I'd say.

I say "lousy" because it's a tough job to fill right now. Away from family. Long hours. Sleep in a semi. Stressful. (My brother drives semi). It's hardly a job people aspire to do, but regardless many studies seem to be in agreement that around 2030 trucking jobs will largely be replaced with automated semis / other technology. (Safer, cheaper, more efficient than human drivers).

That's what also makes it "lousy" because a 20 year old getting into it now will need to retrain for a new career around age 35 if the multitude of projections around automated semis is accurate.

 

[razztazz]

Maybe start growing their own food? Or how about getting a job as a truck driver?

HA! why? We already have the food No need to go stone-age. It's all about progress. Not rigging up news ways to keep people at the end of the whip.

Truck driver jobs? They'll go away too. So, why force them to exist just so there's something we can force people to do?

 

[Mdlerth]

Data? We don't need no stinkin' data

UBI strongly resembles a solution in search of a problem. That ought to be sufficient reason to view it with skepticism.

The argument in favor seems to be that future automation will create near-total unemployment, necessitating state support of the displaced workers. This is pure speculation. The history of the Industrial Revolution indicates the opposite. Thanks to automation, worker productivity is larger today than in 1800 by orders of magnitude, but we don't observe 90% unemployment...

...except, of course, here among the retirees!

 

[Independent]

... how do we handle it as a population when over the course of the next 10-30 years, instead of having 60% of people working it drops down to maybe 30-40%.

What do we do with the 60-70% who simply don't have jobs available to them?
When automation gets to this point, some new jobs will be created but in the name of progress, it's not going to be 1 for 1, otherwise the market wouldn't drive the change.

You've certainly seen this before

In 1870, almost 50 percent of the U.S. population was employed in agriculture. As of 2008, less than 2 percent of the population is directly employed in agriculture.

https://en.wikipedia.org/wiki/Agriculture_in_the_United_States All those jobs disappeared because we automated agriculture. But, the market found jobs for everyone. And, somehow, everyone shared in the bounty provided by rising productivity.

Gov't statistics don't show recent acceleration in productivity gains. https://fred.stlouisfed.org/series/PRS85006092
We are in a range that we've adjusted to in the past.
And the unemployment rate tells us that people who want work are finding jobs.

I know "but this time it's different". Maybe it is, but I'm skeptical. I think the real change over the last 30 years is not accelerating technology, but American workers losing their protections from foreign labor competition.

I don't see a sudden collapse in the job market. I do see a continuation of the slide from labor income to capital income. I think there are sensible things we could do to adjust for that. I'll try to put that in another post.

 

[Independent]

Paying for anything is always a concern, but in my opinion, much of our financial system is a ponzi scheme to begin with. It's just one where they need to keep it honest enough that people partake. Essentially we have been borrowing from the future to pay for now forever.

Regarding ways to pay for it, one theory is to have an automation tax where the company pays a tax for the automation that took place. This could be related to the number of workers displaced, but if instead of paying someone $40k a year you might have a machine and a tax on that machine of $4,000 per year, the company is still better off paying for the automation and the tax for the displaced worker.

This really isn't a discussion about how to pay for it, ...

I guess to me it isn't a question of how do we pay for it. It's a question of how to we best prepare for it so the the system is efficient, makes sense and as affordable as possible while keeping people from uprising.

To me, "how to pay for it" is a hugely important question. I'm not willing to say we've borrowed at lot in the past, so let's borrow far more in the future.

Your automation tax is a step in the right direction (it is much better than Yang's VAT), but I think it is more complicated than necessary. It requires decisions on which machines, software, patents, and processes you're going to tax. Then identifying how much productivity each has added and hence how much tax it should bear.

Fortunately, we don't have to do that. Economic theory says that the value of automation is spread (at least) to everyone with investable capital. So, we tax all capital income. We currently tax capital income at lower rates than labor income. Simply equalizing the rates would both simplify our tax system and move taxes in the direction you want to go for some eventual UBI (if those jobs really do disappear).

Right now, our problem is not complete lack of jobs, but wages that seem "too low". One thing the gov't can do about that is to stop taxing those low wages. I don't think we need to start sending people checks, but it is time to stop carving into those low wages. A single worker earning a nominal $12,000/year pays federal taxes of $1,500. If $12k really is the minimal needed to survive, I'd prefer to see a tax of $0.

These two things both move in the direction you want to go, but don't require a completely new tax or a new cash benefit.

 

[samclem]

You've certainly seen this before https://en.wikipedia.org/wiki/Agriculture_in_the_United_States All those jobs disappeared because we automated agriculture. But, the market found jobs for everyone. And, somehow, everyone shared in the bounty provided by rising productivity.

+1. Yes, many of the professional futurists are saying this time it is different, I think they'll be proven wrong yet again.
This UBI idea has been flogged for decades. It seems a strange time to be raising it now, as here we sit at virtually full employment in the US (according to some economists, US economic growth is being slightly slowed by labor constraints).

There's no fixed number of jobs. The number of people employed is a function of many things, including the cost of labor. Each employee needs to produce a value to the employer exceeding their cost to the employer, else that job will be eliminated. If pay (or benefits, or overhead costs of having an employee, etc) goes up, then some jobs go away. A UBI will decrease the number of people willing to work at a given level of compensation, increasing the cost of labor and reducing the number of jobs. In this way a UBI will worsen the problem it claims to address.

 

[samclem]

Yang's proposal gives $1,000/month to a single adult and $1,000/month to an adult with two dependent children.

. . . .

Then there is financing in general. There are 200 million people in the US between the ages of 18 and 64. $1,000/month is $2.4 trillion. Yang wants to cover that with $800 billion from a VAT plus (he says) $600 billion from current welfare. I don't think that adds up. When I do the numbers, tax rates get too high for me.

No matter how it is paid for, my preference is that (if this should come to pass, and I hope it doesn't) we would define and bound the program on the supply side rather than the demand side. For example, rather than setting a $1000 monthly stipend adjusted for inflation, that we would fix the program as a % of GDP (thus, define the burden we are willing to undertake) and the divide that amount among the citizens. Demand-scoped entitlement programs seem to grow like topsy, and we've created a lot of problems through creative financing of them. True pay-go would mean getting the money in hand, and then paying it out. No bills kicked forward in time to burden future generations. If the economy hits the skids, then everyone will need to tighten their belt a bit.

 

[dd564]

+1. Yes, many of the professional futurists are saying this time it is different, I think they'll be proven wrong yet again.
This UBI idea has been flogged for decades. It seems a strange time to be raising it now, as here we sit at virtually full employment in the US (according to some economists, US economic growth is being slightly slowed by labor constraints).

There's no fixed number of jobs. The number of people employed is a function of many things, including the cost of labor. Each employee needs to produce a value to the employer exceeding their cost to the employer, else that job will be eliminated. If pay (or benefits, or overhead costs of having an employee, etc) goes up, then some jobs go away. A UBI will decrease the number of people willing to work at a given level of compensation, increasing the cost of labor and reducing the number of jobs. In this way a UBI will worsen the problem it claims to address.

Just for the record, I'm not "pushing" the idea, but rather trying to get conversation around it because it could be an intriguing problem, and also the consequences of such UBI are unknown.

Alaska currently awards oil dividends to it's people, and I think North Dakota sends out checks to citizens as well as of a few years ago but that's a small scale in comparison and isolated economies that interact with other states.

To me, it's a social experiment because I think if majority of people got it, the lower class wouldn't feel the burden of being embarrassed by it. Moving your brain from a "defense" mindset to one of "offense" or opportunity could be a powerful thing in instigating new business or a new artistic movement.

Seems like the biggest detractor is the "how do we pay for it" piece which I understand.

This would have been an interesting experiment in 2007/2008. Rather than bailing out the banks, if they had sent that money to citizens to spend how they chose, maybe our economy would have bounced back faster.

 

[natetheb]

I was always taught, "if don't work you don't eat." Sounds like UBI simply encourages laziness.

The United States is the wealthiest nation in the world. The poorest in this country have it far better than some "middle class" in other countries. There will always be inequality in this world and no amount of money thrown at it will make it go away.

 

[dd564]

I was always taught, "if don't work you don't eat." Sounds like UBI simply encourages laziness.

The United States is the wealthiest nation in the world. The poorest in this country have it far better than some "middle class" in other countries. There will always be inequality in this world and no amount of money thrown at it will make it go away.

You're missing the intention of it.

And another difference, this isn't from people who don't WANT to work. It's for a time when people who want to work have no sources of employment.


Also, uou would get the money whether you are working or not. So there is no reason to still not try to find a job or to start your own income producing business, or to start painting, woodworking, etc., to make a few extra bucks, and as you fail miserably for 3 years trying to kick that off, at least you can eat and pay your heating bill.

Being lazy longterm is not satisfying for most people. Satisfaction of life still comes from aspiring to do bigger things.

The intention of UBI is to give people an income to support them and allow them to still aspire for growth, yet have food on the table versus the current policies where if you get a part time job, you lose your government income. It's not to have the whole world be lazy.

But regardless of all of that, if we automate (and it's a debatable question which could be realized in as short as 10-15 years) to the point we are eliminating jobs at a much faster rate than we are creating jobs, those large masses of people without jobs will need something to prevent an uprising or an increase of crime / suicides.

If the next wave of technology brings more jobs than we have now, things will sort themselves out just fine. But if it's an issue, it might be a good idea to start having a good plan in mind to support these people than a half-ass plan too late.

 

[Sunset]

We have more automation right now than ever, yet unemployment is at record lows.
This has gone on for decades in the past and I believe it will in the future, as there is no limit to the things people can do or want.

I know quite a number of people, if you give them $12K per year, they will stop working, and bum around. It's called Early retirement, or free booze/drugs depending upon the person.

Interestingly, the population of industrialized countries is on the decline, so the problem won't be people out of a job, but trying to find someone to work. Even China is looking at the problem they are facing as the population ages out, with not enough young people to replace the old ones retiring and dying.

 

[gwraigty]

If I understand the proposal as written in the link provided in post #2, it would mean that both myself and my husband would each receive $12,000, regardless of income, or lack of. Just because we exist and are citizens.

My husband makes a low 6-figure income. I've been a homemaker since 1992. We live in a LCOL area. We have 2 young adult children still at home. If my husband were to lose his job today, we'd have no worries as to how we'd eat or keep a roof over our heads.

It wouldn't seem right that I'd get $12,000/year all of a sudden, when I hadn't done anything to earn it, and we didn't need it. Or that my husband would get $12,000 outside of his work income, when he's paid very well for the work he does in this area.

 

[natetheb]

You're missing the intention of it.

And another difference, this isn't from people who don't WANT to work. It's for a time when people who want to work have no sources of employment.

No, I really am not missing the point. Considering the website uses the phrase, "Income for all American adults, no strings attached," it implies wealth redistribution, including to the lazy.

Also, uou would get the money whether you are working or not. So there is no reason to still not try to find a job or to start your own income producing business, or to start painting, woodworking, etc., to make a few extra bucks, and as you fail miserably for 3 years trying to kick that off, at least you can eat and pay your heating bill.


Being lazy longterm is not satisfying for most people. Satisfaction of life still comes from aspiring to do bigger things.

There are people already in this country that make about that much a month from government assistance and choose not to work. There are plenty people in this country where there main goal in life is to get on government assistance and not work again. There are people that choose to stay in poor health in order to maintain their disability payments. Every American does not have the same motivations as people like us.

The intention of UBI is to give people an income to support them and allow them to still aspire for growth, yet have food on the table versus the current policies where if you get a part time job, you lose your government income. It's not to have the whole world be lazy.

Yes, that is called the Welfare Cliff, and that is why the gov sucks at wealth distribution, they still haven't gotten it right after 60+ years. Why should I expect a new wealth distribution policy to be any less flawed?

But regardless of all of that, if we automate (and it's a debatable question which could be realized in as short as 10-15 years) to the point we are eliminating jobs at a much faster rate than we are creating jobs, those large masses of people without jobs will need something to prevent an uprising or an increase of crime / suicides.


If the next wave of technology brings more jobs than we have now, things will sort themselves out just fine. But if it's an issue, it might be a good idea to start having a good plan in mind to support these people than a half-ass plan too late.

I don’t think you understand how good automation can be and how smart companies can use it to increase their labor force. I’ll give an example, I recently got to tour the Toyota Engine Plant in my hometown. They were starting to implement automation like a robotic arm that simply stacked piston rods in the proper orientation. Instead of laying off those people the robot arm replaced, they simply shifted them to other areas of the factory. As Toyota continues to increase automation, they are able to put more money into reducing their environmental footprint and fund future expansions to the plant, creating even more jobs.




So what about CNC machines? Has the machinist trade been pushed away by CNC? Nope! Machinists are still required to program the tool paths, install the raw materials, and run the machines. The machinist trade is still going strong and the demand is increasing.


Automation will never fully replace human capital, it simply allows human capital to be reallocated to something that it is better at, like developing new technology.

 

[38Chevy454]

My basic issue with the concept is that you cannot tax yourself into prosperity. Gov't does not create anything and every dollar the gov't has is a result of taking it from someone. Unless you consider gov't printing money



I absolutely disagree that automation will cause less jobs. It will cause *different* jobs, but not *no* jobs. As several previous replies have stated, agricultural and industrial automation has been around for a long time and we have managed to create new jobs for people.


I also have very fundamental disagreement with any redistribution of money programs, especially those administered by the gov't. If I want to redistribute my money, I do that through my charitable giving. It also allows me to choose the recipient of that redistribution. It's *my* money and I should be able to choose what to do with it. Obviously I am very much on the capitalism side and against any socialism type policies.



But what do I know, I'm just a hard working person that has worked full time since 15, with part-time during school, who paid for and worked my way through college, to get a good engineering job. I then used good financial strategies to save and allow me to be in the position I am. I am not sympathetic to those who are against working and taking risk to get ahead.


There is a reason that the United States is the land of opportunity, and why so many desire to immigrate here. The US is a place where a person can work hard and keep the rewards of their efforts. Capitalism works, at least better than other societal structures.

 

[natetheb]

Another thought. Lets simplify this down to an example. There are approx. 300 million people living in the United States. What is more effective for society as a whole and what will improve everyone's lives more?:


1) Take $300 million from all the top technology companies (like Amazon, Microsoft, Facebook, etc) and give everyone in the US a McDonald's cheeseburger.
2) Let those companies keep the $300 million to further fund their expansion, technology development, and job creation.

 

[dd564]

2 items

1. We have different views of what the potential problem is. My concern is a total decrease in jobs as automation increases. You believe the issue is promoting an increase in lazy people. It's two different issues.

If a decrease of job occurs, lazy workers won't be an issue. The issue will be (as I said before) people who want to work but there is no supply of jobs.

2. The endgame in an automated utopia (where things are made cheaper and cheaper and more affordable for everyone) is eventually going to be re-distribution of wealth whether by plan or by uprising.

Right now the top 1% own 40% of wealth in the U.S. By 2030 that amount is projected to be 66%. The decade after that you can only assume it will increase at a faster rate because of their leverage. (I'd venture to guess 90% by 2040 at that pace).


Eventually it will be less than convenient to have private runways and razor wire to protect themselves and their possessions from the masses.

To prevent the uprising it might be wise to ensure people have means to the first couple layers of Maslow's hierarchy. UBI is one option for that. I'm open to hearing other ideas, or maybe you disagree that the wealth gap will widen.


Sorry if I sound combative with this. I just foresee it as a potential risk. I've been very fortunate to get to where I am as I near retirement as well at a "younger" age. I personally wouldn't gain much from a plan like this, but I think the idea might have credence to prevent larger societal issues.

I'd sooner have happy lazy people than angry ambitious people.

 

[Sojourner]

2 items

1. We have different views of what the potential problem is. My concern is a total decrease in jobs as automation increases. You believe the issue is promoting an increase in lazy people. It's two different issues.

If a decrease of job occurs, lazy workers won't be an issue. The issue will be (as I said before) people who want to work but there is no supply of jobs.

2. The endgame in an automated utopia (where things are made cheaper and cheaper and more affordable for everyone) is eventually going to be re-distribution of wealth whether by plan or by uprising.

dd564, I agree with you completely. It seems that the main point of confusion so far in this thread stems from the notion that automation will not continue to accelerate and thus will not ultimately replace a large percentage of "automatable" jobs that exist. I see no reason to believe this is the case, since technology by its nature will always continue to be improved, and this coupled with the development of greater and more capable AI (artificial intelligence) virtually assures us of much, much greater and more widespread automation and elimination of many jobs in the future. Some jobs, like drivers, will be automated out of existence in the fairly near term. Others, like surgeons, in the medium term. But to assume these jobs will never be automated is to misunderstand (or fail to recognize) the inevitable nature of technological advancement. This is a problem that WILL need to be addressed at some point within the next few decades, so simply saying things like "we shouldn't give out free money to people since it would promote laziness" misses the larger point.

 

[jimbee]

My basic issue with the concept is that you cannot tax yourself into prosperity. Gov't does not create anything and every dollar the gov't has is a result of taking it from someone. Unless you consider gov't printing money

I disagree that the government does not create anything. A lot of people benefit from the technology developed and data collected by NASA and the NWS.
https://en.wikipedia.org/wiki/NASA_spinoff_technologies
https://en.wikipedia.org/wiki/National_Weather_Service

 

[Sunset]

I totally disagree with the idea that technology will make people unemployable, as my ox-cart wheel making ancestors believed, and turned out were wrong.

But, lets pretend for a second, that automation does everything, then instead of handing out $$$ to everyone, just make everything free.
Like in Star Trek, where money is abolished and everything is free.

Why do it this way, because it is easier, don't have to print money, make credit cards, distribute money, etc. Plus it answers the problem of you give someone $$ and they don't spend it all, what are they supposed to do with it?
Yet the other person needs more than what you give out ?

By making everything free, everyone's needs are met, without them needing to justify.

Plus it's easier the gov't just declares: "everything is free, money has no value".

 

[38Chevy454]

I disagree that the government does not create anything. A lot of people benefit from the technology developed and data collected by NASA and the NWS.
https://en.wikipedia.org/wiki/NASA_spinoff_technologies
https://en.wikipedia.org/wiki/National_Weather_Service

My comment was not as clear as I intended. Should have stated gov't does not create anything monetarily. Gov't only uses money taken by taxes.


I am agreeing with you that gov't does support research and the trickle down of that technology is beneficial.

 

[razztazz]

I totally disagree with the idea that technology will make people unemployable, as my ox-cart wheel making ancestors believed, and turned out were wrong.

But, lets pretend for a second, that automation does everything, then instead of handing out $$$ to everyone, just make everything free.
Like in Star Trek, where money is abolished and everything is free.

Why do it this way, because it is easier, don't have to print money, make credit cards, distribute money, etc. Plus it answers the problem of you give someone $$ and they don't spend it all, what are they supposed to do with it?
Yet the other person needs more than what you give out ?

By making everything free, everyone's needs are met, without them needing to justify.

Plus it's easier the gov't just declares: "everything is free, money has no value".

Saint Thomas More wrote a book with that as one of its a major themes

 

[razztazz]

Gov't only uses money taken by taxes.

It's not taken. It's put to uses that the holder would not find of personal value. And who gets it in the end? Private industry, of course! The government doesn't smoke it. They give it way to businesses one way or another down the line.

Actually redistribution is the sole reason for that thing everyone calls "the economy" to exist. Making sure the people in it can get what they need. Anything else would be Feudalism which is the ultimate in a private property driven economy, or a raiding party.

 

[dd564]

My comment was not as clear as I intended. Should have stated gov't does not create anything monetarily. Gov't only uses money taken by taxes.


I am agreeing with you that gov't does support research and the trickle down of that technology is beneficial.

I'm not an economic genius, but in some ways, nothing is created without a loan from the Federal Reserve first. We borrow money through the Federal Reserve and drop it into the economy. Some through mortgages, other through business loans, etc. Sure, companies create widgets, but with no debt being issued, no one would have money to buy the widgets. All this money of consumers buying and selling is just trading of existing dollars just like taxes are trading of dollars for the service of government. (And you might feel it's a really bad deal, not disagreeing with that, but it's still just trading dollars).

The only real money that is created is interest on what is owed, and there isn't enough real money to ever pay for that without borrowing more debt.

 

[jimbee]

My comment was not as clear as I intended. Should have stated gov't does not create anything monetarily. Gov't only uses money taken by taxes.

I am agreeing with you that gov't does support research and the trickle down of that technology is beneficial.

Ok, I understand.

 

[Independent]

If the next wave of technology brings more jobs than we have now, things will sort themselves out just fine. But if it's an issue, it might be a good idea to start having a good plan in mind to support these people than a half-ass plan too late.

I agree that it's fine to talk about what to do in the (to me, unlikely) event that technology just keeps driving wages down and profits up.

That's why I mentioned two things that I think have to be considered if you want to have "a good plan in mind". What taxes would you increase to pay for the benefit? How big should the benefit be for children?

The first is important to me because I worry more about our deficit spending leading to hyper inflation and economic collapse than I worry about automation taking too many jobs away. Any UBI needs to be paid for with new taxes.

The second is important because I'm old enough to remember the bad old days of AFDC when we made cash payments to women, and increased those payments as they had more children. I don't want to return to those days. But, I don't want to give the parent with kids the same UBI benefit as the single adult. That conflict is a real "good plan" problem for me.

We can talk about UBI today. We can think seriously about design issues. But we could actually implement changes to tax laws today which would improve our laws if this productivity gain does not occur, and would move us in the right direction if it does.