Monday, July 24, 2017

Collection Post for Basic Income and Living Wages

This post is a working collection of blue road thinking on UBI and LW.  It is subject to additions, editing and other annoyances.  A more readable version an be found at http://jcarlinbl.blogspot.com/2016/11/universal-basic-income.html which is also a work in progress but updated as comments and careful thinking refine the blue road thinking here.

Once again a guest post to start things off.  
 

July 19, 2015 at 4:43am

The biggest reason I support UBI (Universal Basic Income) has nothing to do with our possible automated future, as labor becomes less essential, or at least as we need much less of it, though that's a great reason to support it. It's not even about eliminating poverty or making the unemployment rate a non-issue, though those are very good reasons too.

The reason I want a UBI is to make work at least -technically- optional. I want this because so long as work is not optional, so long as it is mandatory, it is coercive. I want UBI so that every low wage worker whose boss screws them on hours, who reprimands them for taking sick days, who asks them to work too fast in unsafe conditions (see the current fast-food lawsuit), every young employee whose boss secretly grabs their ass while no one is looking, who's constantly making lewd comments, or racist comments, or any other sort of hateful bullshit... So that every employee who finds themselves trapped in the fiefdom of some petty little tyrant of a boss, which is actually The Majority Of Low End Workers, so that they can say:

"TAKE THIS JOB AND SHOVE IT"

So that they can really, truly, meaningfully walk the fuck away. And not have it mean they end up on the streets or their kids starve or they find themselves turning tricks to keep the water running and the lights on. Or for that matter just ending up in yet another job with a slightly different petty tyrant. And they can do this, deal with this, without having to deal with lawyers or Union Reps, who though are better than -not- having them it'd be nicer to just be able to do it ourselves. Because if -enough- of them (us) say 'NO' to this petty fucking bullshit, then firms will be forced to stop letting the petty bullshit happen (those who fail to will simply not get workers), and work in general will end up less awful for everyone.

Because the ability to say 'NO' to someone who's actively abusing you... that should be pretty high on the list of 'Liberties' worth defending. In my mind.


GDP is ultimately people buying goods and services from other people. Somebody has to flip those burgers the basic income recipients are buying. 
Since low income people spend locally and buy from people they know (not robots) the income from outside the local economy stays in the local economy and all are better off. The multiplier effect of the basic income or entry wage dollar is nearly 3 times. That is, the burger flipper who is paid somewhat more than the basic income or hesh wouldn't work, spends most of herm income on local goods and services, creating more local demand for those goods and services.   Also some basic income recipients will use their time to pursue a dream of artisan goods production, a local service like a band or restaurant or performance venue.  Some will succeed and generate more local income. 

Eliminating corporate welfare in the form of support for inadequate wages for minimum wage workers would be the first step to a more equitable distribution of the GDP.  Instead of welfare to supplement inadequate earned income each adult citizen or green card holder would be provided with one half the income necessary for housing, medical care, education,  and local transportation for a family if married, less if single.  This assumes that a two parent household is preferred for raising children.  Single mothers would be encouraged to partner up with an interested co-parent of any gender to form a family unit enabling the larger per person payment. 

Eliminating welfare with all its administrative costs would more than pay for the BI for those unable to work or have better things to do with their time than unskilled minimum wage labor. Those with better things to do will probably provide taxes and purchase goods and services which will cover their BI. Everybody wants to start a restaurant, or write a graphic novel, or sing a song. Some of them would actually succeed if they didn't have to worry about feeding the family first.

It wouldn't take much transfer of wealth from the hoarders to have a profound effect on the GDP. If the corporate welfare queens had to compete for unskilled labor with a UBI minimum wage laws would be anachronistic. Market wages and working conditions for unskilled labor in a competitive market for those willing to work at those jobs would move even unskilled laborers into the low middle class.

The economic argument for a UBI is that it is outside money to low income people who spend locally for necessities provided by mainly other low income people. The bodega proprietor, (there would be food trucks on every corner) and other neighborhood business would thrive and economic benefits would trickle UP to landlords, food truck lessors, food truck builders, etc. They might even buy a solar food truck with a Powerwall 2 from Tesla if they are really successful.


Another opportunity for recipients of UBI would be intermittent garage sales of art, crafts, artisnal foods, etc.  Advertising would be social media to regular customers who would avoid the gallery markup and have the same choices.


 About those "worthless idlers" living off the UBI as couch potatoes.

 People work. Even if it is only knitting at a boring meeting, and some of it will rise to saleable art. I am caregiver and supporter for a disabled person who assumes household chores and does them well even though hesh does not need to and does not get paid explicitly for them. Unpaid volunteer workers now could choose to be idle but work anyway. Why would that not become a way of life for those with no saleable skills? Also most people I know in the class of comfortable retired people are still working hard at something paid or otherwise. Only the trust funders are sailing and golfing their lives away.

 
Some work will be more useful economically than other work and it will be paid. Many "unskilled" jobs which need human attention will be filled inexpensively (to the employer) since they will be optional and provide incremental income for a slightly better life style. Those that do it well will necessarily be paid more as the market will be competitive. 

 The UBI will solve the problem of automation moving the rewards of productivity to the owners of the production lines.  A few mass produced items will survive in the UBI economy but most of the economy will be based on the exchange in custom made items and home produced food. Productivity will no longer be a driving force for specialty food items, although the basics like flour and soy products and cultured meat will probably still be produced in automated factory establishments, the tacos and pizzas will be made and sold by the neighbors as well as more elaborate meals. When a food entrepreneur does not need to survive on herm gross income, hesh can spend the time to provide a special meal service that herm neighbors will pay for, and the best will make a nice (taxable) supplemental wage for their efforts.  

 Similarly artisans and artists can pursue their muse without having to worry about the necessities of living, and the best of them will be rewarded for their talent.  Those with lesser talent will at worst provide amusement for themselves and perhaps a few of their neighbors.  I would expect that the piano will once again be feature of most homes and impromptu chamber groups will provide amusement for many.  Again a sorting will occur and the best chamber groups will find paid performance venues to supplement their UBI. 
 The few couch potatoes living off the stipend are probably just as well off the streets and not making trouble to survive. They still are consumers that drive the economy. They still eat, buy couches, TVs, and pay rent. If we make the "idle" comfortable enough to live a decent, if not easy, life what they do with their life is of no consequence to society.

Work for income or medical insurance is almost by definition meaningless, whether it is on an assembly line, coding for a rich guy, or flipping burgers. What the progressive left (no relationship to the Neolib democratic party) wants is optional work, where basic income, medical care and education as far as they qualify are rights and any work for supplemental income (taxed) is chosen in a competitive market where skills are rewarded and "Take this Job and shove it"--thanks Nyah Wynne--is a given for meaningless work. 

 If basic needs are covered people will work at something meaningful to them whether it is needlework, carving, artisans of all kinds, even coders and inventors. If the work is saleable they get extra income to support the local economy and the Government. If not they can try harder or learn to do something else but in any event they subsist and don't die and will work at something saleable or not. 


Those who want to work will have plenty of opportunities under UBI. There are many jobs that require human input. But a job, which is working for someone else will be only one option, and an option at that. Employers will have to compete on working conditions as well as pay to attract those who wish to work for others if basic needs are covered by UBI. If a restaurant owner or retailer needs people, hesh will have to make the job more attractive than opening a lunchroom or storefront shop. 

Job availability will exceed demand, given the "Be your own boss" drive most people have. If a tradesperson with a truck can supplement UBI working for herm neighbors the job premium would have to be very attractive to drag herm across town instead. Keep in mind that any income above UBI is disposable income in the economic sense.

 A note on what basic income would cover. UBI would be based on the needs of a family of whatever size is considered optimal by the goverment split between 2 adult citizens independent of relationship status or child care choices.   Basic housing, basic food, a local bus pass, HMO premiums and public education costs would be included. Infrastructure, and government costs would be absorbed by the government.

 See Maslow needs pyramid. Once physiological and safety needs are met (UBI and Medicare for all) and you find a friend or two, prestige and accomplishment become critical human psychological needs. Or why Grandma Moses learned to paint and why rednecks whittle. https://www.google.com/imgres...


Assuming UBI and Medicare for All, now dead rural towns and suburbs will become vibrant villages of local commerce and art most of which will generate excess funds for local amenities. UBI is an external source of resources for the community which will be subject to the economic multiplier by those providing services to the UBI recipients.  Assuming an income tax the multiplier will be reduced a bit from a pure subsistence economy, but if the tax rate is progressive the reduction in the multiplier should be minimal for in community services as these services will be provided on narrow margins as the providers will be recipients of UBI as well.   

Social Security and Medicare for ALL.
Social Security at $1200/Mo Grandfathers Grandfathered in at current rate. No Cap on Social Security Taxes and Medicaid payments. Work optional till dead. All income taxed. Self employment income taxed once.  


Merge Federal SSA, state Welfare, Unemployment, and let employees sort themselves out. 
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4 comments:


J'Carlin said...
Why it is worth the daily slog through facebook.
J'Carlin said...
I learned about the TTJASI from a mentor at Pan Am. His advice: As soon as you save up enough "Fuck You Money" you can begin to do your job right. In a sense privilege, and/or another livable income in the family gives the same work freedom as FYM which is after all a relative term, but UBI puts a safety net under all who wish to "do their job right."
J'Carlin said...
Nyah Wynne Yes! Definitely. That's probably my number 2 top reason, in part because it's talked about very little. There are huge numbers of activities that people can engage in that are of real meaningful value to society that don't translate well into market value. Experimenting with art is a major one. Art sometimes pays off, sometimes doesn't, but all too often ends up either compromising itself in order to sell better or having to be fit into someone's spare time while they work some non-career, low end, dead-end job to survive. Other things include many sort of research, as finding grants can be as troublesome as trying to fund art. Care of children and the elderly sometimes pays but only if the ones being cared for can pay. In fact any sort of general service to the community tends to be deeply undervalued. The market values service to people according to their ability to pay, so serving the needs of 100 poor people is worth less than serving the whims of 1 wealthy person. There are all manner of truly valuable activities one can engage in that the market deems worthless.

UBI and Economics (Collection Post)


 GDP is ultimately people buying goods and services from other people. Somebody has to flip those burgers the basic income recipients are buying. 
Since low income people spend locally and buy from people they know (not robots) the income from outside the local economy stays in the local economy and all are better off.  The multiplier effect of the basic income dollar for a relatively closed local economy without box stores or Franchises to siphon off money is nearly 3 times.  The burger flipper in a local lunchroom who is paid a competitive if marginally so wage in addition to the basic income or hesh wouldn't work, spends most of herm income including UBI on local goods and services employing other local workers, creating more local demand for those goods and services and more workers to produce and vend them.  
  
 Assuming UBI and Medicare for All, now dead ex-urban and rural suburbs will become vibrant villages of local commerce and art most of which will generate excess funds for local amenities. UBI is an external source of resources for the community which will be subject to the economic multiplier by those providing services to the UBI recipients.  Dispersal would solve the "BMR" housing issue as only those needing to be close to cities would compete for high end suburbs and high density city housing.  Note that minimum wage jobs in high density areas would no longer be attractive to distant UBI recipients.  There are many things they could do with the costs in time and money of a multi-hour commute. 

 The car based infrastructure will once again become a valuable resource for infrequnt visits to friends and relatives and occasional visits to urban centers for shopping and entertainment.  The car will remain as the personal status symbol for rich and poor alike.  Although it will be autonomous and electric it will still use the roads and freeways unclogged by commuter traffic.  That racing striped Camaro shell will be on a Spark chassis, but hesh will be as devoted to it as before with the big Hemi.


 National box stores and franchises subsidize low prices with subsistence wages.  The only outside money to generate a multiplier is welfare which combined with subsistence wages makes artificially low prices necessary and the multiplier is close to negative. With UBI subsistence employees would be hard to find, and working conditions would have upgraded to attract employees.  Wages could still be low, but equal low wages at local businesses would allow them to compete on price and service effectively and low income people tend to buy from people they know.  With the geographic dispersal of low income UBI recipients box stores would be restricted to the mobile middle class and above. 

 Some basic income recipients will use their time to pursue a dream of artisan goods production; a local service like a band, restaurant, or performance venue; or a mercantile service.  Some will succeed and become tourist magnets generating outside dollars for the community. 

 Assuming an income tax the multiplier will be reduced a bit from a pure subsistence economy, but if the tax rate is progressive the reduction in the multiplier should be minimal for in community services as these services will be provided on narrow margins as the providers will be recipients of UBI as well.   

From Facebook:

FC It's all great until you examine the macroeconomic effects....
J'C PUOSU Throw out a macro effect other than fucking the oligarchy that will be a problem .

FC Hyperinflation?
 Particularly, hyperinflation of pricing on necessities that have a strict supply constraint.

Mind you, this is NOT a "don't" argument. This IS a "can't handwave at it" argument, or more like a "don't cut off your nose to spite your face" argument.
J'C How? UBI is spent on goods and services locally that generate taxable income. The only necessity that I can think of with supply constraints are medical care and drugs which come under the category of fuck the oligarchy. The rest of the world seems to do better with that constrained resource than we do. I am open to other suggestions.
FC Off the top of my head, it's partially a simple supply/demand dynamic, particularly aimed at something with a very limited supply (most notably, physical space).
I don't want to be too strong in my criticism because I AM a UBI crank, but I also don't want to blindly run into something likely to have a spiraling pattern.
J'C Limited space, for housing as an example, is a political not an economic problem. With UBI now dead suburbs and exurbs would be viable for artisans, self employed, and couch potatoes. All create taxable revenue for suppliers of goods and services who would follow them. There would be plenty of space in existing cities for corporate and government employee housing. Facebook is showing how to build a city in a suburb in spite of the political NIMBY flak.
Limited space, for housing as an example, is a political not an economic problem.


Stockton CA experiment @ $500/mo beginning next year.  Good links to other programs. 
https://www.vox.com/policy-and-politics/2017/10/18/16479796/stockton-california-basic-income-economic-security-experiment

UBI March Should Target Po White Trash”V.

 Maybe Ubi March is targeting the wrong people with their urban marches.   Maybe they should be holding rallies in the rural areas which would benefit both from the outside income and poor white flight. And do it before trump figures out how to protect his base.  (a WGBI)  Artists, craft people, and others subsisting in an urban area would take the money and run. Whites would run to their rural roots, I don’t know about ethnic and black communities, but I suspect they would stay put and build their communities. 

https://www.nytimes.com/2019/10/04/opinion/sunday/trump-arkansas.html

 I am typing this in Nowheresville OR.  All the towns we drove through were much the same. The only active businesses were subsistence tourist services with religious tracts in every restroom.  “What is the meaning of life?” Don’t look for it here on earth, bro, there ain’t any. Find God, Find Meaning.

 Some tourist services do well at least by local standards, but I suspect that many of those are white flight that take advantage of low local wage standards to build a tourist trap.  With UBI those low wages will remain with UBI as local people will compete for available work as before before and                                                  People like to utilize their skills.  But those low wages are no longer subsistence as that is taken care of by the UBI.      

Top 5th Percentile Mobility for the Rich and the Poor.


Stop Pretending You're Not Rich 
New York Times

 The difference between the rich and the poor in the top 19% (excluding the 1%.) collectively referred to in some circles as "Gentry" as in gentrification is significant in ways the above piece totally ignores and significantly affects the mobility of the next 30%. The meritocracy Reeves sneers at is in fact a reality for the poor getting into the Gentry and for the top school-top job nuveau Gentry and is probably a major cause of the rich losing their place there. The top fifth does not rule. They do protect their privilege with the help of those who do. There are major holes in their safety net in both directions. 

 Poor by my definition is an attitude not an amount of income. The poor distinguish between wants and needs and buy wants only when they can afford them from current excess resources. They retain that attitude even when they make it into the Gentry.  Many of the Gentry were poor once, and still live like it other than eating better. They still save something for the next meal that might not be as good. Depression era parents are classic examples for the new gentry. I grew up in a house where "Hide-a-bed Hash" was generic for saving for a luxury purchase.  That Gentry is smart poor people with decent jobs who watch their expenditures, chose their homes carefully and use their mortgage and tax deductions, 401ks, IRAs, and 529s to provide for their future. They may have a low end status car but they drive it to COSTCO from their good school neighborhood which they got to by buying before the kids were school age into a gentrifying neighborhood with bad schools; trading up with low end purchases in upcoming neighborhoods; and building equity. Cheap home prepared meals are their main nourishment (everybody cooks), and thrift stores and their closet their source of clothes. Entertainment is online, TV, reading and home grown music, with music lessons the only luxury. 

 Rich people buy what they want where they want to buy without regard to resources at any income level.  They generally have a relatively high debt to income ratio, and are frequently a couple of paychecks or a major financial setback away from losing their place in the Gentry.   

 I would suggest that your "different Gentry" ie. the good school-good job Gentry is a relatively small part of the Gentry we are talking about.   They grew up feeling rich even though their parents are probably in the poor Gentry or even in the achieving poor in next 30%. This privilege is reinforced especially in the top schools where they mingle as equals with rich kids and the good job gives them the income level to buy directly into the Gentry particularly when both partners (generic) work at high level jobs as most do early in their careers. The Mrs. degree is fairly rare in the top colleges as only driven achievers can get past the glass ceiling in the admissions department.   

  The mortgage deduction provides minimal tax relief for the rich but is a major source of mobility for the working poor. A maxed out mortgage is a debt trap for the rich who can't maintain a rich person's income level as they believe they can.   A 1.1 million dollar house with a million dollar mortgage works only if income stays above $150K. That same house with a conforming mortgage works at $60K. Flipped up several times from a house in a poor but stable neighborhood. This flip up is usually primarily for schools, but works even better for the childless as public school taxes are low in high end developments where private schools are the norm for families with children. At $60K a conforming mortgage deduction reduces taxes significantly. Even if mortgage insurance is needed for the first house.


  If you are at $150K that Yale legacy preference Reeves toots is worth less than a HS All American in any sport or talent and is worth even less if the kid barely meets the academic threshold. Education is the great equalizer in the top 19% and many of the top schools are "need blind" for admissions so that any student qualifying, admittedly a tiny percent of any population, can qualify for entry into the 19% regardless of family income if the field of study is chosen carefully. Only the rich can afford worthless majors. 

Sunday, July 23, 2017

Providing for a Sustainable Lower Class in an Economy of Abundance


 A Universal Basic income should be provided for all adults, but not children, which should be designed to cover basic housing, food and recreation needs for a family of 3 split between two adults.

  Jobs are a necessary part of a sustainable lower class. There are many semi-skilled jobs where human interaction is a necessary part of the job: servers, basic care workers, custodians, etc. These jobs would pay enough to justify leaving home and accept the responsibility of showing up for work.  The wage would be incremental to the UBI and thus affordable to employers.  Probably on the order of the current minimum wage.  A 36 hr. work week, 4 10 hour days with breaks would become standard.  Parents could alternate shifts, or work days to provide for parenting needs, or one parent could choose basic income instead of work. 

 Upward mobility would be provided by supervisory positions and skilled work as the employee qualifies for them.  The "minimum acceptable wage" would establish a wage floor and time commitment for all productive work. Any skilled job would be paid at competitive rates

  Medical care, education, and basic transportation needs should be part of package for both basic income and employed citizens. Medical care would be on the HMO model with a small copay for illness or injury to encourage a healthy lifestyle. Basic transportation needs would be met by no cost automated ride share in urban areas, and low cost interurban Hyperloop™.

Taxation could be income based if politically necessary, but ideally all taxes would be consumption based with a progressive value added tax.

UBI and Creators

TL;DR Want to create something? UBI is your trust fund.

Creativity is a fundamental drive for humans once they get beyond subsistence.  Cave people drew on the walls of the cave, ordinary pots and pans became works of art in ancient and indigenous cultures.  The key to success for an artisan or an entrepreneur is being able to fail without consequences to one's family.  A trust fund is the traditional back up for them, but that limits the pool of creative and risk taking to rich people.  Imagine the creative surge if anyone with a dream could pursue it.