Universal basic income

[2020yearfromhell]

Does anyone know more about Ubi, would we ever head this way?

Rutger bregman has written a very good book summarising the research on UBI. Worth a read if you want to understand the concept.

I'm hugely in favour of this because of coming automation

We MUST move towards doing less work/having healthier lives

JRF argue that a UBI is not necessarily the answer to solve poverty:

www.jrf.org.uk/blog/universal-basic-income-not-answer-poverty

One of the key arguments is that an affordable basic income would be inadequate, but an adequate basic income would be unaffordable. It would require a substantial increase in tax to be affordable, and for many voters who belief that no-one should get 'money for nothing', to have to pay more tax to enable this would be a policy that they would not support. And like it or not, governments need votes.

A UBI would also fail to take into account specific needs: higher housing costs in London, disability, high childcare costs for example, because by its very definition, it's a universal income. By contrast, UC is responsive to an individual's circumstances (though not without its faults).

*believe

I can't see UBI working until we have sorted out the housing problem. At the moment all that will happen is that landlords will increase rent prices.

If we had a load of homes that the government owned that was rented the it at an affordable rate so that people UBI could afford to house themselves without worrying about random huge rental increases... I mean that would never happen right?

@Kpo58

I can't see UBI working until we have sorted out the housing problem. At the moment all that will happen is that landlords will increase rent prices.

If we had a load of homes that the government owned that was rented the it at an affordable rate so that people UBI could afford to house themselves without worrying about random huge rental increases... I mean that would never happen right?

Yep, housing and its reliance on private market rents is one of the biggest stumbling blocks. With a universal element to cover housing costs, some would have a huge shortfall whilst others a large surplus because of their own personal circumstances.

If you find the Reasons to be Cheerful podcast, I think their very first episode was on UBI.

Placemarking to read more

I just don't understand how it would work! If I had enough money to live comfortable enough without doing absolutely anything at all to earn it, I wouldn't!

So how on earth would we encourage people to do all the essential jobs that need doing if people didn't need to do them? If you could do nothing for £12k a year why would you work 40 hours a week as a toilet cleaner for the current wage of c.£14k? Or even a nurse on £27k? The only way you could get people to do the essential jobs would be to raise their wages drastically, so you'd have to pay all supermarket staff, toilet cleaners, etc £70k a year. This would either then cause huge inflation and the price of everything would go up, so the basic income would have to go up, and then the wages for essential jobs would have to go drastically again...repeat ad infinitum until you get paid a million pounds to work at mcdonalds!

And even then, would people be willing to work full time hours, even for a high wage, just to pay for luxuries? If I could get by on the UBI, I might pick up one shift a week doing a job to maybe pay for a holiday or other luxury, but I wouldn't work full time just to buy crap I don't need when I could spend that free time with friends/family/ volunteering/doing things I like....

Surely furlough showed this to be the case? When it was first announced that so many places would be closed, I had several friends and family members absolutely panicking about how they would afford to pay their bills and several of them went straight to the supermarkets to try and get some sort of work, however as soon as the 80% amount was clarified they all gave up their applications, as what was the point of working if they got paid for not doing so? Obviously this is a good thing and I'm very glad nobody I loved had to struggle, but if I'm honest it did cause a bit of a divide between the people who had several months off chilling and sunbathing (and in the case of my neighbours having mates over and starting fights) in their gardens and complaining on our zoom catch ups that they were getting bored, and those who were dead eyed and exhausted for working crazy hours for no extra pay, some for less than those being furloughed!

When child tax credits came out to boost the finances of those with children, employers used it as a means to reduce their wage bill by stealth.

Then, in harder economic times, people were chastised for their reliance on benefits - a benefit which was really only of use to their employer, but nonetheless they were the ones who faced this prejudice.

Then, the state stepped in and told people who rely on benefits - that they would not receive any benefits for their third and subsequent children.

So low wages workers - who do not receive their full salary directly from their employer - now face interference in their private lives through subversive financial pressure based on the vote winning moralising of the middle classes.

Honestly, I don't know if I am getting old and cynical, but I think any space between you, your employer and your full wage is vulnerable to exploitation and interference and I'd be cautious about the level dependence that comes with ubi.

I think I’d rather see universal free childcare, so that no people on low wages aren’t left in the situation where they can’t afford to work so end up claiming benefits instead.

If you search IEA universal basic income paper (Steve Davies) it gives a good survey of the pros and cons.

The fact that it couldn't possibly solve the housing crisis (and could create even more problems for those with disabilities etc) are big cons for me, plus the fact you'd be giving billions to people who don't need them...causing them to invest in assets and spend on luxury consumption... political Kryptonite!

Negative income tax might be better. Top up low earners while continuing progressive taxation for higher earners.

I'm in favour of it. I also think if it had been in place it would have saved the country a lot more money than the 80% furlough scheme; I only earn minimum wage as an agency worker, myself.

Looks good on the surface. Scratch the surface and all kinds of problems. You'd need a massive hike in taxation to actually pay for it which would make it less attractive for people to want to work. How do you provide for the disabled who have additional costs? How do you deal with those currently on housing benefits - would they get a "top up" to pay their rent or does it come out of what their UBI? You can't just scrap all existing benefits and replace with UBI as it wouldn't be enough for many people currently on benefits - as soon as you bring in "add ons", you're back to a complex system with inherent unfairness etc.

People will continue to say it isnt enough. There will always be people (earning) who have far more, and social media means people are hyper aware of the lifestyle led by those more affluent
It's not always lack of money that makes people unhappy, often its inequality. The poorest people are still surrounded by millions who have more than them, even one UBI system, and that makes some people unhappy.

It would be a basic income, intended to cover food, housing & utilities. There will still be people on it who struggle to budget, have chaotic lives involving addiction or abuse, make points choices, or are caught out by exceptional circumstances (the boiler needing repair, the car breaking down). It doesnt catapult people instantly to affluence.

Also I strongly disagree with anything universal. I have a high income and clearly should be paying in more, not getting more out. Under the current system I get nothing at all and that's just how it should be. I benefit from our society and economy enabling me to earn well so I need to pay back in.

@Phineyj

If you search IEA universal basic income paper (Steve Davies) it gives a good survey of the pros and cons.

The fact that it couldn't possibly solve the housing crisis (and could create even more problems for those with disabilities etc) are big cons for me, plus the fact you'd be giving billions to people who don't need them...causing them to invest in assets and spend on luxury consumption... political Kryptonite!

Negative income tax might be better. Top up low earners while continuing progressive taxation for higher earners.

Negative income tax was close to Gordon Brown's ill fated tax credit system. It was fraught with complexity, complication, confusion and unfairness. Caused misery for huge numbers of people when their circumstances changed leaving them with massive over-payments to repay. Good idea in practice but completely fouled up in practical/reality terms.

That would be my main concern - that if we changed anything at all in a major way, the losers would be those already in difficulties. I would like to see a proper plan for housing though. There would be so many benefits from that.

UBI wouldn’t work in the UK, the population is too large with so many variables in housing costs. An amount which would cover living costs and housing costs in the south east would give huge disposable income to those living in some northern areas. Or UBI set to cover costs in cheaper areas wouldn’t cover costs in the south east.
And you’d still need to pay extra for disabilities and for children.

The government needs to deliver on its promise to level up the north south divide first with huge investment

I've often thought with housing costs if people got a set allowance rather than to claim their actual rent, so say for example a family of 4 got £700 then people would be much more happy to live in smaller/cheaper properties/ even stay with family to save up - as they keep the remainder of the money.

While HB pays actual rent (up to a point) there is an incentive to get the biggest/best house that can be claimed for.

Would probably need an "in London" and "outside London" allowance that still wouldn't cover everyone's rent. But current housing benefit doesn't always cover everyone's rent I don't think?

It is a nice idea but who would pay for it? I would also envisage rents and prices of most things skyrocketing.

So how on earth would we encourage people to do all the essential jobs that need doing if people didn't need to do them? If you could do nothing for £12k a year why would you work 40 hours a week as a toilet cleaner for the current wage of c.£14k? Or even a nurse on £27k? The only way you could get people to do the essential jobs would be to raise their wages drastically, so you'd have to pay all supermarket staff, toilet cleaners, etc £70k a year. This would either then cause huge inflation and the price of everything would go up, so the basic income would have to go up, and then the wages for essential jobs would have to go drastically again...repeat ad infinitum until you get paid a million pounds to work at McDonalds!

Well, 12k isn't a huge amount of money for a single person. Most people with mortgages, bills and childcare costs wouldn't be able to survive on that for very long. So someone could go to work and earn 14k on the checkouts at Tesco and have a total income of 26k, which is pretty good for a single adult.

The income you get from your salary would be on top of the income you get for "doing nothing", so of course there would be an incentive to work. 1k a month sounds generous but if you have all the regular bills (mortgage or rent, council tax, utilities, food, a car to run, childcare costs to name a few) to come out of that, you don't end up with very much at all left over for luxuries.

What about saving for things like a new boiler, a new car, new appliances? Christmas presents, maternity leave, holidays, new clothes, children's activities, school uniform...you couldn't afford all of that plus necessities on 1k a month.

I would happily go to work to "earn" 14k a year if it meant my total take home was 26k a year! That sounds like a pretty sweet deal to me.

Been in favour of UBI for years. If we had this, I would work more not less. We fall into a strange place in the benefits system where we both work part time, initially due to childcare but now DCs are older it isn't such an issue. DH is self employed due to mental health issues and sometimes works full time and other times can't work for weeks. So we still need support at the moment.
If I want to up my hours my housing benefit and tax credits will go down such that for every £100 extra earned I will see about £20. Every time I do overtime I have to send off my payslip and get a whole new 20+ page housing benefit calculation and then do it again the following month to show it was a one off.
UBI would be a consistent cushion and would mean I could make decisions about my job and hours that would fit with DH and allow me to earn more when he is well enough for me to do so.

To the poster saying that people wouldn't want to work at if they're getting £1k per month. They would be mentally and financially free to take ANY job. Right now, it might not make sense for them to take a minimum wage job. But if that £250 per week pays for 'luxuries' and savings then of course they will try to earn more.