Perhaps I am not understanding the concept correctly, but this seems just like a linear additive - a distortion - to existing incomes, nothing more, for most people.
The only people for whom it would make a material difference would be folks that are otherwise completely indigent, homeless, etc., and that does hold a lot of appeal.
But it's not going to give every other category of society the freedom to say, not work jobs they hate. The lack of economic survival alternatives isn't the only thing that's keeping people at jobs that pay higher than subsistence wages.
So, it sounds like the following things would happen, among others -- good or bad. Am I completely off track here?
- For people who are indigent, homeless and/or completely unemployed, this would be a big help. However, it would also disincentivise taking any very low-wage job that pays comparably, as long as people who have 'moved up' by virtue of receiving basic income are content with that level of lifestyle.
- That would strip a great, great many service industries in this country - i.e. most fast food, a lot of retail - of their present sources of cheap unskilled labour, requiring them to pay a premium above Basic Income and thus drive up costs for them and everyone that consumes their products and services. It would also greatly injure the competitive position of those firms relative to foreign competitors that do not have a Basic Income requirement. Although the requirement to pay higher wages when operating in the US for those foreign competitors would mitigate that _somewhat_, it would still be a very, very significant competitive distortion that could affect their ability to expand into other markets vs. foreign competitors, etc.
- Other aspects of having to "compete" with Basic Income would create similar distortions elsewhere. It's effectively the same as raising minimum wage significantly; it would encourage more aggressive export of jobs out of the country, where Basic Income does not create a high compensation bar.
- For anyone making substantively above a Basic Income-level salary, it would just add $BASIC_INCOME to their salary, contributing to significant inflation and making just about everything less affordable to people who only receive Basic Income.
- There would be constant disagreement as to just what constitutes Basic Income and how much is really needed to subsist. There's not a lot of consensus as to just what exactly "subsistence" entails. Poor people in America (somewhat understandably) have a standard of "subsistence" that poor people in Third World countries could only aspire to.
These are all pertinent observations. The rational of basic income, as applied in France, is to provide some money (not much) to people who have no revenue. It was called the RMI, "Minimum Insertion Revenue". So it was given to indigent people but only without any revenue.
But there was a backside to this system because it produced a threshold below which it wasn't worth to work. This threshold was above the RMI because working needs to cover the cost of the trip to the job, clothing and such.
This is why the system has changed this year into the RSA "Active Solidarity Revenue". People without revenue still get the equivalent of the RMI. But now, when they get a job, they don't lose the RMI. The revenue is now balanced with the income, also providing an incentive to get a job even if it is only a few hours a week.
The huge cost of such basic income model is balanced by the benefit of reduced criminality, because these people don't need to steal, swindle or whatever to survive anymore. This makes France a pleasant place to live even if the taxes are high.
I have a friend on UK disability allowance. He gets more money than me per month, I work an average 6 day week. He also gets housing on top of the money, so in reality he's a lot better off than I. Most council housing, where people are living on unemployment benefits has satellite TV and eat take-away food a lot. I can't afford that. People we know on benefits buy "all new" for their babies (£300 buggys!) whilst we rely on secondhand and hand-me-downs. Basically my argument is that the current system gives too much if it's not a struggle to get by (requiring some work for yourself, mending clothes, growing food) then it's too much IMO.
My friend has considered working, and has in the past, but he makes less money the more he works.
Last time I checked we were at about 75% of the official poverty line but ate healthily and even managed a small holiday. Now I suspect (one more child and ensuing benefit) we're on the line.
The only people for whom it would make a material difference would be folks that are otherwise completely indigent, homeless, etc., and that does hold a lot of appeal.
But it's not going to give every other category of society the freedom to say, not work jobs they hate. The lack of economic survival alternatives isn't the only thing that's keeping people at jobs that pay higher than subsistence wages.
So, it sounds like the following things would happen, among others -- good or bad. Am I completely off track here?
- For people who are indigent, homeless and/or completely unemployed, this would be a big help. However, it would also disincentivise taking any very low-wage job that pays comparably, as long as people who have 'moved up' by virtue of receiving basic income are content with that level of lifestyle.
- That would strip a great, great many service industries in this country - i.e. most fast food, a lot of retail - of their present sources of cheap unskilled labour, requiring them to pay a premium above Basic Income and thus drive up costs for them and everyone that consumes their products and services. It would also greatly injure the competitive position of those firms relative to foreign competitors that do not have a Basic Income requirement. Although the requirement to pay higher wages when operating in the US for those foreign competitors would mitigate that _somewhat_, it would still be a very, very significant competitive distortion that could affect their ability to expand into other markets vs. foreign competitors, etc.
- Other aspects of having to "compete" with Basic Income would create similar distortions elsewhere. It's effectively the same as raising minimum wage significantly; it would encourage more aggressive export of jobs out of the country, where Basic Income does not create a high compensation bar.
- For anyone making substantively above a Basic Income-level salary, it would just add $BASIC_INCOME to their salary, contributing to significant inflation and making just about everything less affordable to people who only receive Basic Income.
- There would be constant disagreement as to just what constitutes Basic Income and how much is really needed to subsist. There's not a lot of consensus as to just what exactly "subsistence" entails. Poor people in America (somewhat understandably) have a standard of "subsistence" that poor people in Third World countries could only aspire to.