Friday, 3 March 2017

Killer Arguments Against Citizen's Income, Not (8)

From The Independent:

Finland’s basic income experiment is unworkable, uneconomical and ultimately useless. Plus, it will only encourage some people to work less.

That’s not the view of a hard core Thatcherite (1), but of the country’s biggest trade union. The labour group says the results of the two-year pilot program will fail to sway its opposition to a welfare-policy idea that’s gaining traction among those looking for an alternative in the post-industrial age...

The traditional paladin of workers’ rights would rather tweak the existing system. It has the backing of the country’s biggest opposition party, the Social Democrats, whose Kalevi Sorsa foundation concluded in a 2012 paper that UBI may simply be a means of scrapping minimum wage requirements.(2)

SAK rejects [UBI proponent] Standing’s accusations that the union’s real motive for opposing UBI is fear of a drop in membership or a collapse of its insurance funds. (3) A 2014 report by the German Institute for Economic Research suggested that trade union hostility “may be a result of the threat of losing bargaining power.”

1) Unfair to drag Thatcher into this. According to Christopher Monckton, she was not entirely opposed to the idea (but as per usual never got round to implementing it).

"Thatcherites" as a stereotype oppose all social security systems.

2) Whether we have minimum wage legislation or not is an entirely separate topic to whether we have a welfare system or not and if so, whether a Citizen's Income is the least distortionary and hence 'cheapest' kind of welfare system for a given level of financial support.

3) Standing's probably put his finger on the real reason why so many Trade Unions oppose it; but by their logic, they should be opposing all kinds of taxpayer-funded welfare system which allow the unemployed to survive.


Lola said...

In my view Min Wage is stupid - it's a price fix. And in the UK (and probably Sweden) we do not have low wages. We have high wages that are made low by two forms of rent seeking, tax and rent, plus deadweight costs.

If CI (with LVT) does away with high taxes on production and high rents and high deadweight costs why would you need min. wage?

So yes, CI is a way of getting rid of Min. Wage. Hooray.

Mark Wadsworth said...

L, agreed, but nmw is still a separate topic
The arguments for and against are the same irrespective of welfare system.

Derek said...

Trade unions in certain parts of the US actually use the minimum wage as part of their membership drive. They do this by lobbying for a high minimum wage but with exceptions for their membership. That way employers can get cheaper employees provided they employ them through the union. The union management benefits through increased membership income and greater clout.

Of course this would all be threatened by a UBI so by-and-large they are not in favour of it.

Lola said...

Robots are capital they make workers better off. So taxing them will make workers worse off.

Mark Wadsworth said...

D, lovely example, thanks.

L, yes, but nobody is talking about taxing robots, per se, we are talking about equalising the tax rates on robots' profits and humans' wages.

The robot itself does not pay tax and you don't pay tax for owning one - you pay tax on the profits, not the capital. The faux libs who don't understand anything always say that corporation tax is a tax on capital. well no it bloody well isn't, it is a tax on income/profits.

Lola said...

MW. Yes. I mis-posted that from my smartphone. It was on the the wrong thread - you'll guess why if you look at the time I posted it...