Killer Arguments Against Citizen's Income, Not (17)

From Medium.com:

The author misses no opportunity to make an unsubstantiated claim and then contradict herself as to what the effect might be:

A Universal Basic Income is capitulation to capitalism

Capitalism is A Very Good Thing indeed, if you strip out the rent-seeking. UBI goes with the flow of capitalism, so must also be A Very Good Thing.

While sovereign governments (those that issue their own currency) can certainly afford a UBI, simply throwing money at a problem, instead of addressing its root cause presents serious concerns.

Firstly, it ignores overwhelming psychological evidence regarding the impact employment has on our physical and mental wellbeing. We derive our sense of self-worth from work. It is where we meet many of our friends, partners. Income replacement does not sufficiently offset the impacts of involuntary unemployment.

Agreed, it's nice to have a job that is reasonably bearable/well paid, and it is horrible being made redundant and then having all your job applications turned down. A UBI softens the blow of unemployment, so is a good safety net for people on the margins.

More to the point, a UBI is paid, by definition, to those not in a position to seek and/or accept work - stay at home parents, other carers, the disabled, students, the enforced early retired.

Second, a UBI is designed to work as a partial or complete substitute for existing welfare and social security programs.

Correct, that reduces the cost enormously. I also fail to see why a welfare claimant would prefer to have all the means-testing, bureaucracy, conditionality, cheating (on both sides).

It was only a matter of years ago politicians were railing against handouts. But former tech executive, and Presidential candidate, Andrew Yang told the New York times that a UBI is necessary for capitalism to continue. Andrew Yang — in his words “I’m not a career politician… I’m an entrepreneur who understands the economy.” Oh, and he is running for US president in 2020.

If the Silicon Valley suite love the idea, you can bet your socks it’s one that works against the interests of most people.

Non-argument, don't blame a message for its supporters, as Bayard always says.

Here are four reasons why a UBI is a bad idea:

1. A UBI is a smokescreen for the destruction of the social safety net

The godfather of neoliberalism himself, Milton Friedman, argued in his book Capitalism and Freedom that a UBI is an efficient way to eliminate and privatise public sector programs including welfare, social security, the minimum wage, public health, housing, hospitals, pensions and aged-care. “If enacted as a substitute for the present rag-bag of measures directed at the same end, the total administrative burden would surely be reduced,” he wrote.

Paying out of pocket for things once provided by the public sector means it is not a Universal Basic Income at all, but a poor tax by another name.

UBI is not "destruction of the social safety net", it IS the social safety net and the best kind of safety net, it's always there. How on earth is a cash payout a 'poor tax'? Again, she's damning the idea for its supporters, most proponents just want to replace cash benefits and would leave the NHS and state education as quite separate universal benefits.

2. A UBI has the potential to further drive down wages

Some advocates claim a UBI empowers workers to reject jobs with insufficient compensation. To the contrary, a UBI that covers the cost of living creates zero incentive for employers to provide wages that do the same and encourages the continuation of outsourcing.

See what she did there? UBI recipients can refuse very low paid work (correct), which ought to put upward pressure on wages - not downward as she says. She makes the equal and opposite claim (which has some substance) that employers will use UBI as an excuse to reduce wages. The two largely cancel out and overall, the impact will be negligible.

But, if we go with her incorrect assumption that wages fall, why would this encourage outsourcing? Outsourcing and automation are employers' response to HIGH wages, or not-so-high wages plus HIGH payroll taxes!

3. Tax implications may render the UBI redundant

Economist, Ian Gogh has described a UBI as a “powerful new tax engine that pulls along a tiny cart.” Particularly for the middle and working class (who already pay more than their fair share proportionally), a UBI risks driving workers into higher tax brackets, meaning their “free money” will inevitably land back in government coffers, defeating the purpose of a UBI in the first place.

The UBI itself is not taxable, and unless "middle and working class people" have a marginal tax rate of 100%, the claim is clearly nonsense.

4. A UBI is expensive & barely makes a dent in working-age poverty

Experts have predicted a UBI could cost anywhere between 6.5% (UK), to 35% of GDP (France and Finland), but barely makes a dent in working-aged poverty which would decline by less than 2%, according to a report by Compass, by less than 1% for pensioners. Though child poverty could decline from 16–9%, a UBI still doesn’t deliver the necessary bang for the government’s buck.

In the intro, she writes that a sovereign government can always afford to pay a UBI, why is she now whining about the 'cost'. It is not a cost, it is a transfer, and the net transfer will be a small fraction of the gross 'cost' - the more equal a society is to start with, the lower the net transfer.

The rest of this claim is not without substance, it's something Malcolm Torry worries about but I don't. The way to fix this particular perceived issue is to have a higher UBI entitlement with some measure of income based withdrawal.

But of course, it is a bit fatuous of here to highlight the impacts on child poverty and pensioner poverty, two groups who would clearly have nothing to gain from a Job Guarantee, her preferred alternative, see below.

If we’re going to spend that kind of money, it is not unreasonable to demand an ROI that equips current and future workers with transferable skills capable of earning them a lifetime’s worth of income. This is why a job guarantee program is essential not only for eradicating poverty but ensuring the future health of the global economy.

Aha, she's a JG-er... What about the aforementioned stay-at-home home parents, other carers, the disabled, students, the enforced early retired? You'd still need welfare for them, and the level of income they receive would have to be somewhat lower than the income from a Job Guarantee, or else few will sign up to it unless forced to.

Why a job guarantee trumps a UBI any day

Even the most ardent neoliberal recognises that for capitalism to continue, more people need to afford to buy, lease or invest in non-essential items.

A job guarantee ensures a permanent pool of skilled workers the private sector can call on when their need for staff increases, and creates an employer of last resort in lean times to keep the economy ticking over. If the private sector has a problem with a job guarantee, it can defeat it entirely by employing more people.

Still no catering for the stay-at-home parents etc. And what makes her think that the government can correctly guess which skills will be needed and what the best kind of training is? Why does she think that businesses will suddenly stop automating and outsourcing? Does she not realise that a UBI also "keeps the economy ticking over"?

There are plenty of industries within the public sector badly in need of both human and financial resources. The Department of Child services comes to mind, along with mental health, domestic violence services and shelters, police resources for sexual assault investigations (including provisions for rape-kit testing) and white collar crime (hello RBS), not to mention skills training, the sciences and education.

That's not Job Guarantee, that's Job Creation. Some of that stuff might be worth doing, in which case the government should be paying for it to be done anyway, the rest is digging and filling in potholes. And however well trained or experienced somebody is in those jobs, it does not equip them for working in the private sector.

While some small-scale UBI experiments have been trialed in countries like Finland and Canada, no economy-wide tests have been conducted.

Yes they have.

The same cannot be said about a Job Guarantee which has already been proven to work in the US, UK and Australia whose post-war full-employment policies were responsible for the creation of the middle class and the subsequent prosperity that lasted all the way-through to the late ’80s, early ‘90s.

Is she talking about British Leyland?

Unfortunately, permanent poverty is no longer seen as a problem to overcome but a policy tool to maintain price stability, which is why we are unlikely to see any similar guarantees anytime soon.

Woah! Try telling UBI campaigners to their face that they don't see "poverty as a problem to be overcome"!

A UBI is an ideological surrender to capitalism. It should be renamed ‘Not My Problem’: because it formalises the complete abdication of the government’s responsibility for employment.

Capitalism is good, see above. Does she seriously credit a load of bureaucrats to know exactly what sort of training each individual needs, and to provide it? Beyond a certain point, people are best off making their own decisions.

EPIC FAIL.