Could a Universal Basic Income (UBI) work?

[Yew]

Presumably by that logic, if we introduce UBI and someone sets up a business, relying on the UBI to support them while they are setting up their business (because the business doesn't generate enough profits to be doable without the support from UBI), you would also regard that as not 'a viable business anyway', yes?

How is that any different to a business that uses startup capital?

 

[DynamicSpirit]

I have no problems at all with businesses who contribute to society.

I do have issues with employers like Amazon, Sports Direct, and Teleperformance, employers who effectively have the taxpayer subsidising their businesses. The taxpayer picks up the slack when their employees don’t earn enough to live on. The businesses make the profit and the taxpayer foots the bill.

But the point you're missing is that companies like Amazon DO contribute to society. Thanks to amazon, we can all (including, Amazon employees) buy loads of different goods much more cheaply than we would have been able to if Amazon didn't exist, and that causes us all to have a slightly higher standard of living. Indeed, my own house is full of books and other gadgets etc. that enhance my life and which I would quite possibly not have been able to purchase at all if it wasn't for Amazon leading the way in creating a new method of distributing goods. Ditto Sports Direct: For all the complaints about them, millions of people are able to get clothes and other sports stuff cheaply from Sports Direct that they might otherwise not have been able to afford.

Now yes, the flip side of that is that there appear to have been issues of staff being treated badly, and less tax being paid than seems reasonable because of the way profits can be declared in other countries (plus an appalling business rates system that heavily penalizes retail stores in town centres) and that all needs sorting. But it doesn't change that those kinds of companies do make us more prosperous. (It would just be better if they did that AND sorted out how employees are treated etc.)

These companies can easily afford to pay more

Well yes, if all us consumers decided that we'd like to pay more for the stuff we buy from them, then they'd be able to pay more. But I don't see any sign that, as a society, people are interested in doing that.

but they don’t because they deliberately base themselves in areas where unemployment is high. Ever wondered why all the call centres are in places like Sunderland or Llandudno Junction?

Uh? Are you seriously saying it's a problem if companies choose to base themselves in areas of high unemployment. I'd have thought that if an area has high unemployment, then that's exactly the place that you would most want companies to set up in, so they provide jobs to people who would otherwise have had none. Of course we'd all like it if the jobs were higher paid or more skilled jobs. But surely you can see that having somewhere in a town that offers jobs is better than there not being any job opportunities.

We know they’re “creating wealth”. For themselves. At our expense.

That is simply not true. No matter how many times you repeat it, it remains false. (Other than in the limited sense that all companies and the owners of companies do - quite rightly - partially benefit via their profits from the wealth that they create).

== Doublepost prevention - post automatically merged: 26 Jun 2023 ==

How is that any different to a business that uses startup capital?

Arguably it's not. But then, I wasn't the person implying that that kind of thing was a problem

 

[RT4038]

You're clearly divorced from the reality of the situation.

People do have the aspiration to move on to higher-paid work, but in order to do so they often need to have better qualifications. It's possible to achieve extra qualifications by going to evening classes at a local college but, in this day and age, many employers expect you to be "fully-flex" and be able to accept work across the full spectrum of hours, even though you may just be on a part-time (or zero-hours) contract. Try fitting that in with a college course that runs on fixed days.

Before you even dare to mention open learning, I'll shut your argument down by saying that this requires a quiet place to study and time between shifts (and multiple jobs in some cases). That's if you can afford the course fees in the first place! Indeed, this is one of the arguments for UBI, because it gives people on the lowest incomes a bit more money that they might be able to spend on some training in order to lift themselves out of their current situation. Of course, I'd rather it was the case that these college courses were free in the first place.

This is just whataboutery. Many people will have difficulties, may well need to put themselves out, but where there is a will there is a way. When there is insufficient will, there will be all sorts of objections, problems ands issues put in the way to try and justify why society should just unquestioningly pay up. Of course, there will be individuals caught in a trap for some combination of reasons, but the welfare system cannot be written/organised revolving around these individuals [it is complicated enough as it is]; and, yes, there will always be people who will not/can not do any better for themselves and as such will remain in relative poverty. Society has always had these people, and always will. A welfare system needs both carrot and stick to keep the numbers to a minimum, but no one on the receiving end of the stick bit likes it!

It is simply not possible for everyone to be satisfied - ranging from the extreme ends of those who believe they are are contributing too much to welfare, to those at the extreme ends of benefitting not enough from welfare.

Your comment about universal credit is also nonsensical because for those for whom it's not possible to "aspire", the DWP is constantly demanding that they do so (get off benefits in realspeak) and they're under threat of sanctions for not trying hard enough to earn more money, even when they're absolutely stretched to the limit.

Please do some basic research into what UC claimants are required to do before you start spouting nonsense!

So are you suggesting that the DWP shouldn't be 'constantly demanding' ? That the demand for welfare should be some kind of self-certification? I just know too many people for whom that would be a shirkers charter..... Not everybody of course, but plenty who would hide behind this not pressurising and upsetting the genuine.

 

[GusB]

This is just whataboutery. Many people will have difficulties, may well need to put themselves out, but where there is a will there is a way. When there is insufficient will, there will be all sorts of objections, problems ands issues put in the way to try and justify why society should just unquestioningly pay up. Of course, there will be individuals caught in a trap for some combination of reasons, but the welfare system cannot be written/organised revolving around these individuals [it is complicated enough as it is]; and, yes, there will always be people who will not/can not do any better for themselves and as such will remain in relative poverty. Society has always had these people, and always will. A welfare system needs both carrot and stick to keep the numbers to a minimum, but no one on the receiving end of the stick bit likes it!

It isn't whataboutery - it's reality for many people. You say where there's a will there's a way, and I agree that some people will defy the odds regardless, but to suggest that some people don't have the will, simply because their circumstances don't permit them to do so, is just wrong. Do you actually want people to improve their lot in life, thereby reducing the need to rely on state help? What you seem to be suggesting is that those who are caught in a trap are there because it's their own fault; you don't want them to get help to get out of that trap, but you also don't want to pay for them while they're in that trap. You can't have it both ways, and it's an extremely cruel attitude. They're not trying hard enough, therefore they must be punished.

So are you suggesting that the DWP shouldn't be 'constantly demanding' ? That the demand for welfare should be some kind of self-certification? I just know too many people for whom that would be a shirkers charter..... Not everybody of course, but plenty who would hide behind this not pressurising and upsetting the genuine.

Yes! If people have reached a point where they cannot achieve any more and are already working, then they shouldn't be left in poverty. Either provide additional state support, or make employers actually pay a decent living wage. Stop putting barriers in the way of people who are willing to improve their skills.

Having a universal income removes all the stupid admin from the process and allows people to actually just get on with it, instead of having to take time out of their lives to have a meeting with a "work coach", whose target isn't to get you into better paid work, but just to get you off benefits.

I'll say it again, you are completely divorced from reality and I find your Victorian attitude rather distasteful.

 

[Falcon1200]

Having a universal income removes all the stupid admin from the process

Would it actually do that though? Unless every single adult, regardless of circumstances and location, was paid exactly the same amount, surely complications and the associated admin, stupid or otherwise, would remain. For example, would the UBI set at a level for a single adult living say in Glasgow be sufficient for a similar person living in London? And how would families be treated, would there be a higher level of UBI for parents, or separate child payments, either of which would need admin of some kind?

 

[Bletchleyite]

Would it actually do that though? Unless every single adult, regardless of circumstances and location, was paid exactly the same amount, surely complications and the associated admin, stupid or otherwise, would remain. For example, would the UBI set at a level for a single adult living say in Glasgow be sufficient for a similar person living in London? And how would families be treated, would there be a higher level of UBI for parents, or separate child payments, either of which would need admin of some kind?

My preference would be for child payments, which I guess would be at a lower level taking into account that they wouldn't need to fund their own home. This isn't a new idea - Child Allowance was a thing for years and may still be in some form.

Or you could pay the full amount to children, but with a large percentage going into a trust fund which becomes available on the 18th birthday to help fund things like university or a first home.

 

[Falcon1200]

My preference would be for child payments, which I guess would be at a lower level taking into account that they wouldn't need to fund their own home. This isn't a new idea - Child Allowance was a thing for years and may still be in some form.

I would agree. AFAIK Child Allowance still exists (at least, it did when my kids were kids) but it is means-tested; So further complication!

 

[Bletchleyite]

I would agree. AFAIK Child Allowance still exists (at least, it did when my kids were kids) but it is means-tested; So further complication!

It wasn't always means tested. Given its low level, means testing it has always struck me as a bit pointless, you could claw it back from people on 40% tax rate with a tiny banding adjustment that most wouldn't even notice. The means testing process must cost more than just doing that.

 

[DynamicSpirit]

Having a universal income removes all the stupid admin from the process and allows people to actually just get on with it, instead of having to take time out of their lives to have a meeting with a "work coach", whose target isn't to get you into better paid work, but just to get you off benefits.

A guaranteed job would achieve that too. Imagine, you'd fill in the claim form, and then the conversation would go something like: "According to the calculations, you need another £100/week to live on. The national living wage is £10.42 so that's 9 hours of work to earn that and I see from your current work situation you can do another 9 hours because that doesn't take you over 40 hours total per week. Looking at your availability, location and preferences for type of work, the tasks we have available are: These streets need the leaves sweeping up. The police need a couple of people to walk around and watch these parks and report any anti-social behaviour. The community centre needs someone to chat to an make coffee for these groups of elderly people. The museum needs some help with archiving this stuff. Blah blah. We'll give you any necessary training. Which one would you like to do?' And that's it. No appointments that you don't want with career advisors. No filling in needless job applications just to show you've applied for something. Just, you're getting the support you need and unlike for UBI, in return the community benefits from the hours you're putting in, plus you get the self-respect from knowing you're doing something and not just getting bored twiddling your thumbs at home. What's not to like? Surely that's better than just paying people to do nothing.

 

[RT4038]

It isn't whataboutery - it's reality for many people.

If you say so. The reality depends on the perspective I suspect.

You say where there's a will there's a way, and I agree that some people will defy the odds regardless, but to suggest that some people don't have the will, simply because their circumstances don't permit them to do so, is just wrong.

No it is not wrong. It is about sufficient will to overcome the circumstances. Yes, there will be some whose particular circumstances overcome their will; likewise there will be some who use the circumstances to excuse the lack of will.

Do you actually want people to improve their lot in life, thereby reducing the need to rely on state help? What you seem to be suggesting is that those who are caught in a trap are there because it's their own fault; you don't want them to get help to get out of that trap, but you also don't want to pay for them while they're in that trap. You can't have it both ways, and it's an extremely cruel attitude. They're not trying hard enough, therefore they must be punished.

Yes, of course I want people to improve their lot in life. And I think practical assistance should be given where appropriate. Some people will be caught in a trap through their own fault, and others not. I have never said that I don't want to pay for anyone who is trying to improve their lot in life, and yes, if they are not trying hard enough it does mean that they are not going to be helped as much. That does not appear to me as punishment, but the justice of life.

Yes! If people have reached a point where they cannot achieve any more

and are already working, then they shouldn't be left in poverty.

On whose reckoning is this 'cannot achieve any more'? Self-certification? They will be left in relative poverty to those who do achieve more.

Having a universal income removes all the stupid admin from the process and allows people to actually just get on with it, instead of having to take time out of their lives to have a meeting with a "work coach", whose target isn't to get you into better paid work, but just to get you off benefits.

So the problem lies with the confrontation with the 'work coach' whose target is to get people off benefits, which invariably will include getting people into better paid work. Quite possibly the system doesn't work exactly like that, but allowing people 'to actually get on with it' will result in many (not all I grant you) just taking the benefits and making no effort to better themselves, because that is so much easier.

I'll say it again, you are completely divorced from reality and I find your Victorian attitude rather distasteful.

Not sure who is divorced from reality: I find your mid Elizabethan attitude to benefit entitlement and society paying distasteful, but I respect your view, even if I don't agree with it.

 

[ainsworth74]

My preference would be for child payments, which I guess would be at a lower level taking into account that they wouldn't need to fund their own home. This isn't a new idea - Child Allowance was a thing for years and may still be in some form.

Or you could pay the full amount to children, but with a large percentage going into a trust fund which becomes available on the 18th birthday to help fund things like university or a first home.

I would agree. AFAIK Child Allowance still exists (at least, it did when my kids were kids) but it is means-tested; So further complication!

It wasn't always means tested. Given its low level, means testing it has always struck me as a bit pointless, you could claw it back from people on 40% tax rate with a tiny banding adjustment that most wouldn't even notice. The means testing process must cost more than just doing that.

Child Benefit still exists and is paid at the rate of £24pw for the eldest or only child and £15.90pw for each subsequent child. If you (or a partner) earn over £50,000 you have an extra tax charge applied which has the effect of tapering away your entitlement to Child Benefit (my understanding is you still get paid the Child Benefit but the extra tax cancels out the Child Benefit) until you reach £60,000 at which point the tax charge equals the amount of Child Benefit you would otherwise be entitled to.

This was brought in by the Coalition Government in their infinite wisdom to complicate an otherwise very simple benefit for probably saving very little in the long run.

 

[cb a1]

For example, would the UBI set at a level for a single adult living say in Glasgow be sufficient for a similar person living in London?

How much does the minimum wage differ between say Glasgow and London?
Maybe peg the difference in UBI to that.

== Doublepost prevention - post automatically merged: 27 Jun 2023 ==

My worry with UBI is that the gig economy employers will take advantage of this. Marginal availability of hours will be appealing but with none of the benefits that come with regular employment.
I think this would need strengthening of employment legislation to stop those unscrupulous employers trashing the meagre existing rights of the poorest workers.

 

[najaB]

How much does the minimum wage differ between say Glasgow and London?

Is the legal minimum wage geographically weighted? I wasn't aware that it was.

 

[XAM2175]

How much does the minimum wage differ between say Glasgow and London?

Is the legal minimum wage geographically weighted? I wasn't aware that it was.

Correct, it's flat across the UK:

National Minimum Wage and National Living Wage rates

The National Minimum Wage and National Living Wage rates: age, apprentices, previous years.

www.gov.uk

 

[cb a1]

Is the legal minimum wage geographically weighted? I wasn't aware that it was.

That was my understanding too, but wasn't sure.
Appreciate that minimum wage and UBI are different, but they're not that different.
I wonder if any consideration was made to minimum wage varying geographically and why it was decided to make it the same across the country.
Those reasons could be useful for considering whether Falcon1200's question on UBI being the same from Glasgow to London.

 

[DynamicSpirit]

That was my understanding too, but wasn't sure.
Appreciate that minimum wage and UBI are different, but they're not that different.
I wonder if any consideration was made to minimum wage varying geographically and why it was decided to make it the same across the country.
Those reasons could be useful for considering whether Falcon1200's question on UBI being the same from Glasgow to London.

I don't know whether any consideration was made by the Government about varying the minimum wage geographically but doing so would cause problems: Do you measure it by where a person lives or where they work? If you go by where they live, then you create an incentive for businesses to discriminate against people who live in high-minimum-wage areas where this is possible (would be possible if the business is located close to the border or if it's a work-from-home job). And you also create an incentive for people to lie about where they live so they can get a higher wage. Probably only a minority of people will consider doing that, but the need to check for that kind of fraud will add to the administrative burden.

But more seriously, you have to remember that neither minimum wage nor UBI are economically neutral: Both put inflationary pressures on prices. If you try to set them at a higher level in places that already have a higher cost of living then you further exacerbate the cost of living in those places - and the inevitable result will be make the differences between - say - London and Glasgow even greater, so the difference in minimum wage levels becomes part of a vicious circle of growing inequality between different parts of the country. The same would certainly happen with UBI.

(On the other hand, differential minimum wage would probably drive a bit more employment towards the poorer areas. Unfortunately, differential UBI would have the opposite effect: It would drive employment even more towards the already prosperous areas).

 

[yorksrob]

Sure, it seems a noble aim. But I could throw that back at you, and say, what on Earth is the problem with saying to people, "Sure, we'll give you a home and enough to live on. And in return, we expect you to be available for a certain number of hours per week to do some useful work the benefits other people.", which is what my alternative proposal would amount to. I really don't understand why anyone would object to that.

btw on making sure, no-one goes homeless, I'm pretty sure the way to achieve that is to - ummm - build enough homes for everyone. As long as the UK does not have enough homes for everyone to live in, then it's inevitable that some people will end up homeless. That once again is basic laws of mathematics - and no level of UBI is going to prevent that. If you think you can prevent homelessness by handing out free money to everyone, while not dealing the the problem of, not enough houses, then you're looking at the wrong end of the problem!

That's all well and good, but that would involve the state actually resolving those major structural issues of having enough housing and wages being enough to live on, rather than shrugging its shoulders and blaming "the market".