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Bad news for universal basic income. (reason.com)

submitted 3 months ago* (last edited 3 months ago) by [email protected] to c/[email protected]

37 comments fedilink hide all child comments

Media Bias/ Fact Check.

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[+] [email protected] -18 points 3 months ago (4 children)

There you go:

National study finds giving Americans $1,000 per month makes them work less.

[–] [email protected] 14 points 3 months ago (3 children)

A whole 1.3 hours a week or $490 per year at federal minimum wage. Essentially a rounding error. Also worth mentioning it doesn’t say what they were working before so this may simply be a reduction on overtime to take better care of other things such as family, health etc. there’s plenty of things other than finding a “better job” or “being an entrepreneur” that would fall into social or leisure but still reduce things like future healthcare, prison system expenses etc.

From the reason link:

The five researchers who published the paper tracked 1,000 people in Illinois and Texas over three years who were given $1,000 monthly gifts from a nonprofit that funded the study. The average household income for the study's participants was about $29,000 in 2019, so the monthly payments amounted to about a 40 percent increase in their income. Relative to a control group of 2,000 people who received just $50 per month, the participants in the UBI group were less productive and no more likely to pursue better jobs or start businesses, the researchers found. They also reported "no significant effects on investments in human capital" due to the monthly payments. Participants receiving the $1,000 monthly payments saw their income fall by about $1,500 per year (excluding the UBI payments), due to a two percentage point decrease in labor market participation and the fact that participants worked about 1.3 hours less per week than the members of the control group.

Participants in the study generally did not use the extra time to seek new or better jobs—even though younger participants were slightly more likely to pursue additional education. There was no clear indication that the participants in the study were more likely to take the risk of starting a new business, although Vivalt points out that there was a significant uptick in "precursors" to entrepreneurialism. Instead, the largest increases were in categories that the researchers termed social and solo leisure activities.

[–] [email protected] 8 points 3 months ago (1 children)

It's also like, if they made $29,000/year before plus $12,000 during the study, they're still making less than someone with a full time job making $20/hour.

$20/hour felt AMAZING as a promotion to a broke-ass food service 20-something, and is a hell of a lot better than $29,000/year-- but having been in that pay-range before, 100% of that increase is going towards stability and comfort stuff.

Imagine-- you can afford more than just scraping by on rent! Wow, what if I can buy a video game?! You mean I can actually say yes when my friend invites me out for a drink this month??? I CAN BUY THE NICE CHICKEN NUGGETS???

Like, damn, of course they aren't like, "starting an entrepreneurial endeavor", they're still broke as hell. The might work a little less, but maybe that's because they're like, taking time off when they're sick, where before they would power through to afford rent? Or maybe they will feel more like they can call off work to help for family or friend emergencies? Like it's pretty obvious that this UBI amount still falls into the category of bringing people out of poverty stress into "normal human decision making" mode, not like into "has the space to be able to dream about visionary possibilities" mode

[–] [email protected] 6 points 3 months ago

The idea that people should not be able to enjoy their lives and always have to keep clawing their way to the top to win at some imaginary race we're all running is so repellent to me.

[–] [email protected] 7 points 3 months ago* (last edited 3 months ago) (1 children)

Plus, there are several studies that have found the opposite, with both better sample sizes and methodology. If I were near my desktop, I could paste them for the terminally lazy, b/c I bookmark most BI articles and studies. I'll do so if someone challenges me in early August - I'm traveling until then.

It's a study. Not a very good one, but even bad ones can be informative. The interpretation leaves a lot to be desired.

P.S. The Center Square is also questionable. They characterize the study as a "massive study." It was three-year, 3000-participant study at $1k/m. A total of $108k, over three years. "Massive" is vast exaggeration.

[–] [email protected] 1 points 3 months ago (1 children)

Can you explain the $108k number and how you got it?

[–] [email protected] 1 points 3 months ago

Decimal point displacement. Something I do all the time, unfortunately, when I'm doing mental math... I drop zeros. I consider it a character flaw.

$108M. A couple of orders of magnitude bigger, but still; over three years, far from "massive."

[–] [email protected] 7 points 3 months ago* (last edited 3 months ago) (1 children)

Humans are just machines to libertarians. Except themselves of course. They're different. They won't be a cog. They're a free-thinker. You're an NPC.

Also, more leisure time as a bad thing. Christ.

[–] [email protected] 3 points 3 months ago

I'm nearly certain my entire life has been a Truman show and that the movie with the same name by Jim Carrey was a psyop for plausible deniability.

As proof: Belgium. Belgium doesn't exist and it's irrational they'd make a good waffle when they have approximately zero maple trees.

[–] [email protected] 10 points 3 months ago (1 children)

That article claims the study is from the National Bureau of Economic Research. Let's look into who funds them.

https://winephysicssong.com/2010/09/16/where-does-the-national-bureau-of-economic-research-get-its-money/

Between 1985 and 2001, the organization received $9,963,301 in 73 grants from only four foundations:

John M. Olin Foundation, Inc.

Lynde and Harry Bradley Foundation

Scaife Foundations (Sarah Mellon Scaife)

Smith Richardson Foundation"

All four of these are characterized (by SourceWatch, at least, in their own descriptions linked in the above quote) as very conservative, small-government/low-regulation foundations. Actually they say the Scaife foundation is no longer pushing this ideology since Sarah Mellon Scaife took over, but (I think) during the 1985-2001 period they were. I wouldn't necessarily trust SourceWatch on this (e.g. they say the Olin Foundation gave $20.5 million to "right-wing think tanks" in 2001, then give a list that includes the Brookings Institution. I'm fairly confident this is not a mistake, rather a combination of deadpan humor and a genuinely left-wing viewpoint that does see Brookings as part of the right-wing liberal establishment. But Olin is well known as a conservative foundation, so the characterization of Olin, if not of Brookings, seems reasonable.

Of course, that was from a 2010 article. Let's see who funds them now.

https://www.sourcewatch.org/index.php/National_Bureau_of_Economic_Research

Huh. No new information.

In fact, I can't find any new information anywhere.

I wonder why that could be?

[+] [email protected] -7 points 3 months ago (1 children)

There you go again:

Support & Funding

[–] [email protected] 10 points 3 months ago (1 children)

Oh you're right! They do show who is funding them these days!

I'm sure none of those corporations have a vested interest in stopping UBI from being implemented or anything.

[+] [email protected] -8 points 3 months ago (1 children)

The funders who currently contribute the most to NBER-based research projects are the National Institute of Health, the National Science Foundation, the Social Security Administration, and the Alfred P. Sloan Foundation.

Even those corporations who are down in the supporters list don't give a shit about UBI.

[–] [email protected] 8 points 3 months ago* (last edited 3 months ago) (1 children)

You're right, banks and investment firms wouldn't care at all about UBI. My mistake.

Also, leisure time is bad. People should be productive and find better jobs, not relax.

[+] [email protected] -9 points 3 months ago (1 children)

You did not read the article if this is your conclusion.

[–] [email protected] 8 points 3 months ago (1 children)

So you're claiming that the article doesn't claim that people would not be productive enough under UBI? Shall I quote it?

Participants in the study generally did not use the extra time to seek new or better jobs—even though younger participants were slightly more likely to pursue additional education. There was no clear indication that the participants in the study were more likely to take the risk of starting a new business, although Vivalt points out that there was a significant uptick in “precursors” to entrepreneurialism. Instead, the largest increases were in categories that the researchers termed social and solo leisure activities.

[–] [email protected] -5 points 3 months ago (2 children)

There you go:

"You can think of total household income, excluding the transfers, as falling by more than 20 cents for every $1 received," wrote Eva Vivalt, a University of Toronto economist who co-authored the study, in a post on X. "This is a pretty substantial effect."

But if those people are working less, the important question to ask is how they spent the extra time—time that was, effectively, purchased by the transfer payments.

Participants in the study generally did not use the extra time to seek new or better jobs—even though younger participants were slightly more likely to pursue additional education. There was no clear indication that the participants in the study were more likely to take the risk of starting a new business, although Vivalt points out that there was a significant uptick in "precursors" to entrepreneurialism. Instead, the largest increases were in categories that the researchers termed social and solo leisure activities.

Some advocates for UBI might argue that the study shows participants were better off, despite the decline in working hours and earnings. Indeed, maybe that's the whole point?

"While decreased labor market participation is generally characterized negatively, policymakers should take into account the fact that recipients have demonstrated—by their own choices—that time away from work is something they prize highly," the researchers note in the paper's conclusion.

If you give someone $1,000 a month so they have more flexibility to live as they choose, there's nothing wrong with the fact that most people will choose leisure over harder work.

"So, free time is good [and] guaranteed income recipients use some of the money to free up time," argued Damon Jones, a professor at the University of Chicago's school of public policy, on X. "The results are bad if you want low-income people to be doing other things with their time, for example working."

Of course, if the money being used to fund a UBI program was simply falling from the sky, policy makers would have no reason to care about things like labor market effects and potential declines in productivity. If a program like this is costless, then the only goal is to see as many individuals self-actualize as much as possible. One person wants to learn new skills or start a business? Great! Others want to play video games all day? Awesome.

In reality, however, a UBI program is not costless and policy makers deciding whether to implement one must decide if the benefits will be worth the high price tag—Yang's proposal for a national UBI, for example, is estimated to cost $2.8 trillion annually.

That's why a study like this one matters, and why it's so potentially damaging to the case for a UBI. A welfare program—which is ultimately what this is—that encourages people to work less and earn less is not a successful public policy. Taxpayers should not be expected to fund an increase in individuals' leisure time, regardless of the mechanism used to achieve it.

[–] [email protected] 5 points 3 months ago

The actual numbers:

For every $1 given to each of the 1000 test subjects, income dropped by $0.12 cents on average. That means that the overall drop in pay was $12 per month, or less than 2 hours per month, at minimum wage.

Now, let's extrapolate more info from this:

Prior to receiving $1000 per month, the average income was $30,000 per annum , which is ~$14.42 an hour. This means that the average number of hours worked dropped less than an hour a month.

The reporting you are sharing is amazingly biased, with sensationalistic headlines determined to skew views against UBI.

Source for my numbers.

[–] [email protected] 4 points 3 months ago (1 children)

Yes, again, I read it. Why do you think that changes what they said?

[–] [email protected] 8 points 3 months ago

Life isn't about working and we've seen how rabid conservatives are to slash and burn disability and unemployment insurance.

This article strongly disagrees with the more scientific studies done here in Canada but even if it's true UBI is a good fucking idea.

[–] [email protected] 1 points 3 months ago

There are quite a few studies with the opposite conclusion where there is no change in behavior. One thing that could explain this is a push up to a higher tax bracket for participants vs the control group. A portion of their income falls into a higher marginal tax which is less of an incentive to work. This also does not report on expenses which also might drop. Instead of having to take high interest loans, that extra $12k can avoid cong to take pay day loans to make rent or not pay 15% on a car loan. So while working Indonesia may drop $500/yr, equivalent expenses likely dropped even more.