Implementing universal basic income could cut poverty rates up to 40%: PBO
Implementing universal basic income could cut poverty rates up to 40%: PBO
OTTAWA - The government's fiscal watchdog says a guaranteed basic income program at the federal level could cut poverty rates in Canada by up to 40 per cent.
When you give money to corporations, they hike up their profits at the expense of workers and individuals. When you give money to workers and individuals, corporations hike up their profits at the expense of the workers and individuals. Because they have the control needed to do so. Everyone's being willingly dumb just to have something to talk about and pass time, so they wouldn't have to think about this fact.
As someone in a high income bracket, I'd gladly pay more in taxes in exchange for a low-overhead direct equalization program such as UBI.
Something that's always bothered me about these discussions, however, is how it always seems to be treated as a binary choice. As if they only two options are to do nothing or flip on the UBI lightswitch. But this is IMHO stupid given the way economies work. Something like UBI would take 3-5 years to fully influence the economy, and anyway, economies tend to do better with stable long-term changes rather than sudden shocks.
So, if it were me, I'd instead implement a UBI program like so:
- Create a crown corporation similar to the Bank of Canada
- Mandate the crown corporation to set UBI rates with an eye out for the health of the economy and the population
- The UBI rate would imply a rate of taxation as well as set forth monthly payments to every Canadian citizen after deducting some (externally audited) operating budget (which should be relatively low given the program will never be means-tested)
- Begin UBI with some small-value sum such as $50/mo per person—enough to look nice hitting people's accounts, enough to make a real difference to the poorest of the poor, but not enough to realistically cause economic problems
- Let the Crown corp adjust the UBI rate yearly and have collection handled by the CRA at tax/paycheck time
In my opinion, if the government did something like this, we'd have a long-lasting program that is agile enough to adapt to economic conditions or things breaking along the way. There is likely a sweet spot for UBI similar to that of an interest rate, and we'd be able to find where that line is empirically, without having to risk serious shocks to the economy, inflation due to supply chain shocks, etc.
I would expect such a program would gradually increase over the span of 10-30 years until basic needs like food and shelter are covered for everybody, but luxuries and "comfortable" lifestyles remain out of reach for those who are out of work. But, if I am wrong, it wouldn't matter anyway... the UBI rate would just wind up settling higher or lower according to the needs of society.
Go look up the Roosevelt Institute's study on UBI if you want a solid take on the strengths and weaknesses of UBI. Do not read Andrew Yang's summaries of it as he miscategorizes the data.
I am a proponent of UBI, but I'm also realistic about what it will likely look like in the future. The truth is that we do not really have a choice. We have to start working towards UBI.
If you want a realistic and likely scenario of what a global UBI implementation could look like, Iook no further than The Expanse book series (not well covered in the TV series).
I haven't read it yet, but I heard what it depicted wasn't actually UBI because you only get it if you are unemployed, and that it is a largely negative take on the concept
UBI in The Expanse was often referred to as "basic". Every citizen of Earth was entitled to "basic", full stop. Basic was enough to survive and not much more (food, shelter, ans no frills living). It is a floor below which you cannot sink. The "negativity" comes not from basic but from the fact that there just isn't enough work for everyone so there isn't a way to rise above basic for most. This is a reality we are going to face whether we implement a floor like UBI or not.
In other words, UBI is something we HAVE TO implement, but it isn't realistic to believe that it will make everyone's existence idyllic.
Let's do it already!
Making people less poor reduces poverty. Wow. Was Sherlock Holmes involved in this research?
Implementing a UBI is a net positive action.First year of implementation would bring some inflation, but after that hings would propay get micb better.
An alternative would be to implement a global UBI at first. A global UBI would be about 30 USD per month and would eradicate extreme poverty worldwide at once
then nations could choose to implement a second part that wwohld increase the ammount to any level, preferably to a 75% of living wage.
Conservatives believe it will cost them their cultural purity. Purity is a huge issue for the conservative mind. Progressives and conservatives are both concerned with fairness, but the conservative version of fairness is more like making sure the right people get punished. Poor people need to suffer for the crime of being poor.
I always found it funny in the mid-2010s when the central bank was struggling to meet inflation targets why nobody seemed to suggest UBI could help fix that... seems to me that giving people money directly is at least as stimulating to the economy as dropping interest rates. Difference is one benefits capitalists, while the other benefits the working class...
maybe they should allow us to do fractional reserve spending to invent new money ;)
I kinda laughed when I read that headline - give people money and they won't not have money! Hehe. But I've always wondered what kinds of upward or downward pressures that would make on the prices of certain things. Or on purchase patterns in aggregate. I'm no economist, so I'm not aware of all the history of similar programs. I have seen some really weird things happen in closed systems like FSA benefits that people 'use or lose' here in the US causing weird purchase patterns that cause shortages of certain things that people end up over-purchasing just to not feel like they've lost a benefit. Dunno if you have a similar program there. But in a scenario where it's just money, I imagine the patterns would be completely different.
In my opinion, this is an issue that can be avoided by implementing UBI gradually.
Shortages and inflation don't just arise from people having more disposable income. If that were true, inflation would've been worse and supply chains would be facing shortages decades ago when everyone had more disposable income in real terms.
Rather, these issues are more a function of three factors:
- Rate of change in demand
- Price collusion among large companies
- Supply chain disruptions
During COVID, we saw all of the above, for example. Supply chains disrupted, people had more disposable income due to CERB and changed their consumption behaviours dramatically during lockdowns/work from home (rapid shift in demand), while large corporations such as Loblaw's & Sobey's engaged in well publicized price-fixing schemes.
This lead to the inflation crisis we are just now recovering from.
However, there's no inherent reason why UBI needs to include any of these things. You could instead, for example:
- "Boil the frog" when it comes to demand, by starting with small payments and phasing them in so that consumption habits do not change too rapidly
- Promote anti-trust measures against large companies to prevent price fixing (bonus: proceeds can go toward UBI)
- Similar to point one, if you take the boil the frog approach it will be less disruptive to supply chains, as people leave jobs gradually & companies are slowly incentivized to pay their employees more in order to stay competitive
At the end of the day I don't see it as all that different from setting interest rates, for example. Like YES the central bank COULD tank our economy by raising the interest rate 2000 basis points tomorrow. And YES they COULD also drive inflation through the roof by setting the interest rate to 0% as well. But they ain't gonna, because it'd cause... inflation/deflation and supply chain shortages.
The Roosevelt Institute did a study 15+ years ago that showed UBI only creates growth if the money is entirely funded through the creation of debt. You cannot create growth in an economy that utilizes UBI for the UBI itself unless the money falls from the sky and you need a griwing economy to fund an entitlement program like UBI.
It makes more sense to target those that need the money than give everyone money.
Edit: “ For all three designs, enacting a UBI and paying for it by increasing the federal debt would grow the economy”
The above is from the cited paper. There’s zero growth if you fund it through taxes and only growth if you fund it through debt. As increased debt payments require more of the budget to pay back said debt year to year after time the ability to provide UBI is threatened. UBI is not a long term solution.
I do appreciate that the counter argument is that the elite class will just raise prices to counter this so worst case scenario it’s like nothing happened