Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
people respond to incentives
What the hell? You dare... You must be an evil market fundamentalist to believe... That is incredible.
Actually as a market fundamentlist myself, I know that, even when equivalent statements have been seen as insulting by quite a number of left wing people.

However, the basic income doesn't pay people for not working, but regardless of work. There is the same problem in Germany, and it has nothing to do with income taxes. The problem is the sharp reduction of benefits, when people earn their own living. The following picture is out of a book from a job market economist. On the Y-axis gross income is plotted, on the X-axis corresponding net income for a family of two adults and 2 children, assuming there is no capital or capital income in this family and all income is generated by work or payment of the gov't.
The red line shows the situation in 2003. As you see for the net income it didn't play a significant role, if this family earned nothing, or up to 1500 Euro, for the net income.
The Hartz reforms have improved this situation, but introduced a 'cave', where it can happen, that you have even less net income, when you increase your gross income from work. The blue line is irrelevant so far, as this is the line, the author proposes with an own model.

So even currently the effective marginal tax/benefit reduction rate is close to 80% for quite a way on this graph. The basic income would work as kind of combi wage, where you can determine the marginal tax rate as you want, but 30-50% will be still largely better than the 80% we have currently. After all it matters how much is left, and with 40% tax rate 3 times as much is left as with 80% tax rate. In the end the basic income would not give the most none-working people in Germany one cent more, but those with very little incomes. It reduces the disincentive of unemployment benefits.

Not even the Greens support it around here anymore.
I'm not 100% sure if it is part of the green basic program in Germany, but they are rather open to it. High ranking greens have already promoted the idea with using it as a corresponding measure to even more increased energy and environment taxes. There is as well some support from the conservatives and some more from the commies. Combi wages, as proposed by the conservatives and liberals, would be as well lead into this direction.
The only party, which totally opposes the idea of a basic income are the social democrats. There are plenty of arguments, which essentially culminate in either in the idea, that it is very difficult to explain hard working low earners, that people who don't try to get a job should be rewarded without strings attached, or that - as they believe it is the meaning of live to work - a basic income would diminish the value of their work.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Mon Oct 6th, 2008 at 07:00:00 PM EST
[ Parent ]
as in "difficult", "dirty", "dangerous"?

Is there any data to suggest that there would still be the same number of people who would be willing in these jobs even if they got a basic living income whether or not they worked?

If the number of people willing to do such jobs did drop, would simply raising the salaries and/or benefits for these jobs solve that problem?

Truth unfolds in time through a communal process.

by marco on Tue Oct 7th, 2008 at 06:46:06 AM EST
[ Parent ]
Anecdotal
"dirty":
- When my father was a child, the waste disposal service was so well paid, that it was even attractive to work there for totally overqualified people.
"dangerous":
- coal miners, dangerous good truck drivers,... could works often elsewhere
"difficult":
- that is not a problem at all. Difficulties are challenges and people like challenges

Perhaps there would be problems in Western Europe with home care of old people, which is now often done by eastern Europeans under really bad conditions - and e.g. in Poland similar jobs that are done by Poles in Germany are done by Ukrainians in Poland. OTOH low paid work becomes more attractive with a basic income, and there is the human mind.
When there are problems, solve them. I think the next big technical development will be a much increased use of roboters in everyday live. When some unnice jobs are currently done for very little money, there is little incentive to use capital to improve productivity in such branches. When you can't get cheap labour to do X, there will be an incentive to invest capital, and creativity into doing X better.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Tue Oct 7th, 2008 at 09:08:30 AM EST
[ Parent ]
However, the basic income doesn't pay people for not working, but regardless of work.

Sure, but the higher the work-free wage is, the larger the difference between working and not working will be.

This means the incentives to work will be weaker.

Look, I have nothing against a generous unemployment system, but it have to be linked to forcing people to actively look for jobs.

Giving people the option to not work but still be bankrolled by the taxpayers is just wrong. Or as Gustav Möller, one of our old soc dem minister from the 30's and 40's used to say: "Every tax krona not spent efficiently is like stealing from the poor".

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Tue Oct 7th, 2008 at 11:58:09 AM EST
[ Parent ]
In an era of mass, structural unemployment, all humane welfare systems end up developing an option not to work yet be bankrolled.

Of course, you can litter those being bankrolled with "back to work" propaganda and useless, time losing "formation", but that is money being spent inefficiently.

And yes, one of the point is to weaken the incentives to work. Debt slavery, workhouses, etc... All great system to push "incentive to work". Still very, very lousy system. And diminishing the incentive to work in low-qualification jobs, which are where, most often, the boss's power is the stronger compared to the worker (see the working conditions in many such jobs, which are, literally, dangerous), is a good thing for bettering the conditions of those who actually do such jobs.

Always funny are the employers in building or restaurants, that keep complaining they can't find workers, yet keep wages low, hours long, conditions dangerous...

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Tue Oct 7th, 2008 at 12:36:45 PM EST
[ Parent ]
The key to the Scandinavian labor model is to have lots of cheap re-education for people who have become unemployed and also push them hard into getting new jobs.

No one likes to give money to hippies who don't feel like working, especially not poor single mothers working two crappy jobs and paying high taxes. I'd much rather see the poor single mother get such a big tax cut she only needs one crap job, and might then having enough time to train to become a nurse, or something.

Of course, there is always the last recourse, going to the social services. But this carries a heavy social stigma. People really don't want to do that. By implementing a basic income for everyone, taking handouts becomes normal and socially acceptable. That's a dangerous road to walk.

But maybe it's just my inner Martin Luther who's protesting. </snark>

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Tue Oct 7th, 2008 at 12:54:21 PM EST
[ Parent ]
But to the best of my knowledge it's never been demonstrated empirically that the pushing people to work part actually works...

If you're going to guarantee somebody a living income, you can't force him to work (short of doing so at gunpoint). So all the "pushing people to work" parts inevitably end up being about failing to guarantee people a living income. And AFAIK, it's never been demonstrated that pushing people into poverty (or threatening to do so) makes those people more likely to find work. It may make them willing to take crappier work or lower paid work, but that's not quite the same thing.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Oct 7th, 2008 at 01:19:07 PM EST
[ Parent ]
If a poor single mother working two job has a high tax rate then that is a problem with the tax rate...

And honestly, I'm noticing, in my generation in France, that taking handouts carries less and less social stigma. Whether it is being on minimal income for a few years preparing some competitive exam, taking a long break between two jobs while getting unemployment money, people simply do it. The stigma of private sector work, where especially among qualified workers it include "managing" people, i.e. making them suffer so that they do the company's bidding, exists too.

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Tue Oct 7th, 2008 at 05:08:44 PM EST
[ Parent ]
Sure, but the higher the work-free wage is, the larger the difference between working and not working will be.
I guess you mean lower, not larger. However, that depends totally on the question of how strong additional income is taxes/how strong benefits are reduced, as Bruce pointed out more clearly than I did.

but it have to be linked to forcing people to actively look for jobs.
I don't believe in the wisdom of the gov't. It is very difficult to make a system, which puts pressure on those who don't want to work, and who are willing to exploit every possible trick, without punishing those who are honestly trying to find work.
In the end not too much will change in most western European countries, except the stigma of living a live not focusing on making money.
This can even help to make people doing the things, they are good at, instead of making people do things, somebody invents sometimes only to test the willingness to work, but without practical use.

In the 30s and 40s Gustav Möller was minister, natural resources were cheap and even stupendous work could contribute a lot to the society. Today natural resources are among the core scarcities, stupendous work is often avoidable by machinery, creative actions, that do not immediately produce revenue can be much more worth than stupendous work and the revenues may not be collectible (e.g. open source stuff).
Moreover we are rich enough today, that we can pay enough to survive, but not enough to participate in the general consumerism. Bottom up approaches - such as a market - often do better in being creative and finding well fitting solutions than a top down approachs, that workfare or similar programs will do. In the 30s and 40s coming along was already quite a lot. 750 Euro, a typical students monthly money in Germany, or 9000 Euro/a, is less than 1/3 of the GNP/capita. I doubt that in the 30s and 40s a single could live a rather untroubled live from a third of the GNP/capita.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Tue Oct 7th, 2008 at 12:54:26 PM EST
[ Parent ]
... stealing from the poor?

As a side note, it is in part money that is spent effectively ... it achieves a number of ends, from reducing the disincentives to work caused by unemployment-tested income and means-tested income support, through reducing the inefficiency of European inter-regional transfer payments, to eliminating the fiscal drag from mixed Green/Revenue taxes by converting them into pure Green taxes.

But primarily, if we elect to pretend that it is funded by a neutral tax, then as a system is transfer from the high income to the low income. And since the high income are great net beneficiaries of the common social inheritence of knowledge, technology and established infrastructure, this is not taking, but simply a payment to the Commonwealth for services rendered, distributed as a universal social dividend.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Oct 7th, 2008 at 04:19:51 PM EST
[ Parent ]

Display:

Occasional Series