One of the classic unintended consequences of social welfare is making someone at the bottom unwilling to work. We saw this during the pandemic when people in formerly low-wage jobs got a lot of cash assistance and stopped being interested in low-wage jobs. (Remember all the "help wanted" signs and early closing hours at local restaurants?)
I'm curious to see an example scale that would continue to incentivize social behavior the whole way up the chain - avoiding the "oh I don't want to make $100 more dollars because I'm in a sweet spot now and bad things happen at $99."
You can certainly argue that many of the current disincentives are bugs in the bureaucracy. I'd like to see a proposal for the UBI tax scale you describe that doesn't have any bugs (that is, bumps in the distribution where people are afraid to reach for state C from state A, because the intermediary state B is worse than A).
> One of the classic unintended consequences of social welfare is making someone at the bottom unwilling to work. We saw this during the pandemic when people in formerly low-wage jobs got a lot of cash assistance and stopped being interested in low-wage jobs. (Remember all the "help wanted" signs and early closing hours at local restaurants?)
I remember this, the cash assistance gave people back their time to focus on starting their own businesses, pursuing self-education, taking care of their kids, etc. It was fully apparent to me that these low-wage jobs effectively trapped people by sucking up all the time they had for self-improvement.
Very much agreed that there should be no cliffs. Every dollar earned should at minimum increase your usable cash flow by at least X amount no matter where you are in the income distribution and other tax incentive phase space
> We saw this during the pandemic when people in formerly low-wage jobs got a lot of cash assistance and stopped being interested in low-wage jobs. (Remember all the "help wanted" signs and early closing hours at local restaurants?)
Unwilling to work or temporarily not desperate to stay alive? How many receiving assistance were still working, just doing it less?
The only studies on outcomes I recall is that a lot of kids were no longer experiencing food insecurity.
That "classic unintended consequence" was specifically tested many times in UBI context, and study after study doesn't find it in any noticeable amount.
In any case, given how badly broken the current system is, surely it's at least worth a try?
We should not make it more than $1000 per month. Very few would choose to be poor. It would put a lot of pressure on companies to pay decent wages, though.
$1000/month is $12,000/year. Thats far far below poverty levels. It needs to be enough that people can choose to supplement in order to engage with luxury consumption. If people are forced to supplement to just survive, then we need to maintain the minimum wage and a whole host of other weird baggage.
The 2024 FPL figure is $15060 + 5380 per additional person family member past the first. $12k/head/year comes up a bit short for an individual, but it's not that far off—expenses involved in holding down a job probably actually account for the difference anyway.
It also becomes clearly tenable with households of more than 1. Supporting a family of 2-3 on $24k-36k is like, yep, I've met married international grad students. Of course they'll spring for supplemental income where available, but as a baseline it is tenuously "enough".
The goal can't be to solve every desperation case. But if the program wouldn't allow individuals living in dangerous and exploitative situations to confidently leave them (financially) Id argue the program was a failure
One of the classic unintended consequences of social welfare is making someone at the bottom unwilling to work. We saw this during the pandemic when people in formerly low-wage jobs got a lot of cash assistance and stopped being interested in low-wage jobs. (Remember all the "help wanted" signs and early closing hours at local restaurants?)
I'm curious to see an example scale that would continue to incentivize social behavior the whole way up the chain - avoiding the "oh I don't want to make $100 more dollars because I'm in a sweet spot now and bad things happen at $99."
You can certainly argue that many of the current disincentives are bugs in the bureaucracy. I'd like to see a proposal for the UBI tax scale you describe that doesn't have any bugs (that is, bumps in the distribution where people are afraid to reach for state C from state A, because the intermediary state B is worse than A).