If the basic income replaces social security but is available to all adults, a large number of working people are going to quit and retire prematurely. SS isn't supposed to be a total retirement plan, but it is for many and this would increase the number - probably to the point where it all falls apart. What is the incentive to work under this scheme?
> SS isn't supposed to be a total retirement plan, but it is for many
There are many people who are unable to work due to age and infirmity and have no other savings and who are forced to rely on SS as a total retirement program, but there are very few if any who do so through choice, even if they have earnings high enough to have SS benefits at the high end of what is possible.
> What is the incentive to work under this scheme?
Even assuming that BI provided a standard of living equivalent to minimum wage (which the levels that have generally been proposed don't, even if one assumes no inflationary effect from BI itself, which is naive), people who have the capacity to expend effort to acheive greater than minimum wage incomes frequently do so under the current regime.
The same incentive exists to do some work in a BI scheme that exists to work to get more than minimum-wage in a non-BI scheme. That incentive is called "money".
Furthermore, because BI would be available to all unconditionally (unlike existing means-tested programs), it would mitigate disincentives to work that exist with existing systems that it would replace.
>> Even assuming that BI provided a standard of living equivalent to minimum wage (which the levels that have generally been proposed don't, even if one assumes no inflationary effect from BI itself, which is naive)
But TFA said it would replace social security payments. Is that more than minimum wage? at $10 per hour and about 160 hr per month that's $1600 per month. I believe social security pays better than that for many people.
To make more than $1k/month, or whatever the basic income is.
The current welfare system tends to provide a disincentive to work, since if you work you lose your benefits. A basic income system would eliminate that. So you have to factor that in too when thinking about how the incentive to work would change. There are a lot of Americans now who want to work but can't because it would cost them way too much money.
Indeed so we should tax people for being poor to make them work. <sarcastic> There are two extremes at work here, either you try to help and incentivize not working (I will lose my free student aid if I make more then X) or you punish them for not working (lazy tax). Sometimes it seems like the best solution would be to do nothing, though I know there's a fine balance that could be struck that's better then "nothing" it seems our current political climate does not do a good job of finding actual solutions to problems (I.E helping people improve their lives/conditions)
Perhaps. It's hard to know what exactly the cultural repercussion of such a big change will be.
Bu, one of the strong ideas behind basic income (or negative income tax currently exists in some places including the US), is that it does allow people to receive it and still be incentivized to work. A person receiving social welfare (or worse, some sort of disability allowance) loses part or all of their benefits if they work.
Social welfare works like a huge marginal tax rate (sometimes over 100%, effectively) on the first dollar earned.
It's not impossible that unemployment actually goes down. What I expect you'd see less of is people working as long for low wages, the proverbial 3 job poverty. Say you make $6 per hour after tax (basic income would probably require income tax to kick in on the first dollar) and you start with $250 per week. The difference between working a 40 or a 60 hour week is $610-$490.
But, this back of the envelop stuff only goes so far. There are a lot of side effects that are complicated in ways even economists will admit we don't understand.
What incentive do any of us have to work for more than $12k/year? Hell, half of us make that in a month, but you don't see everyone dropping everything and playing video games for 11 months of the year. Even low income people currently making $12k/year desperately fight for more hours at their patched together part-time jobs.
If anything, people would increase their hours spent working, as there would no longer be steep disincentives to working as benefits phase out and progressive taxation steps in. The only people who would drop out entirely are ones who simply are incapable of producing any real economic value for society, and we have to figure out how to deal with them anyway.
