Finland and the Basic Income experiment

[tzijlstra 11]

25 minutes ago, woodview said:

I'd be interested to see a calculation done on it.

here's my 30 second one. We spend £160bn on benefits. 55 million adults (a guess) = £3k per annum net each adult average.

So with the basic income model, how does that work in terms of x million unemployed, x million on nmw, and x million on average salary? Would be interesting if anybody has got half an hour and a big fag packet.......

 

 

As a side issue, I think this is going to become interesting as time progresses and we see more and more automation cutting more lower paid jobs (ie the shelf filling example, checkout staff etc) . 

I will give it a go:
 

https://yougov.co.uk/topics/politics/articles-reports/2014/11/09/public-attitudes-tax-distribution

 

That is when the government spent around 750 billion, so 1/3th (at least) is spent on welfare and pensions. That is 250 billion (in 2014). 250 billion divided by 55 million is £4,500 - Of those 55 million there are approximately 32 million in work. Average UK salary in 2017 was 27.2K, 30% of 17,2K is £5160, add to £4,500 and you have £9,660. That means the average disposable income declines slightly (by appr. £1,500/annum) but everybody is guaranteed close to 10K.

 

The majority of UK tax benefits don't come from income tax however, indeed, that 1,500/annum would actually be new income for the state, which means that welfare and pension payments can be simplified enormously (saving money on the government side) whilst maintaining plenty of income to pay for things like healthcare, defence, education and so on.

 

So it is pretty much cost neutral to the government, it also has the intrinsic benefit of people having more choice about how they design their life. For example, if you are a household of 3 adults (Mum, dad, adult child), your household income is 30K with no-one working.

 

I realise that even this calculation is very basic, there are numerous aspects this doesn't take into account, for example - what happens if people decide en masse that they don't need to work? Then ask yourself, would you like to go through life without working and living of 10K a year? This is where it increases choices for people - the 'full time' job is on its last legs, that is a whole different debate of course, but there are a lot of economists who feel the future is one whereby people choose where to work and for how much on a much more flexible basis.

 

At the risk of rambling on: This weekend I was picked up by a lovely Uber driver, he sets his own hours, decides which jobs he picks up himself. He'd retired from being a cabby years ago, yet because of the flexibility Uber gave him, came back to the job market.

[woodview 10]

1 hour ago, tzijlstra said:

 

So it is pretty much cost neutral to the government, it also has the intrinsic benefit of people having more choice about how they design their life. For example, if you are a household of 3 adults (Mum, dad, adult child), your household income is 30K with no-one working.

This is the big downside, not a plus point. A family getting £30k pa for no work is a recipe for disaster.

It needs to be designed so that doesn't happen.

[tinfoilhat 11]

Some people can’t handle money very well. Cameron thought it would be a good idea to give rent money directly to housing benefit recipients and it’s not been a runaway success. 

 

So let’s say we give Wayne and waynetta £20k a year (do they get more if they have two kids or what?) and rather than paying rent (does housing benefit go as well?) and food and utilities, they blow it all on takeaways and scratch cards in week one. Then what?

[tzijlstra 11]

7 hours ago, woodview said:

This is the big downside, not a plus point. A family getting £30k pa for no work is a recipe for disaster.

It needs to be designed so that doesn't happen.

Is it? Where does that money go?

 

 

[woodview 10]

4 hours ago, tzijlstra said:

Is it? Where does that money go?

 

 

why does that matter? it is spent on rent / mortgage , food , heat, cigs, sky sports etc same as any other family. If you are happy to work 40 hours a week along with maybe 5 others, to support a family on £30k, then that is your opinion. I don't want to. I want my money spent on the NHS and people in actual need.

[tzijlstra 11]

23 minutes ago, woodview said:

why does that matter? it is spent on rent / mortgage , food , heat, cigs, sky sports etc same as any other family. If you are happy to work 40 hours a week along with maybe 5 others, to support a family on £30k, then that is your opinion. I don't want to. I want my money spent on the NHS and people in actual need.

But euhmmm... I pointed out earlier in my calculation that this money is already going to welfare and pensions? Look at it this way - if you were in a household with 3 adults and received 30k a year, would you not work at all and be content with that? Chances are not, that applies to a lot of people out there. It gets even more skewed if it is a 2 adult or 1 adult household. And in the end - that money gets spent again, it isn't like it is sitting still, potted up into a savings account, the amount isn't high enough for that, so it has to keep circulating, that means the government gets VAT on the spend, the corporate tax on 'cigs, sky sports etc.' and so on.

 

It is just a different mechanism of distributing wealth and, in my opinion, it is far fairer than having a selective benefit system.

[woodview 10]

47 minutes ago, tzijlstra said:

But euhmmm... I pointed out earlier in my calculation that this money is already going to welfare and pensions? Look at it this way - if you were in a household with 3 adults and received 30k a year, would you not work at all and be content with that? Chances are not, that applies to a lot of people out there. It gets even more skewed if it is a 2 adult or 1 adult household. And in the end - that money gets spent again, it isn't like it is sitting still, potted up into a savings account, the amount isn't high enough for that, so it has to keep circulating, that means the government gets VAT on the spend, the corporate tax on 'cigs, sky sports etc.' and so on.

 

It is just a different mechanism of distributing wealth and, in my opinion, it is far fairer than having a selective benefit system.

I wouldn't because I have a strong work ethic and want to provide as much as I can for my family. I think £30k for a household would incentivise some people not to work at all, and others just to do small top-up type work.

[tzijlstra 11]

1 hour ago, woodview said:

I wouldn't because I have a strong work ethic and want to provide as much as I can for my family. I think £30k for a household would incentivise some people not to work at all, and others just to do small top-up type work.

Why do you think others don't have a work ethic? I appreciate your concern as it is valid for a small portion of the population, but then they probably already have found ways to work as little as possible. For me personally a life without a job would be rather pointless (unless I win the Euromillions of course!) and the people I know feel pretty much the same, as do you?

 

Let's also be realistic - 10K per adult doesn't exactly give you a life of luxury, it is enough to get by on prudently, provided you have access to cheap housing, but not more than that. A car? No sir. Regular drinks with mates in the pub? No sir. Season ticket to the useless punters at Hillsborough? Most definitely not. You see my point I am sure

[woodview 10]

1 hour ago, tzijlstra said:

Why do you think others don't have a work ethic? I appreciate your concern as it is valid for a small portion of the population, but then they probably already have found ways to work as little as possible. For me personally a life without a job would be rather pointless (unless I win the Euromillions of course!) and the people I know feel pretty much the same, as do you?

 

Let's also be realistic - 10K per adult doesn't exactly give you a life of luxury, it is enough to get by on prudently, provided you have access to cheap housing, but not more than that. A car? No sir. Regular drinks with mates in the pub? No sir. Season ticket to the useless punters at Hillsborough? Most definitely not. You see my point I am sure

Because lots of people would rather not work. That is human nature to many people.

 

If you were paying <£100 pw for a 3 bed council house, about £5k pa, it would leave £25k = £480pw for other stuff. Lots of people would give their right arm to have that household disposable income without working, (or working for that matter)

[Olive 10]

18 minutes ago, woodview said:

Because lots of people would rather not work. That is human nature to many people.

 

If you were paying <£100 pw for a 3 bed council house, about £5k pa, it would leave £25k = £480pw for other stuff. Lots of people would give their right arm to have that household disposable income without working, (or working for that matter)

Maybe that wouldn't be so irksome if you were receiving the same?  

[woodview 10]

9 minutes ago, Olive said:

Maybe that wouldn't be so irksome if you were receiving the same?  

It would be irksome if I was working 40 hours per week and paying tax to support healthcare, education, police and those in genuine need, yes.

[tzijlstra 11]

1 hour ago, woodview said:

It would be irksome if I was working 40 hours per week and paying tax to support healthcare, education, police and those in genuine need, yes.

You already are paying tax?