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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhy A Swiss Proposal To Give Every Citizen $2,800 Each Month Is So Radical
Why A Swiss Proposal To Give Every Citizen $2,800 Each Month Is So Radicalby Adam Taylor at the Business Insider
http://www.businessinsider.com/behind-the-swiss-unconditional-income-iniative-2013-10
"SNIP...........................
There's a crazier proposal than this, however. Earlier this month an initiative aimed at giving every Swiss adult a "basic income" that would provide "ensure a dignified existence and participation in the public life of the whole population" gained enough support to qualify for a referendum. The amount suggested is 2,500 francs ($2,800) a month.
While most observers think that the vote is a long shot, it's certainly sparked debate and not just in Switzerland. Writing for USA Today, Duncan Black said that a "minimum income" should be considered for the U.S.
"It's pretty clear that the most efficient way to improve the lives of people is to guarantee a minimum income," Black concludes.
...................
Daniel Straub: A lot of people have proposed this idea. For example Thomas Paine in the United States or also the famous psychologist Erich Fromm has written about it in the sixties.
...........................SNIP"
applegrove
(118,778 posts)Marrah_G
(28,581 posts)That creates far more jobs then giving more millions to billionaires so they can hoard it away.
Scootaloo
(25,699 posts)When did we lose focus of the fact that it's the lower income bracketsthat stimulate the economy the most, sheerly through numbers and high consumption levels?
Oh right; when the upper brackets seized total control of the media.
Nuclear Unicorn
(19,497 posts)If my husband and I both got $36,000 a year for doing nothing it would be more money collectively than he makes at his very good paying job (around $70k) but where he has to work like an animal and also contend with horrible weather and the occasional minor injury such as a broken finger. And I'm sure plenty of people have far more menial jobs for far less pay. How would this create jobs if it's not worth it to go to work?
And you'll still have millionaires and billionaires if some people create and other people buy the-next-big-thing.
EOTE
(13,409 posts)First of all, all that influx of cash would cause a significant amount of inflation. So, the price of goods would rise, but in a way that would significantly increase the buying power of the lower and middle class compared to the wealthy. So, you might think that giving away such sums would encourage people not to work, but inflation would ensure that people would have reason to continue working. Secondly, there's the marginal utility of the dollar. Because the percentage of additional income received will be increasing the lower down the income ladder you go, there would be a HUGE increase in consumption. That spending would create a ridiculous amount of jobs. Contrary to the opinion of many, unemployment isn't really ever high because there is a substantial portion of the population who refuse to work, unemployment is high because of times that job providers don't find it profitable to provide work. There's always going to be a portion of the population that simply doesn't want to work, but that portion has always been very tiny. If something like that were to happen here, that $36,000 or whatever would become the new minimum wage. Frankly, I'd much rather continue to work at my job than receiving a minimum wage for doing nothing.
On edit: If this were to happen here, your husband could afford to leave his job for a job he'd be much happier with, but pays less money. And he could do that without experiencing a loss in quality of life.
CrispyQ
(36,509 posts)Vacations, furniture, stuff galore!
politicat
(9,808 posts)It features heavily in Robert Heinlein's very first and not published until recently book (For Us, the Living.) Heinlein was not always a libertarian -- he worked with Upton Sinclair on the EPIC (End Poverty in California) Project near the end of the Depression and was something of a Social Democrat. During that time, he wrote FU,TL. The book isn't great in terms of literary merit (very much a deservedly shelved first novel) but it is a short course in a functional Social Credit economy. It's worth reading to see how a guaranteed minimum income stimulates an economy.
Alaska has been doing a version of this for years, in the form of their resident royalty payments. Giving every citizen a bump to their annual income helps keep a stable economy. Alberta also made regular payments. Both Alaska and Alberta used sums too small to be livable, but the annual lump sum payments helped people make larger consumer purchases or improvements to their quality of life.
The functional part of a GMI/Social Credit Economy is that in every economy, a percentage of spending is absolutely non-elastic -- people must eat, must stay warm, must have shelter and clothing. In our current system, those who don't have enough to cover non-elastic spending will stop-gap it in usually temporary, usually painful ways that ultimately harm the greater economy because those stop-gap efficiencies mean that the grocer gets a smaller cut, the electric company doesn't get a full payment, a used shirt gets bought instead of a new one. (See the Chained CPI argument for this.) If that non-elastic reduction of spending goes on long enough, the grocer has to cut staff, the used clothing market gets tapped out, the electric company can't pay for line maintenance... By ensuring that people can meet their minimum needs, the whole economy has a consistent and predictable functional baseline.
As for people not working if they have sufficent means to not work... Well...
1. What makes a child born to rich parents more deserving of leisure, education, food, shelter and care than a child born to poor ones? What's so special about Paris Hilton that she is allowed to do whatever she wants because she had the great good luck to choose a clever grandfather? It's kind of a basic democratic principle. Poverty should not be inherited and the fact that our system makes it so, and thereby makes a permanent underclass is the sign of a sick system.
2. What makes a security futures trader's contribution to society more valuable than a full-time parent's, research scientist's, an artist's, or a pre-K teacher's aide? There are a lot of incredibly valuable but not very lucrative professions that more people would take up if they were ensured their basic needs, but for now, are either hobbies or retirement dreams that go unfulfilled. I guarantee you that I would be in a far more socially rewarding field of research and not the one I'm in if I knew I could cover my basic expenses. A lot of my students really want to go into social work or clinical work, but can't because they can't afford to pay rent, pay their student loans, eat and eventually have a family on a research stipend or a social worker's check. If we can keep their basics covered, the whole economy benefits.
3. Why is a full or more than full-time job to be desired? If the basics are covered and employment becomes voluntary, I actually foresee more jobs becoming available. I'd say that the vast majority of people want to work and would do so, but I'd also bet that most of those people would prefer to be able to work a 20 hour week, or only during certain seasons, or to take half a year and hike the Pacific Coast Trail. For people who truly enjoy their work, it won't matter to them, but for those who are currently either only working to live, or are working far more than they want to, a GMI means we can shake up the whole system. I have a college roommate who is currently a waste water engineer. It's literally a crappy job, but she loves it. Give her a GMI and she'll probably remodel her basement (thus creating several jobs for carpenters, carpet makers, plumbers, painters) but she won't quit working. Another former roomie is an incredibly talented studio artist who is in human resources. Give her a GMI and she will drop her day job in a heartbeat (which opens it up for someone who likes Human Resources) and live on that and the money she makes selling her paintings. That's the job creation effect. A more flexible system does not hurt anyone. It makes it possible for everyone doing a job to be doing one they feel is meaningful and worthwhile. Yes, some people will still chase money. Great. If that's what they need to keep score, let 'em. Most people, though, find money to be only useful as a means to an end. And the "crappy" jobs would get done through a combination of people who actually enjoy them and better wages. Also, employers would be forced to treat employees better because starvation and homelessness cease to be a viable threat.
4. So what if a minority of people decide that the best use of their GMI is not working? They will still consume, which means they will still need television engineers and web developers, carpenters to build their housing, textile workers to sew their clothes, farmers to grow their food. Currently, when people are not working, the whole economy contracts and everybody hurts, but under a GMI, being unemployed will not drain the economy because the dollar value of their inelastic consumption doesn't disappear. Besides, why is it your business what someone else does with their time and money? Calvinism is about 500 years out of date and even the Puritans gave up their self-denial by the third generation.
5. For the hard Econ side (and it works mathematically, which is more than can be said for the Austrian school, and it's more mathematically elegant than Keynsian), either of the books referenced above have the core principles, but we've already got a virtual money system. We currently create all of our money out of thin air as a valuation of intellectual, social and potential capital, which we are currently underselling. It's already imaginary, so why not create more? Inflation is a reaction to scarcity, not to an increase in the money supply. Prices rise when too many credits are chasing too few goods, but too few goods are the follow-on result of too little production. Initially, yes, there will be inflation, until a) people realize that they don't need to hoard because they have financial security, and b) people catch up with everything they've had to put off before, and c) production rises to meet demand, but that'll shake out when the new norm is established.
NYC_SKP
(68,644 posts)Am I right?
applegrove
(118,778 posts)I don't know that it has been tried anywhere yet. In the USA I would say minimum wage increase would be the fastest way to improve things for now. A minimum wage hike is one of those things that is very popular with the people but that will make the GOP set their underwear on fire. In other words I hope Obama pushes for it now.
sabrina 1
(62,325 posts)Skeeter Barnes
(994 posts)seveneyes
(4,631 posts)Assuming 200 Million people get $2800 a month. We may need to raise the debt ceiling a bit.
Laelth
(32,017 posts)If we did it in the U.S., and if we chose a more realistic number for the United States, like $1,000.00/month, perhaps 30 million workers would qualify, and 1/2 of those would already be getting some income, so the check to each person who worked some in a given year would be less than $1,000.00/month. I'll assume an average of $7,500./year per beneficiary.
So, 30 million beneficiaries at an average yearly payout of $7,500.00/year = $225 billion/year. That's less than we spent per year on the war in Iraq, and it would be a better investment. Not cheap, mind you, but a good investment in the future.
But, as I said, there's no political will in the United States, at the moment, to do any such thing. As such, this exercise is a bit futile.
-Laelth
Joel thakkar
(363 posts)30 million is 10% of the population....
seveneyes
(4,631 posts)The original Swiss proposal is an unconditional $2800.00 payment regardless of income. Only infants were excluded. My 200 Million number for the USA was generously omitting 120 Million people. If the USA were to give $2800/month to everyone except infants, the number would be unreachable.
Laelth
(32,017 posts)I doubt it.
A guaranteed minimum income works like this: Let's say we go with my figure for the U.S., a guaranteed $1,000.00/month, for every adult over the age of 17. 25% of Americans (roughly) are 17 or younger, so cut the possible beneficiaries down from 320 million to 240 million. Probably 1/2 of the remaining 240 million Americans over the age of 17 earn more than $1,000.00/month, so cut the remaining total possible beneficiaries in half, i.e. 120 million possible beneficiaries. Then, adjust for all sources of income. Of those 120 million people, many earn some income. If you do, that amount is subtracted from your $1,000.00/month. If you get SNAP benefits, that amount is subtracted from your $1,000.00/month. If you get TANF benefits, that amount is subtracted from your $1,000.00/month. If you get Section 8 housing benefits, that amount is subtracted from your $1,000.00/month. If you get unemployment benefits, that amount is subtracted from your $1,000.00/month. If you get SSDI benefits, that amount is subtracted from your $1,000.00/month. If you get SSI benefits, that amount is subtracted from your $1,000.00/month. If you get pension benefits, that amount is subtracted from your $1,000.00/month. In other words, subtract out from the "guaranteed" minimum income all other sources of income, and voila! The cost of this program is nowhere near the nightmare scenario you envision.
That, in fact, is what I think Switzerland has in mind, and I maintain that it would be a good idea to do something similar in the United States.
-Laelth
seveneyes
(4,631 posts)Regardless of any other income. It did exclude infants, so the term "Unconditional" seemed abused to me. Based on that, I can't see it happening here. One of the original articles is here...
http://www.reuters.com/article/2013/10/04/us-swiss-pay-idUSBRE9930O620131004
Laelth
(32,017 posts)It was a "starting point" only for negotiation on the topic. I didn't take it very seriously, nor did the Swiss. That said, a guaranteed minimum income can work, along the lines I suggested above.
Ultimately, though, I agree that there's no political will to attempt any such thing in the United States. That's too bad.
-Laelth
politicat
(9,808 posts)$500 per month, per child, $1000 per month per adult. At that point, we can probably shift off of SS Disability and eventually, Social Security. The automatic savings by eliminating all of the bureaucracy associated with those programs covers a lot of that money.
Means-based social support becomes pretty meaningless when basic needs are automatically met.
I recognize that there are places where $2000-2500 a month (assume single parent, two children, or an adult couple, or a couple with a child) will not be sufficient, but a GMI would also improve mobility. If you know you've got your basic needs met, there's less pressure to remain in a place that offers limited opportunity. So why not move to an arts collective in one of the failing Midwest cities, or build a semi-permanent Burning Man community in one of the West's many ghost towns, or set up a farming commune like The Farm? Why not build a hacktivist collective out of a collectively owned former hotel? Or a robotics institute out of a bunch of hexayurts, tiny houses and Quonset huts? Or for that matter, a gamer house, or a perpetual jam band or knitter's home?
Play is a much bigger part of the economy than people think.
Deep13
(39,154 posts)applegrove
(118,778 posts)when you worked. So you'd be even better working. So it encouraged work. Up to a point where you'd make a good salary that nobody would turn down.
Deep13
(39,154 posts)You studied the cash grant while you were a student and found out "you" have incentives to work. Who is "you?"
applegrove
(118,778 posts)grant would be able to keep a percentage of that grant if they found a paying job. Only up to a certain income. But it means there would be an incentive to find a job. But this is going back 30 years when I studied it in university.
Deep13
(39,154 posts)johnd83
(593 posts)The need for "work" is going to be severely reduced and unemployment is going to get much worse until the economy can adapt.
Deep13
(39,154 posts)mbperrin
(7,672 posts)favoritism, cronyism, government of kleptocrats.
Many very hardworking people make little. Roofers (the actual roofers, not the owners) for instance. Hot nasty dirty work for less than $25,000 a year full time.
Deep13
(39,154 posts)Egalitarian Thug
(12,448 posts)Deep13
(39,154 posts)johnd83
(593 posts)A basic income is the most efficient and "fair" way to deal with the problem. In the next 10-20 years many low wage service jobs will be replaced by machines. Fast food, truck drivers, crop pickers, etc will all be automated. The economy will most likely create new types of jobs to replace the old ones as has happened in the past, but the rate of change is so fast right now there is going to be a lag.
seattle15
(45 posts)They should aim higher.
(8,000,000 people * $2,800 per month *12 months ) / $632,000,000,000 GDP = 0.42531
Laelth
(32,017 posts)Your math assumes that everyone in the country would get a check from the government. I suspect the proposed law is written as a "guaranteed minimum income," i.e. you get the check only if you earn less than $2,800/month, and if you earn half that amount on your own, for example, your government check would cover the other half--meaning the state would only pay 1/2 the amount and your employer would continue paying you the other half. In other words, only a small percentage of their population would qualify for it, and not every check written would be for the full $2,800.
As such, your calculation is rather absurd.
-Laelth
LostinRed
(840 posts)But that is good if the Government paid everyone 2500 a month I'm guessing an employer would take that into account when setting salaries but that would be good the companies could hire more people.
msongs
(67,441 posts)workers
Victor_c3
(3,557 posts)Supposedly, the countries or Dubai and Qatar are wealthy enough because of oil revenues that, if you are a citizen, you receive enough money from the government that you don't have to work. As a result (or at least what I saw when I was in Qatar), most menial jobs are performed by non-citizens who receive little to no protection from the government.
In the end, I believe that this Swiss proposal would lead to a situation like the one I mentioned above. Employers wouldn't pay Swiss citizens more, they'd just hire foreign laborers for less.
cpwm17
(3,829 posts)Money means nothing if a lot of people receive it for free and nobody does the basic jobs.
Wealth is created through labor, and as the economy becomes more efficient it takes less labor to create more wealth, allowing for higher standards of living. But as fewer people work standards of living go down. Foreign labor has to fill in the gap. Ultimately this will destroy the economy.
last1standing
(11,709 posts)But if given the choice of this or nothing, I'd choose this.
I believe work gives people purpose so I think that's the way to go, but I'm sure others would disagree.
LWolf
(46,179 posts)This, though, doesn't keep people from working or discourage them from working, for the most part.
I have to say that something like this available here might encourage me to quit my job, but that's because my job is about scapegoating and abuse in the current U.S. climate. A U.S. that would pass something like this wouldn't abuse teachers and public education (I hope,) so I wouldn't want to quit.
If I were financially able to quit my job today, I would still be working; just not for pay. There are so many ways to contribute to my community; being able to choose how to do so and set my own schedule, I'd be doing just that.
My mom is working for pay now, because the economy crash left her other retirement funds inadequate. Before she had to go back to work, though, she worked harder in her community than ever. She wrote articles for the small local paper, she sat on the board of a community-based group, she organized and ran activities at various seasonal festivals for the town, she did housekeeping and general errand running for a disabled neighbor...she was out doing something every day. She's 75.
Given the opportunity, many might actually find a purpose beyond getting up and going to work to fulfill someone else's mandates every day.
Edited to add:
There was once a DUer who was disabled; unable to work. It was a constant struggle for her to get by on her disability. I thought of her as I read through a couple of "make people work" responses. I haven't seen her on line in a few years. I'm ashamed to say I've forgotten her username. I hope she's okay.
She would have been all over the "guaranteed job" suggestion, wanting to know what provision would be made for those who COULDN'T work.
last1standing
(11,709 posts)But for those who can, I believe that work contributes to the individual as well as society.
Joel thakkar
(363 posts)I am all in for free or low cost food to the poor, free healthcare for the poor, 0% income tax, 0% sales tax for the poor, utilities subsidy etc...but not sure about the minimum income. What is the guarantee that they will spend money on food, health, utilities and not on gambling, betting, hard-core drugs, Heavy drinking etc...If there is a full proof way to make sure that people spend their minimum income only on their Needs and not their Wants, i may support it.
Dragonfli
(10,622 posts)It appears to me the biggest gamblers are among the .01%
How other people choose to live is none of your concern, you are not royalty above them destined to approve or disapprove at your leisure. The attitude that you are reeks of puritanism to me and kinda creeps me out.
You are also missing the entire point of a guaranteed minimum income in a society, it is to foster stability and a robust economy while eradicating the very concept of poverty within that culture,
It is not a hand out by a preacher with a hearty dose of judgement and scorn added like poison to the apple.
Joel thakkar
(363 posts)I meant something else...
I have no problem people spending money where they want...it's just that we start giving people $2500 per month, then we should close other program like : "Food stamps"...I mean $2500 per month per person if more than enough to buy basic groceries/food and other stuff. No one should come and i say that i blew up $2500 on other things and now i don't have money to buy groceries/food so give me food stamps.
Sorry if i have caused trouble for anyone!
RedCappedBandit
(5,514 posts)Joel thakkar
(363 posts)Check post 34 in this thread to know what i meant to say
hobbit709
(41,694 posts)It's their money, how they got it is irrelevant to what they do with it.
Do you also look down your nose at working people who spend their money on things you don't approve of?
SoCalDem
(103,856 posts)That's precisely why "our way" sucks.. It allows "some people" to judge "other people" as to their worthiness..
Put in place a basic floor for a living income, and many will pool resources & never work...but many others will work and good workers will always be needed and in demand.
The poorer ones will be recycling ALL that money back through the economy, and given a respite from the stresses of poverty, may find themselves creating their own businesses.
It's counterproductive to have a class of bureaucrats judging worthiness of another class of people, and having those people jumping through hoops to keep on assistance..
The very wealthy "could" put their subsidy into charities or they could create other opportunities for training young people for the workforce.
The income could also allow older folks to leave the workforce earlier than they may have otherwise done./
seveneyes
(4,631 posts)Then you just make sure someone else pays their rent, food and other bills. Why not just make everything free and avoid all the hassle of money changing hands. That way, the people that want to work can supply the food and infrastructure while those that want to just enjoy the labor of others can relax and enjoy life. As long as there are enough people willing to work, everything will be just fine.
Joel thakkar
(363 posts)Who will work if they know that they can just blew up $2500 in vice and govt (or someone) will still pay for their food, rent , utilities and other needs.
You said "people that want to work can supply the food and infrastructure while those that want to just enjoy the labor of others can relax and enjoy life"
I think this is just possible in theory as majority of the people would just start dropping out of labor force. Young people will obviously have an excuse that they are young and want to enjoy life, party, etc...and middle aged/old age people will start retiring soon as they will think that this job (and stress which comes with it) is now deteriorating their health.
However, i would be the happiest person in this world if i get wrong and this thing actually works!
LWolf
(46,179 posts)don't want to pay for food, utilities, etc., and that they are automatically likely to waste resources. It sounds like you've got some bias going that is not based in the reality of being poor.
I left out health care, because NOBODY should have to pay for health care; it should be easily available and free at point of service to all. I hope a nation that was smart enough to see the benefits of a guaranteed minimum income would already be providing universal health care.
politicat
(9,808 posts)Paris Hilton spends her money on annoying little dogs, getting drunk, stupid shoes, and being a face. It's her money. It's her life. Her choices neither break my leg nor pick my pocket.
Someone who did not hit the genetic-financial lottery should not be prevented from using their time and talents in exactly the fashion they so choose. And yes, some people would spend their GMI on things I, or you, or others consider frivolous or a waste, but that happens now. We just call them the idle rich. As long as they're not hurting anyone else, they can do as they please.
Being poor is not a crime, and it is not a moral failing. It is an economic state.
Joel thakkar
(363 posts)Hoyt
(54,770 posts)is supposedly a "longshot" in Switzerland.
However, I agree with posters who recognize something needs to be done because of jobs displaced by technology, low wages, etc.
Laelth
(32,017 posts)Sadly, there's no political will here to do any such thing.
-Laelth
seveneyes
(4,631 posts)A good start would be to do the math on the values desired.
Laelth
(32,017 posts)There's no political will in the United States to pass any such law. That said, merely for the purpose of appeasing you, I did do the math. See post #41 above.
-Laelth
Trillo
(9,154 posts)are "too big to fail" so they receive unbelievably huge sums of money while homeless folks in the same country have their "encampments" bulldozed.
me b zola
(19,053 posts)...for thinkers & tinkerers to be freed from slave wage that the bulk of their time goes to provide for survival and little else. Think of the communities that will benefit from their citizens having the time~and head space~to be involved in their schools and other aspects of community.
I love this idea.
applegrove
(118,778 posts)and pay their own way.
me b zola
(19,053 posts)I absolutely love the idea of people having a path to exploring their gifts, their talents and passions! Education should be available to everyone who wants it! My heart breaks to think of the wonderful minds that are currently being wasted on slave-wage jobs that very well could be the minds to cure cancer, or create the next "thing" that enables the masses to live a more enriched life.
I'm with you, sister!
applegrove
(118,778 posts)Dash87
(3,220 posts)The way it is now sounds like it could work. The latter would be fairly stupid.
Sirveri
(4,517 posts)Every person above the age of 12 gets 150$/mo. Below that it is 75$/mo. Based on tax returns, minors share goes to the tax filer who claims the dependent. The ultra poor would be able to retro file via simple paperwork that could be given to outreach and advocacy groups which could then be used to distribute SNAP EBT cards.
The funding for the program is a flat tax, where the break even point is 40k for a single person with no dependents (this person would receive 150$/mo and pay 150$/mo in additional taxes). Everyone already is going to buy food, so this smashes the stigma of food stamps while serving as a backdoor way to elevate incomes of the working poor.