Social Justice, Libertarianism

Why Living on the Dole Is Bad for You

In a post last week, Jessica Flanigan takes me to task for my opposition to a universal basic income. Because I worry that a UBI would further encourage mass idleness, a serious and worsening social blight among the less educated and less skilled, I favor instead social policies that promote engagement in the work force – in particular, through wage subsidies for low-skill work. Flanigan says this makes me a paternalist.

There are serious reasons for favoring a UBI, and I applaud Flanigan for raising important issues. But I don’t think the paternalism charge really gets us anywhere. After all, the purpose of both a UBI and wage subsidies is to help people who are failing to support themselves adequately. In one sense, then, both policies are paternalistic, since in both cases the state is assuming a paternal role of providing for dependents. Viewed from another angle, though, neither policy is properly considered paternalistic. Paternalism, after all, is about reducing people’s choices for their own good. But either a UBI or wage subsidies would expand the choices of their intended beneficiaries relative to what they would be in the absence of any government provision at all.

Nevertheless, it is true that the choices of UBI recipients are less constrained than those of workers who receive wage subsidies. With a UBI, you get a check every month no matter what, whereas to benefit from wage subsidies you have to get a job.

The great virtue of a UBI is its directness and simplicity: people need help, so just give them money. Don’t worry about providing food stamps, public housing, job training, etc. – instead just cut a check and let people figure out for themselves how best to use the money. As the cleanest social policy option, the UBI sets an appropriate benchmark for judging any alternative form of assistance. Supporters of any program of specific government-provided benefits – including wage subsidies – need to be able to show that such in-kind aid helps its beneficiaries more than simply writing checks for the equivalent amount of money.

I think a good case can be made that a UBI would be more helpful to the disadvantaged than the patchwork of frequently intrusive, infantilizing, bureaucratic, and wasteful means-tested programs that presently constitutes the American social safety net. So if I could wave a magic wand and replace the policy status quo with a UBI, I would do so. That said, my reading of the available evidence convinces me that a social policy that channels benefits through work and thereby encourages paid employment has important advantages over a UBI in helping the disadvantaged to live full, happy, productive, and rewarding lives.

What evidence? Let’s start with the well-established finding that unemployment has major negative effects on well-being, including both mental and physical health. And the effects are remarkably persistent. A study using German panel data examined changes in reported life satisfaction after marriage, divorce, birth of a child, death of a spouse, layoff, and unemployment. All had predictable effects in the short term, but for five of the six the effect generally wore off with time: the joy of having a new baby subsided, while the pain of a loved one’s death gradually faded. The exception was unemployment: even after five years, the researchers found little evidence of adaptation.

Evidence even more directly on point comes from the experience of welfare reform – specifically, the imposition of work requirements on recipients of public assistance. Interestingly, studies of the economic consequences of reform showed little or no change in recipients’ material well-being. But a pair of studies found a positive impact on single mothers’ happiness as a result of moving off welfare and finding work.

Flanigan is certainly correct that it’s possible to have an enjoyable and satisfying life without working for pay. Employment’s psychic benefits come from engaging us in challenges to overcome, encouraging us to develop and realize our inborn talents, and involving us in projects and purposes larger than ourselves. But we can obtain these benefits just as well through hobbies, volunteer work, and family life. And indeed, there is a real tension between the demands of a job and these other pathways to happiness, as all of us who struggle for that elusive work-life balance can attest.

So you might think that not having to work would free people to spend more time on these other, potentially more rewarding activities. But life doesn’t seem to work that way. Consider the most recent results from the American Time Use Survey, compiled annually by the Bureau of Labor Statistics. In 2013, employed men averaged 6.43 hours a day on work and related activities (like commuting). So how did men without jobs fill up all that free time? Well, compared to employed men they spent 19 extra minutes a day on housework, 11 more minutes on socializing, 9 more minutes on exercise and recreation, 8 more minutes on childcare, and 6 more minutes on organizational, civic, and religious activities. The really dramatic differences in time use, though, came in two areas: jobless men spent an extra hour sleeping (for a total of 9.25 hours a day!) and two extra hours watching TV (4.05 hours a day!). The evidence is quite clear: people who don’t work can’t be counted on to fill that void with other forms of productive, engaged, goal-oriented activity.

Yes, there are plenty of happy students and stay-at-home parents, and retirement apparently improves well-being. You don’t need a paycheck to thrive. But for most working-age people, paid employment is the most reliable path to commitment, engagement, and a sense of purpose. For most people, joblessness means not only a lack of income, but also lack of status, lack of identity, and lack of direction. It is the path, not to nonpecuniary forms of fulfillment, but to anomie and despair.

Over the past few decades, there has been a steady deterioration in American men’s commitment to work. For so-called prime-age males aged 25-54, the labor force participation rate has fallen from 96 percent in 1970 to 88 percent today. This drop-off in participation is concentrated among the less educated and less skilled. Among all adult men in 2010, the labor force participation rate for college grads was 81 percent – compared to 71 percent for high school grads, and only 59 percent for high school dropouts.

What is going on? The emergence of the postindustrial information economy is reducing relative demand for, and the relative wages of, less skilled workers. Meanwhile, eligibility for the dole has expanded (especially disability insurance) while the cultural stigma against idleness has faded. This pincer movement is squeezing less skilled men out of the work force.

And in turn, the reduced availability of “marriageable” (i.e., gainfully employed) men is contributing to family breakdown at the bottom of the socioeconomic scale. In 2011, 87 percent of kids who have a parent with a college degree lived with both of their parents – compared to only 53 percent of kids of high school grads, and 47 percent of the kids of high school dropouts. Unstable single-parent families can then be expected to produce another generation of unmarriageable less skilled men, thus perpetuating a vicious circle.

The rise of mass joblessness among the less skilled is a catastrophe, plain and simple. Work and family, the two great cornerstones of life satisfaction, are both under assault, and declining commitment to one is feeding declining commitment to the other.

Under these circumstances, a UBI cannot be recommended as sound social policy. The great challenge at present is to arrest and reverse the slide of less skilled Americans into a permanent underclass – even as automation and globalization continue to marginalize the role and value of low-skill work. But as the celebrated negative income tax experiments of the late 1960s and early 1970s made clear, unconditional income support reduces labor supply. Perhaps not dramatically, but still the impact is going in the wrong direction. By contrast, wage subsidies in the form of graduated payments to employers of low-skill workers can increase the attractiveness of work and boost labor force participation.

It’s entirely possible that the continued progress of automation will eventually make paid employment the exception rather than the rule. We must hope that by then we are up to facing what Keynes called man’s “permanent problem – how to use his freedom from pressing economic cares, how to occupy the leisure, which compound interest and science will have won for him, to live wisely and agreeably and well.”

But we’re not ready yet. We cannot maintain our current living standards without a high degree of labor participation, and against that backdrop mass joblessness is a recipe for dysfunction and misery. We may someday enjoy a post-work society of productive, creative leisure, but maintaining and expanding the underclass aren’t the way to get there.

  • I think it’s worth considering, however, that the UBI gives options. An unemployed man watches more TV because it’s free (or at least it’s a cost he’s already incurring), unlike going out to a bar with his friends or driving somewhere to go camping or taking up a new hobby and buying the materials. I’m in grad school and the limited budget has drastically changed the sorts of things I can do with my spare time, even though there’s ostensibly more of it. If you live in a crappy urban neighborhood without access to parks, or no interesting nature, exercising outdoors may not be all that appealing. That doesn’t mean there aren’t options for such a person, but it’s certainly true that it’s harder for people to see their options.

    Further, with more money available to the lower classes, there is more option to build bottom-up solutions for their needs: co-ops, employee-owned businesses of various sorts, and other sorts of community investment. Wealthy investors will obviously see the opportunity afforded by much more wealth among the lower classes, which should create more employment. Better than that, they will have the option of putting together their own means of employment.

    • Sean II

      “…with more money available to the lower classes, there is more option to build bottom-up solutions for their needs: co-ops, employee-owned businesses of various sorts, and other sorts of community investment.”

      They don’t though. That’s not what the lower classes actually do with extra money. Indeed, one of the things a market does for the lower classes is help supply them with a good they lack quite severely: conscientiousness.

      Imagine a young man who in theory has just these three choices:

      A – A vibrant career as a dole-financed graffiti artist
      B – A dreary career as a low wage fast food worker
      V – A dole-financed ‘anti-career’ of doing nothing

      I think we’ll both start by agreeing that A might be better for him than B or C, (though of course I must point out that B is clearly better once we take the rights of other people into account).

      But what if the only choices are B and C? What if most of these young men lack the talent and drive even for option A? In that case I assure you that B is better than C.

      I’ve met the poor. Only a tiny few are capable of being productive on their own. That means, only a tiny few are capable of being creative on their own. Most face a choice between menial creativity or none.

      Yes, yes, that’s an ugly thing to notice. God knows it’s a socially undesirable thing to say. The problem is, it’s true.

      • I find the claim that the poor are incapable of being productive (or creative) on their own to be dubious, much less the claim that any apparent lack of creativity is a result of insufficient personal virtue rather than being emotionally or physically tapped out from the various stressors that come with poverty. Further, it need not be the case that *all* of the poor be clever and creative. A couple of clever or creative people in each neighborhood, who can help the neighborhood to pool resources in productive, profit-making enterprises. And surely you’ll concede that there are plenty of people who are currently in poverty because they have simply never had the resources (or opportunity to acquire same) to escape.

        Setting that aside, I believe that we have evidence at this point that the poor, when given money, will use it toward their bills, general necessities, and kids, just like the non-poor. So even if your claim that the poor are uncreative is correct, they will now have more spending money and, thus, be more likely to have businesses seeking to meet their needs.

        • Sean II

          “I find the claim that the poor are incapable of being productive (or creative) on their own to be dubious…”

          You sure you mean dubious? Not just unpleasant?

          “Surely you’ll concede that there are plenty of people who are currently in poverty because they have simply never had the resources (or opportunity to acquire same) to escape.”

          No. Absolutely not. There are not plenty of such people. There are very, very few. As others have pointed out before me, plenty of grad students will show you what a conscientious smart person can do on just $8,000 a year.

          Ever see what happens to poor people when a legal or insurance settlement suddenly drops $100,000 in their lap? After just a few years you’ll find them back in the same condition or worse.

          Aren’t you even curious about why? Would it kill you, would it kill anyone, to consider one of the main possibilities: maybe they were different to begin with.

          • Raoul

            I think dubious fits. Maybe obscure. Or unscientific. Or not rooted in reality. It’s just wild c;

            I don’t think it’s an unpleasant thing to hear though, no. It’s curious. Not productive but mankind has a lot of unproductive conflicts going. They exist for people to please themselves and please others. It’s in the human capacity to derive joy from self affirmation as false as their claims might be, so it’s just something drolly a fellow human being might be saying. “Oh the poor they don’t know how to be creative, oh! How will they ever be productive! We need to discipline em, command em, ooh.”

          • j_m_h

            Pigmillion anyone?

        • You two do not need to be arguing, there is a happy compromise that gives poor benefit of doubt AND channels their labor via the free market to serve one another:

          • I really like your concept, a little too stingy for my tastes but I can agree that full employment and output should be the goal.

            I just have one question for you.. In your seminal GICYB expose, you mention that the program will only cost around $350B per year, and you also had a chart that showed roughly $975B per year in “welfare” spending, would your position than be to cut more than $600B in Govt spending by eliminating all other “welfare” spending?

            And if that is your position, then do you also advocate for cutting taxes by an even greater amount than the $600B so that we can preserve our private sector surplusGovt deficit?

          • No non-Medical welfare is the only thing I repurpose.

            Medical welfare, while it should be optimized far better than it is (like non-medical welfare), it should be done to increase outcomes, not save money.

            Non-medical is nearing $500B ($468B in 2011), and realistically, I think a $3/hr avg wage is conservative, that’d mean only 60% ($300B+ of so) of non-medical would get funneled into GICYB.

            But I’d go much further.

            I think we ought to have this moral code for American citizens:

            1. In a two earner household, you should be able to cover your household’s nut, no matter your trials and tribulations, and get to choose the job you do from amongst the things private citizens actually want done. There is virtue in meeting the need of a single real person, not the conceptualized needs of a group defined by a bureaucrat without skin in game.

            2. Because #1, we now have a FED and COMFY pool of happy labor and that is a natural resource that we ought to offer to Families and Small and Medium Businesses (SMBs) exclusively.

            Basically I’m a #distributist, and I want to create a rentier class of SMB owners who get a bigger badder subsidy than ANY other rentier class in America.

            Note: I go so far as to offer GICYB labor exclusively to blacks as Slave Reparations:


            I’m not dicking around here. I don’t do theory. I do software.

          • Sean II

            I, too, am just an anonymous member of the audience who is naturally interested in this new and exciting product. Part of what makes me curious is the fact that I’ve never met this man before today, and am in no way a confederate of his.

            Can you tell us more about your elixir, sir? Is there perhaps a special bargain for first-time buyers?

          • Jerome Bigge

            Check out his website. There’s a really good idea there!

          • Sean II

            Can’t believe I’m even bothering with this, but among countless other problems you’re ignoring a whole category of costs to the employer.

            Anyone who’s ever babysat a summer intern can tell you how hard it is to get above zero marginal revenue product with even a smart unskilled twenty-something. Most of the time you’re happy if they merely refrain from breaking things.

            If you think people are going to let the chronic unemployed – many of them unsmart, unskilled, and not conscientious – anywhere near their home or business for $40 a week, you’re nuts.

            I spend many times that amount each week, on various measures designed to keep such people AWAY.

          • You’re missing the point. GICYB grabs kids who want $ when they are14+ and begins the weekly feedback system, full time during summer and part time after school, and IMPROVES them vs. the other person they become in today’s system. They learn trades. They learn to be labor.

            And that’s bottom the 80% of GICYB users.

            It’s the top 20% that I’m after, the natural born hustlers. The guys, some of whom, in poor areas may rationally see crime as their most viable profit opportunity.

            Those guys, I want to give the other 80% on GICYB, and let them do legal stuff and have legit shots at becoming wealthy.

            Your personal experience with millennial interns has nothing to do with this. Nada. Zero.

            This plan let’s half of Detroit operate with 2x purchasing power parity, in a nearly true free market, with almost no regulations, and no business taxes. Middle and upper class in Detroit will find that they can EAT FAR BETTER CHEAPER int he bad neighborhoods.

            Rich white politically connected liberals in Chicago will HATE GICYB because black owned service businesses will come charging in from the poorest areas and decimate landscaping (public and private), rehab construction, mobile auto mechanics, catering, you name it… whites won’t be able to compete, the labor price advantage is too high.

            In Appalachia, where home ownership is very high, the lower cost of labor will make renting a decent place VIABLE. Right now, it simply isn’t possible to rent quality in poor areas.

          • Sean II

            “They learn trades. They learn to be labor.”

            Still not getting it. What you describe as “they learn trades” means someone must be teaching them, or worse, giving them a chance to learn by trial and costly error.

            That someone is called an employer, and from their point of view what you’re proposing is a cost.

            Indeed, since supervisory attention is an especially dear thing in the workplace, what you’re proposing is a very unpleasant cost.

            As an employer, I’d want a whole separate subsidy – in cash, and not in your discounted ZMP or NMP labor – before I’d even consider such a thing.

          • Ok Sean, listen VERY CLOSELY, because while most of the time, you are not learning new things, this is not one of those times.

            1. There are in ALL ghettos Appalachian and inner city CAPABLE ENTREPRENEURS who do not reach their full potential.

            2. CHEAP LABOR has ALWAYS and FOREVER been an advantage for entrepreneurs.

            3. GICYB is structured to separate chaff from wheat in poor areas and let the WHEAT put the chaff to work and keep the profits. You and I don’t get them, but guys like me in poor areas, do get to run the show.

            Neither 1 or 2 is debatable.

            You are free to get VERY SPECIFIC about why the top 20% in poor areas aren’t going to manage the bottom 80% out of their own greed and profit, but you are literally arguing against the vast literature of development economics.

            It could be perhaps that you once read some Tyler Cowen talking about how some employees have negative marginal product, but it doesn’t hold in this case, because this is NOT a firm.

            This is very much a function of the gig economy. Think Data Darwinism and Uber, no one can lose more than 1 week of labor, you are dumped if you not deliver, and the machine is set up to punish outright laziness. Incompetence is allowed, BUT because of the magic of two sided search, only the mentally disabled will be given free passes.

            This system will find the folks begging at road sides and instead made them spin ad boards at roadsides.

          • Sean II

            I’m sorry, did you just say that negative marginal revenue workers are only a problem within firms?

            Why would you think that?

          • Sean THINK. It requires you think mechanistically. You have to play it out step by step.

            If you hire Person A, and you are not able to extract $40 worth of value for the $40 you spend, you do not offer the job to them again.

            ALL firms, ALL employers will occasionally run into workers that aren’t worth the salary.

            The difference is that most firms are structured for longevity. They HAVE TO BE. Mostly because of needing to train workers on job, so worker churn is a cost.

            But some aren’t!

            Some jobs, whats called the ever growing Gig economy, are built on approaching labor in a different way, by making a much smaller commitment to them, shrugging off churn, and sifting…. with the glorious help of feedback systems.

            If you’ve done lots of hiring on Craigslist or ever filled up a truck with guys sitting outside Home Depot, this will make sense.

            Or if you’ve used Uber, AirBnb or Task Rabbit recently, then you’ll also understand this.

            Or if you’ve used elance or odesk to hire developers. Or if you’ve used Fiverr.

            So you understand Sean, I’ve used all of these in the past year, most guys like me have as well.

            Is this is all odd to you, it’s OK, you just don’t understand where economy is going or why.


            See, what Tyler’s firm analysis misses, and he’s not really on your side on this, he’s versed in GICYB, is that the shitty employee in a firm KNOWS he has leverage, he’s less worried about being fired.

            GICYB makes getting rehired by a job you like take effort.

            GICYB makes getting to rehire the worker you like take effort.

            There are always going to be a bottom 20% of the 30M in GICYB who aren’t worth the effort, BUT those who are lazy will be stymied, only the truly incompetent in the bottom will be deems disabled and forgiven.

      • Raoul

        Good thing is, if you give money to unconditionally, they have option A, and the preliminary requirement, time of their own. As of now they only get V, look for jobs and tell themselves its their sole calling and if they can’t succeed they are complete and utter failures. Plus a heap of paperwork.

        I’ve yet to meet a person less capable than me, so.

        • Sean II

          “I’ve yet to meet a person less capable than me, so.”

          See, even there you give yourself away. That sort of self-effacing remark is a classic counter-signal of class and status, a back-handed compliment you give yourself. After all, who but a confident, comfortable person would say such things about himself?

          To understand the real-life chronic poor, one of the first things you need to know is: they don’t do that.

          They don’t sit around making ironic remarks to advertise their introspection. The real poor aren’t very good at irony, remark-making, advertising, or introspection. Though I’ll grant you they’re tops at sitting around.

          • Raoul

            Well, considering my whole other comment comes with the intent of blunt self praise, that’s not hard to figure out. Not sure why you wrap your disapproval into fancy words while providing neither why that’s relevant nor what you’d like to see instead.

            Now my claim is, give people money and time to think and they’ll produce similar results, fixing the problem of a chronically poor’s lethargy. As opposed to worsening it by making people obedient through force.

          • Sean II

            Love how you have “give people money” and “make people obedient through force” as the only options.

          • Raoul

            Well, I don’t think the state is good at providing goods and services period c;

      • JoshInca

        I’ve met the poor. Only a tiny few are capable of being productive on their own. That means, only a tiny few are capable of being creative on their own. Most face a choice between menial creativity or none.

        Of course, those poor have spent their lives immersed in sub culture, driven by the welfare state, that has devalued their initiative and rewarded dependence.

        I’ve known a number of poor immigrants, often completely illiterate and innumerate, who nonetheless were productive, sought to improve their life through personal initiative.

        Sadly, their children often resembled the children of the native poor more than their parents.

        • Sean II

          I don’t see that so much with Asians. The pattern there seems to be:

          Generation 1: Entrepreneurship
          Generation 2: Upper-Middle Class Credentials Raj
          Generation 3: Rinse, Repeat Step 2

          In this respect what you see resembles the classic Jewish American trajectory, where mom and dad inhabit a milieu of high-risk, high-reward market competition, and yet dream of the day when their children reach the promised land of an 8:00am to 6:00pm salaried position at Cedars-Sinai.

          Come to think of it, we don’t talk enough about one of society’s most anti-market groups: parents.

      • j_m_h

        “I’ve met the poor. Only a tiny few are capable of being productive on their own.”
        That could describe a lot of people who are non-poor that I’ve met. I suspect a certain amount of that depends on your defiition of being productive on their own though.

    • TracyW

      Every analysis I’ve seen of a UBI that actually looks at paying for it is that it would pay less per person than current welfare, so I don’t see how the lower classes would have more money (although I do vaguely recall one of my professors saying that in the US a single healthy man gets very little public money, so perhaps for that specific example it’s different).

  • Rob Szarka

    It’s not immediately clear to me, though, that the bulk of the negative effects of unemployment are due to unemployment per se, rather than to the lower wealth and difficulties in smoothing consumption (and investment in human capital) that follow from unemployment. Since a UBI would address these effects, this makes your case for wage subsidies rather than a UBI less compelling.

    • Jerome Bigge

      Seniors on Social Security (nothing else) live about the same lives as people on UBI would. Get a public library card. Much better than sitting in front of the TV watching soap operas and “Judge Judy”. Then there is fishing, which gets you outdoors. Hunting in the fall. There are also various “odd jobs” that you might be able to do. Housing is a problem for low income people, although for seniors there are apartments where you pay 30% of your SS and are allowed to deduct health care expenses from that. You’ll probably have to move somewhere to get into one of these, but they are a good deal for low income seniors.

      • Sean II

        “Seniors on Social Security (nothing else) live about the same lives as people on UBI would.”

        No reason to think that. People idle near the end of life who can look back on years of productive work are not the same as people in their late teens and early 20s who have never been anything but idle.

        But you’re kidding about the library card, right?

        • This is all besides the point.

          Forget UBI, as mentioned above, GICYB always delivers more consumption to the poor for whatever the $$$ of welfare is. THAT is the winning argument.

          Moreover, even SS can be folded into GICYB. Uber for welfare works just as well for 75 year olds. Everyone who has someone offering them work, SHOULD be incentivized to take it – until they die.

          • Sean II

            I’m not ignoring you. I’m just trying to figure out if you’re a person or a spambot.

            If the former, I promise eventually to respond.

          • rofl. Dude I’m the guy who has SOLVED this stupid issue:


            This isn’t a theory, this is a total line by line policy and software roadmap.

            Road tested for years with Tea Party faithful at Breitbart.

            Buy in from HARD LEFT econ activists like rortybomb (Konczal) and Freddie deBoer.

            Outright endorsement from serious econ academics Scott Sumner, Miles Kimball, and Keynes expert Roger Farmer.

            I have CRUSHED the MMT crowd and their stupid little Job Guarantee.

            I have leaped over the whiny UBI crowd in Europe with a single bit of logic:

            Whatever increases consumption, increases welfare, unless you are an effete dilettante.

            Make no mistake, ALL roads lead to Rome.

            There is zero chance the current welfare system exists in future.

            There is zero chance a workless UBI gets done.

            Frankly, I judge BHL harshly because they don’t just say, “Morgan solved this and we are grateful.”


          • everyday reader

            Skip down to his implementation ideas, especially the one on no closed circles. This guy is nuts, it’s a huge waste of time.

          • Dufus, you understand a machine can sniff out closed circles right?

            What your looking at is what a technologist would call obvious.

            Literally ask anyone who builds tech startups if they could remake welfare as a job app that:

            1. clears labor weekly
            2. runs cred / feedback system
            3. encourages documentation of work
            4. allows marketing of skills
            5. manages the accounts of buyers and sellers

            And they are going to say, “oh you want me to build Ebay where every auction is $40 per week, no reserve?

            and you say “YES, but the seller doesn’t have to take the highest bid, he just picks the offer he wants.”

            And it is DONE.

            There are 10K tech founders, if you know one ASK HIM.

            And then apologize.

          • Kurt H

            Seriously. This guy’s site is like Time Cube for alternative safety nets. Ignore this arrogant fool.

        • Jerome Bigge

          I read at least 200 books a year that I get from the public library. I’ve been a user of the public library since I was old enough to get a library card. Used the grade school library before that. I was born in 1938. Different “world” back then.

          • Sean II

            Yeah, it WAS a different time. The price of reading was enormously higher than it is now. You needed either money to buy books or time to go fetch them from the library. Now anyone can bring a torrent of text right into his house for almost nothing.

            And yet you still managed to read back then. And yet…the poor still don’t read now.

            Can you still not see we’re talking about different people, different kinds of people?

          • Kurt H

            Different kinds of people with different family income, different educational opportunities, different childhood nutrition and medical care, and living in neighborhoods with different degrees of violence and available quality jobs. But none of those differences apparently matter, these are just born losers, amirite?


            Even if a UBI would encourage permanent sloth in some of the poor, this would not universally be true. Moreover, as soon as you recognize that many of the bad habits of the poor are built up over years of missed opportunities, the generation that grows up with a UBI system will have fewer roadblocks. Thus, the UBI would reduce the number of “undeserving” poor over the long run.

          • Sean II

            Kurt, you live in an age revolutionized by genetics. The last 15 years have been only the beginning.

            Everywhere we look, we’re finding that previous estimates of environment vs heredity were wrong, and that they erred by massively overestimating the power of environment.

            Any special reason why you think chronic poverty should go on being studied as if none of this ever happened?

            Any special reason why you think we should prejudicially rule out one of the best possible explanations, before we even start?

            Finally, to throw down a moral challenge, how can you presume to care about the poor without first trying to understand them?

          • Kurt H

            That is an excellent non-response to the half dozen confounding factors I mentioned that an honest analysis of poverty would require.

            How can you presume to care about the poor when you talk about people in poverty like they are a separate lesser species? You might have missed the memo, but eugenics went out of fashion about 70 years ago. Technically, real scientists had rejected it about 20 years before that, but a lot of powerful people liked the idea too much to let it go.

          • Sean II

            All the factors you mentioned fall into the category known as environment. I talked about that, sure enough.

            And hey, if you’re gonna Godwin me, just fucking Godwin me. Don’t hide behind phrases like “70 years ago…”

            As for the rest of it, I think you’ve announced yourself very clearly: Your plan for poor people is to say nice things about them.

            Cool. I’m sure that’ll start working any day now.

          • Kurt H

            Have you considered why it is that reputable scholars in the relevant fields don’t back up this Bell Curve garbage? Or do you think it’s a “conspiracy” driven by “political correctness”? Consider how silly that sounds for you to assert higher knowledge than the relevant experts in the field.

            As for your Godwin comment, are you asserting that the rejection of eugenics by the scientific community is not based in fact — that’s it’s just a visceral reaction to Nazi “excesses”? Because, man, I didn’t think your rabbit hole went that far down.

            As for saying nice things about the poor, I do happen to think that your “solutions” are going to be inherently problematic if you insist on talking about them like unruly children. At the very least, they’re not going to be well received. They might be slightly ungrateful about the help they get from “superior” stock like yourself.

          • Sean II

            I like your style, man. You claim that all reputable scholars in relevant fields agree with you. So anyone who doesn’t agree, you can just dismiss by calling them disreputable or irrelevant. If that doesn’t work, you’ve got the other N-word standing by, available either for direct use or for sly insinuation.

            In fact, realizing that you can never be defeated, I think I’ll completely change my position.

            Let me make sure I have this right: The poor are simply victims of circumstance. They differ from everyone else only by having less money. Traits like intelligence and conscientiousness 1) don’t exist and 2) are totally irrelevant to economic outcomes.

            I’m fuzzy on this last part: Does heredity not exist at all, or is it just prohibited from having political significance? For example, is it okay to talk of heredity in connection with things like height and cancer risk, but not okay to talk about heredity in intelligence? Help me out here.

          • Jerome Bigge

            Part of the problem is likely cable (satellite) TV. People manage to dig up the money to pay their cable or satellite provider even if they can’t afford much of anything else. Same thing today with cell phones. You see people walking around talking on the phone or texting. The phones and the plans aren’t cheap by any means either. But they seem to find the money to pay these sort of things…

    • Sean II

      Sorry for the repost, but:

      Highlight: “According to the literature, being unemployed features among the strongest individual determinants of unhappiness, and the non-pecuniary effect of being unemployed may be larger than the effect that stems from the associated loss of income”

      • Rob Szarka

        Not a very strong claim, and it’s also talking about something different: the (contemporaneous?) effect of unemployment on subjective reports of happiness. Not to discount that entirely, but that’s a different issue than the kind of long-term effects that BL mentions above. Meanwhile, the Urban Institute report linked above says this: “Lower wages and lifetime incomes are associated with longer periods of unemployment, but the reason for the decreasing earnings prospects is not clear. In domains where we might expect to see strong evidence, such as mental health outcomes, the evidence is murky at best. When there are patterns of declining well-being as unemployment extends longer, the extent to which declining well-being is due to increasing loss of lifetime income alone or to time out of work is not clear.”

        • Sean II

          So the hope you’re holding onto is that maybe unemployment makes people miserable in the short-run, but happy in the long?

          Why think that? What would you expect to change?

          • Rob Szarka

            I’m not “hoping” anything in particular. And the question is not whether unemployment is bad for people, but whether it’s bad for reasons that a wage subsidy can address better than a UBI. (And I’m not advocating either. Just making a point about the original poster’s argument.)

          • Sean II

            The question I’m interested in is whether unemployment is bad for people in and by itself, because it cuts them off from productive activity in the market.

            We can’t consider the matter of UBI vs. wage subsidy without answering that question first.

            My view: folk wisdom, social science, and intuition all combine to tell us that unproductive = unhappy.

            Mix in the fact that working in the market is the surest way to be productive, and you’re halfway home.

          • Libertymike

            Congratulations. You have a fellow traveler.

  • awp

    It is my understanding that most forms of the “dole” actively discourage work through the increase in the implicit marginal tax rate. The UBI would remove that discouragement.

    Also, I think you brush off the charge of paternalism too quickly.
    The UBI is maternalism, we care about you so we are going to give you this.

    Your arguments for Wage subsidies are paternalism, I think you I know better than you what you want, so I am only going to help you out if you do what I think is best for you.

    • Rob Szarka

      In terms of changing the incentives to work, though, I think it’s an empirical question whether a particular UBI policy is better than a particular wage subsidies proposal. One issue is the interaction of income and substitution effects at the low end. Another issue is that the taxes required to finance the policies themselves have disincentive effects.

      • Les Kyle Nearhood

        I think it would have to be done correctly. There are ways to do it and ways not to do it. I am uncomfortable with a pure guaranteed income but would not mind something that was a safety net which kicked in at a certain income. The key being that you would have to make it so that a person did not lose benefits due to getting a job on a one for one basis. That would indeed discourage work.

      • Jerome Bigge

        I doubt that the taxes would be much higher than what we are paying now. Most people aren’t aware that their employer is paying half of their payroll tax. It’s really 15.3%, not 7.65%. The money either is coming out their wages or is passed on to the consumer in the form of higher prices.

        • GICYB requires NO new taxes and delivers poor 30% more consumption:

          You have no excuse GICYB always delivers the poor 30%+ more consumption than UBI.

          Stop trying to cut welfare to the poor. It is disgusting.

          • JoshInca

            I find you proposal interesting, as a variation of a gmi; but a couple of problems pop up right away.

            1) It completely precludes self employment.

            2) It could be easily gamed – give me $80 a week and I’ll ‘hire’ you for $40 to get your bi.

          • I cover the gaming issue this this in the What Abouts…

            As to self-employment this IS self-employment for everyone. What’s more the hustlers / winners in the GICYB then spin up their gig into a Business, the moment they can afford $40+ for guys to rop in.

            I make a great hamburger, I save up $10K and work with five of my good buddies (maybe we pool our resources), to “hire” then for $40 a week, give them a piece of the biz, and we set up shop next to a McDonalds in a food truck and churn out High Quality gourmet product that is cheaper than the Clown.

            Again, imagine there is a brain, one that is good at figuring out angles and exploiting them, one that is good at Hustling…

            My plan is built to REWARD THEM FIRST over all others in the poor areas, the very guys that “might” be able to find a loophole the machine can’t catch, well they are in the top 10% of the GICYB crowd, and GICYB is built to help them MAKE BANK doing legit stuff that serves the local community.

  • This discussion sorely needs exposure to another alternative, the MMT JG program. It satisfies many of the problems elucidated by tthe poster:

  • Jerome Bigge

    Most of the jobs that were “lost” are not ever going to return. Increased levels of imports along with mechanization, automation means that fewer people will be needed to meet the demand for goods and services. Effectively we now need fewer and fewer unskilled workers than before, especially with the level of immigration (legal or not) that we now have. Nor is there any “new technology” that would change things so that more workers are needed. It should also be understood that the minimum IQ level needed for productive work today is much higher than it used to be. My grandfather dropped out of school at the end of the 5th grade, got a job as an apprentice in a foundry (late 19th Century) and when he retired (after WW2) with a good pension, he had been foreman over the entire foundry. Back then, if you were willing to work and learn the job, you had a good future waiting for you even without much education. Not true today. As technology continues to advance, a high school diploma will no longer be adequate for most jobs. Effectively those on the left hand side of the “Bell Curve” are going to be condemned to frequent unemployment and when employed, the jobs will only be those which cannot be “automated”…

    We will eventually be forced to create something like the UBI.

    • Les Kyle Nearhood

      I have a big problem with that prognostication. Mainly because industrialization, trade, and automation have been destroying jobs for several centuries now and always new jobs have arisen. As recently as 11 years ago we were very near full employment in the US. I am betting that the need for human capital will still be there, we just cannot now foresee what form that will take.

      • Jerome Bigge

        All the new technologies coming on line now require fewer workers, not more. Today’s cars require less service than those of the past and last longer. That means fewer mechanics, auto workers in general. We are importing more and more, sometimes in the form of parts that are used in various machines here in the US. Your “American made car” has lots of parts made in other parts of the world. My TV set was made in South Korea, my Gateway laptop computer was made in China. GM assembles a lot of cars in Canada. Lower health care costs are one reason. Having the world’s highest priced health care hurts our ability to compete with countries that have lower health care costs. Capital will always go to where it can get the best “return” on investment. Unfortunately that isn’t “here” any more for lots of stuff.

        The Remington electric shaver I just bought was “Made in China”. You will find that your shoes were probably made somewhere in Asia. A lot of the food we buy today was grown outside the US. Even services like medicine are increasingly “automated”. The drugs you take could have been made in India. India is now a major supplier of generic medicines. Our military drones do what human flown aircraft used to do. Our birth rate is dropping, so fewer schools, teachers are needed.

        Then also there is the issue that people have to earn the money to buy things. The relative decline in incomes means people have less money to spend. Our retail trade industry is definitely moving away from “service” to one of fewer employees, do it yourself check outs.
        Here in Michigan they no longer put prices on individual items, only on the shelf they are on. So less people are needed relative to sales. Again that means fewer jobs over all. Ever stop and consider what’s employee to sales ratio must be? And Amazon has computerized as much of their warehouse systems that they can.

        The licensed professions (medicine for one) create jobs because of government regulation and licensing. Take away prescription laws and suddenly your doctor probably “loses” a third of his or her patients sitting there in the waiting room. The health insurance system also “creates jobs” by requiring unnecessary office visits and lab tests. That’s one of the reasons our health care costs are so high. “Make work” creates jobs that wouldn’t exist in a true free market system. There’s a lot of government employees that have jobs because of government rules and regulations. But they do not add anything to the economy. They are “dead weight” that is supported by those workers who are actually producing goods and services people want to buy. Without these “government jobs” we’d have a lot more unemployment…

        • SteveD

          The means by which public sector activity is financed is more complex than you imply above. Yes, your taxes do go to pay the salary of the fireman or school teacher, but, when either spends it, their salary contributes to YOUR WAGES. So who is supporting whom–is the government dependent on taxation of private sector salaries, or are private sector salaries dependent on sales to government institutions and employees? Obviously, they are largely interdependent and rely on the continuation of the flow between them. At the federal level, we can spend in deficit indefinitely and without fear of default, meaning that the government can spend even without tax revenue, and its spending can create private sector sales–and jobs. Therefore, in a world where we have a difficult time generating sufficient demand to hire all those willing to work, the private sector is actually more dependent on the government to boost its sales than the government is on the private sector for tax revenues . So now, tell me, who is the parasite?

        • Les Kyle Nearhood

          Your argument is not compelling because as I stated, anybody at any time in the last 300 years could have made the exact same argument. Every new process takes fewer workers, and trade destroys some domestic jobs. But none of those predictions of doom ever panned out. (except in economies which embraced a lot of socialism or economic fascism.)

          • Jerome Bigge

            The change from agricultural work to industrial work also had the effect of “work the year around” which was not true with agriculture as winter pretty much was a season of “rest”. Compared to the growing season where the harvest was the time when people had to work from sun up to sun down, often even after sunset if the Moon shed enough to continue working.

            With industrial work it was “year around” because production of industrial goods was not dependent upon the season. It was also possible to operate some industry on a 24 hour a day, 7 days a week basis. So you had “shift” workers which allowed work to continue day and night once some sort of lighting was available to allow people to work at night as well as during the daytime. Productivity was relatively low and little skill was needed to do the work. Making the work simple enough allowed employers to put even children to work along with illiterate foreign immigrants. The wages paid there in the 19th Century were far below the actual level of productivity which allowed the owners to live lives of luxury while at the same time kept the workers in a state of poverty. The rate of capital accumulation was high, encouraging the use of machines to replace workers. The surplus production was exported, which for a time did solve the problem of supply versus demand we face now. It was because of this that workers could unionize and gain higher wages which the owners of capital could grant because there were eager buyers for everything produced. This state of affairs came to an end in the 1980’s as the demand for US made good declined and more and more Americans were buying better made, but cheaper foreign products. I recall back in late 1971 comparing a Toyota to a Chevy Vega. The Toyota was far superior in quality of workmanship to what GM was capable of back then.

            Work today is increasing more and more skilled work, with unskilled work being “exported” to where it can be done for the least cost. The non-exportable unskilled and lower skilled jobs will eventually be automated to the point that fewer and fewer workers will be necessary for any level of production.

            The problem comes when people no longer have the money to purchase sufficient goods to keep the economy going and there is less demand for exports as existing less developed countries become more developed to the point that they need fewer imports. Capital is now seeking better returns outside the US (which is why so much is now made outside the US) than investing it in this country where the return on investment is not as good as it is elsewhere today.

            We simply do not any longer need the amount of labor that we used to need to produce today’s goods and services… The net result is a growing level of unemployment and also one of “underemployment” (part time work) because the “demand” is no longer there today to bring hiring back up.

            The solution may not be the UBI, but we do have in effect a “surplus of labor” because there is no longer enough work anymore to provide a job to anyone who wants one.

            On aspect of this is the growing number of “lawn care” businesses here locally all competing to do “yardwork”. Unlike most small businesses, it does not need much in the line of capital investment to get one of these going. Then we are seeing outfits like Uber going into competition with the taxi companies. All of them competing to serve the need people have for transportation. Looks like small “part time” work is going to be part of what a developed economy ends up with…

  • Again GICYB – Uber for Welfare:

    The logic here cannot be refuted:

    1. The purpose of welfare is to increase consumption for the poor.
    2. The poor tend to live and work amongst themselves.
    3. Requiring work for GI, reduces the price level in the ghetto, and increases the purchasing power of the GI. For any given amount of GI, requiring work will deliver 30%+ more consumption.

    Make the argument, and force UBI supporters to say increasing consumption isn’t in the general welfare of the poor.

    • Very cool plan, Morgan.

    • William Ellis

      Morgan, Three things….
      1) You have done a great job making your proposal far more palatable to lefties like me. Some friendly advice… Drop the word ghetto. You can make your same point without making it racial. ( I know that technically “Ghetto” is a race neutral word, but what matters is what people actually hear. )

      2) Do you remember when the right wing media was rabble rousing about how Obama’s program to let states experiment with new approaches to welfare was characterized as “ending the work requirement” and “guting welfare reform”? ( Did not happen did it? ) Did you ever look at if your plan could be a candidate for an experimental program under the Obama guidelines ? It would be interesting to see if it would fit or if it could be tweaked to fit . Or even if it could not fit, to find out why.
      If you could get it to fit you would have an actionable cause to pursue. I would think that Texas would be fertile political ground for your idea. If you had one locality in mind, predisposed to be receptive… I bet you could get some prominent economists to address the leaders… to come to your rhetorical aid in selling it.

      3) Your proposal says it would do away with the Minimum wage, but it seems to me it sets a minimum wage.

      Sincerely…Bill Ellis.

      • Bill, I appreciate your feedback, it’s HARD to not use word ghetto and talk at length about what I’m doing with GICYB.

        “poor areas” and “poverty dense” repeated over and over makes it seem like I’m not just saying ghetto. Perhaps I should explain right upfront, I mean this to work from the Appalachian to Detroit ghetto.

        The main thing is that I am actually trying to solve for is the ghetto, not unemployment.

        Yes, I do solve unemployment. I do solve for illegal immigration. I do solve for ending bad monetary policy. All of these things are really just downstream bad effects from getting the first step done wrong: We CANNOT use wages to deliver safety net. It’s literally like fighting a fire with gasoline.

        But really, personally, what I’m doing is taking the abundance of poor labor in poor areas and treating it like a natural resource that i want to GIVE to guys like me, entrepreneurs, who even though they aren’t from my background, they have my gene.

        I get into it here with my outright support of Slave Reparations:

        What’s different from me (and entrepreneurs) vs the guys (pretend wonks) who chatter about this, is that I come into this as a fully self-interested natural resource exploiter. ANY hustler in any area looks around to see what he could take advantage of, and 30M poor unemployed who are already being given welfare, and are just sitting, WELL, if we cleared their labor at literally and almost throw away cost, well that’s a MASSIVE TON of natural resource to exploit.

        That’s why the trick of making no one travel far for work automatically delivers the EXPLOIT gains to minorities.

        That’s me personally, I’m a distributist. I also want to only let Mutual Local banks have FDIC coverage.

        But FOR THE POOR non-entrepreneurs, being required to work, means they get super low prices.

        I built out a platform for a property management group that manages close to 6K single family homes – their main client is Goldman.

        Basically, as long as the rent is $1200K a month or more, it is possible to deliver 65% of the rent to the owner every month, after all costs, insurance, taxes, I mean everything – marketing, vacancy, eviction everything.

        But it won’t work for a home that is $700 a month.

        WHY? Cost of labor.

        Where do slum lords come from?

        They come from not requiring the people who live in slums and receive welfare not to be put to work FIXING UP SLUMS.

        When 30% of a beat up neighborhood is receiving livable aid, if we are honest about pricing the labor, the neighborhood will not be beat up.

  • Remember the genius of Miles Kimball, an actual economist:

  • Michael Byrnes

    Doesn’t the level of UBI matter here? If we had a UBI of, say, $100,000 per year, I could imagine that a lot of people would opt for idleness (at least until the inevitable inflation pushed an annual income of $100,000 below the poverty line). But if the UBI was a poverty line income, is there really a major concern that people would opt for idleness due to the reduced incentive to work? Some people might, I sppose, but so what? I think it’s fair to say that the vast majority of people want to live better than that, and are willing to work in order to live better than that.

    I will personally attest to the negative effects of unemployment on physical and mental health… I have experienced that first hand. But I will also say that the worry about being able to adequately provide for myself and my family was a major contibuting factor to my distress – distress that, to some extent, has remained with me to this day even though it has been almost seven years since I was last unemployed. Distress that is always in the back of my mind, particularly when I’ve had a bad day at work, or when the company I work for gets bought or sold (which has happened five has h, or when I have a choice between unemployment or signing a non-compete agreement that basically trades away my ability to find work at some future time versus being able to work today, etc.

    If we had a UBI I’d still be working, in large part because I want better than poverty for myself and my family. But I would still sleep better at night knowing that should there be, say, a massive economic crisis that had a major negative affect on employment, I would have a little bit more financial breathing room. What good would wage subsidies have been in 2008-2009?

    I think that, as a society, we have a very splt personality attitude about work. On the one hand, there is the view that work is a means to an end. It’s a cost. Labor is a scarce resource, and this scarcity often limits the amount of real wealth that can be created. Labor-saving technology, when available, makes us richer because it raises productivity.

    But then there’s the Puritan view – we don’t work as a means to an end (compensation, financial and otherwise), we work because idleness is evil. Labor-saving technology is the work of the devil!

    • JoshInca

      Excellent points.

  • Barnaby

    I’m just about to start a dissertation on the effects of UBI. I’m sad to say there are only a few reasonably sized studies in to the effects it would have on labour market outcomes. One such study is ‘Mincome’, which found that hours worked fell only 1% for men, 3% for married women and 5% for unmarried women. Your assumption that UBI would lead to a significant rise in unemployment, is not by any means supported by the albeit limited amount of data, nor is it necessarily supported by theories of labour economics.

    I would also question whether one can prescribe unemployment itself as a root cause of unhappiness. I would expect that it has more to do with notions of class/worth/ability (or lack of) that may arise from being unemployed, rather than just being ‘bored’. Surely a ‘Universal’ policy would help, at least in some way, with the social/psychological implications of not being in paid work. People are generally a lot happier and a lot more productive doing something they enjoy.

    Maybe we’re not ready yet but at some point in the future our attitudes towards work are going to have to change

  • Mike Knone

    Just found this website and this article. You individuals are on to something. Thanks! I look forward to more informed discussion.

  • Raoul

    “through wage subsidies for low-skill work. Flanigan says this makes me a paternalist.”

    I say this makes you supporter of zero marginal cost labor. I’d rather see machines and code get us closer to a zero marginal cost economy (and they will out compete labor at any price point anyway, gotta be practical here). To accelerate we need to increase labor cost, so I’m all welcoming a slight 1% dip in labor supply. Sadly releasing state employed will more than make up for that dip, in my prediction. Can’t stop them machines either way c;

    Also, worrying about “encourage mass idleness, a serious and worsening social blight among the less educated and less skilled” and answering with forced labor, is paternalistic. The logic here is that you see a problem and forcibly prescribe a behavior pattern to the afflicted. Doesn’t make you a parent or a good one at that, but paternalistic. Just how it is.

    Now I can’t be arsed to read the rest of the article because your worry is baseless, if you spent some time on history and observation of real world structures. Special mention to marginal tax rates and other hard limits on earning on assistance programs.

    • This is incorrect. AND BTW, you do not understand tech.

      The poor live and work amongst each other.

      Requiring work for welfare means that their price levels fall dramatically.

      Going from a MW of $7 to $1 (with wage subsidy), like my GICYB plan does, is a NON-MARGINAL decrease. It is 700%. It will have the positive impact on prices equal to the negative impact a MW of $49 will have.

      There are literally ZERO economists who do not agree that non-marginal changes in the price of labor have massive impacts on demand.

      Literally ZERO economists.

      Look, wherever there are 30% unemployed living on welfare, the price of haircuts there should be $2, daycare should be $50 a week. Four guys cooking ribs should be able to kick shit out of their food desert McDonalds. LET THEM.

      • Raoul

        “Four guys cooking ribs should be able to kick shit out of their food desert McDonalds. LET THEM.”

        Agreed, that’s why wage subsidies help MC Donalds and I’m all in favor of a basic income as an alternative.

        • Good to have you aboard MY plan GICYB, with requires work, but precludes Fortune 1000 from hiring:

          Only my plan delivers #distributism.

          • Barnaby

            Very similar to the mincome project!

          • Raoul

            I’d consider it if you can chose yourself as your own boss c;

          • it’d work like this:

            1. You can start a business and get a income tax credit.
            2. You can hire cheap.
            3. You pay no other taxes, payroll at all, or income up to X over norms, since you get a tax credit.

            But it’s not a lot, just enough to incent those who want to take on the roll of employer to bust ass.

            You simply don’t feel like working, you starve.

            It’s the best deal someone like you is ever going to get!

          • Raoul

            “1. You can start a business and get a income tax credit.”

            Already done so I guess I’m good! Just don’t make the hurdles ridiculous for the others c;

            “You simply don’t feel like working, you starve.”

            Nah, if I didn’t feel like working I’d die of thirst, as drinking water requires work.

          • NO clutter. Ebay is not clutter. Uber is not clutter. This means all the welfare offices get closed down.

            Work = private citizen pays you money out of own pocket.

            Whats so great is that GICYB makes everybody their own boss.

            You open up your Uber for Welfare app, you take a gig for next week very near you and you go do it. Done and done.

  • JoshInca

    A number of random observations:

    1) The data on the unhappiness associated with long term unemployment is driven by the experience of middle class people whose income was primarily from wages that suffered financial hardship because of the long term unemployment. In which case it is impossible to separate the cause from the effect. I would be interested to see a study done on the effect of lose of employment for people that are financially secure and do not ‘need’ to work to maintain their lifestyle and status – I suspect that the results would be quite diffferent.

    2) Lower family formation being blamed on a lack of marriageable men is seriously overblown and inherently biased. The flip side is equally true, that there is a lack of marriageable women. Historically, in the West, poor people with few prospects have still gotten married and formed families. What’s changed is that people’s expectations have dramatically diverged from reality and the welfare state has separated child rearing from marriage. BMI would be a neutral to slightly positive influence on these larger social factors.

    3) The problem with means tested welfare, which any direct work supplement would necessarily be a part of, is that it creates effective marginal tax rates over 100% at the threshold of leaving the program(s) which is what creates the welfare trap in the first place. With a second order effect of incenting tournament behavior, which further entrenches the welfare trap.

    4) The decline in total hours worked is a reflection of our overall wealth and nothing to be lamented. Two hundred years ago the average person worked many, many more hours per week, month, year and lifetime than the modern equivalent. Asking a person then, what they thought of a society with our level of hours worked; they most likely would have said that it must be a poor or savage one.

  • Sgt Zim

    All of those points overlook fundamental economics: government involvement in markets, including the market for labor, always always always creates artificial shortages which always puts upward pressure on prices. We’ve seen this over and over and over again. This makes life HARDER for poor people, not easier.

    More importantly, you BHLs overlook the fact that it is immoral to force me, at gunpoint, to subsidize someone else’s life.

  • Kennon Gilson

    Libertarians have been successfully working on voluntary-direction endowments to support a basic income/goods for decades. See

  • TracyW

    But either a UBI or wage subsidies would expand the choices of their intended beneficiaries relative to what they would be in the absence of any government provision at all.

    On the other hand, a UBI or wage subsidy reduces the choices of their intended payors relative to what they would be in the absence of any government provision at all.

  • TracyW

    ” Employment’s psychic benefits come from engaging us in challenges to overcome, encouraging us to develop and realize our inborn talents, and involving us in projects and purposes larger than ourselves. But we can obtain these benefits just as well through hobbies, volunteer work, and family life.”

    It strikes me that this last sentence is wrong. The thing about hobbies, volunteer work and family life is that you can walk away from them if they get tough. Yes, morally, there’s a massive difference between walking away from your hobby and walking away from your kids, but some people do do the latter. And, sadly, kids can’t escape if they’re being abused, until they grow up, so people can do really badly at parenting for years and years, much worse than at most jobs. The negative consequences of terribly parenting maybe come 30 years down the track, unlike say being unable to keep a job or your clients.

  • j_m_h

    I’m something of two minds on the question but suspect the UBI approach is still better than what we have today.
    With regard to the benefits of work versus the leisure life it’s worth pointing out that historically the leisure class included people like Darwin and there was a culture related to “doing something productive” even if working was not necessary. Granted the incomes we’d all be getting would not be on par with the allowance someone like Darwin would have enjoyed the concept would still be the same. The point here being that it’s not the need/forced nature of having to work that is the whole (and possible not even the primary) drving force here.
    The other thing to note is that with a declining demand for human labor to produce the margket goods (and services) demanded in a modern ecomony policies that have a reductive affect on labor supply are not necessarily bad in terms of social incentives.

  • Theresa Klein

    I am late to the party again.

    There is another important difference between seeking fulfillment through work and seeking it through hobbies :
    Work connects your labor up to what is desired and needed by others via market pricing.

    For instance, staying at home making model trains might be personally fulfilling for you, but unless you can sell those trains on E-Bay, it’s not helping anyone else.

    By having to work for a living people are thus compelled to produce something that is objectively valuable to others, instead of living in a narcissistic void. Work connects people to the economy. The UBI isolates them from it. Ultimately, work subsidies would be better for society as a whole because it would increase net productivity.

    You can make similar arguments for volunteer work and home-making. The UBI alters the price signals that individuals are getting so they end up expending their labor on a less productive activity. For example, the patents might be better off if both parents work and they hire a caretaker, but the UBI would alter the equation just enough to cause the one parent to quit work. The caretaker would also then be out of a job. Net reduction in productivity. The volunteer worker’s labor might be better spent working and then donating the excess money he earns to charity, but the UBI alters the incentives so he decides to quit work instead. Net reduction in productivity.

    if you believe that the market is better able to optimally allocate resources, including labor, then you have to recognize that a UBI will result in a misallocation of labor.

    • Michael Byrnes

      Theresa Klein wrote:

      “if you believe that the market is better able to optimally allocate resources, including labor, then you have to recognize that a UBI will result in a misallocation of labor.”

      There’s a plausible argument for this, but it isn’t a point that “has to be recognized”. Even granting many of your other assumptions, it is in no way clear that, relative to the status quo, a poverty-level UBI (and a more than poverty-level UBI does not seem even remotely plausible given the costs involved) would disincentivize work or misallocate labor. Remember, the status quo is one in which the working poor face the highest implicit marginal rates due to the phasing out of benefits. A UBI eliminates that problem. Under a UBI, a worker who currently earns a poverty-line income would not necessarily be disincentivzed to work. Ultimately, your argument only proves out if you start with the assumption that the working poor are lazy people who are happy with their standard of living and only want to work less.

      “There is another important difference between seeking fulfillment through work and seeking it through hobbies : Work connects your labor up to what is desired and needed by others via market pricing.”

      That’s certainly true. But I don’t think it applies for a wage subsidy vs. UBI argument. A wage subsidy is, by its very nature, a disconnect between the labor and the desires and needs of others as expressed through market prices. More importantly, market prices will correct this problem on their own. If there is a shortage of any good or service desired and needed by others, prices will rise and induce greater production.

      • Theresa Klein

        Ok, relative to the status quo, I’m not sure whether the UBI would result in a greater misallocation of labor than currently exists. It would depend on how big it is.
        But let’s talk wage subsidies vs. UBI, since that’s the topic of the post. Given an equal amount of wage subsidy vs. a UBI, which one is likely to result in less misallocation of labor? Clearly, the wage subsidy, since the wage subsidy is conditioned upon doing some sort of labor that someone else is willing to pay you for.

  • miranda

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  • Hunter Cook

    “The evidence is quite clear: people who don’t work can’t be counted on to fill that void with other forms of productive, engaged, goal-oriented activity.”

    You protest being called paternalist, and then write that.

    Also, your whole post is based on the effects of involuntary unemployment, which is almost certainly much different psychologically from the experience of people who decide not to work because they are otherwise financially secure.

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