I beg to differ. I totally agree with the paradox (with the advances in technology, humans should be working less) but the problem, today, is economic:
- In order to live you need money
- In order to obtain money you need to work (except for the lucky too few)
- Therefore, work needs to exist to provide people with money, to the point of creating "useless" jobs if needs be
How are you going to remove jobs if it so directly means no more revenue for those people ? The problem here is that we're conflating revenue with work. The only answer is to decouple them, and introduce something like basic income (https://en.wikipedia.org/wiki/Basic_income)
* It it proven and was highly successful during the previous depression.
* We actually do have a lot of infrastructure which needs rebuilding and projects which would make all of our lives better (high speed rail, mission to mars, etc.)
* People actually like to work - to feel useful. Basic Income will prevent the unemployed from starving but nearly ALL of them would rather have a guarantee of meaningful, stable, reasonably paid and respectable work than just getting paid to stay at home all day. The PWA provided that.
There is actually a good example of a public works program that was turned into basic income (Plan Jefes in Argentina). Unexpectedly, large numbers of the people who were part of it CONTINUED to work at the jobs (things like caregiving) even though under the new basic income rules they no longer had to go.
There is this common misconception that basic income will make everyone stay home and do nothing useful. I think it's completely wrong, people (most of them) will continue to work; the huge difference is that they will not do it for the money, but for the actual effect it has. Your example shows it. You can also ask yourselves if chefs, musicians, programmers, mechanics would just grab the money and stay home; I don't believe so. Only those who do their job purely for revenues will stop... At least, that's my prediction (and hope). In other words, useless jobs (as in, not useful for others) will vanish.
> I think it's completely wrong, people (most of them) will continue to work; the huge difference is that they will not do it for the money
Of course they'll do it for the money -- at least, for a very long time until productivity is so high that the economy can provide a very comfortable lifestyle that most people are happy with without work (but that's going to take very high output with little labor, which we are nowhere close to and may never reach, given the way that experience drives expectations and expectations increase with output.)
BI reduces the downside risk of unemployment or entrepreneurial failure, provides opportunities to transitionally opt-out of regular employment or income-earning activity for education or other personal development, etc., but it doesn't in any realistic near-term scenario make it so that the vast majority of the population isn't working (whether at wage labor or something more entrepreneurial) for money.
>There is this common misconception that basic income will make everyone stay home and do nothing useful.
Rather than answering supposedly common misconceptions that nobody on this thread actually had - answer me this instead:
What is so wrong with giving the unemployed a JOB rather than just money? They need money, but they also want to work. During the last depression the PWA built tons of useful stuff, much of which we still use today. Why would Basic Income be better than doing that again?
> What is so wrong with giving the unemployed a JOB rather than just money?
If you give them basic income, then the jobs can pay what the jobs are worth, and no one needs to be forced into economically inefficient make-work jobs that take time that could be used for focussed training, risky (but potentially valuable) self-initiated ventures, etc.
Any such make-work jobs proposal is obviously paying a premium over the actual value of the work (which is why the same job isn't available in the market already), so instead treat the premium as basic income, and the job will be available, through the market, at its actual value (and, with an adequate BI, you don't need a minimum wage, because the BI provides basic support, so taking a low-wage job that may be more suitable for other reasons than pay doesn't have the opportunity cost of not being able to provide basic support.)
> Any such make-work jobs proposal is obviously paying a premium over the actual value of the work (which is why the same job isn't available in the market already)
Wouldn't the government be providing these "make-work" jobs? The government regularly creates jobs, like research and infrastructure development, that would not be profitable for any private entity. Value can be calculated either from the perspective of the employer, or from the perspective of society at large, but the market only creates jobs which are valuable according to criterion #1.
In my view, this is the essential function of government. It is fascinating that, if you look back 2-3 years, when unemployment was still quite high, the private sector had recovered completely in terms of employment -- all the unemployment was actually being caused by reduced government spending (mostly on the state or local level).
I don't know that dragonwriter meant to exclude government employment from "the market". If we include it, the question remains approximately as strong. If there is useful work to be done, we should employ them to do that work, but we should do that based on the work we see to be done, not based on some notion that people having freedom to choose how they spend their time is bad.
>no one needs to be forced into economically inefficient make-work jobs
So you are saying that the jobs building the Lincoln Tunnel in Manhattan and the Triborough bridge (among many other things under the PWA) were "economically inefficient make work jobs".
> So you are saying that the jobs building the Lincoln Tunnel in Manhattan and the Triborough bridge (among many other things under the PWA) were "economically inefficient make work jobs".
No, I agree that it is an essential function of government (arguably, the only legitimate function of government) to correct for market failures by shifting incentives or directly purchasing goods and services so that exchanges which are a net benefit but which the market fails to provide because externalized costs or benefits are not taken into account naturally in market exchanges (as is the case, for instance, when benefits or costs are particularly diffuse in space or time or both). And many public works projects fit that bill, and when labor costs are low because of a dip in private market demand, more of those projects have a positive cost:benefit ratio.
OTOH, the social benefit from an income support is independent of its tie to employment, and therefore it makes sense for the income support to be decoupled from any public works program. Coupling the two creates inefficiency, as individuals receiving the income support are then compelled to devote time to an economically-inefficient job that could, instead, be devoted to economically efficient activities, including working at an economically-efficient job with a lower wage (that would be inadequate income for basic living on its own) than is provided by the government make-work job but which provides experience which enables the individual to progress to better paying jobs and greater contributions to society.
>Coupling the two creates inefficiency, as individuals receiving the income support are then compelled to devote time to an economically-inefficient job
Economically inefficient jobs like building the triborough bridge.
Or providing healthcare.
Or building dams.
Or building schools.
Or building public art works.
Your entire argument is based upon a theoretical presumption that is disproved by reality: that if the government provides jobs that did not otherwise exist that those jobs will by necessity be make work.
Economic efficiency is also a terrible measure of whether something is worthwhile. Was sending a man to the moon economically efficient? Was it worthwhile?
I see no claim in the parent that everything done by the PWA was make-work. Also, while creating jobs was an important motivation of the PWA, to the best of my knowledge it never included any guarantee.
That's not what you said. You said, "This is preferable to a Basic Income", and linked both the PWA and a page on a job guarantee. I don't think dragonwriter's response would have been the same to the above. A job guarantee necessarily involves possibility of make-work, or it's not a guarantee.
I think you've set up a dichotomy where you can have the PWA or basic income.
The best approach would be both: a basic income to provide people enough to survive (probably not so comfortably, but...). From there, you could have a PWA that focuses on infrastructure that features a strong training component and pays well, or you strike out on your own.
Politically it kind of is a dichotomy. I see very little hope for Basic Income politically because the A) protestant work ethic is too deeply embedded in American culture and B) for many Americans the only outcome they would notice would be very high inflation.
I'm not against the very idea of it and if there were a referendum for it tomorrow I would almost certainly vote yes, but I honestly think that its basic presumptions are wrong:
* The the labor market today is allocating people to jobs efficiently.
* That as a society we don't have enough useful work for everybody to do today.
* That the government wouldn't efficiently allocate resources if it were to create jobs.
That as a society we don't have enough useful work for everybody to do today.
I believe this is largely true today in the context of people who are currently unemployed, and will only be more so in the future.
That the government wouldn't efficiently allocate resources if it were to create jobs.
You think it would? Look at military contracts, where it's more important for every member of Congress to be able to point to jobs "created" in their district, than that we actually get functional projects at reasonable costs.
>I believe this is largely true today in the context of people who are currently unemployed, and will only be more so in the future.
Poverty is on the increase, our infrastructure is not only crumbling it is currently inferior in many ways to some third world countries like China. We have budget cuts for science and NASA not because they've run out of useful work, but because of a political imperative that we should create as many unemployed people as possible through budget cuts.
>You think it would?
It already did in the 1930s and I am confident it would again.
>Look at military contracts, where it's more important for every member of Congress to be able to point to jobs "created" in their district, than that we actually get functional projects at reasonable costs.
If we had an alternative working job creation program Congressmen wouldn't try and ram through military contracts to create jobs in their district instead. Meaning less military bloat and more infrastructure spending. Sounds good to me.
I'm skeptical that we have a significant number of useful projects today at which throwing unskilled labor would be useful. We saw a form of this in the last stimulus, where "shovel-ready" turned out not to be a thing.
"If basic income were to be established, what would you think people do ?"
As owenmarshall said, you can perfectly have both -- establish basic income for "survival" needs, and let people have work if they really want to. Basic income doesn't mean abolishing all kinds of work, it just means making sure humans don't have to work to live.
I think most people would continue to work and the people who are currently unemployed would largely remain unemployed.
I don't think the unemployment we have is economically efficient, though. Our neo-command economy run by wall street selfishly demanded high unemployment despite the need for currently unemployed people to work and desire for those same people to work.
"the people who are currently unemployed would largely remain unemployed."
Why do you believe that? Some small portion of those working, with better things to do, will probably work less or stop working. This will represent a larger portion of the unemployed, because of the size of the two sets.
Meanwhile, demand will rise as the people at the bottom end of the income spectrum are more able to meet their needs.
With increased demand for labor and decreased supply, it should become quite a bit easier to find a job.
On top of that, looking for a job is quite a bit easier when you know you have some resources to fall back on, and a basic income can help provide the bandwidth to pursue whatever training, &c, they find appropriate rather than having to jump through bureaucratic hoops or focusing on scrounging together enough to get to tomorrow.
I expect quite a few of the unemployed would stop being unemployed with a modest basic income.
>What is so wrong with giving the unemployed a JOB rather than just money?
Who decides what jobs are available? Who decide who gets which jobs?
By giving a job instead of money, you are using up a significant chunk of the labor pool. You need an additional chunk to figure out how to allocate it, and are then relying on them to allocate it well. To build something, you are also paying for and using up capital.
By giving money, people are free to use their time in whatever way is most valuable to them, only using up the resources they need to live, and those resources get allocated by market forces.
>Who decides what jobs are available? Who decide who gets which jobs?
Your questions can be answered by looking at what happened in the 1930s. The government decided that things like the triborough bridge and the lincoln tunnel, airports, dams, new schools etc. would be a net benefit to our society.
They were.
>By giving a job instead of money, you are using up a significant chunk of the labor pool.
Yes, it is using up a significant chunk of the labor pool that is currently idle.
>You need an additional chunk to figure out how to allocate it, and are then relying on them to allocate it well.
Exactly like we had in the 1930s with the PWA. Which worked.
>To build something, you are also paying for and using up capital.
Damn right. ZIRP and asset bubbles all over the place are not forming today because we have too little available capital. They happening because we have an excess of it.
>By giving money, people are free to use their time in whatever way is most valuable to them, only using up the resources they need to live, and those resources get allocated by market forces.
Those same market forces that didn't build the triborough bridge or the hoover dam but which did cause a massive overbuild of useless McMansions in Las Vegas and a glut of payday loans?
Sorry, I'm not convinced by arguments that appeal to the dogma that market forces are god and governments always suck at resource allocation. It's a fairy tale.
> Giving money is currently costing more for the administration than the money given out.
The administrative cost in giving money in status quo benefit programs is tied up in means-testing, use-enforcement, behavior-testing, etc. -- making sure that all the variable inputs that control who gets which benefits, how much of those benefits they get, and how those benefits can be used. That's the whole problem unconditional basic income solves. You have very simple qualified class (all citizens or all legal residents, whatever is chosen as the target population), everyone in the class gets the same benefit, and there are no use restrictions associated with the benefit. Administrative overhead eliminated neatly -- and at the same time, the perverse incentives that go with the same restrictions that the administrative costs go to enforcing are also eliminated.
>The administrative cost in giving money in status quo benefit programs is tied up in means-testing, use-enforcement, behavior-testing, etc. -- making sure that all the variable inputs that control who gets which benefits, how much of those benefits they get, and how those benefits can be used. That's the whole problem unconditional basic income solves.
It's also a problem solved by a job guarantee. There is no need to create elaborate tests to see if the welfare job seeker is really looking for work. If they want a job, the state can provide it. If they don't want a job, no welfare.
With basic income or a job guarantee you will still need additional welfare (and means testing) for the disabled simply because they require more resources than a regular unemployed joe and really cannot work.
Those means testing things would crop up again even if you created a basic income tomorrow because the protestant work ethic so deeply embedded in our culture would create a political imperative for it to happen. Politicians would get to work corrupting it straight away.
I think the main benefit of an unconditional basic income, however small, is exactly to help us getting over the worst of protestant work ethic. Do we really need to make existential threats to people who don't accept the work that the government thinks they should be doing? If something really needs to be done, you can increase the pay until somebody does it.
>I think the main benefit of an unconditional basic income, however small, is exactly to help us getting over the worst of protestant work ethic.
Well, that presents you with a chicken/egg situation because for it to have any hope of becoming reality you will need to convince everybody (the majority of Americans) who believe that everybody should pull their weight.
>Do we really need to make existential threats to people who don't accept the work that the government thinks they should be doing?
Do we need to? No. Do I agree with you? Yes. But, most people think that it is a moral imperative that you should have to work for a living and we live in a kind of Democracy, so...
Until that part of our culture changes to accommodate we won't get basic income.
At the moment we're making existential threats to people who don't accept the work that the private sector (i.e. democratically unaccountable 1%) thinks that should be doing.
All I'm saying is that the government should provide decent jobs so that the 1% have to compete with the government and provide better jobs than they currently do.
Not to mention basic income is not a comfortable living. Folks will not work unless they can get paid enough to notice. Will that drive down entry-level salaries, or drive them up? Hm.
Your argument seems to hinge on this, but I see no reason to believe it. There have been fairly long-term experiments on BI, and people who choose not to work do things they enjoy - learning to paint, going to school, etc. There weren't any problems with people "needing to work" but not being able to.
> It it proven and was highly successful during the previous depression
Much of the unskilled labor done by the CCC has since been automated into fewer skilled jobs. "It worked in a completely different world" doesn't convince me that it'll work in this one.
> high speed rail, mission to mars, etc.
See what I said re: unskilled->skilled labor shift. To what degree do you actually expect unskilled labor to move those programs along? They're held up by engineering problems, not labor shortages.
>Your argument seems to hinge on this, but I see no reason to believe it.
Why else did the people under Plan Jefes CONTINUE doing their jobs - kind of for free, really - after the jobguarantee was replaced with an income guarantee?
>Much of the unskilled labor done by the CCC has since been automated into fewer skilled jobs. "It worked in a completely different world" doesn't convince me that it'll work in this one.
I'm very unimpressed with the idea that automation has killed off all our jobs and will continue to do so. It's pushed as a red herring for the sudden surge in unemployment since the 1990s that was nearly ALL political in origin.
If automation had replaced all those jobs instead of politics deciding that they were unnecessary then our infrastructure would be in considerably better shape. It isnt'.
>See what I said re: unskilled->skilled labor shift. To what degree do you actually expect unskilled labor to move those programs along? They're held up by engineering problems, not labor shortages.
We've actually had a skilled labor -> unskilled labor shift since 2008. Check the statistics.
I don't expect a job guarantee to provide only unskilled jobs, either. I expect it to provide jobs for unemployed engineers, just like the PWA did. Hell, the PWA gave Milton Friedman a job as an economist (we needed them too). It's where he got his start. It wasn't only for unskilled laborers.
> Why else did the people under Plan Jefes CONTINUE doing their jobs - kind of for free, really - after the jobguarantee was replaced with an income guarantee?
Again, link? I can't find any reference about that program dropping the work requirement.
> I don't expect a job guarantee to provide only unskilled jobs, either.
I didn't claim that. Finding useful work for skilled laborers is far easier than for unskilled, and unfortunately most of the unemployed are the latter, which is why that is the more difficult problem to solve.
Edit:
From your other comment:
> Yep, the question is whether as a society you'd rather have them building bridges and schools or forming bands and writing (mostly pretty bad) poetry.
Again, bridges and schools are built by skilled laborers. Employing them is not that difficult part of this plan.
Also, its not a direct trade-off. Employing someone for a set salary is far more expensive than just giving them that money. BI becomes an easier sell when you recognize that PWA is both less effective (what about the people who can't work?) and far more expensive.
I think something does not qualify as "work", in the sense thedufer was using it, if you don't stand an appreciable chance of being paid for it. I think that's an important sense, but I agree that we need to be careful that this does not cause us to overlook or undervalue productive efforts where that isn't the case.
I was using some implicit assumptions made by crdoconnor (without which the `"need to work" -> PWA > BI` implication falls apart). The first, that "work" implies something you can reasonably be paid for. And the second, that there's some dependence on others in order to do the work.
Alternatively, you can re-word my argument if you'd like - the human need to work doesn't imply that BI is insufficient because people can find meaningful work on their own.
I thought the first argument was clearer, but your comment forced me to think harder about the second - and in retrospect, I think it makes more sense put that way.
>Alternatively, you can re-word my argument if you'd like - the human need to work doesn't imply that BI is insufficient because people can find meaningful work on their own.
Yep, the question is whether as a society you'd rather have them building bridges and schools or forming bands and writing (mostly pretty bad) poetry.
I can see arguments for both but honestly I think the first is an easier sell for the vast majority of citizens.
If you feel like your inflation is high enough and you don't really want more people out there writing poetry, basic income doesn't seem like such a great deal.
I don't object to PWA style projects when we find things that we want to do. I don't think it's a sensible way to guarantee a job. As orangecat said downthread a bit, "shovel-ready" often isn't. I want to spend money to build the infrastructure we actually need. I don't want to throw money at boondoggles, which will be increasingly hard to avoid if we structurally have to keep pushing out projects whether or not we have anything that's actually 1) a good idea, and 2) ready to go.
Edited to add: To be precise, when I say "throw money at", I really mean "throw physical resources and people's time at, while shifting power toward whoever organized it". Obviously I'm advocating paying out some of the money either way so that's not the difference.
Certainly not, but requiring any purchase decision be backed up by someone wanting the thing helps quite a bit. That's something that naturally follows in the private sector when we give people cash, and frequently happens in the public sector when things are working right, but is undermined by pressure to build out projects to "provide jobs" - and a guarantee makes that worse.
I'll note again that I'm certainly well in favor of improving our infrastructure.
As far as I know, the job market is not demand driven. So, the number of people who work isn't really determined by how many people need money. It is determined by how many jobs there is.
In other words, jobs don't exist to provide people with money. They exist to provide the boss with labour. The fact that people need money is just very convenient for the capitalists.
That doesn't seem entirely true. If most people didn't need money to live, they would be less willing to sign up for "bullshit jobs", meaning employers would have to provide more enticing compensation, potentially resulting in a reduction in people working such meaningless jobs.
In other words, the job market is currently supply driven, but that is due to the fact that demand is inelastic -- everyone needs money to live.
ETA: There is also an indirect effect through public policy: politicians will not want to pass legislation that reduces the number of jobs, since that would increase unemployment figures, making them look bad. Of course, the fact that high unemployment figures are bad is a result of people needing to work to live.
Meeting the needs of people who cannot pay you is not a job, without some sort of external involvement. Giving them cash is the approach that gives the market the most room to find the best solution. Giving cash to everyone unconditionally gets rid of strange incentives around discontinuities. Hence, a basic income.
That's true, but when I said decoupling I meant "break the common misconception that one cannot happen without the other". It's more about breaking the idea than actually separating them. I don't think we can introduce Basic Income as a full income directly anyway, it will most certainly be gradual (start with e.g. a BI equal to the level of poverty, and go up from there)... but the most important part will be achieved: people will stop thinking that in order to live there is no other way but work, even in useless jobs.
My SO has recently been on a kick about basic income, and I admit I have been skeptical. Could you elaborate on the pros/cons of basic income as you understand it please?
The main downside, in a nutshell, is inflation. There's simply no way to distribute the same amount to everyone in an economy and not have proportional inflation occur--because basically what you've done is dilute the value of every dollar in the economy. This is essentially what has happened with the cost of college. The more aid we give students, the more colleges soak it up...which leads to those who needed assistance still needing assistance as much as before, but the absolute cost of education has just risen.
Basic income sounds like a great idea until you realize the above.
Careful. Aid to students isn't something we can turn around and spend on something else when prices go up. That is a very different dynamic than "dollars I can spend like anything else". People bidding on status symbols with someone else's money, versus people trading off their various wants against each other from their increased-but-still-limited pool of resources.
I think you would still see some inflation as typical demand for the marginal dollar falls, even if you don't increase the total number of dollars, but it wouldn't look like student aid.
For the record, I support a low (certainly <$15k, probably closer to half that) Basic Income.
I don't think any of the BI proponents suggested to finance it by printing new money. More likely taxes, but keep in mind that they wouldn't be spent by the government. But speaking of inflation, in the eurozone, they can't seem to figure out how to increase it. Everyone seems to be anxious about the possibility of deflation. Which seems strange, because if they just printed money and distributed it to everyone, you'd think this would both produce inflation and increase consumption, no?
I beg to differ. I totally agree with the paradox (with the advances in technology, humans should be working less) but the problem, today, is economic:
- In order to live you need money
- In order to obtain money you need to work (except for the lucky too few)
- Therefore, work needs to exist to provide people with money, to the point of creating "useless" jobs if needs be
How are you going to remove jobs if it so directly means no more revenue for those people ? The problem here is that we're conflating revenue with work. The only answer is to decouple them, and introduce something like basic income (https://en.wikipedia.org/wiki/Basic_income)