Why give it to everyone? Shouldn’t we target sectors like the poor and indigent?
There are three main reasons why everyone should get a basic income: immediacy, error reduction, and social cohesion.
First, people may need financial help immediately, and means testing — determining who gets the money or not — can delay the money getting to those who desperately need it now.
Second, if we draw a line that divides the people between the “poor” and the “rich,” or the “deserving” and “undeserving,” studies have shown that poverty targeting can exclude a large chunk of the people the programs are intended for. On the other hand, basic income ensures that nobody falls through the cracks.
Third, trust in government drops significantly among those who do not get help. A large portion of our society losing trust in our government can mean a lot of them falling prey to populist rhetoric and other dangerous ideas inimical to our democracy.
Aside from these reasons, whenever we create a specific target group, we have to end up commissioning a team — the one doing the means testing — to qualify them. This team and this qualification ends up being subject to at worst, abuse and corruption and at best, inefficiencies and bureaucracy, which leads to further loss of faith in our institutions.
Absolutely. We generate enough value to afford the four trillion pesos needed for basic income. The issue is being able to properly collect the correct taxes to do it. In our case, the rough calculation is that we need to effectively tax 35% of our GDP vs the current 22% effective tax rate. There are way too many exemptions, breaks and excuses — brought about by misaligned incentives — that we can correct to be able to pay for basic income.
Basic income also has multiplier effects. Of the studies that are available, the results vary from a 1.3x to a 2.3x return of the basic income to the economy. This means that we effectively have the chance to grow our economy by double just by giving people money. Imagine the effect of that to tax-paying businesses who will now be able to increase capacity and manufacture more efficiently. Traders can now negotiate for higher volumes and cheaper prices. It is not a perfect virtuous cycle but it is damn close.
What we have to be up front about though is that no one really knows what that cost and benefit will be for the Philippines. Even the pilot program we are advocating for will not exactly present the true cost and benefit of the program. The number does not include government welfare programs and laws that will be made redundant. Moreover, the multiplier range is large and inexact because the test subjects have different sociological ranges than that of our country. What we do know is that poor people given money will spend it because they need to. We can definitely expect the effect on our economy to be on the higher end of that range.
Increases in price are typically brought about by increasing costs of inputs (oil derivatives, currency devaluation etc.) Yes, we are increasing
aggregate demand but that does not address whether or not the businesses that participate in our market are at their maximum production capacities yet or not. And even so, competition drives them down to an eventual competitive price again.
Take masks during the Taal explosion and the start of the pandemic, for example. There was a huge bump in prices because demand went insane but they are now back to their original listed prices pre-pandemic, pre-explosion. Some are even cheaper, and market competition has brought in innovation in that space. All of this is not despite, but actually because of astronomical increases in demand.
What basic income does is it allows people who may not be in ideal situations to have options — whether they have an abusive boss, unsafe work environment, an inhumane exploitative situation, or a morally reprehensible task. There will be people who leave those jobs, and you will definitely hear from businesses complaining about losing people.
What is unsaid here is that 5,000 pesos is not a lot of money. It is calculated to be enough but it is barely enough. If people leave because someone is giving them 5,000 pesos, then the job you are asking them to do is not really worth their trouble.
The largest study so far for basic income in the world, in Stockton, California, was able to show that the recipients of their basic income experiment actually increased their labor force participation. The recipients were able to afford childcare, transportation, clothes, and other things that enable people to participate in the labor force.
Imagine what can be done with basic income. A generation of people can now afford the opportunity cost of studying. They can pursue their genuine interests instead of grabbing the lowest hanging fruit of a quickly accessible job. We can build careers and industry. Imagine the amount of creativity, entrepreneurship, and innovation backed by fundamental education, practice and an ability to risk for greater things. Imagine what that does to industry.
We are not advocating for the state to take the means of production.
Basic income actually creates a situation for businesses to have access to a much larger market. As much as capitalism loves tax breaks, what it really much prefers are customers with money. We want capitalism to work. It will work better this way — capitalism with a safety net, where people will not be exploited, and a continuous market that will not want for demand.
How will people work if all they have is a basic income and robots take all the jobs?
First off, it is important to distinguish between intrinsically motivated
work, which one is willing to do for free, and extrinsically motivated work – something which you do to get paid – which is a job.
With basic income, the goal is to shift to a new system where anyone can choose to do work for free, that is, choose intrinsically motivated work. Right now, there is a lot of work that goes unpaid, like being an activist, or an open source programmer, or a volunteer, or being a parent, or caring for sick loved ones. Many jobs will disappear because of automation. But if we have basic income, work will not disappear, because we will choose to do the work that we want to do. It will also enable us to recognize new forms of work, e.g. playing games online.
Moreover, basic income will also enable us to enjoy the things that we produce, that is, to link again our work to the social purpose of production, which is to consume the products of our work.
If we look at employment data, here is always perpetual job shortage. Across all kinds of jobs, there are always more unemployed — including those who have stopped working altogether — than there are available jobs. And due to automation, the number of jobs will get fewer every year, eliminating even the higher-paying jobs.
Moreover, programs take a long time to reap benefits. In between, people will starve, drop out, or are forced into roles that they will not be a proper fit.
With basic income, people will feel more secure, and will be more inclined to take risks like self -employment and starting their own businesses, which will in turn create more jobs. In other words, when people get basic income, they use it to enable work. They use it to earn more money or to pursue unpaid work like being a parent or volunteering, and other work that they love to do. They also use it to get more education.
If we lower taxes, it will only benefit the taxpayers, which excludes the extreme poorest, and only benefits slightly the poorest. Meanwhile, the remaining population – the middle income earners and the rich – gets a boost in income. There is no trickle down effect, because in reality, the wealthy get more rich, and they will just stash their earnings in offshore accounts.
However, with a basic income, everyone – except the rich – gets a raise in income.
With lowering taxes, inequality remains, while with basic income, poverty and inequality are reduced, and also boosts the local economy because everyone has money to spend which helps businesses grow, which, in turn, creates more jobs.
Here are some ways we can fund basic income:
● Lotterized taxation
● Taxes on churches
● Giving incentives to whistleblowers of tax evasion to increase tax collection.
● Legalization of all drugs, but highly taxed.
● Capital gains and dividend taxes – Since labor is being replaced by capital, with machines and robots taking on the work of humans, revenue should come mostly from capital.
● Tax on carbon pollution and high frequency trading – Let us tax what our society does not want.
● Land Value Tax
● Rent on patent, copyright, trademark extension
● Taking a small percentage of all IPO stocks, and putting those stocks into a giant national mutual fund, whose dividends pay out into the basic income pool.
If it is exclusively an unemployment benefit, then yes. But this is giving money to everyone, both employed and unemployed. This is making sure that everyone in our system is ok.
Won't basic income give the government too much power and make everyone easier to control by nurturing dependence?
On the contrary, basic income will give the people greater power, and will strengthen direct democracy over representative democracy. Politicians will be afraid to take basic income away from the people. People will participate and want to know more about what is happening in government, because it is their money that is at stake.
Large companies can scale up because of higher demand. Cheaper and
more efficient supply chains mean lower prices.
Although technology has led to an increase of goods and services, it has also led, paradoxically, to less productivity. Technology has eliminated jobs, and the jobs that replaced them pay less. This means the economy is being hurt by technology because those who have jobs have less money to spend. It also means that those who have jobs need to work more hours to earn more.
Productivity is measured by GDP divided by the number of total working hours.
Thus, if people are working more hours in a day, productivity will go down.
To address this dilemma, we need to cut off the link between work and income.
We need to pay individuals non-work related income. We have to pay
them what the technology is not earning as income, and not spending on the economy. People will now do voluntary work, which can have a positive effect on the economy because of higher engagement in what they are doing. They will have more bargaining power for higher wages, which, in turn will increase their spending power.
Thus, basic income, instead of lowering productivity, will increase it because, aside from decreasing the number of total hours worked, it will also mean more people spending their money on the economy
On the contrary, based on studies and basic income pilots, giving people money is unlikely to increase drug or alcohol use and other forms of addictions, and may even decrease it.
Experiments and studies have shown that drug use is also a result of poverty or the lack of access to resources.
Addictions are also rooted in pain – they are a form of self-medication. For example, what is common among hardcore drug addicts, according to addiction expert Dr. Gabor Mate, is childhood abuse. Childhood abuse, in turn, increases in times of economic hardship. This is because the poor experience far greater amounts of stress, which manifests in a variety of ways, including taking matters on one’s family. Another major cause of inequality is stress.
Therefore, if we give people cash, we are addressing the root causes of addiction – poverty and inequality
A basic income will increase an employee’s bargaining power. He will not
be forced to settle for less for fear of not getting any at all if they ask for a
raise. The bigger an individual’s basic income, the greater is his bargaining
power. If, say, his basic income can cover his basic living expenses, then he will
not settle for a lower hourly rate. In this sense, a basic income can help raise a
minimum wage.
Also, minimum wage only helps those with jobs. A lot of these jobs do not pay enough, and people would refuse them if they had the choice. A large enough basic income would give them that choice, and the ability to pursue work that is most important to them. This basic income will replace the minimum wage law and other welfare programs, and no one will be left behind, including those who are unemployed who can now do meaningful work. Poverty will be erased
Aren't jobs greatly responsible for our sense of community? So won't universal basic income decrease social cohesion?
Real-world evidence has shown that basic income or giving people cash actually increases mutual cooperation and social cohesion. In pilots and experiments in countries like Namibia, India, and Lebanon, some of the positive effects include the cessation of begging, huge decline in crime, child malnutrition and school dropout rates.
There were also significant increases in self-employment and economic activity. Also observed were improvements in nutrition, overall health, housing, school attendance and performance, as well as mutual support and cooperation which included even non- beneficiaries. Recipients increased their savings and lowered their debts.
Additional income also improved personality traits. In North Carolina, where tribal members received 4,000 USD annually from casino dividends, there were lower behavioral and emotional disorders among children. Two key personality traits, which have long-term positive life effects were also boosted among the young: conscientiousness and agreeableness.
Meanwhile, Alaska, because of the oil dividends, has the lowest rates of poverty and inequality in the United States, with individuals reporting the highest rate of well-being, including social and community well-being.
It’s the latter. Basic income would improve the way markets function. The limitation of the law of supply and demand is that the market has no way of knowing whether customers do not want a certain good or service or if they just don’t have the means to purchase that good or service.
If people have enough cash, they can buy goods which they could not afford to buy otherwise. They will also be able to buy the goods that they really want, and not just the inferior goods because they cannot afford the superior ones. A lot of food on store shelves also goes to waste because people cannot afford them. But if people have the cash, waste would be reduced.
It is less efficient and more costly to determine who needs a basic income than simply giving everyone — including the rich — a basic income. We do not need to spend money on interviewers, interview equipment or things we do not need, or spend time on calculations or deciding who deserves the money or not.
Basic income is the essential step 1 to creating a system where our whole society can thrive and be happy. We want Basic Income in the Philippines because after this we can enact big changes like carbon taxes, forced rank voting, citizen funded elections, land reform, infrastructure modernization as well as other major broad sweeping changes we desperately need to make to create a better world.