Drawbacks of very robust social safety net + deregulation of labor

I’m not sure about any of this, which is why I’m starting the thread. I just want to throw some ideas around.

For a little while I’ve been intrigued by the idea of a social safety net that’s so robust that essentially everyone can afford and receive the basic necessities for life (food, shelter, and health care), indefinitely, combined with the elimination of standards like minimum wage, overtime, and other regulations meant to protect workers.

The idea behind linking these two ideas, I believe, is to provide a base-level of protection for all workers with the social safety net (whether it’s UBI plus UHC or some other combination) such that they have the ability to quit shitty jobs without risking losing their family’s home, survival needs, and health care, along with a very free market to encourage competition and innovation without being encumbered by regulation. It doesn’t necessarily mean all regulations go out the window – I would tend to think that safety regulations probably should still be required, as well as laws against employment discrimination per the Civil Rights Act and related anti-discrimination laws. But this would eliminate the need for minimum wage and other compensation regulations, as well as regulations that make it hard for employees to fire workers that aren’t delivering. Further, it would allow workers to take more risks, like starting businesses and passion projects, that they can’t take in the current environment because the loss of their day job could mean a loss of health care, home, and basic needs for their families.

So those are some of the positives.

Some drawbacks I can think of:

Decreased incentive to work – if work isn’t needed for basic survival and to keep shelter over one’s head, as well as to get care for sick family members, some people might choose not to work. This might not always be a drawback, though – they might contribute in other ways, with volunteer work or similar.

Greatly increased incentive for employers to hire and mistreat undocumented immigrants – with no regulations for wages, compensation, and the like, their livelihoods will be at the whim of the employers, who can treat them like utter shit (or at least only slightly better than the country from which they came) and they’ll have very little recourse.

I’m sure there are others.

Also, am I correct in thinking that this is at least somewhat close to the Scandinavian economic model?

The first half is the hard part to implement. To provide a safety net that is robust enough that people can live o it, but not so comfy that people get comfortable on it. Once you’ve figured out that bit, then you figure out how to pay for it. I agree that some sort of basic income is necessary, but how to sell it, and what form of implementation is problematic.

The second half is easy, just stop fighting to keep all those worker rights in place, and they will go away quickly enough.

I don’t know about the decreased incentive to work being all that much of a problem, thing is, is that there is going to be less work to do in the future anyway, so fewer people looking for jobs. If technology progresses to the point of automating those jobs though, then we should have the technology to provide for the basic necessities of life for minimal cost.

I think we kind of need to redefine what we mean by work, especially work that draws a paycheck. When there was never enough for everyone, everyone had to work for their survival, or someone did not get to eat. If someone doesn’t get to eat because you slacked off, then that someone should be you. If you sat back in your village and waited for the foragers and hunters to bring back food, they would have no reason to share with you.

This changed a bit with specialization. Agriculture and husbandry suddenly meant that a small percentage of our population no longer needed to be directly involved in survival. They didn’t just sit on their asses all day though, the made stuff that couldn’t be made by someone who spent all their time hunting or foraging. They thought about stuff that would be a distraction to someone hunting or foraging. I imagine at this point, there were some tribespeople who looked at the guy whittling wood instead of throwing spears, or the guy looking at the stars rather than looking for berries, and thought of them as a waste of resources, freeloaders, even. The fact that the carpenter eventually created a new tool or weapon for the hunter, or the astrologer determined when to plant and when to harvest are a bit more ethereal ideas.

As humanity progressed, more and more of us stopped working on producing basic items for survival, and started producing luxuries for others, or for ourselves. We started getting the chance to think about time scales greater than next week, and distances of greater than the horizon.

All of this advancement happened when humanity was at a couple hundred million people, at best, and with the vast majority of them dedicated to basic survival.

When we advance to the point where the average person’s labor is unneeded to improve the survival of humanity, the average person will no longer be employable, but that’s okay, because they will not be sitting on their asses all day, they will be making things, or thinking things. Just as the early agricultural people could little tell the benefit of having specialized labor, we can only speculate as to what advances could be made when there are literally billions of human minds all “idle”, in that they are not working on the problems of immediate survival, but still thinking of ways to improve our environment.

Whether that is due to them creating works of art, or studying science and discovering new insights, or even just playing a video game, giving others another player with which to interact.

People can start up “cottage industries” making hand made goods that people buy because they are handmade. There are a few industries that I cannot see getting automated anytime soon, dog grooming being one of them, so those industries will become bigger and more robust as they get most of the employees that are actually looking to work.

I hadn’t thought of the downside of migrant workers in that regard, that’s an interesting one. I would think that employers would need to pay enough to attract the workers, which would mean that they would have to be able to have at least a good standard of living here as they would have back home. Interestingly, in this scenario, a native can undercut and immigrant, as the native does not actually need the money to survive. If you just really like cooking fries at your local mcd’s, you can do that for pennies an hour, and still have a living wage, because your living wage is not dependant on your job. I suppose the easiest would be to put wage and labor laws into place for immigrants that are not applicable to citizens on the guaranteed income, then make it fairly simple to immigrate and naturalize. It is often those who have a difficult trip to get here that are the most put upon.

I think the term you’re looking for is “Universal Basic Income”. It hasn’t been implemented anywhere long-term (there have been short-term experiments that seemed to show people wouldn’t stop working, but then it was short term so of course they wouldn’t stop, they needed a job after the study too). The Swiss flirted with the idea but it was shot down in a referendum. The Scandinavians do have a robust social safety net but I believe they still have most worker protections found in Industrialized nations.

As far as your downsides, the biggest is usually the cost: to provide poverty level wages for every man, woman, and child in the US, you’d need more money than is currently in the national budget. There would be some offset to this as you could theoretically dump all the programs that come close to this (Social Security, Medicare, Medicaid, Housing Assistance, Unemployment Benefits, etc), but you’re still looking at an increased need for revenue.

Some proponents of UBI note that as automation continues to erode the need for human labor (i.e., we get driverless cars to put taxi drivers/truckers/bus drivers/etc out of work, automatic stocking and cashiers put all the retail workers out of business, the food-o-bot puts restaurant workers out of business, etc), we may have to go to this model as there won’t be any jobs left for unskilled labor - and a great deal of skilled labor gets automated as well. The pushback on this is generally “well, the last time technology eliminated a job, the buggy whip makers just got jobs at the car factories”, but I do think the automation revolution is different in that it’s not shifting the need for human labor, it’s eliminating the need for human labor. So the model may need to come, and the pay for it may need to come on a tax on automated work. The problem is “how do you tax the robot’s owners?” and the answer may be some kind of VAT.

I think some people would still work, for the prestige of working in a job that can’t be automated, or in the arts or something where people still want the product “the human way”, but it’s certainly true that many people would stop working. Isn’t that the point of our technological progress, that we no longer have to work?

Would a person have to physically reside in the US to collect this guaranteed income?

I once considered what would happen if we all started to live and work in virtual reality, where there’s no real limit on how many of a thing you can produce, how much land you have, how nice your house can be, etc. and the things which would still have value in all of that are:

  1. Being able to add new features to the VR world (e.g., being one of the developers)
  2. Artistry (designing new clothes, houses, etc.)
  3. Controlling the one thing which is finite: Other humans

What value in having a huge mansion in your own instance if it’s just you? Being able to hire and employ a vast body of servants would be the real status symbol.

As automation and robotics render low-ability humans useless, their value to the household of those who still have high-ability jobs will probably start to grow.

Back in the 17th and 18th centuries, large manors would have a line of servants, dressed up in fine outfits, just to go out and stand in a line in front of the house, to welcome visitors in. The Romans had slaves just to help them bath. Renaissance royals had people just to help them dress.

Personally, I am guessing that we’ll start to see these sorts of things again.

Again, this points directly to a key advantage of my model, where free or or subsidized goods and services would be emphasized rather than cash. Free healthcare, free childcare (with parents perhaps required to work at the child care location several hours a week), free education, subsidized cheap housing, even cheap food and clothing. Free childcare, in particular, acts as* incentive* rather than disincentive to work: the unemployed will usually prefer to spend their leisure time with their children.

There will be complaints that this is all "unfair." Childless people will get no benefit from free childcare; those with high-paying jobs will not want to utilize the subsidized low-value housing. But I hope we are intelligent enough here to understand that the dictum To each according to his needs does have some merit.

What is unfair is that I am the biggest guy in the room, and everyone else in the room is not serving me. Once we get past those selfish ideas that I can take more, therefore I should get more, then the fairness stops being about how you are treated compared to other people, but how people are treated as a minimal baseline.

I have no kids, yet I vote for school (and park) levies. I have always payed my own unsubsidized rent or mortgage on any domicile in which I have resided, yet I have no problem with subsidizing the housing of others.

What I see as fair is when there is no one who is left needing for the basic items of survival, and everyone is given the tools that they need to thrive and be successful in any environment, should he be so inclined. Those who have everything they need, and many of the things that they want (you can never have everything you want that’s a basic principle of economics) who resent not being able to get more stuff that they want in order for others to have what they need are asshole, and their complaints can be dismissed. Not true, they vote, so their complaints actually do need to be addressed, but it is frustrating dealing with the selfish snowflakes who think that just because they want more, they should have more, not realizing that the very social structure that they are complaining about is what allowed them to thrive in the first place.

You’ll get an employment culture of “If you don’t like it, just quit.” When you take away a floor like minimum wage or a 40-hour week, you’ll find all sorts of employers ready and willing to pay less and work more to cut costs. That starts a death spiral of competition where decent employers can’t compete. There’s no public pressure on employers to make things right because, “if you don’t like it, just quit.” Eventually you get a culture where no one will be willing to work a low-paying job because of no employee protection or chance for advancement, and the cost of providing a universal basic income becomes too expensive for the remaining employed group to sustain.

Wouldn’t competition take care of this? Employers who keep their employees at least somewhat happy might have a competitive advantage.

I think the opposite becomes the case. The employee is no longer beholden to the employer for survival.

If they don’t like it, they will quit. The employer will need to make sure that the job is worth working. They will either need to make the job interesting and fun, or pay well enough to ensure that people will find it worth their time.

As is, if you don’t have a job, you cannot survive. Your employer now says, “If you don’t like it, then quit” with the knowledge that that is much easier said than done.

With a strong safety net, the employee has no reason to not leave, if the work conditions are not to their liking. They don’t need to have a job to survive, the employer is not holding their very livelihood over their heads.

I find myself in large agreement with the tone or philosophy of this post. But it was framed as a reply to me, and I’m unclear whether you’re pro-, con-, or neutral on my proposal.

Universal Basic Income is just welfare by another name expanded to include everyone and that has massive problems. One is that it is literally dangerous to have large numbers of people, especially young men, sitting around all day. Some people like to claim that most people will use their spare time to do volunteer work or better themselves. If you believe that, I have a whole van load of stuff that I would I like to sell you.

What really happens is that they form gangs, engage in criminal activity, develop drug and alcohol addictions and let their immediate environment turn into a hellscape. It has happened almost everywhere it has been tried because it is just human nature. Don’t even think about incentivising having kids because people on the dole respond very easily to that signal so you just end up with inter-generational semi-poverty.

There isn’t enough money to give non-working people anything more than the very basics and they aren’t going to be happy with that. No, most of them aren’t and, if they aren’t capable of getting a regular job, they aren’t going to be out busting their ass shoveling snow and landscaping for the people that have them. Talk about a recipe for class warfare. Instead, they will create their own underground economy to supplement their meager lifestyle and we know how that works out.

The only way I know of to handle the problem is to keep money tied to gainful employment but scale back hours and increase onging education so that most people have skin in the game. That is difficult to do as well but it least it doesn’t violate the laws of human nature and spreads the load more fairly.

Since the new format seems to have blocked me from multiquoting, these comments are also for k9bfriender.

How many employers right now do you think make “keeping employees at least somewhat happy” any kind of priority? The companies I see who’d be most affected by these changes are trying right now to bust unions, outsource as much labor as they can, and cut insurance and pensions.

And how much do you think consumers are willing to pay in both extra taxes AND higher prices needed “to make the job interesting and fun, or pay well enough to ensure that people will find it worth their time.”?

Most western societies have a recent history of lots of opportunity and very strong incentives for “self-improvement” - acquiring knowledge and skills. Not everyone has had fair access to that opportunity, but there’s still been a lot of it.

The opportunity and rewards for self-improvement are very tied to employment.

Society promises that if people work hard to improve themselves, they can get better jobs. We can’t always live up to that promise, but that’s the general idea.

A basic living allowance is a different sort of promise, that the system will take care of you at the bottom, but it won’t help you off that bottom. We don’t really know what effect it would have if implemented on a wide scale. The scary prospect is a whole class of people separated from a well-educated, good-job “elite”, with massive resentment in both directions.

Separate but related question for any conservatives/libertarians who would like to answer:

Suppose we start from keeping social welfare spending (SS, Medicare/aid, welfare, disability, etc.) static as a whole (but it might be rearranged into some combo of UBI and UHC). That obviously wouldn’t be enough for what I’m proposing. But suppose I (representing all liberals, for this hypothetical) offer you (representing all conservatives) that I’ll agree to eliminate the minimum wage in exchange for some level of increase in this new UBI/UHC. What level would you agree too? Suppose I throw in additional deregulations on labor and employers’ abilities to do business? How much social welfare spending would you agree to in exchanged for a more free market?

We’re talking about a world in the very near future where the same GDP of the country is being made - GNI per capita, USA, is $58,000 a head - but only half the population is actually employed. Robots are producing all the products and services that the ‘bottom’ half of the population was making. (‘bottom’ means “had skills that were easy to automate”. Some very high wage people are in that group. )

If that happens, there absolutely is tons of money to give to the non working people. At least as much as those people made working today.

I am kinda neutral on your proposal. I think it would work, but there are a few ideas that may work, so it is certainly under consideration once we get enough population on board with the basic idea of a comprehensive safety net it should be on the table.

I was also in agreement that there would be the difficulty in dealing with the issue of “fairness”, and changing what people think is “fair”.

Multiquote works for me…

What happens with employers right now don’t matter. Employer’s right now have power over their employees. If an employer right now fires an employee, that employee needs to replace that job to survive.

If there is a comprehensive safety net, then the employer doesn’t have that power. If they don’t want to treat their employees well, then their employees will leave, and then they will have no employees.

Businesses don’t employ people to give them money, they employ people to get work done, and we give them money in exchange for getting the work done. If there is no work for an employee to do, then a business does not need to hire anyone. If there is work for an employee to do, then a business needs to hire people to do that work. If a business has work to do, but refuses to pay well enough or treat employees well enough to get them to work, then the business will fail. I’m not sure why you think that businesses will drive off all of their employees and go bankrupt, that is a poor business model, and most will adapt.

Consumers will pay whatever it is that it costs to produce the goods and services that they want, that has always been the case, and will continue to be the case.

The problem with the proposal is twofold. Firstly, it is way too expensive. The second and more important problem is that it will eliminate entry level jobs. No one would do any low wage work and so the low skilled would have no way of learning skills on the job. This would bifurcate society. You would have the smart and highly skilled people with good jobs, being taxed at a punishing level and a poor class who has no jobs skills and no way of learning any. The rich would resent the poor for sponging off them and the poor would resent the rich for locking them into poverty.
The way to fix this would be to have a negative income tax. We could make it 33% and start it at $18K for an individual, then every adult who made under $18K would receive 33% of whatever 18K minus their salary was. That way everybody is getting a little something but the more you work the more you get. This allows poor people to contribute to the economy, their own upkeep, and allows them access to the world of work so they can work their way up.

It is way too expensive given the current costs of goods and services that are necessary for survival. It is quite possible to get those costs down substantially, especially as the biggest cost, labor, is what is getting removed from the equation.

Why do you think this? I would think that it would increase the entry level job, as an employee is taking less of a risk in changing industries and learning a new trade. They will not need to demand a living wage from their new employer who doesn’t want to pay that much to someone they are paying to train in the first place. They could even work for free while learning on the job.

Low wage work would still pay for luxuries that are not paid for or provided as the necessities are. People would be happy to throw in a few hours a day to afford a new phone or game or some other minor luxury.

This is once again forgetting the reason for all these out of work people, the automation of their jobs. Those with good jobs would not be taxed at a punishing level to afford to have automated systems provide basic necessities. If these goods are coming at too high a price, bucea the owners of the capital charge a high price for their goods and services, well, it is exactly those owners of the capital that are being taxed. If they insist on having excessive profits on their automated systems, then they can pay higher taxes too.

I don’t disagree with a negative income tax, but I am concerned that it would be just as expensive or more than other proposals, especially if that was the only change made to economic policy. $500 a month does not get you far.

One purpose of a broad social safety net is to reduce red-tape, including means-testing (e.g. income verification). Social security could be phased out, reducing employers’ expenses. Et cetera.

Since the difference between 0 and -$1000 is the same as the difference between $1000 and 0, you are calling for a marginal tax rate of 33% on the poor. This is the same marginal tax rate as paid at present by a married couple earning $400,000.

Most of us agree that a good “basic income” program should not disincentivize entry-level employment. Yet you would let the employee keep only 2/3 of his low wage. In practice, of course, a huge “black” economy would develop with “under-the-counter” wages paid to evade the income tax.