Finland and the Basic Income experiment

[carosio]

23 hours ago, Ontarian1981 said:

https://www.ontario.ca/page/ontario-basic-income-pilot.

 Above explains what Ontario have been doing about a basic income plan for the past 3 years.

Looks like it's being cancelled.

https://www.citylab.com/equity/2019/02/canadian-basic-income-pilot-cancel-ontario-lawsuit-doug-ford/581890/

[Ontarian1981]

58 minutes ago, carosio said:

Looks like it's being cancelled.

https://www.citylab.com/equity/2019/02/canadian-basic-income-pilot-cancel-ontario-lawsuit-doug-ford/581890/

 Yeah, I know that it was only a three year pilot and time was up next month.I expected the new Conservative government to scrap it like all the social programmes that the former Liberal govt. had going. The new Premier Ford is a bit of a tyrant in a lot of people's eyes. He is a hard line right winger, that's for sure.

Edited February 11, 2019 by Ontarian1981

[woodview]

2 hours ago, Cyclone said:

Yes, that's the idea.

And in the Finnish experiment I believe that of the participants, if they found work, it made no difference, they continued to receive the sum, if they lost work again, it made no difference.

They WERE unemployed to start with though, which wouldn't normally be a requirement for a basic income.

 

How does it affect the tax?

Well, whilst it might seem expensive in the general concept.  You can adjust tax rates a little higher because now everyone is being given money for free (in your example 10k, so perhaps remove the 10k tax free band and all earned income immediately falls into the 20% bracket).  You can also do away with a huge portion of the DWP.  Reams of bureaucracy that no longer need to exist, no need to assess people for so many different variations of benefits, no need for teams and managers, no need for sanctions and legal departments to fight about them, no need for buildings and offices.  The job centre can refocus on actually finding people work, instead of trying to find fault and cancel payments.

I'd be interested to see a calculation done on it.

here's my 30 second one. We spend £160bn on benefits. 55 million adults (a guess) = £3k per annum net each adult average.

So with the basic income model, how does that work in terms of x million unemployed, x million on nmw, and x million on average salary? Would be interesting if anybody has got half an hour and a big fag packet.......

 

 

As a side issue, I think this is going to become interesting as time progresses and we see more and more automation cutting more lower paid jobs (ie the shelf filling example, checkout staff etc) . 

Edited February 11, 2019 by woodview

[Ontarian1981]

1 hour ago, Ontarian1981 said:

 

 

 

 

Edited February 11, 2019 by Ontarian1981
Post is a duplicate of what is already here.

[tzijlstra]

25 minutes ago, woodview said:

I'd be interested to see a calculation done on it.

here's my 30 second one. We spend £160bn on benefits. 55 million adults (a guess) = £3k per annum net each adult average.

So with the basic income model, how does that work in terms of x million unemployed, x million on nmw, and x million on average salary? Would be interesting if anybody has got half an hour and a big fag packet.......

 

 

As a side issue, I think this is going to become interesting as time progresses and we see more and more automation cutting more lower paid jobs (ie the shelf filling example, checkout staff etc) . 

I will give it a go:
 

https://yougov.co.uk/topics/politics/articles-reports/2014/11/09/public-attitudes-tax-distribution

 

That is when the government spent around 750 billion, so 1/3th (at least) is spent on welfare and pensions. That is 250 billion (in 2014). 250 billion divided by 55 million is £4,500 - Of those 55 million there are approximately 32 million in work. Average UK salary in 2017 was 27.2K, 30% of 17,2K is £5160, add to £4,500 and you have £9,660. That means the average disposable income declines slightly (by appr. £1,500/annum) but everybody is guaranteed close to 10K.

 

The majority of UK tax benefits don't come from income tax however, indeed, that 1,500/annum would actually be new income for the state, which means that welfare and pension payments can be simplified enormously (saving money on the government side) whilst maintaining plenty of income to pay for things like healthcare, defence, education and so on.

 

So it is pretty much cost neutral to the government, it also has the intrinsic benefit of people having more choice about how they design their life. For example, if you are a household of 3 adults (Mum, dad, adult child), your household income is 30K with no-one working.

 

I realise that even this calculation is very basic, there are numerous aspects this doesn't take into account, for example - what happens if people decide en masse that they don't need to work? Then ask yourself, would you like to go through life without working and living of 10K a year? This is where it increases choices for people - the 'full time' job is on its last legs, that is a whole different debate of course, but there are a lot of economists who feel the future is one whereby people choose where to work and for how much on a much more flexible basis.

 

At the risk of rambling on: This weekend I was picked up by a lovely Uber driver, he sets his own hours, decides which jobs he picks up himself. He'd retired from being a cabby years ago, yet because of the flexibility Uber gave him, came back to the job market.

[woodview]

1 hour ago, tzijlstra said:

 

So it is pretty much cost neutral to the government, it also has the intrinsic benefit of people having more choice about how they design their life. For example, if you are a household of 3 adults (Mum, dad, adult child), your household income is 30K with no-one working.

This is the big downside, not a plus point. A family getting £30k pa for no work is a recipe for disaster.

It needs to be designed so that doesn't happen.

[tinfoilhat]

Some people can’t handle money very well. Cameron thought it would be a good idea to give rent money directly to housing benefit recipients and it’s not been a runaway success. 

 

So let’s say we give Wayne and waynetta £20k a year (do they get more if they have two kids or what?) and rather than paying rent (does housing benefit go as well?) and food and utilities, they blow it all on takeaways and scratch cards in week one. Then what?

[tzijlstra]

7 hours ago, woodview said:

This is the big downside, not a plus point. A family getting £30k pa for no work is a recipe for disaster.

It needs to be designed so that doesn't happen.

Is it? Where does that money go?

 

 

[woodview]

4 hours ago, tzijlstra said:

Is it? Where does that money go?

 

 

why does that matter? it is spent on rent / mortgage , food , heat, cigs, sky sports etc same as any other family. If you are happy to work 40 hours a week along with maybe 5 others, to support a family on £30k, then that is your opinion. I don't want to. I want my money spent on the NHS and people in actual need.

[tzijlstra]

23 minutes ago, woodview said:

why does that matter? it is spent on rent / mortgage , food , heat, cigs, sky sports etc same as any other family. If you are happy to work 40 hours a week along with maybe 5 others, to support a family on £30k, then that is your opinion. I don't want to. I want my money spent on the NHS and people in actual need.

But euhmmm... I pointed out earlier in my calculation that this money is already going to welfare and pensions? Look at it this way - if you were in a household with 3 adults and received 30k a year, would you not work at all and be content with that? Chances are not, that applies to a lot of people out there. It gets even more skewed if it is a 2 adult or 1 adult household. And in the end - that money gets spent again, it isn't like it is sitting still, potted up into a savings account, the amount isn't high enough for that, so it has to keep circulating, that means the government gets VAT on the spend, the corporate tax on 'cigs, sky sports etc.' and so on.

 

It is just a different mechanism of distributing wealth and, in my opinion, it is far fairer than having a selective benefit system.