Doesn’t a de facto version already exist? There are about 3.5 million fast food employees in the US, there are a million and a half American Walmart employees (so maybe a million clerks), there are over 6 million entertainment attendants (e.g. ticket takers, etc.), well over a million cashiers in the retail sector outside of these, and so on. The point is not that these are jobs anyone can have to get themselves rich, but the point is that these are jobs almost anyone could secure at any time with almost no or little training or “skill” to speak of. This observation covers many people who are variously not born lucky physically or mentally as well. My local McDonalds is always hiring, and they pay $10.25 an hour for entry level jobs. At full-time this is over $20,000 per year, and it includes benefits, training, career mobility and a community of people to interact with.
My point is not that it is easy for someone to transition to these jobs in the family labor supply sense – there are issues of child care, parent-care, transportation, and such, that make labor supply decisions more complicated (though a vast many people are able to navigate these challenges, especially if family structure is intact), the point is that it is certainly “easy” to find employment that pays considerably more than any level of UBI could ever promise to pay. If one reason to support a UBI is to enable people to take risks and to have peace of mind about their uncertain futures, then why is an annual $8,000-$10,000 cash grant via UBI much more attractive than a $20,000 per year job with upside? Or even if someone works part-time at McDonalds, that is $10,000 per year, plus all of the time to get additional education, take entrepreneurial risks, and so on? One reason people support the UBI is something like, “people can live together and share it.” Well, if multiple adults all live together working at McDonalds, that is a good amount of income too, and all of that without burdening taxpayers or the potential negative incentives of cash grants – leaving a heck of a lot more resources available to fund basic research, maintain infrastructure, expand health-care access, and so on.
Just think about it. If things REALLY went into the crapper for my wife and I, we could each very easily secure a job at McDonalds or Walmart, earning a combined $40,000. We could easily rent a smaller place than we live in today and be comfortable, we could send our kids to the “free” public school, we would easily qualify for ACA subsidies, we could shop more intelligently, and we could keep our current cars for a little while longer. No, we wouldn’t be taking weeklong ski vacations or securing cottages in Maine, but we’d live pretty similarly to how we live today. Knowing that this option is always out there for us is a very fine insurance policy, and surely influences the way we are currently living.
I think it is high time to raise the status of “crappy low-wage” jobs.
I have a couple different problems with this argument. I’ll try to lay them out cogently.
First off, you assume it’s easy to get full-time employment at a McDonald’s. I agree it’s easy to get part-time employment, but the same benefits that you laud for full-time workers (and that are required by the federal government) create a massive disincentive for McDonald’s to ever hire full-time. It’s hard to find solid numbers, and I’m supposed to be writing a paper so I’m not going to look, but most sources I’ve read indicate the vast majority of McDonald’s workers are part time.
Second, you assume that no black swans will happen. No unforeseen crises that could prevent you from working (and getting paid). Car accident, house burning down, getting sick, your local McDonald’s closes down or cuts hours, etc. Individually, each risk is small. Lumped altogether and considered over many years, you’re pretty much certain to have a crisis that will upend everything.
So, the UBI is to not replace full time employment, but to get rid of the necessity of full time employment. When paid for by a properly designed income tax, the UBI never creates a perverse incentive where working for an extra $1 ends up setting back your net income several hundred dollars (like with the current set up of SNAP (food stamps) or Section 8.
The idea behind UBI is not that people never have to work, it’s that if their work is interrupted, it’s not a life-changing disaster.
This is important, because it changes the dynamics of a negotiation. Let’s concentrate on the micro here – ultimately, every time someone is hired, it’s a negotiation between the employer and the soon to be employee. If the employee is desperate – if they need to work – then their negotiating position is going to be weaker than the employer’s. “well, I don’t like the pay, but I need the work,” is a grumbling admission you hear all the time. Meanwhile, the employer knows that there is always someone else, also desperate, willing to take the job.
The employer then offers the least amount he can in order to hire the employee. An UBI changes this dynamic. The employee with an UBI can say “take this job, and shove it, I’ll live off pasta for the next few months while I search for a better job/study or otherwise improve my human capital/pursue this art project I’ve been wanting to do/wait for you to offer me a better wage.” A labor force that is able to choose more freely, that is able to pursue education with less cost, that is able to allocate itself without the distortion of desperation hanging over its head, is the more productive labor force.
So, to me, the comparison is between: no UBI and dead end jobs that people have to work and fear any interruption, or UBI and the freedom to pursue the most productive work for that individual.
On other points:
1) I used “then” instead of “than,” among other grammatical mistakes. Interpret charitably, please.
2) The size of the labor supply doesn’t alter this analysis. So increasing or limiting immigration shouldn’t matter.
3) I agree that labor market rules are inefficient.
4) You don’t consider the “born unlucky” in your analysis, so neither did I – but they’re still part of society. We pay for them no matter how we slice it – either through medical care, charity, and food stamps, etc, or, if we’re uncharitable, through the emotional cost of watching them suffer. I think that having a basic income is a more efficient form of social assistance that the collection of other programs.
First of all, the time and energy spent having to work miserable low-order service industry jobs is a tragic waste of human potential. The idea that a mere wage makes labor inherently valuable is arbitrary and suspiciously convenient for employers. Whoever takes Walmart or McDonald’s jobs, we live in a hierarchical society that for a obvious reasons considers low-wage work demeaning and undignified. This won’t change without significant change to our present system. You end this post by saying “let’s raise the status” of these jobs, as if the jobs’ lowly status were a mere misunderstanding personally overcome, and not, perhaps, an integral mechanism of a broader system that just doesn’t allow (or isn’t designed for) the social mobility of people who find themselves having to take these sorts of jobs. Every advanced society furnishes for the well-off a narrative that allows them to feel superior to the lower orders. The undignified status of low-wage labor is just one of these effects.
But when it comes to whether we “already have UBI”, wouldn’t it make more sense to focus on the many forms of *passive* income that already in fact exist, like capital gains, rents, various tax breaks and subsidies, etc.?