Another hugely viral Scott article: BASIC INCOME, NOT BASIC JOBS: AGAINST HIJACKING UTOPIA
He’s possibly overestimating the efficacy of a UBI. A UBI, according to Scott, is supposed to eliminate poverty and bring individual life fulfillment. If a UBI is $10,000/year, that is still just slightly below the poverty line (for a single person). For people with serious medical conditions, that is barely enough to cover a few month’s worth of treatment. It’s not enough to pay for even half a year of tuition at most public out-of-state colleges. An extra $10,000 a year could mean more discretionary spending, such as vacations or flat screen TVs, but it will not be nearly enough to cover the biggest of all expenses, in which people rely heavily on welfare and loans and cause the most anxiety: education and healthcare.
He never touches on the most important question: how to pay for it. A default answer is, the “rich and government,” but ignoring the whole ‘fairness’ argument of having the rich subsidize this giant welfare program on top of existing welfare programs, the wealthiest of Americans, collectively, don’t even have enough money to put a dent in the figure. A UBI of $10,000/person times 200 million people (we’re assuming children and adolescents don’t qualify) would cost $2 trillion/year. That is the cost of the Iraq war, but instead of over a decade-long period, compressed into just a singe year and repeated over and over. The Forbes 400 have a total of trillion dollars of wealth, so even if one were to confiscate their wealth to pay for a UBI, would be greatly insufficient. Now, one could argue that the UBI could pay for itself due to increased economic activity; however, such gains may be eroded by inflation and ‘crowding out’ effects.
I think much of Scott’s article is actually a giant “why work sucks” list disguised as a think-piece. “Basic jobs” does not mean everyone must work, but rather those who are capable should. The mentally feeble and the mentally ill (such as the guy who yells ‘Gahhh!’ at strangers) would never be expected to work under such a program anyway, just as they don’t work today. It’s not like schizophrenics would be forced to work under a ‘basic jobs’ program. Rather, governments subsidize employers to employ people at a loss (and employers are reimbursed by the government, ensuring profitability). Such a loss would in theory be better than welfare, but as Scott points would could lead to unforeseen consequences that subtract economic value. Sub IQ-90 people may contribute more to economy by simply not working and getting a stipend, than being subsidized to do a job badly.
Disability and other entitlement spending is becoming a de facto UBI. Millions of people that decades ago would be working are retiring early on disability.
From the Planet Money article UNFIT FOR WORK: The startling rise of disability in America, it’s becoming evident disability is functioning as an early form of social security for individuals who would rather retire early and be poor for the rest for their lives, than work.
But disability has also become a de facto welfare program for people without a lot of education or job skills. But it wasn’t supposed to serve this purpose; it’s not a retraining program designed to get people back onto their feet. Once people go onto disability, they almost never go back to work. Fewer than 1 percent of those who were on the federal program for disabled workers at the beginning of 2011 have returned to the workforce since then, one economist told me.
People who leave the workforce and go on disability qualify for Medicare, the government health care program that also covers the elderly. They also get disability payments from the government of about $13,000 a year. This isn’t great. But if your alternative is a minimum wage job that will pay you at most $15,000 a year, and probably does not include health insurance, disability may be a better option.
And also disability shifts spending from the state level to the federal, which has access to greater funds:
A person on welfare costs a state money. That same resident on disability doesn’t cost the state a cent, because the federal government covers the entire bill for people on disability. So states can save money by shifting people from welfare to disability. And the Public Consulting Group is glad to help.
So maybe we are closer to a UBI than we think.
Regarding ‘basic jobs’ again, even if such jobs don’t pay a subsistence wage, there is an almost a limitless number of possible jobs low & average-IQ people can do, if one is imaginative enough. Solving those annoying Google security verification images where you have to identify cars, street signs, and buses, for example, can be outsourced through the use of a script to have someone on a remote computer solve the image. Such a job already exists, but there is no reason why Americans cannot do it too. Even if it pays a few dollars an hour, that’s possibly still more economic value than not working. Another ‘job’ could be posting on Facebook or tweeting on behalf of brands, or engaging in passive consumption for market research purposes. In a partnership with the federal government, companies would rent these low-skilled workers for simple tasks, and upon completion the workers would be paid. Because the jobs are very simple, done remotely, and workers only get paid for successful completions, there is very little way they can mess up or cause negative externalities, unlike Scott’s soup kitchen example. All these millions of people on disability can be turned into low-skilled digital workers, posting, tweeting, solving captcha puzzles, uploading pictures, etc.
This solves the problem of someone who is extremely cognitively disabled but still wants to work. Under a ‘basic jobs’ program, such an individual cannot be denied work, but by creating work environments (such as telecommuting online) in which such individuals are segregated, solves the problem of negative externalities. ‘Basic jobs’ does not mean anyone can have any job…it just means, at minimum, everyone has a job, even if such a ‘job’, in theory, entails sitting in a supervised empty room doing nothing [but then you can run a projector, play some movies, and turn these people into movie reviewers: another job created!]. But individuals who are so blighted that no net-positive productive value can be extracted from them, should not be allowed to apply for such a program, but then technically it would not be a ‘basic job’. Inevitably, some form of cognitive screening will be necessary to determine which jobs are most suitable at the individual level; someone with an IQ of 90, for example, would be ineligible for a coding job, but could do basic data entry. Someone with schizophrenia and a drug addiction would not have many options.