Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The problem with this is if folks spend all their money the liberals will say its cruel to refuse them more help. It will be never ending aid. As for the Gulf States they already have a problem with idle men not doing much of anything. What happens when the oil runs out or Anerica stops importing their oil because of natural gas?
"Every step we take towards making the State our Caretaker of our lives, by that much we move toward making the State our Master."
Dwight D. Eisenhower
It depends how the system is structured. Some countries already do this (Qatar is one example - citizens get a stipend of sorts that comes from the country's oil/gas profits), and my sense is that some kind of "negative income tax" or "universal basic income" will be implemented as the percentage of people in the workforce continues to fall. Especially if the pace of automation picks up, and more jobs are eliminated.
I understand the oil/gas stipend. But that is generally a very small amount of money. If you look at the case of Alaska for instance. The "dividend" only equals out to be about $100 a month. And if you consider the cost-of-living in Alaska compared to the rest of the United States. Relying on the dividend is probably not very wise. And you definitely don't want to be homeless in Alaska.
Secondly, I always find it funny how people constantly argue that "automation will put everyone out of work". This argument has been made non-stop since probably the 1950's. The argument that was, as automation and productivity increases, you will have less demand for labor, and so the average work-week will consistently fall. Many at that time believe that by now, no one would work more than 10-20 hours a week, because there wouldn't be much work to even do.
If we look at the world for a minute. It is true that there is relatively high unemployment now, with fewer people in the workforce. But that is really only a recent development. And is most likely a temporary circumstance.
If you look at the situation even more broadly. There is such a high demand for labor, that the United States consistently imports people from Mexico to do the work, while also effectively importing huge amounts of goods made by laborers working long hours, in places like China, India, Pakistan, etc.
For instance, if you were to completely stop international trade tomorrow(I'm not advising this BTW). The amount of labor needed to keep up our current materialism, would be far beyond what was even available here in the United States, even if everyone worked.
At some point the consumer demand for goods in currently developing countries, in which we utilize their labor for a pittance, will increase to the point that the need for labor in first-world countries will again rise.
So the argument that automation has gotten to the point where there is no more need for labor, and so we need to create a basic wage. Is simply nonsense.
Quote:
Originally Posted by tablemtn
That wouldn't necessarily be an economic problem, though. It would increase the bargaining power/market value of individual labor, which would raise wages. We still see "tough" or "unpleasant" jobs being filled in places like oil/gas fields - just at a higher rate of pay. There is a lot of economic "deadwood" in the workforce right now - that's something we don't like to talk about - people whose removal from the workplace would actually raise productivity, and if a basic income could facilitate that, that would be a GDP booster.
Look, raising wages by itself is neither good nor bad. People who obsess about arbitrary wage rates, have no concept of economics. What we actually want, is wages that produce increased buying power. And more importantly, we tend to desire more "equitable" wages.
Secondly, to talk about the removal of workplace "deadwood". Are you referring to old people being in the workforce who are unproductive/less productive? Or are you referring to unskilled labor? Whom you believe are holding down productive efficiency because they are paid so little, and so there is no incentive to invest in higher efficiency?
The question is, how do you plan to solve the unequal wage rates? Lets take the simple case of professional athletes for a minute. Many athletes are paid tens of millions of dollars a year. Some are paid even more with their many endorsements. Should athletes be paid upwards of $100 million a year, to play baseball? If you don't believe so, how would you fix it?
Secondly, I can understand the general economic theory, that a labor shortage would require employers to raise efficiency. Which would create a boom in automation technology, which could be exported to the world, at high profits. But even if all that is true, would reducing the workforce, and making large percentages of the citizenry dependent on the government, increase actual overall productivity, or quality of life?
And more importantly, what might be the long-term social, political, and economic ramifications of effectively bribing people to stop working?
I think the basic guaranteed income is the way to go to help low wage workers and all Americans.
You do? And once you've implemented this, who exactly is going to work the counter at fast food restaurants, stock the shelves in grocery stores, sell the tickets at movie theaters, clean the rooms at hotels, etc?
You can make $X doing hours of menial labor. Or you can sit at home watching TV and make the same $X from your guaranteed income.
And once everyone is making $X, what is going to stop inflation from rising to the point where $X is poverty level and people are right back where they started?
Have you actually thought this through? You just get to the point where it's compassionate to take from the rich who don't need it and give it to the poor who do need it, and then stop there without a thought as to the consequences?
This was Milton Friedman's idea--he called it the 'negative income tax.' Per standard micro-economic theory he reasoned that people would be better off if they were just given cash, and allowed to decide how to spend it, as opposed to food stamps, housing subsidies, etc.
I predict that libs in Switzerland will scream to high heaven, because this version of welfare cuts out the bureaucracy to a large extent.
But that is really only a recent development. And is most likely a temporary circumstance.
The labor force participation rate peaked in 1999 and has been in gradual decline since then:
US Bureau of Labor Statistics
There are a lot of other statistics such as the labor share of income which show that we've moved into an economy where labor is increasingly devalued, and its market price continues to dip relative to productivity per labor hour. Which is to say, you can get way more output per unit of labor than was possible in the past - which is consistent with long-term trends in automation and efficiency leading to the loss of jobs.
Quote:
There is such a high demand for labor, that the United States consistently imports people from Mexico to do the work
That's not due to labor demand - that's just the farm lobby being cheap, and getting away with undercutting the price of citizen labor. Agricultural output itself continues to rise on a nationwide basis - once again - with fewer workers than before. Unemployment in California's central valley is quite high. There are a glut of workers and not enough fieldwork to go around, which is what we'd expect as various efficiency gains eliminate their functions.
Quote:
The amount of labor needed to keep up our current materialism, would be far beyond what was even available here in the United States, even if everyone worked.
In a theoretical America with enormous tariffs that precluded almost all but domestic production/consumption, we'd probably see a short-term spike in employment, followed by a return of the gradual decline from automation. But that's not feasible in any way; even North Korea buys imported goods. However, tariffs and import duties are indeed a couple of tools that may be useful in some areas.
Quote:
What we actually want, is wages that produce increased buying power.
Yes, but this entire debate is over the condition of the income/wage rates at the lower end of the income scale. What percentage of the population would it take to match the value of the wealth/holdings of the Forbes 400? It's enormous. I'm not worried about a $12 or even a $15 minimum wage leading to money supply distortions or rampant inflation - labor as a share of the final price of most things in America is already small. Going back to agriculture, field labor wages only contribute a few percent to the price of any given item of produce. It's like a lever that only moves an object a tiny distance even when it is cranked all the way down.
Much of the goal of a guaranteed minimum income is to ensure a steady flow of capital through the populations with the highest marginal propensity to consume - poorer people, basically - because they tend to spend locally (not many people will be investing their meager cash in foreign hedge funds...), which stimulates local economic activity. That has other beneficial social effects. That's the big appeal of a minimum income of some kind.
As long as labor force participation keeps dropping, I see this as inevitable. You can't have a viable wage-based economy when a large percentage of people are not drawing wages. It would have to be modified or augmented to prevent unrest/disorder/collapse. I don't see "inequality" by itself as the main issue; highly unequal societies are perfectly sustainable provided that the bottom doesn't fall out. But if it does...
As for the labor force deadwood, yes, as people retire, we actually see a lot of positions simply not being filled, because it turns out they were superfluous or unnecessary, but inertia/momentum/incomplete information prevented the job's occupant from actually being dismissed.
Those jobs are useful socially because they transfer wage income to workers, but in productivity terms, they are not much different from welfare.
"Every step we take towards making the State our Caretaker of our lives, by that much we move toward making the State our Master."
Dwight D. Eisenhower
A government big enough to give you everything you want is a government big enough to take from you everything you have.
Gerald Ford
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
