How would you construct a universal basic income to avoid perverse incentives?
Many of us like the idea of having a universal basic income, such that nobody has to be gainfully employed to survive. However, depending on how the UBI is structured, there are potential problems, including actively discouraging work, encouraging excess reproduction, and possibly other problems I haven't thought of.
So, if we are going to have a universal basic income, how would you want to avoid the potential pitfalls?
ChemFlunky2020-03-26T08:18:53Z
Some of the things I would do, to avoid perverse incentives:
To avoid people not working:
No hard cutoff. That is, absolutely no point at which working means you have less money than not working, or even the exact same amount of money. Depending on which works out best overall, either don't means test the UBI at all (you get the payout whether you make nothing, or are a millionaire), or have a sloped cutoff shallow enough that it always makes sense to work if you can (eg you lose 25 cents of UBI for every dollar you make, above a certain level). Part of that will depend on which structure leads to the smallest overall costs, including the costs of the bureaucracy to determine these sorts of things. What may be the best tradeoff is to have a low UBI that's not means tested, and is barely enough that someone can marginally survive, with a means-tested higher payout that you can apply for.
Some general incentive to make yourself *available* for work, if the UBI is high enough to be comfortable on (in a particular area or whatever, eg due to low cost of living)--like, maybe a higher UBI if you're in the "labor pool", but you can only stay in said pool if you take jobs when offered. Or maybe a requirement that, in order to get the UBI, you have to do some minimal amount (eg 5 hours/week) of either paid work, or volunteer work.
To avoid people having kids to get more UBI:
Decreased UBI for kids beyond the first 1 or 2 (with provisions made for multiple births, eg if you have twins, each gets the "first child" UBI level if they're your first kids, instead of one getting the first level and the other getting the second level). Probably make it so that someone with 1 kid can be comfortable on the UBI without working, but someone with 5 kids can't.
Put some portion of kids' UBI into a trust that they get when they turn 18, so their parents can't spend it all and leave them unable to go to college or whatever
People using the UBI to buy drugs, or alcohol, or other things they shouldn't, instead of necessities:
Limit some portion of the UBI (probably all or almost all of kids' UBI) to a special card or whatever that can *only* be spent on things considered "necessities"--food, rent or mortgage, utilities, toiletries and most other non-food grocery items, basic clothing, and the like. Maybe books and educational toys, too.
Make sure there are good drug rehab programs, with actual oversight and decent success rates.
various models are proposed. One I recently heard of assigns 600 euro per adult, 300 per child and 600 per household in the form of negative income tax, combined with a flat-tax of 50 %
In other words, a single person gets 1200, a couple gets 1800, a family of three gets 2100... and if you work for money you can keep half of your wages.
Basically you have a choice between rich people profiting too on the one hand, and having welfare-cliffs aka poverty-trap on the other
Removing the welfare-cliffs is one of the main goals of a UBI. Creating a better balance of power between employer and employee is another.
Reducing overtime and the number of unemployed and shortening the working week would be welcome side-effects, as would more people doing unpaid volunteering and getting an education