The economics of Covid-19. Will UK spearhead dialogue for Universal Basic Income?

Greetings & salutations from across the pond, O' majority of ATS readership!

It's great to be here for once not writing about the weird & wonderful world of Woo... Today I'm opening a discussion regarding the relatively normal (if remarkably atypical) economic impact of the Covid-19 outbreak, based on observations from the UK regarding our conservative government's decision to support private income to the tune of a whopping 80% of salaries for almost all privately employed citizens, as well as providing various grants & loans to help keep small to medium enterprises afloat & in essence, to ensure that their employees will have somewhere to return to, once the present near-total lockdown situation (which may get worse before it gets better) eventually returns to normal..

What immediately struck me on hearing of the scope of these measures, was that in essence, we have a conservative government taking the unprecedented step of artificially providing a form of universal basic income (UBI) to almost all citizens in the private sector/segments of the economy. Now I recognise that the entire situation is unprecedented, but it seems remarkably ironic that the greatest ever provision of welfare for the citizens of the United Kingdom has come from a staunchly conservative government which was voted in with an overwhelming mandate from the British people, who were resolute on keeping one man in particular out of Downing Street - he who shall not be named, a certain Mr Jeremy Corbyn. And we shall not name him hereafter, for he is a classic buffoon of the order maximus. He's toxic to members of his own party, let alone the vast majority of the British public. The last time he was interviewed on BBC television a few days ago, he was chewing on lemons & wasps complaining about something entirely irrelevant, basically wasting his airtime. Good riddance to a terrorist sponsor communist pillock.

Returning to the topic at hand, what are your thoughts on UBI, and can you recognise the overwhelming evidence of a de facto UBI state existing in the form of the United Kingdom's response to the Coronavirus outbreak? It seems to me that the nation, and perhaps the Western world at large, may be ready for a discussion on the matter, if nothing else..

To my mind, I think this situation demonstrates that at least in times of crisis, a plan based around some sort of unifying basic income provision would be extremely practical, worthwhile & sensible. Perhaps we are moving inexorably towards a nation state which will one day issue basic income to all citizens, to defend those whom the advance of technology has caused to become derelict & without means of providing an income to their family. The weight of so many people being edged out of their traditional routes to employment, along with this need to have some sort of structure in place for times of national emergency (to ensure that all people have a means to obtain the basics such as food, shelter & cash to spend in order to keep the economy ticking over) - it seems bound to lead to a pragmatic acceptance of a UBI principle which eliminates the costly assessment procedures for individual 'benefit' provision, by which I mean individual welfare payments on a regular basis.

We have a massive benefit system in the UK, which has helped millions to climb out of poverty, but also has a negative reactionary effects on the national awareness of that benefit system, due to millions more becoming trapped in poverty, particularly in areas where powerful companies would employ tens of thousands in industrial activity such as shipbuilding, car manufacture, and harking back a few decades, coal mining too. It's not exactly class warfare, but there is a great deal of prejudice on both sides of the line, looking down at claimants with no local opportunity for personal development; and equally looking up & presuming the worst about those who are gainfully employed, professionals, etc.

I can see UBI replacing the complex existing benefit system, but we need a total revision of the shameful & shoddy so-called 'Universal Credit', which has been developed cynically by heartless & grossly inept, total #wit social engineers, as a means for the state to claw back income from people who need or deserve it (due to long-term illness, for example).

Universal Basic Income would need to be launched with a real emphasis on making a clean break from the past #wittery of 'Universal Credit', which doesn't even function. The government would need to confess that UC was inept & poorly thought out, with no moral compass leading its way. UBI needs to replace UC cleanly, it needs to be socially responsible, providing sufficient funds to rent private accommodation (with state mandates on the maximum amounts which can be charged by landlords, to avoid profiteering). It would provide sufficient funds to cover the bills which come with the accommodation, including WiFi internet access. It would need to provide for local transport. It would need to provide for general spending levels weighted locally where necessary (eg London). It would need to include a modest amount for normal leisure activities - not much, but enough for the cinema once a month, or a night out, or a meal in a reasonable establishment. Or, it might cover entertainment packages for TV streaming, and a takeaway once a month, for those who are disabled & can't get out & about. These measures help keep the economy afloat!

Next comes a discussion of how different career paths will open different salaried top-up amounts to be provided over & above the UBI level of funds a person would already possess. I guess this means that the employer would pay a percentage of a normal salary to the government (a sort of tax to provide for UBI) & thereafter they provide a top-up amount as a salary for the employee. So for a family doctor with a UBI of 20,000 tax free (the amount everyone would get), their top-up salary would provide an amount of £40,000 - taking that tax-free amount up to £60,000. There would therefore remain plenty of imperative to study, earn qualifications, and top up the UBI amount to excellent levels of income. I suppose there would be lending arrangements between banks & government, concerning how to charge for mortgages & so forth - beyond my ken, I have no idea exactly how this would be done, I know only that it technically could be done.

And so there I leave it hanging for you to dissect & debate - how would UBI work? Is the UK demonstrating the characteristics of a UBI economy at this time of national crisis? What, if any, are the alternatives to a longer-term program of UBI provision, in a technologically advanced society which still possesses a huge number of workers who have been edged out by technology & carried over into a society where they don't fit? Where they have no alternatives to welfare or excruciatingly low paid, crappy dead-end jobs? Is UBI a measure that would tide us over until we could figure out ways to re-employ those people in alternative work arrangements? (I believe it is - it will tide us over until we figure out ways to divert our economy in interesting & productive ways...) And so, what type of work would the averagely-educated person carry out, in such alternative work arrangements for the technologically advanced society? Could it involve helping to plan the future economy?

Thanks,


FITO.

a reply to: FlyInTheOintment
It's all well and good having a safety-net system, but the whole thing starts to unravel when people have no incentive to work. If UBI paid enough for the cinema once a month, a few nights out, a meal in a reasonable establishment and so on, who would bother to spend their time working in cinemas, bars and restaurants?

I'm all for a basic safety-net system for those who need and deserve it, but it grinds my gears when I see people who through their own actions (drink, drugs, tattoos across the forehead, to name just three) render themselves incapable of work, knowing that it is my taxes that are going to pay for their next pint, spliff and ink.

If we go down the UBI route, I think that there should at least be some quid pro quo on the part of recipients, such as one day per week spent improving community spaces, collecting shopping for the elderly or disabled, and so on.

The Government of the UK is implementing extraordinary measures to tackle the problems of an economy being slowed due to a pandemic.

The measures being taken don't really look like a Universal Basic Income.

The proponents of a Universal Basic Income tend to have a simplistic view of the world IMHO. For a start it would lead to a complete revision of the welfare system in the UK, which may be good or bad depending on your political leanings. For example, as per the OP, if you don't like the how the welfare system works in the UK (known as Universal Credit), then UBI becomes the panacea.

Personally, I think UBI has some merit, but it’s naïve to think it would replace welfare. It would also need to ensure it does not just become a way to pay people to be economically inactive as that produces social division and injustice. One of the drivers for Universal Credit was to break the dependency on welfare and remove the scope for people to “live a good life without contribution” i.e. the take, take, take attitude of the idle.

a reply to: FlyInTheOintment

Do we get chipped before, after or during the vaccine guaranteeing citizenship?

a reply to: lacrimoniousfinale

If we go down the UBI route, I think that there should at least be some quid pro quo on the part of recipients, such as one day per week spent improving community spaces, collecting shopping for the elderly or disabled, and so on.

I am in full, 110% agreement with you. This is why I started the thread, to discuss how such a system could evolve from the current de facto UBI status of the UK's citizens.

To be clear though, I was suggesting that UBI could be budgeted to cover only one of the three suggested leisure options per person per month, with regards to the cinema, night out or meal. One reasonable leisure activity per month - I certainly wouldn't advocate spending on the life of Riley, not without absolute commitments to a social infrastructure improvement programs, cleaning up the nation's rivers, canals & beaches, litter picking & clearing up fly tipping, that sort of thing.

You could go a step further & demand adherence to a practical skill improvement program, where the recipient of UBI selects an apprenticeship scheme & commits to three days per week of attendance at a local adult learning college, perhaps with something like the construction skills training board evene, where they have live-in facilities for young apprentices. Alternatively there's a professional skills program for those who are capable but have not had access to unibersity schemes for whatever reason. No point letting a good mind go to waste!

I'm hoping to see this discussion lead into the realms of the 'protopia' meritocracy.

We cannot ever engineer a perfect utopian society, but we can commit to steady, iterative improvement through the implementation of a meritocracy which always builds on the successful social improvement programs of the past in an organised, bureaucratic manner, without political 'interference' (though of course politicians would still be necessary, and would take a certain role in the developing system - perhaps a similar structure to the Nordic system of unions, management & politicians getting together & hashing out development schemes or changes to labour regulations, etc..)

Of course there are failings in every system, but the Nordic approach is pretty good..

a reply to: paraphi

Personally, I think UBI has some merit, but it’s naïve to think it would replace welfare

It sounds like you have an opinion which is in some way informed - but you haven't shared any information or justification of the opinion to which you averr..? Just saying it's naive in passing, then walking off without comment, comes across as damn patronising to be honest. Personally, I'm always teachable, if you're willing to share your thoughts. I certainly have no special understanding of the UBI system or social engineering in general - but rather than dismiss my 'simplistic' view of the world (most people have a simplistic view of the world - if they didn't, they'd probably go insane trying to understand everything that's going on) - why don't you choose to inform?

Again, with regards to the universal credit comments, you clearly have no understanding of the actual impact of the universal credit system rollout. Universal credit has had an horrendous impact not only on those who are economically inactive, such as the long-term sick or disabled, or those without local opportunities for employment (the 'idle' perhaps, in your view) - but it also means low wage workers in the rental housing market lose their homes, and subsequently their jobs, due to the chaos which is caused by the switch to universal credit, leading to the loss of your home, which is incredibly disruptive when working on a low wage, leading into a catch-22 situation. When you add children into the mix, that gets even bloody worse. Nor have I yet mentioned how it cripples (for example) the unfolding of so-called high value career paths - such as with nurses working in our NHS, perhaps young mothers who end up having to spend some time caring for children instead of working, due to the insanely high cost of childcare, ending up at food banks because of delays to provision of universal credit, and worse. UC seems to be a draconian stick, rather than a protopian carrot.

You clearly look down your nose at those who have an unavoidable need to rely on the welfare system. UBI could very well be the answer, if it is properly appraised by people who don't share snooty & distorted value systems, which would seem to be you, in this equation. I speak as a middle class man who was disabled by a catastrophic neurological disorder, and thereafter spent the better part of fifteen years being harangued by an out-of-date & insufferably unfair welfare system. The devastation I have witnessed others going through is impossible to describe - I'm literate & able to complete paperwork, and I had a terrible time with repeated assessments despite clear medical evidence that my condition was never going to change. I for one hope that the current crisis will bring more compassion & understanding to the people of the UK, and perhaps the world in general - to understand that former prejudices against 'the idle' were utter BS from the beginning.

A small subset of 'benefit cheats/ scroungers' does not represent the total body of decent, formerly & currently hardworking claimants, who often care for children & sick relatives, in addition to managing their own conditions or attempts to find work, and keep a roof over their heads, as if they were juggling plates every day of their lives.

A call for compassion & understanding, along with social innovation is what we need - not more of the same snooty, patronising attitudes from people who clearly prefer a prejudiced pretence at understanding problems, rather than an enlightened commitment to forming solutions.

a reply to: FlyInTheOintment

When looking at all the conversations going around in the planet right now, it becomes painfully obvious that we are all operating under the same playbook.

They keep us in the dark, all things have already been decided by the ones hiding in the shadows.

Probably not.

The measures taken weren't the will of the people or a vote by them for it, rather, a pamdemic culminating in emergency powers to stem the Chinese Virus and that includes some economic measures as well to help stem the finanical tide.

On the surface, one can probably see something like UBI or another socialist deal, but once again, people tend to ignore the fact that all this is, is simply a response to the Chinese Virus and our ability to tackle it.

Political affiliation aside, whatever the Gov may need to do is simply to help stem the fallout from the Virus, once Virus is gone, we go back to igniting the economic world engines and GET BACK TO WORK.

I believe that they need to somehow encourage self-reliance with the UBI "safety net" system. Perhaps they need a few cottage industries to pursue like producing face masks and hand sanitizer (as an example) similar to what Gandhi did in India.

Perhaps those receiving the UBI would have to participate in some trade apprenticeship program based on ability and experience. Encourage people to pursue their personal interests productively and contribute to the UBI budget.

Assuming that a UBI income will only cover the basics like food, shelter, and medical, when one's efforts exceed the UBI cap, they can keep the profit (tax free) to improve their quality of life and build wealth.

a reply to: FlyInTheOintment

I think it extremely unlikely that this will happen in our country, at the moment instead what we have is Boris Johnson trying to get emergency powers past parliament that would effectively give him the NHS on a platter for two years allowing him to all but privatize it under the guise of managing the virus and a looming Common's revolt against his cruel plan, he also want's to usher in emergency that will then become permanent new police powers etc.

Basically typical and very nasty Tory Bullingdon club boy politics.

Meanwhile on the other side of the divide over in Labour we have NEW Labour AKA False Labour about to make a come back with SIR Keir Starmer about to win the competition and wage a blood purge of all OLD Labour AKA True Labour mostly wrongly called Corbynites these day's members, in the vein of Blair all he will then be is Tory Lite, Corbyn was too weak to be leader because of his defense policy and talking to bloody terrorists but that aside the rest of his policy's wrongly termed loony socialism by the media were actually genuine traditional Labour, had he won it would have been a new dawn for the country as massive social housing, new Hospital's and School's as well as all the job's that would have brought with it would have been there priority, also Legal Aid would have been restored AND this cruel Universal Credit system would have been scrapped as it has literally killed thousands or even ten's of thousands of people, OH and the government would during this crisis have immediately stepped up and taken the reign's to protect job's and industry bailing employers out.

But you see too many people have mortgages and they all wrongly believed that Corbyn would have led to them somehow becoming more poor when in fact the idiot's will mostly end up poverty stricken in privately run care homes and having to sell there by then probably worthless property's to cover the costs of there care in there ailing years while the hedge fund's will have by then sold off all there investments in the private pension system before it crashes and swannied off with all there ill gotten gain's to offshore tax haven's.

Never let it be said that Jesus did not warn them, They shall sow as they reap and they will reap the whirlwind with this Johnson guy whom is already trying to abuse the current crisis for his own personal power ambition's - creep.

UBI is fine but for it to truly work we need to control how much can be charged for education, rent, food and medical and need to perfect automation at least to the level it can do all or most of the menial crap jobs so that even if most of the population stopped working, as the paranoid assume would happen, society could still function without issue.

The goal is to eliminate the mindless tedious jobs, and bulk of necessary jobs, leaving creative and the study of sciences, etc and encourage people to explore their interests and provide the resources to do so.

I believe if all this were to happen you would see humanity advance at a pace so fast it would make even the industrial revolution look like it moved at a snail's pace.

There's so much potential wasted in menial bull# jobs and blocked by societal bull# slowing it down and getting in the way. Even the greats who manage to fight through the bs to accomplish wonders have wasted 90 percent of their potential on bull#. We need to stop finding ways to be in the way of all humanity has to offer and find ways to help promote, encourage and pursue what each of us can give by unlocking our passions and giving them what they need to truly flourish.

a reply to: Puppylove

That is a good point, if everyone received a basic income then basic good's would go up in price as a result, this is because of the rules of supply and demand so government regulation would have to be implemented to keep prices reasonable on food, rent and energy bill's.

UBI won't work for several reasons.

Inflation: Prices of good and services would go up. You cannot regulate supply and demand effectively to prevent this from happening and when government tries, it almost always fails spectacularly.

There will always be poverty. The key is ensuring people have the opportunity to not be trapped in it. Often times what happens is there are unintended consequences of government intervention that can actually be worse than doing nothing. We have plenty of data to show how welfare, public housing, minimum wage, etc all often times result in people being trapped in poverty either directly or indirectly.

Human Nature: One aspect that I think people over look is human nature. Everyone is not motivated. Everyone doesn't always think of the greater good. There are simply lazy people and people who make bad choices, have bad luck, etc. Even if you had UBI, there will always be someone who is going to blow their money on hookers and coke. Society is not just going to let them rot. This is why even with UBI, you can't get rid of welfare. The bleeding hearts won't let people lie in the bed they made.

originally posted by: FlyInTheOintment
It sounds like you have an opinion which is in some way informed - but you haven't shared any information or justification of the opinion to which you averr..? Just saying it's naive in passing, then walking off without comment, comes across as damn patronising to be honest.

Um. If you want discussion then best not insult me, eh?

In my experience UBI means different things to different people. I would suggest that most people who support UBI are naive and do not grasp the complexities of trying to keep a balance in society between those who are net contributors (in tax) and those who are net takers. That is to say, at what point does a person's earnings actually tip the balance where society no longer "gives" them money, usually through a combination of welfare, housing support (i.e. UK=Universal Credit) and tax concessions / income support et al. You can work that out for yourself here at the ONS.

In the UK if the UBI was (say) £10K then then people who actually benefit from the indiscriminate hand-out would still require the State to give them welfare and other benefits. On the other hand, if the UBI was to remove all benefits then the payment per person would be excessive at c. £30K per annum.

The proponents of UBI fail to identify how the State would pay an increase in the welfare bill, which in the UK is pretty large. Nor is their consensus as to how to avoid the problem where it becomes a career choice not to work at all. This problem is hugely divisive in our society and has happened in the past.

UBI sounds good, but I have never seen a proposal which I could support. Your proposal outlined in the OP would be unworkable IMHO, where you use the example of a family doctor without perhaps considering that a family doctor (assume you mean GP) is in the top earning bracket, so is already quite well-off thank you very much. Why give a igh-earner a pile of cash?