A citizen's wage

[ymu]

Would result in lots of public sector job losses (getting rid of many of the people who are administering the current system) ?

Sounds like a good idea to me though.

Yes. It would mean a small expansion in HMRC and the abolition of DWP completely. There'd also be savings down the line in the criminal justice system and the health service. It would be a much smaller but much more effective public sector.

 

[Jazzz]

I think this is an excellent idea. I would even make it the way money is introduced into the economy (rather than by bank loans).

 

[ymu]

It does have some excellent Keynesian properties, that's for sure. Nice spot.

 

[littlebabyjesus]

I also think it's an excellent idea, but what would you do about my only objection: that non-citizens would not be eligible for it? It could become divisive and insular.

 

[ymu]

I also think it's an excellent idea, but what would you do about my only objection: that non-citizens would not be eligible for it? It could become divisive and insular.

I've been pondering on this.

Immigrants come to work, generally, and would pay the same high taxes as anyone else, so justice would demand that they also receive the CW, at least once they are in work. Given that we already do offer a form of social security to immigrants whilst they are unable to work due to the rules, I also can't see why this wouldn't continue. It might need to be a modified version of a CW based on a temporary NI number, but I'm not sure I see a problem.

 

[DotCommunist]

It would certainly discourage economic migrants. But given the current stats fo unemployment amongst people born here is that a bad thing? There is no shortage of labour here, just a shortage of jobs paying a livable wage.

 

[littlebabyjesus]

It would certainly discourage economic migrants. But given the current stats fo unemployment amongst people born here is that a bad thing? There is no shortage of labour here, just a shortage of jobs paying a livable wage.

No, it doesn't work like that. If you ended migration tomorrow, that would almost certainly push unemployment up. Jobs aren't zero-sum – a person takes a job, then they pay taxes and spend their money themselves, and jobs are created elsewhere as a result.

The structural unemployment we find ourselves with is essentially the product of the free market, but restricting the market without putting something else in its place just makes things worse. A more sensible way to reduce unemployment is for the government to create jobs – look at what needs to be done and get people doing it. Pay for this through taxation initially, but in the long term it more than pays for itself. The housing shortage is a good example of where there is massive scope for job creation without causing inflation. Should have done it this year instead of quantitative easing, but that's another matter.

 

[ymu]

The CW would probably reduce the tension between immigrants and the established population. Many people would choose to do voluntary work or pursue their dreams in the arts or care for family members. Many more would choose to work part-time and job-share. Most people in work would be fairly well off. It could be the solution to the problem of supporting the older generation. Given that we are not going to commit mass murder to keep the population under control, we are going to have to quit worrying about when we'll get full and start addressing the problem of the inverted population pyramid. We need young skilled immigrants to support the ever increasing number of pensioners. This could be the way to do it.

 

[ymu]

No, it doesn't work like that. If you ended migration tomorrow, that would almost certainly push unemployment up. Jobs aren't zero-sum – a person takes a job, then they pay taxes and spend their money themselves, and jobs are created elsewhere as a result.

Yes. Immigrants tend to create more jobs than they take (obv varies for different groups because they arrive with different resources). The Sun ran a headline in the late 1980s saying NO! when Uganda asked for its Asians back. Since they'd arrived in the early 70's they'd created something like 120,000 jobs; there were 20,000 of them. The Sun.

 

[littlebabyjesus]

I'm completely in favour of this, for all the reasons you give in your OP. It's an idea that's been around a long time – Bertrand Russel advocated it 100 years ago – but I'm still worried about how you accommodate immigrants into the system without creating a 'with papers/without papers' divide. I also favour the free movement of people, and this does cause tension with that idea for me.

Maybe it would just have to be the case that the CW would be a system you'd move into after a certain time here. Still don't like that too much though.

Mind you, it's already hard enough to come here legally if you're from a poor country, so maybe it wouldn't be any worse.

 

[ymu]

I'm completely in favour of this, for all the reasons you give in your OP. It's an idea that's been around a long time – Bertrand Russel advocated it 100 years ago – but I'm still worried about how you accommodate immigrants into the system without creating a 'with papers/without papers' divide. I also favour the free movement of people, and this does cause tension with that idea for me.

Maybe it would just have to be the case that the CW would be a system you'd move into after a certain time here. Still don't like that too much though.

Mind you, it's already hard enough to come here legally if you're from a poor country, so maybe it wouldn't be any worse.

No. I've concluded that you would be given a temporary NI number and the CW when you arrive on an immigrant visa or apply for asylum, or register in some other way. It'd cost no more than what we do now, given that we prevent these people from working - they came to work, let them pay tax!

 

[littlebabyjesus]

Refugees are prevented from working, yes. Hmmm. I don't know. What about simple economic migrants. I lived in the US for two years. I was an illegal immigrant doing various illegal immigrant-type jobs. Not just for that reason, I'm always on the side of the illegal immigrant – good bloody luck to them, wherever they may be. I could see this kind of system being very effective at excluding those who don't have a visa. It's a plan for a just world, but this isn't a just world.

This might just be part of my contradictory nature, though. I like ideas like this that would improve this society, but if it can't be applied worldwide, I'm more concerned about preserving the spaces in between authority that make our iniquitous world more bearable to be in.

 

[ymu]

Right, to sell this we need to know what happens to work patterns with a CW. We need some evidence. Anyone know a billionaire or two that would be willing to fund a pilot? I'm thinking Manchester.

 

[ymu]

Refugees are prevented from working, yes. Hmmm. I don't know. What about simple economic migrants. I lived in the US for two years. I was an illegal immigrant doing various illegal immigrant-type jobs. Not just for that reason, I'm always on the side of the illegal immigrant – good bloody luck to them, wherever they may be. I could see this kind of system being very effective at excluding those who don't have a visa. It's a plan for a just world, but this isn't a just world.

This might just be part of my contradictory nature, though. I like ideas like this that would improve this society, but if it can't be applied worldwide, I'm more concerned about preserving the spaces in between authority that make our iniquitous world more bearable to be in.

By definition we cannot give illegal migrants the CW because they haven't told us they exist. If they register they'll get the CW whilst their claim is being looked at. There won't be a shortage of jobs with a CW - we'll just have more people doing jobs they love and more people working part-time. I want the migrants. They need to pay my pension!

 

[kabbes]

Someone entering a minimum wage job on £10k would pay 4.5K tax for a net income of £15.5k; they're better off by 55p in every pound they earn. Those entering minimum wage work today pay a 95% marginal rate of tax, being only 5p better off for every pound they earn.

I hope I haven't fucked up these figures. kabbes, where are you?

Nah, you don't need me. There's nothing wrong with your calculations. I don't think a lot of people realise how little incentive there is to take a minimum wage job compared with staying on unemployment benefit.

Looking at it from a total fiscal perspective -- let's say 40m people on £12k and 20m on £5k, to keep the numbers simple. That makes £580 thousand million (£580bn) -- call it £0.5tn. GDP is about £2.5tn. Theoretically, it means taxation on output needs to average around 20%.

Obviously its more complicated than that. Building it up instead:

Breakdown on UK public sector spending. I haven't looked around that website though, so I can't vouch for its accuracy. It has very detailed drill-downs though, so if they're making it up then they're going to a lot of work to do so.

One thing I get from exploring the website a bit is that "real UK GDP" is only about half that given by the Wikipedia figure of £2.5tn, above. Odd.

Anyway, if it's right, we currently spend £638bn in total in the public sector. Pensions and welfare make up £206.6bn of that. Drilling down to the item-by-item lists reveals probably about another £50bn that wouldn't be needed if there was a citizen's wage. Call it £250bn in total. By comparison, though, that's quite a shortfall to £580bn. It means a like-for-like spend could only give about half the proposed amount.

Then we have education and health, which make up £190.4bn. I assume that there would be no plan to privatise these though, and let people buy their own services? I wouldn't be an advocate of that.

One unknown factor is what the existence of the citizen's wage would do to the total tax revenue. It might go up, because disincentives to work on the grounds of marginal gainst have been removed. On the other hand, it might go down because you are removing the overwhelming need to work.

The costs certainly seem uncertain, anyway.

 

[littlebabyjesus]

One unknown factor is what the existence of the citizen's wage would do to the total tax revenue. It might go up, because disincentives to work on the grounds of marginal gainst have been removed. On the other hand, it might go down because you are removing the overwhelming need to work.

My guess: it would go up. As you yourself say, the incentive to do low-paid work right now is tiny. Most people will want to earn more than the CW, so will work. Maybe more people would work part-time, but I would suggest that this would serve to increase productivity as people work shorter hours but fuck around at work less. Then, of course, there are the uncountable benefits from the time and energies directed towards not-for-profit activity.

I think you probably underestimate the savings, too. Of the overall cost of administering housing benefit/the dole, currently less than half of it goes to the claimant. There are potentially enormous savings to be mad there.

 

[kabbes]

Total spending on pensions and welfare are still only a tad over £200bn though, regardless of how that is distrubuted.

 

[IMR]

There was a study on the effects of 'negative income tax' on employment take-up somewhere, iirc there wasn't a big effect either way. Negative income tax is a Friedmanite idea, but it has some features in common with the universal income/citizen's wage.

 

[IMR]

Charles Murray, one of the two authors of the IQ-is-destiny book The Bell Curve also backs a universal wage.

Maybe some on the libertarian right like the idea because of its potential for saying 'Here's your £150 a week, now stop bothering me'. Sort of seven acres and a mule for modern times.

That said, it's an intriguing proposal.

 

[littlebabyjesus]

Just because idiots like him back it doesn't necessarily make it wrong. And if he's co-author of the Bell Curve, he really is an idiot.

Best not to listen to his opinion – he won't have thought it through properly either way.

 

[IMR]

Just because idiots like him back it doesn't necessarily make it wrong.

For sure, it's an interesting idea. We already have one universal no-questions-asked payout in the form of Child Benefit.

It might be interesting to look up some of the arguments made to advance it in place of means-tested benefits.

 

[ymu]

For sure, it's an interesting idea. We already have one universal no-questions-asked payout in the form of Child Benefit.

It might be interesting to look up some of the arguments made for it at the time to replace means-tested benefits.

I think it was because even middle-class women did not necessarily get given any access to money.

This article sort of discusses the arguments.

 

[Rod Sleeves]

Charles Murray, one of the two authors of the IQ-is-destiny book The Bell Curve also backs a universal wage.

Maybe some on the libertarian right like the idea because of its potential for saying 'Here's your £150 a week, now stop bothering me'. Sort of seven acres and a mule for modern times.

That said, it's an intriguing proposal.

There are those who promote a minimum income guarantee, along with a flat tax and privatisation of pretty much everything else, and you're right it's entirely based around the idea of "I'll pay you to stop bothering me".

From their point of view it's really just paying corporate welfare direct to the consumer who can then pay it straight back.

 

[tbaldwin]

It would certainly discourage economic migrants. But given the current stats fo unemployment amongst people born here is that a bad thing? There is no shortage of labour here, just a shortage of jobs paying a livable wage.

Be a really good thingfor millions of long term unemployed and underemployed.
And it might discourage some economic migrants if uk born people were not stopped from working by a daft benefits system. But as an internationalist that is a good thing. People should not all be encouraged to go the richest countries and/or regions. It increases worldwide inequality and is terrible for the environment.

 

[Jazzz]

I think you probably underestimate the savings, too. Of the overall cost of administering housing benefit/the dole, currently less than half of it goes to the claimant. There are potentially enormous savings to be mad there.

Really is it that bad? Gosh.

 

[tbaldwin]

Bumped.....as i think its a good iudea to generate some positive ideas and not just anti cuts stuff etc.
Also its interesting to push for as Cable, Clegg and Cameron are all talking about cutting down on bureacracy and this could lead to a lot less bureacracy than tax credits etc....