It might skew it, but YC is probably trying to answer a more fundamental question. If people are provided a minimum lifestyle what will they do? I don't think anyone really knows if it will be a golden age of entrepreneurs and self improvement. Or if people will just sit on the couch, have kids till they can't afford them, become addicted to drugs.
If people are provided a minimum lifestyle what will they do? I don't think anyone really knows if it will be a golden age of entrepreneurs and self improvement.
If only there were a group of people with sufficient money they never had to work! We could study them and see what they did to amuse themselves.
We've seen string free money transfer already work in some places. There's been a few trials an follow up on that, although not in Western countries.
What I'm really curious to personally answer is: what would happen if everybody would be guaranteed a basic income? What kind of problems would it introduce? Would the new minimum income become a poor tool because of corresponding price increases (to capture that income)? Or would it work well long term?
That's why I'd love to see a small country. Preferably not Switzerland or Nordic. Because they've been able to create programs that others have a hard time replicating. A country with a more mixed population (religions, races, education levels).
I understand this, but ignoring what I mentioned means the question becomes, "What would people, who are provided a basic income in addition to basic government services, do?"
For example, an important question is if the implementation would require disbanding Obamacare, reverting to the old system, etc. The ability to obtain healthcare can sway a lot of outcomes. I might have pursued a more entrepreneurial path in the past if I had an option of basic income in addition to healthcare.
Obama care made health insurance a lot more expensive for me. I used to pay $66 a month for a high deductible PPO plan now I have to pay triple that for an HMO with a similarly high deductible. In other words it made following an entrepreneurial path more expensive.
Lets interpret the claim charitably - people on welfare have reduced work effort, increased fertility, and increased drug consumption. Do you assert that any of those claims are false?
The assertion is that none of those are inherent qualities of a group. Reduced work effort is a chicken egg issue. Of course people on welfare are going to have reduced "work effort" -- joblessness is probably what made you have to get it in the first place.
Same with drug consumption. I would question any "higher drug use" measure as selection bias -- investment bankers aren't generally being drug tested are they? That doesn't mean the overwhelming majority are not eager to earn a productive living.
I think it would be great to drug test for it (but damn expensive and not very libertarian). I bet you'd see a lot of well off people not opting for the free income because they "don't need it" whereas they'd line up for it without a drug test.
A further claim is that increasing welfare reduces work effort. Is this disputed?
I don't know why we are discussing drug tests for welfare, but simple arithmetic provides a very low bar for them to be cost effective. Google suggests a drug test costs $10-30. If welfare costs $15,000/year, then you only need to have a 0.2% positive rate for it to be worth it.
Do you think folks on welfare do drugs at a rate lower than 0.2%?
> A further claim is that increasing welfare reduces work effort. Is this disputed?
Yes, it's disputed. Assuming that you/the GP are correct, and that data do exist that people on welfare have reduced "work effort" (how is that measured?), increased fertility, and increased drug consumption, then you of all people know that correlation doesn't mean causation. It could be that their increased fertility and/or drug consumption caused them to go on to welfare. Or vice versa.
Either way, it would be very hard to draw any conclusions from such data outside of correlation.
In addition to confounding, you also run into lots of statistical biases in such data. As someone else pointed out, poor people are screened for drugs at much higher rates than non-poor, because the jobs that poor people work in are much more likely to require them. As such, even if such data exists, it would be very suspect.
Furthermore, drug testing the general population, even one that has marginally higher drug use rates (and I've seen no convincing data of this either way) runs into the problem of predictive value and false positives (for the same reason screening the general female population under 40 for breast cancer results in massively high rates of false positives).
I think it was more of a "follow the money" kind of argument. Governments want to collect as much and pay out as little.
One way to pay out less is to create a barrier such as drug testing. according to the math, drug testing is "worth it" to that end. Its also fairly politically acceptable compared other more extreme examples such as lowering the welfare amount, random denials or killing poor people.
Naturally, I'm not in favor of any of those options.
Drug consumption is definitely wrong. Poor people can't afford drugs. People on welfare in states that require drug testing of welfare recipients have much lower rates of drug use than the population at large. http://thinkprogress.org/economy/2015/02/26/3624447/tanf-dru...
Consider their headline number - Missouri. Testing cost $336k and found 48 drug users. Assuming welfare costs $10k/person, it saved $480k making it a net positive. All the other states they discuss had significantly higher returns (5-10x).
This all assumes not a single drug user was deterred from applying and also that not a single welfare recipient was deterred from using drugs.
Further, none of these measure the question of whether poor people do more or less drugs. Most of these programs only drug test some people and have expensive human-administered programs to decide who to test: "complete a written questionnaire about drug use"“suspicion-based drug testing for each applicant”,“reasonable suspicion exists” that they might be illegally using “a controlled substance or controlled substance analog.”
The fact that these programs found very few drug users is merely due to the fact that welfare recipients aren't dumb enough to put "yes I do drugs" on a written test.
This article is pulling the social sciences shuffle - find a socially undesirable conclusion, write an abstract hinting that it's false, and bury the truth in the data tables.
The reason these rely on surveys instead of urine tests is because courts have deemed mandatory testing to be an unreasonable search, while random testing based on reasonable suspicion hasn't been shut down by courts (yet). Florida tried to have mandatory testing for all welfare recipients but the courts threw it out.
Nevertheless, these results are really astonishing and I think you're looking at them all wrong. Some bureaucrat in Utah thought that 460 welfare recipients were suspicious and ordered them tested, but only 18 of them tested positive. The bureaucrat was wrong 96% of the time, and the 4% usage rate is both under the drug use rate for the general population of that state (6% self-reported) and over-represented (because these were the 10% specifically selected people that the agency thought were using drugs).
Anyway, your profit and loss analysis seems fishy to me. It is highly unlikely that by denying 14 applicants their welfare checks the state of Utah saved anything near 100% of the face value of said check. In fact I would say it is quite likely that the state paid some fraction (with no upper bound) of that on subsequent support for and/or enforcement upon the unsupported people and their families, not to mention the general economic loss of not putting that money in motion.
If you want to do a more detailed cost/benefit calculation, go ahead. I'd love to see it. But you do need to include the benefits which that article pretty explicitly does not.
not to mention the general economic loss of not putting that money in motion.
Can you explain what this means? Sometimes I hear language like this describing Keynesian stimulus, but you do know we aren't in a recession, right? We don't have any slack labor force that can be tricked into working by reducing their real wages while holding nominal wages fixed.
We're grownups here. It doesn't require an explicit reference to race to read between the lines. That stereotype is a historically racist get-out-our-kind-of-voters code.
Not racist, but perhaps a bit too coarse. I don't really consider BI to be welfare though. It's not need based, and generally has more possible upsides to it than welfare. Like being able to start a business with the money.
Point is it could be the wrong direction. We don't really know yet how it should be implemented. Experiments like this are what is going to tell us.
