Switzerland to vote on universal basic income in referendum on Sunday

There have been calls to raise Australia's dole up to $300 a week. With the minimum wage at $680 a week (before tax) there'd still be incentive for people to work rather than sitting at home on welfare.

 

Interesting concept!

Think someone alluded to it earlier but those on the lower paying jobs would be better off not working than getting paid $2 per hour or so. Which would mean they'd need to pay more... Which would mean... Inflation?

 

Plus everyone would spend more because the had more money.

 

Prices of things will go up (more supply of money).

Rents up, property up... Bring it here to Australia

 

Our dole payments are a disgrace.

 

It is an interesting read - how many of you read the links?
My mind explodes slightly trying to figure out what would actually happen.

As mentioned on one of the pages, the jobs that would be impacted would be "dirty jobs" - low pay and bad conditions. Would they see the establishment of an underclass ("illegal" immigrants maybe?) to perform these jobs for cash, or as suggested on the web page would there be technological innovation to solve the dirty jobs problem?

Reduce/eliminate income tax and some corporate tax (eg payroll tax or whatever they have), which reduces the administrative costs associated with same, increase the consumer taxes to offset the reduction in gov revenue...

Once the 3D printing of food progresses a bit more, we really will be ready to live in the post-scarcity world of Star Trek.

 

Poor people spend more money, so it should be

We are already are living in a post-scarcity world, it’s just that we see more and more **** as being necessities!

 

If someone is cleaning the streets for before UBI for $2,500 and they introduce a UBI of $2,500 then they won't do that job (after all you get paid nothing compared to sitting at home compared to working).

So you now need to pay them more, GREAT (or is it).

Lets say you now need to pay $4,000 instead to get them to clean the streets they still need to minus the UBI so their effective extra pay is $1,500. So far all seems good.

However two clear issues arise for me;

1. Who pays the $2,500 UBI back to the government? The company? If so then the end user needs to pay so products become more expensive or if the government pays it then taxes go up... Unless of course you want to run things at a loss...?

2. If a teacher (learnt a skill) was earning $3,500 what incentive is there to now study and further educate yourself after all you may as well clean the streets instead of spending years getting your degree. So in order to make it appealing for people to continue to develop their skills so what do you pay them now? If you pay them $4,000 they should probably just stick to cleaning the street so now you pay them $5,000 or $1,500 more than the UBI.

All you have really done is given more people more money which in turn will push prices up (might not happen the very next day) but as cost to produce go up so does the cost of living.

Same as if you doubled everyone's salary (sounds great in theory).

A person who is on 30k p.a. now has 60k p.a. so they think ohh I can now rent a better house (or save for one) so instead of living in scum land (didn't want to reference a suburb) they can now live in median land... So they think. The issue is that people who were at 50k p.a. are now looking to move better as well and so on up however the people who were at 50k are now on 100k so they still have roughly double the income of the 60k people (previously 30k).

Save for a house hey! Well all that will do is make it even more unaffordable (to the complainers) as people in property will ride that massive wave and laugh how they paid 1M for the median house in Sydney when it is now at least 2M (again not happening overnight).

 

The unemployment system is very generous, 70% of your previous salary, or 80% if you have kids, for up to 2 years depending on how much you have worked in the past few years, up to a maximum of about 10K CHF a month. As I said before, wasn't a huge incentive to find another job when I used it for a few months.

I think the proposal will not get through. Switzerland is slightly right leaning and they have a lot of these sort of peoples referendums. This will be seen as too socialist.

Some of the famous referendums when I lived there (kick out foreigners who commit crimes, and prohibit minarets on mosques).. these Ads were plastered everywhere and didn't go down too well with a lot of people or internationally (first one failed, minaret ban passed).

 

This isn't about buying property though. This is just about giving people a living wage. Yes it has the possibility to create inflation, but the problem Europe is currently suffering is deflation and stagnant economies ever since the GFC because austerity is not working. Europe's obsession with austerity is starving economies of sufficient aggregate demand to ensure there are enough jobs created.

Keynes noted in his battles against the Classical economists during the Great Depression that the classical remedy of attempting to cut real wages was bound to fail for a multitude of reasons. First, it is not guaranteed that a cut in nominal wages will result in a cut in real wages if prices fall as the economy moves into recession. Second, wages are not only a cost (part of the firms’ supply side decision making) but also an income, upon which aggregate demand depends. He argued convincingly, that wage cuts would probably undermine aggregate demand as much as they “improve” aggregate supply and so nothing is gained other than the workers are worse off and still unemployed. Third, and most relevant to the living wage – Keynes also argued that most firms would resist cutting wages of their work force because they would not want to be seen as being a capricious employer. They soon work out that if they hold their workforce to ransom when times are tough, the tables will turn in goods times.

The whole point of introducing a living wage (other than helping to raise living standards for the poorest citizens) is about boosting consumption. Spending= growth. Unfortunately, the usual policy recommendation from mainstream economists when there is mass unemployment is to cut the real wage (via money wage cuts) to allegedly stimulate the demand side and to simultaneously cut welfare benefits to stimulate the supply side (aka making workers desperate in the misguided belief that they will have more incentive to get jobs). A living wage would stimulate spending and allow individual balance sheet restructuring (deleveraging) to occur swiftly.

 

I understand it isn't about property prices but more money earned means more expensive to hire so either you cut jobs or pay more. By paying more means the cost of the product goes up as the end user will need to pay.

E.g. Lets use a builder and their rough cost of 1/3 labour materials and profit (not all profit) or;

$33 in labour
$33 in materials (the manufacture is $11 L/$11 M/$11 P)
$33 is profit
Total - $99 (end user pays)

If you double everyone's wage (or pay them a UBI which causes them to get paid double).

$66 in labour
$66 in materials (as the manufacture now is $22 L/$22 M/$22 P)
$66 is profit
Total - $198 (end user pays)

If the builder doesn't increase their price he is left with
$66 labour
$66 materials
-$33 profit
Total - $99 (end user pays)

Guess what it also happens in reverse if pays are halved because there is less supply of money/demand drops off.
$16.55 L
$16.55 M
$16.55 P
Total - $49.50

Lets look at inflation;


If something cost $100 in Argentina in 2006 today in 2007 it would be roughly cost $115 (15% inflation) in 2014 it using the inflation rate it would now be $458.07

Compared to the Australia it would be $134.07.

If you didn't increase wages I would much rather live in Australia as I am only $34.07 worse off for this purchase compared to Argentina which would be $358.07 worse off.

At what point do you increase wages or increase cost?

To note Argentina property price has decreased as people are not wanting to live there due to hyper inflation.

 

Live in Bali until my visa runs out, go home, come back. Start an interest business. Live like a king.

 

Payments would stop when you left the country, at least that's how the unemployment system works, although you are allowed 1 week "holiday" from unemployment every 3 months where you are still paid when out of the country.

 

A holiday from a holiday!

 

The question is not will happen if we do, but what will happen if we do not introduce a living wage. We are coming to an age where advanced AI and robotics will produce an incredible excess of labour resources. Unlike in the past where new tech produced new jobs, generalist machines will fill jobs at a faster rate than they will be created. The alternative is massive negative social upheaval. Think of this as guillotine insurance.

Some people will bludge, so what, they will spend their money and thus pump it back into the economy, but they will be in the vast minority. Some people will also get a part time job and will be able to persue other activities eg, volunteering, working on open source software projects, making music, writing, creating, parenting. I'd love to have another 50k part time developers on OSS projects. Most people will continue working, but the nature for work will vastly change.

For an interesting read on this sort of stuff...

Augmented: Life in the Smart Lane
Front Page - Augmented

 

Was just going off the facts of the OP "no matter where they live". Lol

 

Universal basic income in exchange for being sterilised.

Deal.

 

This is what quantitative easing should have been

 

So where is all this extra money gonna come from is what I am wondering about!

 

House prices would go crazy. Economy would increase. Every store/food restaurant would be making a killing. Remember when Rudd was giving away money that was insane enough. I don't think anyone would know for sure what this would do good or bad