What should I consider in a society with basic unconditional income?

Question

I'm creating a city of about 200 000 people in a nation equivalent to a modern western nation, like Germany, France or the United States.

Strong economy and a calm society, but still a conspicuous underclass.

The nations government is about to realize an unconditional basic income to overcome poverty. Politics just perceived that the question is not if the nation could afford a unconditional basic income, but if it could afford poverty. (Please do not go to deep into a political discussion, this will not be the point of my question.)

The income is enough to cover the most basic needs of anyone who is registered in the register of residents. No one has to worry about enough to eat, or frostbite in winter. Even if one lives a really spartan life, it won't be enough to save more than a few 100$ per year. A saver would have to save several decades just to buy a car which most others could buy after some months of work. The "I'll never have to work again" is viable, if one does not want to have any fun in his life.

I assume that the unpleasant jobs of today would be better paid, as no one would work as a charlady if the salary is not noticeable higher than the basic income. So when no one applies for this jobs, the wages rise. If jobs are still paid so low, they are not needed.

So my question is:

What kind of influence would a basic income have to the society on the level of a city, not the nation?

My thoughts so far:

• Changes in nearby cities also will take influence and other way round.
• Will everything noticeable on a national scale, also occur on a city's scale?
• Depending if it's leading to better social harmony or disaffection, would it be "safer" on the streets in general?

Edit: More specific version of the question: What change would occur only on city-level and what change would NOT occur on city-level even if it occurred on national level?

Answer 1

City vs Nation
Since this is implemented at the national level, it seems to me that whatever happens in the nation at large will also happen at the lower level. This might vary if the city has a high concentration of high-end (say tech) jobs (you would not see much change), or if contrarily, it's a big slum with unpleasant jobs (most people would stop working and those that stay would want a lot more money).

This is actually going to happen
Realistically, I think some sort of basic guaranteed income is unavoidably in the future of western societies, since it's more efficient for most people than having a massive administrative bureaucracy to handle welfare. So I'd expect to see this before mid-century around the world.

Fewer jobs, better paid
Now, the obvious direct implications will be economic: A lot of things will become more expensive, and a lot of things will become (more) automated. In reality, I'd expect a basic guaranteed income to be implemented in response to high and persistent unemployment, especially youth unemployment, so the job displacement might predate the law.

(Parasitic) Leisure Class
Now, presumably many people would choose to spend all their lives online playing games, watching pornography, replying to questions on stack-exchange, partying or doing haven-knows-what, so the pool of available labor will likely decrease somewhat. Now these were presumably unmotivated and rather marginal workers to begin with (since more ambitious people would not be satisfied with a basic income), but there would be an economic loss at first. A vast class of people would just consume and never produce anything besides waste. Many might travel to other cities just for seasonal activities (carnivals, oktoberfests, mardi gras, etc) or other festivals. We'll come back to the sociological implications of this later.

The Body Economic
Presumably, as jobs become scarcer, and literally unnecessary for survival, those who still are able and choose to have a job would presumably gain some non-financial reward from being employed, in terms of peer prestige (at least among those who also have jobs). By contrast, members of the leisurely class might instead respond by considering these workers "idiots", "squares" or "dorks." YOLO, man, and all that.

More risk-taking
Moving to a new city, starting over, taking career risks would all be more common, since there is a safety net in place. So I'd expect greater entrepreneurialism and more labor mobility.

Addicts and mentally ill problem
Another important consideration to keep in mind is the behavior of addicts and the mentally ill. Simply providing an addict or a mentally ill person with money 'for rent and food' does not mean the money will be spent for rent and food. So you might still have homeless and hungry people.

Sociological implications
Marx famously noted that man is a working animal. By this (to explain it anachronistically) he meant that having a sense of doing useful work is an essential part of a human's Maslowian self-fulfillment. By providing a basic income you resolve the issue of alienation of labor (at least in part), but you potentially deny an avenue of self-fulfillment. Contrary to the rosy views of today, not everyone can be an artist or a craftsman (most people are lousy artists and have two left hands as far as craftsmanship is concerned), since those activities require an audience, which will still be a scarce resource. So how will people find self-fulfillment? Hard to say, but I'd guess in addictive virtual worlds and through volunteering.

Answer 2

Financing

Financing a city level basic income is going to be more complicated than financing a national one. Some things that a nation can do that a city can't:

• Print its own currency.
• Borrow against the ability to print its own currency.
• Tax all citizens rather than just those resident within its borders.

The issue with borrowing isn't that a nation can borrow money for basic financing but that it can use the money as bridge financing for slower economic times. In other words, the city is likely to have to cut back on its basic income payments at the exact time when they are most needed. A nation can borrow for a few years to keep payments flowing but a city often can't.

If taxes are increased to pay for basic income, it provides an incentive to move somewhere else. This can be difficult at the national level. You have to move away from your job, find another country that will allow you to immigrate, move away from family and friends, etc. At the city level, this can follow an existing pattern: suburbanization.

Because taxes are increased, jobs have to pay higher wages. This encourages employers to move out of the city. This won't work for everything. For example, government jobs can't move. But a large retailer might well move just outside city limits so as to take advantage of the lower wages. A manufacturer certainly. It's hard to move something like a port, but traffic can be diverted from one port to another. The impact on new business is important too.

All this matters because a city can tax people who live there or work there but not those who move. A nation can tax citizens, even if they move outside the nation. A city can't tax people who both live and work elsewhere.

In general, proposals that work at the city level either need a specific source of financing, e.g. sale of mineral rights, or national support.

Safety

Well, we could look at what has happened in existing areas where income has been supported, for example, housing projects. Are housing projects more or less safe? Anyone who's ever helped with distribution to the poor can tell you that many people resent charity. With basic income, they'll likely resent that it is not more. Obviously, that's the result of the greed of those who pay for the system.

Immigration

With a nation, it can be difficult to move into the nation. With a city, it's easier. In particular, cities almost always have suburbs next to them where people commute to and from the city for work. Interstate commutes are more difficult and less common. I would guess that this is even more true for countries, even those like Switzerland and Germany. Jobs usually don't exist right at the border between countries. They quite often exist close enough to the borders of cities since cities are smaller. Simply, it is more feasible to move to a city for basic income than it is for a country.

Risk-taking

Implemented at the city level, this will decrease many ways of taking risk. Note that if you move out of the city, you lose your basic income. So it's harder for someone on basic income to leave. It can increase other forms of risk-taking though. There's less reason to worry about giving up your job locally to do something else locally. There's also less reason to worry about something like gambling.

In fact, it favors really big gambles. You may not want to take little gambles as taxes could reduce your winnings. But a truly huge gamble may be worth it. Particularly if you can move before the tax bill comes due so that you can get the lower taxes from outside the basic income zone. It also favors illegal gambling, as that can avoid the tax penalty altogether. Of course, illegal gambling would also make sense in a national system whereas moving before taking one's winnings probably would not.

Inflation

This can't cause general inflation, as a city can't print its own money. This can however move inflation. In particular, things on which the poor spend money may become more expensive.

Class Warfare

This is unlikely to have much impact on class warfare. The Haves will continue to look down on the Have Nots and the Have Nots will continue to resent the Haves. It may express itself differently on the part of the Have Nots, as they wonder why the Haves bother to work when they could just get basic income.

Answer 3

I assume you are asking for suggestions what aspects you need to consider when designing such world.

This minimal basic income needed for basic spartan life would be very different in different parts of any country - because climate is different. In Hawaii, you can live in tent on a beach year-long (and have more resources for food and fun), in Minnesota - living in tent during winter would be less fun. So if basic income would be established, people would move to such hospitable places and life with basic income there - would be "working" people allow that? Would be some areas of Hawaii reserved as a ghetto for "basic income" people, and others, more desirable, for paid tourists?

If basic income covers cheap 1-bedroom rental, I can again save (and have more fun) by living in car/van/RV on public lands for free, and move with the climate. So would government provided me with money for housing, or free housing without me having a choice where do I live? Can I travel for summer in Colorado/Montana and winter in Arizona/Florida?

There is currently such traveling "tribe" in USA - retired snowbirds, almost a million strong, and almost invisible because they spend winter in public lands and cheap campgrounds in the West. They do live on fixed income. They do volunteer a lot - like volunteer camp manager and/or bathroom cleaner few hours per week for free camping permit.

So even in such economy with basic income provided, people would barter their skills and services for other services they need, even without money being involved.

Another problem is how to deal with people arbitraging cost of living differences between countries (and not regions inside same country). Will your basic income follow you if you live in different country? Thailand on $1000 per month is better than New York City. Should your spending of basic income be creating income for taxpayers who pay the tax to support your basic income? Or income for Thailand hotel/entertainment industry?

Another aspect: possibly service providers would differentiate if they provide services for "basic income" people, who are extremely sensitive to price, and would accept lesser quality and worse service experience ("Walmart model"), or more upscale, with substantially higher profit margin. Would there be mixed shopping malls? Or would they be separated?

Big part of econonic interactions are about signaling - I think that extravagant dresses evolve as conspicuous consumption to visually separate "haves" from "have nots". If so, criminal gangs would steal such clothing items, and/or create fake counterfeit.

Would police spent resources providing protection to "have nots" who by definition do NOT pay their salary? Would "equal protection" still apply? And if involved with any crime, how a jury of your peers will be defined? If some "have not" steals clothing item from a "have" person, would offender will by judged by:

• (1) 100% "have nots", his peers?
• (2) 100% "haves", peers of the victim?
• (3) haves and have nots mixed, as they are represented in national averages? Or as in local city, which might be substantially different in cities with warmer climate?

If someone works for a salary and pays taxes (a "have"), how long this status will last when such person retire to live off basic income? Would rules be different for disabled person, who cannot work? What about partially disabled? Naturalized immigrant?

Nice can of worms. Good question.

Basic income for no work is unlikely to happen: it clearly separates community to "makers" and "takers". I am aware that with productivity increase and automation, amount of work available will decrease. More probable are:

• work programs (build roads in National Parks) for people who cannot find profitable employment
• job sharing (two people can share one job, if they can live basic spartan life off half the salary)
• early retirement. Work 10 years and live as unemployed off of savings for 10 (and travel/play music/improv comedy on corner as you wish). later, or when bored, you can come back to work and earn more.
• earned income tax credit - which you get only if you have some income.

In each of these situation, you still "earned" your leisure time, government control of resources is much less (no forced "free housing"), and market drives allocation of resources, not a government agency.

More and more question are popping up. What about taxes and voting rights? Would "have nots" or "takers" keep voting rights? Maybe "haves" would be willing to provide basic income, if receivers they give up voting rights? On maybe "have nots" can vote only in local elections (keeping local issues under more control of "have nots"), but not national - if that is price? If receivers of basic income keep national voting rights, are they in majority? And if so, can they tax heavily "haves", cooking the goose which lays golden eggs?

Draft during military conflict: will be basic income receivers drafted preferentially? Or volunteering for military service counts as job: and if so, would be "have nots" eligible to send other people to war?

What about price and taxes on real estate? If you can inherit house in desirable destination, not have to pay taxes on it, and live without effort, what can newly rich "have" trade you for desirable house? So from POV of a "have" such situation would be highly unequal. People who inherited desirable properties can keep them forever, and who did not, will never get any, regardless of the new wealth they accumulated. That would be interesting to see.

Answer 4

More a sociology observation. To quote Arthur Clarke on the novel 3001

...in theory all class distinctions had vanished, there were a few thousand super-citizens. George Orwell had been right; some would always be more equal than others.

You will still have elites. The intelligent specialists. The person who has friends and contacts among the elites etc. The talented artists. Forming powerful clicques or cabals is something humans do whatever their culture is.

Oh George Orwell's full quote is "All animals are equal, but some animals are more equal than others"

Also worth considering a clicque is a group of people who share a common interests. So you will always have groups of people who will "rise to the top". They won't necessarily act superior but their opinions will be highly regarded.

Answer 5

Because this "system" already exists at both the national and local level a few facts can be extrapolated:

1. Large groups of non-working "families" will live in one household or one building. This offsets the rent and food costs and leaves a pool of money available for leisure activities for the "family".

2. The economy at both the local and national level will not perceive the impact of paying for this system due to the extra pool of money being spent immediately back into the economy.

3. If the "system" is paying youth as well, this will encourage the non-working to breed more. (To increase the available pool of money to the "family") This will have educational impacts. This can also have the impact of passing on non-working values to subsequent generations.

4. The social impact of "the system" will be immense. Income of any kind is largely never enough. This is currently a human plight of both the working and non-working. Across the nation people will live to their means. When an unconditional income becomes not enough, the social impact will be some of the following:

   a. resentment

   b. crime

   c. a need for more police and subsequently more arrests of the non-working

a b & c will be compounded by both a sense of entitlement and utter lack of impetus, the unintended outcomes of "paying" non-working individuals.

A sense of self perceived prejudice against those in the "system" will initially be the direct result of their own resentment, and not necessarily the direct result of classism. Since the prejudice will "feel real" (unaware of the causal relationship between resentment and prejudice), a frustration will be felt by both the working and the non-working regarding the issue of prejudice. This frustration can lead to actual prejudice, causing a cycle of hatred.

Not including the physically or mentally disabled, the choice to work or not work will be largely self imposed, making any oppression also self imposed and "self" perceived. This chosen oppression will lead to resentment, in turn leading to frustration and hatred.

"Which came first the chicken or the egg?" is a question of prejudice and oppression that will never be asked or debated by either the working or non-working. In the end, it won't matter, prejudice and oppression will both eventually be a real problem.

Largely "the system" will fail for the same reason it is failing currently in reality; resentment.

Answer 6

I assume that the unpleasant jobs of today would be better paid, as no one would work as a charlady if the salary is not noticeable higher than the basic income.

Basic income is the idea that the sum is payed to every citizen whether or not they have a job. As a result any additional income that the person makes helps them.

A low basic income makes it easier for citizens to take low paying jobs because they don't lose any of the government support the moment they take a job.

Otherwise I don't think that German society would change that much if the job center would stop to pressure people to seek jobs and simply transfers Hartz IV money without asking about the amount of tried job applications.

It likely would need to be a higher amount of money to discourage people from low status jobs.

Answer 7

Some points to consider:

Does the society have a minimum wage law? In theory, the basic unconditional income should undermine the argument that a minimum wage is necessary for people to afford a minimum standard of living.

What is the highest marginal tax rate (including the effect of reduced benefits as income increases)? In theory, the basic unconditional income should eliminate the need to reduce benefits as income increases. The marginal tax rate should then be a function of (aggregate amount of basic income plus amount spent on other government expenses) divided by (aggregate taxable income).

Does the basic unconditional income reduce or eliminate the need for other government welfare programs? (Such as government-sponsored healthcare, old-folks pensions, food stamps, et cetera.)

Does the basic unconditional income cost so much that the government reduces what it spends on other services? (Such as police, fire protection, ambulances, emergency medical services, education, courts, jails, prisons, military training, military bases, fighting wars, et cetera.)

Is voting restricted? to non-immigrants? to members of a particular class? to people who pay more in taxes than they receive from the basic unconditional income program? to military veterans? to people who have not been convicted of certain crimes?

If nobody will ever starve, what incentive is there to educate children? Will uneducated children form dangerous street gangs?

If nobody will ever starve, what incentive is there to get married and stay married? Will children without fathers form dangerous street gangs?

If nobody needs to go to school or work, will most people be bored?

Can cities impose immigration restrictions? How can they enforce them?

What are the standards for success? Are there public prizes or honors for achievements?

Are there restrictions on the number of children a person or family can have? How are they enforced?

Answer 8

Is the value of the basic income determined nationally or locally? If it is the former, then some of the impact will depend on your city's ranking in the national cost-of-living league table. The higher you are, the more likely you are to lose population. The losses are unlikely to be large in the short term for an "average" city, as social ties will still operate, but there will be a tendency for the young to move "downmarket". Over time the "have-not" population may shrink. If the city has very high income levels (think of London as an example) the effect will be much more pronounced.

If the basic income is set in relation to local costs, this mechanism will not operate.

Answer 9

BLS needs to have more surplus, discretionary money. Paying for internet (if you want them to have telephone / communications) and to play games. Paying for drugs. Paying for beer. If you can pay for entertainment, you can choose an austere, ascetic and frugal lifestyle and save and invest money.

If you don't have enough to pay for those things on BLS, and there are no job opportunities, then there will be massive crime. Without those, you're basically describing a wall-less prison situation. Especially as you automate away the low-end jobs, the ones that the most talentless and useless of society need. Expect crime or revolt.

No havenot will be able to keep nice, inherited property. Taxes in places that have taxes, or upkeep in places without - will eventually drag them down. Same if trying to sell access to it - since only the haves will have extra money to drop on tourism, and havenot will not have the nicest place.

Upset in banking industry. Can't get loans, unless you have a job. No spare money to save = means no bank accounts, either.

How is medical handled? Wide variance in needs. Drugs will get siphoned off, from legit needs for recreation.

Food: are you going to let them select their own food? If so, expect more obesity and health problems, as the cheaper food is worse for you (and you seem to be going after punishing people who're on BLS - so they won't be able to afford better). Choose to eat nice, or to not and remaining difference can allow you to save more than a few hundred in a year. If you control the food, and are keeping people hungry (or not fat) - so they can't choose to save the surplus money, expect obesity to be the mark of the haves, who're the only ones who can afford to overeat (your healthy food),

Clothing: same issues. People can save money if they control their own clothing budgets (choose to wear nice, or to not). If they don't have enough, they won't be warm enough in the winter, or can choose to go nude.

If you leave them no other affordable entertainment, expect a lot of sport-fucking. With all that entails. STDs, kids, etc. If you regulate this, expect revolt. Or, figure out your enforcement costs, since you're making a prison. Cheaper to put them all in cells.

Library use == way up.

Not much art for havenots - art requires tools (can be sold off or stolen for drug money), and materials. You might get drawing, as long as this is not becoming a paperless, digital society. Havenots don't get cameras, nor electronic devices. No money for service plans, and cost of devices without service plans are hundreds of dollars. So no digital art, and only long-hand writing, unless computers/typewriters in your libraries.

Same for musical instruments. Down to singing, rapping, and beatboxing.

Storytelling.

Demagoguery, and fun political bullshit. Assuming you don't disenfranchise the havenots. Rabble-rousing and revolt if you do take away the vote.

How do havenots pay for school? No way to advance your skills or career if you can't save up money to pay for school. If you've made school free (in such a society), expect it to be of low-quality. It is, after all, now just a form of entertainment to the bored masses. Not conducive to learning. And, why go to school? You'll get BLS anyways. Haves will get more out of school, even if you outlaw private schools. They can hire tutors, they can get better school supplies, they'll have more and better access to computers to do their schoolwork with. Etc. You will have to outlaw private schools, or the haves will just flee to them - like is happening now. The haves can afford to hire the most effective, and best teachers for their own schools or their own private use. Same with better equipment, heating and lighting, quiet classrooms, nice design elements (beautiful, restful surroundings), low student to teacher ratios, etc, etc.

The list goes on.