Comment by Michael Haines (michael-haines) on Universal Basic Income and Poverty · 2024-11-13T11:53:12.457Z · LW · GW

On the whole, however, a UBI strikes me as a much less powerful change than a 100-fold productivity increase.  If that didn't prevent a huge underclass that has to desperately scrabble for scraps, I expect UBI can't prevent it either.

This is a system problem.

While the current system of money, property rights, and paid work has been hugely beneficial for many people, it has suffered from a major problem: if you could not earn money (and had no savings or family support)... you were forced into charity, or crime... or you starved and died.

Over the last century, it was recognised that this state of affairs is immoral.

Unfortunately, the solution, namely 'welfare', is itself flawed.

The problem is that welfare is offered as an alternative to a job.  In this case, if welfare is set at or above the poverty rate, it would be rational for an able-bodied person to take the benefit in lieu of the low paid job.

As a result, welfare is usually set below the poverty line to force those who can work to take the available jobs. This has the unfortunate side effect of forcing those who (for a time) cannot do paid work, into poverty.  This is called the 'welfare trap'.

It traps our young, sick and injured, disabled, aged, their unpaid carers and those between jobs who have no savings or family support.  This is around 12-14% of the population, including 17% of ALL children.  It's not a static group.  The young grow up, the sick and injured recover, the disabled age, and the age die, and their unpaid carers and those between jobs find new paid work... only to be replaced by a new group.

A UBI offers a system solution.

Basic Income Australia has developed a proposal that can pay every adult $500/week (the poverty line) to meet their basic needs.
 
People are free to earn what they can on top... to better themselves and their family. Removing the 'welfare trap'.

Our short policy paper explains in more detail, why we need a UBI, how it would solve the fundamental system problem, and how it would be administered and funded, without increasing taxes or causing undue inflation:

https://basicincomeaustralia.com/policy_short/