Eliminate poverty with Gauranteed income scheme

techynt · Post by **techynt** » Mon Sep 19, 2016 1:20 am

I have been researching about why somebody working 40 hours a week still has to live in poverty?

I came across a concept called as Guaranteed minimum income. https://en.wikipedia.org/wiki/Guaranteed_minimum_income

https://www.quora.com/Economics-How-is-basic-income-in-Canada-going-to-work

It seems like a very nice idea.

IMO, pay with no work does not seem like a good idea, because people may lose their way and become nuisance to society(watching tv all day or doing drugs to kill boredom etc).

I was thinking more in terms of reducing the cost of hiring people by eliminating all taxes related to hiring like social security, medicare and also by reducing the minimum wage to whatever the employer is willing to pay to a person, rest will be paid by the govt to the worker such that the net equals a living wage, say $30k/year in USA.

Example, a business wants to pay only $5/hour the govt will pay the worker $10/hour, total is $15/hour, approx $30k/year.

People have to be available for work to be paid, and they get paid only if they work. If they cant find work, employment exchange will find them work(employers can pay whatever, which means they can hire someone for 10cents/hour if there is really lack of demand for labor. If they give hard time to employers and are not good workers, too bad, we will put them to work in prison like conditions. i.e. under supervision and forced to behave. This is to only make sure people dont take advantage of the system. IMO, this is worst case scenario, maybe 1-2% of population.

These ideas get shot down with the question how will we pay for it. The answer is quite simple, we live in a fiat currency economy, money can be printed at will. Currently banks have access to zero percent loans, in some countries interest rate has gone negative, its equal to being paid to borrow money.

Unfortunately all the ideas being floated wants money to be paid with no strings attached. I prefer that everyone be participating and contribute towards the betterment of society rather than sit at home and watch tv.

This idea will reduce automation in areas where it is being done with the sole intention of reducing cost by eliminating labor.

What do you think will be pros and cons of these kind schemes?

okonomi · Post by **okonomi** » Mon Sep 19, 2016 4:21 am

techynt;638159I prefer that everyone be participating and contribute towards the betterment of society rather than sit at home and watch tv.

Everyone participating is a good idea. Staying at wherever, and participating on internet social media should be declared real work, with a wage guarantee.
In many religions, giving alms is considered a virtue. Cancelling the tax-exempt status of religions, and making alms-giving mandatory would be useful.

techynt · Post by **techynt** » Mon Sep 19, 2016 6:08 am

Tangential cryptic posts much? How about some real contribution to this discussion, how about telling us what is wrong with this scheme?

okonomi;638160Everyone participating is a good idea. Staying at wherever, and participating on internet social media should be declared real work, with a wage guarantee.
In many religions, giving alms is considered a virtue. Cancelling the tax-exempt status of religions, and making alms-giving mandatory would be useful.

realgoogler · Post by **realgoogler** » Mon Sep 19, 2016 7:55 am

If you want to minimize poverty for hard working workers, you will have to be understand of cost of living which could vary with location and solution will have to be locally adjusted. You just can't pay a Fast food worker/Barber minimum wage and expect them to live in SF. Here's the catch, place where it is booming with activity is where the opportunities are but you just can't afford to live there. Govt could bear the cost of commute so the worker lives in a affordable place. Low income housing needs to be addressed.

You just can't help poverty due to substance addiction or mental illness which seems to be the case in the cities other than getting rehabilitation.

Added
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If you look at look at America, it is already socialist for poor. Based on one's low income status you get basic needs at a subsidy. Unfortunately it is available for citizens only.

plansup · Post by **plansup** » Mon Sep 19, 2016 8:04 am

How is this different from MNREGA, which has been criticized ( may be rightfully so) for lack of real asset creation ?

If someone is putting 10cents per hr to produce something, is it even worth producing? Would the money (remaining 14.90$) be better spent in training and skill upgrades for jobs that would actually contribute to the economy ?

realgoogler · Post by **realgoogler** » Mon Sep 19, 2016 8:35 am

plansup;638170
If someone is putting 10cents per hr to produce something, is it even worth producing? Would the money (remaining 14.90$) be better spent in training and skill upgrades for jobs that would actually contribute to the economy ?

Goods produced could be worth the labor cost of 15$. Only issue here is seems to be that Small Business seems to be rewarded for paying less when they should be rewarded for paying more. May be it should be a dollar to dollar match up to 7.5 $.

The problem with MNREGA seems to be the unemployment allowance. Where there is a obligation to pay even with no labor contributed, which definitely work in India as the unskilled labor force is more.

I am worried about the negative labor value where an employee who is irresponsible causes harm than producing value. Technyt's suggestion on prison like environment flirts with human rights violation.

techynt · Post by **techynt** » Mon Sep 19, 2016 9:08 am

What do you mean by "unfortunately it is available only for citizens", I think that is absolutely the correct way, only citizens should be entitled to safety nets. Anyways this is a tangential discussion we should not be having in this thread.

All your points are good points, but then it increases the scope too much and we will get lost. For now lets see if it is possible to remove this "remove labor from business" because they cost too much.

realgoogler;638169If you want to minimize poverty for hard working workers, you will have to be understand of cost of living which could vary with location and solution will have to be locally adjusted. You just can't pay a Fast food worker/Barber minimum wage and expect them to live in SF. Here's the catch, place where it is booming with activity is where the opportunities are but you just can't afford to live there. Govt could bear the cost of commute so the worker lives in a affordable place. Low income housing needs to be addressed.

You just can't help poverty due to substance addiction or mental illness which seems to be the case in the cities other than getting rehabilitation.

Added
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If you look at look at America, it is already socialist for poor. Based on one's low income status you get basic needs at a subsidy. Unfortunately it is available for citizens only.

techynt · Post by **techynt** » Mon Sep 19, 2016 9:12 am

What do you want to do with trouble makers, if you dont like strong arm tactics to make sure they work to get paid, we are open to other ideas? My only goal is I dont want to support free loaders who just want to get paid for no work.

If they dont want to get paid I am ok if they dont show up for work. We will have a way to keep an eye on those individuals to see if they have enough savings to take care of expenses or they are upto no good and going to crime to pay the bills.

realgoogler;638171Goods produced could be worth the labor cost of 15$. Only issue here is seems to be that Small Business seems to be rewarded for paying less when they should be rewarded for paying more. May be it should be a dollar to dollar match up to 7.5 $.

The problem with MNREGA seems to be the unemployment allowance. Where there is a obligation to pay even with no labor contributed, which definitely work in India as the unskilled labor force is more.

I am worried about the negative labor value where an employee who is irresponsible causes harm than producing value. Technyt's suggestion on prison like environment flirts with human rights violation.

techynt · Post by **techynt** » Mon Sep 19, 2016 9:22 am

You are assuming that people will be available to work at 10cents/hour. I think that will be only in super recession/depression like situation. I was only thinking about having people employed rather than them being idle. If someone is in some kind of training, they will not be available for work.

But you brought a good point. We need to have incentives for workers to bargain for higher wages and we need to make businesses bid higher wages for workers.

If a worker negotiates and get $10/hour he should get paid more than another worker who can only get $5/hour from employers.

Lets put a floor on min wage that gets paid by employers to around $5/hr, a reasonably low price, which will discourage automation just to save costs. So in a way govt will match $10 (inflation adjusted) to whatever the worker gets from employer. If worker gets only $5, govt pays $10, his wage equals $15. If worker gets $10, then his wage will be $20.

plansup;638170How is this different from MNREGA, which has been criticized ( may be rightfully so) for lack of real asset creation ?

If someone is putting 10cents per hr to produce something, is it even worth producing? Would the money (remaining 14.90$) be better spent in training and skill upgrades for jobs that would actually contribute to the economy ?

realgoogler · Post by **realgoogler** » Mon Sep 19, 2016 10:31 am

techynt;638173What do you want to do with trouble makers, if you dont like strong arm tactics to make sure they work to get paid, we are open to other ideas? My only goal is I dont want to support free loaders who just want to get paid for no work.

If they dont want to get paid I am ok if they dont show up for work. We will have a way to keep an eye on those individuals to see if they have enough savings to take care of expenses or they are upto no good and going to crime to pay the bills.

With crime they get accomodation and food, there may be you can try your tactic with human rights limit. Don't have to create prison for crime of laziness.