I don't want a "living wage."

[Naturyl]

http://isonomics.blogspot.com/2008/09/gmi-vs-living-wage.html

There is a great deal of emphasis in progressive circles on the idea of a "living wage" - that is, a federally mandated minimum wage that reflects a decent standard of living rather than the absurd sub-poverty level of current minimum and near-minimum wages.

While this idea is admirable and I would otherwise fully support it, a Guaranteed Minimum Income (GMI) makes it unnecessary. If people are guaranteed an income above the poverty line as a right of citizenship, then we do not need to force employers to pay wages which may strain their ability to remain competitive.

The full post answers some objections you might have.

[rurallib]

1. I remember Nixon proposing this in the early '70s

[SoCalDem]

2. Or, like Denmark does..50% tax rate..BUT

free education all the way to PHD
national health care
old age pension
unemployment as long as you are unemployed
5-6 week paid vacation
1 yr maternity leave--paid

If those things were a RIGHT of citizenship, one could easily survive on that 50%...

[El Pinko]

3. I wouldn't have any objection to that...

And I would very much like to see the pre-Reagan income tax brackets brought back...

[stray cat]

4. Does that mean you and I get to pay if an employer pays low or someone doesn't work?

[Romulox]

7. Right. It would be *YET ANOTHER* subsidy to big business.

For example, food stamps and WIC subsidize Wal Mart's low wages. Do you think that a teller on WIC working at Wal Mart 35 hours/week is able to "more picky about the terms of their employment" because of WIC? :eyes:

"Employers would still have to offer competitive wages to attract willing workers."

Basic economic suggest wages would plummet under this plan.

[Naturyl]

9. So you like the current setup better

Where Wal-Mart is subsidized anyway and people are still homeless and in poverty?

[Romulox]

10. False dichotomy. You're proposing spending trillions in federal monies to subsidize big business

The only choices in life are either the status quo or a massive new transfer of money to multinational corporations??? I don't think so.

[Naturyl]

12. I'm proposing spending "trillions?"

Um, no. A robust GMI would cost $60-90 billion, and maybe a lot less counting savings in other areas.

Maybe as little as zero net cost. Check out:

http://isonomics.blogspot.com/2008/09/case-for-gauranteed-minimum-income-gmi.html

Also, how does a check in your name, delivered to your own mailbox, constitute "a massive new transfer of money to multinational corporations?" I think you're torturing the logic a bit here.

[Romulox]

19. $100 billion x 10 years = $1 trillion dollars. I'm planning to live a few more decades, so...

"Also, how does a check in your name, delivered to your own mailbox, constitute ;a massive new transfer of money to multinational corporations?'"

Our economy has between 10-20% unemployment and over 1 million new residents each year. For the past 30 years, the American employment landscape has been characterized by stagnant and declining wages, reduced or eliminated benefits, and longer hours under harsher conditions. This all suggests we have an excess of labor in this country--imply put, there are more workers than jobs.

Your plan would allows worker in a very competitive labor market to accept a wage far below what they would've previously required merely to survive. Let's imagine a Target store. It stands to reason that Target would rather pay a currently out-of-work prospective employee $5.00/hour than an existing employee $10.00 to work the checkout. If, because of the GMI, a worker who is currently unemployed can take the checker job at $5.00/hour and still pay all his bills, then it stands to reason that he will get the job, or the existing employee will have to accept a pay cut.

But here's the kicker: since we will pay a GMI to the person without a job, regardless of whether Target hires the new cut at $5.00 or forces the existing guy to take a pay cut, the economy will still be flush with cash! Since prices are set by supply and demand, and not a sense of symmetry or fairness, the price of consumer goods would likely increase, not decrease, under your GMI plan!

So, we have Target hiring scads of checkers at $5/hour to ring up scads of plastic junk which is flying off the shelves (even at the inflated prices, compared to pre-GMI!). Target's profits will soar, no doubt, but where will the money come from? Oh, right. The US taxpayer. It would've been nice if multinational corporations had helped out, but as I'm sure you're well aware, the vast majority of corporations doing business in the US pay no federal taxes.

Sounds like a subsidy to Target to me. :shrug:

[Naturyl]

20. Even if that were the case...

Isn't it worth it to end poverty and homelessness? I think so. Your mileage may vary.

Note that I'm not necessarily acknowledging what you said, I just lack the energy to rebut that many well-argued points at the moment. Thanks for your input.

[Naturyl]

8. There would still be a minimum wage.

It just wouldn't be raised so high as to put employers out of business.

[Selatius]

5. It'll never pass. It'll be labeled welfare by Republicans in a derisive manner.

By letting them set wages the way they want it, they must accept higher tax brackets on their incomes in order to sustain such a scheme. That's basically the deal in a nutshell? They'll lobby to have it both ways instead of compromising.

For them, it's all or nothing. They want both low wages and low taxes.

[Naturyl]

6. Never is a big word.

I agree it will be difficult to pass. But impossible? They said the same of Social Security.

[Selatius]

22. That was done under incredibly exceptional circumstances. Namely, the Great Depression.

The country was on its knees. One out of every three working men was unemployed, and people were starving to death and were homeless. In the cities, people were in soup kitchen lines. In the country, people were moving away from the Dust Bowl. People were angry and ready for a revolution.

People were ready to try anything to stop the bleeding because the Republicans under Hoover offered no help except messages of pulling yourself up by the bootstraps. It's why the Wagoner Act and the Federal Insurance Contributions Act (Social Security) passed. Those acts passed in the 1930s not as a mere coincidence during the Great Depression but because of the Great Depression. Of course, it's likely also true FDR could not have won office in 1932 had it also not been for the start of the Depression in 1929.

[Naturyl]

30. So poverty and homlessness today aren't a big problem?

I understand what you are saying, but shouldn't progressives be bringing attention to the misery that exists right now rather than offering justifications for why nothing is being done about it?

[Donald Ian Rankin]

11. This would be political suicide, plain and simple.

A great many American people believe (wrongly, in my view) that most of those who don't have jobs or who have low-paying jobs do so because they are lazy and undeserving, and react very hostilely to any plan to tax them to support the poor.

A proposal like this would be political suicide.

I'm also very sceptical of the economics underlying it - it would increase the overall tax burden, and decrease the incentive to earn money.

[SammyWinstonJack]

13. How many thought that FDR's New Deal and Social Security would be

"political suicide"? I bet many did. :shrug:

[Naturyl]

16. Practically everyone.

The fight for Social Security was waged against fierce opposition within the Democratic party itself, and almost no one believed it could be done.

One imagines a scene like that in the movie "Pearl Harbor," where FDR rises from his wheelchair and stands, saying "Damn it, don't tell me what can't be done." :)

[SammyWinstonJack]

17. I thought so.

[Donald Ian Rankin]

25. I don't think that's terribly strong evidence.

"60 years ago, a vaguely similar scheme was politically viable, just about" does not tell us much.

[Naturyl]

14. Arch-libertarian economist Milton Friedman supported it.

He thought a case could be made, and there was nobody more anti-welfare than him. He saw how it would end up saving taxpayers money in the long run. The proposal went all the way to Nixon, and got *very* serious consideration.

[Donald Ian Rankin]

21. He was an economist. Convincing the ignorant would be a lot harder.

Especially with the Republicans trying at the same time to use it against you.

[Naturyl]

28. True, especially when some of "the ignorant" seem to be...

...within our own ranks.

Nothing personal to anyone here. But it's amazing the opposition the only fully effective poverty-ending measure gets in "progressive" circles. Again, nothing personal. Everyone in this thread seems to have informed objections, at least.

[Donald Ian Rankin]

32. The phrasing is extremely clumsy.

Introducing/raising "unemployment benefit" might conceivably be politically feasible in the US.

Introducing "A guaranteed minimum income" won't be for the forseable future, even if the policy is identical, I think.

[Naturyl]

33. maybe so. I say call it somethning else, then.

I'm not attached to the GMI term. I don't care if we call it "super-duper personal responsibility conservative republican money" as long as the damn thing is passed. :)

[hfojvt]

15. the post does not answer the main question

Why is anybody gonna work a slog job if they can get the same amount of money for watching TV, playing beach volleyball, doing sudokus and/or putzing around on the internets? Hence, either a) the GMI must be low, scraping to the bone poor, but enough to get by (and how is that figured? Some people can live on $14,000 a year and some cannot.) or b) the wage for drudge jobs would need to be $2 an hour or so above the GMI in order to get anybody to work. And c) I already work with slugs who don't work worth a tanj because they don't really NEED their part-time job. Good luck with an economy where people are paid $15 an hour to do ALAP (As Little As Possible).

[Naturyl]

18. Tell it to Sweden.

They have such an economy, and last I checked, it's doing just fine.

But if you want to argue differently, there are lots of right-wing sources that say Sweden's economy is in the toilet...

[Selatius]

23. Welfare is only provided in Sweden if you can prove you cannot support yourself.

Sweden does not have a traditional minimum wage; this is true, verifiably so, but unlike most other countries, the Swedish population is 80 percent unionized. The US barely at 10 percent. Wages in each market are collectively determined between employers and employees. Because bargaining power between employers and employees is on an equal playing field, as opposed to being tilted in favor of employers as it is in the US and most other European countries, no minimum wage is necessary simply because workers actually have a voice in the workplace in setting their own pay.

While you could make an argument for the GMI, Sweden would be a counter-example that wouldn't support the GMI because they got to their current position through sheer unionization, not by implementing a GMI-like scheme.

[Naturyl]

31. True, but as any Swede will tell you

Compared to the US, you can remain unemployed virtually forever and receive support. While this isn't technically a GMI, combined with all the other safeguards, it practically amounts to one.

[yodoobo]

24. Wouldn't end poverty. Would just create a "new poverty"

The "new poverty" would be at the level of GMI.

Oh sure for awhile it would be fantastic. Truly it would be.

Millions of poor would be suddenly lifted out of poverty and we would, for a little while pat ourselves on the back at how we eliminated it.

But it wouldn't take long, before the inflationary effects of all that cash flowing in would raise prices on essential goods and services, and eventually all goods and services.

After the economy re-balances from the effects of GMI. The net effect is that folks relying on GMI would find themselves right back where they started.

I want to see poverty ended, not create a new form of it.

[Hugabear]

26. Sounds like the same logic rethugs use against minimum wage

n/t

[yodoobo]

27. different animal

minimum wage is a different animal entirely. And actually the arguments that I have heard against min wage are more the un-employment effects and far less the inflation effects. I don't buy those arguments but those are what are argued.

Minimum wage, imo, does not have the intrinsic inflationary effect that GMI would.

Minimum wage simply requires employers to spend more of a fixed money supply on their employees.

GMI, by definitions I see here would increase the money supply which is the basis of devaluing currency which in turn produces inflation.

Now if you could engineer a GMI whereby the money supply was not increased, such as by increasing taxes on upper x% and use that to fund GMI, the inflationary effects would not necessary be realized.

If it is possible to engineer (and pass the necessary legislation) on this without devaluing the dollar, it might work.

There's also a number of other economic factors which make me skeptical.

Nonetheless its probably worth flushing out further, but I think in the ends its pie in the sky.

[Naturyl]

29. Most progressive ideas are "pie in the sky"...

...Until someone makes them happen.

Lots of research has been done on GMI and inflation. A number of GMI advocates have proposed effective anti-inflation measures, and some reject the premise that GMI causes inflation to begin with.

[fed_up_mother]

34. Let me guess. You're for open borders, as well.

You know, it would be nice to have things like living wages, universal preschool, family leave, and single payer health care.

My feet are firmly planted in reality. A guaranteed income will never happen. And, frankly, I don't want to support folks who refuse to work while they live off the dole at the beach and work on their "art."

[tjwash]

35. "I don't want to support folks who refuse to work..."

Too late...we are coming to your house to get our money right now. Better have that check ready. Us welfare queens have to have our Cadillac payments in by the 20th.

Well...since we are all for putting words in other peoples mouths miss "you must be for open borders." :eyes:

The last time I heard those particular words strung together like that, my freeptard brother in law was railing against "the commie rat bastards that infest my beloved country."

If you really feel the need to gripe about where "your" money is going, why don't you take a look at the 500 billion a year that the pentagon gets.

[Naturyl]

37. Thank you.

Pretty unbelievable to hear those talking points on DU, isn't it?

[fed_up_mother]

38. You know, some liberals happen to be more pragmatic than others

We can have either/or, or some things, but not other things.

Me - I'm hoping for universal preschool, affordable higher education, higher minimum wages, stronger unions, single payer healthcare, longer family leave.

And if you're going to bring up the military, I'd like to see better wages for our men and women in uniform, and less money spent on bombs and such. And I'd like this war to end tomorrow.

If that's "freeper" to you, then you must be living in another universe from me.

[Naturyl]

39. You do realize you just proposed spending WAY more money than I did

Right? But that's cool, because they are good ideas.

Those proposals aren't "freeper" and I support just about all of them. What was "freeper" (in spirit) were you hateful (to my ears) words about people who "refuse to work." It's Reagan's "welfare queen" argument all over again.

I live on SSI. Six hundred thirty seven dollars and 00 cents per month. Want to tell me about the royally resplendent lifestyle I'm living, down at the beach all day frolicking in the warm summer breeze?

[fed_up_mother]

41. I'm sorry you are living on so little

But that's a problem with social security, imo. I have a mentally challenged child who will need SSI. Thankfully, we have a large family to help, but it scares the crap out of me that folks with disabilities are supposed to live on so little. I'm really sorry about your situation.

[Naturyl]

42. Thanks, and that's one of the things a GMI helps with

With a GMI in place, your special needs child can be taken care of - without having to accept a permanent government label and intrusive government presence in his or her life.

As for my situation, I ain't complaining. I prefer a Spartan existence for reasons of conscience. I'm just pointing out that it ain't a taxpayer-sponsored picnic on the beach.

[Naturyl]

36. No, i'm not for open borders.

As for your comments about people who "refuse to work," I could very easily have read them at Free Republic. I'm not accusing you of being a troll (so don't have an indignant fit), I'm just pointing out that there's no difference between your final sentence and something Hannity could have said verbatim. Can you dispute that?

A GMI will happen. Not today, not next year, and maybe not in my lifetime. But it's happening elsewhere in the world, step by step, and it will happen here eventually. And neither your complaints or Hannity's will stop it, if we are being "frank" here.

[fed_up_mother]

43. You do realize many, many democrats feel the way I do

And probably more here who are scared of being labeled "hateful" and "freeper."

There's so many other things I'd like to see first - again, universal preschool, affordable higher education, better schools, stronger unions, family leave, single payer healthcare, better infrastsructure, etc.

Those things will greatly improve our quality of life, imo.

Work happens to be part of life, and I'm not talking about that repressive protestant work ethic. LOL

[Naturyl]

44. And you perhaps don't realize that many also agree with me

But are afraid of being seen as Utopians or whatever.

Work happens to be part of life, and I'm not talking about that repressive protestant work ethic.

Are you sure? I don't mean to be difficult, but your statements sure sounded like it to me. If you lack "repressive protestant work ethic," why resent those who would be able to make a (very modest) living without working?

[fed_up_mother]

47. Because if there are jobs to be found

I'd rather they support themselves, and we use that money on other things - like better healthcare, etc. We have no money tree, and since choices have to be made, I'd prefer to make choices that would truly benefit everyone or those people who are really in need.

[Naturyl]

48. But how do you know who can really support themselves...

And who can't? Fifty years ago, for example, my disability wasn't recognized. I would have been dismissed as simply a lazy bum unwilling to work. Don't you think the same thing is going on in many cases right now? Do you think we now suddenly know everything about the disabilities that might make people "unwilling" to work? I sure don't think so, and I don't want people being forced to go hungry and homeless because we don't understand why they won't just go get jobs.

Think about it. How many short years ago was your own special needs child's disability unrecognized or deeply misunderstood? I bet not too many. You should think about this very carefully.

[LongTomH]

40. By the way!

Are you the proprietor of the "Isonomics" blog? I just bookmarked it for future reference.

[Cleita]

45. Okay, so how are they going to fund this?

I have imagined similar plans, but mine always involved billing the corporations hiring these workers for the cost.

[Naturyl]

46. Restore the progressive income tax

And fund it from general revenue.

A 1/5 cut in the Pentagon budget would pay for it easily, and that's without raising taxes at all. But let's raise taxes on the wealthy, cut the Pentagon anyway, and get health care and free higher education while were at it. :)