Friday, March 24, 2006

UBI, employment law, and a vision for the left

Make Tea Not War has a long post up at Work Without End on Flexibility and the Guaranteed Basic Income. While the initial focus is on Sue Kedgley's Employment Relations (Flexible Working Hours) Amendment Bill (and whether it would be effective in helping those who need it most), the real target is the underlying paradigm of employment law. Traditionally, employment law has recognised that there is an imbalance of power between employer and employees, and aimed to correct this through regulation and the promotion of collective bargaining. However, while this helps, it doesn't change the fact that usually employees need to eat far more than employers need their work, and this is a fundamental limit on its effectiveness. And the bottom end of the employment market, where employees tend to be in greatest need of protection because they have few other options available, is precisely where that protection fails, because employers are able to use the threat of starvation to force "agreement" to conditions which noone would voluntarily agree to.

In this situation, MTNW thinks that a universal or guaranteed basic income - a universal payment given to every adult regardless of circumstances - would be the supreme equaliser:

How much easier would it be, for example, to say to an employer, for example, "I will need to finish work every day by 3 so I can be at home with my kids after school" if you weren't depending on that job to put food on the table? I feel pretty sure that if workers had genuine power of exit if their needs can't be accomodated rather than a token right to voice that more flexible working arrangements would evolve very quickly indeed.

And its very hard to disagree. Free people from the necessity of having to work to eat, give them real alternatives to shitty jobs or shitty employers, and the market will be forced to change to accommodate their needs. The work will still need to be done, and, apart from a few people who want to spend their lives surfing or blogging or whatever, people will still want to do it (we have to have something to do with our lives, after all) - but we won't have to put up with so much shit any more. From either party. As MTNW points out,

Equalising the bargaining power of workers would mean that the State could back right off on making rules concerning employment relationships thus reducing red tape and compliance costs significantly.

This is what we should be aiming for. It would dramatically increase the actual, substantive freedom of ordinary people to spend their lives how they wish - a key goal of the left - and end the nastiest practices of the employment market. Yes, we'd have to pay for it - Grey Shade had some interesting calculations on that which I think I still have somewhere - and it would result in substantial economic change; some shitty industries would (deservedly) go to the wall. But it would be well worth it in terms of human happiness and freedom.


I'm not sure, but somehow I object to this. I think it's because I find that whenever my basic income has been guaranteed, I lose direction in my life, and take a long time to get anything much done. It's not that I cease to function as a unit, it's just that I find that my better achievements (work, academic, hobby, personal) have often happened when I was under the greatest levels of financial stress - I achieved because I absolutely had to, or admit defeat and rely on either government or family assistance, which is something I really dislike doing.

Posted by Weekend_Viking : 3/24/2006 06:04:00 PM

I remember this being a hot topic in my student days and I thought it was a great idea in principle. Still do. I remember reading evidence from some US researcher (which I now can't find) that people don't necessarily behave the way weekend_viking fears he might. I suppose it very much depends on the level the GBI was set at.

Posted by Jarvis Pink : 3/25/2006 03:37:00 PM

Amount best set to about the single retirement benefit, enough to realistically live a quiet life on with some shared costs. Still can't really do anything, but not the stress and depression associated with the unemployment benefit. Call it $12k, after tax.

That's an equivilent part-time wage of $11.80/hour after tax, but without the usual costs of working to get it.

Saves all employers about $12000 per year per employee once wages adjust, which then gets taken back on average once taxes change to suit. Workplaces that employ a large proportion of people save big-time, while companies that make big profits without employing anyone loose big time.

Still great boosts to those who work but it's easy enough to clear out for a while if you feel you must (assuming you can dump any debts, which is another matter altogether).

Pay kids the full amount from birth too, they're not cheap to run and it would remove reams of red tape regarding family tax help and subsidies on every damn thing for middle-wage workers and benefits for the low-wagers.

Stay home mums get an automatic $12k per annum, as do their kids, as do sick folk, disabled folk, retired folk, struggling artists, political commentators, activists, married or single folk; and the no-hoper bums and druggies. Legislate the drug trade if you really care about druggies, better mental health care if you really care for the bums.
Prisinors can probably get it too, less room and board of about $12k. ;)

Biggest red-tape cutter is in the graduated tax system with it's infinate exemptions, refunds, and resultant loopholes, which could damn near disappear. 33% (or whatever may be nessicary) company and personal from dollar one with absolutely no exceptions becomes possible without really hurting anyone.

The Labour party has floated the concept of a "universal benefit" at times, but I doubt they'd go whole hog and pay wage earners too. I don't know if other parties have an opinion on the matter.

W_V: The incentive to work is that employers will still desperately want wokers and will provide whatever the (minimal effective) incentive is as required. Expect crappy jobs to start paying well with short, flexible hours.
As for your personal direction, try producing something real, like a vege garden, it's good for the hunter-gatherer in you.

Posted by tussock : 3/26/2006 05:31:00 AM

I know it ruins a bit of the red tape argument but what you need is a system through which you maintain a work ethic etc (i.e. make sure while providing flexibility for the individuals they still tend to work towards the collective goals).

Potentially a media campaign and so forth. Sound a little counter to the goals but if you don’t do it your population’s work ethic will tend to slip away. It might take decades but it will cause long lasting damage.

If you include all the appropriate policies to support the change then I support it.

Posted by Genius : 3/26/2006 10:41:00 AM

Meanwhile, back in the world of capitalist reality, let's celebrate the achievement of young people working in the fast food industry!

Posted by Anonymous : 3/26/2006 04:27:00 PM

I think the vast majority of people would still want to work to some extent if they got UBI. At the moment a lot of beneficiaries are prevented from working because they lose benefit (or they actually *are* working in the black economy).

Posted by Rich : 3/27/2006 02:00:00 AM

the vast majority still wanting to work to some extent is not enough.

that is like saying the vast majority of Italian rugby players are almost as good as new Zealand ones. Despite that it would still be a bit silly to swap rugby teams.

I would rather think that we are not throwing away hard earned productivity gains through not thinking the policy through well enough.

Work ethic is not a natural human trait it is something children learn by being praised for doing a god job or adults learn from being paid and dirty looks from workmates when they slack off.
It would certainly remain for a long time if the laws changed because human behavior resists change, and this policy would not do it all by itself, but the government could easily create policies that would in the long run wipe out work ethic almost entirely.

Posted by Genius : 3/27/2006 10:22:00 AM