So, I did this last year at one point, but one way I like to argue for my UBI is to translate it into a minimum wage. This not only gives me a good idea of what we should argue the minimum wage should be in the absence of a UBI, but it also allows me to make a case for it.
We all know that the current minimum wage is at $7.25 federally. Sure, some states have made it a bit higher these days, but all in all it hasn't changed since...2009. Yeah, maybe we should get on that. Heck why didn't we do that when we had control of both legislative chambers and the presidency? Oh right, Manchin. Oh right, Sinema. Bleh. *casts evil eye at them*
Anyway, what is the typical minimum wage advocated for? $15 has been the rallying cry since 2016, with some arguing that we need it to be $20+. I've previously argued for up to $18. I would argue that's still a rather reasonable pragmatic maximum. We don't know what a higher wage would do, and it could accelerate inflation, which is already rather high, and I like to be a bit conservative when we start venturing into uncharted territory.
People argue that it should be a "living wage", and that it should feed a family of say, four. Well, that said, let's just make a comparison of how my UBI compares with varying minimum wage amounts. All numbers will be calculated according to a 40 hour work week, 52 weeks a year.
1 adult: $15,000 - $7.21 (1.03x FPL)
1 adult, 1 child: $20,400 - $9.80 (1.03x FPL)
1 adult, 2 children: $25,800 - $12.40 (1.04x FPL)
1 adult, 3 children: $31,200 - $15.00 (1.04x FPL)
2 adults: $30,000 - $14.42 (1.52x FPL)
2 adults, 1 child: $35,400 - $17.01 (1.42x FPL)
2 adults, 2 children: $40,800 - $19.61 (1.36x FPL)
2 adults, 3 children: $46,200 - $22.21 (1.31x FPL)
3 adults: $45,000 - $21.63 (1.81x FPL)
3 adults, 1 child: $50,400 - $24.23 (1.68x FPL)
3 adults, 2 children: $55,800 - $26.82 (1.59x FPL)
3 adults 3 children: $61,200 - $29.42 (1.52x FPL)
So yeah, to discuss, we can clearly see that the current minimum wage is wholly inadequate by this point, with my UBI for one being almost equivalent to it, and any household being far in excess of it. Interestingly, a minimum wage of $15 scales identically with a single parent with 3 kids' UBI, which is the bare minimum a family of four would get, and we can see it's clearly literally just above the poverty line. So if a minimum wage is intended to feed a family, a $15 minimum wage is about right at minimum. With 2 adults and 2 children though, the minimum wage goes up to $19.61, or almost $20 an hour. So maybe the calls for that aren't that crazy after all.
You can clearly see how UBI scales very well in households. My UBI is intended to ensure everyone is technically out of poverty, but when multiple adults are in a household, you can clearly see how that scales quite well. Some might say, almost too well. I mean, if you have a lot of adults in a household, you get way above the basics, up to 2x the poverty line in some cases (4 adults would be exactly 2x the FPL), but as you can tell, as you add kids, it kinda normalizes and relative living standards remains the same with one adult, and goes down with multiple. So I think the kid side of the equation is fair here. We want to not overly incentivize having kids, but also not screw single moms and stuff.
To be fair the minimum wage has the same problem. It was intended to feed a family of four but then people scream about teenagers making some F U money on the side. Well, with a UBI, I'd argue the scaling is better in this sense. It actually scales with household size and thus need. Someone living alone will get the bare minimum, while living with others gets you more. Given your typical household size in the US is 2.6 people, well, it probably won't scale too insane. And given most households top out at 4 people, the scary looking amounts offered in larger household sizes probably won't happen anyway. This is why I always go for 2 adults with 1 child as my "average" household by the way. I just assume 2 adults and 1 kid, I mean, kids are 1/4 of the population roughly in the first place, so that's the most likely makeup based on a 3 person household. They get $35,400, or $17 an hour, or 1.42x the poverty line. So a little generous, but again, going by the worst case scenario and planning around that, I think this is fair. If we need to tweak the amount down a little to make it more balanced for households I'd rather it follow a similar structure here, where we all suffer and it affects us all equally. That would amount to a roughly $11,000 grant if we want this typical family to hit the poverty line almost exactly, but it would cause some to fall as low as 73% of the poverty line. Not terrible, but not as good as I would hope for. I still think the deprecated $12k standard is as low as we could go for. Speaking of which, if we were to rerun this for a $12,000/$4,200 UBI standard, this is what the above would translate to:
1 adult: $12,000 - $5.76 (0.82x FPL)
1 adult, 1 child: $16,200 - $7.79 (0.82x FPL)
1 adult, 2 children: $20,400 - $9.81 (0.82x FPL)
1 adult, 3 children: $24,600 - $11.83 (0.82x FPL)
2 adults: $24,000 - $11.54 (1.22x FPL)
2 adults, 1 child: $28,200 - $13.56 (1.13x FPL)
2 adults, 2 children: $32,400 - $15.58 (1.08x FPL)
2 adults, 3 children: $36,600 - $17.59 (1.04x FPL)
3 adults: $36,000 - $17.31 (1.45x FPL)
3 adults, 1 child: $40,200 - $19.32 (1.34x FPL)
3 adults, 2 children: $44,400 - $21.35 (1.26x FPL)
3 adults 3 children: $48,600 - $23.37 (1.21x FPL)
This seems to be a bit more balanced for families, but I do not like what this does to single mothers and the like. I mean, any household with only one adult will be below the poverty line, while households with 2 adults will be slightly above it, and those with 3 still end up being above. This happens when you have a UBI given to people individually instead of based around households.
I mean, I could almost see a conservative favoring the above structure. They'd argue our existing safety net favors single motherhood whereas this incentivizes nuclear families. Now, I don't give a crap what family structure you prefer here, as a progressive libertarian, but I do admit a conservative argument in favor of my UBI is it does incentivize cohabitation in a way the existing welfare state arguably punishes. Of course the left will think the opposite as they have the paternalistic means testing mentality, we need to care for single moms with kids, while screw those two adult households, they can work and support themselves, and screw ABAWDs in general. Honestly, both mindsets are kinda toxic. I do admit I think that having people group up is a positive as a huge reason we have a housing crisis since 2020 was because COVID encouraged people who didnt get along to split up and find new housing, leading to a surge in demand. Keeping people in larger households could incentivize less consumption of housing, even if it decreases work effort (which is my only concern with my UBI being too generous, too much work disincentive all at once could do bad things to the economy).
The real question is what qualifies as an incentive and what qualifies as a coercion. Well, an incentive you can say no to, coercion you can't. An incentive and coercion can be just two points on a spectrum with the dividing line being that between trying to encourage people to do something, and to MAKE people to something. While conservatives claim to be libertarian, they're fine with coercing people into certain life choices. Whereas I'm again, more consistently libertarian. I'd personally argue that in order to make this minimally coercive, we should err on the side of generosity and go with my full UBI amount. But it is nice to see how this scales with a lower amount.
One way we could attempt to balance this without going full in favor of moving away from individual UBI to some sort of family side calculation and all of the means testing and bureaucracy and coercion that comes with THAT is to lower the UBI amounts for adults but to raise them for children. This could ensure single moms could do well, but that households wouldn't be overpowered. Let's see how it works if we have a UBI of say, $12,000 per adult and $6,000 per child.
1 adult: $12,000 - $5.76 (0.82x FPL)
1 adult, 1 child: $18,000 - $8.65 (0.92x FPL)
1 adult, 2 children: $24,000 - $11.54 (0.97x FPL)
1 adult, 3 children: $30,000 - $14.42 (1.00x FPL)
2 adults: $24,000 - $11.54 (1.22x FPL)
2 adults, 1 child: $30,000 - $14.42 (1.21x FPL)
2 adults, 2 children: $36,000 - $17.31 (1.20x FPL)
2 adults, 3 children: $42,000 - $20.19 (1.20x FPL)
3 adults: $36,000 - $17.31 (1.45x FPL)
3 adults, 1 child: $42,000 - $20.19 (1.40x FPL)
3 adults, 2 children: $48,000 - $23.08 (1.37x FPL)
3 adults 3 children: $54,000 - $25.96 (1.34x FPL)
Well, that seems, a little more fair, but still, single moms still get the short end of the stick here. They do improve as they have more kids ever so slightly, but they need three just to break even with the poverty line here. Two adult households seem to remain rather consistent no matter how many kids they have and it helps them a bit more. Three adult ones tend to once again beat the system but more kids does slightly reduce overall living standards relative to the poverty line.
It seems like as long as we have a UBI given out individually rather than a household level there is always going to be some debate on the scaling here. And some are going to do better than they "should" if 1x FPL is the baseline, and some might do worse if we change it. I think we should stick to my original structure assuming we don't run into excessive work disincentive, in which case we might have to work out a compromise.
To be fair, once again, the minimum wage has the same problem. When conservatives talk about teenagers making too much money if you raise it too high, liberals will talk about single mothers with families of four trying to make a living. Given I skew liberal, and only go back to conservative sentiments if my ideas prove too overreaching to be sustainable, I would prefer to try my original structure first, before I talk about compromising it. Again, I would only change the UBI amounts if I absolutely had to. And I'm sure I can find some compromise like $13,200, $13,800, or $14,400 before settling for $12,000, my original 2014 standard. So yeah.
Honestly, if anything, UBI scales BETTER in households than a minimum wage would anyway. You could argue a minimum wage would help a teenager who doesnt need the money, but then a large family that does wouldnt be able to have enough living off of said wage. UBI helps everyone somewhat. It gives an individual roughly the equivalent of the current minimum wage (sadly, more an attack at the existing minimum wage than my UBI), but it also gives more in households, scaling quite well in them and ensuring that everyone reaches at least the ideal minimum. If anything, after going over this, I think UBI is better than minimum wage. I know bernie bros were crapping on Yang's UBI showing that a UBI would only bring you up to like $13 an hour between min wage and UBI, but that's for ONE person working minimum wage. Even with my deprecated $12k standard 2 adults and 1 child is gonna be $13.56 without even working. So with a $7.25 minimum wage, we're talking...$20.81. And that's with my weak standard. Yang's plan might scale a little differently without a benefit for children, but even then, $11.54 for 2 adults $7.25 brings that up to $18.79. Yeah, it's better for most.
I mean to some extent, you have to ask, do we even need a minimum wage if we have a UBI?
Well, I'm not really sure, actually. I mean, it depends on a lot of things. Just as my UBI might disincentivize work too much, especially in households going to 1.5x the FPL and higher (keep in mind most UBI amounts tested are around 0.5x-1x if I recall), if the UBI ISNT sufficient enough to allow people to pull out of the work force, then removing the minimum wage is a BAD idea. I mean, not every first world country has a minimum wage. A lot of nordic countries dont, because they have crazy unionization levels instead. UBI, assuming it's sufficient to grant the power to say no, might do the same thing, keeping wages high because people would simply refuse to work for less than a decent wage. But at the same time, the left fears that if the UBI isn't sufficient to grant people the power to say no, then people will be forced to work and we'll have given up the past century of progress for nothing. Which is a fair point.
So, I would say, given the current minimum wage, if we implement a UBI, we can then wait and see what the impact on the labor market may be. While a slight reduction in work effort is not a bad thing and potentially even welcome here, a massive reduction might lead to an inflationary spiral, at which point UBI would have to be capped at the highest sustainable amount, with further recommendations made from there. And if UBI isn't sufficient to truly grant workers the ability to say no and people are still chained to their jobs, the minimum wage might need to stick around.
Let's be honest about the minimum wage is. In a system where people rely on jobs for their livelihoods, the minimum wage is protection to ensure that at the very least that people can LIVE on their wages. I mean, as i keep saying, it's kind of the bare minimum. Wow, you're forced to work and then we make sure you can actually live on the wages you earn. Such a progressive concept /s.
Like again, bare minimum for society to meet. UBI is just so much more than that. And while we can likely still have some minimum wage to ensure that there is social mobility above the UBI level, yeah, that's kind of the point of the minimum wage. To protect workers from employers. A sufficient UBI could make such a protection redundant, but you never know, and while some on the right might be tempted to repeal the minimum wage if we implement UBI, I'd just keep it and if it's redundant just keep letting it depreciate over time.
That said, what can we deduce from this? That a good UBI is roughly equivalent to a solid minimum wage. For a family of four (1 adult and 3 kids), my UBI is equivalent to $15 an hour. For a family of four with two adults instead, it's equivalent to $19.61. My UBI is very generous in the household level, sometimes far more generous than a UBI would be, but there isn't really a solid way to fix that without pushing some into poverty. There are only tradeoffs. And while tradeoffs may ultimately be necessary of my UBI proves a bit too effective at reducing work effort to the point it sends the economy into a spiral, even a UBI at 80% of my preferred amount would generally work well in households. Honestly, I think UBI is far superior to a minimum wage after doing this exercise, both in providing for people, and scalability. Although a minimum wage may still be needed if UBI isn't sufficient to give workers the ability to say no to any job they come across.
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