ESRI Universal Basic Income.....Bonkers

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joe sod

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An article today in the independent about ESRI study on this , they propose that everyone gets a 1200 euro per month basic income whether you work or not. It will cost 50 billion per year and they are proposing to pay for it by abolishing tax credits and the 20% tax rate so everyone will pay 40% tax.
The whole thing is nuts and it is obvious what will happen, loads of people on the 20% rate will stop working, people on high incomes will flee the country, no houses will be built and we will be hit by a massive influx of economic migrants.
How a so called academic organisation can come up with such a bonkers idea let alone waste huge amounts of time and taxpayers money on silly ideas that they know no rational government will implement. Who decides what the ESRI carries out their studies on?
Maybe they should be sent on secondment to an Eastern european University to study the economy of communist Eastern Europe in the 1980s to cure them of nonsensical studies, they will obtain hard raw data from that
 
The ESRI did not come up with the idea of UBI.

I don't think the ESRI are proposing, or pushing UBI.

The ESRI are simply studying it.

The people pushing / proposing a UBI are groups/parties like the Green Party, Social Justice Ireland, etc.
 
joe sod said:
Who decides what the ESRI carries out their studies on?
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About the ESRI

www.esri.ie www.esri.ie
Research priorities are determined during the strategic planning process, which takes place every 5 years. Under the current ESRI Research Strategy (2019-2023), research activities are structured around 11 key policy areas. Find out more about the Institute’s research areas here.
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Protocol said:
The ESRI did not come up with the idea of UBI.

I don't think the ESRI are proposing, or pushing UBI.
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In saying "They were pushing" UBI , I meant generally. The concept certainly got more attention that it deserved in my college economics classes.
 
I suppose we should read the study, rather that draw our conclusions from the Indo.


The report is a high level overview of UBI and it's impacts. Despite the high cost, the outcomes that seem to accrue to those in receipt are very interesting. What is difficult to quantify are the 'flywheel' benefits on a societal level such as improved health outcomes (physical and mental), reduction in precarious employment, overall financial wellbeing, improved agency for the vulnerable. All effects that have been reported from the empirical studies they looked at Finland, Stockton, Ontario, North Carolina, Barcelona and others.

The study does note that Ireland is close to the levels of support required to provide the minimum income to those at risk already:

levels of minimum income vary considerably across the EU, Ireland is the only country where benefit levels for a single member household are close to the poverty threshold...Therefore, even in the absence of a UBI, Ireland appears to perform better than other EU countries at providing a minimum income for those that need it most.
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joe sod said:
they propose that everyone gets a 1200 euro per month basic income whether you work or not. It will cost 50 billion per year and they are proposing to pay for it by abolishing tax credits and the 20% tax rate so everyone will pay 40% tax.
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The cost of €50bn is €1200 a month which is the "at risk of poverty" threshold or 60% of the median income. (1200 x 3.5m people).
The current cost of social welfare programs is €20.9bn.
A UBI equivalent to the current social welfare payment would cost €37bn.

What's not factored in is the savings accruing from the cost of administering the current system and other tax and benefit systems (Which is easily changeable to ensure its cost neutral for the state to give it to those on higher incomes).

joe sod said:
loads of people on the 20% rate will stop working, people on high incomes will flee the country, no houses will be built and we will be hit by a massive influx of economic migrants.
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In terms of the empirical evidence on labour supply, De Paz-Báñez et al. (2020) carried out a systematic review of the available evidence on the relationship between UBI and labour supply. They found no evidence of a significant reduction in labour supply associated with UBI policies; however, there was some heterogeneity across groups, with labour supply reductions observed among children, the elderly, the sick, those with disabilities, women with young children and young people in education. Similarly, Gentilini et al. (2019), reviewing empirical evidence for basic income pilots in North America and Iran, concluded that, overall, unconditional basic income did not appear to generate significant disincentives to paid work.
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One notable recent study is Jones and Marinescu’s (2018) examination of the impact of the Alaskan Permanent Fund Dividend, which amounts to a yearly payment of $2,072 per resident. They found no evidence of a negative impact on employment (the extensive margin). One suggestion put forward to explain this result is that any negative income effect is offset by consumption increases that stimulate labour demand. There is some evidence of a reduction in the intensive margin (hours worked). ..... in a review of the impact of the Finnish pilot, in which participating unemployment benefit recipients could retain their unemployment benefit even if they found employment, found no negative employment effects associated with the pilot. In the Spanish experiment, labour market participation decreased for persons who received the payment only but increased for those who received the payment and participated in education and training programmes (Riutort et al., 2021).
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I don't see how this works in a situation where you have a lot of migrant workers who may or may not be eligible for it.

It says one of the savings would be on administration of benefits, but you would still have to have resources and processes in place to prevent abuse.

I'll excerpt this section.

The questions of eligibility based on residency and the potential impacts on
migration are raised by Boyle and McCarthy (2000). The assumption is that
entitlement is not based on Irish citizenship, but rather is aligned with the general
rules relating to social welfare entitlement. However, even this is not
straightforward. As noted by Boyle and McCarthy (2000), entitlement could vary
depending on whether basic income was viewed in a similar way to unemployment
benefits, rather than family benefits. For example, if linked to family benefits, a
person from another European Economic Area (EEA) country who is working in
Ireland, but whose family is in another EEA country, may be able to claim UBI for
their family members not residing in Ireland. Boyle and McCarthy note that, ‘This
would open up the possibility of migrants seeking to work or reside in Ireland while
benefits would be payable in respect of a family still residing in the migrants’ home
country’.
 
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odyssey06 said:
I don't see how this works in a situation where you have a lot of migrant workers who may or may not be eligible for it.

It says one of the savings would be on administration of benefits, but you would still have to have resources and processes in place to prevent abuse.

I'll excerpt this section.

The questions of eligibility based on residency and the potential impacts on
migration are raised by Boyle and McCarthy (2000). The assumption is that
entitlement is not based on Irish citizenship, but rather is aligned with the general
rules relating to social welfare entitlement. However, even this is not
straightforward. As noted by Boyle and McCarthy (2000), entitlement could vary
depending on whether basic income was viewed in a similar way to unemployment
benefits, rather than family benefits. For example, if linked to family benefits, a
person from another European Economic Area (EEA) country who is working in
Ireland, but whose family is in another EEA country, may be able to claim UBI for
their family members not residing in Ireland. Boyle and McCarthy note that, ‘This
would open up the possibility of migrants seeking to work or reside in Ireland while
benefits would be payable in respect of a family still residing in the migrants’ home
country’.
Click to expand...

I think that's fair, there would need be significant administration but just on the face of it, it's surely far less than the existing system, in terms of complexity particularly?

Rather than contextualizing it as a social welfare benefit, I would think of it more a sort of economic/social dividend. The Alaska Permanent Fund pays its dividend based on residency and is well established. The amount is far less than a living income so there would have to be domiciliary requirements etc. for a national scheme.

We have fraud in the current system, would there be a risk that this increases? I don't think so, not meaningfully anyway.
 
It would be impossible for the government to introduce this payment and tell everyone that that's all they're getting from the state. There would have to be lots of supplementary welfare payments and benefits in addition to the payment. Therefore no saving on administration and extra cost far above 50 billion.
 
ClubMan said:
Ah, where's the fun in that? ;)
But seriously, well said.
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Well obviously they want it it publicised , why is it getting top billing in the media this morning. I doubt the media are scrutinising ESRI publications, it's not exactly the hutch trial material.
Somebody in the esri is feeding this to media sources in an easily digestible manner for it to be headlines first thing in the morning .
Secondly if the esri is basically funded by government for "independent" research well then surely government should have a say in what they are researching as then its just an expensive talking shop with little practical use for government.
The secondary impacts of such a proposal on workers and migration was glossed over when it is obvious to the lay man that it would have an enormous impact.
Why would anyone bother with precarious, dangerous, dirty jobs when they are going to be taxed on everything at 40% , they would get the easiest job they could or just stay on welfare and get topped up 1200 euros, this is blatantly obvious yet completely glossed over by the esri. This was also the hard earned lesson from communist eastern Europe productivity dropped off a cliff as nobody wanted to do the difficult dirty jobs, the authorities used forced labour on those undesirables.

Another thing is the enormous coat of this 50billion directly (hard to quantity the indirect costs) irish government income was 67billion after repayments in 2021 so this would consume most of the government income. We already have one of the highest per capita debt loads in the oecd
 
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llgon said:
It would be impossible for the government to introduce this payment and tell everyone that that's all they're getting from the state. There would have to be lots of supplementary welfare payments and benefits in addition to the payment.
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Following a detailed feasibility study to explore the possibility of implementing a basic income pilot in Scotland (Citizens’ Basic Income Feasibility Study Steering Group, 2020), it was noted that some vulnerable individuals could be made financially worse off. For this reason, it was suggested that, while some social welfare payments could be replaced, others would need to be retained – in particular, those relating to disability, work capability, housing and childcare support.
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Fair observation, however, it seems that may be relevant only for the most vulnerable. A lot depends on the objectives of a program, poverty reduction or providing a Guaranteed minimum income. The studies looked at had different levels of payment, €500 p.m in Finland up to €1200 p.m in Germany.
 
Itchy said:
The Alaska Permanent Fund pays its dividend based on residency and is well established. The amount is far less than a living income so there would have to be domiciliary requirements etc. for a national scheme
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It's also in existence in alberta, Canada for natural resources wealth, but we don't have a natural resource cash cow like alaska, this proposal wants to take it from other taxpayers, the most productive would be contributing the most, not comparable at all

Secondly to qualify as a "resident" is not simple you have to be both a resident and a citizen and we all know the US and Canada have some of the most restrictive migration paths in the world, that's not the case for Ireland
 
joe sod said:
It's also in existence in alberta, Canada for natural resources wealth, but we don't have a natural resource cash cow like alaska, this proposal wants to take it from other taxpayers, the most productive would be contributing the most, not comparable at all

Secondly to qualify as a "resident" is not simple you have to be both a resident and a citizen and we all know the US and Canada have some of the most restrictive migration paths in the world, that's not the case for Ireland
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Yes, that it is true as they have a wealth fund, which is not the case here. I was referencing it more for the eligibility requirements given the reluctance to share locally generated wealth with outsiders. Somewhat similar in this case.

In fact you don't have to be a citizen to receive the Alaskan dividend. Here is how you establish residency.

I think if it was introduced in Ireland, what's important is that you have stake in society and will contribute in the long term. Like in the Alaskan case, you have to prove your intent to remain indefinitely (beyond just physical presence), which involves cutting residency ties with other locations. Not an insurmountable condition that could be imposed.
 
joe sod said:
An article today in the independent about ESRI study on this , they propose that everyone gets a 1200 euro per month basic income whether you work or not. It will cost 50 billion per year and they are proposing to pay for it by abolishing tax credits and the 20% tax rate so everyone will pay 40% tax.
The whole thing is nuts and it is obvious what will happen, loads of people on the 20% rate will stop working, people on high incomes will flee the country, no houses will be built and we will be hit by a massive influx of economic migrants.
How a so called academic organisation can come up with such a bonkers idea let alone waste huge amounts of time and taxpayers money on silly ideas that they know no rational government will implement. Who decides what the ESRI carries out their studies on?
Maybe they should be sent on secondment to an Eastern european University to study the economy of communist Eastern Europe in the 1980s to cure them of nonsensical studies, they will obtain hard raw data from that
Click to expand...

Oh it will happen that you can count on, it won't happen in my life time (59 years old), but it will happen probably in my kids life time and be driven by commercial reality. You need to broaden your mind and update your thinking.

High productivity, automation and declining workforces means you need to find some way to put income into people's hands if you want them to be able to buy all those goods and service being produced. Many states and regions in Europe are already experimenting with it. As a research organisation it's exactly what I'd expect them to do.

Looking back at the past and arguing that the future will be the same is an excellent way of falling behind.
 
Itchy said:
Yes, that it is true as they have a wealth fund, which is not the case here. I was referencing it more for the eligibility requirements given the reluctance to share locally generated wealth with outsiders. Somewhat similar in this case.

In fact you don't have to be a citizen to receive the Alaskan dividend. Here is how you establish residency.

I think if it was introduced in Ireland, what's important is that you have stake in society and will contribute in the long term. Like in the Alaskan case, you have to prove your intent to remain indefinitely (beyond just physical presence), which involves cutting residency ties with other locations. Not an insurmountable condition that could be imposed.
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That condition could not be imposed here within the context of our EU membership.
 
odyssey06 said:
I don't see how this works in a situation where you have a lot of migrant workers who may or may not be eligible for it.

It says one of the savings would be on administration of benefits, but you would still have to have resources and processes in place to prevent abuse.

I'll excerpt this section.

The questions of eligibility based on residency and the potential impacts on
migration are raised by Boyle and McCarthy (2000). The assumption is that
entitlement is not based on Irish citizenship, but rather is aligned with the general
rules relating to social welfare entitlement. However, even this is not
straightforward. As noted by Boyle and McCarthy (2000), entitlement could vary
depending on whether basic income was viewed in a similar way to unemployment
benefits, rather than family benefits. For example, if linked to family benefits, a
person from another European Economic Area (EEA) country who is working in
Ireland, but whose family is in another EEA country, may be able to claim UBI for
their family members not residing in Ireland. Boyle and McCarthy note that, ‘This
would open up the possibility of migrants seeking to work or reside in Ireland while
benefits would be payable in respect of a family still residing in the migrants’ home
country’.
Click to expand...

Well between productivity and automation, plus a declining workforce there won't be much call for migrant workers in the first place... There will have to be some kind of a redistribution of wealth to the poorer regions of the EU. At the end of the day our entire economic model depends on there being consumers, producing massive amounts of goods and services in a market where there are few buyers will not work.
 
Jim2007 said:
Oh it will happen that you can count on, it won't happen in my life time (59 years old), but it will happen probably in my kids life time and be driven by commercial reality. You need to broaden your mind and update your thinking.

High productivity, automation and declining workforces means you need to find some way to put income into people's hands if you want them to be able to buy all those goods and service being produced. Many states and regions in Europe are already experimenting with it. As a research organisation it's exactly what I'd expect them to do.

Looking back at the past and arguing that the future will be the same is an excellent way of falling behind.
Click to expand...
Sort of like "Brazil is the country of the future and always will be" stuff
We heard all this 60 years ago , that people wouldn't need to work as machines would do all the work and people would have more leisure time, didn't really happen yes machines took away the hard laborious tasks . It's been long touted but apart from highly automated factories I don't see it especially not in Ireland except high tech manufacturing . The problem for Ireland is that much of our industry is FDI , if that were to become fully automated, would it stay in Ireland ,sure our high skilled English speaking workforce would then be irrelevant , Alexia would be doing everything

Secondly it would be dependent on very high skilled staff to run them , the very people that would be heavily penalised by this proposal, they would be the very people that would up sticks and leave bringing the industry with them

The elephant in the room is that irish revenue is highly dependent on FDI and corporation tax, if we frightened the horses we would have no revenue anyway for universal basic income, the academics living in public service land keep forgetting that, therefore we have to keep reminding them of it again and again
 
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Jim2007 said:
Well between productivity and automation, plus a declining workforce there won't be much call for migrant workers in the first place... There will have to be some kind of a redistribution of wealth to the poorer regions of the EU. At the end of the day our entire economic model depends on there being consumers, producing massive amounts of goods and services in a market where there are few buyers will not work.
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Who is going to deliver these services?
Who will be signing up to be the delivery drivers, hairdressers, cleaners, waiters, security staff, barmen in this model?

A market where there are few workers won't work either.
 
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