Radical Stupidity: Academics Endorse $20,000 Income for Everyone, Working or Not

If you made less than $20,000 annually, but were guaranteed $20,000 whether you worked at all, would you work?

Most wouldn't. And it should be obvious why: People like free time and they would gladly take more of it if they got paid for doing nothing (about $9.61 per hour).

Academic Wonderland

Academics in wonderland need some remedial education because they have not figured out what should be blatantly obvious.

Please consider Guaranteed $20K income for all Canadians endorsed by academics.

A group of academics and activists is trying to drum up interest in an ambitious plan to provide every Canadian with a guaranteed minimum level of income — whether or not they have a job.

Rob Rainer, a campaign director for the Basic Income Canada Network, envisions a country where everyone is assured a minimum of $20,000 annually to make ends meet.

"For many of us, we think the goal is no one should be living in poverty," Rainer said at a conference on the issue over the weekend at McGill University.

"That's essentially what we're striving to achieve."

More than 100 speakers and participants were on hand for the conference, which focused on the merits of a guaranteed minimum income that would either replace or exist alongside existing social programs.

The idea is hardly new — the Canadian and Manitoba government conducted an experiment with the issue in the 1970s — but it has enjoyed a resurgence lately.

Switzerland is expected to hold a non-binding referendum this fall on whether to guarantee every citizen an annual income of $35,900 Cdn.

And in the United Sates, the idea has supporters on both sides of the political spectrum.

"The idea is not new, it's not really radical," Rainer said, pointing out that seniors and families with children receive a form of guaranteed income from the government.

"Where it does become more radical is when you get into the area of the working age population, and the idea that people should receive some income whether they are in the labour market or not. That's a fairly radical idea in our culture, because most of us were brought up to believe that in order to survive you have to work."

Radical Stupidity

None of these geniuses have bothered to work out the tax implication math and the consequences of huge numbers of people who would prefer to watch TV, play games, or go fishing rather than work if the economic payback was the same.

Actually, because of transportation and meal costs, people working a $9.61 per hour job would be far worse off than those getting $9.61 for those sitting at home watching TV.

How many illegal aliens would such a scheme attract?

And why would it stop at $20,000?

It wouldn't and couldn't. Companies would have to hike the minimum wage to $30,000 or $40,000 to attract any workers. Prices would go up accordingly, and the inflation aspects of a guaranteed "living income" would immediately make $20,000 too little to live on.

Someone with a 7th grade education should be able to figure this out. But academics in wonderland, with no common sense, and no real world experience can't.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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