Testing UBI in the Real World

by wj

It seems that there are several places around the country which are actually trying out variations on the idea of Universal Basic Income (UBI), to see how it works in the real world.
https://usbig.net/state-level-ubi-and-guaranteed-income-initiatives-in-the-u-s/

We may, in the not too distant future, have something besides theory on which to evaluate the idea. (Actual data! Oh, the horror!)

It will be extremely interesting to see how it plays out.

Comments

[Robert Queisser]

This (UBI) is an idea articulated in the 1960s by British economist Robert Theobold. He presented strong evidence of benefit to all levels of society by guaranteeing a minimum level of cash to each household. - RLQ

[wj]

As so often, there is a tipping point, where something has happened in enough different places that it becomes real, and the results become real. That's "real" in the sense of being part of the overall culture's view of how the world works -- not to be confused with objective reality.

It may be that we are approaching such a tipping point for UBI.

[Sebastian H]

My concern in big cities is that with the state of housing any UBI will immediately be captured by rentors the way that universities captured nearly all the government money through higher tuition.

[wj]

any UBI will immediately be captured by rentors

As so often, no policy is really able to stand alone. In this case, some changes to zoning (to allow more rental housing to get built) would be required as well. But then, they are needed regardless. And, at least around here, they are already starting to happen.

[Pro Bono]

To my mind, the big advantage of UBI is the abolition of wage slavery. You can abolish minimum wage laws, and people can work for whatever price makes sense to them.

If rents are too high, they can live somewhere more congenial - they're not tied to their workplace.

[wj]

they can live somewhere more congenial - they're not tied to their workplace.

There are, however, multiple reasons why people feel tied to a particular location. Workplace is only one -- and often not the main one. For example, family members (especially elderly family members) are located there.

[bobbyp]

My concern in big cities is that with the state of housing any UBI will immediately be captured by rentors the way that universities captured nearly all the government money through higher tuition.

gosh. really? nearly "all of the government money"? amazing claim, that.

[bobbyp]

as so often, no policy is really able to stand alone.

hate to say it, but I agree with wj on this one. UBI should be seen as part of a host of progressive policies that shift the playing field rules from heirs, the well connected, sociopaths and squatters, to you know, normal types of people.

[wj]

hate to say it, but I agree with wj on this one.

"Even a blind pig gets an acorn now and then." 😁

[CharlesWT]

So, which one is the blind pig?...

[wj]

I was thinking me . . . from bobby's point of view. ;-)

[cleek]

also...

London (CNN Business)
A trio of economists were awarded the Nobel Prize on Monday for showing that precise — and surprising — answers to some of society's most pressing questions can be gleaned from experiments rooted in real life.
David Card was recognized by the Royal Swedish Academy of Sciences for groundbreaking work on minimum wages, immigration and education. He showed, using a natural experiment — where researchers study situations as they unfold in the real world — that increasing the minimum wage does not necessarily lead to fewer jobs.

[liberal japonicus]

Being the knee-jerk leftist I am, I assumed that the problem with capture of tuitions was that it was for-profit universities. However, looking for some proof, I found this

https://www.studentloanplanner.com/not-profit-universities-biggest-culprit-student-loan-crisis/

Very few lawmakers, reporters, or thought leaders understand how badly many professional and grad schools at not for profit universities are screwing their students and the taxpayer. All the attention is on greedy for-profit schools who sign someone up for a useless degree often leaving them with $5,000 to $20,000 of debt.

The data on professional schools is so distorted, it would cause many of them to close if the public knew how out of control costs have become. Whether by luck or design, almost no one knows how awful the tuition problem is after undergrad thanks to shoddy government stats that shield the student loan crisis.

This was also interesting
It’s stunning that 8% of borrowers account for 38% of the debt. That makes sense in that you’d expect individuals borrowing for med school or law school to owe multiples of what someone just graduating undergrad would have.

and reminds me of an article that found that a small number of cases were often responsible for an immense amount of medical debt.

[wj]

Nostalgic conservative that I am, I pine for the days when universities' priority was education, not sports facilities.

[CharlesWT]

Nostalgic conservative that I am, I pine for the days when universities' priority was education, not sports facilities.

The same for high schools.

[wj]

I'd like to think that, for high schools, parents were closer to the action. And could therefore more effectively push the education side. Except that I remember growing up with local parents making a huge deal over raising money for things like high school tennis courts.

Somebody out there must care more about education** than sports. But all too often it seems like that's a minority interest.

** Except for diploma-as-a-job-boost. Which isn't the same as education.

[Snarki, child of Loki]

Universities are just doing the "free market" thing, and jacking up the price (tuition) to whatever the market will bear.

Strong demand + limited supply = $$$$

The only thing "non-profit" means, in terms of price restraint, is that the Universities don't pay dividends to stockholders, and the tax code limits how much tuition money they can put in an endowment, so they have to bloat up admin numbers and salaries and do fancy real-estate deals to absorb that extra cash.

Fancy athletic facilities? That's a SYMPTOM. Not the disease, especially when the stadiums, etc., are heavily funded by donors who are gung-ho for sportsball, and want their name on stuff.

[CharlesWT]

Not the only high school stadium of its kind in Texas.

Allen, Texas High School stadium

[nous]

Snarki - those things are certainly a factor at some universities, but only at those universities who have enough reputation to work that particular line.

The universities on the bottom are being eaten alive by the for-profits that run on a credentialing model and that run on a low-overhead and gig-faculty model. They can't compete and offer anything like the "college experience," so they are failing and selling off their property to larger universities.

The universities at the top are working the gig that you outline and keeping their demand strong precisely by leaning into that luxury model that signals ++elite education++ to applicants. That then becomes their value proposition for wealthy alums, too. Donating gets them a name on a building at an ++elite++ institution, which shows the world that they are the elite of the elite.

And because universities are finding their public funding drying up, the water keeps rising and the middle finds itself forced to compete with the elites or they slip closer to the danger zone as the University of Phoenix's of the world soak up their prospectives.

So the fancy athletic facilities are a symptom, but the disease isn't greed for any but the top tier of universities. The lower tiers are all trapped between playing an eliteness game that they can't sustain, or racing to the bottom with cost cutting that hollows out their educational mission and erodes the middle class even further (both for gig faculty and for students strapped with more debt than they can ever pay back in a future that is shrinking).

At least that's how things look to contingent faculty at those elite institutions, who actually do care about educating students, and would like to be able to do that without putting both themselves and their students into hock for the glory of their management at the expense of their colleagues at smaller institutions.

Higher education is where corporations were in the 80s as finance downsized everything and took all the profits for management and stockholders, leaving workers and customers holding the bag.

[nous]

I also want to echo what lj writes above about the professional schools and tuition and how that plays into what Snarki is talking about. I recently heard directly from a B-School Assistant/Associate Dean directly that their school runs on a consumer model, that they work hard to admit as many students as they can, offer classes that are popular, and cut classes that are not popular regardless of their educational value.

And since most of the university level administrators come from the ranks of either B-school or law graduates, these groups mutually reinforce each other. The engineering and medical schools and sciences gain a measure of autonomy owing to their contributions to the overhead from IP and health care profits. Everyone else is pretty much along for the ride.

[Pro Bono]

My understanding is that US universities make a profit on their american football and basketball programmes. If that's right, it's not unreasonable for them to spend money on facilities.

[liberal japonicus]

Well...
https://www.jstor.org/stable/40251010

The article is from 1991, so I believe that the problem has only gotten worse.

and this
https://college.lovetoknow.com/campus-life/does-college-football-make-money

College football programs can generate revenue in a variety of ways, including ticket purchases, corporate sponsorships, endorsements, licensing fees, television contracts, alumni donations, capital campaigns, student athletic fees and, for the elite few, bowl game fees or playoff/championship revenue.

A lot of money changes hands in the world of college football, particularly in the big programs within the powerhouse conferences. However, taking in a significant amount of football money doesn't mean a school's football program is actually profitable. Profitable college football programs are not the rule; they are the exception. As pointed out in the International Business Times, "Most public universities lose money on their athletic programs."

And this is eye-opening
https://www.gobankingrates.com/money/business/universities-profit-off-student-athletes/
Imagine any other place where you can say (figures for Iowa) Let me spend 88 million and I'll get you a return of 0.1%!

But if they are making a profit, it is important to realize that making a profit is only a small part of the equation.

For example, one way they make a profit is that they basically require the student-athlete to work for free. Yes, they get a scholarship, but do they really get an education? And given the way the NCAA has fought against student-athletes gaining any benefits from their time at the university (including the rights to their image) suggests that if there are profits, there is a background of exploitation.

It is also argued that a winning football or basketball team acts to bring in more donations. Yet if there are more donations, but those donations are directed to athletics, they may be, as the article suggests, draining other budgets.

[hairshirthedonist]

Setting aside whether sports are profitable, I bet universities could make a profit selling drugs to their students. Does that make it good for education?

[wj]

I bet universities could make a profit selling drugs to their students. Does that make it good for education?

Suppose they included in their drug sales program the occasional adulteration. Not with something lethal, just with very unpleasant side effects. That could provide a useful, and educational, experience for the students.

[nous]

Universities selling drugs to students would be horribly inefficient. What we really need is for the drugs to be sold through a public/private partnership where the students could get real world drug experience, not just some unrealistic ivory drug den.

[cleek]

we need a UBIS (Universal Basic Intoxicant Supply) where each student is guaranteed a basic package of drugs: an ounce of weed and two cases of beer each month.

[nous]

Won't that just put the campus Libertarians in a bind.

[wj]

Won't that just put the campus Libertarians in a bind

Probably not.

Most libertarians (especially campus libertarians) cheerfully abandon that view the instant that they notice that there's something in it for them when you get to government action. See, for example, the number who are happily attending a state (i.e. government subsidized) university. Rather than insisting on attending a private college of some kind.