The City That’s Giving People Money

[RavenSky]

Randomly selected Stockton residents are receiving $500 a month. The experiment might prove that guaranteed income works.

Is Maggie Denang deserving of your money? How about Tomas Vargas Jr.?

Denang and Vargas are residents of Stockton, a high-poverty city on the outskirts of the Bay Area’s technology-and-wealth boom. They are also participants in a much publicized, pathbreaking project, the Stockton Economic Empowerment Demonstration, in which 130 people are receiving $500 a month for 18 months, to use however they see fit. The experiment raises the question of whether Vargas and Denang are worthy of no-strings-attached cash, or whether anyone is, or everyone is.

As it is, America’s means-tested social policies operate with very little trust, as do many of its nonprofits and charities. Many states drug-test welfare recipients. The government limits what individuals can buy with food stamps or WIC funds (no imported cheese, for instance), with a number of state legislators pushing provisions that would stop families from buying luxuries such as steak and lobster as well as junk food. But study after study has shown that cash transfers do not lead families to consume more vice goods, such as cigarettes and alcohol. As a general point, cash-transfer programs tend to increase families’ consumption of the basics, and in some cases allow them to make investments that improve their income down the road. When they get cash, people tend to act like Vargas and Denang do, in other words.

https://www.citylab.com/equity/2019/05/the-city-thats-giving-people-money/590224/

 

[Politesse]

Half of a month's rent? What's that supposed to do?

 

[ZiprHead]

Half of a month's rent? What's that supposed to do?

You can buy a pretty decent used car to get reliably to work and back.

 

[dismal]

Well, you’ve convinced me. I’ll take the $500.

 

[James Brown]

Receiving something by surprise yields different behaviors than receiving it on a regular schedule.

 

[dismal]

Receiving something by surprise yields different behaviors than receiving it on a regular schedule.

Ok, I’ll take it on a regular schedule.

 

[southernhybrid]

Receiving something by surprise yields different behaviors than receiving it on a regular schedule.

Ok, I’ll take it on a regular schedule.

Okay, but first you have to move to Stockton.

 

[Politesse]

Receiving something by surprise yields different behaviors than receiving it on a regular schedule.

Ok, I’ll take it on a regular schedule.

Okay, but first you have to move to Stockton.

There's always a flaw in the plan....

 

[dismal]

Receiving something by surprise yields different behaviors than receiving it on a regular schedule.

Ok, I’ll take it on a regular schedule.

Okay, but first you have to move to Stockton.

Can’t you guys just hook me up on Venmo?

 

[thebeave]

Will they let you put the $500/mo towards a new jet ski? Or, are there restrictions on it, like you have to spend it on rent and stuff.

 

[Politesse]

Are we just assuming that rent is a good "investment" of money?

Microloans and microgrants are just one more way to ensnare the poor even further in an exploitative economic engine that was not and never was designed for their benefit.

 

[steve_bank]

It is justn more of throwing money at a problem without any real stargy.

Give money away and see what happens.

In Seattle a head tax was proposed on business to support homeless housing. The idea being higher professional salaries were driving up housing costs and companies had to compensate. I think it started at around $500 per employee and dropped down as protest grew and then was abandoned.

A minimum s;asdty si not the same as giving money away.

If you guarantee a min salry to a teen dropout or a HS grad with no expeince it has to show up somewhere.

Higher costs of goods and services
Hiring less people and making do


Rent control in NYC in the lung run bad problems.

We could have a national income supplement which is graded, but that would face stiff opposition as socialism.

It is a structural problem. The free market economy was never intended to provide a living wage for every adult man and woman. Add in the old e job and wage suppression that existed for minorities where the main woker pool was white men.

To solve the problem there needs to be structural change in the economy. Shoten the work week so a company needs to hire more workers.

I know a woman who spent 15 years working in Hong Kong and 10 in mainland China. She had a permanent resident permit. When she turned 60 she was told to get out. Mandatory retirement to make room for younger workers.

The real question is whether or not the free market system can survive with the current wage and employment demands and a growing population.

I do not think it can.

Back in the 50s and 60s an adult male working as an unskilled labor could afford a small house and a family. Not anymore.

 

[bilby]

It is justn more of throwing money at a problem without any real stargy.

Give money away and see what happens.

In Seattle a head tax was proposed on business to support homeless housing. The idea being higher professional salaries were driving up housing costs and companies had to compensate. I think it started at around $500 per employee and dropped down as protest grew and then was abandoned.

A minimum s;asdty si not the same as giving money away.

If you guarantee a min salry to a teen dropout or a HS grad with no expeince it has to show up somewhere.

Higher costs of goods and services
Hiring less people and making do


Rent control in NYC in the lung run bad problems.

We could have a national income supplement which is graded, but that would face stiff opposition as socialism.

Indeed it would.

It is a structural problem.

No, as you literally pojted out with your last six words, it's a POLITICAL problem. You can't just slap the 'socialism' label on things you don't like, and pretend it reads 'impossible'.

Socialism (in the sense we are using it here, to mean re-distributive policies) is, and has always been, a feature of US politics. There's no particular reason why you can't have a bit more or a bit less of it.

The free market economy was never intended to provide a living wage for every adult man and woman.

You don't HAVE a free market economy. So the question is 'Do you want your economy to provide a living wage for every adult man and woman?' And the answer assuredly isn't 'We can't afford it', because US GDP per Capita is about $60,000. So you can afford to pay every man, woman, and child $30,000, and STILL have half your national income available for ensuring a wealthy class of people earning far more than that - so that everyone has an 'incentive to work harder', if that's your credo.

Add in the old e job and wage suppression that existed for minorities where the main woker pool was white men.

To solve the problem there needs to be structural change in the economy. Shoten the work week so a company needs to hire more workers.

Or just accept that production no longer requires a lot of workers, and pay people as if they had the jobs that have been taken over by machines. Machines are supposed to make our lives better - not just to enrich a handful of people and fuck the rest.

I know a woman who spent 15 years working in Hong Kong and 10 in mainland China. She had a permanent resident permit. When she turned 60 she was told to get out. Mandatory retirement to make room for younger workers.

The real question is whether or not the free market system can survive with the current wage and employment demands and a growing population.

You don't have a free market system. So, no.

I do not think it can.

Back in the 50s and 60s an adult male working as an unskilled labor could afford a small house and a family. Not anymore.

Which is insane. Because GDP per capita is FAR higher today than it was then, even after adjusting for inflation.

If it was possible then, then it should be not only possible, but easy now. (and the male/female thing is a red herring - we are discussing household income, so it's irrelevant whether it's income due to one, two or even more than two members of the household).

GDP per capita 2017 - $59,531.66
GDP per capita 1960 - $3007.12
1960 figure Adjusted to 2017 dollars - $24,694.39

I wonder why ordinary workers are not getting even half the share of the pie that they did back in 1960? Could it be that the problem is re-distributive socialism?

Well, yes. The problem could well be that in 1960, people paid about twice the proportion of their income in taxes that they do today. The problem may indeed be re-distributive socialism - you stopped having enough of it, and instead let rich people keep the money for themselves, instead of sharing it out.

Of course, many people would say that this is only fair; But economics isn't about what's fair, it's about what achieves your policy objectives.

If your policy objective is to allow some people to accumulate a lot of wealth, while others don't have enough to survive, then re-distributive socialism is something you need to reduce. If not, then you may need to increase it - perhaps to 1960 levels, which I note were insufficiently draconian to crash the economy.

It's doubtless that either extreme - completely leveling wealth by re-distribution; or not making any re-distribution at all - is disastrous.

But it's equally obvious that your current system could make more people less poverty stricken, by increasing re-distribution back to the levels you had in 1960 (when I note that your economy didn't crash as a result).

The re-distribution of the fruits of the economy has always been controlled to some extent, by the government, via taxation. For a couple of hundred years, primarily through income taxation. It's a good thing (unless you are an extremist loon who believes in either a total free market, or total communist wealth leveling). The trick is to work out how much of it you can afford to do without crashing the economy by disincentivizing people from seeking higher incomes. The answer (if we accept that 1960 wasn't a bad time to be an American go-getter) is apparently 'At least twice as much as at present'.

 

[Loren Pechtel]

Back in the 50s and 60s an adult male working as an unskilled labor could afford a small house and a family. Not anymore.

A white American. The worst jobs were either non-white or not in the USA. We didn't see them, that doesn't mean they weren't there.

 

[Loren Pechtel]

Which is insane. Because GDP per capita is FAR higher today than it was then, even after adjusting for inflation.

If it was possible then, then it should be not only possible, but easy now. (and the male/female thing is a red herring - we are discussing household income, so it's irrelevant whether it's income due to one, two or even more than two members of the household).

GDP per capita 2017 - $59,531.66
GDP per capita 1960 - $3007.12
1960 figure Adjusted to 2017 dollars - $24,694.39

I wonder why ordinary workers are not getting even half the share of the pie that they did back in 1960? Could it be that the problem is re-distributive socialism?

I don't follow. You have shown per-capita GDP has more than doubled in those years--this says nothing about the share of the pie the workers get. Note, also, that there are two other factors at work:

1) There has been a lot of improvement that you can't put in the bank. No dying is a good thing but doesn't make money.

2) You would expect the worker's share of GDP to go down as technology advances because an increasing percentage of the economy is going to provide the tools.

Well, yes. The problem could well be that in 1960, people paid about twice the proportion of their income in taxes that they do today. The problem may indeed be re-distributive socialism - you stopped having enough of it, and instead let rich people keep the money for themselves, instead of sharing it out.

Except the tax receipts do not support this assertion. The top rate was a lot higher, tax take as a % of GNP didn't have a big difference.

 

[bilby]

Which is insane. Because GDP per capita is FAR higher today than it was then, even after adjusting for inflation.

If it was possible then, then it should be not only possible, but easy now. (and the male/female thing is a red herring - we are discussing household income, so it's irrelevant whether it's income due to one, two or even more than two members of the household).

GDP per capita 2017 - $59,531.66
GDP per capita 1960 - $3007.12
1960 figure Adjusted to 2017 dollars - $24,694.39

I wonder why ordinary workers are not getting even half the share of the pie that they did back in 1960? Could it be that the problem is re-distributive socialism?

I don't follow. You have shown per-capita GDP has more than doubled in those years--this says nothing about the share of the pie the workers get.

Yes. Congratulations, you have correctly identified my grievance.

Note, also, that there are two other factors at work:

1) There has been a lot of improvement that you can't put in the bank. No dying is a good thing but doesn't make money.

2) You would expect the worker's share of GDP to go down as technology advances because an increasing percentage of the economy is going to provide the tools.

Sure. But you don't have to make that trend worse by lowering taxes on high income earners; You could instead mitigate it by increasing their taxes.

Well, yes. The problem could well be that in 1960, people paid about twice the proportion of their income in taxes that they do today. The problem may indeed be re-distributive socialism - you stopped having enough of it, and instead let rich people keep the money for themselves, instead of sharing it out.

Except the tax receipts do not support this assertion. The top rate was a lot higher, tax take as a % of GNP didn't have a big difference.

Sure.

Your numbers are contradicted by reality.

 

[Loren Pechtel]

Yes. Congratulations, you have correctly identified my grievance.

You mean you're unhappy productivity as gone up? Because that's all that data shows!

Note, also, that there are two other factors at work:

1) There has been a lot of improvement that you can't put in the bank. No dying is a good thing but doesn't make money.

2) You would expect the worker's share of GDP to go down as technology advances because an increasing percentage of the economy is going to provide the tools.

Sure. But you don't have to make that trend worse by lowering taxes on high income earners; You could instead mitigate it by increasing their taxes.

So you want to be handed more money you didn't make?

Well, yes. The problem could well be that in 1960, people paid about twice the proportion of their income in taxes that they do today. The problem may indeed be re-distributive socialism - you stopped having enough of it, and instead let rich people keep the money for themselves, instead of sharing it out.

Except the tax receipts do not support this assertion. The top rate was a lot higher, tax take as a % of GNP didn't have a big difference.

Sure.

Your numbers are contradicted by reality.

Hauser says otherwise: https://en.wikipedia.org/wiki/Hauser's_law

 

[bilby]

You mean you're unhappy productivity as gone up? Because that's all that data shows!

I am unhappy that "this says nothing about the share of the pie the workers get".

I believe that society has a moral duty to ensure that these things are not decoupled.

Sure. But you don't have to make that trend worse by lowering taxes on high income earners; You could instead mitigate it by increasing their taxes.

So you want to be handed more money you didn't make?

You misunderstand my personal situation. I pay quite a lot of tax; But I think taxes on people like me should be higher, and the money should be redistributed to those less fortunate.

And I also think that this MUST be a universal redistribution, if we are to have a successful economy.

So, to anticipate your next reflex, no it doesn't help for me to voluntarily give some of my wealth to the poor. Though I do that anyway. Nor to the government, who are not in the business of accepting gifts anyway.

Well, yes. The problem could well be that in 1960, people paid about twice the proportion of their income in taxes that they do today. The problem may indeed be re-distributive socialism - you stopped having enough of it, and instead let rich people keep the money for themselves, instead of sharing it out.

Except the tax receipts do not support this assertion. The top rate was a lot higher, tax take as a % of GNP didn't have a big difference.

Sure.

Your numbers are contradicted by reality.

Hauser says otherwise: https://en.wikipedia.org/wiki/Hauser's_law

Taxes at every bracket were higher. Per capita GDP was far lower. Income tax receipts as a proportion of GDP were dramatically greater then than now.

Total taxation revenue is not relevant to my argument; So Hauser's Law is a red herring.

I am talking about redistriution of income, via income taxation.

Please try to keep up.

 

[steve_bank]

Back in the 50s and 60s an adult male working as an unskilled labor could afford a small house and a family. Not anymore.

A white American. The worst jobs were either non-white or not in the USA. We didn't see them, that doesn't mean they weren't there.

Yes there was Jim Crow, but there was also a black middle class udder the principle of separate but equal.. Middle class black communities and neighborhoods with schools, banks, business, lawyers and so on.

In the early days of jazz the music was rejected by some educated blacks as coarse and unsophisticated. Musicians who could not read music and played by ear.

 

[Loren Pechtel]

I am unhappy that "this says nothing about the share of the pie the workers get".

I believe that society has a moral duty to ensure that these things are not decoupled.

You pick an irrelevant yardstick and complain that it's irrelevant. You have simply decided there's a problem, you aren't showing there is one. The standard "proof" of the problem is seriously flawed--it's unions bemoaning the fact that union jobs aren't the good jobs anymore.

Except the tax receipts do not support this assertion. The top rate was a lot higher, tax take as a % of GNP didn't have a big difference.

Sure.

Your numbers are contradicted by reality.

Hauser says otherwise: https://en.wikipedia.org/wiki/Hauser's_law

Taxes at every bracket were higher. Per capita GDP was far lower. Income tax receipts as a proportion of GDP were dramatically greater then than now.

Total taxation revenue is not relevant to my argument; So Hauser's Law is a red herring.

I am talking about redistriution of income, via income taxation.

Please try to keep up.

You seem to be confusing the top tax rate with the amount of income tax collected. The former has varied widely but when it's been high there have been more ways around it. The actual money collected doesn't vary that much.