Duh! (Re. the Income in My Economic Paradigm*)
Why make it the same for all who were being paid it?
For years, I have been writing about an economic paradigm* that would have a democratically distributed income (DDI), that is, an income for which any adult citizen (and any number of adult citizens) could become eligible — that a person could actually live on. It would also be a guaranteed minimum income (GMI).
Heretofore I have routinely written that everyone paid that income would be paid the same amount. It finally dawned on me that such a thing need not be the case: different categories of people would be paid the income, and there is no particular reason why it must be the same income for all of those categories of people.
I must have unconsciously been under the influence of its being “democratically” distributed. As I have been fully aware, that only means that eligibility for it cannot be arbitrarily restricted: the existence of an income for which any (adult) citizen (and any number of adult citizens) could become eligible makes its distribution ‘democratic’. Still, that word sort of directs us towards ‘the same for all’ — if we’re not conceptually alert (enough).
[Of course, anyone who has read about this paradigm of mine could have had the same thought and shared it with me, but nooo: no one ever has. This does go to show how undogmatic the whole thing is — and I certainly have always recognized that much discussion, in which thoughts that had never occurred to me could occur to someone else, would precede any implementation of the paradigm. In the inexplicable absence of any such discussion it has been up to me to think of everything. (At 72, though, how much longer can I?)]
In the paradigm the income would be paid to retirees, adults unable to work, and people employed in positions that were paid that minimum income. Those employees would also receive benefits as part of their remuneration, but people in the other two categories would only have the DDI. So it would make sense for retirees and adults unable to work to receive a higher income.
Since in this paradigm those minimum-pay employees would not be paid by their employers, but would be receiving the DDI/GMI as income, employers would find themselves using benefits to compete for employees to fill those positions — whether they wanted to or not, but due (only) to the dynamics of a free market for labor. Employees would negotiate for benefits based on personal needs and wants.
As I have always noted, to prevent inflation, the GMI would have to start at something close to the current minimum pay, increasing gradually towards whatever its final amount would be. Let’s say that here in the U.S. (where I have always lived) the GMI started tomorrow at $10/hr.; $400/wk. So all employees being paid that amount or less would immediately be paid that amount. At the same time, though, employers would immediately have the amount of money that they had been paying to those employees available to finance benefits (which all people would know full well). An employer that had been paying an employee the current federal minimum wage ($7.25/hr.; $290/wk.) would have that amount of money — $15,080/yr.; $1,256.67/mo. — available to finance benefits. So with a GMI of $10/hr.; 400/wk. an employee who had been making $15,080/yr. could now have a total remuneration of $35,880/yr.: $20,800 in pay plus $15,080 in benefits (plus any benefits the employee had already been receiving — if any). All that, and the cost to employers would be zero, so they would have no valid reason to object to the paradigm.
Plus, taxation of every kind would be going down — gradually, to prevent inflation, of course, but all the way to zero, potentially. The DDI could be immediately exempt from taxes on it.
The most important thing about a DDI is to ensure that every (adult) citizen would have enough income for sufficient material well-being. Again, since retirees and adults unable to work would not be receiving benefits, logic suggests that they would need a bigger income. It, too, would have to start lower and gradually increase. It might start in the U.S. at, say, $2,000/mo., which is very slightly more than the current average Social Security payment. The level to which it might rise would be a matter to be decided.
Like the minimum pay for employees, after its initial implementation this income for retirees and adults unable to work would only be replacing existing incomes. So increases in either could not cause inflation. In the case of the employees, however, with benefits also increasing discretionary income would be increasing, which could contribute to inflation. So increases in the GMI would have to proceed more slowly than increases in the income paid to retirees and adults who were unable to work would have to proceed. [Clearly, in the U.S. this income would replace Social Security; it would be replacing incomes from Social Security until the DDI paid to retirees and adults unable to work reached the maximum Social Security income, which is currently $4,018/mo.]
Now, to ensure the absence of unemployment (and ensure competition for minimum-pay employees) government would be an employer of last resort. That creates a kind of sub-category of employees. They would be employed in make-work jobs that paid the GMI without any benefits (such as picking up trash on the side of the road). The absence of benefits would make the jobs essentially cost-free yet would give people employed in such jobs an incentive to seek a job that did include benefits. Still, even those make-work jobs would need to pay ‘enough’. Maybe it could be $500/wk., but here’s another thought: maybe people who had lost a job for some reason could receive that pay for a certain amount of time without having to work for it. For that matter, a person who had lost a job could continue to receive the same income that person had been being paid (again, without any benefits) for a certain amount of time.
With this paradigm, the possibilities for good outcomes are apparently endless. Why not think about it — and share your thoughts?
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*Linked article is a “2 min read” here in Medium with links to articles about the paradigm from various perspectives — with none of it, for the benefit of any ‘guest readers’, behind the paywall.