Alexius wrote:A citizen's wage is a system where the government gives every citizen a sum of money that is sufficient to live on, regardless of their other income or whether they have worked, are seeking work, etc. This sum is roughly equivalent to what someone in receipt of full unemployment benefit (plus related allowances) currently gets. Children get a reduced payment (paid to their parents), while people above retirement age might get an increased one.
This is paid for by eliminating the tax-free income allowance (though CW income is not taxed) and raising income tax on all brackets, especially the highest one. Overall, this means that below a certain income people are better off as they receive more in CW than they pay in extra tax, while above that income (which would be well above the average) people are worse off- in other words, it's progressive taxation. In addition, other forms of unemployment benefit and housing assistance can be abolished, as they are no longer necessary- the CW means everyone has enough money for food and shelter.
I have my doubts, especially about the last few lines... Frankly what I suspect would happen would be similar to what happens when wages are artificially inflated; prices would go up accordingly. It would cost more to buy food, to pay rent, to keep the heat and the lights on; and before long the people who were actually depending on this citizens wage would find themselves in need of additional support just to keep up. So we'd have a situation where we'd need to implement welfare above and beyond this new citizens wage; at which point the people actually paying for this whole thing are taxed even further.
Some state benefits do remain. The CW proposals I have read are from countries with nationalised healthcare systems, so people don't need to be paid enough to afford health insurance, but government assistance to people with disabilities would still be needed.
But again, this is assuming that the costs of necessities do not rise accordingly.
The big effect of the citizen's wage is that people are no longer forced to work or starve. It would be entirely viable to do no work and just live on the citizen's wage- while not luxurious, you would be able to afford a small apartment, food, clothing and utilities.
In other words, if you don't work you get to live like someone on welfare; which begs the question why adopt this system at all? Why not just improve the welfare system to include more people who actually need it, and weed out more people who abuse it?
A citizen's wage might also mean that the minimum wage could be abolished. Given that everyone can choose not to work, people would only take a job if they think the extra income is worth the time and effort. Also, there would be a lot more people taking part-time jobs, just working a few hours to have some disposable income.
Which means that, in addition to the upward pressure on prices that you've caused by new taxes, you're also creating upward pressure by dramatically inflating the costs of various services. Take for example, the fast food industry. Working in a fast food restaurant is tedious and boring, and it doesn't pay well at all. But people still do it. Why? Because they need the money. Imagine how much more
you're going to need to pay someone to do that job if nobody really needs the money?
Now, that may sound like a cold thing to say; but that is the reality of the situation. Crappy jobs exist, for crappy pay, because somebody needs them. Take away that need, and you've taken away that job. Take away that job, and you've taken away what that job provides; in this case it's just cheap food. But the same thing applies to janitors, garbage collectors, cashiers, and all manner of other menial, tedious jobs that, suck as they may, exist for a reason.
I've worked these types of jobs. I worked at McDonald's for six years; I bailed hay for several summers; I worked night security; I've shoveled rocks. None of these jobs were fun, and certainly none of them paid well. But I needed the money. I can assure you, speaking for myself, every single one of them would have had to drastically
increased what they were offering if I'd had a citizens wage...
So if you're one of the folks who decides to live on the citizens wage - or, worse, is living on the citizens wage because you cannot work - suddenly you find that the prices for just about everything - especially at the lower end of the price scale
- are suddenly much higher than before. Because even if we set all else aside, they're paying more for payroll almost across the board.
For example, a lot of folks on the lower end of the income scale shop at places like Wal-Mart, because Wal-Mart has really low prices. Wal-Mart has really low prices, in large part, because they employ a lot of people with low wages. Wal-Mart can hire people at low wages because people need to work. If you take away the need to work, it cascades upward to higher prices at Wal-Mart.
The more I read about the idea of a citizen's wage programme, the more I support it. This thread is to discuss whether you think it would work, and what effects it would have on the economy.
Personally, I believe that if such a system is put into place, that the increases in costs - especially at the lower end of the price scale - will be more than enough to harm the very people this system is intended to help.