I have spent a frustrating time on the net trying to better understand basic income/minimum income models. There are many different models of a basic income guarantee (a summary in six illustrative graphs including the one shown to the right is here [.pdf]). Most of them stipulate a cash handout to people below a certain income threshold, and usually the cash-handout is not means-tested. In other words, everybody living in a certain community should be guaranteed a tolerable minimum of material standards. Annoyingly, the corresponding websites tend to be big in vision but small in analysis of economic consequences.
Here I do not want to get into the sprawling debate about why such models would or wouldn't be a good thing as a radical reform project of social policy, although I point you to the longish and favourable review in German that triggered my curiosity. Lohn der Angst [DE] by Wolf Lotter appeared in German new-economy magazine brand eins in July 2005.
My appeal to readers - and reminder to myself - is this: are there any online documents that answer the following questions:
- What percentage of jobs, full- and part-time, in a developed economy of 2005 would disappear if a basic income equivalent to the poverty threshold (60% of median income) was introduced, assuming beneficiaries could not earn extra without losing corresponding amounts of the basic income? Clearly few people would take up (part-time) jobs below the basic income level any longer, and not all such jobs would still be productive for the employer at a higher wage. So a certain number of jobs would be lost, but would they be few enough for tax revenues to remain solid?
- What percentage of GDP would these lost jobs represent?
- In order to avoid these job losses, one could allow people to earn extra on top of the basic income subsidy, which leads to models of a negative income tax. The problem here seems to be that employers could then lower the wages and absorb a public subsidy that is originally designed to help the poor. How could this be avoided? (Minimum wages may be part of the answer.)
- How can it be avoided that if such a basic income system covers all residents in a certain place, it will force governments to severely limit immigration, because otherwise poor people from countries with low incomes or high unemployment would flood the place?
I would like to support basic income models for many reasons, but I need answers to these doubts.
I have some friends in Oxford who can easily access their libraries/lecturers and if you wish I could drop them a line.