Incentives are not some ethereal concept; they are very real and engrained in human nature. You tend to get more of what you allow, encourage, or subsidize because you have made that thing attractive. Same with getting less of what you discourage or even punish. It has nothing to do with shit jobs or greed or whatever else. People tend to act in their self-interest. When a greater income can be derived by working vs. not working, there is nothing complicated about what follows.
"If we taxed unemployment insurance, the rich would be hurt more than the poor, because they don't have a high-paying job.” The rich don't need unemployment insurance. They can live off their savings until they find another job, which is very soon as they're well-connected, and they likely have the skills, experience and will to strike out on their own. They have multiple streams of income which those who depend on unemployment insurance don't have.
I say a better incentive to get people off unemployment is to offer incentives to businesses to hire, and at higher rates. If your essential job is paying less than the meagre UI of subsistence living, there's something wrong with this picture. Shouldn't 'essential' jobs earn a lot more?
Glenn, read the book Bullshit Jobs to get a much clearer picture of what your wife is saying. Or if you don't have time (but you should read it, really, it's killer) you can read the essay over lunch that went viral.
Excellent initiation and description of “evil, cold economists” Mr. Glenn Loury, and an interesting conversation with Mr. Steven Rhoads.
I also agree with you that the proper use of the economy, considers all the variables. One of these variables is of course, human labor and it is logical that everything related to the human being becomes part of the equation. The economy may sound cold and dry, but behind all those numbers are human beings. In the first part, you talk about unemployment benefits. I live in Sweden and the system is, in short terms like this:
Both the employed and the unemployed can pay a certain amount to the unemployment fund. In case of losing a job, the person is entitled to unemployment benefits for 300 days. That deadline can be extended, meeting certain conditions, for the next 150 days. After that deadline, there are various programs through the employment service. This would be the shortest version.
The second part is about people receiving welfare. Most of them are immigrants, but there are also a domicile population. Immigrants have various education programs, learning the Swedish language, and try to decide what kind of further education would suit them as individuals. Everything happens through the system, and they get help from various sides. Of course, education counselors are involved, teachers and so on…The truth is, all this exists, and it seemingly sounds very good.
However, this is where we come to "good intentions" and the right goals, in my opinion.
All these processes are quite complicated, changes are often made in the way of collaborating with immigrants, etc.
I take as an example a family that receives financial aid, 4 members, mom dad and two children.
Children receive financial aid up to 18 years of age. If one of the parents gets a job, it is enough for the other parent to lose the right to financial aid. It is difficult and unusual for both to find the job at the same time. They also lose the right to financial aid related to the rent for the apartment. That one salary is at best, just a little more than the amount they received while they were not working. I believe most people want to work, but experiences say a little differently.
Most end up asking a Shakespearean question: “To work or not to work”?
So, with unemployment rising, we have many people who have not yet reached the labor market. This is of course a very simplified and very brief explanation of the situation in Sweden.
I know you are busy and if you happen to read this, I would be really interested in your opinion on the following:
In this way, the left wing of the political sphere creates a future and current army of voters. It doesn't matter to them whether and when these people will reach the labor market, because everything is paid from the state treasury, and we know who fills the same state treasury.
The right wing of the political sphere is persistent in insisting that financial aid be abolished or reduced. Whether this request is correct or not, such an attitude strengthens the will of people who depend on financial aid to vote for the left side of the political sphere.
These two settings are quite similar in Sweden and the USA.
It is a small paradox that nothing significant changes even when the right side of the political sphere is in power.
Is the right path to a possible solution to these problems, insisting on reducing the state apparatus, and not on reducing financial aid, which is quite short-term and more of a respite than a solution?
"We have to have incentives to get ordinary, nice people to do what adults think they ought to do and would make them happier in the long run." This smacks of paternalism to me. The idea here is that while people would choose to be "lazy," ie to pursue leisure over toil, actually their jobs make them happier than they would be if they were just given a UBI and could do whatever they want. This is an empirical question and one that can't be resolved with polls of people saying they wouldn't quit their jobs if they won the lottery. The question is: do they keep their jobs when they win the lottery? And when they do, it's probably because they already have work that they find intrinsically satisfying. Do most people who do underpaid hard labor continue to do it if they win the lottery? Do we think they they would be "happier" if they were forced to continue to do said underpaid hard labor for the rest of their lives?
I reject the idea that jobs bring a more fulfilling life than "laziness." For some people this may be true. For others, who hate their jobs, the freedom to quit and pursue their hobbies (things that don't necessarily have market value) would be a blessing. A mistake here is seeing a binary between "jobs" and "laziness." In fact, you can work hard without having a job. You can volunteer. You can paint or write. You can go to the gym. Personally I would love a life that I could just spend reading, exercising, writing, gardening, helping friends, and making love. I think a lot of people might feel the same way and telling them that we need to force them into the labor force because, while they THINK they want this life of leisure, actually their jobs will bring them greater fulfillment strikes me as the same kind of "false consciousness" argument that is so ridiculed when it is expressed by Marxists. If we think that having too many people living lives of leisure is unsustainable and they need to be compelled to enter the labor force through coercion (work or starve) so that work can get done, then fine. But don't add insult to injury by telling them that actually it's good for them and they like it and their clearly expressed preference to be paid not to work is a misjudgment of their own best interests.
Biden and his lapdog media said that inflation is transitory, now they’re saying inflation is good for you. And they keep citing the support of economists. This damages all of their credibility, like the entire “expert” class.
Incentives are not some ethereal concept; they are very real and engrained in human nature. You tend to get more of what you allow, encourage, or subsidize because you have made that thing attractive. Same with getting less of what you discourage or even punish. It has nothing to do with shit jobs or greed or whatever else. People tend to act in their self-interest. When a greater income can be derived by working vs. not working, there is nothing complicated about what follows.
"If we taxed unemployment insurance, the rich would be hurt more than the poor, because they don't have a high-paying job.” The rich don't need unemployment insurance. They can live off their savings until they find another job, which is very soon as they're well-connected, and they likely have the skills, experience and will to strike out on their own. They have multiple streams of income which those who depend on unemployment insurance don't have.
I say a better incentive to get people off unemployment is to offer incentives to businesses to hire, and at higher rates. If your essential job is paying less than the meagre UI of subsistence living, there's something wrong with this picture. Shouldn't 'essential' jobs earn a lot more?
Glenn, read the book Bullshit Jobs to get a much clearer picture of what your wife is saying. Or if you don't have time (but you should read it, really, it's killer) you can read the essay over lunch that went viral.
https://www.strike.coop/bullshit-jobs/
Excellent initiation and description of “evil, cold economists” Mr. Glenn Loury, and an interesting conversation with Mr. Steven Rhoads.
I also agree with you that the proper use of the economy, considers all the variables. One of these variables is of course, human labor and it is logical that everything related to the human being becomes part of the equation. The economy may sound cold and dry, but behind all those numbers are human beings. In the first part, you talk about unemployment benefits. I live in Sweden and the system is, in short terms like this:
Both the employed and the unemployed can pay a certain amount to the unemployment fund. In case of losing a job, the person is entitled to unemployment benefits for 300 days. That deadline can be extended, meeting certain conditions, for the next 150 days. After that deadline, there are various programs through the employment service. This would be the shortest version.
The second part is about people receiving welfare. Most of them are immigrants, but there are also a domicile population. Immigrants have various education programs, learning the Swedish language, and try to decide what kind of further education would suit them as individuals. Everything happens through the system, and they get help from various sides. Of course, education counselors are involved, teachers and so on…The truth is, all this exists, and it seemingly sounds very good.
However, this is where we come to "good intentions" and the right goals, in my opinion.
All these processes are quite complicated, changes are often made in the way of collaborating with immigrants, etc.
I take as an example a family that receives financial aid, 4 members, mom dad and two children.
Children receive financial aid up to 18 years of age. If one of the parents gets a job, it is enough for the other parent to lose the right to financial aid. It is difficult and unusual for both to find the job at the same time. They also lose the right to financial aid related to the rent for the apartment. That one salary is at best, just a little more than the amount they received while they were not working. I believe most people want to work, but experiences say a little differently.
Most end up asking a Shakespearean question: “To work or not to work”?
So, with unemployment rising, we have many people who have not yet reached the labor market. This is of course a very simplified and very brief explanation of the situation in Sweden.
I know you are busy and if you happen to read this, I would be really interested in your opinion on the following:
In this way, the left wing of the political sphere creates a future and current army of voters. It doesn't matter to them whether and when these people will reach the labor market, because everything is paid from the state treasury, and we know who fills the same state treasury.
The right wing of the political sphere is persistent in insisting that financial aid be abolished or reduced. Whether this request is correct or not, such an attitude strengthens the will of people who depend on financial aid to vote for the left side of the political sphere.
These two settings are quite similar in Sweden and the USA.
It is a small paradox that nothing significant changes even when the right side of the political sphere is in power.
Is the right path to a possible solution to these problems, insisting on reducing the state apparatus, and not on reducing financial aid, which is quite short-term and more of a respite than a solution?
With regards from Sweden
"We have to have incentives to get ordinary, nice people to do what adults think they ought to do and would make them happier in the long run." This smacks of paternalism to me. The idea here is that while people would choose to be "lazy," ie to pursue leisure over toil, actually their jobs make them happier than they would be if they were just given a UBI and could do whatever they want. This is an empirical question and one that can't be resolved with polls of people saying they wouldn't quit their jobs if they won the lottery. The question is: do they keep their jobs when they win the lottery? And when they do, it's probably because they already have work that they find intrinsically satisfying. Do most people who do underpaid hard labor continue to do it if they win the lottery? Do we think they they would be "happier" if they were forced to continue to do said underpaid hard labor for the rest of their lives?
I reject the idea that jobs bring a more fulfilling life than "laziness." For some people this may be true. For others, who hate their jobs, the freedom to quit and pursue their hobbies (things that don't necessarily have market value) would be a blessing. A mistake here is seeing a binary between "jobs" and "laziness." In fact, you can work hard without having a job. You can volunteer. You can paint or write. You can go to the gym. Personally I would love a life that I could just spend reading, exercising, writing, gardening, helping friends, and making love. I think a lot of people might feel the same way and telling them that we need to force them into the labor force because, while they THINK they want this life of leisure, actually their jobs will bring them greater fulfillment strikes me as the same kind of "false consciousness" argument that is so ridiculed when it is expressed by Marxists. If we think that having too many people living lives of leisure is unsustainable and they need to be compelled to enter the labor force through coercion (work or starve) so that work can get done, then fine. But don't add insult to injury by telling them that actually it's good for them and they like it and their clearly expressed preference to be paid not to work is a misjudgment of their own best interests.
Biden and his lapdog media said that inflation is transitory, now they’re saying inflation is good for you. And they keep citing the support of economists. This damages all of their credibility, like the entire “expert” class.