Switzerland and "Star Trek" economics: $2,800 a month for everyone?

This was briefly mentioned in an Obamacare thread ... also interesting in light of our discussion about Star Trek economics here.

Switzerland is going to consider a proposal to give every adult in the country $2,800 per month as a "universal basic income."

Salon sez:

More at the link.

Discuss.

Seatac Washington (yes, the city named itself after the airport) will vote next month on a $15/h minimum wage (there are exemptions for small businesses and union shops).

Both mayoral candidates in Seattle say they support eventually getting to a $15/h minimum wage, but both want to ease into it.

Have to wait and see how that works out.

Simple question, what's to stop inflation? Price controls?

If that is the case, they really don't have an economy as much as an employee/company store relationship.

But even if you're getting $15 an hour for minimum wage, you still have to do something for it...

Can one of the Euro folks weigh in on how far the equivalent of $2,800 a month goes in Switzerland? Are we talking barely-subsistence-level income, the kind of thing where only people who are OK with the lowest possible standard of living would contemplate quitting their jobs and living off of the guaranteed minimum? Or would they be looking at an epidemic of people saying "screw you, I'm taking my gub'mint check and never working again"?

I doubt they are going to go through with it, but eventually, someone is. And I haven't got the slightest idea how that will turn out. It will be a fascinating experiment, and it could very well change the world.

Also, Heinlein agrees!

As long as they aren't just printing the money, inflation will stay in check.

Somewhere in between. Altogether, the amount seems quite high to me. Thing about Switzerland is that living costs are very high, but only some jobs pay proportionally well. The sum certainly suffices to make a living, but you'd be wanting for extras. We're talking "can't eat at restaurants" here, not "don't have a roof over my head".

I imagine their Free Trade Agreements with the rest of the world and especially the EU. Aside from chocolate and watches they don't really produce much.

So, not an economy. Got it.

If everyone gets 2800 a month, what do you think is going to happen to the price of everything?

Put it this way: if I had to live on that sum in Switzerland, I'd be looking for a job, but I wouldn't be willing to do menial work just to better my lifestyle beyond that. And that's really the question, isn't it? How enormously well will you have to pay people to collect the trash? Right now, bad jobs pay badly, because you're desperate enough to do them as well as desperate enough to accept low wages. When people are no longer desperate, we might find that unpleasant jobs suddenly pay a lot more that white collar stuff. Which is, of course, as it would and should be in a truly free market.

Bad jobs pay badly? If a job pays poorly, it probably requires a low, generic skill set. Plenty of "bad" jobs pay very well in this country, because they're a combination of work people don't want to do, and require a certain ethic and intelligence to get it done.

I know living in Okie frak country has skewed the curve, but there a lot of guys around here working their ass off in simple jobs for triple the pay because of the hours and hardship required. But then again, we have an economy. We produce things.

Oh they have an economy, its just more service (banking) oriented than most. Most goods are imported so raising the minimum wage shouldn't have much of an effect.

We shall see, I really don't care one way or another. If someone things subsidizing the incomes of people in this country is a good idea, I'll see that and raise them the clusterfuck that is decades of American agricultural policy.

A quick check shows that the cost of living for one apartment, with food, utilities, basic items needed, and using public transportation costs about 3003-3200 Swiss Francs or $3300-3500 for one person. Also the cost of living in Switzerland is the highest in Europe. You can expect to pay about 50% more to live in Switzerland than in the U.S.

Hopefully someone will double my wages to keep up.

I'm not sure it necessarily follows that everything will go out. I'd expect optional items to either go up or not deflate over time as they normally would (say, an iphone might end up costing $1500) BUT there would be a big expansion in the market of things people need and can't afford now.

in my own case, for example, my monthly income with the recent bump in hours is ~$1300 a month (not in the past, but upcoming checks) before taxes...if you double that (not getting into the weds of my salary plus such a check, just illustrating here) then I can afford the following things I'm not buying now:

1. health insurance
2. full coverage auto insurance
3 legal services (will and etc)
4. eye care (no exam in maybe 6 years, my glasses are 3 or 4 years old)
5. Dental care (my mouth is a train wreck
6. health care (spouse is in major need of all sorts of stuff, I'm looking at thousands in transition related expense)
7. auto service
8. paying all of my own rent and food
9. decent furniture (you should see the second hand stuff we make do with)
10. a freezer (to better use our grocery funds)
11. a storm shelter
12. gym membership

and that's just the top of my head, I could probably triple that list with a little thought. Al before I decide I have to have an iphone or a 55" TV

I'm not an economist, maybe that stuff does get higher, but i would think there's plenty of money to be made just by having a lot more potential buyers

well if this is designed to be apart from already existing wages, the relative gap between you and the cashier at McDonalds isn't going to close that much.

It's not a truly free market when the government is giving everyone $2800 a month.

That would be a market distortion.

And if I as the trash collector manager have to pay a lot more then I'm currently paying just to get employees to do the job then I'm going to pass the costs on to you the customer.

Thank you government distortion.....

And we could never do this in America because we'd fuck it up and put all sorts of rules and restrictions on it.

Give rich people the monthly check? Why the left in this country would be horrified!!

Almost forgot.....

Give poor people a check that doesn't require work? The right in the is country would be horrified!!

Intriguing experiment. If implemented, if successful, I wonder if it will change anyone's mind?

On what, that people like money?

The corporate sector is fond of saying 'a rising tide lifts all boats'.

It wouldn't be $2800 in America.

Someone did the math in the comments section and if you want the government to go broke in year one then give every adult $2800 a month per year.

Also can't be giving it to illegals.

It's an interesting Idea for sure, and like Packard I think it's inevitable that it will be trialled somewhere.

Could be super successful, could be an abject failure. I think it has the potential for both, based on how the annual figures are decided upon. Too low a figure and it won't do much, too high a figure and you risk excessive inflation.

In principle there are ways it could do a lot of good. I'd be especially interested in seeing the petty crime figures after such a scheme was introduced. It also gives many low income earners the ability to make decisions based on long term best interests rather than short term essentials. It's hard to make decisions that will put you best off a year from now when you are starving today.

@Zombie, my understanding is that it isn't cutting everyone a check for $2800 but making sure every adult gets AT LEAST that much a month.

In other words, make $2700 and you get a $100 check. Make $2800 and you get nothing.

Hmm, I'd hope not because that would be the most destructive way of introducing such a scheme.

Here there are some benefits that cut off at fixed income values, while others are phased out.

For example when I was getting student benefits they were $350 a fortnight. I was also allowed to earn up to $400 a fortnight before those payments would be reduced. However that is done gradually, where you lose 50 cents for every dollar earned.

So if I earned $600 in a fortnight I was $200 over my allowed income, meaning my support payment would be reduced by $100 for that fortnight.

Phasing things in like that keeps an incentive to work, a strict cut off means there is no reason to.

This assumes someone would be happy making $2800 a month for the rest of their life. From what Packard and ed have said, adjusted for CoL that isn't that much there.

If you want to make more than that you've got to work your way up, even if that means that short term you don't earn any extra doing so.