Basic income proposal

[wpc@xxxxxxxxxxxxxxxxx (Paul Cockshott)]

Rich Parkin ask why a basic income should tend to lower wages.

At present in most capitalist countries unemployed workers get social
security payments which are set at around the bare subsistence
minimum. This sets a floor below which wages can not fall, since
unemployed people are not going to be willing to give up a subsistence
dole for a less than subsistence wage.

If a basic income scheme were introduced in a capitalist economy the
basic income provided would again be a bare subsistence minimum. Then
however, it would be worth while for a worker to take on a job that paid
half the subsistence wage since she would still be getting her basic income
and would end up with somewhere between 1 and 1 and a half times the
subsistence minimum after tax. But if the employers could hire labour
at a net cost to themselves of half subsistence, this would be used to
drive down the wages of those already in work.

The net result would be to drive wages lower than the minimum to which
they can at present be driven.

All in all it is a very dangerous proposition for the workingclass but
makes good sense from the standpoint of capitalist liberalism.

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Paul Cockshott , 		WPS, PO Box 1125, Glasgow, G44 5UF
Phone: 041 637 2927		wpc@xxxxxxxxxxxxxxxxx
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