Welfare?


In an economy that has transitioned into demand for highly skilled jobs and services, where manufacturing is not competitive anymore, what we do with that chunk of the population previously employed by manufacturing?

Minimum wage and other welfare policies end up essentially amounting to "let's give free money to this chunk of the population to which we don't know what to do with".

It becomes virtually equivalent to an universal basic income (UBI), except that UBI would be explicitly designed for that purpose whereas in the current welfare system, the statement is more along the lines  of "look, for some reason these people can't do anything, but we need to help them so they can go do something".

But it seems realistic to predict that the fraction of the population that has nothing to do - no productive possible occupation - will only increase, and

thus, either we give them money for free (UBI), or we give them money for free and ask them to pretend to do things (minimum wage + welfare).

Pragmatically speaking, they are equivalent, only differing in efficiency and how people perceive and react to them.

Traditional welfare is generally seen as acceptable and even desirable. It is generally inefficient not only because of the big bureaucratic apparatus needed to implement it, but because definition it aims to treat people unequally in order to achieve equality. And ideally that needs to be done on a case by case basis.

This subjective case by case basis of traditional welfare makes it extremely prone to political behavior and rent seeking. And this seems impossible to eliminate as long as there is room for subjectivity in the decision process.

In contrast, an UBI leaves no room for argument or political behavior - if everyone is entitled to the exact same thing, once that is set in stone, there is no room for argument, and the bureaucratic machinery is virtually eliminated.

But UBI is a concept to which people are not used to, and funny enough can be attacked from both sides: those who don't believe in welfare will immediately label it as socialism, and those who do will be put off by the fact that it aims to treat everyone the same - not just those who "need".