Economist's Journey to Life: minimum wage

Showing posts with label minimum wage. Show all posts

Sunday, 12 October 2014

Common Concerns about the Implementation of a Living Income Guaranteed

The following is a Q&A discussion from the Living Income Guaranteed Facebook page.

Do we have equal education, ambition, and iq? should the cashier and server make the same as the entrepreneur with more risk and skin in the game? If you want more pay, find a profession in high demand. Also, if positioning the government to raise minimum wage rates only creates a market distortion inducing hyperinflation, increasing the rate of automated points of sales, job elimination, and pricing some smaller companies completely out of markets. i find it hard to believe that the people on this page can't see through a socialist ideology for the disaster that it is.

Hi - it's not within the Living Income Guaranteed proposal to give each one equal wages, regardless of skill, profession or education. However, it is within the Human Rights Declaration to provide each one with certain rights - which requires a minimum living income. Wouldn't you say it is hypocritical to promise or guarantee these rights and then refrain from providing the means through which these rights find their expression - which in our world, is money? In terms of the inflation argument - please check out the hangout we did on that topic:

A living income is not a right. It's a right to persue, it. How can someone be provided something equal, or to a hyper -standard of their personal production? If a living is "guaranteed ", what is the motivation of the indevidual to continue to be a productive member of society? Where is this guarantee coming from, if the incentive to work is gone? Will farmers farm if they are guaranteed a living even if they dount? Will truckers get up at 3am and drive? Will doctors continue to practice?
The truth is, this utopian, society you are promoting sounds like roses and rainbows but the facts are, you are pushing the same socialist ideology that has been failing for hundreds of years.
I hope you never see the day your agenda is a reality. I hope you never have to explain why you have to stand in line for the only meal of the day. I think you should be studying the reasons for the collapse of the Soviet Union, or for that matter, Rome. Noone can guarantee you a living, it's a fact. The people who say they they can, are only going to make those promises until they realize, that giving you that guarantee, means taking from someone else who WORKS for it. It's called slavery. What some see as greed and unfair, I call success.
Asking your government to guarantee your living, is in turn relinquishing your liberty to them. If you want to know your rights, read the constitution. There are no guarantees in life. If you want freedom and peace, and your rights? You have to work and fight for them. And that means taking personal responsibility for your actions and wellbeeing. If you want someone to guarantee you the the things that sustain your life and you are over the age of 18, you are completely delusional.

Hi - I hear your concerns regarding the Living Income Guaranteed proposal as they have been brought up before. If we lived in a world where jobs and opportunities for success were readily available to all - then, yes, we can suppose that it is ever person's choice to live in poverty and there might be reason to leave someone to their own vices. However, that is not the world we live in today. Not everyone grows up in the same environment that supports them with the skills to enter the job-market. Not everyone has access to decent education and even with having a degree and the will to work, youth unemployment is a growing phenomenon, because there are no jobs available. For a different perspective, I suggest you read the blog 'Redemption and the Right to a Living Income' as it is directly pertinent to the point you raised here. Placing that absolute 'rule' or 'principle' that only those who can make a decent living within the economic system rightly deserve it is problematic when you consider the world we live in, because it can not simply be argued that those in poverty choose to be there and/or that they are unwilling to change their living conditions.

In terms of work incentives, we looked at this point as well. If staying at home still provides you with your basic living necessities, would there be a reason to work? One point here I would like to bring up is that pilot projects for a basic income have all shown that work efforts are not reduced when a basic income is provided. So, there is reason to believe that our fears are just that - fears. But do we want to take that risk? We'd rather not. Therefore, within the Living Income Guaranteed proposal, we suggest that the minimum wage be double the Living Income. That means that those with a job can definitely afford more luxurious lifestyles than those living with just the basic requirements - which therefore provides an incentive to take up employment.

In terms of your argument of taking from someone else who worked for their income to provide another with a living income, I suggest you read the Living Income Proposal itself again as we suggest a way of financing the Living Income Guaranteed that does not require means such as income tax which ensures that no one pays for anyone else's Living Income.

That guaranteeing a Living Income stands equal to, or is a slippery slope towards communism is quite a leap. Consider that communism was characterized by central planning and the centralization of ownership of resources. We propose instead that capitalism remains the way in which economic activities are conducted and we support the decentralization of power with minimal government - less government in fact than a welfare state implies. Herein, we agree with Libertarians such as Matt Zwolinski who recently wrote an informative and insightful article titled 'The Pragmatic Libertarian Case for a Basic Income Guarantee'.

The constitutions and the values and principles that we've been upholding are products of the past - where once upon a time, they were considered useful and an improvement over what was here before. However, if you look at the abuse that has been allowed in the name of these values and principles, it becomes clear that we have to formulate new principles for our global society to live by. We simply cannot continue as we are. If not for those in need - then out of self-interest - because in the battle where each person is fighting for their rights - we are disregarding the planet we live on and some day, we will all have to pay the price - unless we change what we're doing. That doesn't mean we have to implement a utopian society of equality - but would it be so outrageous if each person was given the bare necessities to survive?

Wednesday, 18 September 2013

Day 248: Q&A on Living Income Guaranteed

Here follow questions and perspectives about the Living Income Guaranteed proposal - from the Discussion Forum at livingincome.me.

It would be very helpful if all the essential information on your LIG proposal were to be found in one place, preferably a single page or two, instead of being scattered all over numerous blogs and vlogs. What I mean by essential information is how exactly it is to be financed, who are entitled to it and on what conditions.

I am aware that your proposal differs from the one laid out by the Basic Income Earth Network (BIEN), but what I would like to know is to what extent LIG comply with the four criteria that are adhered to by most proponents of BIEN. Those criteria are that the Basic Income should be: universal, individual, unconditional and high enough for a decent standard of living.

What I have understood so far is that the LIG is means-tested, in other words conditioned on not having wealth or savings or a paid job for that matter, but not conditioned on the willingness to take a job (I only know the latter through correspondence, but have found no references). What this seems to imply is that if you are willing to live with few belongings no one can force you to work. This would make the proposal as a whole partly conditioned.

But what happens if you are not working full-time? Will you be entitled to a Living Income supplement? And if so, how would it be calculated considering the minimum wage is twice the amount of the LIG? Is the minimum wage the same for a part-time job for instance?

As I understand the proposal, it is to be financed solely from sales tax or value added tax, the idea being that the value of labor is directly reflected in the prices of goods and services. But does this mean that income tax is completely abolished? And have you ever considered a negative income tax system which is a model often used in financing a Basic Income?

From what I can see, LIG is to be paid individually and not to households or families, so that settles, I guess, the question of individuality, but how about universality? It is not entirely clear to me whether every individual, including children, will receive it, and, if so, the full amount. Also, if children are included, will their LIG be dependent on what means the parents have, savings, job or otherwise?

It is stated in several places that LIG is to be high enough to secure a decent standard of living, so that would seem to satisfy the last criteria.

I would prefer having all replies here or with links to texts, not videos. Thanks.

“It would be very helpful if all the essential information on your LIG proposal were to be found in one place, preferably a single page or two, instead of being scattered all over numerous blogs and vlogs. What I mean by essential information is how exactly it is to be financed, who are entitled to it and on what conditions.”

Yes, we’re working on exactly that. The information will soon be found on a page on this website.
“I am aware that your proposal differs from the one laid out by the Basic Income Earth Network (BIEN), but what I would like to know is to what extent LIG comply with the four criteria that are adhered to by most proponents of BIEN. Those criteria are that the Basic Income should be: universal, individual, unconditional and high enough for a decent standard of living.”

The principle of universality in terms of ‘anyone gets a living income regardless of whether one is employed or not’: No – Living Income Guaranteed does not adhere to this principle. It is about making sure that everyone has a Guaranteed Living Income – meaning, an income that secures a dignified life. We suggest the minimum wage to be double a Living Income so that if one is employed – one can afford not only a dignified lifestyle, but one with ‘perks’. In general terms, then, LIG is for those who are unemployed.

In terms of your question on working part-time – labor will be equated at an hourly rate, where the particular rate will also be determined according to one’s skill/educational level. One may thus be able to be employed part-time without requiring a Living Income Guaranteed as one is self-sufficient due to the particular rate one receives as determined by one’s skill / level of education. For those working part time on a minimum wage would mean they would receive the same amount of income as they would being unemployed and receiving LIG. Herein – one can look at setting an absolute minimum of part-time wage at 3/2 of the Living Income Guaranteed in order to create incentive for part-time workers. Alternatively, one can simply accept that those who are currently working part-time to make ends meet, will instead stop working, receive a LIG and from there perhaps have more time to perform the tasks that makes it impossible for them to work full-time in the first place, which are often tasks such as caretaking or studying. Those part-time workers who like to work to keep themselves busy or because they would like to contribute but have no financial reason to do so – can still do this and receive a part-time minimum wage, or can volunteer and receive LIG.

Children – Ideally, yes, children should receive a LIG, which would be available to the parents up until a specified age, after which, the parents are locked out and the LIG is solely accessible by the child. A child’s LIG is not dependent on the parents’ income. However – one would require investigating the financial capabilities of a particular economy at the implementation stage. It is possible that one would require to continue with a basic child grant system until the economy expands sufficiently to allow for a LIG for every child.

Individual – yes – Living Income Guaranteed is not given to families but to individuals.

Unconditional – yes, but only insofar as discussed above. Meaning – anyone receiving a minimum wage is excluded from LIG. However, there are no other specified conditions such as having to actively search for a job.

High enough for a decent standard of living – yes.

“As I understand the proposal, it is to be financed solely from sales tax or value added tax, the idea being that the value of labor is directly reflected in the prices of goods and services. But does this mean that income tax is completely abolished? And have you ever considered a negative income tax system which is a model often used in financing a Basic Income?”

The primary way of financing LIG would be through the nationalization of resources:

Nationalization of Resources and Social Dividends
One of the ways to fund a Living Income Guaranteed is through the Nationalization of Resources within a particular country. Within this, relevant resources are appropriated towards the public good, where those companies dealing with the production and manufacturing process of these resources will be nationalized. The citizenry would then effectively become shareholders of these companies. Economic profits or surplus value generated by publicly owned companies would partially (or wholly if possible) finance the Living Income Guaranteed.
Aside from the obvious funding function of such a step, the nationalization of resources and connected enterprises also provides an opportunity for the management of the country’s resources by the people of that country, and is thus in fact an extension of direct democracy.

On Taxation:

Taxation
Within the Living Income Guaranteed, Direct or Personal Tax methods will be discontinued. Only Indirect Tax methods will be facilitated in the form of inter alia Value Added Tax (VAT), Sales Tax and Import Duties. When a society and system is in place which effectively tends to all points of requirement within a country, one does not require an extensive government structure to tend to those points which the private sphere has not yet covered. As such, there is no longer a need for excessive taxation, as the role and functions the government will be required to execute and fund, will be minimal.
The amount of tax an individual takes on, will then be directly related to one’s activity and participation within a particular system or section of society (eg. Toll roads / Road pricing).

Friday, 19 July 2013

Day 241: Will Inflation be a Problem with Providing a Living Income Guaranteed?

‘Inflation’ is one of those big posh words that people like to use when they want to show off that they’re “in the know” of economics and money mechanics. You hear it on the news, tv, the internet and when you listen to other people talk about it, it never really becomes clear ‘what it is’ or ‘why it is so important’. But you won’t ask about it because you don’t want to appear like you’re “not in the know”. It’s kind of like the story of The Emperor's New Clothes, where only ‘smart people can see’ the clothes and where everyone pretends that they can see his wonderful clothes while he’s actually walking around in his undies (or naked depending on your source )… It’s just something everyone has agreed upon has ‘great importance’ but no-one really knows the “how’s” and “what’s” and no-one questions it.

So is inflation really this ‘big’ and ‘complicated’ concept that only our economists are in the know about? Not really. I mean, one of the first things you will learn when getting to the topic of inflation is that there is very little known about the exact causes of inflation and how good or bad it is for the economy. Most of the time, the concept will be used to suite the authors ideological standpoint and so you get a lot of conflicting answers to the same question.

So what is inflation? Inflation (because no-one really knows how it works) has been given a very simple and broad definition – so that you can’t really ‘go wrong’ with it:

“Inflation simply refers to the continuous increase of prices in an economy. So - two points are important to note: if prices go up and then remain stable for a while, we don't refer to it as inflation, as inflation only applies to a continuous increase in prices. Secondly - if the price of petrol keeps rising, but all other prices remain somewhat stable, we're also not dealing with inflation, because in the case of inflation all prices keep rising.”

This is taken from one of our previous blogs we made which was on the topic of Inflation, so if you want to read up about it you can do so here: Day 64: Inflation - Part 1 (also read the comments).

So you see, inflation is nothing scary or complicated, it’s just prices of all things going up and up over time. When the ‘issue’ of inflation is brought up, it’s not so much the rising of the prices that is an issue – but the wages that lag behind. Because what happens is that you used to be able to buy say a thousand breads with your monthly salary, and with the prices going up and your wage remaining the same – you can now suddenly only buy 800 breads. So here, you have a problem because your purchasing power has been diminished. Because obviously so long as you keep the variables on either side of your equation in proportion – you won’t have a problem and you’ll be able to buy just as much. It’s only when one variable goes up and the other one stays the same or lowers – that you get a problem in your proportions. What happens then is that people will start buying a lot and hogging things because they fear the future prices which will be higher, but then within this increase in consumption place the products in ‘higher demand’ and thus up the prices again – so it becomes a self-fulfilling prophecy to the point where you get hyperinflation.

So with putting into place a Living Income Guaranteed to ensure everyone’s Living and placing in a Minimum Wage amounting to double the LIG – yes, your prices will go up and so yes, that could be considered ‘inflation’. But remember that inflation in itself a neutral manifestation – meaning, it just is what it is as pricing going up. It doesn’t mean anything else. It only starts meaning something else when we fail to adjust ourselves where nominal wages remain the same while real wages go down. So yes, there will be inflation but it won’t be a problem from the perspective that your prices are directly linked and interconnected to your wages where at all times your Living is Guaranteed and thus your wages / living income will adjust to the prices to make sure everyone is able to live decently and vice versa where your prices will adjust to ensure that you get a decent wage. Here one must also consider that we will have Bureaus of Standards in place managing Quality Assurance and Control where there will be a move from obsolescence and disposability to quality and durability – which means that you will have to buy less.

So from that perspective – the whole “inflation” horror story will become something of the past as it simply won’t be able to affect anyone to the point where it does damage, as your wages and prices are no longer separate bodies but closely connected and intertwined. You will thus at all times, be protected.

Another point where inflation becomes a problem is when it is linked to a growing money supply without a matching growth in economic activity. So when the government for instance decides to finance its debt simply by printing money – you suddenly have an increase in your money supply which makes money ‘worth less’ (because ‘scarcity’ makes things ‘more valuable’ and so the opposite happens). Because this money came out of nowhere without originating or being connected to any form economic activity of real value such as labor and production – your system / equation gets thrown out of balance and all these money born out of ‘no value’ in turn has the effect devaluing / tainting all other money already present.

This type of situations will not be occurring within a Living Income Guaranteed as proposed by the Equal Life Foundation, as you will be able to discern for yourself from our previous blog on banking: Day 240: A Bank for the People, as banking/financing will always be directly related to actual activity, actual growth and actual value – and will thus not be able to throw the system out of balance.

Also check out Will the Living Income Guaranteed cause Inflation?, to get a new perspective on Inflation and to see and realize how inflation it its traditional use of the word has become a distraction of the actual Inflation taking place in our lives and in the economy – where inflation is an actual problem.

Sunday, 14 July 2013

Day 240: A Bank for the People

We have an interesting point being taught in economy books - which is that an increase in investment spending has an expansionary effect on the economy - because money is invested in certain products and therefore, people are being paid or jobs being created, which means an increase in income, which means more consumption spending and so a multiplier effect sets in - because, in turn, consumption spending increases income, which increases consumption spending, where of course the increase each time becomes smaller and smaller and eventually 'dies out'. However, on the flip side - what is not spoken about in the text books, is how, at the same time as a multiplier effect is in progress - there is also a growing debt - because interest rates cause a debt to increase over time as well. And this debt, which is eventually a multiple of the initial loan, must be repaid, and so money again disappears from the economy, causing the economy to shrink.

So, within Living Income Guaranteed, we suggest banking will still be relevant from the perspective of big capital investments such as housing or cars. In some countries, we see a rising trend of loans being taken out, not for such big capital expenditure, but for day-to-day living costs, such as food and clothing. Such points will stop within Living Income Guaranteed, because one will be guaranteed to have an income that is sufficient to provide oneself with these basic necessities.

So - when it comes to loans, banks will herein make money through asking for a once-off fee rather than an interest rate - where this fee must cover labor costs and a profit markup - where the fee is reasonable from the perspective of what is required for banking to be profitable without creating a monopoly on money. And of course loans must only be undertaken if the capacity exists for the debt to be repaid.

The creation of money through fractional reserve banking would have to be revised and a way of money-creation be devised so that it stands in relation to supporting the rate at which the economy is growing - which must take into account population growth as well as available resources.

So - herein, banking becomes an actual life-support system where big investments can be paid over time and where it will increase and support the value of the citizen in terms of their life. And thus, the banking system becomes a means to truly supports economic growth as well as the growth in value of a citizen's life.

Tuesday, 9 July 2013

Day 239: Sustainable Pricing with Living Income Guaranteed

When we have a look at how prices have been determined throughout history, we can see that that for most throughout time (up to until the last 50-100 years), prices were set in the interest of the owner of the product / service, whereby those who labored on the products were given miniscule wages. Back in the day, we had so many people living in absolute poverty and hardship that any wage – even if it was next to nothing – was ‘good enough’ for them to take the job.

When people would start getting tired of their ridiculous wages and crappy working conditions, the business owners could always just fire them and replace them with people who were worse off and thus wouldn’t ‘complain as much’. With our tendency within society towards division and discrimination, there was always some form of group lower on the ladder, whether they were from a different race, newly emigrated, different gender, lower class,… -- there’s was always some chap in a more horrible condition that would take the job – and so never any real change came about in terms of everyone together standing for a living wage. Much of this same scenario is still taking place in the world – where it is taking place ‘out of sight’ and thus ‘out of mind’. Where slaves and minorities have now been replaced with alienated workforces abroad. As long as it’s ‘not us’ and ‘not in our face’ – we don’t seem to care.

If we have a look at the minimum wage concept, this is a fairly new concept when placing it into context of our entire history. Not so long ago, the idea of a minimum wage was even ruled to have been ‘unconstitutional’ In the United States, because it limits the scope of ‘freedom’ within contracts. So the freedom involving someone entering a contract, was deemed more important than the freedom to one’s Life, to the freedom of earn a living wage whereby you can sustain yourself.

So even though we now have certain protection points in place like the Declaration of Human Rights, and all sorts of Bills that are supposed to safeguard and protect our dignity and well-being – we still seem to shift in our ‘old way’ of doing things, where we care more about the freedom of contract, the freedom of the business environment than we do about the freedom of our own Human Rights. After all these years of so called ‘progression’, we have still failed to see and understand the simplistic connection that exists between prices and wages.

Many of us who do earn some kind of wage, still have to be careful about our spending. Because our wages are not secured, and very likely to be lower than what we’d like – we are picky with our spending and will look for the ‘cheap stuff’. The more cheap stuff we buy, the more stuff we can get for our money. It seems like a rational decision, following that ‘since I have so little money, I better buy things that cost little money, so that I can at least ‘maximize’ my purchases with the little I have’. Because we are purchasing and buying from a starting point of fear, a starting point of lack – we look for what is cheap. Yet, we fail to see that things can only be ‘cheap’, if somewhere down the production line, other things were made ‘cheap’ – which in most cases would be = the wages. So because we have cheap wages we buy cheap stuff and maintain our cheap wages because that is what we are supporting through buying cheap things. It’s a cycle that feeds itself.

When we do our shopping and purchases, we only look at prices in relation to our own pocket. We forget that there is another party involved as those who participated in its creation process, whose wages are to be paid and included within the price of goods and services. We only care about ‘getting the best deal’ where we are happy when we got something very cheap, and then feel cheated if we find out we paid more for something, where we could have paid less. We don’t get that for us to have our happy/winning experience when getting a ‘good deal’, someone else has to be cheated on --- where they are now being paid less than their actual value as a living, breathing, laboring, contributing human being.

In modern society, most of us are both the consumers and the workers. We are the ones feeling like we’re winning when we can buy cheap things and we are the ones feeling like we’re losing / being cheated on when we get our paycheck.

The only way for us to have a healthy relationship towards consumption and our own dignity as a human being as being intricately involved in the creation of products for consumption – is by directly connecting prices to sustainable living wages. Prices should not be set first, where only afterwards we give the ‘leftovers’ and ‘scraps’ to the workforce. Living wages should come first, and not be up for negotiation when setting and calculating prices. It should become downright illegal to price any product or service in a way that diminishes the wage level of an individual to lower than that of a sustainable / minimum living wage – because this would be a direct infringement on someone’s Right to Life.

As part of the implementation of a Living Income Guaranteed, Prices should thus firstly serve to sustain living wages and should only secondarily (if at all) be used towards the purpose of furthering competition in the name of business. If everyone lives on a Living Income or at least a Minimum Wage, everyone can afford this form of sustainable pricing (unlike in the current system, where for many households ‘fair trade’ products simply exceed one’s budget) and we can have system where we support others’ labor as a contribution to society the way we would like to be valued and

Thursday, 13 June 2013

Day 232: Putting Economic Theory into Practice with Living Income Guaranteed

Living Income Guaranteed as the Capitalist’s Answer to a Healthy and Wealthy Economy

Any economist is familiar with Keynes and the Keynesian economic model of a demand-driven economy. Keynes understood that money requires to move for an economy to thrive, in the same way that blood must flow for a body to be healthy.

An economy can be broken down into three basic flows: Spending, production and income – spending requires to happen for companies to be able to produce goods – the production of these goods then provides income to the employees of the companies that produced them. There is thus an undeniable link between spending and income. When too few people have adequate income, or when income is too low – too little is spent, too little is produced – and income reduces even more.

The ideal way to ensure spending is therefore to secure everyone with an Income.

Furthermore – capitalism can only work if Equal Opportunity of Participation exists. Unless Equal Opportunity exists, capitalism becomes a system of exclusion and deprivation – because Capitalism only ensures efficient production and distribution of resources for those with an income. Therefore – to prevent Capitalism from becoming a weapon, but instead, an actual management system as how it was intended to be – each individual should have a guaranteed income.

Furthermore – an economy will not only thrive through money movement, BIG pilot projects have shown that more children attend school, and thus, one will have a more qualified labor force in the future – increasing the intellectual capital in an economy.

A Guaranteed Living Income is a Human Right

Regardless of the economic arguments, guaranteed income is a basic human right. To speak of Basic Human Rights without securing the means through which to benefit from these rights, is useless.

The Equal Life Foundation therefore suggest that the Living Income one receives should be sufficient to be able to enjoy one’s Basic Human Rights, and thus, large enough for individuals and families to live a decent human life – meaning: one can live off a Living Income Guaranteed with dignity. This implies the ability to pay for one’s basic needs such as electricity, water, food and clothing – but also extends to the means to participate in our current society and thus includes things such as a car, a phone/cell phone and internet access.

Social Dividends

To fund a Living Income Guaranteed – a system of social dividends is ideal. In every country there are those goods and services that are vital for the basic well-being of the citizens of that country. Examples are basic resources such as water, electricity, raw materials, transportation and media. Such goods and services do not belong in private hands – but belong to each individual of the nation. Therefore – every citizen should be a shareholder of every company involved in the production of such goods and services.

This is not a new idea – as early as 1935, G.D.H. Cole, wrote the following:

“How will ... incomes be distributed? There are two possible ways - payments for work done, and 'doles', or, to give them a less coloured name, 'social dividends'. I believe the system of distribution will be a combination of these two, but a very different combination from that which now exists. ... There will remain, broadly, two sources of income - work and citizenship. Incomes will be distributed partly as rewards for work, and partly as direct payments from the State to every citizen as 'social dividends' - a recognition of each citizen's claim as a consumer to share in the common heritage of productive power.” (Cole 1935, pp. 234-235)

The dividends one receives from the profits of these nationally owned companies then form the Living Income Guaranteed. With each one being a shareholder, each one immediately also has an equal say in the activities of such companies – which is an application of direct democracy in the areas of life that are most important, which again solidifies and protects each one’s Basic Human Rights.

Incentive to Work

The inevitable question then comes up: If everyone receives an income that covers one’s needs – who will be willing to work?

This is where the Equal Life Foundation suggests an interesting solution. To provide incentive – the minimum wage should be double the Living Income. This means that anyone who has a job can not only fulfill one’s needs, but can enhance one’s quality of life through acquiring luxury items that would not be available on a Living Income budget. One can then afford a bigger house, a larger family, a second car, a bigger garden, more exotic and fulfilling holiday destinations, subscriptions to sports clubs and other leisure organizations, and so on and so forth.

Consequentially - as soon as one has a job – and thus, receives a wage that is at least double the income one would have earned from social dividends – one’s right to the Living Income Guaranteed falls away – simply because one doesn’t require it anymore. The social dividends system then functions as a National Insurance system – combining unemployment fund, life insurance and retirement funds all in one – where, one receives a pay-out based on the applicability to one’ situation.