Pay for Nothing

What would you do with a guaranteed income and no financial obligations? If a benefactor granted you an adequate living wage, how would you spend your life? Would you continue doing exactly what you do now, or would you drastically change your behaviors? Volunteer for causes close to your heart? Sit in a lounge chair eating bon-bons and watching TV? Devote your time to family-intensive matters? Tackle that exciting challenge you never had the time or leisure to attempt?

You may have a chance to find out.

This is no longer an academic theoretical question, because someone actually wants to offer money for nothing, just as an experiment. Some managers may sarcastically comment that they already pay people to do nothing, but this is a serious proposition.

The president of Y Combinator, a Silicon Valley venture capital firm, made this announcement recently:

We’d like to fund a study on basic income—i.e., giving people enough money to live on with no strings attached.  I’ve been intrigued by the idea for a while, and although there’s been a lot of discussion, there’s fairly little data about how it would work.
 
It’s true that we have systems in place to give people resources, but the bureaucracy and qualification requirements make it a very imperfect approximation of what most people mean when talking about a basic income.  We have some examples of something close to a basic income in other countries, but we’d like to see how it would work in the US.

This is an exciting opportunity to discover if lessons of the past work in the present or are useful for the future.  A guaranteed basic income is not a modern idea but actually a retroactive return to the age of privilege. In bygone ages, it was generally accepted that the better class of people did not work for a living but instead “received an income.” Gentlemen did not soil their hands with brute labor or toil behind desks performing commercial tasks directed by others; no, they simply lived on the income from their property holdings. In return, they lived well and benefited society by dabbling in the liberal arts. They consumed by free choice rather than produced from obligation.

Sponsoring the finer aspects of humanity was once considered the role and responsibility of the upper classes. The original “Idea of a University” came from an 1852 seminal book by that name advocating a cirriculum embracing the totality of the liberal arts. Behind it was the theory that basic education should exist in order to learn how to live well. Trade schools (like medical or engineering schools) existed for any advanced specialized practical knowledge required to earn money. But the mercantile class who engaged in commerce were generally disdained as inferior money-grubbers. The expectation that people should be obliged to earn their livings applied to commoners and was not something for the gentry or ruling class. Gentlemen and ladies read, discussed and explored the classics, applying that background to enrich and refine society via music, theatre, philosophy and other forms of art.

Such leisurely and self-indulgent attitudes seem anachronistic and out of place in the modern world. Perhaps they had value; but we won't know without realistic practical research. The sponsor is recruiting for a scientist to design and conduct the research project over a five-year period.  Interested?

The results of the study should be fascinating. Actual controlled experimental findings in real-life settings will have important implications for compensation people. When money has been taken off the table as a motivator, what will people choose to do? Academic theories drawn from student behaviors don't really explain why people work for a living. Selected case examples drawn from isolated exceptional situations in other cultures also fail to reflect normal American work environments. Valid patterns might be discovered by careful study of what actually happens when external pressures to work for a living are absent.

What do you think?

E. James (Jim) Brennan is an independent compensation advisor with extensive total rewards experience, specializing in job evaluation, market pricing and pay budget distribution. After corporate HR jobs in chemical and pharmaceutical manufacturing, he consulted at retail, government, energy, IT, tax-exempt and other industries throughout North America before becoming Senior Associate of pay survey software publisher ERI until returning to consulting in 2015. A prolific writer (author of the Performance Management Workbook) and speaker, Jim gave expert witness testimony in many reasonable executive compensation cases both for and against the Internal Revenue Service and also serves on the Advisory Board of the Compensation and Benefits Review.

Creative Commons Image, "Lazy Harbor Days" by Karen

Comments

[Chris Dobyns]

I'm intrigued (okay, more than intrigued) by this topic - which was MY motivation for urging/nudging/goading Jim into writing about it. When I pitched this concept to the folks in my work unit, they liked the idea, but couldn't separate themselves from a "market mentality" that kept nagging at them, that suggested that no one would want to remain complacent at just receiving a "livable wage" - they would desire and aspire to greater income. Now I'll point out that that's the mentality of the people who work for ME. And as Jim already pointed out, I've also known folks who might be totally fine with doing nothing for a livable wage.

There's a undercurrent of seriousness in this proposal - because as technology expands to absorb routine work (and maybe even complex work), we're going to have people who will need to have income, and will voluntarily be willing to think and create in exchange for that income - as opposed to doing nothing.

[E. James (Jim) Brennan]

You got it in one, Chris! Seeking a way to continue blogging like this, I may have become their first volunteer.

[E. James (Jim) Brennan]

P.S. Private messages pointed out that my last two links were to 19th Century theoretical writings rather than any of the more current discussions directly addressing this issue. Here http://evolllution.com/opinions/the-purpose-of-higher-education-to-create-prepared-minds/ is one the many recent articles about the purpose of life and higher education for living it.

By using older references, I wanted to illustrate how this classic topic has been around forever but never has been actually "scientifically" researched before now ... to my knowledge, of course. If so, about time, I say!

[Jacque Vilet]

This is a very thought-provoking post. I'm intrigued by it because the idea has been in the back of my mind for 20 years --- ever since I read the book "The End of Work" by Jeremy Rifkin. Unbelievable that the author had been noodling this very idea 20 years ago.

It is surfacing again by some people who think and write about the fact that in ??? years computers will be doing not only menial jobs but professional jobs as well. In fact there was an article recently (can't recall where I read it) that listed the occupations that would be replaced. There were a lot of professional occupations on that list

I think that some politicians have been/are talking about the large displacement of people over time and that it will --- of necessity --- call for a safety net wage. It's not like in the past when you would tell people who lost their job to go work at McDonald's. There will be no work at McDonald's or anywhere else.

Rifkin believes that people will get more involved in social causes and devote time to helping people. They will do things that they may have wanted to do when working and now have the time to do them.

When I read this book 20 years ago I rolled my eyes and thought it was a fairy tale --- wishful thinking. Now however I believe it just might be true. I don't know anyone who would just sit on the couch and watch TV all day. I sure wouldn't!

[E. James (Jim) Brennan]

Believe you refer to the McKinsey research published a few months ago about the jobs to be affected by "robots" and other forms of automation, Jacque. You have a keen eye.

I made notes and kept the article but had put off writing about it ... then Chris waved YC's Request for Research on Basic Income under my nose and distracted me. Now I'll have to tie these two developments together ... nothing but challenges... You can probably guess how I would pass my time if I had a guaranteed income.

[Karen Kervick]

Thank you for this post as I too find it very interesting! I don't believe I read where that guaranteed income would come from but it's certainly something we all dreamed about when the Publisher's Clearing House envelope came in the mail. (I understand PCH is now automated as well.)

The perfect comparison, or the subject matter experts if you will, might be "retirees". How many sit back and move to Florida where they hang out at the clubhouse and how many start a 2nd career in volunteerism? Most I know have been busier in retirement than they were while working but having more fun. (I bet Jim you are one.)

I also believe the pendulum is swinging back to a minimalist lifestyle that would require a lower income making this idea more plausible.

It has also been happening in households with only one wage earner (intentional or forced). The partner at home becomes the caretaker and with any free time (depending on # of kids, dogs and elders to care for) is able to indulge those creative juices, provide valuable volunteer hours to society, or work part time for a non profit.

Unfortunately, the PTO Moms are few and far between these days. Volunteer organizations suffer from a lack of people needing to fill their time. We need people who are able live on a guaranteed income of their own or a partners' to enrich society. The big question of how much is enough for a guaranteed income is similar to the how much salary is enough for employee satisfaction? Answer, it depends.

[E. James (Jim) Brennan]

All good observations but one, Karen. Living without an income is not fun and I would love to correct that problem.

As you said, there are shortages of people able and available to do good works for free. In the community meeting that I co-led last night, don't recall more than two under age 40 in the crowd. Most participants were retirees.

A big part of that proposed research project will be the effective determination of the right income for each experimental subject. Survival level is different from satisfaction level. Just estimating what it takes to sustain rather than enrich is difficult, especially since one of the anticipated outcomes will be studying how many decide to supplement their basic living income with regular jobs they maybe "couldn't afford" to take before. Suspect they should not offer an income that provides "satisfaction" but merely one that assures survival. I'd take that deal, today!

[Karen Kervick]

Did I say or imply that living without an income is fun? If so, I take it back and whole-heartedly agree! It is not fun to live without an income or even an adequate survival rate income. Basic needs must be met. One can survive on very little for a time but eventually most will become unsatisfied with just surviving.

It will be interesting to see what the right income level is....I always go back to the movie, It's a Wonderful Life for the scene in the bank - "how much do you need?" Those who understood, took only a small amount to get by that week, while others wanted their entire investment. I'm sure it will depend on many factors including where the participant lives.

I think most people would rather earn a basic living than be handed one. There are those who would make valuable use of their time and talents while provided a guaranteed income - and those contributions would be worth the investment.

Perhaps if we reframe our unemployment criteria to be along the lines of: if you can make a contribution while being provided a basic survival income, we will pay you to leave the workforce - that will then free up jobs for those otherwise inclined. What do you think?

[E. James (Jim) Brennan]

I like the concept, Karen, but suspect the economic model would have to change. The employers who are taxed for Unemployment Insurance would object to penalizing their experience ratings for voluntary withdrawls from the workforce. If the family residuals needed for survival were funded by a higher marginal tax rate, I expect the overall costs would be amortized by savings from other parts of the Federal and State budgets. Overall taxes could fall with a stronger universal safety net.

Short term change would be tough, of course. Lobbyists for the obscenely rich of all political spectrums would resist. But I doubt that many billionaires would offshore another operation over a tiny increase to their tax rate that funded a truly supportive social environment. If people could be allowed to choose what they wanted to do for self-actualization rather than what they must do in order to survive, how could our world not become better?