Uber for Welfare, a crank welfare scheme promoted by Twitter libertarian Morgan Warstler, has been thoroughly debunked. But that doesn't mean it can't be salvaged!
With a few minor tweaks, I have developed a brilliant alternative to UFW 1.0 that actually solves the problems it sets out to solve. Here's how Uber For Welfare 2.0 actually works.
THE BASIC PLAN
First, the federal government should establish a guaranteed income. Around $280 a week would be a good start. On the condition that they enroll in the program, participants will receive the funds in a state-of-the-art Electronic Benefits Transfer card, which works exactly like an ATM card.
Enrolling in the program will automatically register users to a futuristic jobs portal. This futuristic site will work like a combination of Monster.com, eBay, and LinkedIn, allowing employers to market themselves to potential workers. All colleagues and companies that have worked together can rate each other.
Companies must hire all of their employees through this site as a condition of incorporation. Employers are welcome to compete in the labor market outside of this site, but they will not be granted the special legal benefits of incorporation if they do so.
...and that's it!
VERSION CHANGELOG
As you can see, Uber For Welfare 2.0 is infinitely simpler than the original. Like the original, it is a far from perfect solution. But it is certainly a better solution, improving nearly all of the problems of the previous version.
* Previously, UFW encouraged relatively employers to be free-riders in the system, offering them free labor with no buy-in. In this version, UFW is still exposed to the free-rider problem, but now the potential beneficiaries are the poor rather than relatively wealthy business owners.
* UFW now only replaces other welfare programs if it works. All existing programs remain in place, but their eligibility requirements are obviously only met insofar as UFW has failed. This exchanges the unacceptable prospect of Americans lacking any form of welfare for the much preferable problem of temporary budgetary redundancies. Obviously as UFW accomplishes its mission, other welfare programs will simply wither away.
* By transferring payments through an EBT card, UFW avoids the inevitable handouts that would accompany any private-public payment process (through PayPal or Visa or whatever) which positions business to charge fees and profit at taxpayers' expense.
* UFW now frees job portal users from the artificial restriction of only allowing employers and employees to rate each other. All coworkers and companies that have worked together can rate each other, ensuring a much more robust and accurate reputation system.
KNOWN PROBLEMS
About me
Hi, and welcome. I'm a junior in college studying economics at GWU.
I've mostly created this blog to respond in my free time to a policy proposal called Uber For Welfare, promoted relentlessly by Twitter personality Morgan Warstler.
Ironically, I share many of Warstler's apparent concerns about the various problems and failures with our current welfare system. Like most professional economists, however, I do not consider UFW a particularly rigorous or thoughtful approach. It also does not make any serious attempt to grapple with even the most basic points of criticism invariably aimed at such proposals. Thus far Warstler's writing on this has avoided grappling with technical issues and basic empirical problems entirely. It is almost exclusively political, written to troll opponents and flatter the sensibilities of partisans.
For these reasons I think that UFW has on balance been harmful for those of us who are making genuine efforts to pursue real, market-based solutions to welfare issues.
Professional and academic economists have for the most part ignored Warstler's scheme, which is probably the wisest course of action. I, unfortunately, have a weakness for trolls, and a fondness for crank / fringe theories. I have written elsewhere on Lyndon LaRouche's global railroad scheme, Gene Ray's Time Cube metaphysics, and the bizarre "economics" of Cyber-Communism.
The reader who acquaints himself with Warstler's Twitter behavior will appreciate my preference to remain anonymous.
Sincerely,
@theREALwartstler
Responses to "Uber For Welfare Would Not Work"
Uber For Welfare (UFW) is a crank welfare scheme promoted by Twitter personality Morgan Warstler. It has been thoroughly debunked here. Warstler has of course attempted to defend his project, with predictable results. On a 1/17 blog post, for example, he attempts to attack two points of criticism leveled at UFW:
Warstler is correct to note an inconsistency here. What he fails to recognize is that this inconsistency emerges from his own position, which those two points merely set out to address.
* * *
On one hand, Warstler sells UFW as a payroll cut for employers:
If payroll costs are inevitably passed along to consumers, UFW's cheap labor offers no particular incentive to employers. Here Warstler insists that it does, so it follows directly that employers pay for labor. Right? On one hand, employers pay for labor -- but on the other hand,
Here, in order to defend himself from point (1), Warstler has to completely reverse his position. Now payroll costs always get passed along to the consumer, which is why UFW businesses have no incentive to abuse the program.
So when he wants to sell UFW to businesses, he promises payroll cuts -- but when he wants to sell it to the public, he pretends there's no potential for abuse since the payroll cuts aren't really payroll cuts. Which is it?
* * *
This sort of obvious dissembling two-step runs through Warstler's entire post. Skipping to the end, for example, where he argues against (11)'s observation that UFW would ratchet in enormous, growing precarity:
This is not actually an argument that high turnover is an advantage -- it's an argument that the evils of high turnover are avoided because employees "find their place". But insofar as UFW maintains a high rate of turnover (which Warstler concedes it would), employees have clearly not found their place. So again: which is it?
No need to further belabor the point. These instances are representative of both the entire post defending UFW and UFW itself, neither of which make any attempt to maintain any kind of internal consistency. Warstler will presumably continue to avoid any rigorous defense of his project, for reasons too obvious to spell out.
Uber For Welfare Would Not Work
UPDATED
Uber For Welfare (UFW) is a crank welfare scheme promoted by Twitter personality Morgan Warstler. Despite its aspirations to innovation, UFW is a standard subsidized employment scheme coupled with a standard jobs portal website, all coupled with a few gimmicky flourishes. As such, it faces all of the known problems of those existing programs, plus an array of additional problems created by UFW's various quirks and ad-hoc calibrations.
What follows are a list of known problems with schemes like UFW, as well as predictable problems owing to its unique eccentricities. This list will be updated as needed, and thus presumably grow.
UFW PROBLEMS
1. Employers can exploit UFW to subsidize employees that it would otherwise pay in full, and pocket the difference in payroll. It is functionally a corporate welfare program that transfers taxpayer money to businesses.
2. Participating businesses do not have to invest anything into this program, since they can always pass their payroll costs along to consumers. For this reason UFW does not avoid free rider problems - it simply lets business owners be free riders rather than recipients.
3. UFW incentivizes companies to try to replace expensive labor with lots of cheap UFW-subsidized labor, driving down wages and pushing more people into the system.
4. The $3m cap on business participation is powerless to keep big businesses from exploiting the system to cut payroll. They can use all of their usual tactics to get around this cap, EG by dividing and outsourcing labor, or can passively benefit from the lower labor costs that emerge in the production chain.
5. For these reasons, UFW would incentivize the growth of a massive sector of low-income federally subsidized employees.
6. Subsidized employment programs have a poor track record of transitioning workers into non-subsidized jobs.
7. UFW would for these reasons also incentivize the growth of a sector of unproductive SMBs that only exist to facilitate big business access to cheap UFW labor.
8. Market inefficiencies and externalities would prevent even those willing to work from finding employment.
9. UFW allows government intervention against the "criminally lazy" but not against "the scumbag slave labor boss". The government can define "some fair criteria" that triggers worker suspension from the UFW program. There is no analagous mechanism against employers.
10. There is no reason to assume that the eBay rating gimmick would meaningfully regulate the employment market. There are already enough real-world analogues (the job reference system, glassdoor.com, and so on) to demonstrate the ways that labor market competition can create perverse incentives and distort reputation systems.
11. The absence of employer payroll investment; the standardization of labor (jobs are literally described through check boxes); the division of complex, high-wage positions into multiple, simplified UFW-positions for the sake of subsidies; the necessity of populating the reputation system with a high volume of work experiences; and a whole range of other factors all incentivize a UFW with a high rate of turnover, and thus high precarity for workers.
Warstler has written about this post. My response is available here.
Uber For Welfare (UFW) is a crank welfare scheme promoted by Twitter personality Morgan Warstler. Despite its aspirations to innovation, UFW is a standard subsidized employment scheme coupled with a standard jobs portal website, all coupled with a few gimmicky flourishes. As such, it faces all of the known problems of those existing programs, plus an array of additional problems created by UFW's various quirks and ad-hoc calibrations.
What follows are a list of known problems with schemes like UFW, as well as predictable problems owing to its unique eccentricities. This list will be updated as needed, and thus presumably grow.
UFW PROBLEMS
1. Employers can exploit UFW to subsidize employees that it would otherwise pay in full, and pocket the difference in payroll. It is functionally a corporate welfare program that transfers taxpayer money to businesses.
2. Participating businesses do not have to invest anything into this program, since they can always pass their payroll costs along to consumers. For this reason UFW does not avoid free rider problems - it simply lets business owners be free riders rather than recipients.
3. UFW incentivizes companies to try to replace expensive labor with lots of cheap UFW-subsidized labor, driving down wages and pushing more people into the system.
4. The $3m cap on business participation is powerless to keep big businesses from exploiting the system to cut payroll. They can use all of their usual tactics to get around this cap, EG by dividing and outsourcing labor, or can passively benefit from the lower labor costs that emerge in the production chain.
5. For these reasons, UFW would incentivize the growth of a massive sector of low-income federally subsidized employees.
6. Subsidized employment programs have a poor track record of transitioning workers into non-subsidized jobs.
7. UFW would for these reasons also incentivize the growth of a sector of unproductive SMBs that only exist to facilitate big business access to cheap UFW labor.
8. Market inefficiencies and externalities would prevent even those willing to work from finding employment.
9. UFW allows government intervention against the "criminally lazy" but not against "the scumbag slave labor boss". The government can define "some fair criteria" that triggers worker suspension from the UFW program. There is no analagous mechanism against employers.
10. There is no reason to assume that the eBay rating gimmick would meaningfully regulate the employment market. There are already enough real-world analogues (the job reference system, glassdoor.com, and so on) to demonstrate the ways that labor market competition can create perverse incentives and distort reputation systems.
11. The absence of employer payroll investment; the standardization of labor (jobs are literally described through check boxes); the division of complex, high-wage positions into multiple, simplified UFW-positions for the sake of subsidies; the necessity of populating the reputation system with a high volume of work experiences; and a whole range of other factors all incentivize a UFW with a high rate of turnover, and thus high precarity for workers.
Warstler has written about this post. My response is available here.
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