> If you believe the Keynesians or the Monetarists, it's because they refuse to work at a lower nominal wage than before. Unemployment/welfare/etc makes this an appealing prospect, and Basic Income only makes the problem worse.
How? One of the problems with qualification-based benefit programs is that they reduce the marginal benefit of work (both unemployment and welfare benefits go down with work, which reduces the marginal benefit of any given nominal wage level, which makes people more likely to seek to avoid work at any given nominal wage level -- which also makes the benefit programs more expensive to administer, since they then need mechanism to try to catch people avoiding work to maintain the benefits.)
If you have unconditional basic income, you assure that work always has a higher marginal benefit for the same nominal wage than it would have in a traditional system of means-tested benefits, which reduces the incidence of people rejecting work at any given nominal wage.
I was wrong, and you are correct. Replacing unemployment with a basic income could go either way, depending on the marginal taxation rates of reducing benefits and the rates of diminishing marginal utility.
However, a Basic Job guarantee can only go one way. You never get to avoid the disutility of labor (X in my formulation).
But I'll dispute one point: you assure that work always has a higher marginal benefit
BI assures that work has a higher marginal income. It does not assure that work has a higher marginal utility, which is what matters.
How? One of the problems with qualification-based benefit programs is that they reduce the marginal benefit of work (both unemployment and welfare benefits go down with work, which reduces the marginal benefit of any given nominal wage level, which makes people more likely to seek to avoid work at any given nominal wage level -- which also makes the benefit programs more expensive to administer, since they then need mechanism to try to catch people avoiding work to maintain the benefits.)
If you have unconditional basic income, you assure that work always has a higher marginal benefit for the same nominal wage than it would have in a traditional system of means-tested benefits, which reduces the incidence of people rejecting work at any given nominal wage.