Michael Bohmeyer 29-year-old German tech entrepreneur, decided to quit working after his company could pay him an ongoing living salary. Not able to sit idle he decided to see what would happen if he provided the same amount of money to a person for free for a year. What will people do if they are unencumbered by the need to work? His interview with
Taking this interesting idea to a crowdfunding site, he has now raised twice as much as he had intended and has enough to “sponsor” two people with a “basic salary” ($1300). The amount seems to be enough to live off in Berlin, where he lives and even has a child. I’m not sure it is the case in San Diego, but then I am possibly a little old and used to my comforts to return to shared living situations.
That aside, it is a very interesting question. 20 years ago, my answer would have been simple…..travel! A 6 month bike ride in Asia in 1999 cost me $1500. So, a 12 month trip would have left me with wonderful memories and a surplus to invest in a business idea or education.
These days, I think I would err more on the business education side and perhaps delve into some artistic pursuits.
I guess the one year scenario varies slightly from Michaels situation, in that he seems to have a stream of money in perpetuity. As such he is not tied to making sure that when the 12 months are up he is employed or running a successful business. He can continue to pursue his passions.
He, clearly also has get up and go, because he has already been successful. So, he may not be comparable to many people. An anecdotal study of 1 or 2 people is a fun experiment, but doesn’t really answer the question.
What would happen if every person in the USA were given a living wage? I doubt the math works, but lets say for arguments sake that we take a massive chunk from the top 5% wealthiest people and pay the rest of the USA a living wage.
Would everyone slack off and do nothing? Would people keep their jobs and take the extra money and spend it on necessities? Would they pay off debts? Would they splurge on luxuries? Now that would be an interesting experiment.
There would certainly be more money in circulation as people wouldn’t just sit on it. Retail, food and travel would probably prosper as money would be injected at the everyday level. Some businesses would prosper and want to hire more people.
Would people drop out of the workforce? As Michael points out people that have lowly or unpleasant jobs, may well decide to to opt out or ask to be paid a better wage. There are so many jobs out there that are vital to society, but are underpaid. After all the reason for business is not to make life better it is to make money. What if all the underpaid teachers and nurses just walked out? Would society change the way they valued these vital professions?
People that weren’t working would probably not be inspired to go to work, especially those conditioned into a state of not working, and some working people would probably drop out. However, many may well take the opportunity to up skill and re-enter the work force, inspired by the growing opportunities. Whilst people over the “living wage” threshold would no doubt keep working and just enjoy the additional cash. I suspect there could actually be a net increase in people working.
Would the world be better off with everyone a little better off, rather than some people having so much money they could never figure out what to do with it except buying opulent things just so that they can be more opulent than the Jones’s. I believe the answer is yes.
What would happen if you did in conflict countries where people have nothing to live on or for? Would improving peoples lives give them a reason to avoid conflict rather than risking what they have? Hmmmm….
Interestingly the biggest economic success of the past 20 years has been China and low and behold it seems they are starting to realize that GDP is not the best measure for societal wellbeing.
I like your experiment Michael, but lets shoot for a bigger sample size!