In the US, there is a federal minimum wage, which sets the minimum wage for people who work for an employer that has over a number of employees. In some countries, the minimum wage is as low as $2 a day. People in these countries work and live in poverty, without having access to the vital essentials. This blog talks about why the world needs a global minimum income.

Could something like bitcoin be used to create a global minimum income for the human race?

Richard Russell, Cross-Functional Alignment Expert — ex-Amazon & Google employee says,

“No.

“It’s not possible to generate more bitcoins than the system allows, so there’s a total supply of 21 million bitcoins. To get them requires either mining (cost: electricity + computing power) or buying them (cost: real assets). Hence, if you were to distribute them to “the human race”, it would cost you a lot to get them. Gold has similar qualities in this sense — you can’t just create more gold.

“But suppose one were to do that with something we can easily create more of. Say $US. The US Government could print more of them, and distribute them evenly around the 0world, say $10 per person per day. That’s $70bn/day, or about $25trn/year. This is in the order of 20–50x the amounts released for Quantitative Easing, and if one were to do it permanently, the total amount of money released would dwarf any QE program.

“The end result would be inflation. Printing money (creating bitcoin) doesn’t increase the wealth of the world, as it creates nothing worthwhile. Actual value is created by work. The value of a currency is how much work you can buy for a currency unit. If you gave everyone $10/day, then you value the output of a person who isn’t doing anything, has access to no resources, and has no real market, at $10/day. The value of the work that someone with modern tools, first-world resources, and a global market can produce, would be (as it is now) many orders of magnitude more than this….”

What is the global minimum tax?

In late 2017, the Republican Congress’s big tax overhaul law lowered the U.S. corporate rate for multinationals to 21% from 35%, and it created a minimum tax on U.S. companies’ foreign income of at least 10.5%.

The idea of a global minimum rate is to ensure that big multinationals pay a certain amount of tax no matter how they shift their profits from one country to another.

“Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and spurs innovation, growth and prosperity,” Yellen said in her first major speech since becoming Treasury secretary and reported by Politico.

What is the global minimum income?
Paragraph:

What happens when there is no global minimum income?

A universal basic income could work to grow the economy by putting money in the hands of people who will spend it. Economists estimate that a universal basic income of 12,000 dollars a year could grow the United States economy, for example, by more than 2 trillion dollars a year.

According to The Balance, Universal basic income is a program where every citizen receives a flat monthly payment, regardless of whether they’re working and earning an income or not. Different programs outline who exactly receives the income — some state that all citizens would get it regardless of what they make, while other programs may only give it to those who fall below the poverty line.

In 1967, Martin Luther King Jr. said a guaranteed income would abolish poverty.2 That means reducing income inequality as well.

Economist Milton Friedman proposed a negative income tax. The poor would receive a tax credit if their income fell below a minimum level. It would be equivalent to the tax payment for the families earning above the minimum level.3

In 2018, Facebook co-founder Chris Hughes outlined his plan in his book “Fair Shot.”4 He argued that U.S. workers, students, and caregivers making $50,000 or less a year should receive a guaranteed income of $500 a month.

If there is no global minimum income, what would happen to the world? What would be the consequences of not having a global minimum income?

Basic income is not a single idea but a family of closely related ideas, which go by an assortment of names: universal basic income, unconditional basic income, social dividend, guaranteed annual income, citizen’s income, negative income tax, etc. But the core motivation — to address social ills by just giving people money — has a long history.

Thomas Paine, the intellectual founding father and pamphleteer, outlined a plan in his 1797 essay “Agrarian Justice” to create a national fund making payments of 15 pounds sterling to each adult over 21 years old.

In the 1960s, basic income became intertwined with the civil rights movement and the War on Poverty. Martin Luther King, Jr. was a fan. In his 1967 book “Where Do We Go From Here: Chaos or Community?” King wrote: “I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.”

Even right-wingers grew to embrace the idea. Libertarian economist Milton Friedman began to advocate for a negative income tax, whereby those earning below a certain threshold would get money from the government instead of paying taxes. At the end of the ’60s, President Richard Nixon’s plan for a partial basic income passed the House of Representatives before stalling in the Senate. No longer a proposal of bleeding-heart lefties, basic income was endorsed by a slew of notable economists (including several who went on to nab Nobel Prizes).

The global minimum tax is a tax that is paid by every person, no matter where they live in the world. The goal of this tax is to make sure that no one has an unfair advantage over the other and it also supports poorer countries by giving them a bigger piece of the pie.

“Simply being you makes you one of us,” declares Ron Alin, CEO and Co-founder of Those Untitled.

Ron, interviewed by Jerry Ashton here on LRT, is consumed with creating what he calls a Lifetime Community – aiming to engage purpose-driven creators and innovators with purpose-driven consumers. The mission of Those Untiled is to inspire companies and individuals wanting to join their fold is to uncompromisingly be themselves in order to pursue their wildest dreams.

Ron’s awakening to this call began after being recruited from FIDM (Fashion institute of Design & Merchandising) to be a design room assistant at the groundbreaking e-commerce retailer Revolve.

He then leveled up to associate designer at emerging men's subscription startup, Five Four Group where he lead the ideation and design of their activewear line, Grand Athletic Club. His next gig was to be lead designer for startup company Super Heroic. He was responsible for the conception and execution of four seasonal tactical play apparel collections for Kids FootLocker via a nationwide wholesale program.

Basically, paying his dues.

This might require rethinking

As Ron rose the ranks within the fashion world, he noticed a lack of connection with the creatives behind the ideas and the individual consumers.

This realization led him to rethink and rebrand his own purpose, both professionally and personally. As he peeled away the trappings of his previous work and he, himself was being pigeonholed, he was left with an amazing freedom. Of being…untitled. Almost a Zen emptiness from which something new might grow.

Crafting a network of independent minds while fueling a collaborative spirit was the easy part. As he discusses with Jerry Ashton in the interview, the real challenge is to be sure that purpose – bringing about social good while selling commercial products – was a lot trickier than he first imagined.

“This has to be real service,” Ron says, “not lip service.”

The first time I can recall rethinking my career as a corporate health insurance executive was during a company leadership meeting. The top brass had decided to get on the “consumer-driven” bandwagon, and we had been summoned to a large conference room to be briefed on the strategy.

“Consumer-driven health care” was the euphemistic buzz term industry consultants had come up with to call what this strategy was really all about: moving as many Americans into high-deductible plans as quickly as possible. 

Shareholders and Wall Street financial analysts had soured on insurers’ prevailing managed care business model at the time because it was no longer providing sufficient return on investment. 

They believed insurers were paying too much for medical care. And of course, when Wall Street sneezes, executives catch colds. In the health insurance business, that translated into getting rid of managed care plans that provided enrollees relatively modest copayments when they saw a doctor or picked up a prescription.

To convince employers that high-deductible plans would be the long-awaited silver bullet to bring down medical inflation, my colleagues and I came up with the talking point that Americans were using too much health care because they didn’t have enough financial “skin in the game.”

At that leadership meeting, a newly hired vice president was trying to persuade us on the merits of high-deductible plans. We could easily understand how saddling people with high out-of-pockets would boost insurers’ bottom lines, but we were not getting how patients, especially those with chronic conditions or the millions of families who were living paycheck-to-paycheck, would benefit.

Kool-Aide, anyone?

After about thirty minutes of nonstop questions, he finally said, “Look, you’re just going to have to drink the Kool-Aid.”

That was the end of the Q&A and the beginning of the end of my career in the insurance business and public relations. I knew that if I stayed on the job I’d have to do my part to persuade Americans that consumer-driven health care was exactly what the doctor ordered. It wasn’t. It was what Wall Street ordered.

I began doing my own research and came across numerous studies that showed how people in high-deductible plans were forgoing needed care, how they were splitting pills or not even picking up their prescriptions because of what they would have to pay out of their own pockets before their coverage kicked in.

Other events that contributed to my ultimate decision to not only quit but become a vocal critic of the health insurance industry. But being told to just drink up and shut up got me to the point of some serious soul searching.

Now a big part of my work is focused on getting rid of health insurance with high out-of-pockets. Unfortunately, the industry strategy to this point has been unstoppable.

While insurance companies report record profits, a growing number of Americans in high-deductible plans--especially people of color--have gotten sicker, and many have died because they could not afford the care they needed. These plans have exacerbated health inequities in this country. 

The moral of my story is this: if you are ever told to either get with the program or get out, you just might want to check your GPS. Be sure it points True North

If necessity is the mother of invention, today’s pandemic is the father! All of us alive in these trying times are witnessing a huge change in the economy. If we are lucky enough and smart enough, we are fully engaged in that process. How else can we survive – if not thrive – while working our way back to some form of personal financial stability.

This quandary, and how we are coping with it, is catching the attention of the media.

Events over the last several months have significantly affected not only how the mainstream media thinks about change, but how they portray it in their attempts to make sense of what we are facing. Just we are we dealing with circumstances that are forcing us to find ways of generating an income, any income, some income.

Here is how I see it. As we dived deeper and deeper into the lockdown, our faint hopes for a return to “normalcy” started to fade away into the grim realization of the likely permanency of it all.

A different financial community, connected through Social Media, is arriving

Anyone with a history book or who has a few decades of life under their belts know that humans have lived through adverse economic situations before. This time, however, we have the benefit of another revolution added to the mix: a powerful tool called social media.

This has reshaped our ability not just to receive news, but to comment and react to it in real time. This has created a whole new level of community and community awareness. We are not just passive receptors; rather, through our feedback, rethinking the landscape and sharing breakthroughs we are bringing into existence a different world.

You might ask, what this has this to do with finance?

Until recently we have never been able to shape the narrative or more importantly, co-create powerful, collaborative responses. We have stood on the precipice, never crossing the event horizon until now.

Imagine yourself in today’s casino (banking). Each individual is just that, an individual. On their own, each makes their a bet. Many reading this article can guess the outcome through their personal experience. The bank wins 90% of the time and the meager 10% payout is just there to lure new players and keep the present players somewhat pacified.

But what if the individuals are connected, what if they know the cards, what if they can collectively act on them? Prior to today, this precious group has been Wall Street and their “unfair advantage” has always been to almost everyone else’s disadvantage.

Until now.

Stay tuned to the Economies section of LRT and to later articles I will be writing as a member of its co-creator community. I will be one of many people revealing unusual and compelling ways in which finance is being rethought.

Rethought to the advantage of us, not them.

Although unfamiliar to those of us steeped in a competitive model of economic success, the world has moved on and is continuing to stake out new opportunities for economic success through previously unheard-of degrees of cooperative effort.

Our conflict aversion is our greatest enemy in the Exponential Age of digital data, artificial intelligence and blockchain technologies. Doing “better, faster and cheaper” is the mantra of the collaborative economy. The business model that has worked extremely well in the former competitive economy is on the verge of collapse. Let’s examine the evidence.

RETHINKING THE COSTS OF A COMPETITIVE MINDSET

Howatt HR Consulting provides a conflict cost calculator to gauge the cost of unresolved conflict in law firms and legal departments. I recently ran my calculator from the perspective of the most conflict-rich workplace I remember being a part of. It only cost $100,000 per year in lost productivity, absenteeism, health-care claims, turnover and other profit-destroying contributors.

That is simply the impact of one person in that workplace! Howatt points out that the Canadian economy suffers a loss of over $16 billion each year due to unresolved conflict in the nation’s workplaces.

A recent visit to Silicon Valley revealed how cooperative business has become. I spoke with a software engineer working for Dell who supervises a software development team. Nothing abnormal about that. However, he manages a team whose members change every day on projects that change every day. A Dell engineer manages a team that one day might consist of developers from Microsoft, SAP, Google, Apple and others. They are working on open-source software that builds open-source software—for the benefit of all.

When did all this happen, you ask? Seemingly overnight, and without warning. That’s exponential. As a result, no disciplinary expertise is sufficient in itself.

Cognitive diversity is the fuel of innovation. Seeing a problem from the same perspective leads to the same old solutions. Seeing the same problem from multiple perspectives (gender, racial, religious, sexual orientation, disability and national origin) brings creativity to the table, and competition is inimical to its success.

The Harvard Business Review cites the power of our “mind-blindness” in the face of economic peril. It’s all about heuristics. This is the state of mind that determines how we react to stress and threat. Our worldview is only valuable in the context of how it was formed. Another way of saying it is, “You can’t tell a room full of millionaires their business model is broken.” They can’t hear it. This is not a function of intelligence but of experience. We can’t know what we don’t know.

Specifically, the mental heuristics that take over our cognitive capacity in times of economic peril can be summarized with startling reality in the following ways:

The sunk cost fallacy. A rational decision maker will look only at future costs, not at past ones.
Loss aversion. Decision makers often prefer to allocate more resources to continue with a chosen course than abandon it.
The illusion of control. People habitually overestimate their ability to control the future.
Preference for completion. People have an inherent bias toward completing tasks.
Pluralistic ignorance. This can result in everyone agreeing to a decision that no one believes in.
Personal identification. Withdrawing from a commitment may result in a perceived loss of status or a threat to one’s identity.

When combined, these mental heuristics, which reflect simply how the human brain works, can be a toxic brew of mind-blindness, obscuring paths to rescue and ways out of a dilemma of our own making.

What’s a body to do? We must overcome our conflict aversion and welcome a path to open, respectful and strategic conflict competence rather than our preferred resort to passive-aggressive behavior.

RETHINKING: COMPETITIVE TO COLLABORATIVE

The same Harvard Business Review article suggests rules to follow to achieve conflict competence in the context of group activity

Rule No. 1: Set decision rules. Agree to decision rules in advance. How we decide is as important as what we decide.
Rule No. 2: Pay attention to voting rules. Power-based voting, as in by partnership shares, is disjunctive and therefore divisive. Criterion-based voting is conjunctive and far more reflective of objective consensus than sheer power. Learn the “fist to five” model.
Rule No. 3: Protect dissenters. Cognitive diversity is the fuel for innovation. All thinking alike is the heuristic equivalent of “see no evil, hear no evil, say no evil.” Opposing views should be encouraged, not silenced. Respectful disagreement can open minds to previously unconsidered solutions.
Rule No. 4: Expressly consider alternatives. When unanimity masks mere acquiescence, trouble is brewing. Mere binary choices may be easy but be ill-informed. Take time, do some research and fully consider a number of alternatives, even if they are not obvious in the current state.
Rule No. 5: Separate advocacy from decision making. A course chosen is not always the best course to follow without thought. A decision made too often instills an advocacy for its completion that can be unquestioned. It’s not being wishy-washy or indecisive to ensure that as a decision is implemented, it remains the best decision to adhere to when data suggests otherwise.
Rule No. 6: Reinforce the anticipation of regret. Leaving familiar territory is uncomfortable, and it’s appropriate to regret the loss. However, imagining the state of being to be achieved if the journey is successful can be a better strategy than simply focusing on the land left behind. Visualize the future and plan for its arrival while acknowledging the reality of the comfort of the past.

EMBRACING THE COLLABORATIVE MINDSET

Start small and learn as you go. Discover the power and the scope of building bridges rather than silos. As our digital world continues to explode in data and the power to process it, learn to learn from other disciplines. Make friends with a data scientist, a software engineer or a legal project manager. Learn to see problems from the perspective of others.

And, most importantly, jump in, the water’s fine.