this post was submitted on 15 Mar 2024
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UBI is implemented tomorrow. Every citizen gets $1000 per month.

Landlord now knows you have an extra $1000 that you never had before. Why wouldn't the landlord raise prices?

Now you have an extra $1000 a month and instead of eating rice and beans for a few meals you go out to a restaurant. The restaurant owners know everyone is eating out more so why not raise prices and maximize shareholder profit as always. The restaurant/corporation is on TV saying, "well, demand increased and it is a simple Economic principle that prices had to increase. There's nothing we can do about it".

Your state/country has toll roads. The state needs money for its deficit. UBI is implemented and the state/country sees it as the perfect time to incrementally raise toll prices.

Next thing you know UBI is effectively gone because everything costs more and billionaires keep hitting higher and higher all time net worth records.

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[–] SpaceCowboy@lemmy.ca 0 points 8 months ago (2 children)

I mean... kinda?

I think you're putting too much evil intent behind the motivations though. Supply and demand isn't some made up excuse. If the prices were to stay the same and everyone had more money, then there would be shortages. It's not as if a factory can instantly increase production and the supply chain can instantly get the products on the shelves over night. There are real world factors involved in increasing production.

So what happens is prices increase for many products and this results in inflation. Nobody wants inflation, not even the wealthy. So the central bank will want to tamp down that inflation and the lever they use for that is increasing interest rates. So you wanted to put that UBI towards a mortgage or a car payment? Well a lot of it will be going towards the increased interest on the money you're borrowing.

And the thing about inflation is that it doesn't really get reversed. So the inflation from the initial shock to the economy would take a bite out of UBI (and also the income besides UBI). Your employer may be less likely to give you a raise to offset that inflation because you have UBI. and the fix for the inflation will mean paying more interest on a mortgage.

So yeah, UBI wouldn't gain people much. It's mostly just a poison pill promoted to kids by wealthy people like Andrew Yang so you don't push for an increase in minimum wage. An increase in minimum wage would be a direct transfer of wealth from businesses to employees. They don't want this so they promote UBI which isn't actually feasible to distract from minimum wage increases (which almost everyone supports) and make taxing the wealthy less likely (which is also supported by most, but not when it's to pay for UBI).

[–] orcrist@lemm.ee 1 points 8 months ago

If UBI is pegged to inflation, what you wrote cannot happen. And it ignores the other economic pressure: if people have UBI, they won't waste their lives on horrible minimum wage jobs, which will lead to exciting goodness for millions.

[–] LotrOrc@lemmy.world 0 points 8 months ago (1 children)

That's why you add caps to rent and interest as well, so that that basic income legitimately does go into people's pockets and therefore the rest of the thinking

[–] SpaceCowboy@lemmy.ca 0 points 8 months ago (1 children)

If you cap rent, you have housing shortages. If you cap interest rates, you have out of control inflation.

It seems UBI is a product of people on the left buying into the supply side economcis theories which hinge on the idea the work is meaningless and it's only through a largess from the wealthy that people have money. This is a competing idea within the flawed supply side economics framework where UBI is a proposed way to have people receive a largess from the government instead of from the wealthy.

Everything you consume comes from someone doing work somewhere. Those minimum wage jobs don't exist because companies are being charitable. They exist because there's work that needs to be done. They'll tell you that they're "job creators" and those jobs would be eliminated if minimum wage were increased, but that's all a lie. UBI leading to some Star Trek paradise is another lie meant to distract people.

Increase minimum wage, form more labor unions, and working conditions will improve. There's known solutions to these problems, we should implement these solutions instead of the solutions proposed by wealthy people like Andrew Yang.

[–] LotrOrc@lemmy.world 1 points 8 months ago

Then why has every study/instance of there being a UBI helped the people in that area?