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Won't a basic income just increase inflation? Minimum-wage jobs would by necessity then need to pay more, which would then cause the costs of goods and services

Won't a basic income just increase inflation? Minimum-wage jobs would by necessity then need to pay more, which would then cause the costs of goods and services to go up, which would then make living more expensive, necessitating an increase in the basic income and so forth...? For example, say I'm a landlord. If everyone all of a sudden had an additional "base" income, why wouldn't I increase my rents to absorb at least a portion of that? Then, only people who had a job would still be able to afford to rent from me, while those on the basic income would be unable to afford it. I'm not out either way. So you would say you need to introduce legislation to stop me from doing that, but the free market would abhor that and likely accuse you of being a communist. So you can't. So I'm failing to see the point of the whole exercise?

ramblerman 11y ago
> Minimum-wage jobs would by necessity then need to pay more The whole reason the debate is becoming so prominent now is just because minimum-wage jobs and even non minimum wage jobs will be replaced by robots/ai. The goods may even become cheaper.
adaml_623 11y ago
You need to read some analysis of this before asking basic questions like that. There are factors like unemployment rate, tax, and government efficiency to consider.
crdoconnor 11y ago
The cost of inflation is spread across the whole economy. The brunt will mainly be borne by those holding large liquid cash reserves and owning loans, not minimum wagers.
- empressplay 11y ago
  I still think that until the real estate question is resolved it's all a moot point. Already-inflated property markets will just become more inflated.
  - crdoconnor 11y ago
    Actually it will probably depress property markets. Our inflated property markets are caused by the ultrawealthy hoarding their wealth in property. A large dose of cost-push inflation will drain that wealth, causing them to sell off their property, causing the price of it to drop.
    - empressplay 11y ago
      While what you say might be true to some extent, the upper-middle class will then have the additional UBI income with which to spend on buying property from those who are selling it. So while there may be less property hoarding on the extreme end and some selloffs, the drop caused by an increase in supply will be absorbed by an increase in what people are willing and able to pay in competitive markets.
panic 11y ago
Minimum-wage jobs would by necessity then need to pay more That's the opposite of what's being proposed: the minimum income comes from the government, not employers. Minimum income can replace minimum wage. For example, say I'm a landlord. If everyone all of a sudden had an additional "base" income, why wouldn't I increase my rents to absorb at least a portion of that? Then, only people who had a job would still be able to afford to rent from me, while those on the basic income would be unable to afford it. I'm not out either way. Sure, but now that you've raised the price, there's an opportunity to undercut you that didn't exist before. The result ultimately depends on the supply and demand of housing. Just think of it like a bunch of slightly-richer people moving into the neighborhood. Prices will rise, but not enough to take all the new residents' extra money.
- empressplay 11y ago
  This would only work in places where supply exceeded demand. In a landlords' market there is no reason to compete. All the same people who could afford to rent from you before can still afford to rent from you now, you're just charging them more.
  - AlisdairO 11y ago
    Basic income could have the effect of flattening out demand rather - at the moment, people are forced to cluster close to where the work is available. If I want to just live on basic income, why not go somewhere more affordable?
    - empressplay 11y ago
      ...and all of a sudden these places that were previously unattractive are now attractive, and housing that previously had no demand now does. The point I'm trying to make is that it's not as simple as some might like to think.
      - AlisdairO 11y ago
        I take your point, but if we remove the requirement for jobs to be present, a much larger range of locations become reasonable to live in. A broader range of acceptable locations spread amongst the same population is clearly likely to decrease overall competition for a given property.
keithnz 11y ago
with a UBI, you don't need a minimum wage. Also low end jobs will pay on top of a UBI, so it will be quite attractive if you don't have a lot of skills for higher paying work. Also with a UBI you have to balance it with a tax system that taxes wealth. In new zealand one of the advocates of UBI came up with a calculator for it ( simplified, but gives the idea of some of the levers you need to do it ) http://www.bigkahuna.org.nz/calculator/finance-minister.aspx http://www.bigkahuna.org.nz/calculator/finance-minister.aspx If you live in an area where there is a housing shortage, then yes, the market will drive things higher, but then a UBI lets people be a bit more mobile so people may move out of high rent areas more easily, also potentially driving up wages because less people are around to do needed work, but then as everyone gets pushed up, the tax will start to pull things back down. The whole point is income redistribution , especially in a society thats starts getting more and more automated.

ramblerman 11y ago

> Minimum-wage jobs would by necessity then need to pay more The whole reason the debate is becoming so prominent now is just because minimum-wage jobs and even non minimum wage jobs will be replaced by robots/ai. The goods may even become cheaper.

adaml_623 11y ago

You need to read some analysis of this before asking basic questions like that. There are factors like unemployment rate, tax, and government efficiency to consider.

crdoconnor 11y ago

The cost of inflation is spread across the whole economy. The brunt will mainly be borne by those holding large liquid cash reserves and owning loans, not minimum wagers.

empressplay 11y ago
I still think that until the real estate question is resolved it's all a moot point. Already-inflated property markets will just become more inflated.
- crdoconnor 11y ago
  Actually it will probably depress property markets. Our inflated property markets are caused by the ultrawealthy hoarding their wealth in property. A large dose of cost-push inflation will drain that wealth, causing them to sell off their property, causing the price of it to drop.
  - empressplay 11y ago
    While what you say might be true to some extent, the upper-middle class will then have the additional UBI income with which to spend on buying property from those who are selling it. So while there may be less property hoarding on the extreme end and some selloffs, the drop caused by an increase in supply will be absorbed by an increase in what people are willing and able to pay in competitive markets.

panic 11y ago

Minimum-wage jobs would by necessity then need to pay more That's the opposite of what's being proposed: the minimum income comes from the government, not employers. Minimum income can replace minimum wage. For example, say I'm a landlord. If everyone all of a sudden had an additional "base" income, why wouldn't I increase my rents to absorb at least a portion of that? Then, only people who had a job would still be able to afford to rent from me, while those on the basic income would be unable to afford it. I'm not out either way. Sure, but now that you've raised the price, there's an opportunity to undercut you that didn't exist before. The result ultimately depends on the supply and demand of housing. Just think of it like a bunch of slightly-richer people moving into the neighborhood. Prices will rise, but not enough to take all the new residents' extra money.

empressplay 11y ago
This would only work in places where supply exceeded demand. In a landlords' market there is no reason to compete. All the same people who could afford to rent from you before can still afford to rent from you now, you're just charging them more.
- AlisdairO 11y ago
  Basic income could have the effect of flattening out demand rather - at the moment, people are forced to cluster close to where the work is available. If I want to just live on basic income, why not go somewhere more affordable?
  - empressplay 11y ago
    ...and all of a sudden these places that were previously unattractive are now attractive, and housing that previously had no demand now does. The point I'm trying to make is that it's not as simple as some might like to think.
    - AlisdairO 11y ago
      I take your point, but if we remove the requirement for jobs to be present, a much larger range of locations become reasonable to live in. A broader range of acceptable locations spread amongst the same population is clearly likely to decrease overall competition for a given property.

keithnz 11y ago

with a UBI, you don't need a minimum wage. Also low end jobs will pay on top of a UBI, so it will be quite attractive if you don't have a lot of skills for higher paying work. Also with a UBI you have to balance it with a tax system that taxes wealth. In new zealand one of the advocates of UBI came up with a calculator for it ( simplified, but gives the idea of some of the levers you need to do it ) http://www.bigkahuna.org.nz/calculator/finance-minister.aspx http://www.bigkahuna.org.nz/calculator/finance-minister.aspx If you live in an area where there is a housing shortage, then yes, the market will drive things higher, but then a UBI lets people be a bit more mobile so people may move out of high rent areas more easily, also potentially driving up wages because less people are around to do needed work, but then as everyone gets pushed up, the tax will start to pull things back down. The whole point is income redistribution , especially in a society thats starts getting more and more automated.