4 ms·

I think tis is a step in the right direction, but I can't help but think that raising the floor still leaves people there on the floor. Won't inflation, as wel

I think tis is a step in the right direction, but I can't help but think that raising the floor still leaves people there on the floor. Won't inflation, as well as increased demand for the things people need just raise prices of those things out of reach of those on the floor negating any benefit?

elizabeth-ycr 10y ago
It’s a good question, and how basic income affects macroeconomic conditions (inflation, housing prices, demand for labor, etc.) is really important to figure out, but it’s honestly beyond the scope of this study. We’re focusing on the individual-level effects as a first step.
diyseguy 10y ago
That's what I imagine happening too. $1K a month sounds great until inflation renders it equivalent to $100 a month. Perhaps it could be adjusted for inflation in some way.
- rincebrain 10y ago
  I'd hope you'd tie it to inflation, but that only helps so much if the rate of inflation it's tied to is even slightly "off" (say, by a tenth of a percent), and then you compound it annually...
ZenoArrow 10y ago
> "Won't inflation, as well as increased demand for the things people need just raise prices of those things out of reach of those on the floor negating any benefit?" Ideally you'd want UBI to increase with inflation. However, as the initial study is over 5 years the decrease in purchasing power by the end of the study is likely to be minimal. There is a risk that companies that service low-income people will increase their prices faster than inflation, negating some of the benefits of UBI. The only guard I know of for this is strong competition and disciplined consumers, people have to be willing to express their dislike of price hikes by shopping elsewhere otherwise the system won't work. I'm guessing that monitoring price rises will be part of this YC-backed study.
- stcredzero 10y ago
  There is a risk that companies that service low-income people will increase their prices faster than inflation, negating some of the benefits of UBI. The only guard I know of for this is strong competition and disciplined consumers, people have to be willing to express their dislike of price hikes by shopping elsewhere otherwise the system won't work. There are places where people don't have enough mobility to be able to do this. EDIT: One of the interns at the non-profit I volunteer at landed a job, but had to give it up because he didn't have transportation that could reliably get him to his job. (Late shift.) He lives in Oakland.
  - ZenoArrow 10y ago
    > "There are places where people don't have enough mobility to be able to do this." That's where Internet shopping comes in. Ideally you want to support local businesses to keep jobs in the area, but if you need to fight against price hikes and can't do so locally then the best thing to do is shop online until the price hikes are reduced.
    - runako 10y ago
      The irony here is that it's well-documented that the poorest are also generally the least equipped to take advantage of the best deals (online or otherwise). Lack of a credit card, inability to purchase in bulk ("bulk" to someone with meager financial resources might not appear to be "bulk" to you), no Internet at home, unreliable transportation, are all reasons people are not able to shop online or at places like Costco.
      - ZenoArrow 10y ago
        Traditionally yes, but there are options. If the individual is too poor to have any Internet-capable device (can use free WiFi to buy things, though I recognise this is a security risk unless you're tech savvy) then there are ways to save money through community action (pooling resources to buy in bulk, etc...). It's more a question of organisation and discipline rather than opportunity, though it's certainly harder than only having to rely on your own initiative.
stale2002 10y ago
Inflation is caused by a total increase in the money supply. That doesn't have to be the case with UBI. The way that you get rid of the inflation caused by the money that is added to the system by UBI, is by taking away from someone else. Usually this is done through taxes.

elizabeth-ycr 10y ago

It’s a good question, and how basic income affects macroeconomic conditions (inflation, housing prices, demand for labor, etc.) is really important to figure out, but it’s honestly beyond the scope of this study. We’re focusing on the individual-level effects as a first step.

diyseguy 10y ago

That's what I imagine happening too. $1K a month sounds great until inflation renders it equivalent to $100 a month. Perhaps it could be adjusted for inflation in some way.

rincebrain 10y ago
I'd hope you'd tie it to inflation, but that only helps so much if the rate of inflation it's tied to is even slightly "off" (say, by a tenth of a percent), and then you compound it annually...

ZenoArrow 10y ago

> "Won't inflation, as well as increased demand for the things people need just raise prices of those things out of reach of those on the floor negating any benefit?" Ideally you'd want UBI to increase with inflation. However, as the initial study is over 5 years the decrease in purchasing power by the end of the study is likely to be minimal. There is a risk that companies that service low-income people will increase their prices faster than inflation, negating some of the benefits of UBI. The only guard I know of for this is strong competition and disciplined consumers, people have to be willing to express their dislike of price hikes by shopping elsewhere otherwise the system won't work. I'm guessing that monitoring price rises will be part of this YC-backed study.

stcredzero 10y ago
There is a risk that companies that service low-income people will increase their prices faster than inflation, negating some of the benefits of UBI. The only guard I know of for this is strong competition and disciplined consumers, people have to be willing to express their dislike of price hikes by shopping elsewhere otherwise the system won't work. There are places where people don't have enough mobility to be able to do this. EDIT: One of the interns at the non-profit I volunteer at landed a job, but had to give it up because he didn't have transportation that could reliably get him to his job. (Late shift.) He lives in Oakland.
- ZenoArrow 10y ago
  > "There are places where people don't have enough mobility to be able to do this." That's where Internet shopping comes in. Ideally you want to support local businesses to keep jobs in the area, but if you need to fight against price hikes and can't do so locally then the best thing to do is shop online until the price hikes are reduced.
  - runako 10y ago
    The irony here is that it's well-documented that the poorest are also generally the least equipped to take advantage of the best deals (online or otherwise). Lack of a credit card, inability to purchase in bulk ("bulk" to someone with meager financial resources might not appear to be "bulk" to you), no Internet at home, unreliable transportation, are all reasons people are not able to shop online or at places like Costco.
    - ZenoArrow 10y ago
      Traditionally yes, but there are options. If the individual is too poor to have any Internet-capable device (can use free WiFi to buy things, though I recognise this is a security risk unless you're tech savvy) then there are ways to save money through community action (pooling resources to buy in bulk, etc...). It's more a question of organisation and discipline rather than opportunity, though it's certainly harder than only having to rely on your own initiative.

stale2002 10y ago

Inflation is caused by a total increase in the money supply. That doesn't have to be the case with UBI. The way that you get rid of the inflation caused by the money that is added to the system by UBI, is by taking away from someone else. Usually this is done through taxes.