4 ms·

If cost is not controlled I'd expect expenses of food, clothed and renting to rise after UBI being implemented.

encoderer 5y ago
Costs cannot be controlled. That’s not how it works. That’s how you get empty shelves. I think some inflation will happen but not dramatically in food and clothing. We do not have many naked and starving people in America. It’s the premium consumer goods that will see higher demand - think dishwashers not Chanel.
- com2kid 5y ago
  > Costs cannot be controlled. That’s not how it works. That’s how you get empty shelves. Many types of food in America are massively subsidized, including dairy[1], beef[2], and corn. Government policies can certainly drive down prices. Direct price controls don't work, but subsidizing production most certainly works. Though an economist would argue that a dollar saved at the market cost tax payers more than a dollar to get, due to inefficiencies, counter argument is that people who are poor pay less taxes and benefit more from reduced food prices. (At which points arguments about corn subsidizes and long term harm to the health of the citizenry are brought up.) [1] https://www.numbeo.com/cost-of-living/country_price_rankings?itemId=8 https://www.numbeo.com/cost-of-living/country_price_rankings... [2] https://www.numbeo.com/cost-of-living/country_price_rankings?itemId=121 https://www.numbeo.com/cost-of-living/country_price_rankings...
  - encoderer 5y ago
    Sure but a subsidy is a market support. A price control is a market support. A subsidy is not a price control.
- inglor_cz 5y ago
  I guess rent will be the one to go up in case of UBI. UBI fundamentally does not solve the problems that: a) some people do not want to live next to some other people, and are willing to pay extra for that privilege - now they have even more money to use for that purpose, b) in the most expensive regions, demand exceeds supply a lot. I even think that a vast majority of UBI would, at the end, accrue to landlords.
  - colinmhayes 5y ago
    It's gotta be combined with YIMBY policies, hopefully LVT.
  - vpribish 5y ago
    in the current context of this experiment rent dropped by 30% in SF while this was going on. Sure some of that was people fleeing dense urban areas to escape lockdowns, but also some was people decamping because the economic pressure to work in a city was lifted. UBI might be a terrible threat to landlords' incomes as people redistribute.
    - chii 5y ago
      the drop in rent would be more attributable to the WFH policies instituted by many companies rather than any UBI imho.
- markus_zhang 5y ago
  The state can definitely influence the prices of goods (e.g. it can affect the price of money). Direct control is indeed infeasible.
oconnor663 5y ago
I can see the argument for the price of rent rising, but why would the prices of food and clothing rise? My understanding is that those are highly competitive markets, with low margins on top of the cost of production, at least in their non-luxury segments. Is that wrong?
- markus_zhang 5y ago
  Not necessarily non-luxury but also the middle brands I think. But it's difficult to prove though. As a user said the pandemic also sees a decrease in supplies so it's kinda difficult to do "tests" properly.
- BobbyJo 5y ago
  Food and clothing depend on other things (cost of employees, equipment, materials, etc.) When the costs of those things rise, the cost of food and clothing will have to rise.
  - joshenberg 5y ago
    Depends where we source them, for example American-made clothing is already prohibitively expensive to the economic demographic segments that are targeted by UBI experiments.
  - rualca 5y ago
    > Food and clothing depend on other things (cost of employees, equipment, materials, etc.) When the costs of those things rise, the cost of food and clothing will have to rise. Not really. You're pointing to production costs, but production costs just define the price's lower bound, not the price itself. Price depends solely on willingness to pay and pricing strategy, which is higher than the production cost when the product/service is not subsidized or a loss leader.
    - oconnor663 5y ago
      It seems like there are two effects we're considering at the same time: 1. UBI might increase people's willingness to pay for goods in general, and the prices of goods that are most strongly driven by willingness to pay would rise. (Rent in expensive cities might be an example of this. Milk, soap, and socks probably aren't.) 2. To the extent that UBI is paid for with higher taxes, the prices of everything would go up. This seems obviously true on average and to some extent, but the specific numbers matter a lot. For example if prices go up by 10%, but the people whom UBI is designed to help see their income rise by 20%, then UBI is achieving its stated goal. (Importantly, the hypothetical 10% rise in prices doesn't reflect wealth being burned or spent, but rather resources being moved around in some sense.)
munk-a 5y ago
I think that's one of the biggest weaknesses of using the pandemic as an experiment on UBI - it's one of the best ones we'll get for a while (and I think we have seen increases in luxury spending from most sectors which would indicate greater financial security) but at the same time we're seeing the continued echoes of supply chain shortages. It'll be hard to determine precisely why the price of meat has gone up from two prior, there are quite legitimate additional costs on production by having increased sanitary and working space requirements - and I think both sides of the UBI debate will be able to sanely say that those costs were either mostly due to the pandemic or mostly due to labour shortages driven by the covid benefit... and I don't know if we'll ever get a really clear answer.

Costs cannot be controlled. That’s not how it works. That’s how you get empty shelves. I think some inflation will happen but not dramatically in food and clothing. We do not have many naked and starving people in America. It’s the premium consumer goods that will see higher demand - think dishwashers not Chanel.

com2kid 5y ago
> Costs cannot be controlled. That’s not how it works. That’s how you get empty shelves. Many types of food in America are massively subsidized, including dairy[1], beef[2], and corn. Government policies can certainly drive down prices. Direct price controls don't work, but subsidizing production most certainly works. Though an economist would argue that a dollar saved at the market cost tax payers more than a dollar to get, due to inefficiencies, counter argument is that people who are poor pay less taxes and benefit more from reduced food prices. (At which points arguments about corn subsidizes and long term harm to the health of the citizenry are brought up.) [1] https://www.numbeo.com/cost-of-living/country_price_rankings?itemId=8 https://www.numbeo.com/cost-of-living/country_price_rankings... [2] https://www.numbeo.com/cost-of-living/country_price_rankings?itemId=121 https://www.numbeo.com/cost-of-living/country_price_rankings...
- encoderer 5y ago
  Sure but a subsidy is a market support. A price control is a market support. A subsidy is not a price control.
inglor_cz 5y ago
I guess rent will be the one to go up in case of UBI. UBI fundamentally does not solve the problems that: a) some people do not want to live next to some other people, and are willing to pay extra for that privilege - now they have even more money to use for that purpose, b) in the most expensive regions, demand exceeds supply a lot. I even think that a vast majority of UBI would, at the end, accrue to landlords.
- colinmhayes 5y ago
  It's gotta be combined with YIMBY policies, hopefully LVT.
- vpribish 5y ago
  in the current context of this experiment rent dropped by 30% in SF while this was going on. Sure some of that was people fleeing dense urban areas to escape lockdowns, but also some was people decamping because the economic pressure to work in a city was lifted. UBI might be a terrible threat to landlords' incomes as people redistribute.
  - chii 5y ago
    the drop in rent would be more attributable to the WFH policies instituted by many companies rather than any UBI imho.
markus_zhang 5y ago
The state can definitely influence the prices of goods (e.g. it can affect the price of money). Direct control is indeed infeasible.

oconnor663 5y ago

I can see the argument for the price of rent rising, but why would the prices of food and clothing rise? My understanding is that those are highly competitive markets, with low margins on top of the cost of production, at least in their non-luxury segments. Is that wrong?

markus_zhang 5y ago
Not necessarily non-luxury but also the middle brands I think. But it's difficult to prove though. As a user said the pandemic also sees a decrease in supplies so it's kinda difficult to do "tests" properly.
BobbyJo 5y ago
Food and clothing depend on other things (cost of employees, equipment, materials, etc.) When the costs of those things rise, the cost of food and clothing will have to rise.
- joshenberg 5y ago
  Depends where we source them, for example American-made clothing is already prohibitively expensive to the economic demographic segments that are targeted by UBI experiments.
- rualca 5y ago
  > Food and clothing depend on other things (cost of employees, equipment, materials, etc.) When the costs of those things rise, the cost of food and clothing will have to rise. Not really. You're pointing to production costs, but production costs just define the price's lower bound, not the price itself. Price depends solely on willingness to pay and pricing strategy, which is higher than the production cost when the product/service is not subsidized or a loss leader.
  - oconnor663 5y ago
    It seems like there are two effects we're considering at the same time: 1. UBI might increase people's willingness to pay for goods in general, and the prices of goods that are most strongly driven by willingness to pay would rise. (Rent in expensive cities might be an example of this. Milk, soap, and socks probably aren't.) 2. To the extent that UBI is paid for with higher taxes, the prices of everything would go up. This seems obviously true on average and to some extent, but the specific numbers matter a lot. For example if prices go up by 10%, but the people whom UBI is designed to help see their income rise by 20%, then UBI is achieving its stated goal. (Importantly, the hypothetical 10% rise in prices doesn't reflect wealth being burned or spent, but rather resources being moved around in some sense.)

munk-a 5y ago

I think that's one of the biggest weaknesses of using the pandemic as an experiment on UBI - it's one of the best ones we'll get for a while (and I think we have seen increases in luxury spending from most sectors which would indicate greater financial security) but at the same time we're seeing the continued echoes of supply chain shortages. It'll be hard to determine precisely why the price of meat has gone up from two prior, there are quite legitimate additional costs on production by having increased sanitary and working space requirements - and I think both sides of the UBI debate will be able to sanely say that those costs were either mostly due to the pandemic or mostly due to labour shortages driven by the covid benefit... and I don't know if we'll ever get a really clear answer.