5 ms·

UBI would likely cool the housing market since people would have the resources to try cheaper places.

anonporridge 5y ago
This is an important point too. Traditionally, humans have to live where they can find a flow of capital via the jobs available. If every human has a baseline flow of capital attached to them specifically, regardless of where they live, it potentially opens up a ton of possibility in where people can live, because they can do less well paying jobs but still live a good life.
- qqqwerty 5y ago
  It is also worth comparing this to the current status quo. About ~17% of working age adults in West Virginia are receiving disability benefits[1] vs about 8% for California and New York. The reasons for this are complex, but in short it is likely due to a mixture of cost of living (disability benefits go farther in LOC areas), economic opportunity (disability is "more attractive" when job opportunities are scare), and demographics (older, more blue collar, etc...). But regardless of how or why these discrepancies exist, we have essentially created a system which incentives our population to self-sort geographically based on their ability to contribute economically. That is of course problematic in and of itself, but this also means we have a real life pseudo "UBI experiment" that we can evaluate. And if you look at the data, nearly all of the states with high disability percentages are low cost of living states, particularly when it comes to housing prices. So anyone who complains about how UBI would increase housing costs needs to first account for the fact that large swaths of the working age population are already receiving benefits similar in level to a UBI (disability is about $1600/mo). And despite the higher concentration of beneficiaries in areas like WV, we haven't seen much of any impact in real estate or local inflation. If anything we have seen the opposite. [1] https://www.mathematica.org/dataviz/state-disability-maps https://www.mathematica.org/dataviz/state-disability-maps
julienb_sea 5y ago
Alternatively, UBI would provide a new income stream to literally everyone, increasing everyone's purchasing power. In a pure supply/demand scenario, the equilibrium price of essentially anything will increase accordingly, i.e. inflation. It's a fair point that UBI would result in some shift in market dynamic. But ultimately, most people will still want to get a job to supplement the UBI income, and high demand areas will remain high demand.
- stormbrew 5y ago
  Inflation isn't that simple. Sure, if you print a huge wad of money and give it out to everyone (ie. increase the money supply) then you'll get inflation, but that's not generally how UBI proponents intend it to work. The other side of it is increasing taxes on the other end of the progressive spectrum to compensate, leaving the money supply (ideally) largely unchanged. Anyways, it'd still be better than quantitative easing, the current approach to keeping the economy running now that they can't lower reserve ratios or interest rates anymore, wherein (roughly) the government prints money to shove into the stock market so people who are already rich keep getting richer.

This is an important point too. Traditionally, humans have to live where they can find a flow of capital via the jobs available. If every human has a baseline flow of capital attached to them specifically, regardless of where they live, it potentially opens up a ton of possibility in where people can live, because they can do less well paying jobs but still live a good life.

qqqwerty 5y ago
It is also worth comparing this to the current status quo. About ~17% of working age adults in West Virginia are receiving disability benefits[1] vs about 8% for California and New York. The reasons for this are complex, but in short it is likely due to a mixture of cost of living (disability benefits go farther in LOC areas), economic opportunity (disability is "more attractive" when job opportunities are scare), and demographics (older, more blue collar, etc...). But regardless of how or why these discrepancies exist, we have essentially created a system which incentives our population to self-sort geographically based on their ability to contribute economically. That is of course problematic in and of itself, but this also means we have a real life pseudo "UBI experiment" that we can evaluate. And if you look at the data, nearly all of the states with high disability percentages are low cost of living states, particularly when it comes to housing prices. So anyone who complains about how UBI would increase housing costs needs to first account for the fact that large swaths of the working age population are already receiving benefits similar in level to a UBI (disability is about $1600/mo). And despite the higher concentration of beneficiaries in areas like WV, we haven't seen much of any impact in real estate or local inflation. If anything we have seen the opposite. [1] https://www.mathematica.org/dataviz/state-disability-maps https://www.mathematica.org/dataviz/state-disability-maps

julienb_sea 5y ago

Alternatively, UBI would provide a new income stream to literally everyone, increasing everyone's purchasing power. In a pure supply/demand scenario, the equilibrium price of essentially anything will increase accordingly, i.e. inflation. It's a fair point that UBI would result in some shift in market dynamic. But ultimately, most people will still want to get a job to supplement the UBI income, and high demand areas will remain high demand.

stormbrew 5y ago
Inflation isn't that simple. Sure, if you print a huge wad of money and give it out to everyone (ie. increase the money supply) then you'll get inflation, but that's not generally how UBI proponents intend it to work. The other side of it is increasing taxes on the other end of the progressive spectrum to compensate, leaving the money supply (ideally) largely unchanged. Anyways, it'd still be better than quantitative easing, the current approach to keeping the economy running now that they can't lower reserve ratios or interest rates anymore, wherein (roughly) the government prints money to shove into the stock market so people who are already rich keep getting richer.