4 ms·
It will increase the cost of labor (that is, hourly wages, salaries). In other words, UBI sets a floor to wages. As one transitions from non-UBI regime to that
by raincom 5y ago
It will increase the cost of labor (that is, hourly wages, salaries). In other words, UBI sets a floor to wages. As one transitions from non-UBI regime to that of UBI, in this transitory period cost-push inflation occurs due to the increase in the cost of wages; and this is the first order effect.
Second order effects: upper class (not super wealthy) owns rental properties, and jack up the rents in order to suck out whatever wage increases due to the UBI floor. This vicious cycle will continue.
UBI is good, if healthcare and housing don't steal whatever wage increase one sees. UBI can be implemented in the developed countries, whose currencies (nominal assets) are swapped with real goods (raw materials, commodities). A country like US, UK, EU, Japan can run UBI; however, India, South Africa, etc can't run such schemes due to the balance of payments constraints, despite whatever MMT folks sell.
- gremlinsinc 5y agoA land value tax that is set based on basic income needs actually would curb land-owners from raising rents. If they're taxed based on say average rents, if that goes up their taxes goes up as much as the difference and it goes down and gives them a bonus drop-off IF they are below averages, then I think it could even out more. LVT's a great way to fund UBI, many great articles on it.
- josephcsible 5y agoTying taxes to average rents seems like it will cause a Prisoners' Dilemma that will send rent skyrocketing.
- raincom 5y agoThe issue is: whether the policy of LVT funding GBI has political support in legislative bodies? I don’t think so since the majority of legislators come from upper classes.