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>Problem #1: - The market will correct itself, meaning that if everyone has X amount of cash to buy products, services, etc... businesses will just increment th

by slg 4y ago

>Problem #1: - The market will correct itself, meaning that if everyone has X amount of cash to buy products, services, etc... businesses will just increment their offerings to take advantage of that rendering the UBI useless. Why do people always say this in response to UBI as if it is a universal fact? UBI doesn't create new money by itself. It redistributes money. Its impact on inflation will therefore be in the shifting of demand curves. However that won't be uniform. Demand for certain products is rather static and therefore those prices won't be impacted much. For example, if you give me the money to double my food budget, I will go to nicer restaurants and buy higher quality items from the supermarket. I'm not simply going to buy twice the amount of everything I used to buy. Demand for basic staples like milk and eggs won't go up and therefore their price won't go up much. The biggest increases will be in luxury goods and services. The inflation caused by UBI would be progressive which is completely in line with the goals of UBI in providing a base level of money for people to live on. And this isn't even getting into the supply side response to these demand changes which will act as another counter to inflation. If there suddenly is increased demand, suppliers will bring more products to market. They aren't just going to jack up their prices unless there is a complete lack of competition (which is its own issue that would need to be addressed regardless of UBI).

fauxpause_ 4y ago
If you need minimum wage to survive, you’ll work for minimum wage. If you don’t need minimum wage to survive, you’ll demand more money to work, or work to improve yourself, or just not work. The point remains that it’s harder to find cheap employees. So the cost of labor goes up. So prices rise. Specifically they rise until the poor folks must work at a low wage to survive again. Also, prices absolutely rise when there is a surge in demand. That’s literally economics 101.
- slg 4y ago
  >Specifically they rise until the poor folks must work at a low wage to survive again. What are you basing this conclusion on? If what you say is true, minimum wage increases would be worthless as they would just be swallowed by inflation. However, studies on the topic show this isn't true. Minimum wage increases have a negligible impact on inflation. This should be obvious because minimum wage positions do not make up the entirety of the labor market and the labor costs do not make up the entirety of business costs. So why would all prices increase in pace with the minimum wage? >The point remains that it’s harder to find cheap employees. So the cost of labor goes up. So prices rise. Specifically they rise until the poor folks must work at a low wage to survive again. I didn't say there would be no inflation. I said inflation would be progressive in that it wouldn't have much of an impact on stables in which demand is inelastic and working class people spend a relatively higher percentage of their income.
  - fauxpause_ 4y ago
    > What are you basing this conclusion on? That is the natural balance. People need to be paid enough to be incentivized to work. Work sucks. Especially low income work. But society needs these jobs to be done. > If what you say is true, minimum wage increases would be worthless as they would just be swallowed by inflation. However, studies on the topic show this isn't true. Minimum wage increases have a negligible impact on inflation. This should be obvious because minimum wage positions do not make up the entirety of the labor market and the labor costs do not make up the entirety of business costs. So why would all prices increase in pace with the minimum wage? That’s mostly true. But this is not a minimum wage increase. This is taking away the most valuable part of the paycheck: the part you need to survive. People aren’t going to work hard for $8 an hour if they’re taken care of by the government. It’s simply not worth it. > I didn't say there would be no inflation. I said inflation would be progressive in that it wouldn't have much of an impact on stables in which demand is inelastic and working class people spend a relatively higher percentage of their income It’s a supply side effect. Not a demand one. Also, basically any non trivial inflation is enough to make UBI not UBI because it’s supposed to be just enough to be liveable.
    - slg 4y ago
      >That is the natural balance. People need to be paid enough to be incentivized to work. Work sucks. Especially low income work. But society needs these jobs to be done. You didn't just say that giving poor people money causes inflation. You said that giving poor people money causes the exact right amount of inflation to cancel out the money you give them. Where is the idea of this balance coming from other than it being theoretically convenient? Do you think society has some innate poverty rate that wage increases can never alter? If so, why is the US poverty rate higher than our peers like Canada, Germany, France, etc? >That’s mostly true. But this is not a minimum wage increase. This is taking away the most valuable part of the paycheck: the part you need to survive. People aren’t going to work hard for $8 an hour if they’re taken care of by the government. It’s simply not worth it. Do you make minimum wage? If not, why do you work as many hours as you do if you could be "taken care of" working less? Most people don't work just to get the bare minimum to survive or else most people would be working a lot less. >Also, basically any non trivial inflation is enough to make UBI not UBI because it’s supposed to be just enough to be liveable. Peg UBI to inflation like minimum wage should be.

by slg 4y ago

fauxpause_ 4y ago

If you need minimum wage to survive, you’ll work for minimum wage. If you don’t need minimum wage to survive, you’ll demand more money to work, or work to improve yourself, or just not work. The point remains that it’s harder to find cheap employees. So the cost of labor goes up. So prices rise. Specifically they rise until the poor folks must work at a low wage to survive again. Also, prices absolutely rise when there is a surge in demand. That’s literally economics 101.

slg 4y ago
>Specifically they rise until the poor folks must work at a low wage to survive again. What are you basing this conclusion on? If what you say is true, minimum wage increases would be worthless as they would just be swallowed by inflation. However, studies on the topic show this isn't true. Minimum wage increases have a negligible impact on inflation. This should be obvious because minimum wage positions do not make up the entirety of the labor market and the labor costs do not make up the entirety of business costs. So why would all prices increase in pace with the minimum wage? >The point remains that it’s harder to find cheap employees. So the cost of labor goes up. So prices rise. Specifically they rise until the poor folks must work at a low wage to survive again. I didn't say there would be no inflation. I said inflation would be progressive in that it wouldn't have much of an impact on stables in which demand is inelastic and working class people spend a relatively higher percentage of their income.
- fauxpause_ 4y ago
  > What are you basing this conclusion on? That is the natural balance. People need to be paid enough to be incentivized to work. Work sucks. Especially low income work. But society needs these jobs to be done. > If what you say is true, minimum wage increases would be worthless as they would just be swallowed by inflation. However, studies on the topic show this isn't true. Minimum wage increases have a negligible impact on inflation. This should be obvious because minimum wage positions do not make up the entirety of the labor market and the labor costs do not make up the entirety of business costs. So why would all prices increase in pace with the minimum wage? That’s mostly true. But this is not a minimum wage increase. This is taking away the most valuable part of the paycheck: the part you need to survive. People aren’t going to work hard for $8 an hour if they’re taken care of by the government. It’s simply not worth it. > I didn't say there would be no inflation. I said inflation would be progressive in that it wouldn't have much of an impact on stables in which demand is inelastic and working class people spend a relatively higher percentage of their income It’s a supply side effect. Not a demand one. Also, basically any non trivial inflation is enough to make UBI not UBI because it’s supposed to be just enough to be liveable.
  - slg 4y ago
    >That is the natural balance. People need to be paid enough to be incentivized to work. Work sucks. Especially low income work. But society needs these jobs to be done. You didn't just say that giving poor people money causes inflation. You said that giving poor people money causes the exact right amount of inflation to cancel out the money you give them. Where is the idea of this balance coming from other than it being theoretically convenient? Do you think society has some innate poverty rate that wage increases can never alter? If so, why is the US poverty rate higher than our peers like Canada, Germany, France, etc? >That’s mostly true. But this is not a minimum wage increase. This is taking away the most valuable part of the paycheck: the part you need to survive. People aren’t going to work hard for $8 an hour if they’re taken care of by the government. It’s simply not worth it. Do you make minimum wage? If not, why do you work as many hours as you do if you could be "taken care of" working less? Most people don't work just to get the bare minimum to survive or else most people would be working a lot less. >Also, basically any non trivial inflation is enough to make UBI not UBI because it’s supposed to be just enough to be liveable. Peg UBI to inflation like minimum wage should be.