Precisely the argument against UBI. If an employer knows you’re getting money from the government, it’s natural for them to cut your pay to reflect that, or raise prices on consumers. Bringing us right back to where we started.
With UBI, laborers - especially lower skilled laborers - are less incentivized to take any job just to survive, which can increase the cost of labor for the employers, and also increase the production of most consumer goods purchased with UBI - basics like diapers and cereal - which are not supply constrained, but demand constrained.
Even rents might not be increased if UBI allows people to support themselves better in less expensive, typically rural areas, thereby reducing demand somewhat on housing in more expensive areas. It could, coupled with targeted investment, even enable an economic rebirth of smaller towns by bringing purchasing power back to them.
Competition from other car-makers, which is precisely capitalism. Otherwise it would be illegal price collusion.
> Why not raise the rent $1000?
You can only do that if supply/demand in your area supports that, and that's often because of local restrictions on increasing housing (i.e. as seen in a variety of exclusive Bay Area hamlets).
With UBI, more people would be able to choose not to inhabit these supply-constrained housing markets, which might actually temper rents in those areas. If every place implements excessive supply constraints on housing, that would again be collusion - which is another issue that should be addressed simultaneously.
They could, until one of them try to out compete other by lowering price.
If all car companies suffer a derangement simultaneously and decides they are entitled to a larger share of my money, I, along with other consumers, will put off our purcase untill they've come to their sences. A few months of reduced sales willl get the message across.
With rents the situation is a bit more plausible, but car manufacturers have excess capacity, and there is no ' limited nunber of cars' in the world. If we needed to double their production, we would.
Because to me it looks like a serious misinterpretation of economics
Firstly most products are commodities and are priced based on cost of production. They are volume products in international markets, people will import grain from across the world if that's cheaper. Yoy can't raise prices on them just because you want to.
Goods like Macbooks are the minority, and most peope who buy macbooks arent on minimum wage and UBI will increase their incomes by like 5% big woop.
Pick up a book on economics and you will realise that economy is not that predictable and mechanistic, and that there are mutiple competing theories, and all ofbthem are ibconplete. So no matter what you believe ecobomically, you should be carefull rather than dogmatic about it.
No car company raises (or for that matter lowers) prices independently without considering what their competitors are doing. All of them raising their prices together in that context is collusion.
You say that like price collusion doesn't happen anyway.
https://www.usitc.gov/press_room/news_release/2009/er0629gg1...
We already saw the Obama administration tax the shit out of underpriced Chinese tires to drive production and consumption of domestic brands. So some funny money gets injected into the market, and the first thing we see is American manufacturers taking advantage of the lack of competition by raising their own prices to absorb the delta in capital since cheaper alternatives no longer existed.
UBI does not work in a capitalist economy. Prices always adjust to the maximum people are able to pay, even (and especially) where it does not meet the statutory definition of "collusion." It's fucked by design.
Your employer is going to pay as little as the market will bear. UBI raises the minimum the market will bear for any given work (while simultaneously lowering the minimum wage necessary for any minimum level of income for an employed person) because of the declining marginal value of income. So, plausibly, it both increases wages for those who are and would otherwise be working and makes more people minimally employable (if the minimum wage is reduced to keep the minimum full-time income including UBI at the same level as pre-UBI.)
For the record, to the extent to which I support UBI, I support my own net income decreasing to support others on it and I think any tax plan that does not involve some upper-middle class and middle class Americans paying more than they receive would be financially unviable.
If you are earning $2000 a month, and the company knows that you were earning $1000 a month from the government, and they cut your pay to $1000 a month, you’re still only getting $2000 a month. Your overall financial health, and way of life has not changed one bit. you have simply replaced one source of income with another. You’re still making $2000 a month, the only difference is, the corporation doesn’t have to pay you. We have simply replaced one source of income with another. You’re still making $2000 a month, the only difference is, the corporation doesn’t have to pay you. If a Toyota Camry cost $10,000, and all customers are getting $1000 a month free from the government, then raise the price of the Camry to $11,000. Services and goods have not decreased in price, and I contend they will increase, resulting in absolutely zero positive affect. So what if you don’t have to depend on that employer for that extra thousand dollars, you’re depending on the government now. Which is better, depending on the government, or the free market Services and goods have not decreased in price, and I contend they will increase, resulting in absolutely zero positive affect. So what if you don’t have to depend on that employer for that extra thousand dollars, you’re depending on the government now. Which is better, depending on the government, or the free market?
I often argue that the markets do not optimize for the right outcomes, thus not so great, but even I do not think they are that stupid nor inefficient.
If your standard of living has not improved (by your previous argument), why would the markets raise the price for the Toyota Camry? So they get less sales? Why would the workers agree to do the same work for less even if they are gettin extra money?
An UBI will definitely shift the markets and maybe not in a good way, but that analysis seems so absurd that I consider even calling it an oversimplification to be too generous.
This is why you can never tell a car dealer how much money you have to spend, because they are going to do everything they can to squeeze every last dime out of you. a UBI makes that WAY easier. Quick credit check, how much do you make, oh only $28k. You must be getting a UBI. Let's make sure we factor that into the price they will pay.
The only way a UBI works is everyone agrees not to screw people over, and that has never, ever, happened in the history of mankind. So why will it suddenly work for a UBI?
I oppose UBI but your arguments are poor refutation.
UBI is theoretical and depends a lot on good will and everyone being treated fairly and equal. When has that EVER happened?
The problem is that the increase in wages will necessitate higher prices to the point at which the UBI is not longer sufficient on its own, so the above mentioned effect falls off, and you find some sort of equilibrium at which poor people still need to work to survive.
It's not crazy to imagine the long term impact being what you suggest though. Right now you need, say $100 paychecks to survive. In a universal non basic income, you might only need to earn $50 + your UnBI. The cunning capitalist observes here that the poor need fewer wages to live and so they get... fewer wages.
You can probably see how this is a very different situation from something like Yang's proposal, where a person would get an extra $230/wk no matter what they did. That would be $670 to go to work or $230 if they don't.
You have to be careful not to look at a single side of the equation -- there are also savings that would happen as a result of UBI. Maybe you give someone $100 for free and it raises the price of everything by $5, but you don't have to pay $300 to replace a car window that is broken out when someone robs your car. And/or the costs of insurance/taxes goes down. Crime, poverty, poor health, etc have huge costs to everyone in the US, and you have to factor those things into the equation.
Planet money has an episode on the subject.
1. https://www.businessinsider.com/finland-basic-income-experim...
Listen to the panet money podcast, the experiment is much better conducted and the podcast goes into great depth discussing various effects on the participants.
https://www.npr.org/sections/money/2017/09/22/552850245/epis...
There is a lot more than succeded and failed to dicsuss here, happy to do so if you are interested in doing that rather than just proving your point.
I have no doubt that rents and costs would go up but they would go up by less than the full amount of the UBI so the UBI would still be helpful to the recipient.
It'll also never be a "basic" income in that the poor will always need to work to survive.
From another perspective, why doesn't food cost 90% of our income anymore? Why didn't food prices go up in perfect lockstep with every productivity improvement and rise in wages since 300BC? Because there are people out there willing and happy to sell it for less, no other reason.
Unemployment is nuanced because you're incentivized to not even try and probably not really that relevant to UBI fwiw.
Not really, since someone working no time or half-time still gets more money under that regime.
Possibly pedantic, definitely anecdotal, but I've always felt like the best time to buy a laptop or home appliances was right between Xmas and Tax season. For some reason it seemed like the sales just weren't as good during peak Rebate time...
UBI is a theoretical fantasy that hasn’t worked every time it’s tried.
I am sorry, but what is this peasantry? It is not his money to take. Where do you get this idea of economy of like a 16th century labourer in indentured servitude?
> UBI is a theoretical fantasy that hasn’t worked every time it’s tried.
Please present your sources, because the largest scale UBI experiment i am aware if was quitr succesfull. Planet Money even has an episode on it. https://www.npr.org/sections/money/2017/09/22/552850245/epis...
(This is the "basic" part of UBI.)
For most employment, especially lower-paid, I would say there is a hassle factor, and if a job doesn't pay UBI plus hassle compensation, it won't seem like a good deal to keep that job.
The outsourcing is a big deal for exactly the point you list. In order to get someone with no need for income to survive to work an unpleasant job, you'll need to pay them a pretty good sum because otherwise they'll spend that time investing in themselves (or just not working). Improving labor relations for the poor is a nice idea, but all that newfound employee leverage is worth exactly nothing if the process is moved to another country.
Create money, put it into the economy at the bottom. Take it back out when it bubbles up to the top, and destroy it. Kind of like how your body creates red blood cells that bounce around transporting oxygen for about three months before breaking them down again.
There has been hardly any inflation in developed economies for the last thirty years. Japan and Germany have negative interest rates.
Yet the political wisdom of the day says that you can print money to bail out the banks, you can print money to inflate the stock market and yhats fine, but as soon as you try any kind of UBI\ help the poor, inflation will come for us all.
UBI is great, but if it's paid for by printing money instead of redistributing it, it will absolutely cause inflation.
You have a strawman situation because it comes from the obvious side of the aisle who doesn't want UBI, but ignores the fact that with UBI would come a motley of other regulations against exactly this type of predatory capitalism that created the need for UBI in the first place.
Don't worry, if UBI gains steam; nobody will forget what caused it and corporate shareholders won't be able to wiggle themselves free.