If you pay a “living” wage, prices of goods will go up, and soon it will no longer be a “living” wage.
What you describe is one of my concerns with UBI, but the devil is very much in the detail.
Granted, you can often play political games with labor, such as only raising the wages of workers in the USA, while leaving the labor making the plastic trinkets in who knows what third-world country to continue to struggle. In that sense, it doesn't necessarily happen linearly. Not really achieving the goal of a "living" wage then, though.