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this post was submitted on 06 Oct 2023
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Sure, prices inflate... and the guy who had $0 to buy nothing at the cheaper prices, still has $1000 to buy something at inflated prices.
I think the problem here is that the guy who can now afford a non zero number of things is counterbalance by the person who is just outside of the threshold for receiving the $1000 stipend. The person who previously could afford very few things that is now able to afford even less. It averages everyone out which is good for those who have nothing it is a horrible slap in the face to people who are only slightly better off
"Universal" means for everyone, no threshold. If there is a threshold, that's a subsidy, not a UBI.
To keep content the likes of "I earn my money, so fuck those who don't", some subsidies complete people's income "up to" some amount, like up to $1000/month. Guess it's a slap to the face of those working to earn $1050... and maybe they deserve it, for not negotiating a better pay.
I believe they're referring to an undefined threshold of buying power. E.g. if I earn $3000 but my take home is $200 after taxes, rent, food, utilities, and student loan repayments, abusive price hikes on basic needs could reduce my take home below the point of sustainability, even factoring in an extra $1000 on top of that. Basically, if rent, food, and utilities go up by 50% but I'm only earning 33% more.
Might be an extreme example, but I think it's certainly a consideration that needs to be made when putting together the legislation. There needs to be some form of price control, otherwise those UBI checks could basically just become a free gift from the government to exploitative corporations and landlords.
The abusive price hikes scenario, is what happens when subsidies are tied to a specific purpose and income threshold: the providers of that particular service can increase their prices by the subsidy amount for everyone, while only those qualifying get the actual subsidy, and everyone else gets swindled. (This has also been tried, and proven)
The price control with an UBI, is the lack of a single provider who can blindly increase prices without getting undercut out of the market, meaning the increase would get spread over all services, particularly those someone earning $0/month would spend their money on, like rent, food, and utilities.
They wouldn't go up "by 50%" (or more precisely, the % is irrelevant), they'd go up, taken together, by less than the UBI amount, which you'd also be receiving. Otherwise, those earning $0/month wouldn't be able to afford them, and since it means a direct increase to provider margins, anyone trying to rise them more, would get undercut out of business by someone else who'd be fine with a slightly lower margin increase.
That means, the basic services you worry about, would increase by at most the same UBI amount which you'd also be getting, leading to a net zero or barely positive effect.
Your $200 take home wouldn't change, and only if you wanted more rent, food, utilities, or whatever an UBI-only person would buy, you'd find those $200 would get you less of those... but only of those, not of services an UBI-only person wouldn't purchase.
A jet ski would still cost almost the same, only increased by the extra amount business owners could pay due to increased profit margins.
Overall, it would mean a huge influx of cash to the top 1% through "trickle up", which they could spend on more expensive toys, but it would still mean a night-and-day difference to those below the UBI level, little difference to non-business owners earning barely a few times above it, and a slight margin increase to business owners.
Basically a win-for-all scenario.
I do want to believe all of that, but I am also not going to underestimate the tendency for de facto oligopolies like ISPs to continue colluding on prices, or landlords disproportionately raising rents to "keep out the (probably non-white) poors" who have been gifted greater economic mobility.
I'm just not keen on any policy which assumes that the market can be trusted to course correct itself in a way that is healthy and fair for consumers, because that is so often not the case. I would honestly prefer a system with no UBI, where people simply do not need to buy basic necessities at all. Shelter, food, and utilities should be fundamental rights that people shouldn't need to pay for in the first place, and income would just allow people to improve the quality of those things should they desire.
The idea behind a UBI is that it's given to everyone (Universal), not just the poorest. So this wouldn't be a problem with a true UBI
EDIT: I notice in the article that it was only given to certain people. In that case it's not really a UBI, but maybe I'm just getting pedantic about the Universal bit