UBI, or universal basic income, is a form of direct cash assistance to help the most vulnerable get back on their feet. A new study in Denver suggests it works.
  • @jarfilEnglish
    1•1 year ago

    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)

    There needs to be some form of price control

    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.

    Basically, if rent, food, and utilities go up by 50% but I’m only earning 33% more.

    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.

    • @StovetopEnglish
      1•1 year ago

      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.