Doesn’t this argument also apply to any form of social security or monetary wealth redistribution whatsoever and e.g. imply that giving people an unemployment benefit of X dollars would give them zero benefit compared to a counterfactual world where they got 0 dollars?
The “universal” part of UBI is an important difference. If you print money to give to only one person then that won’t be inflationary, but the more beneficiaries there are the more inflation will cut into the gains they each individually experience. So unemployment benefit, by hitting a smaller number of people, has less of this.
I think it is plausible that introducing UBI would make certain goods go up in price. For example rents right at the bottom of the market might go up (because landlords know the tenants can pay it), but they might go down at the top (due to the raised taxes cutting into rent budgets of the rich). That would feel exactly the same as inflation to the people effected, although I suppose technically it would not be inflation if the hit at the top balanced it on average. This would increase the supply of “poor person” goods, because the poor can afford more of them, so more will be manufactured.
(Inflation is a weird one because every person experiences a different inflation rate, depending on how the prices of the goods they buy are changing. The headline rate is some kind of average, which for many people might not be very close to their reality.)
The “universal” part of UBI is an important difference.
That is true, but note that relative to the current day, a UBI (at least in the form of the UBI schemes I’m most familiar with) would also only go to a relatively limited number of people. For people already earning a decent income, their taxation would be increased to eliminate the gain from the UBI; and a lot of the people who would income-wise be in a position where their UBI wouldn’t just be taxed out, are already on some form of social security that might be paying them the same as the UBI or more. (More, because the sum for the UBI would be chosen on the assumption that it would provide an income that was enough to make by but was still meager enough to incentivize work; whereas people who are e.g. on a disability pension because they are genuinely incapable of working and can’t be incentivized into it are thought to deserve more than just the bare basic minimum for living.)
I haven’t seen anyone run the numbers on this, and it of course also depends on the details of the exact scheme, but I guess that the number of people whose income would increase due to getting a UBI would be smaller than the number of people who are already getting the same amount or more through some other form of social security.
There’s also the consideration that there might be some people who’d like to quit their jobs, which currently pay them more than a UBI would, but are afraid to do that because they’re concerned that they couldn’t find another job or qualify for social security if they did. But with a UBI and a guaranteed income they would be more willing to quit, even if it meant a cut in their overall income. So there are some people who might move from medium-income to low-income, and have overall less money. Probably not a huge fraction but still something that would somewhat counterbalance the “inflationary on the lowest incomes” effect.
Doesn’t this argument also apply to any form of social security or monetary wealth redistribution whatsoever and e.g. imply that giving people an unemployment benefit of X dollars would give them zero benefit compared to a counterfactual world where they got 0 dollars?
The “universal” part of UBI is an important difference. If you print money to give to only one person then that won’t be inflationary, but the more beneficiaries there are the more inflation will cut into the gains they each individually experience. So unemployment benefit, by hitting a smaller number of people, has less of this.
I think it is plausible that introducing UBI would make certain goods go up in price. For example rents right at the bottom of the market might go up (because landlords know the tenants can pay it), but they might go down at the top (due to the raised taxes cutting into rent budgets of the rich). That would feel exactly the same as inflation to the people effected, although I suppose technically it would not be inflation if the hit at the top balanced it on average. This would increase the supply of “poor person” goods, because the poor can afford more of them, so more will be manufactured.
(Inflation is a weird one because every person experiences a different inflation rate, depending on how the prices of the goods they buy are changing. The headline rate is some kind of average, which for many people might not be very close to their reality.)
That is true, but note that relative to the current day, a UBI (at least in the form of the UBI schemes I’m most familiar with) would also only go to a relatively limited number of people. For people already earning a decent income, their taxation would be increased to eliminate the gain from the UBI; and a lot of the people who would income-wise be in a position where their UBI wouldn’t just be taxed out, are already on some form of social security that might be paying them the same as the UBI or more. (More, because the sum for the UBI would be chosen on the assumption that it would provide an income that was enough to make by but was still meager enough to incentivize work; whereas people who are e.g. on a disability pension because they are genuinely incapable of working and can’t be incentivized into it are thought to deserve more than just the bare basic minimum for living.)
I haven’t seen anyone run the numbers on this, and it of course also depends on the details of the exact scheme, but I guess that the number of people whose income would increase due to getting a UBI would be smaller than the number of people who are already getting the same amount or more through some other form of social security.
There’s also the consideration that there might be some people who’d like to quit their jobs, which currently pay them more than a UBI would, but are afraid to do that because they’re concerned that they couldn’t find another job or qualify for social security if they did. But with a UBI and a guaranteed income they would be more willing to quit, even if it meant a cut in their overall income. So there are some people who might move from medium-income to low-income, and have overall less money. Probably not a huge fraction but still something that would somewhat counterbalance the “inflationary on the lowest incomes” effect.