[habosa]

The cost-rising point is greatly simplified. Yes the cost of labor will go up, however this does not mean the prices rise so much that your basic income is not very helpful, and here's why:

  * Only the cost of labor will increase, the cost of other inputs to making goods or providing services will not.
  * The cost of labor will not increase uniformly, but rather it will increase most at the low end (people who are more likely to refuse employment due to basic income) and less at the high end.  A software engineer making $120k is not likely to decide to stop working because he now gets $10k from the government.  However a part-time fry cook making $6k a year might.

So you have a slight increase in the price of goods (the x% of the cost of goods that was from low-paid labor just got y% higher) but an increase in purchasing power that is larger than x% * y% so overall people now have more purchasing power.