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> Sure, if everyone today had an extra guaranteed $1,000 every month, it would short-term be fantastic. But the economy would eventually adjust, as it always does. Rent would slide upwards, so would goods prices, etc, to the point where we wind up where we are today with minimum wage (perpetually raising it every few years in a never-ending game of cat and mouse, the essential cost of living). If implemented by idiots, I agree basic income would tend to result in the consequences you describe [1]. It is very important that any implementation of basic income also do away with minimum wage at the same time. If a person is currently working a job which pays them $1500 / month, then ideally basic income would result in (assuming that we agree on $1000 / month as the minimum subsistence-level income) that same person making $500 / month at the same job, and receiving $1000 / month in basic income. So to be clear, anyone currently getting a wage exceeding the agreed-upon basic income level, should not see much difference in how much they take home each month. Properly done, the only price inflation you should see are from people who are seeing more money each month than they were before, because they were previously working at below-subsistence wages. But even then, they were probably receiving other government assistance anyway, and with basic income we'd start phasing that stuff out as well. [1] Which, I admit, means it stands a good chance of happening that way. Difficulty of proper implementation is an argument against basic income, but it is also reflective of our broken, irresponsible government. |
I don't necessarily oppose BI, but I am very skeptical of it actually working in practice for any nation. We'll have to wait and see how Finland's experiment works in the long term, but also we should recognize Finland is a small nation (5.3 million population, or about 45% of NYC's population) without a major economy like the US. The successes of one small nation don't necessarily translate into successes for large nations.
> It is very important that any implementation of basic income also do away with minimum wage at the same time.
I would argue, and you touched on, that we would have to do more than just drop minimum wage. We'd have to do away with all forms of social welfare safety nets.
There is a good argument that government would actually save money annually by shifting all forms of social welfare into a BI, due to reduced overhead of management, number of concurrent (and sometimes redundant) programs, folks who abuse/scam the system, etc. With a BI, that would be it, nobody gets any more or less, and you're free to spend it how you see fit.
> the only price inflation you should see
I'm not an economist, however I do believe some inflation is natural. This would mean, that over time, BI would have to be increased, just like our current-day minimum wage program. If we can somehow generate a self-sustaining feedback loop on a BI economy, maybe that works.