[rualca]

> Food and clothing depend on other things (cost of employees, equipment, materials, etc.) When the costs of those things rise, the cost of food and clothing will have to rise.

Not really. You're pointing to production costs, but production costs just define the price's lower bound, not the price itself.

Price depends solely on willingness to pay and pricing strategy, which is higher than the production cost when the product/service is not subsidized or a loss leader.

[oconnor663]

It seems like there are two effects we're considering at the same time:

1. UBI might increase people's willingness to pay for goods in general, and the prices of goods that are most strongly driven by willingness to pay would rise. (Rent in expensive cities might be an example of this. Milk, soap, and socks probably aren't.)

2. To the extent that UBI is paid for with higher taxes, the prices of everything would go up. This seems obviously true on average and to some extent, but the specific numbers matter a lot. For example if prices go up by 10%, but the people whom UBI is designed to help see their income rise by 20%, then UBI is achieving its stated goal. (Importantly, the hypothetical 10% rise in prices doesn't reflect wealth being burned or spent, but rather resources being moved around in some sense.)

[rualca]

> 1. UBI might increase people's willingness to pay for goods in general, and the prices of goods that are most strongly driven by willingness to pay would rise.

It's reasonable to assume that UBI would be linked with an increase in the demand for some goods and services, but there is no indication that this would reflect in a proportional increase in prices. For example, those who live in poverty already tend to purchase substitute goods due to lower price, which is reflected in some aspects such as the link between poverty and malnutrition. In this scenario it's likely that the increase in purchasing power from UBI would actually cause a shift in the market so that it brings down the demand for said substitute goods and instead spread the newly-found demand through other products.

The same scenario also applies to other markets, such as housing. If UBI grants you a little bit of economic freedom so that you are no longer tied to a specific job or place of residence or even access to public transportation, you can also consider moving to a better/cheaper place somewhere else without your livelihood being a constraint.

Keep in mind that one of the enablers of living frugally/off-the-grif is ensuring that you secure your financial needs. Once people are no longer forced to endure a horrible job to make ends meet, they start to make changes to improve their lives.

[BobbyJo]

> Not really. You're pointing to production costs, but production costs just define the price's lower bound, not the price itself.

I was replying to a comment about how intensely competitive these markets are, and how that means margins are driven down. If your business is operating at a very low margin, and costs rise, you will necessarily raise prices, because you are already operating on the price floor.

Low margin businesses are defined by the price floor (the cost) being very close to, if not equal to, the price sold at.