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Discussion in 'General Business Forum' started by Talay, Aug 9, 2019.
Hey, you're the one finding problems, I'm coming up with solutions here. No pleasing some people...
You want to give me problems that's why.
Without showing you know what your solution is solving, if anything.
...we should nationalise Fortnite
Well I'm free the 18th September for 2 weeks.
How much you planning to spend to buy it?
I haven't yet heard a credible answer to the question that I ask whenever I encounter UBI utopia:
If you give the entire population a chunk of extra cash, what will they spend it on and what will be the effect of that expenditure on prices?
Basic economics suggests that prices for goods and services with finite supply (i.e. most of what we buy as consumers) will rise, so many indiciduals would be no better off if everyone received a fixed payment.
Regarding the original question on NMW, its perhaps worth noting that the sector of the population being paid NMW has enjoyed far higher wage inflation during the last decade than those earning more. The government knows this, and is in no hurry to exacerbate that.
What would you do with an extra £20-25 per day?
An extra 25 what a day?
Besides pay the extra price for goods & services due to the extra taxes?
I'd just drink better
For those with very low incomes, an increase in their disposable income will result in them buying more of the same, primarily basic goods, which would not tend toincrease prices because, while the supply of everything is finite, those basic goods tend to be unaffected by increased demand.
Are those basic goods affected by increased costs though?
The extra taxes and higher prices the company producing the goods and the company selling the goods have to be paid somehow. They cover the increased costs by what method? Increasing prices charged to customers?
May I ask you to provide an example please?
That reeks of oxymoron. I think of economics as a sort of Mandelbrot set; nothing I have seen of modern life suggests I am much mistook.
Bread, milk, toilet paper.
Will suppliers of goods and services to makers of that stuff and sellers of that stuff put prices up when taxes go up? Yes or no?
You don't think that anybody in the supply chain (farming/foresty, manufacturer/production, logistics, wholesale, distribution, retail) might work out that if everybody uses toilet paper at a constant rate but everybody suddenly has extra money, they could increase the price of it?
With respect, this is a very odd question. You clearly understand the principles of a market economy - probably much better than I - so do you really think that price competition for abundant universal commodities would just disappear? If it did, I would certainly hope that price-fixing investigations would start sharpish.
It - universal basic income, ubi - is an interesting idea, and one that I’m sure will keep raising its head from time to time.
It’s introduction would lead to some inflationary pressure, but I don’t think it would be that great, the key word is basic, it wouldn’t be a huge sum of money and there wouldn’t extra money in the system- I suspect the aim would be to keep the mean after tax income the same, but reduce the standard deviation, I.e. reduce the gap between the richest and poorest. As the poorest in society tend to recycle their money through the economy more than the wealthy (who tend to take money out of circulation in the form of savings -either onshore or off) it could be argued that it would be beneficial to the economy.
However, an argument against is that money would be given to people who do nothing (= don’t deserve it.) But that argument already exists - look at how people moan about those who claim benefits. A ubi could negate this argument as how can it be unfair if x gets £££ from the state if you also get £££ from the state?
The min wage could be abolished so the OP could offer a job for, say, £5 an hour which someone may now be willing to do to top up their income, but at the moment couldn’t afford to take as they couldn’t live on that amount.
It might transform social care - freed from all adults in a family needing to work, some may chose to not work but care for young children, elderly parents etc.
But, despite the above, I remain suspicious and have in no way made up my mind on the subject. I simply haven’t thought about/explored it enough to arrive at even the most basic (pun intended) conclusion.
Switzerland recently (2016/17?) held a referendum on introducing a ubi but voted heavily against it (circa 77%) the main anti-argument was that it (ubi) would be a magnet for people to move to the country. You certainly would end up with a two tier system - those entitled to ubi and those not - perhaps leading to an even more unfair society than before ubi.
Saudi has a ubi like system- essentially a (male) Saudi National doesn’t have to “work” - they will be notionally employed by the state, but need to do very little - but the Saudi economy is very different from ours