Universal basic income (UBI) has supporters across the political spectrum. The idea is that if every citizen received a payment from the state to cover their living costs, it this will allow them the freedom to live as they choose.
But voters who turned down a UBI pilot in a recent referendum in the German city of Hamburg apparently found something to dislike. A frequent argument against UBI is that recipients will decide to work less. This in turn will make labour (and consequently labour-intensive products) more expensive.
Indeed, a recent study on a UBI experiment has found that recipients of an unconditional monthly transfer of US$1,000 (£760) were significantly less likely to work. And if they did work, they put in fewer hours than a control group who received only US$50 per month.
UBI fundamentally doesn’t work unless you have controls in place against inflation (read: profiteering). Give everyone an additional paycheck? Welp, I guess prices of everything just rose to compensate this sudden new “cash”.
The goal of UBI isnt to “make everyone more wealthy instantly”, that would be unrealistic. So claiming it “doesnt work” because it doesnt make everyone 1000$ richer is just wrong.
One of the main goals is to help people with low/no income, who struggle to get their lives on track, by taking away the immense stress they experience from the struggle for survival. This could turn their downward spiral back upwards.
A months worth of groceries wont get 1000$ more expensive. For the median employee it might not make a difference as it might cancel out, for the rich probably neither, they arent really influenced by inflation. But it would have a huge impact on lower-income households.