I think it might help some people like artists, writers, etc, but in the long run, I think it will just create inflation, and in the US it will create higher home prices.
Any time more money is injected into an area, it creates inflation. For example, when women started to enter the work force starting in the 70/80s, it lead to a dramatic rise in prices. Of course, I'm not saying that women entering the workforce is bad, I'm saying that when households effectively started doubling their income, it didn't result in more saved money, it resulted in higher house prices.
The same goes with the income tax deduction for mortgage interest. The idea is that more money would go back to the mortgage payer, however, all it did is factor into the calculus of buying homes, so people could funnel that "savings" into a higher mortgage payment.
If the US decided to give everyone $1000/month for free, I'm pretty sure that would just make the house prices higher by the equivalent amount.
Is there any evidence of women entering the workforce at different points in time being tied to inflation?
I could be mistaken, but I thought it was pretty well agreed upon that the extremely high inflation of the 70s was due to the oils shortage and significantly higher gas prices. Gasoline was (and is) essential to just about every business and increased costs including transportation costs.
In the same way "free energy" increases production per dollar, scarcer/costlier energy reduces production per dollar which can be expressed as inflated prices.
Or in one form simply employees demanded higher wages to still be able to afford to drive to work, and companies demanded higher prices to account for higher manufacturing and shipping costs on everything.
Increase in cost of labor and increase in cost of goods is inflation.
I would need to see data before I believe that women entering the workforce resulted in higher home prices in a significant way. I have no proof, but I guess it allowed women to more accurately value themselves in the market, therefore helping them pair up with other high income men, and causing home prices to go up where dual high income households tend to congregate. But on the other end of the spectrum, women may have displaced men and caused pay for men to go down, thus total household income would not have risen as much. Even more, men and women on the lower end of income scale are less likely to marry, therefore would have even less purchasing power when (or if) buying a home.
> have no proof, but I guess it allowed women to more accurately value themselves in the market, therefore helping them pair up with other high income men, and causing home prices to go up where dual high income households tend to congregate.
This makes sense to me. Even more so if we make the assumption that it's easier to be a married couple making $200K combined (e.g. 125K and 75K) vs one member of the marriage making $200K.
> in the long run, I think it will just create inflation
Not if the basic-income is funded by taxes or other such sources. In which case all you're effectively doing is taking money (ie, resources) from the upper-class and redistributing it to the middle class. This is the exact same principle behind progressive taxation, as opposed to a flat tax.
The fact the US left to gold standard on August 15, 1971 was a necessary condition for this inflation to happen. The cause, of course, is a confluence of many factors. With complex adaptive systems like an economy there really is no one reason something happens.
> For example, when women started to enter the work force starting in the 70/80s, it lead to a dramatic rise in prices.
I agree with the earlier point about inflation due to free money, but this one doesn't follow.
Women mostly entered the workforce during the war. Not to mention cheaper labor (which would happen if more labor enters the workforce) should actually cause the prices of goods to drop, not rise.
However in case of UBI, labor pool isn't being increased (it's being shrunk), and more money is being given to that segment of the society (taken from other segment of the society), which would mean the prices for the goods which these people wanna buy would go up.
> case of UBI, labor pool isn't being increased (it's being shrunk),
That's not what the few experiments on UBI say. Generally the only people to put in fewer work hours in the Canadian experiment were mothers with small children. See https://en.wikipedia.org/wiki/Mincome#Results
I know I'm focusing on one small part of your post - but don't forget that guaranteed income could enable folks to live in places with very low cost of living, but little to no economy where that wasn't previously possible for them without guaranteed income
Inflation would depend on the way labor responds. If folks continue to work the same number of hours, inflation is likely. But what if folks use the extra $1000/month to justify spending more time on non-income producing activities?
If people decide to work less then you have even more price inflation. Not only are you increasing effective demand by injecting more money, you're also decreasing the supply.
The only way prices stay the same, or decrease, is if productivity increases in line with the extra income.
Nitpicking a minor detail since this is a common misconception:
> Most recently, it became the country’s first organic state, eliminating the use of pesticides and fertilizers.
"Organic" does not mean "eliminating the use of pesticides and fertilizers". You can still use /organic/ pesticides and fertilizers, some of which (e.g. copper salts) can pose risks to health and/or the environment.
When a UBI experiment runs for only a limited-time or can be ended abruptly by a new government (e.g. Finland's just-finished 2-year trial run, Ontario's 2017 project ending abruptly after a year, or Stockton's proposed 18-month trial), the data it provides is of no value whatsoever when determining the viability of a permanent scheme.
One of things I am super interested in is how the outcome of this experiment is measured. How do people end-up using this money, how local economy is impacted and does this address any issues like poverty/education.
As I understand it, some small Indian tribes already have something very much like guaranteed income for their members, funded from casino profits. Anecdotally, the outcomes seem to mildly positive - worth noting, but not that dramatic; the social issues in Indian country are quite simply huge, and it's not quite clear that even a guaranteed income is enough to make a dent. I'm not aware of any formal academic paper analyzing these outcomes, however.
Indian tribes = Native American / First Nations tribe in US/Canada. Derived from misunderstanding by the stupidest explorer that ever lived, Christopher Columbus.
Indian = from India, a country in Asia. An Indian state in the country of India is the topic of this article.
Reading between the lines, it sounds like it's going to be mainly redistributing income from hydro-power generation sold to the rest of the country, which makes it sound similar to things like the Alaska Permanent Fund (i.e. a dividend paid from exceptional resource revenues which is below local subsistence levels rather than a taxpayer-funded redistribution programme)
Some Indian sources (which also don't seem to have a figure_ suggest they're also proposing top up the fund by cutting other subsidy programmes, so it'd also be interesting to see the net impact on different sections of society if it happens
Any time more money is injected into an area, it creates inflation. For example, when women started to enter the work force starting in the 70/80s, it lead to a dramatic rise in prices. Of course, I'm not saying that women entering the workforce is bad, I'm saying that when households effectively started doubling their income, it didn't result in more saved money, it resulted in higher house prices.
The same goes with the income tax deduction for mortgage interest. The idea is that more money would go back to the mortgage payer, however, all it did is factor into the calculus of buying homes, so people could funnel that "savings" into a higher mortgage payment.
If the US decided to give everyone $1000/month for free, I'm pretty sure that would just make the house prices higher by the equivalent amount.