This has been a common argument made against raising minimum wage.
There is some truth to it, companies absolutely do try to profiteer however in Canada and many states that have raised their minimum wage the quality of life of the average person did increase despite these effects.
Moreover every test of universal basic income not only increased the quality of life of the people but tax revenue as well because it gave citizens the economic mobility to seek more gainful employment and education.
Yeah, in a healthy developed economy inflation is a sign of more economic activity. When people have money, they spend it (duh). This balance between low employment and low inflation is what the Federal Reserve tries to achieve through managing interest rates.
Worrying about a little inflation is missing the forest for the trees. It’s more important that quality of life improves and the economy does better.
I’m not worried about a little healthy inflation, I’m terrified about the 10+% annual inflation we’ve seen the last few of years continuing or worsening. People are watching their income and savings being gobbled up by ridiculous prices, and it hurts. I wasn’t trying to state that giving people money would for sure cause additional price increases or even argue against giving the money. I was more or less just expressing concerns over a possible outcome. Since it is indeed a possible outcome, hopefully anyone passing any legislation around a UBI also considers it and either passes accompanying legislation to address the risk, or gives education on money management and supply/demand principles so that everyone doesn’t just rush out and throw all their new money at companies, prices be damned.
Studies show that people don’t “throw all their new money” at stupid things when they get a small amount of money. They fix their car or buy their kid new shoes, things they needed but couldn’t afford.
Inflation was never near 10%, let alone above it. I think you need to do a bit more research on these topics.
Official federal inflation over the last 3 years has been between 6-7%. That’s not indicative of local inflation, nor does it account for hyper inflation on specific goods like groceries. I have watched the prices on certain grocery items increase up to 100% in the last couple of years. I’ve watched some discretionary goods increase between 30-50%. My rent has been increased 22% in the last two years. So the fed not reporting 10% inflation for the year doesn’t necessarily mean that people’s purchasing power hasn’t been reduced by a greater margin.
Studies show that people living below their means will spend additional income on necessities, bills they’re behind on, etc. That’s fucking fantastic! But we’ve also seen that people who are current on bills and not in poverty will spend windfall money on luxury goods or entertainment. That’s also good because it stimulates the economy. People who are well off will just save or invest windfalls.
Again, I’m not trying to argue against UBI. I’m just expressing concerns over how the extra capital will influence pricing, if at all.
Inflation hasn’t been 6-7% for three years. It was only around that level in 2021 and 2022. And no, the BLS is not tracking your individual rent and things you see in the grocery store. They track averages.
People argue about what should be included in CPI, and how accurately it measures inflation. But what you’re saying is just wrong, or exaggerated based on your personal experience.
So you are looking at an old article that only references the first two months of the year. If you check the actual BLS website, you’ll see something very different:
This has been a common argument made against raising minimum wage.
There is some truth to it, companies absolutely do try to profiteer however in Canada and many states that have raised their minimum wage the quality of life of the average person did increase despite these effects.
Moreover every test of universal basic income not only increased the quality of life of the people but tax revenue as well because it gave citizens the economic mobility to seek more gainful employment and education.
Yeah, in a healthy developed economy inflation is a sign of more economic activity. When people have money, they spend it (duh). This balance between low employment and low inflation is what the Federal Reserve tries to achieve through managing interest rates.
Worrying about a little inflation is missing the forest for the trees. It’s more important that quality of life improves and the economy does better.
I’m not worried about a little healthy inflation, I’m terrified about the 10+% annual inflation we’ve seen the last few of years continuing or worsening. People are watching their income and savings being gobbled up by ridiculous prices, and it hurts. I wasn’t trying to state that giving people money would for sure cause additional price increases or even argue against giving the money. I was more or less just expressing concerns over a possible outcome. Since it is indeed a possible outcome, hopefully anyone passing any legislation around a UBI also considers it and either passes accompanying legislation to address the risk, or gives education on money management and supply/demand principles so that everyone doesn’t just rush out and throw all their new money at companies, prices be damned.
Studies show that people don’t “throw all their new money” at stupid things when they get a small amount of money. They fix their car or buy their kid new shoes, things they needed but couldn’t afford.
Inflation was never near 10%, let alone above it. I think you need to do a bit more research on these topics.
Official federal inflation over the last 3 years has been between 6-7%. That’s not indicative of local inflation, nor does it account for hyper inflation on specific goods like groceries. I have watched the prices on certain grocery items increase up to 100% in the last couple of years. I’ve watched some discretionary goods increase between 30-50%. My rent has been increased 22% in the last two years. So the fed not reporting 10% inflation for the year doesn’t necessarily mean that people’s purchasing power hasn’t been reduced by a greater margin.
Studies show that people living below their means will spend additional income on necessities, bills they’re behind on, etc. That’s fucking fantastic! But we’ve also seen that people who are current on bills and not in poverty will spend windfall money on luxury goods or entertainment. That’s also good because it stimulates the economy. People who are well off will just save or invest windfalls.
Again, I’m not trying to argue against UBI. I’m just expressing concerns over how the extra capital will influence pricing, if at all.
Inflation hasn’t been 6-7% for three years. It was only around that level in 2021 and 2022. And no, the BLS is not tracking your individual rent and things you see in the grocery store. They track averages.
People argue about what should be included in CPI, and how accurately it measures inflation. But what you’re saying is just wrong, or exaggerated based on your personal experience.
2021: 7%
2022: 6.5%
2023: 6%
Source: https://www.investopedia.com/inflation-rate-by-year-7253832
Okay
You missed this:
So you are looking at an old article that only references the first two months of the year. If you check the actual BLS website, you’ll see something very different:
https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm
You just went to Google and clicked the first link you saw. That’s why I told you to read more.