Inflation and Universal Basic Income
Where are the checks to balance Corporate Greed?
Watching inflation rise, fresh after securing financial independence, is painful and terrifying. I worked hard to get to a point that I can financially support myself, my disabled adult son, and pay for my daughter’s college tuition, all without dependency on an abusive person’s involvement in our lives. I am frugal, but we are comfortable.
Right now, I’m watching my currently good income turn into not quite enough. An argument circling news outlets and social media is that the injection of “free money” has caused a spiral upwards on the costs of everything. But why? “Well it’s supply chain issues, of course.” And yet that’s not what the data show. The cost of goods are going up because they can, because the market rules in their present form allow it, and there’s nothing in place to keep it in check.
The point of free money injection isn’t entirely wrong, look at all the people kept afloat during the pandemic. But from a corporate standpoint, if there wasn’t a sudden flush population of consumers, there wouldn’t be increased demand. The natural order of capitalist market rules is to interpret the available money as something to get their fair share of, to get it while it’s good. “If consumers can suddenly afford to buy then obviously the price point is too accessible, there’s money being left on the table, and that just won’t do.” Corporate greed parades around with the mantra “it’s just business” to the detriment of everyone else.
The idea of a Universal Basic Income (UBI) is nice, but without the checks in place to hold business accountable for disrupting the progress of the people, all a UBI will do is raise the minimum costs and move the goal posts that so many already can’t reach. Studies show offering a basic income improves peoples’ lives. But the studies are applied to small populations restricted to a cluster of need, not a wide scale event involving an entire state or country. Right now in our country, when the bar is raised for everyone, and we ensure we’re all meeting it, nothing guards us from the corporate greed that feels justified in it’s assertion that they should charge more while holding up their hands, declaring their innocence and citing “market rules.”
There’s a bill in my state making it’s way around, promising a basic income for everyone, and I’m on the fence. A part of me thinks it’s silly to give out free money to people like me and everyone else in higher income brackets. We’re not suffering, we’re not on the verge of destitution if a doctor’s bill hits. Another part is eager simply so I can chuck it at my student loans, quickening the pay off and saving me a few thousand dollars on interest. But the bigger problem is that the bill lacks provisions that will prevent runaway corporate greed from seeing all that cash and deciding to capitalize, as they do best. Rents and housing go up because “hey, people can afford it and clearly indicates our property value must go up to account for the new baseline of affordability.” Groceries and every day goods, “well, wouldn’t want to under value these either.” Vehicles, electronics, software, entertainment, “look don’t blame us, $20 is the new $1.”
I’m not an economist, my business and finance knowledge is in fintech, but I know the real world experience. I can’t afford to buy a house, a townhouse, and right now, not even a condo in the region I live. My tightly controlled budget shows that the cost of food, medical and cleaning supplies, clothing and entertainment has all increased while my pay stays the same. And I’m in the Great Resignation population, jumping ship for a much better base pay and great benefits. Somehow, in the weird upside down world we live in, it’s proving not quite enough.
Unfortunately, I don’t have a lot of faith that a UBI will do as much good on a wide scale setting as we hope. The COVID-19 pandemic has shown that an injection of cash without the checks to balance corporate greed just reduces our spending power. If we could dial back the earnestness of politicians putting out bills like this and send them back to include provisions to tamp down on corporate greed, I could get behind the bills. As it stands, it just feels like all we’re doing is setting a new minimum that will soon hurt everyone. UBI is an inflation trap waiting to happen unless we couple it with the critical counterbalance of reining in corporate greed.
