Monday, March 05, 2007

Why a state-ordered guaranteed minimum annual income for all wouldn’t work
As some in Canada want to do
Like the minimum wage idea over here (of which the guaranteed income seems an extension) it's a good idea in principle but doesn't work in practice: all that happens is that those on the bottom rung get paid y as a minimum instead of the more crappy x, and those immediately above who were being paid y demand and get y+z and so on. In order to afford these increments in wages, employers have to put their prices up and the ensuing inflation effectively devalues y back to x.
From Ship of Fools.

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