[mntmoss]

Yes, this argument is one shared with some arguments for minimum wage. When a sector of the economy can set wage freely, it often races to the bottom on price competitiveness, neglecting automation and training improvements; businesses that attempt to raise their quality get pummelled by the higher costs and risks relative to competition. A rising minimum wage standard therefore encourages modernization of the work environment.

With UBI a similar effect is had on the demand side: If you assume a higher base of income, then consumer credit, payday loans, friends-and-family-favors, etc. become less of a necessity for low-income workers. Higher-income workers with long-term debts like mortgages and student loans become free of their debt more quickly, and face fewer consequences if their income takes a hit. The workforce is therefore disentangled from a set of predatory financial interests that chain them to needing their current job and to stay in the good graces of their financial backers. Even a very small amount of UBI will create a substantial reduction in poverty traps, domestic abuse, and labor mistreatment.

[TazeTSchnitzel]

For similar reasons I have recently been entertaining the idea of government as employer-of-last-resort. Essentially, have the government spend lots of money on creating businesses designed to employ the unemployed, with good working conditions and pay, and don't immediately focus on making the operation profitable. This would, I hope, create positive pressure on wages and conditions in low-skilled jobs: no stream of desparate people they could rely on, and an alternative employer raising the bar.

I wasn't thinking of COVID-19 when I contemplated it though. It's not a new idea of course.