Some people are being given thousands of dollars with no strings attached in universal basic income trials. They mostly spend the cash wisely.
Some people are being given thousands of dollars with no strings attached in universal basic income trials. They mostly spend the cash wisely.
A common question about universal basic income, or UBI, is how people spend the money, but early trials are showing promising results.
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My point is that people with more money would have more "fun" money, and people with less money would have more room for essentials.
You'd think the bigger market would be to pull at the people with "fun" money, rather than the people who can now afford a well-rounded diet.
Yeah, things will go up in price. It's like when minimum wage goes up. But in all the studies I've seen on minimum wage going up, the minimum wage earners generally win out over rising prices (being better off after the increase).
I'm sure some store has done the math that it's better to sell 2 boxes of cookies to the poor guy than to raise the price to get the maximum profit off of an individual box. And then there are places with competition...and some staples are already generally competitive (such as bread) to the point of being loss leaders in grocery stores.
I certainly hope you're right. All I picture is the dollar stores suddenly becoming $2 stores as everything just shifts to be more expensive with very few people improving their financial situation at all.
The funny part is that you're describing things that are happening in my country and we don't even have UBI.
Our Dollar stores are already $2+ dollar stores. Anything that's $1 is smaller than it was a decade ago, or is fewer units than it used to be.
The price of all kinds of stuff is increasing in price, and rent is already completely unaffordable, including places that are multi-hour commutes away from the places with jobs.
Someone working full time at minimum wage will not make enough money to rent a studio apartment, let alone also be able to afford groceries and other essentials. They'd need to rent a room, get a second job, or be born 10 years earlier and be in a rent-controlled place.
So yeah, with UBI, more people are going to be able to do things like...
- Afford rent. Our rents are already very inflated, and many people are rent controlled where they are. And if UBI is only for citizens, we likely wouldn't see a huge skyrocket as a lot of new renters are newcomers to the country.
- Quit their second jobs. This would improve the job market by making more jobs available, and putting pressure on employers to make jobs better.
- Improve their employability and skills. We have caps on tuition that make it relatively easy for people to afford school, but even student loans don't make it possible for most people to attend unless they have income or savings. And not many people can go to school while working two jobs. This will also improve the job market, and our productivity/GDP as a whole.
Things will get more expensive. But we live in an open market. Stores and brands will compete with each other for some of that extra money. Some people will be spending it on "fun stuff", and I think that's where we'd see prices increase the most. And I'm okay with new video games being $120 (like they used to be sometimes!) if it means we get UBI.
Doesn't that just further validate my concerns? Prices are going up to gouge people even when a lot of people don't have the cash to pay for it. I see no reason why a landlord charging $15,000 a year won't just up it to $25,000 a year when everyone gets a $10k UBI. The government seems to care very little about preventing things like that.
- Rent control protects current renters
- With UBI not applying to newcomers, then newcomers would be priced out of the market. But they are a big portion of the market, so their capacity would inevitably be considered when setting new rent prices.
- New rent is already about (or more than) $25,000/yr (CAD) where I live. Generally, that's enough to pay for a person's mortgage, taxes, maintenance, and to still profit (unless they're a new buyer). There'll always be someone willing to accept less profit to get the sale.
- Add taxes/fines for vacant units. (Some municipalities have this where I live)
- Add rent control between renters or market rent. Some countries do this, and this would probably be the best solution for rent specifically.
I understand that there are solutions that could fix this, I just don't think the US government as it is now would be willing to enact or enforce them even if it went ahead with UBI. That's why my initial post said we need to figure out these things before UBI, or else we'll enact it without things like taxes for vacant units or rent control between renters, and it'll fail, killing any enthusiasm for another attempt following potential law changes to fix the issues.
Can landlords just change rent whenever they feel like it in the US?
Essentially. They can't freely change rent for current tenants since they need to stay within the confines of whatever lease was agreed upon, but they can make rent whatever they want for new tenants, so it's not an uncommon occurrence for them to simply stop fixing things in a timely manner so that current tenants feel compelled to leave, and then they can fill the space, charging whatever they feel someone will pay for rent after that. It's scummy, and it's technically illegal, but everyone knows they won't really get in trouble for it.
Same thing happens where I live, but there is recourse. If it were me, I'd probably try to fix things on my own if I were getting a great deal on rent. Not that I'd have to, but to save myself from having to move. Of course, that's not an option for everyone.
Still, with a lot of the rental market (again, where I live) being newcomers, I don't think it'd make sense to immediately jack up the rates... they'd be turning away too much of the market.
Well, once the lease is over people have to sign a new one anyway, so even existing tenants can only lock in rates for so long. And when one landlord ups rent, it's usually because all the other landlords are doing it too - it seems like they do it in unison, I imagine because they don't want to have to worry about people leaving for somewhere cheaper. I'm not sure if it's illegal like price fixing or not, but it doesn't seem to make a difference in the end.