My primary concern is that most people in the margins depend on rent, and shopping locally because the cost of ownership of home, and transport to bigger (cheaper) shops is above their threshold. They're trapped in the locality of poverty.
Which immediately makes them prey to being exploited by inflation of costs, prices, to match the UBI guaranteed income.
TL;DR what stops a landlord and local shopkeeper increasing prices until the UBI is drained?
How does any class of goods keep from growing in price relative to the purchase power of the buyer vs the cost of goods sold?
Competition typically keeps pricing in check, and as long as there isn't a monopoly or constrained supply/demand, prices are not able to rise too high.
I don't really see how/why this would be magically different.
For example, while rents in SV are sky high, that's a reflection of constrained supply. An apple in SV costs roughly the same as an apple in Bakersfield, despite avg income being multiples higher.
I don't really see how rentals in low income areas would become a constrained supply after the availability of UBI. And the groceries point is just crazy sauce.
I'm aware of very few goods outside of monopolies where the price is determined by the spending power of the purchaser and not the cost of the goods.
Competition is a farce in this space. I lived in rental accommodation in the 80s (a time of high inflation) and I recall well the price excess a local shop charged to keep open. Facilities like cheque cashing, breaking cigarette packets and selling single smokes, they all leverage huge profit for a service you can't really go and find competition for, in any real sense.
you might as well ask why loan sharking exists.
Rentiers do not normally want to rent to people on state benefits. When they do, they maximise the rent to the amount the state will pay, plus a small increment. Competition keeps that increment small? sure. But if you increase the benefit, suddenly, rents go up "everywhere" as a non-collusive event (non-collusive? hah)
We see this in Australia in the cost of childcare, and the cost of any service where the government gives a your-choice voucher to the client: the service fees go up beyond the voucher.
Price/Cost disjoin is a thing. Rental is not a "goods" in that sense, its a location-dependent (non) monopoly. So, rent, which was one of my primary concerns, is one of the things which absent rent controls does this. And, if you don't have a car, then if you live in a housing estate a long way from supermarkets you are caught behind the effort to shop cheaper, rather than pay the premium to the small number of local stores who will sell you goods you can carry home.
Depends on the locale. In many places, there is more housing than demand for housing, and so rent is based on the cost more than the ability to pay. In bay area markets, rent is based on the renter's ability to pay of course.
So you assume that in the west, seduced by free market economics, rent control is coming back? I ask this in Australia frequently. I'm laughed out of court: nobody wants to re-introduce any constraints on market rent.
"travel far enough" is the whole point: if you live in a marginalized situation, UBI is unlikely to pay the cost of transport to save money on shopping, and mechanistically, since you don't have a car and cannot pay delivery, you are stuck behind higher unit pricing exploitation.
Unbelievably high numbers of people in the UK now depend on food handouts organised informally. Food stamps and Gated cards for welfare have their own problems. France recently passed laws requiring supermarkets to supply charity food from unsellable ugly fruit and vegetables, and near-dated produce.
Why do you think this is? Why do you think the state is trying to force independent, semi regulated economic entities to perform a social welfare outcome? Now put UBI into the equation. You think this is axiomatically going to fix the systemic underlying problem?
UBI in greece would demand the entire last 15 years historic debt be wiped out. Otherwise, its going to be grabbed by the asset-rich who have been avoiding the consequences of forcing defaults on the non-working poor.
>>So you assume that in the west, seduced by free market economics, rent control is coming back?
Not really; but I also don't think UBI is likely to happen in any real way without pretty drastic societal changes. In a world where UBI is close to being implemented I think rent control is too.
>>Why do you think the state is trying to force independent, semi regulated economic entities to perform a social welfare outcome?
I don't think the state forces that, I think people force that, by being unwilling to have their taxes go towards "those lazy poor people".
I think once society changes for the better, UBI might solve some of the remaining problems. But no, I don't think UBI would fix everything that's currently broken.
Comments
My primary concern is that most people in the margins depend on rent, and shopping locally because the cost of ownership of home, and transport to bigger (cheaper) shops is above their threshold. They're trapped in the locality of poverty.
Which immediately makes them prey to being exploited by inflation of costs, prices, to match the UBI guaranteed income.
TL;DR what stops a landlord and local shopkeeper increasing prices until the UBI is drained?
How does any class of goods keep from growing in price relative to the purchase power of the buyer vs the cost of goods sold?
Competition typically keeps pricing in check, and as long as there isn't a monopoly or constrained supply/demand, prices are not able to rise too high.
I don't really see how/why this would be magically different.
For example, while rents in SV are sky high, that's a reflection of constrained supply. An apple in SV costs roughly the same as an apple in Bakersfield, despite avg income being multiples higher.
I don't really see how rentals in low income areas would become a constrained supply after the availability of UBI. And the groceries point is just crazy sauce.
I'm aware of very few goods outside of monopolies where the price is determined by the spending power of the purchaser and not the cost of the goods.
Competition is a farce in this space. I lived in rental accommodation in the 80s (a time of high inflation) and I recall well the price excess a local shop charged to keep open. Facilities like cheque cashing, breaking cigarette packets and selling single smokes, they all leverage huge profit for a service you can't really go and find competition for, in any real sense.
you might as well ask why loan sharking exists.
Rentiers do not normally want to rent to people on state benefits. When they do, they maximise the rent to the amount the state will pay, plus a small increment. Competition keeps that increment small? sure. But if you increase the benefit, suddenly, rents go up "everywhere" as a non-collusive event (non-collusive? hah)
We see this in Australia in the cost of childcare, and the cost of any service where the government gives a your-choice voucher to the client: the service fees go up beyond the voucher.
Price/Cost disjoin is a thing. Rental is not a "goods" in that sense, its a location-dependent (non) monopoly. So, rent, which was one of my primary concerns, is one of the things which absent rent controls does this. And, if you don't have a car, then if you live in a housing estate a long way from supermarkets you are caught behind the effort to shop cheaper, rather than pay the premium to the small number of local stores who will sell you goods you can carry home.
its not a monopoly, until it is.
Depends on the locale. In many places, there is more housing than demand for housing, and so rent is based on the cost more than the ability to pay. In bay area markets, rent is based on the renter's ability to pay of course.
Still based on cost.
The housing itself costs more in the Bay area.
Rentals/housing in the Bay area (or other desirable locales) are supply constrained.
The only class of goods I can think of that are not based on underlying costs are monopolies.
And yes - it's unlikely that low income rentals will suddenly become supply constrained after UBI.
Rent control for the first, competition (or a high enough UBI that they can travel far enough) for the second.
So you assume that in the west, seduced by free market economics, rent control is coming back? I ask this in Australia frequently. I'm laughed out of court: nobody wants to re-introduce any constraints on market rent.
"travel far enough" is the whole point: if you live in a marginalized situation, UBI is unlikely to pay the cost of transport to save money on shopping, and mechanistically, since you don't have a car and cannot pay delivery, you are stuck behind higher unit pricing exploitation.
Unbelievably high numbers of people in the UK now depend on food handouts organised informally. Food stamps and Gated cards for welfare have their own problems. France recently passed laws requiring supermarkets to supply charity food from unsellable ugly fruit and vegetables, and near-dated produce.
Why do you think this is? Why do you think the state is trying to force independent, semi regulated economic entities to perform a social welfare outcome? Now put UBI into the equation. You think this is axiomatically going to fix the systemic underlying problem?
UBI in greece would demand the entire last 15 years historic debt be wiped out. Otherwise, its going to be grabbed by the asset-rich who have been avoiding the consequences of forcing defaults on the non-working poor.
Not really; but I also don't think UBI is likely to happen in any real way without pretty drastic societal changes. In a world where UBI is close to being implemented I think rent control is too.
I don't think the state forces that, I think people force that, by being unwilling to have their taxes go towards "those lazy poor people".
I think once society changes for the better, UBI might solve some of the remaining problems. But no, I don't think UBI would fix everything that's currently broken.