Re:Policies that make the poor less poor
by lmm on Tuesday June 22, 2021 @09:46PM
(#27599820)
> On the other hand: with UBI even the landlords in the middle of nowhere can demand higher rent, since everyone now has a spare $1000 per month
There are still no jobs there, so either those landlords keep the rent low enough that people can afford some kind of existence on UBI, or their houses stand empty (like they do at the moment). And competition would limit rent - on a national scale there is already a lot more housing than needed and the result is that rent is very low in flyover country, but people still can't afford to live there, whereas landlords in the cities that have jobs are currently a de facto oligopoly that can squeeze and squeeze.
> Laws of economy are like laws of physics: you cannot cheat them. All the UBI will do is it will raise the nominal prices of everything, but no poor person will be better off because of it.
At first order UBI is wealth transfer not wealth creation - the working poor will be better off, the middle/upper class will be worse off. At second order UBI unlocks a lot of real value that's currently a deadweight loss: people who could work for a few hours a week, but don't because that would lose them their benefits. It frees up the labour that's currently burned on complex benefit administration to be redirected to doing something productive instead. And by making it easier for people to change jobs, get training/education, or start a business, it increases labour efficiency.
There is no free lunch in economics, and if anyone tells you their policy will make people better off then you're right to ask where the brass tacks of that value creation actually lie. But UBI has some compelling answers.
There are still no jobs there, so either those landlords keep the rent low enough that people can afford some kind of existence on UBI, or their houses stand empty (like they do at the moment). And competition would limit rent - on a national scale there is already a lot more housing than needed and the result is that rent is very low in flyover country, but people still can't afford to live there, whereas landlords in the cities that have jobs are currently a de facto oligopoly that can squeeze and squeeze.
> Laws of economy are like laws of physics: you cannot cheat them. All the UBI will do is it will raise the nominal prices of everything, but no poor person will be better off because of it.
At first order UBI is wealth transfer not wealth creation - the working poor will be better off, the middle/upper class will be worse off. At second order UBI unlocks a lot of real value that's currently a deadweight loss: people who could work for a few hours a week, but don't because that would lose them their benefits. It frees up the labour that's currently burned on complex benefit administration to be redirected to doing something productive instead. And by making it easier for people to change jobs, get training/education, or start a business, it increases labour efficiency.
There is no free lunch in economics, and if anyone tells you their policy will make people better off then you're right to ask where the brass tacks of that value creation actually lie. But UBI has some compelling answers.