UBI is implemented tomorrow. Every citizen gets $1000 per month.
Landlord now knows you have an extra $1000 that you never had before. Why wouldn’t the landlord raise prices?
Now you have an extra $1000 a month and instead of eating rice and beans for a few meals you go out to a restaurant. The restaurant owners know everyone is eating out more so why not raise prices and maximize shareholder profit as always. The restaurant/corporation is on TV saying, “well, demand increased and it is a simple Economic principle that prices had to increase. There’s nothing we can do about it”.
Your state/country has toll roads. The state needs money for its deficit. UBI is implemented and the state/country sees it as the perfect time to incrementally raise toll prices.
Next thing you know UBI is effectively gone because everything costs more and billionaires keep hitting higher and higher all time net worth records.
I mean, if demand for restaurants goes up, wouldn’t there just be more restaurants opening up?
I agree with the landlord thing though, cause landlords are generally dicks. Maybe if local governments imposed more rent caps.
Are landlords holding off on increasing rent because people’s incomes are not going up?
No?
Maybe rent isn’t tied to average income!
Yeah at this point rent is just a made up number to keep a landlord happy.
Who opens them up exactly? And that person who invests in a restaurant will leave some other job resulting in that much less product being built this something rises in price somewhere.
Rent caps just result in less people or corporations investing in rental properties. If you are alread have 90 houses and 100 people want to rent, how does caps encourage more houses?
At the end of the day the only thing that matters is how productive we are in total. Anything that is scarce will be high in price and if you mandate a lower price, then some people will simply not have shelter if you want to use that example.
Real estate isn’t that simple. Way too many layers of work and bureaucracy between wanting to build something and making it happen even when you have the cash to make it so. Many of these layers are essential, others like nimby idiots are not. We need more housing for people and it would take a huge increase in available housing to have any negligible effect on any one individuals house/property value.
As for restaurants. It’s also not that simple. Most restaurants fail in the first year or two. You have to figure out what type of food is in demand and then maybe be willing and able to shift to something else if the market gets oversaturated.
That’s the first part, but you have to keep going deeper to see how that leads to inflation.
If you open more restaurants, the market has more jobs for staffing. If the market has more jobs for staffing, then some businesses will increase pay to lure the better talent to their business. If businesses increase pay, then that can often get passed down to the customer.
San Francisco’s tech market was a good example of this theory in action.