[New York Diary] Junk Fees Fueling Inflation?... The U.S. Is at War

"Junk Fees" Spark Debate in the U.S.
Biden Administration Pushes for Transparency as Airlines and Hotels Face Scrutiny

"An airline cannot treat your child like baggage."

This was a statement made by U.S. President Joe Biden during his State of the Union address last February, declaring a war on so-called "junk fees." He specifically targeted the rule requiring parents to pay extra fees to sit next to their children under 13 years old on major U.S. airlines.

[Image source=AP Yonhap News]

Then, a month later on the 6th (local time), the U.S. Department of Transportation (DOT) released a new list. Alaska Airlines, American Airlines, and Frontier Airlines have agreed in writing with the DOT to eliminate these fees. However, the remaining seven airlines, including Delta Air Lines, Southwest Airlines, United Airlines, Spirit, and JetBlue, are still charging these fees. Transportation Secretary Pete Buttigieg openly pressured the remaining airlines, saying, "Parents traveling with young children should naturally be able to sit together without paying junk fees."

These junk fees recently under scrutiny in the U.S. are not limited to airlines. If you have visited the U.S., you may have experienced being charged a "resort fee" or "amenity fee" ranging from $20 to $80 per night after booking a regular hotel. This is a type of hidden fee that was unknown before confirming the hotel reservation. Additional service charges added at the final stage of purchasing tickets for concerts or sporting events are also common. For example, when buying a $265 Taylor Swift concert ticket through Ticketmaster, a popular platform among Americans, an additional $70.45 service fee, $8 operation fee, and $5 ticket issuance fee are added, totaling about $80 extra. The cheapest seats at the New York City Ballet cost $38, but you have to pay $50 at checkout.

These junk fees have become even more controversial as U.S. inflation surged to its highest level in decades last year. They are seen as factors that further fuel already high inflation. Critics argue that unnecessary and hidden fees not only directly harm household finances but also make it difficult for consumers to compare products and make purchasing decisions.

It has been confirmed that 33% of hotel guests in the U.S. have experienced paying undisclosed fees. On local online communities, posts criticizing unfair junk fees are common, such as "Banks charge up to $35 for depositing money, which should be banned by law," "I had to pay $70 and $110 service fees respectively when canceling and repurchasing refundable tickets. This is unreasonable," and "There are too many junk fees in other sectors as well. They should all be eliminated."

Especially with the 2024 presidential election approaching, the Biden administration appears to be using the war on junk fees as a key livelihood policy to win voter support. Following President Biden’s directive to reduce or eliminate junk fees, investigations into various cost structures are already underway at the federal level. Last week, the administration urged states to join efforts to eliminate junk fees. Rohit Chopra, Director of the U.S. Consumer Financial Protection Bureau (CFPB), which recently released a report on junk fee damages, expressed concern that "junk fees are permeating the entire economy." Rob Bonta, Attorney General of California, pointed out that "the advertised product price and the consumer’s purchase price must be the same."

There are also opposing views. Some argue that not all necessary fees should be lumped together under the term "junk." The American Institute for Economic Research (AIER) stated, "No one works for free. When purchasing a concert ticket, it is natural to pay for ticket delivery, processing, and facility usage costs in addition to the admission fee," and argued that "junk fees" should not be labeled as "cash grabs."

Even if the fees identified as junk fees disappear immediately, concerns remain that they will eventually be passed on to consumers in other ways. The Biden administration seems aware of this, focusing more on "accurate fee disclosure" rather than outright bans, but it may not be able to prevent repercussions such as price increases. There is some skepticism among Americans regarding junk fees deeply embedded in the U.S. market economy. One friend said, "Junk fees should disappear, but inflation is not because of Ticketmaster."

This content was produced with the assistance of AI translation services.