Inflation or Greed?

Inflation has many causes. Shortage of supply is one. Too much money available is another. When supply and demand for anything gets too far out of whack, prices go crazy.

The pandemic created supply and demand imbalances. Prices went down heavily for the first year of the pandemic. Many goods were chasing low demand. Gasoline prices went down because commuting by car dropped off the face of the earth. Parking prices dropped; too few users for the oversupply of spaces. Restaurant prices dropped or stagnated; too few patrons and food was rotting in the storeroom and refrigerators. Especially in downtown areas where commuting had almost ceased to exist.

Many businesses couldn’t handle this situation and closed their doors. Sad. Some hospitality businesses found ways to work around the pandemic chaos and survived. Some even thrived.

Prices, however, were all over the place. That is the economic system working its magic to balance out the effects of supply and demand.

Some players, however, played the system for their own benefit. Oil companies lowered their production and made artificial shortages. Demand pushed against short supplies and pump prices for gasoline stabilized and many rose. Today’s supply of gasoline inventories are sky high but the producers hide that fact and pretend there is a shortage. This pushes up pump prices unnecessarily. The winner is the producer; the loser is you and I.

This is the face of greed.

Another face of greed is stagnated wages and benefits. Actually, benefits have been continually reduced in recent years to save employers money. Vacation and sick time were one pull back. Health insurance benefits have long been reduced and premium sharing raised for the employee. The greatest disappearing act has been pensions and retirement plans. This is now mostly on employees. Employers have been gaining from this strategy now for well over 20 years.

Another face of greed is allowing employee head count to decrease without replacement. This gives the false impression that jobs are drying up and remaining staff shudders in place and accepts stagnated wages and salaries while absorbing more work. The stress rises. Staff morale suffers. Employers smile all the way to the bank and enjoy record bonuses for enhanced bottom lines.

The pandemic has softened. Jobs have bounced back. Employees, however, are quitting their current jobs because they have had it. Employers wonder why. Really?

So now we have a labor shortage. Not a real one, but a disgusted and tired labor force which wants more respect, better benefits, wages and salaries that keep up with their dreams for the future and better working conditions.

We have an abundant labor force available. Some are not prepared for the jobs needing to be done, but then that’s the employer’s responsibility to train and develop his people.

Greed has many faces. In an upset economy, a lot of things are out of balance. Prices are unstable. Pay them or avoid them. In the long run, however, fix the underlying problems.

February 10, 2022

 

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