Friday, May 19, 2006

More Labor = Lower Prices

Well, I’m glad that someone besides me figured out that high payroll costs result in lower prices.

NJ Rejects Self-Service Gas

Dressler [executive director of the New Jersey Gasoline Retailers Association and Allied Trades] -- and other foes of self-service, including AAA -- argue the price of gasoline is kept low because of the presence of gas station attendants. Paying these workers cuts into the profits of big oil companies, who then avoid the state, allowing smaller companies such as Lukoil to remain competitive and keep prices down, they say.

No kidding!

And maybe if they paid the attendants ten-fold the minimum wage, prices would be even cheaper.

Of course, this brings us back to Wal-Mart. Supposedly, they “sell for less”. Well, if their management listened to any consultants with advanced degrees, they would know that they could sell for much less if they hired more employees and paid them much more. They ought to, in fact, hire lots of gas station attendants.

But in fact, these workers would cut into their profits, which would allow honest (and competitive!) mom-and-pop stores to instead hire these thousands of employees at ten-fold the minimum wage. Is this a utopia? You bet!

Up next for the Nation’s Debate: Laws requiring unionized elevator operators, ATM attendants, and personal toilet flushers.


shlemazl said...

No kidding. I am just back from a business trip from a Canadian nuclear power plant.

These guys had external conractors coming in to do some work. Each welder had to be supervised for safety reasons. Qualified supervisors were not members of the same union. Therefore they needed a third guy (unqualified) from the right union to supervise the supervisor.

No wonder electricity prices in Ontario are tumbling down!

Ian said...

Thank you! I am so happy to finally have my views on gas prices confirmed by a truly learned man.
I was born in the '50s so I well remember when two or even three gas station attendants would scamper out to our car, fill the tank, wash the windows, check the oil and tire pressure, all those little things. And the price of gas was only 25 cents a gallon! And not only that but they'd give you china and glassware just for gassing up at their station. Why was the price so low back then and so high now? They kept the damn oil companies out. The price of gas didn't start going up until they fired all those poor people.

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