How prices changed at a Walmart in a year
npr.org
npr.org
> China had been the biggest exporter of garlic to the U.S. and domestic garlic growers have long argued they were being undercut by cheaper Chinese competition. Now that Chinese garlic faces higher tariffs, domestic companies can charge higher prices.
Domestic companies being able to charge higher prices was not the goal of tariffs. Labor is cheaper in other Asian countries, and that also results in their being able to undercut America producers. However, the trade war is against China and not low labor cost countries like Vietnam and Malaysia.
Are there really no other factors at play?
What factors do you have in mind, and how do they relate to the goal of the trade wars?
One purely theoretical explanation is demand elasticity - if you can sell 20 items at 3$ now your costs increase to 5$ - you can sell 10 items at 5$ but 8 at 10$ it makes sense to sell at 10$ - not saying that's the case with garlic - but it explains how a 30% cost increase could cause higher price increase.
Adding a 30% tax means that if you draw a line down from the new equilibrium point to zero price, that line will cross the original supply curve at 30% of the way down. But the new equilibrium point may also be at a different (likely lower) quantity, where the demand curve could have a different slope.
For a perfect commodity, where the supply curve is nearly flat, the percentage tax has the effect of raising that flat line higher. A 30% tax raises prices 30% higher. The shape of the demand curve only determines the reduction in trade volume.
For a fixed-supply good, where the supply curve is completely vertical, the price remains exactly the same, and the tax is paid entirely by the supplier. The shape of the demand curve isn't very relevant.
If the demand curve is perfectly vertical, consumers pay all the tax, and quantity remains the same.
In order for an x% tax to produce an x+y% increase in price, there has to be some other effect in play. The demand curve has a positive slope, as with a Veblen good. The demand curve shifts upward or rightward, as though the tax serves as advertising. A 30% tariff on similar goods or general inflation produced a substitution effect that drove more people to demand garlic.
Pure demand elasticity can't account for it all.
The real reason for the remaining increases are probably a combination of domestic Chinese pressures and the inflation machine Obama started and Trump has only continued both starting to grip and people are starting to notice as articles like this point out things that have been going on for a decade now.
With that being said it's sad to hear that so many people purchase Chinese produce.
The bad part, environmentally, think of all the excess CO2 produced in transport that in reality, doesn't truly need to happen.
(If I have a dog in this fight, it's actually New Jersey, where I grew up.)
Just kidding. To my knowledge a lot go to processing, not consumer consumption. Typically these are also labeled as "ugly" because they're not always your traditional strawberry shape. Similar, Florida oranges were mostly juicing oranges, not consumption. Though greenery has really fucked up that market sector.
I just don't appreciate the whole "look" based market we have in the states. I think it's as stupid as stupid gets. A majority of food prices are due to people not wanting their food to "look" a certain way. Even though that look has zero correlation to taste. Which, typically, the ugly ones have more flavor. Like, the best beefsteak tomato looks like a hideous tumor. God as my witness, they have a great taste. It's good enough to just slice and eat by itself. But then the pretty beefsteak tomatoes are a watery disaster of sadness.
Just me ranting away about the terrible disconnect a majority of the population has to their food. It's really sad. There's really no cure to it unless the fed mandates Victory Gardens. Which, I'm totally for. The only big government action I'll approve is the fed saying "If you have a yard, you must cultivate 25% of it minimum as a Victory Garden or face penalty of death." A day worth celebrating.
Most people these days never get that experience. So they think what they're looking at is a pretty strawberry. In reality, it's only real use is compost.
If we all agree to purchase slightly damaged food and only remove the damaged part, it would be fine.
There is still the issue that people do not know how the food was damaged, which is a different supply chain issue.
I'm talking about "ugly". The strawberries and tomatoes at the store are perfect shaped. The breeds that pump out these typically lack the same intensity of flavor as heirloom varieties, that if you are not use to them, would barely recognize them.
Watch some homesteading harvest videos on youtube. Especially if they do carrots. They wont look like store bought ones.
We can’t have our cake and eat it too.
Part 2. There are farmer markets (real ones, not the hipster kind) with local farmers and it's a good 20%-50% cheaper. Plus, those farmers make a better margin. Problem, lower volume in comparison. Typically (near me) these are part of the weekly flea markets or literally a dude in his pickup truck on the side of the road. These places don't have a good... PR look. But I'm also in Florida and I grew up white trash. Nearly everything grows here and I'm fine if things aren't pristine/well-marketed.
I think over marketing, bad lock in deals and piss poor public perception of real food production are the main problems. Real strawberries look like Frankenstein's face. And they're fucking delicious.
It feels weird to unthinkingly sacrifice valuable life preferences at the altar of Economic Efficiency Uber Alles.
Why should Polish people leave their country so they can find work in England? In theory, countries should be self-sufficient enough to where only niche based jobs should have such movement. I'm talking about highly specialized stuff. But when it comes to generic labor, why? Farming? Building houses? The fact people want to leave one country for another just for basic jobs is kind of messed up. I feel both countries are to blame forcing people to leave their homeland. One needs to get their fucking shit together and/or quit punishing a demographic because said gov wants to become a more service oriented country, the other country needs to stop creating incentives for such actions to become easily profitable on a large scale basis.
Countries need to be self-sufficient with their own population. One population sacrificing its people for the good of another is not sustainable, no matter how you slice or dice it.
> The fact people want to leave one country for another just for basic jobs is kind of messed up.
Do they have to or do they want to? If they want to, what is the problem?
Economically countries are linked. You can say how these things 'should' be, but do you only buy food that was produced locally? You have to think about the incentives all the way through.
Farmer Jack driving a few hundred pounds of tomatoes to the farmer’s market might be spewing more CO2 per tomato than the hundreds of tons coming by ship from the Dominican Republic. Scale of efficiency definitely applies to transportation.
Even with constant quality issues and recalls[1], there just weren't many other options out there. For sufficiently large orders, it's hard to secure consistent sourcing more locally. China constitutes half of the world's product, India a majority of the rest, and every other country rolls up to a very minority stake[2]. I was working on raw materials supply chain optimization, and broccoli in particular (and produce in general) was the bane of my work.
I don't know much about the wider produce supply chain, but it was really unexpected when I started just how much fresh produce we imported from China, and how it wasn't even necessarily a cost-driven factor.
[1] These consisted virtually entirely of supplier-side recalls that before production or shortly after, and at least during my tenure did not result in any customer-facing recalls. But our production/distribution process did account for enough capacity padding to allow for that, and an incredible amount of production waste.
[2] https://www.worldatlas.com/articles/countries-growing-the-mo...
When I heard this on the radio, one of the first items they listed was a Better Homes and Gardens lamp. My impression of their research on that one was immediately to discount what they found because they are particularly subject to fad and fashion, especially with the proliferation of " XX stylish lamps that make you look like you have an interior designer for under $YY!!" type of blog posts.
Education, housing, food, clothing, etc. are far more important and relevant to what it means to live a decent life in the 21st century.
This is a very confused comment. The part that's coherent enough to clearly identify what is wrong is that it refers to “fiscal policy” when it means “monetary policy”, which is the policy targeted at particular inflation rates. But even aside from that, the whole claim is incoherent.
Lower consumer prices would help make up for the reduced demand for labor. But rather than this being allowed to just happen, the overt policy is to keep labor from realizing these gains so that everyone keeps working "full time".
Not in dollar terms, especially when dollars are being deliverately managed so that the dollar cost of a labor hour increases over time.
In terms of labor-hours, sure.
> Lower consumer prices would help make up for the reduced demand for labor.
No, lower nominal (dollar) prices would not. Lower real prices are an incoherent concept. Lower labor-hour-equivalent prices would if and only if lower labor demand meant equal employment but reduced hours, otherwise it would just exacerbate the tangible inequality resulting from reduced labor demand.
> But rather than this being allowed to just happen, the overt policy is to keep labor from realizing these gains so that everyone keeps working "full time".
But, it's not: that's not what targeting low positive inflation is. That would only be the overt policy if there was an overt policy to reatrict real wage gains.
While I do think (at least large portions of) one of the two major parties is actively and deliberately pursuing policies with that goal, it's very much not an overt policy.
This is sophomoric relativism - achieving lower day-to-day prices is exactly how market competition works. It's tautological to justify a policy of changing the value of a dollar by rejecting analysis in terms of an unchanged dollar. When creating a new variable, you have to analyze it in terms of existing variables.
> lower nominal (dollar) prices would not [help make up for the reduced demand for labor]
It very clearly would if businesses said "we're going to reduce everyone's hours by 20%" while everyone's expenses went down 20% - everyone's budget would remain the same.
I'll give you that this won't happen so pleasantly uniformly. But posit E who remains employed, and U who is laid off. If the expenses of four such E's go down, they now have extra money to spend locally to create a new job for U. Whereas if the E's expenses remain the same, then U's only options to get money are to head towards where it is being printed or compete with the E's in a race to the bottom (which is why the price of easily-interchangeable labor is now set by "minimum wage" rather than the market).
> that's not what targeting low positive inflation is.
An explicit goal of inflationary monetary policy is to drive "full employment". So yes, pushing everyone to keep working full time is one of its overt goals. A goal that is regressive in the face of needing ever-less labor.
I'm obviously not going to convince you on the merits of this, especially in a few comments, and that's fine. It's just fundamentally dishonest to discard a political viewpoint by condescending from a paradigm that rules out said political viewpoint by construction.
That's true, but irrelevant. You are using microlevel concepts on a macro level where they are by-definition cannot apply.
> It's tautological to justify a policy of changing the value of a dollar by rejecting analysis in terms of an unchanged dollar.
You can't have lower overall consumer prices against an unchanged dollar, because the definition of a constant or unchanged dollar is that it is corrected for price-level changes.
You can have lower nominal prices (deflation) which doesn't have the effects you attribute to lower prices at all, and you can have lower consumer prices relative to wages, which, as I've explained, do what you want if and only if the reduction in labor hours is spread evenly. Which there is little reason to think it would be absent direct regulation; what you'd normally expect is increased unemployment, because transaction costs of hiring scale with number employed, not hours worked, so it's usually more efficient for business to have fewer full-time (or even overtime) workers rather than more short-hours workers. Regulation can change this, of course, by reducing number of hours worked before additional overtime compensation is owed and increasing overtime premiums.
> An explicit goal of inflationary monetary policy is to drive "full employment". So yes, pushing everyone to keep working full time is one of its overt goals.
That's...not what “full employment” means. I know that some people like to point to the product of labor force participation rate times the employment rate and call it the real rate of employment, but that's not what policymakers consider employment to be or what they are targeting maximizing with “full employment”.
It's to stimulate a level of economic activity at which there is a labor demand such that all the labor that people want to sell is sold (which is full employment, because employment rate is people selling labor divided by people trying to sell labor) less transactional inefficiencies, it is not intended to increase real costs to force everyone into the labor force (which wouldn't actually support full-employment, but a higher labor-force participation rate.)
When you get to the point of articulating an idea that can be clearly understood, it seems to always be a misunderstanding caused by misinterpreting basic economic terminology.
"It's just fundamentally dishonest to discard a political viewpoint by condescending from a paradigm that rules out said political viewpoint by construction."
(And we wonder why political polarization has gotten so extreme)
Concretely this dogma was formed based around a need to be manufacturing more stuff. Now we have plenty of stuff but are depleting our natural resources creating a massive surplus just to throw it away. I'd say it's time to revisit the assumptions of that dogma.
It has some flaws, like failing to take into account new products or improvements in products, as well as being susceptible to swings in volatile food and energy prices. But Core CPI excludes the more volatile pieces and I think it’s a reasonably good indicator.
Perhaps my single biggest gripe with CPI is that it fails to properly reflect changes in housing prices, because of how infrequently people sell/buy their house, and because in some parts of the country nobody rents, so price discovery is a little wonky in those places.
All throughout 2013-2017, the CPI number has hovered either close to 2% or been below it. Keep in mind that the Fed’s goal is symmetric, meaning that to make up for the times when CPI is below 2%, there needs to be other times when CPI is above 2%. It blows my mind that throughout the late 80s and 90s we were hitting anywhere from 3-5% and now we’re struggling to get 2%.
There are some people who try to provide alternative accurate information to the government's data, and it consistently shows far less rosy numbers that also match the historical record far closer.
The products were picked not to represent an average shopping cart at Walmart (because we already do that and it’s called the CPI), but to specifically target items which they thought would be hardest hit by tariffs.
It’s an entirely unscientific report showing price changes at a single store with an artificial basket of goods with no attempt whatsoever to control for independent variables. In short, it tells us nothing at best, and is misinformation at worst. It’s hard to tell if the effort was even done in good faith.
Then again, TFA’s first sentence is “Shoppers beware.” Maybe that tells us all we need to know. I am actually a bit surprised that first sentence made it to print.
In that case we can draw some conclusions. Even trying to game the basket, most of the items either stayed the same price or went down. So the effect of tariffs on prices appears to be negligible.
That might be what’s fed to the average Joe the plumber Trump supporter but common sense easily precludes that motivation. To actually move manufacturing back you’d have to tariff every country with a lower cost of living than the US, and that’s most of the world. You’d have to massively reduce consumption in the US since such a policy will greatly redistribute wealth to domestic the physical laborer. And in the long term, because of the unsustainable labor costs here eventually automation and robotics R&D will catch up to destroy those jobs anyways.
Alternatively, to decouple US and Chinese trade as China is a major strategic rival to the US.
> That might be what’s fed to the average Joe the plumber Trump supporter but common sense easily precludes that motivation.
Perhaps one should avoid thinly veiled political insults. Particularly as it blinds one to alternative possibilities.
Otherwise, we’d be moving our production to Pakistan and not India (a country with a comparably low cost of living)
The article even says it: most companies have stayed in China or moved to other countries like Vietnam.
Manufacturing is also the low-value end of the supply chain. Building up expertise at the top (Apple, Microsoft, Google, Intel, AMD, Nvidia—level tech) is exponentially harder than building up the bottom end.
In other words, the West may the first to have fully automated factories and warehouses, but China is likely to be the first to deploy them on a large-scale.