Monday, August 5, 2019

Amazon v Minimum Wage and Plastic Bags

Eli,

In 2018 about 2% of my groceries were purchased via Amazon. Year-to-date in 2019 about 10%. I'm pretty sure I'm behind the curve on this one.

Some of this change is price related, but more is due to getting exactly what I want from Amazon versus hoping my local grocery store has what I want in stock. And more due to the increasing sense of dissatisfaction I have at my local grocery store because there are fewer employees, fewer full-service check-out lines and more carts littering the parking lot.

And I can't help but wonder how much the minimum wage increases results in general increases in wages, resulting in fewer employees and fewer employee hours and a less service-intensive grocery store and me changing my shopping preference to Amazon.

Recently Connecticut abolished plastic bags, for reasons I can not comprehend. In the grand scheme of things this is a small change. However, it is a change, a greater inconvenience, an increased cost to my grocery bills. It is marginal, meaning small, but marginal in the economic sense as well, in that it is a change to equilibrium. In economics, all the action is at the margin.

And I can't help but wonder a couple of things. Did the proponents of this bill realize it will incentivize me to purchase even more of my groceries from Amazon because shopping is even more inconvenient? Did they consider my decision may be similar to the other shoppers out there and the market share of Amazon will increase and the market share of brick and mortar grocery stores will decline and this will result in fewer local jobs and reduced taxes receipts for the community.

And do the proponents realize grocery costs are a greater percent of low-income budgets than they are for well-off people? These guys, who get data from the Bureau of Labor Statistics, claim food costs are 6% to 10% of the average family budget. For the well off it's lower, much lower. So when costs go up, either due to minimum wage or plastic bag bans, the costs are born disproportionately by the less well off. It's a regressive tax.

Bill

PS
Mrs. Knabe tells me the bag people are concerned about the Pacific garbage patch and biodegradability of bags. Both objections strike me as absurd, but so what. More of my purchases from Amazon results in many more cardboard boxes and plastic inside the boxes to protect the goods. I'm not convinced anything has been accomplished from an environmental perspective.