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posted: Nov. 20, 2009 @ 5:09p
lampy2k4
Senior Member - 1K
posted: Nov. 20, 2009 @ 5:18p
tripleB said: NJ Parkway Tolls in the late 90s were 25 cents. 12 years later they are $1. They removed toll booths in one directions and doubled the tolls on remaining side, meaning no increase for those who commute daily. IIRC the tolls went from $0.25 to $0.33 for tokens in 1990s, then to $0.35 to effectively $0.50 now ($1 but in one direction). There are also discounts through EZPass.
tripleB said: Anyone notice that government-controlled services experience price increases at the rate of about 5x inflation according to CPI numbers?
Here's a few examples:
NJ Parkway Tolls in the late 90s were 25 cents. 12 years later they are $1.
Train Service in my old city - $1 in 2003. 6 years later it's $2.
Electricity - was about 5 cents per kilowatt hour when I got my first apartment 9 years ago. Now its 11 cents.Hmmmmm... energy costs have increased faster than inflation recently. I'm not sure why the examples you picked have increased faster than inflation...
I was bored of this thread and closed by browser window. Then I thought to myself must be a tripleB thread, and came back just to see if I was right... How did I know
College tuition has risen much faster than inflation. This is yet another example of what OP is talking about. Yes, many schools are private, but when there is a cartel of state-run schools setting the price, then private schools are free to raise prices with less worry about competition.
If you look back to 1980, tuition cost has risen more than oil prices!
Newspapers are another example of a government controlled service with a huge run up in price. When I was a lad they sold on the newsstand for a dime, now they're 75 cents!
tolamapS
Senior Member - 2K
posted: Nov. 21, 2009 @ 4:41p
WalStMonky said: Newspapers are another example of a government controlled service with a huge run up in price. When I was a lad they sold on the newsstand for a dime, now they're bankrupt!
In the 1990s, average baseball ticket prices ranged from $8.84 in 1991 to $14.45 in 1999. In 2009 it grew to $26.64. The average Yankee ticket price grew to $72.97. Damn pinkos!
bustgum said: In the 1990s, average baseball ticket prices ranged from $8.84 in 1991 to $14.45 in 1999. In 2009 it grew to $26.64. The average Yankee ticket price grew to $72.97. Damn pinkos!Major sports are an excellent example, because there is a partnership between pro sports and the government. It's often public funds that are used to build stadiums and anti-trust laws are lifted for pro leagues. That's further evidence of how when government gets involved, prices rise faster than the CPI.
Xnarg
Senior Member - 5K
posted: Nov. 22, 2009 @ 9:14a
katx said: A fairer example would be first class stamp.
1981 = 20 cents 2009 = 44 centsAnother fair example would be personal computers.
tolamapS
Senior Member - 2K
posted: Nov. 22, 2009 @ 10:56p
Stamps are a good example, but the economics of stamp pricing is different.
USPS is a huge fixed-cost business. With the advent of the internet and cell phones, both individuals and retailers send less snail mail.
To recover the fixed costs, the variable costs are pushed higher. But obviously, that destroys demand.
USPS needs some niche service that is priced just right. Priority mail might be it. If USPS improves their computing infrastructure just a little bit, they might be able to beat out FedEx and UPS in the Priority Mail range. I.e., 2-3 day delivery window anywhere in the US, for flat rates
Priority mail is an excellent alternative to overnight express.
Xnarg
Senior Member - 5K
posted: Nov. 22, 2009 @ 11:04p
One of the ways that the USPS has reduced costs is through outsourcing a lot of things they used to do inhouse. For example, they subcontract a lot of their long-haul carrier service.
They've cut a lot of their internal support, too. They often contract with outside companies to repair and paint their vehicles.
That all gets down to the fact that they aren't very efficient at what they do and in order to improve their efficiency, they have to rely on private businesses to do a lot of their work for them.
They have a number of union issues with which to deal. Our letter carrier had been on the same route for over 10 years. He was usually done with the route in less than five hours, but of course got paid for a full shift. When the USPS rearranged routes so that workers in our area would work full shifts, he took medical leave for several months, claiming "stress" in learning the new route and he got the union to file a grievance about his route change. That sort of thing is not uncommon in the USPS and it adds a lot to their cost.
FYI: The increase in first class stamp (for the last ~30 years) that I cited boils down to about 2.85% increase on a yearly basis. I am just guessing that that is below the rate of inflation and certainly below 5x inflation.
Which medical cost has risen faster: that of Canada or that of US?
I think it is a myth that the government cannot do things right.
Xnarg said: One of the ways that the USPS has reduced costs is through outsourcing a lot of things they used to do inhouse. For example, they subcontract a lot of their long-haul carrier service.
They've cut a lot of their internal support, too. They often contract with outside companies to repair and paint their vehicles.
That all gets down to the fact that they aren't very efficient at what they do and in order to improve their efficiency, they have to rely on private businesses to do a lot of their work for them.
They have a number of union issues with which to deal. Our letter carrier had been on the same route for over 10 years. He was usually done with the route in less than five hours, but of course got paid for a full shift. When the USPS rearranged routes so that workers in our area would work full shifts, he took medical leave for several months, claiming "stress" in learning the new route and he got the union to file a grievance about his route change. That sort of thing is not uncommon in the USPS and it adds a lot to their cost.Despite all these, a stamp is still $0.44. Ask UPS to do the same thing, you need to pay 10x that.
In fact, UPS is contracting USPS to finish the "last mile" delivery. I think it is called something like parcel innovation service. Many online merchants use that to handle free shipping orders.
Xnarg said: College tuition has risen much faster than inflation. This is yet another example of what OP is talking about. Yes, many schools are private, but when there is a cartel of state-run schools setting the price, then private schools are free to raise prices with less worry about competition.
If you look back to 1980, tuition cost has risen more than oil prices!
SourcePlease explain why private schools are even more expensive. After all the private sector is always more efficient.
For transit, it all depends on when the agency has the political will to raise fares. Buses in LA cost $1.35 in 1994. They cost $1.25 today, 15 years later. Next year they will cost $1.50. The reason? Nobody wants to raise the base fare. The monthly pass has gone up from $42 to $62 (50%) in that time, but that was over 15 years. The cost of gas has gone up 150% from 1994.
Xnarg
Senior Member - 5K
posted: Nov. 23, 2009 @ 11:33p
larrymoencurly said: Xnarg said: College tuition has risen much faster than inflation. This is yet another example of what OP is talking about. Yes, many schools are private, but when there is a cartel of state-run schools setting the price, then private schools are free to raise prices with less worry about competition.
If you look back to 1980, tuition cost has risen more than oil prices!
SourcePlease explain why private schools are even more expensive. After all the private sector is always more efficient.It's difficult to compete against a government-funded semi-monopoly.
State schools are like the OPEC of higher education. Too, in many cases, if you want real quality, you don't go to a state school.
Finally, because of their special treatment, state schools can more easily achieve economies of scale.
Xnarg
Senior Member - 5K
posted: Nov. 23, 2009 @ 11:36p
nycll said: ...Ask UPS to do the same thing, you need to pay 10x that.
In fact, UPS is contracting USPS to finish the "last mile" delivery. I think it is called something like parcel innovation service. Many online merchants use that to handle free shipping orders.USPS has the monopoly on regular mail delivery. They are designed to go past every mailbox every day. Their vehicles, routes, and entire distribution system was planned that way. UPS wisely takes advantage of that with their last mile delivery approach.
If UPS or FedEx took over regular mail delivery, either or both of those firms would do a better job of it. It has been competition by firms like FDX and UPS that has dragged USPS kicking and screaming towards the modern age, with the exception that UPS has the handicap of being more highly unionized.
Xnarg said: State schools are like the OPEC of higher education. Too, in many cases, if you want real quality, you don't go to a state school.
Finally, because of their special treatment, state schools can more easily achieve economies of scale.This is only therory/hunch. Some private schools are excellent because they have to compete with Michigans and Berkeleys. Else, they would become like De Vry and Spencerian.
US undoubtedly has the best higher education schools, the overwhelming majority of them are public. But some are intent on destroying that too.
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