By Mabel Doge Luhan
I was OVERJOYED when Governor Palazzo instituted a PRICE FREEZE because of the impending whirlyboo!
I love low prices. I’m not Chinese or Jewish, but I very well could be!
It reminds me of the time I announced to the shopkeep that I would pay no more than one silver dollar for a two-pound jar of Metamucil (grape flavor!). I marched in to his store the next day, triumphantly, with my silver dollar, to get my heavily discounted Metamucil. And what did that wily son-of-a-gun do? By golly, he refused to sell me any Metamucil! Even when I told him that back in my day, Metamucil cost no more than a Colonial farthing! He also called me a well-preserved nineteenth-century harpie, but let’s pretend that never happened.
Apparently, when you tell merchants they can’t charge the market price for something, they won’t apologize and start selling you your merchandise for a below-market price. They’ll just close up shop and stop selling it to you! This was a DIFFICULT LESSON for me, and I learned it yet again when I posted an ad requesting for a handsome stallion to perform my husband’s neglected bedroom duties, for a price of no more than a nickel a night. There were no takers! Imagine that!
The idea of a price freeze when there’s a disaster is a nice one. It lets us pretend that there was no disaster: that it’s not now more difficult to supply goods, and that there’s no increased demand for goods. It reminds me of how I’ve been paying the BMV to make me exactly twenty-one years old for the past many years — but it still does nothing for my wrinkles!
You see, higher prices aren’t the root of pain after a disaster, or in times of difficulty supplying goods, or increased demand. Higher prices are just an indicator that a disaster happened. A policymaker banning higher prices is like a doctor banning fevers, or a Garapan karaoke establishment banning STD tests! All you’re doing is covering up the indicator, which actually makes the underlying condition worse.
So what happens when there’s a real disaster and there’s a price freeze? You saw it after Yutu: gas stations either completely closed down, or sold a very small amount of gasoline for a couple of hours a day. Meanwhile, people wasted hours of time and gallons of gas lining up for that limited gas — and people who most desperately needed gas, say to run generators for their medical equipment or cars to get to school and work, weren’t able to get that gas. Of course, gas resellers sprouted up and made a killing by selling gas at market prices, “illegally”: money that rightfully belonged to the gas station owners, not to whoever had a few cans sitting around and was willing to advertise on Facebook.
If you see videos of North Korean grocery stores — the ones for regular people, not for the elites — you’ll see the same thing. Empty shelves. Nothing to sell. Why? Because at the government-set, artificially low prices, nobody wants to produce anything. So instead of only those who most need something (are most willing to pay for it) having something, nobody has anything.
What about poor people? Actually, poor people are often the most willing to pay market price for gas. Their jobs don’t allow them flexibility. They have to be somewhere, and they wouldn’t mind paying an extra dollar for gas, instead of either being without gas or spending hours of work time and lots of their existing gas trying to wait in a line.
You don’t have to believe me, though! You can fire up your Godzilla Netscape and see for yourself:
https://www.cato.org/
As for poor people, we can, if we want, compensate them with cash-in-hand. That’s a lot more productive and efficient than limiting market prices.
But that’s not all!
You know that “labor shortage” we’ve all been crowing about in the CNMI?
Look, there’s no “labor shortage.” All there is is nobody willing or able to pay the wages required to bring people to work on a remote island with few amenities or attractions. Think about it this way: say we started paying a million dollars a year for construction workers and ten million dollars a year for utility engineers. We’d get applicants from all over the world, right? Well the same is true even at lower wage levels — ones that are still much higher than what we’re paying now.
The only “shortage” is in CNMI businesses’ shortage of cash to pay sufficient salaries. Not many businesses in the CNMI can afford to pay salaries to compete for workers on a global market. Why? Because CNMI businesses don’t make much money, don’t have much investment capital, and are generally set up with the idea that labor is almost free. Have you seen how many “workers” there are in your average sari-sari, and how many of them mostly do nothing? With more capital investment and maybe higher-quality workers, businesses could hire fewer people who do more work — and would be able to generate profit to pay those people’s salaries.
Just look at Best Pacific in its golden days! It was generating enough cash from investment fra— money lau— I mean LEGITIMATE GAMING OPERATIONS to pay sufficient wages to bring construction workers from Turkey, pit bosses from Las Vegas, and prostitutes from Hong Kong! There was no “labor shortage” for them as long as they had cash to pay sufficient wages. Their “labor shortage” only started when they could no longer pay the salaries required to bring those people to work in Saipan.
And ironically, while we complain about the “labor shortage,” we are doing everything possible not to make use of the one resource we have, of people who have no choice but work in the CNMI: workers lacking immigration documents. They can’t go to Guam or Hawaii, and generally can’t go anywhere other than their home countries, where wages are even lower than in the CNMI.
If we were serious about alleviating labor shortages, we’d work in a serious way to put these people to productive work. Lots of mainland US cities and states do that, organizing day labor centers and matching services, primarily serving undocumented immigrants and the people who need their labor. See, for example: http://hireadaylaborer.org/
Of course, those who complain about a “labor shortage” are often really talking about a “job shortage,” and when they say “job shortage,” they really mean “sinecure shortage” — the “jobs” that don’t require much of anything, other than the ability to vote and convince your relatives to do the same. Good work if you can get it, and nothing to sneeze at. I’ve thrown more than a few elections in my day in return for my post as Chief Assistant for Northern Islands Public Transit. But such jobs are, like firm buttocks past age thirty, gifts from up above, and not something we should count on!
Let prices swing free! Let wages find their own equilibrium! I’m not wearing a bra!
_____
Mabel Doge Luhan is a rootless cosmopolitan and a woman of loose morals. She resides in Kagman V, where she pursues her passions of crocheting, beatboxing, and falconry.
2 Comments
Russ Mason
10/13/2023 at 6:53 PM
Cool read, Mabel!
It seems to me that some (not ALL) of our locals prefer to not work. They own property with some houses and collect $200k for a 55 year lease. Do they start a business or launch some new enterprise? No. They go fishing. Their diet is simple (white rice, Spam, betelnut and alcohol) so the $200k will last a long time.
That’s a sweeping generalization, but it’s not far from the truth. The notion of personal industry has never been present in the Marianas to any significant degree. As well, there are few opportunities here, since the CNMI is populated with many poor people. That explains why there are approximately 6,000 people on the government payroll.
The truly motivated individuals often high-tail it to the USA, where opportunities abound and the pay is better.
But the question remains: why work when the fish are biting and there’s money in the bank?
Mabel Doge Luhan
10/14/2023 at 1:59 AM
I have a four-letter word I like to call someone who quits working just because they have money in the bank and fish on the line: SANE.