It's that time once again, for shopaholics, Black Friday, and all that nonsense. Many of us survive it by simply not joining the sheep at the shopping centers. Who wants to get trampled by all those bargain hunters?
Those who track this stuff tell us that sales on Black Friday were down this year. Replaced by what? Partially by sales on Thanksgiving Day itself. So much for "family values," preached to us by the same people who insist that closing stores on Thanksgiving Day would interfere with the "freedom" of corporate America.
It seems that low paid retail employees ought to at least have Thanksgiving Day to spend with their families. After all, what isn't sold on Thanksgiving Day can and would be sold on some other day.
With this madness, even economists, unsung practitioners of "the dismal science," have to have some fun with this stuff.
Economists at Pittsburgh's PNC Bank have just released their annual Christmas Price Index, tracking costs of the items given by the True Love in the song, "The Twelve Days of Christmas."
Although these items are a far cry from more practical items included in the consumer price index compiled by the U.S. Bureau of Labor Statistics, inflation of 1 percent as measured by the Christmas Price Index is not far off from that measured by the Consumer Price Index of 1.7 percent. Let's take a look at the individual items.
The cost of the Partridge in a Pear Tree increased by 3.8 percent. The cost of the pear tree, reflecting housing cost for the bird, increased by a modest 2 percent, from $184 to $187.68. But the price of the bird, increasing by a third, from $15 to $20, drives up the cost of the combination a bit.
The cost of the Two Turtle Doves remained constant at $125. The cost of the Three French Hens increased by 10 percent, from $165 to $181.50. The cost of the Four Calling Birds remained constant at just under $600.
Having declined from its high of several years ago, the price of gold has been stagnant of late, resulting in a constant cost of the Five Golden Rings at $750.
For unspecified reasons, the cost of the Six Geese-a-Laying has increased an astounding 71.4 percent, from $210 to $360. Economists instinctively look initially to demand and supply for explanation of dramatic price changes. With lack of further information, it is difficult to conjure up reasons for increased demand for geese. We turn to supply - possibly an increase in price of inputs resulting in reduced supply? Nope - wages have remained stagnant and feed costs have actually declined. A remaining explanation would lie in possible formation of a cartel with monopoly pricing power. Again, we draw a blank. As my rural readers will affirm, producers of livestock and poultry characteristically lack pricing power. Production agriculture is what economists call, a competitive industry. We therefore leave the dramatic price increase of the geese unexplained.
At this point, an economics instructor would illustrate to students a major feature of index numbers. With a 33-percent increase in cost of the Partridge, a 10-percent increase in cost of the Three French Hens, and a 71.4-percent increase in the in cost of the Six Geese-a-Laying, do these items not create sufficient upward pressure on the index to drive it above 1 percent?
They do create upward pressure, but ever so slightly because, even combined, those three items represent only a small component, or weight, of the total index. The more costly, hence more weighty, items, the Seven Swans-a-Swimming and, as we shall see, four of the five labor components disproportionately affect the index. Let us proceed.
The second most costly item in the index, the Seven Swans-a-Swimming, is normally the most volatile in price. However, their price has remained constant at an even $7,000, a major factor in relative stability of the index.
The most insignificant labor item with respect to cost is the Eight Maids-a-Milking. These long-suffering Maids bill out at the federal minimum wage for a measly $58 - same as last year, as the Congress refuses to move on the minimum wage.
Based on data from the Pennsylvania Ballet Company, the Nine Ladies Dancing price out at a handsome $7,552 and change, the same as last year.
The Ten Lords-a-Leaping enjoyed a 2-percent increase in remuneration, from $5,243 and change, to $5,348 and change. Even with the increase, they bill out at less than the Ladies Dancing, doubtlessly because of the extraordinary athletic skills demanded of the ballet dancers.
The musicians are less adequately compensated than the dancers. The Eleven Pipers Piping bill out at $2,635 and change, same as last year. Remuneration of the Twelve Drummers Drumming also remains constant, at just under $2,855.
The total cost of the set of gifts born by the song's True Love bills out at $27,673.21, for a 1-percent increase over 2013.
But there is always a glitch. Recall that the gifts are given repetitively over the Twelve Days of Christmas. The generous, not to mention, affluent, True Love so impelled will rack up a bill of $116,273 plus a few pennies. This amounts to a 1.4-percent cost increase over 2013, not far from the 1.7 percent measure of inflation compiled by the Bureau of Labor Statistics.
Residence of the Eight Maids-a-Milking is unspecified. But as they are subject to the federal minimum wage, it's obvious that they reside in a state that holds to the federal minimum wage. Given our current political environment, the return to the Eight Maids-a-Milking is certain to remain stagnant.
Those who fear rampant inflation as a consequence of the Fed's expansionary monetary policy can rest easy, at least for now. Whether measured by the consumer price index or the Christmas price index, dire predictions of inflation have not come to pass.
- John Waelti's column appears every Friday in the Times. He can be reached at jjwaelti1@tds.net.
Those who track this stuff tell us that sales on Black Friday were down this year. Replaced by what? Partially by sales on Thanksgiving Day itself. So much for "family values," preached to us by the same people who insist that closing stores on Thanksgiving Day would interfere with the "freedom" of corporate America.
It seems that low paid retail employees ought to at least have Thanksgiving Day to spend with their families. After all, what isn't sold on Thanksgiving Day can and would be sold on some other day.
With this madness, even economists, unsung practitioners of "the dismal science," have to have some fun with this stuff.
Economists at Pittsburgh's PNC Bank have just released their annual Christmas Price Index, tracking costs of the items given by the True Love in the song, "The Twelve Days of Christmas."
Although these items are a far cry from more practical items included in the consumer price index compiled by the U.S. Bureau of Labor Statistics, inflation of 1 percent as measured by the Christmas Price Index is not far off from that measured by the Consumer Price Index of 1.7 percent. Let's take a look at the individual items.
The cost of the Partridge in a Pear Tree increased by 3.8 percent. The cost of the pear tree, reflecting housing cost for the bird, increased by a modest 2 percent, from $184 to $187.68. But the price of the bird, increasing by a third, from $15 to $20, drives up the cost of the combination a bit.
The cost of the Two Turtle Doves remained constant at $125. The cost of the Three French Hens increased by 10 percent, from $165 to $181.50. The cost of the Four Calling Birds remained constant at just under $600.
Having declined from its high of several years ago, the price of gold has been stagnant of late, resulting in a constant cost of the Five Golden Rings at $750.
For unspecified reasons, the cost of the Six Geese-a-Laying has increased an astounding 71.4 percent, from $210 to $360. Economists instinctively look initially to demand and supply for explanation of dramatic price changes. With lack of further information, it is difficult to conjure up reasons for increased demand for geese. We turn to supply - possibly an increase in price of inputs resulting in reduced supply? Nope - wages have remained stagnant and feed costs have actually declined. A remaining explanation would lie in possible formation of a cartel with monopoly pricing power. Again, we draw a blank. As my rural readers will affirm, producers of livestock and poultry characteristically lack pricing power. Production agriculture is what economists call, a competitive industry. We therefore leave the dramatic price increase of the geese unexplained.
At this point, an economics instructor would illustrate to students a major feature of index numbers. With a 33-percent increase in cost of the Partridge, a 10-percent increase in cost of the Three French Hens, and a 71.4-percent increase in the in cost of the Six Geese-a-Laying, do these items not create sufficient upward pressure on the index to drive it above 1 percent?
They do create upward pressure, but ever so slightly because, even combined, those three items represent only a small component, or weight, of the total index. The more costly, hence more weighty, items, the Seven Swans-a-Swimming and, as we shall see, four of the five labor components disproportionately affect the index. Let us proceed.
The second most costly item in the index, the Seven Swans-a-Swimming, is normally the most volatile in price. However, their price has remained constant at an even $7,000, a major factor in relative stability of the index.
The most insignificant labor item with respect to cost is the Eight Maids-a-Milking. These long-suffering Maids bill out at the federal minimum wage for a measly $58 - same as last year, as the Congress refuses to move on the minimum wage.
Based on data from the Pennsylvania Ballet Company, the Nine Ladies Dancing price out at a handsome $7,552 and change, the same as last year.
The Ten Lords-a-Leaping enjoyed a 2-percent increase in remuneration, from $5,243 and change, to $5,348 and change. Even with the increase, they bill out at less than the Ladies Dancing, doubtlessly because of the extraordinary athletic skills demanded of the ballet dancers.
The musicians are less adequately compensated than the dancers. The Eleven Pipers Piping bill out at $2,635 and change, same as last year. Remuneration of the Twelve Drummers Drumming also remains constant, at just under $2,855.
The total cost of the set of gifts born by the song's True Love bills out at $27,673.21, for a 1-percent increase over 2013.
But there is always a glitch. Recall that the gifts are given repetitively over the Twelve Days of Christmas. The generous, not to mention, affluent, True Love so impelled will rack up a bill of $116,273 plus a few pennies. This amounts to a 1.4-percent cost increase over 2013, not far from the 1.7 percent measure of inflation compiled by the Bureau of Labor Statistics.
Residence of the Eight Maids-a-Milking is unspecified. But as they are subject to the federal minimum wage, it's obvious that they reside in a state that holds to the federal minimum wage. Given our current political environment, the return to the Eight Maids-a-Milking is certain to remain stagnant.
Those who fear rampant inflation as a consequence of the Fed's expansionary monetary policy can rest easy, at least for now. Whether measured by the consumer price index or the Christmas price index, dire predictions of inflation have not come to pass.
- John Waelti's column appears every Friday in the Times. He can be reached at jjwaelti1@tds.net.
