The last independent of Ocasio-Cortez: expensive croissants for the airport

IOne of the best owners of me that I have seen for a long time on the worst website on the internet, the future of the Democratic Party has dropped today a brain conundrum on Twitter.

Where even to start? Perhaps with the immorality of its utilitarian equation of economic value and human worth? Or perhaps with the fact that LaGuardia is about to enact a minimum wage of $ 19, which is likely to increase the cost of these same croissants?

Or better yet, the fact that every airport in the country still has a McDonald's Dollar menu – if you're ready to swap French pastries for fries, like the rest of us in the twenty-four years and on a budget?

Let's start with the very reason why airports can charge exorbitant prices for waste, namely: absence free market, mainly because of a captive passenger market and government regulation.

Closed sites will always have higher prices than open markets. On the way to work, you can choose between Starbucks, Dunkin Donuts or even your local bodega to grab a cup of coffee for a few dollars. However, if you are in a concert hall, a place that you have voluntarily chosen as a consumer, it sets prices because consumer demand is essentially elastic. Of course, you can buy an 18-disc pack of Bud Light at an alcohol store for less than a dollar a beer, but a concert hall knows that raising the price of a beer from $ 5 to $ 8 does You will probably not be dissuaded from buying them. a show.

Airports operate in much the same way, but government intervention exacerbates the problem of elasticity by imposing a number of barriers to entry for sellers. It is obvious that we must find enough employees to occupy 18 hours a day, seven days a week, willing to spend half an hour just to get to the parking lot, but several cities impose arbitrary fines , licenses and yes, a minimum wage. requirements that make it almost impossible to reach the breakeven point. They range from madness (TSA demands that butcher knives in airport kitchens are repeatedly tied up and inventoried) to outright corruption. For example, the city of Atlanta had to pay $ 300,000 to a single company in 2012 after being sued for playing politics with the assignment of an artificially low number of contracts concession to friends. The federal government is complicating matters further, competing with local governments, with the Ministry of Transportation contributing to qualified vendors through the Airport Concession Disadvantaged Business Enterprise program.

Beyond the vendors themselves, local governments can artificially increase the raw supplies of airport vendors with absurd standards. For example, Atlanta requires food suppliers delivered at airports that they subscribe a $ 2 million insurance policy. For example, an airport vendor who buys materials for a crescent with a dollar market value may pay twice the amount paid to offset his suppliers' insurance costs.

All of these restrictive regulations make that a beer that costs less than a supermarket and $ 8 in a concert hall can cost a lot more than a bar at the airport. And it's not just the sellers who are stingy in themselves. As we have seen above, they have to offset the costs associated with regulatory burdens related to the delivery of raw materials to the price of labor willing to work in an airport.

For what it's worth, I've found an agreement on Amazon for a dozen croissants for $ 20.94. I would say that Ocasio-Cortez has just learned a valuable lesson on the benefits of the free market compared to oligopolistic markets devolved to cartels, but it's she who has launched 25,000 Amazon jobs in New York .