econlife - The Great Lid Shortage of 2020 by Elaine Schwartz

Perhaps reflecting its necessity, wartime canning was most mentioned in books during 1942. But because this Google Ngram end date is 2019, we cannot see what surely would be an upswing for 2020:

Stuck at home because of the pandemic, people have been planting their own gardens and then pickling the peppers and preserving the peaches. They are canning tomatoes and making blackberry jam.

However, canning’s recent popularity has created a problem.

The Lid Shortage

Soaring seed orders were the first clue that a canning surge was imminent. Ball, the go-to company for canning supplies, says a lot of its items are on back order. A hardware firm in Kidron, Ohio reports a 600 percent pop in canning category sales.

Canners know that jars can be repeatedly refilled. But, since lids cannot be reused, in 1975 and now, there have been shortages.

Forty-five years ago, shoppers responded to rising food prices by doing more canning. In many parts of the country canning kits were available. However, in rural areas like Fayetteville, Arkansas and Whiteville, North Carolina, women wanted to reuse their old jars. That meant they only needed the lids that local stores had run out of. A 1975 NY Times article reports that the House Small Business Committee even scheduled hearings and concluded that there was no hoarding conspiracy.

Instead, the problem was and is supply inelasticity.

Our Bottom Line: Supply Elasticity

In 1975, even with 24/7 production churning out 6.2 million lids a day from 3 major suppliers, there was a lid shortage. I suspect we have the same phenomenon today.

Given short notice, supply cannot stretch. Called supply inelasticity, producers are constrained by their land, labor, and capital. For all three factors of production to increase within weeks is usually impossible. The quantity supplied responds minimally to more demand and even higher prices because in the short run, supply is inelastic. It takes time to add more land, labor, and capital.

I’ve copied this illustration of supply inelasticity from my textbook, Understanding Our Economy:

So, if someone you know needs a lid, just explain he will have to wait a bit for supply to become elastic.

My sources and more: Thanks to NPR’s “Weekend Edition” for alerting me to the lid shortage. From there, I discovered more in The Washington Post and in this 1975 NY Times article.

Our featured image is from The Washington Post.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - How a $350 Meal Became $35 Takeout by Elaine Schwartz

In Chicago, there is a restaurant called Alinea.

Legendary for its cuisine, Alinea’s multi-course meal can cost $395 a person (without the wine). At Alinea online, when you make your reservation, you also pay for the meal. But since the amount depends on the time and the day, diners can save some money by booking a Tuesday instead of a Saturday.

The Alinea website conveys their upscale image:

Now, with the pandemic lockdown, Alinea is vastly different from what it used to be.

Alinea’s Pandemic Takeout Plan

After Alinea’s owners saw Hong Kong’s restaurant reservations dive from 96 percent to zero, during late February they started to plan for the pandemic. They realized that staff would have to hand wash hourly, social distance, and do temperature checks. Once the lockdown started, they closed, furloughed staff, and sent all full time employees a $1,000 check.

Meanwhile though, they were designing their own kind of takeout. By requiring pick up time slots, they could pace the kitchen. With just one entree, volume was feasible.

On March 16, their first day, they sold 500 short rib Beef Wellingtons at $35 apiece. Figuring diners would return for a new entrée several weeks later, by May, they had moved onward to coq au vin and cassoulet. Meanwhile, nightly meal capacity ascended to 1,000 and then 1,250, revenue climbed, the staff grew, and they added courses. For their 15th anniversary, offering a six-course meal for $49.95, they sold 1,250 meals a night for 10 days straight. For Easter they sold 3,000 meals.

Below you can see an Alinea takeout reservation. I added the arrow showing the takeout time slot:

Our Bottom Line: Price

I would suggest that price was one reason for Alinea’s success.

In a market system, price sends a message. It tells customers that a $10 t-shirt is inferior to one that costs $100. However, for Alinea, we have the opposite. Few people assumed that a $35 price tag represented a meal equal to other establishments charging the same amount. Everyone instead perceived a bargain. It was their one chance to eat $350 food for one-tenth the price. As is always true for the market, prices said it all.

My sources and more: I enthusiastically recommend the Eater’s podcast, “How Alinea’s Takeout Business Became a Massive Success Story.” Then, with my mouth watering, I went onward to this article.

Our featured image is an Alinea dining room from their website.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - The Reopening Role of the Restroom by Elaine Schwartz

One of the stars of The Irishman, a 3 1/2 hour movie with Al Pacino and Robert De Niro, said, “…just go to the bathroom before it starts…” Now, as we end pandemic lockdowns and reopen theaters, stores, and stadiums, we need to resolve restroom problems.

Resolving (Coronavirus) Restroom Problems

Coronavirus worries converge in the restroom. Many of us are concerned with social distancing, airborne germ droplets, and sanitizing hands and surfaces. Whether it’s a drive-in theater, an outdoor music festival, or a restaurant with curbside dining, the establishment needs a restroom policy.

One drive-in theater owner said she was increasing the number of portable toilets. But still, the lines would be a problem. Meanwhile, in public restrooms, a high speed hand dryer could spread COVID-19 droplets. Enclosed stalls are a worry because those droplets can be virulent for eight minutes. We also might have sinks that are too close and infected surfaces we all touch.

The solution is expensive retooling. McDonald’s said that with touchless sinks and sensor-activated towel dispensers, the cost of a restroom renovation could exceed $25,000. A group that oversees beach restrooms said they would be charged $250 for the cleaning they want to repeat every 90 minutes.

Our Bottom Line: Spillover

The economic term spillover seems uniquely appropriate for tracking the connection between lockdown reopening and the public restroom. Defined as the positive or negative impact on unrelated third parties, the spillover from a restroom flows to economic growth.

At movie theaters, ball games, parks–wherever we share public space–we depend on restrooms. According to Slate, a California water use textbook tells us that a typical office worker flushes the toilet somewhere between 2 and 3 1/2 times a day. In restaurants, half of all diners use the facilities.

As we reopen, accelerated economic activity will require a new kind of restroom. When we are willing to leave home to see a three hour movie, we create a spillover through the employees theaters hire, the popcorn they sell, and the movie studios they support.

My sources and more: During a family dinner discussion, I learned that restrooms were a big reason that the summer music festivities in Tanglewood could not open. From there, The Washington Post and Slate confirmed their plight.

Our featured image is from Pixabay.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.