Here’s the sad truth. Everything will be more expensive now. Regardless of what business you as a customer frequent, the business owners’ expenses are going up. And they’re not arbitrarily using COVID as a pretext to raise their prices. Expenses are up because restaurants, clothing stores, doctor’s offices etc are spending more on personal protective equipment (PPE) and cleaning supplies than ever before. Specifically in our practice, we’re spending more on PPE but also rapid in-office testing kits.
It’s not just the expense of buying more supplies. The supplies themselves are more expensive than ever before. Why? Because of the law of supply and demand. Manufacturers, suppliers and distributors recognize there’s a greater demand, so prices go up. While they may not raise the prices to usurious highs that are just plain price gouging, everyone’s costs are going up. So to cover these increased expenses, a businesses’ prices go up and pass those costs onto the consumer.
Everything will be more expensive now
Aside from supply and demand of PPE increasing prices, another economic phenomenon will come into play over the next several months and years. This pandemic has reaffirmed something we already knew. Our supply chain relies too heavily on countries that have experienced an epidemic several times in the 21st century. SARS in 2002/2003, MERS, H1N1 in 2009 and now COVID in 2019/2020. China, Taiwan and South Korea are the first affected by these epidemics.
The US will start to shift as much manufacturing as possible to facilities within our borders. This is great in reducing the unemployment rate by increasing the number of manufacturing jobs available. However, labor is more expensive in the US so the costs of those goods will be more expensive than those coming from Asia. Pro: it’s good for jobs. Con: it will cost us more. Intel is already in discussions with the White House to develop chip making factories here.
Cosmetic surgery costs and the airline industry
Airline tickets were less expensive in recent years. It wasn’t magic. By loading planes with more passengers than ever before, the airline could lower costs due to the volume of passengers. Now that the middle seat is gone, so are those discount fares. With fewer tickets available for purchase, airlines will have to raise their prices.
This is analogous to cosmetic surgery. Yes, prices will go up due to increasing expenses for PPE. But offices may not feel comfortable seeing as many Botox patients every day or operating on several patients in one day. With lower daily volume comes lower revenue. So doctors will be forced to raise surgery fees to counteract the loss in volume.