See, I want this everywhere so bad but I worry that without some kind of control on the price of basic needs (food/housing/healthcare/etc) a broader rollout will cause providers of those things to just raise their prices across the board and result in little or no benefit to everyone else. Housing especially, since the market is already in la la land. Am I wrong about this? Or is there an easy solution maybe?
druidgreeneyes
joined 10 months ago
These thoughts are all reasonable but there are two problems:
1: Human psychology. Showing a smaller price on the menu (or on the shelf label) has proven to be effective at getting consumers to choose your good or service over those of your competitors even in the face of paying a higher final price. At a larger and more convoluted scale this is what Walmart and Amazon do; one of the reasons they can show a lower price than their competitors is that they have become adept at offloading the true cost of the good in ways that are difficult or impossible for the buyer to see. Walmart, for example, has been widely reported on for intentionally paying employees a wage that qualifies them for state support where they live, and sometimes even helping employees through the legwork to actually receive that support. This saves face for Walmart because they look like they’re supporting their workers in ways their competitors don’t; but that support really comes out of tax revenue collected by the state. So when somebody buys stuff from Walmart, they’re actually paying more for the good than they realize, and importantly this works because the shelf price is still better than competing stores. You can see this all across retail. We like to think ourselves clever when we catch it, like pointing out that $9.99 and $10 are functionally the same, but it still appears to be exceedingly effective: most people will take the $9.99 unless they have a reason to stop and think about it, and largely we’re all occupied with matters that feel more pressing than whether the extra cent is worth it. When we can even see that the trick is in play.
2: Capitalism. Competitive markets imply winners and losers, which in turn means that if your competitors are doing something to attract consumers (like showing a lower sticker price) and you are not, your business will quickly become unsustainable and die from lack of patronage. For restaurants especially the market is extremely competitive, so restauranteurs tend to act in ways that are heavily influenced by paranoia about what other restaurants in the similar lanes (location, cuisine, price range, atmosphere, etc) are doing at the time.
Those two points together lead to a situation where, as “invisible” costs like kitchen supplies or employee healthcare continue to rise, the pressure on any given restaurant to find ways to hide those costs from the consumer continues to grow. We can observe restaurants reacting to this in a variety of ways. Some cut their hours to only provide service during the times when they reliably see the most traffic. Some cut staff and try to do the same work with a smaller pool of labor. Some are lucky and manage to build brand followings that make them more resilient to this pressure, and can confidently raise their prices to some degree without losing a meaningful amount of business. And I think we can see pretty clearly that for many, hiding the true price behind junk fees has been an effective tactic to keep people coming in the door.
None of that makes the practice ethical or worth supporting, but it’s also not going to go away just because consumers would prefer to see the full price up front, because that preference doesn’t cause enough people to stop visiting restaurants that use junk fees. What you want only matters insofar as it drives change in your spending patterns, and as far as we can see right now, it looks like the use of junk fees attracts more business than it drives away. Thus, as much as we might hate it, it doesn’t seem like it will truly go away until one of the problems listed above changes; even in the face of anti-junk-fee regulation, the continual pressure means that somebody will eventually discover some new way to hide the true price from consumers, and then that too will spread throughout the market.