One of the many unpleasant side effects of the rapidly spreading coronavirus has been the tendency for people to hoard some common products that most of us normally don’t give much thought to. These include Nitron gloves, surgical masks and hand sanitizer. This has led to stores quickly running out of these products and some people selling them for vastly inflated prices. Out in Long Island, New York, lawmakers are attempting to stop this trend by passing a measure that would impose a fine on individuals attempting to profit in this fashion. (CBS New York)
Lawmakers are working to stop price gougers who are cashing in on the coronavirus outbreak. New legislation could stop sky-high prices for items that are currently flying off store shelves.
Long Island pharmacy owner Maisey Khodzhayev told CBS2’s Dave Carlin on Sunday that customers are desperate to get their hands on masks and hand sanitizer. He’s down to just a few masks and the hand sanitizer is all gone.
“I sold out my last five pieces today. I sold out last week,” Khodzhayev said.
When stores like this one sell out it pushes some people to look elsewhere and pay more than they should.
Nassau County Executive Laura Curran is the one pushing the measure with the support of several county legislators. But there are several concerns over how this will be implemented and if it’s even legal.
I think most of us would be annoyed (at a minimum) to find that the only locally available hand sanitizer was going for $100 per bottle. (This is an actual price that was seen on Long Island this week.) But can you truly throw the book at someone who is doing it? More than thirty states have laws on the books against price gouging and they’ve been upheld by state supreme courts, such as the one in Kentucky. I can find no record of such a challenge being heard by SCOTUS.
But the scope of the laws is restricted. They only pass constitutional muster if they are enforced during a declared state of emergency or disaster. Further, they can only apply to products that are considered “essential goods” and the law must specify price ceilings for each class of product. There is currently a state of emergency in New York State due to the coronavirus, so Nassau County should be able to get away with this if they structure the rule correctly.
But even if they can, should they? After all, while repugnant to most, price gouging is really just an example of the free market being pushed to extreme limits. Supply and demand is the underlying principle of capitalist systems and it controls pricing in every aspect of society not directly regulated by the government. If there is less of something available, the price goes up. If there’s a glut of any given product or service, prices are supposed to drop. (Unless you control a monopoly such as the airlines do.)
The other complicating factor here is the prevalence of online shopping. These aren’t the old days when your only option if the local store was out of something was to buy it from a guy selling wares from the trunk of his car. You can still find hand sanitizer, gloves and masks online, generally for fairly normal prices. There are a few crazy prices on E-Bay, but if you spend some time on Amazon (I just checked) you can get all of those things, even if the expected shipping dates are running a bit longer than usual.
Most of you shouldn’t be particularly worried about this. The CDC has already stated that the majority of publicly available surgical masks don’t protect against the coronavirus anyway. Gloves can be effective, but you’re going to go through a lot of them quickly or they rapidly become useless. Hand sanitizer is fine, but just washing your hands regularly throughout the day is what most doctors are advising.
But hey… if you want to pay $100 for a bottle of Purell, be my guest. It’s a free market after all.