Wired868 Wired868 for smart sport news and opinion
“[…] The spread of Covid-19 has disrupted households and businesses in the form of reduced economic activity which has affected wages and revenue. This disruption leads to a lowered standard of living/poverty, or price increases to prevent business losses which then results in inflation…”
The following Letter to the Editor on combating rising prices and lowered incomes resulting from Covid-19 disruptions was submitted to Wired868 by Antonio Decklan Ross:
The basic fact is that, in a capitalist system, the goal of an individual/business is to increase wages/revenue in order to offset cost of living/expenses, so as to improve standard of living/save/make a profit.
Every person/household/business carries costs (fixed and variable). Fixed cost is constant and therefore does not change regardless of what you do. Variable cost depends on the activities carried out within a specific period of time in a home or business.
Wages/revenue are used to offset costs. Depending on your form of employment or business, wages/revenue are either fixed or variable.
Efficiency in a household or business is a situation where little to nothing is wasted. Inefficiency is a cost. Depending on the nature of a business, idle equipment is considered ‘waste’ because it carries a fixed cost but does not generate revenue.
The spread of Covid-19 has disrupted households and businesses in the form of reduced economic activity, which has affected wages and revenue. This disruption leads to a lowered standard of living/poverty, or price increases to prevent business losses, which then result in inflation.
This logic can be applied in the case of the taxi/taxi-driver as well as a bakery.
A taxi-driver with a fixed cost at home and an increasing cost of living due to inflation can only offset this by increasing earnings through a hike in the taxi fare.
A taxi carries fixed and variable costs. Its operating cost will increase due to the raised cost of parts and repair labour, which again can only be offset by increasing taxi fares. And consider too the cost of inefficiency due to reduced capacity caused by Covid-19 regulations.
(I deliberately separated taxi-driver from taxi because those are two different ‘business entities’.)
In the bakery, there is the disruption of the labour force due to Covid-19 illness, reduced sales by small/medium/large vendors due to the lockdowns, which lead to reduced revenue and idle equipment while still carrying fixed costs such as bank loans. And there is the increased cost of raw materials used to make finished products for sale as well as increased distribution cost.
(Courtesy FinanceTwitter)
What can YOU do to battle loss of wages/earnings or inflation?
- Do a WRITTEN budget
- Be creative and industrious
- Utilise your time wisely by converting it into money
- Swallow your pride and engage in economic activity that you may have previously considered to be beneath you
- Reduce your cost of living and that of your household.
- Seek out and utilise more government subsidised services, such as buses, public healthcare, social services, etc
- Ask for HELP
Please note, I am not making a case for price increases but merely trying to explain—from a layman’s perspective—how you can overcome them.
“[…] T&T’s education system thus faces two challenges—decades old, but now more pressing in the context of 21st century market Read more
“[…] While the proponents of this proposed bill argue that these laws will promote self-defense and personal responsibility, critics have Read more
Elements of the trade union movement now sits inside the coalition that governs Trinidad and Tobago. That should have brought Read more
“[…] The psychological impact of long-term oppression can be devastating, leading to a cycle of poverty, social alienation, and continued Read more
“[…] The 1990 coup demonstrated that unchecked religious freedom and extreme religious ideologies can pose a direct threat to democracy Read more
“[…] Let us be clear: the perpetrators of July 1990 were not patriots. The true patriots defended the Constitution and Read more
Want to share your thoughts with Wired868? Email us at editor@wired868.com.
Please keep your letter between 300 to 600 words and be sure to read it over first for typos and punctuation.
We don’t publish anonymously unless there is a good reason, such as an obvious threat of harassment or job loss.
