Cost of Living on the Rise
Jan Khysl
The Reality Czech
Jan Khysl (17 Dec 200
😎
While some may be unaware of the rising cost of living in the Czech Republic, it is certainly painfully obvious for others.
With the disappearance of goods from eGroup eHungary eFood and some of its Czech competitors, a void has been left in the market for low quality food. Everyone has to eat and now the cheapest options are the once uncompetitive CRU Food Company and Delicious snacks.
While the Hungarians could market their products at less than one CZK, the remaining Czech companies are selling at nearly 3 CZK. This wouldn't be nearly as disastrous but with a mininum wage of 2 CZK, paying nearly 3 a day is a recipe for disaster for those working minimum or low wage jobs.
For a company aligned with the far-right Czech Right Union, the company seems to be ignoring the rules of supply and demand. With nearly 700 units on the market, they still charge a rather exorbitant 2,99 CZK.
So what is there for one to do? If you're only pulling in minimum wage try to make ends meet and look for better paying job options as you build your trade and increase your skill. If you can afford it, purchase quality 2 or 3 food as the prices of such food are a better deal than lesser competitors.
This is a problem that can be easily fixed by the government should they choose to interevene. Raising the minimum wage by a mere 1,50 CZK would be enough to allow minimum wage workers to purchase the lowest quality food available on the market daily.
Comments
The grain price is at lowest in this moment 1.4 czk, we get food price when we add employees fee and i think i would like to have some profit and then we have a price of nearly 3 czk, surprise surprise.
I understand that there is a cost to doing business and I don't think your price is necessarily unfair but considering the Hungarians (and another Czech company StomachCare if I'm not mistaken) were able to outsell you big time. Clearly they are doing something very well that you are not. I'm not involved in business nor do I know the entire situation you face, but if they can do it, certainly we can too.
Donating food is great, but this is a problem that I believe the government must face. If they want to steer clear of regulating business, the easy route is just to up the minimum wage.
To explain some things:
1)Cheap food and also other products(gifts, tickets, weapons) are mainly supplies from previous version. q1 food in this e-republic version lost much of its importance (in previous version if you had q2 house and q1 food your wellnes was around 99). So in current version are both, experienced citizens and newbies, forced buy higher quality food. If they do not, their wellness will be lower and lower - thats mean productivity will be lower=higher cost of products + lower wages.
2)Assuming that, Hungarians will have similiar problem when their supplies will come to end.
3)I fully agree that companies hyping up prices are harming Czech economy, especcialy productivity of newbies. Its the question if market will solve it itself or its needed state intervention.
Red Duck
You know what Jan, i bought the stomach care... if im not totally wrong...
with my salaries empolyee can afford even with skill 1.5 q2 food...
@Duck: I'm a little confused. You believe that the cheap food is left over from some previous version? I would imagine such a supply would have run out by now but I could be mistaken.
@Fin: I only ever spotted StomachCare on the market once when they were selling q1 food at around 1 CZK a unit. Regardless, I don't see how your purchase of it applies to the situation unless you're trying to suggest that your business is more competitive (which it isn't).
@Anyone: If we are to believe, as Fin states, that business cannot really lower prices any lower than they are then the obvious solution is to raise the minimum wage. If the minimum wage is so low that someone working for such a wage can't afford to buy the lowest quality food to eat everyday, we have a problem.
@Fin, again: I'm not trying to demonize you. You do not need to be on the defensive. All I'm trying to suggest is that there is a need for a raise in the minimum wage. It doesn't matter what you pay your employees but rather what others are paid.
@Jan Khysl
I have already explained it, its because q1 food demand in previous version and q1 food demand in this version are different. Also, there was company leaded by Germans before independence war which was selling grain for dumping prices, that led to monopol and destruction of healthy competition so new grain and food companies have not enough capital.
Minimum wage raising is not smart, because companies would rather employ these experienced employers to profit rather than invest to low qualified employers. Thats why every new citizen will get some CZK from start, to buy food/gifts for start until he will be fully profitable. With lets tell more than 3 CZK as minimum wage companies would be forced to count with any newbie as loss. They would not have any guarantee that emplyee would not work there and will withdraw to another company when he would reach proper skill. That means that job offers for 0-1 skill workers should disappear and products would be more expensive.
No insult taken Jan, its politics and im ok with it 🙂
Im sorry, it was a bit unrelated to tell that i bought stomach care and it was nothing needed to know.
Higher minimum salary would only make the situation badder, because now there is 5 czk offers for 0 skill employees which is too much for me already.
I would like to fix the grain situation and its my primary mission for now...
well lets do little maths: worker with 0 skill produces 0,5 food, he gets paied 2 czk and uses 0,5 grain so 2/0,5=4 well then food should cost 4 czk and company still wouldnt have any profit...
@Duck: I understand that taking on a newbie at any point is unprofitable but at the same time its an investment. In the future they may be better employee but as you point out there is no guarantee that they'll work for you. But then again, if you offer well-paying jobs at advanced skill levels this should be negligible.
@Fin: My concern is for new citizens. I realize that a higher minimum wage would be unpopular with business but as things are now we're discouraging people from entering certain professions, namely construction. Had it not been for cheap Hungarian food, it is likely I would not have been able to afford to work in the construction sector and would have had to switch fields.
@Jordy: from what I've seen the food companies already pay more to employees as is. In fact, from what I've seen they're already paid around the minimum wage I proposed (~3,50 CZK). So what you would likely see is that it would end up costing the food businesses nothing or little more but would mean minimum-wage employees in other industries could afford to build their skill in a different field.
It takes only two days of work to get to skill level 1 and you can get level 1 jobs for more than just the minimum wage. Combined with relatively high starting money I don't think it'll be usefull to raise minimum wage.
High prices would be problem only if there is some unemployment or shortage of available better paid positions.
A solution which is radical could be we have A) Government owned Companies that everyone works in. If everyone worked in Grain-Food, that would help.
But I support a free market.
@Baltazar: I realize that it does not take long to build your skill early on. Regardless, new citizens will likely change sectors early on and not all of them may have the luxury of working every day. As you point out, a higher minimum wage would not really have any effect on business while guaranteeing new citizens meals.
@Vaclav: I had a similar idea but rather than government owned companies it would be a sort of league of business. Basically, profits of all member companies would be shared so that some companies could take a loss while selling products. If this were done, products could be sold home and abroad at prices that would be very difficult to compete with. Perhaps I will outline the idea better in the future but it could be very good for the Czech Republic.
We should still lower taxes on minimum.
Yea sounds interesting.. If we had majority of Czechs in a few companies instead of spread out maybe we could control the market better.. 😛
I don't think the government should intervene at all. We're a capitalist society - the less the government is involved in business, the better.
Raising minimum wage isn't really an answer or a problem - It's fine how it is, although it could go up a few CZK without much problem.
I think grain should be cheaper. Right now, I'm selling the cheapest grain (Shandavio Grain Goods, 1.2 CZK each, compared to next cheapest which is 1.5 CZK and only has 1 in stock). I'm willing to go lower, obviously, to lower prices of food, but not until I start selling. I've hardly sold any grain at all despite the amount I have available and the low price.
I don't think the government should intervene at all. We're a capitalist society - the less the government is involved in business, the better.
Yea that is how i want to keep it 😛
I do think we need more workers in grain and lumber though 😕
Well, as a newbie in this game I am sure that I am missing some points, nevertheless, this seems as a economical problem and a believe I have some background economy knowledge, so here is my proposal.
When browsing in the economy stats, I noted a very high import tax on food. So in this case, free market mechanism could provide us a solution. If we allowed through some incentives foreign companies to sell food on our market, our citizens would benefit from cheap food as a result of unevitable competition of food distributors (providing that there would be enough of them). Our citizens would benefit as well as our companies (through higher citizen working output as a result of improved living conditions - wellness, if I am correct).
So my proposal is simple: lower the food import tax as well as VAT (not sure what the volume of VAT tax collected on food is, may be significant) and advertise these changes on foreign markets to attract suppliers.
Free market, almost free food for all 🙂
Please fell free to correct me at any point, as long as I am NewB to this game, but I learn swiftly 🙂
Sounds good, I think some people may be worries about the amount of Korunas being sent out of CZ and the strain on our food companies
__ just throwing somethign out there 😛
Actually, with how much food the CRU company has stockpiled, they could probably afford to undersell their competition and maybe drive them out of business. I think what we're facing is a little (if unintentional) price fixing.
Honestly, it would seem to me that the minimum wage should be fixed to the price of q1 food. Everyone should be able to afford to eat without the risk of going broke. A small hike in the minimum wage isn't going to kill business and can only do good for future citizens of the Czech Republic.
@Slava - I happen to think the opposite. It may work for a while, but we can't rely on foreign companies to supply us with grain (and any other resource for that matter). If anything, import taxes should be increased to promote buying and selling in our own economy. That way, we fix our own problem, and that's more money for us.
Also, @Jan - That's a good idea. Minimum wage should be ~Q1 food. Throw in the citizen fee (which is, what 25?), new members should be able to last for a while before they get higher-level jobs.
my products are starting to pile and i have now 200 for sale, because i sell about 40 food per day but my empoyees produce twice that...
That's why I suggested a minimum wage hike of 1,50 CZK. That's just enough to cover buying q1 food daily plus a little extra which could keep the Congress from having to change the minimum wage more often then necessary and allowing new citizens to build up a little savings.