Economics 101 teaches that much of life - from gas station lines and international airfare rates to the price of tea in China - is simply a matter of supply and demand. Generally speaking, low supply combined with strong demand means high price. So perhaps it comes as no shock that it's common practice in some businesses and industries to overstate the scarcity of a certain item in order to spike demand and perceived value. Just which foods, objects and intangibles are more plentiful than it seems, however, may be a little surprising.
Hey Mickey, how many DVDs do you have in the Disney Vault? That many?
Gas, water, chicken wings: Reports of their demise have been greatly exaggerated, at least according to some experts. Sometimes the confusion is purposely designed to peak buyers' interests; other times, it's simply a matter of media hype and the frenzy that comes with it.
Read on for a look at 10 of the most notable "fake scarcities."
10. Flu Vaccine
 A sign advertises flu shots at a Manhattan pharmacy during the 2013 flu epidemic. Despite media reports to the contrary, flu shots were readily available. |
Given that the Centres for Disease Control and Prevention recommends that everyone over the age of 6 months get an annual flu shot, it's easy to believe that a rush on the vaccinations could lead to a shortage by the time flu season hits full swing [source: Reuters]. But health officials and vaccine producers have been ahead of the curve in recent years, even when the virus starts its assault ahead of time [sources: Doyle, Pamer].
Each year, vaccine-makers produce flu shots in August, well in advance of the cold months in which the virus tends to rear its ugly head. Most people are vaccinated in the fall, meaning that less of the vaccine is typically available by season's end. Even if some pharmacies have a shortage of the vaccine, others in the area are bound to have it. There's even a government Web site to tell you where you can find it. A total of 145 million vaccines were created for the 2012-13 flu season and some 16 million doses remained available in the U.S. in late January 2013, which experts say is par for the course [sources: Doyle, Pamer].
9. Chicken Wings
 Rick Russo of Trappe, Pennsylvania, chows down on Buffalo wings during Wing Bowl 17 in Philadelphia. Wing Bowl, a competitive eating contest held Super Bowl weekend, was started by a local DJ who was tired of the Eagles never making it to the big game. |
There are few things more American than the pairing of football and chicken wings. Media hype may be one of them. Every year around Super Bowl time, fans of the U.S. pastime and purveyors of deep-fried Buffalo, BBQ or just plain hot wings are swept up in a wave of giggly news reports about a chicken wing "shortage." The only problem is, it's not true.
The annual headlines scream something about how a run on wings leading up to the big game has drained the world's chicken supply and sent prices soaring [source: Daneman]. In 2013, the rumours stemmed from a report by the National Chicken Council (NCC), an organization that, yes, does exist, claiming that wing prices would be higher in the run-up to Super Bowl kick-off. According to the council, drought and ethanol production requirements led to a spike in corn and feed prices, which in turn made it more expensive to raise birds [source: Tuttle].
What the council didn't make clear is that it was referring to a potential rise in wholesale wing prices, though later it did say that since restaurants and grocery stores plan for this event in advance, the price increase doesn't get passed on to the consumer. Oh, and in the middle of the press release it reassures that "consumers shouldn't worry about any shortage of wings on Super Bowl Sunday or any time soon" [source: Tuttle].
8. Mobile Data
 Data traffic is actually slowing as consumers seek out free Wi-Fi as an alternative to data caps or higher fees charged by wireless companies. |
No, "spectrum" is not a reference to the legendary Philadelphia arena that was once home to the Flyers and 76ers and host to superstars like Bruce Springsteen and Genesis. These days, the term is most commonly used to describe the radio frequency over which people access the Internet wirelessly. As our voracious appetite for data continues to increase, some say it is wearing on the limited amount of spectrum available, creating a supposed "scarcity" [source: Reardon].
The CTIA-Wireless Association and some government officials have been sounding the alarm for quite some time now. Wireless traffic jumped by 104 percent from June 2011 to June 2012, according to the industry group, which says additional spectrum will be necessary to feed the beast that is our burning desire to get football scores, check the weather and post photos to Instagram, all on the go [source: Farrar].
Yet others claim that data traffic growth is actually slowing. Substantially. In the first six months of 2012, wireless data traffic rose by only 21 percent, probably due to the data caps imposed by some major telecom carriers, which has sent consumers searching for Wi-Fi. Meanwhile, watchdogs point out that only about one-third of the spectrum available in the U.S. is currently being used [sources: Farrar, Reardon]
7. Disney Movies
 Wonder many of these Disney characters have had movies stored in the "vault." Fortunately for kids and unfortunately for their parents, the expensive stuffed toys are available all the time. |
Pay no attention to the mouse behind the curtain. He is simply working the hype machine.
"Masters of trademark and copyright, Disney knows something about locking up content - especially its own," the Wall Street Journal explains. The company regularly removes a handful of its movie titles from the shelves, placing them in the so-called "vault," where they will supposedly stay locked up and unavailable for purchase for an undisclosed period of time. Not before the company gives fans one last chance to snag these selections, of course. Disney generates demand for these flicks with a cloud of uncertainty as to when and if a specific title will be back on the market [source: Felten].
Turns out the Disney "vault" is as mythical as Alice's Wonderland. Shoppers at the company's online store can find "Fantasia"-themed shirts, hats, cups and ornaments, but not the movie itself. But head on over to Amazon and other third-party retailers, and you can easily find this and other vault titles for sale[source: Felten].
6. Diamonds
 Beyonce flashes her engagement ring while watching the 2011 U.S. Open tennis championships. Reportedly the 18-carat diamond ring costed $5 million. Was that two months of Jay-Z's salary? |
If what the television commercials say is true, there can be no shortage of diamonds on the market as every Tom, Dick, and Harry to get hitched in the last decade "went to Jared." Yet, these precious stones have long been considered largely scarce, driving the size of the huge price tags to which they are typically attached.
The short diamond supply is an illusion created by one big gem seller. As far back as the 1880s, the De Beers family of diamond companies began a practice that still affects the price of stones today when chairman Cecil Rhodes secured the rights to a large swath of South African diamond mines. The method spread to other diamond regions. De Beers and a few other companies soon controlled the vast majority of the world's diamond supply and, more importantly, the prices that could be charged for them [source: Zoellner].
These diamond hoarders want end-buyers to believe that the stones are incredibly hard to come by, and thus be willing to shell out more cash for them. The truth is that vast supplies of diamonds are under lock and key, kept off the market completely to inflate prices [source: Stossel].
5. Online Advertising Space
Contrary to popular myths, there's no shortage of advertising space online.
One only need look at the spectrum "crises" to know that people sure do spend a lot of time online. People also buy stuff. As a result, businesses clamour for the opportunity to get in front of Web surfers by advertising on popular sites. Those sites' owners are only too happy to cash in on the craze. Claiming that ad space on their pages sell out months in advance, Yahoo, MSN, AOL and other sites jack up the rates for prime, 24-hour ad spots[source: Angwin].
The "shortage" is mostly confined to home pages, however. There remains a nearly endless array of advertising opportunities available on other, interior pages. In fact, some experts say that ads on these pages are better for marketing purposes because they allow companies to tailor their message to niche markets. Google, for example, links ads to keywords - meaning that they are customized to reflect whatever it is that a consumer may be searching for online - and charges advertisers largely based on what users actually click on. A recent shift to less costly (or free) mobile ads and marketing ventures via social networking sites like Facebook and Twitter, has helped bring down the price for "traditional" Web ads [sources: Angwin, Jarvis, Efrati].
4. Oil
A freighter passes an oil drilling platform in Guanabara Bay, Rio de Janeiro, Brazil.
"Peak oil" refers to that old saw about how the world is on the verge of running out of the bubbling crude. Alarmists have been floating the idea since the early 1880s. More than 130 years later, worldwide oil demand is expected to grow 840,000 barrels per day in 2013, according to the Organization of the Petroleum Exporting Countries (OPEC), the cartel that keeps much of the world's supply of black gold on a short leash [sources: Rotman, Reuters].
The continuing rise in oil demand, fuelled largely by China, has peak oil theorists fretting once again that the reserves may eventually be tapped out. But detractors say the theory wrongly assumes that there will be no more significant innovations in oil production and new resource development will essentially stop in its tracks. Meanwhile, untapped reserves of Texas Tea have been located across the globe, from off the Brazilian coast to the Canadian oil sands. Even the United States is stepping it up: OPEC says American oil production is set to climb by 490,000 barrels per day as a result of a North Dakota oil boom and increased drilling efforts in the Gulf of Mexico [sources: Rotman, Graeber].
3. Skilled Technical Workers
 Workers paint a construction vehicle. Skilled construction workers apparently would not be in short supply if the wages were higher. |
Recent recessions have resulted in a seemingly insurmountable skills gap in which the skilled technology positions replacing manual labouring jobs in factories and elsewhere simply can't be filled because the available workforce lacks the necessary training. At least that's the narrative spewed by various business and political leaders. The National Association of Manufacturers estimates that there are about 600,000 technical factory jobs available for candidates with the advanced know-how to perform them [source: Davidson].
Nonsense, say a vocal sector of labour economists who argue that it's the low money offered for these positions that make them hard to fill, rather than a dearth of skills. In other words, manufacturers want workers with education and technical capacity and are offering to pay them substantially less than the wages they can demand in other industries. Or, in some cases, just a little more than the local McDonald's. Even at the higher end of the spectrum, engineers and other technical workers are opting to go into more lucrative unrelated fields like finance and medicine, according to experts [sources: Davidson, Barger].
2. Nurses
 Graduate candidates in the nursing program wait to be conferred their degrees during commencement exercises for New York University in 2009. |
We've been told for some time now that the health care industry is in a state of crisis stemming from a severe shortage of nurses. A greying population, plus increased access to medical treatment is supposed to mean more demand for nurses. But a funny thing happened during the recent recession: Many nurses expected to retire decided to keep working [source: Kurtz].
The shortage rumours have been good for nursing schools - enrolment in bachelor's degree programs has doubled over the last decade - but not so much for their recent grads, many of whom have a hard time finding work. More than one-third (36 percent) of new registered nurses who graduating in 2011 were not employed as RNs four months after receiving their diplomas, according to a survey by the National Student Nurses Association. That's nothing compared to California, where almost half (46 percent) of nursing students were still looking for work within 18 months of graduation. Experts say that's because doctors and hospitals want something these new grads can't possibly offer: experience [source: Kurtz].
1. Water
 A dog walks past people gathered to buy water during a shortage in Villa El Salvador, a slum district of Lima, Peru. |
Water shortages are a real concern in certain parts of the world, particularly in developing areas. About 20 percent of the world’s population lives in places where water is physically scare but a further 25 percent lives in areas that lack the infrastructure to get water from its source - rivers, aquifers - to the people whose lives depend on it. And in these and other places, poor water quality, resulting in the spread of diseases like cholera, malaria and typhoid fever, can be as dangerous as no water at all. [source: World Health Organization].
But the total volume of water on planet Earth has not declined and, overall, we are not at risk of running dry. The old yarn about 97 percent of the planet's H2O being the unusable salt variety is just that. Casual observers often don't understand that oceans actually serve as fresh water springs as the sun, sea and evaporation work together to produce about 45,000 gallons (170,344 litres) of rainwater for each of the Earth's inhabitants. The problem is that, in many cases, living communities, farms and reservoirs simply are not developed in areas where that water is easy to access [source: Fishman].
Author's Note: If you're a baseball fan who grew up in the '60s, any player cards you still have may actually be worth something. Or at least you probably have a good story about how you'd be sipping on a Tom Collins in Tahiti right now if grandma hadn't thrown out that Mickey Mantle rookie card you stashed under your bed as a kid. Those old cards retain some value simply because not many were produced back in the day. Then card trading became popular, and companies like Topps and Donruss couldn't print 'em fast enough. So if you are a baseball fan who grew up in the 80s or later, go ahead and let Granny throw those old things out.
Article Sources:
1. Barger, Theresa Sullivan. "The 'Engineer Shortage' Fails NSBE's Fact-Check." National Society of Black Engineers. (March 18, 2013)
2. Daneman, Matthew. "Chicken-wing craze sends prices soaring." USA Today. March 1, 2010. (March 19, 2013)
3. Davidson, Adam. "Skills Don't Pay the Bills." The New York Times. Nov. 20, 2012. (March 18, 2013)
4. Doyle, Jessica Ryen. "Early, severe flu season makes for 'supposed' vaccine shortage." Fox News. Jan. 23, 2013. (March 16, 2013)
5. Efrati, Amir. "Google Hit by Weak Results." The Wall Street Journal. Oct. 19, 2012. (March 19, 2013)
6. Farrar, Tim. "The Myth of the Wireless Spectrum Crisis." Gigaom.
7. Felten, Eric. "Disney's Movie Vault: Scarily Creating a Fantasia of Scarcity." The Wall Street Journal. May 20, 2011. (March 18, 2013)
8. Fishman, Charles. "Five Myths About Water." The Washington Post. April 6, 2012. (March 18, 2013)
9. Graeber, Daniel J. "OPEC forecasts record US oil supply growth in 2013." The Christian Science Monitor. Jan. 17, 2013. (March 18, 2013)
10. Kurtz, Annalyn. "For nursing jobs, new grads need not apply." CNN. Jan. 23, 2013. (March 18, 2013)
11. National Chicken Council. "Americans to Eat 1.23 Billion Chicken Wings Super Bowl Weekend." Jan. 22, 2013. (March 16, 2013)
12. Pamer, Melissa. "'Spot Shortages' of Flu Vaccine Reported; Some SoCal Locations Out." NBC. Jan. 12, 2013. (March 16, 2013)
13. Reardon, Marguerite. "Wireless spectrum: What it is, and why you should care." CNet.com. Aug. 13, 2012. (March 16, 2013)
14. Reardon, Marguerite. "Wireless spectrum shortage? What spectrum shortage?" CNet.com. Sept. 27, 2011. (March 16, 2013)
15. Reuters. "OPEC Sees 2013 World Oil Demand Downside Risk." CNBC. March 12, 2013. (March 18, 2013)
16. Reuters. "Flu Vaccine, Tamiflu Shortages reported By Drugmakers." Huffington Post. Jan. 10, 2013. (March 19, 2013)
17. Rotman, David. "Peak Oil Debunked." Technology Review. Sept. 22, 2011. (March 18, 2013)
18. Stossel, John. "Stossel Asks: Why Diamonds?" ABC. Feb. 14, 2013. (March 16, 2013)
19. Tuttle, Brad. "Reality Check: There Is No Chicken-Wing Shortage — Prices Haven't Really Soared Either." Time. Jan. 31, 2013. (March 16, 2013)
20. World Health Organization. "10 facts about water scarcity." March 2009. (March 18, 2013)
Related Articles:
No comments:
Post a Comment
Please adhere to proper blog etiquette when posting your comments. This blog owner will exercise his absolution discretion in allowing or rejecting any comments that are deemed seditious, defamatory, libelous, racist, vulgar, insulting, and other remarks that exhibit similar characteristics. If you insist on using anonymous comments, please write your name or other IDs at the end of your message.