HARRISBURG, Pa. (WHTM) — Almost everyone agrees: Price gouging is bad.
But the solution to it — and even the definition of what exactly gouging is — are a matter of more debate.
State Rep. Ryan Bizzarro (D-Erie) says the definition is clear: “Price gouging is when you’re making astronomical profits and increasing prices just because you can.”
He says companies that sell gasoline do it — “Corporate greed is driving these prices up, and the money is flowing out of the pockets of working people and to the shareholders,” Bizzarro said — requiring intervention like a bill he is sponsoring.
Among other provisions, it would ban gas stations from changing their price more than once a day or from charging “an unconscionably excessive price.”
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“We’re not against anybody making money,” Bizzarro said. “But there is a complete difference between making money and being a pig, and some of these people are being pigs. They’re taking advantage of consumers to the point where I don’t know how they can sleep at night.”
Think of people, he says, who hoarded masks and hand sanitizer and resold them at jacked-up prices early in the pandemic.
“I myself couldn’t find hand sanitizer during the pandemic,” Bizzarro said. “I had to make my own literally from aloe and buying rubbing alcohol. That’s how much of a shortage there was.”
But hold on, say other people. An effective way to prevent shortages, they say, is to let businesses charge higher prices.
“No one wants prices to go up,” said Ben Baldanza, a former CEO of Spirit Airlines who now teaches economics. “But the alternative is not to have the product for some period of time.”
Baldanza said he understands some of the gripes consumers have about airlines, but he said the way they handle pricing — i.e., changing fares frequently — prevents shortages.
“It’s just a fact that more people want to fly to February than in July,” Baldanza said. But airlines rarely run out of seats to sell in February, he said, because they charge more then, which causes some people to hesitate to buy tickets.
Does that mean — unseemly as this might have been in March 2020 — Walmart and Target should have charged more for toilet paper to discourage hoarding and keep more of it on their shelves?
“I think that’s right, because clearly if everybody had gotten one pack of toilet paper, we’d have been better off than the first ten people taking a tenth of the stock and everybody else being left out,” he said.
In other words, in the view of people like Baldanza, the opposite of price gouging — price controls — can be a problem too.
Baldanza said he too is against price gouging. But he has a more narrow definition of what defines gouging, one shared by Republicans sponsoring a bill — supported by business groups — that would pare Pennsylvania’s definition of the practice during future emergencies.
Bizzarro said he’s confident of his bill’s chances in the Democrat-controlled state House, where the GOP bill could face tougher odds. But Bizzarro’s bill’s path through the GOP-controlled Senate, on the other hand, could be tougher than in the House. Either bill would need to pass both chambers before Governor Josh Shapiro (D) could consider signing it into law.