I've always founds this curios, if I'm my company is going through a rough time, I don't call my boss and say I want 50% more money, I usually just help out until we get through it, occasionally I'll get a bonus for that but it's optional.
Oil companies are interesting because it seems like the first thing that happens if there is any kind of problem is put their prices up?
Does your company trade a global commodity like oil? The market prices it. Let’s say you had two buyers for your home with a market value of 300k. One buyer wanted to buy it for 240k and the other for 300k. Which offer would you take?
So basically, war starts, oil prices go up because war has started, and oil companies pocket the extra money for their oil which they've literally done nothing yet received a handsome bonus?
Do farmers triple or 5x the price of food during droughts?
> Do farmers triple or 5x the price of food during droughts?
Yes, actually. The price of 1 pint of real vanilla extract is currently $9.59 at Costco. I have seen it as high as $42.99. That is a nearly 5x spread, and it largely depends on the weather and politics in Madagascar.
Do those price differentials go the the vanilla farmers in Madagascar, or to the other farmers who are the sources for real vanilla; i.e. Uganda, Indonesia, PNG?
I always though that it basically was conditions reduced supply (weather and politics), purchasers of the raw products basically get all of the available production at pretty close to standard prices for what limited amount there is, farmers who dont have product get no income, farmers with product get some - maybe a little more per unit but fewer units overall, and then the raise global prices was due to the tier 1 buyers/distributors needing to cover fixed processing and distribution premiums which do not fluctuate much even when supplies are low.
So, Madagascar by virtue of overwhelming percentage of production pretty much set the availability curve, but i expect farmers pretty much get what they get for the beans they grow, within a range and that's probably not more than 2x at most. But I could be way off and the 5x price differential is perfectly proportional, 5x cost of raw bean == 5x cost of delivered extract.
If there's a shortage of labour, one company wants to pay you $60k, one company $90k and one company $150k. Where will you choose to work? Right, the last one. The first one will have to at least come close to $150k if it wants to keep you. The labour market has higher friction than the oil market so this probably won't happen for a few weeks until the manager realises he's bleeding employees.
This is intuitive on an individual level, but price discovery works differently in these two scenarios.
Wages are "sticky" and negotiated directly between two parties. Oil is a globally traded commodity. Oil companies don't just decide to "put their prices up", though large players can influence it.
When a shock happens, buyers immediately bid up the price to secure limited future supply. Producers largely aren't involved in that pricing.
I will also add that, depending on the situation, your company having hard times very well might be the time to renegotiate your pay. It also though may be the right time to sit quietly and not draw attention to yourself.
bamboozled · · focus · HN ↗
Oil companies are interesting because it seems like the first thing that happens if there is any kind of problem is put their prices up?
Steppphennn · · focus · HN ↗
bamboozled · · focus · HN ↗
Do farmers triple or 5x the price of food during droughts?
kbolino · · focus · HN ↗
Yes, actually. The price of 1 pint of real vanilla extract is currently $9.59 at Costco. I have seen it as high as $42.99. That is a nearly 5x spread, and it largely depends on the weather and politics in Madagascar.
naishoya · · focus · HN ↗
I always though that it basically was conditions reduced supply (weather and politics), purchasers of the raw products basically get all of the available production at pretty close to standard prices for what limited amount there is, farmers who dont have product get no income, farmers with product get some - maybe a little more per unit but fewer units overall, and then the raise global prices was due to the tier 1 buyers/distributors needing to cover fixed processing and distribution premiums which do not fluctuate much even when supplies are low.
So, Madagascar by virtue of overwhelming percentage of production pretty much set the availability curve, but i expect farmers pretty much get what they get for the beans they grow, within a range and that's probably not more than 2x at most. But I could be way off and the 5x price differential is perfectly proportional, 5x cost of raw bean == 5x cost of delivered extract.
someonebaggy · · focus · HN ↗
jfyi · · focus · HN ↗
Wages are "sticky" and negotiated directly between two parties. Oil is a globally traded commodity. Oil companies don't just decide to "put their prices up", though large players can influence it.
When a shock happens, buyers immediately bid up the price to secure limited future supply. Producers largely aren't involved in that pricing.
I will also add that, depending on the situation, your company having hard times very well might be the time to renegotiate your pay. It also though may be the right time to sit quietly and not draw attention to yourself.