COVID-19

What constitutes price gouging?

Jasmine Garsd Aug 13, 2020
Heard on: Marketplace Morning Report
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Rising prices by a lot on essential items — like eggs or medicine — during a crisis is illegal. Philippe Huguen/AFP via Getty Images
COVID-19

What constitutes price gouging?

Jasmine Garsd Aug 13, 2020
Rising prices by a lot on essential items — like eggs or medicine — during a crisis is illegal. Philippe Huguen/AFP via Getty Images
HTML EMBED:
COPY

The New York attorney general this week filed a lawsuit against a major egg producer, alleging that Hillandale Farms raised prices for eggs in the midst of the pandemic to as much as quadruple the prices it charged between January and early March.

Hillendale has denied the allegations and said it worked to make sure eggs would remain on store shelves for its customers.

When it comes to raising prices, what is legal and what is not?

In a free market society, you can raise the price on your products. But Omri Ben-Shahar, a law professor at the University of Chicago, said once a state of emergency is declared, raising it too much could be considered price gouging.

“The price cannot rise to a level that, we sometimes call it, unconscionable,” he said.

And in an emergency, like a hurricane, an earthquake or a pandemic, price increases that might be OK under other circumstances raise questions.

“That starts to feel a little more like taking advantage of someone when they’re down,” said Andrew Novakovic, professor of agricultural economics emeritus at Cornell University.

In a lot of states, anti-gouging laws reference essential goods, which in many states means fuel, medicine and food.

Charging a lot more for those during an emergency is illegal.

COVID-19 Economy FAQs

With a slow vaccine rollout so far, how has the government changed its approach?

On Tuesday, Jan. 12, Health and Human Services Secretary Alex Azar announced changes to how the federal government is distributing vaccine doses. The CDC has expanded coronavirus vaccine eligibility to everyone 65 and older, along with people with conditions that might raise their risks of complications from COVID-19. The new approach also looks to reward those states that are the most efficient by giving them more doses, but critics say that won’t address underlying problems some states are having with vaccine rollout.

What kind of help can small businesses get right now?

A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.

What does the hiring situation in the U.S. look like as we enter the new year?

New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.

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