May 2022
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Supply, Demand and Increasing Costs for Business
GE OLD ARGUMENT — DOES GROWTH PAY FOR ITSELF? I can’t remember how many state and local conversations that RAN has been involved in over its lifetime pondering that same issue. The interesting part is that during those conversations we were talking about tax revenue not the societal issues triggered by growth. I don’t think anyone had a crystal ball that “discussed” the future possibilities of a world-wide pandemic that exacerbated into a worldwide supply chain problem followed by inflation reaching a 40-year high. Couple that with significant, sustained population growth in Nevada and our market-oriented economic system, the perfect storm has occurred. Supply does not meet demand and this results in a higher pricing structure in all areas of business. There are many factors that affect demand. Price, consumer income, related goods, tastes and preferences of consumers, consumer expectations and population. Over population
Mary Lau can have its benefits, such as an increased labor force but at the same time necessities can be overtaxed. Some examples can be the price of food, gas and housing. The unfortunate side bar to these issues is that inevitably this growth also results in a decline in the value of the wages that are received. More demand + less products = higher prices. Now businesses are stuck trying to find a balance between absorbing costs and passing them on to consumers, and no amount of wage increases can offset that cycle because it also exacerbates that very cycle. There is also a lot to be said for positive effects of population growth. Yes, it
expands the tax base but it expands expenses at the same time. It increases spending with local businesses, and it increases the overhead of those same businesses to stock shelves, pay rent and meet demand. Demand is a whole different animal. Demand is determined by price and income. Any decrease in spending power by consumers for goods that are essential and normal can result Continued on page 3
INSIDE Cause and Effect.......................2 Mother’s Day Spending...........3 Board of Pharmacy Update.....................4 The Rising Cost of Doing Business in Nevada...................................5 NRF: Economy Should Continue “Bustling Forward”...................7 Food Industry Association Welcomes Pharmacy DIR Regulatrory Reforms................8 Andelin Family Farm................9 Nevada and National Notes.................... 11