Economics in the News – April 18-24, 2022
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
- For the first time in a decade, Netflix announced that it had lost more customers than it had signed up in the first quarter of 2022. Netflix attributed the loss to a multiple of factors, including rampant password sharing among households, increased competition and Netflix’s decision to shut down its service in Russia after the Kremlin invaded Ukraine.
But with so many direct competitors, such as Disney+, HBOMax, Apple TV and more, and a lack of must-see content, perhaps there are too many options for streaming. Many customers are canceling their subscriptions with Netflix because of cost issues and a lack of new content, according to a recent survey from Deloitte. Netflix also has plans to address password sharing, believing that there are more than 100 million unauthorized users worldwide. [The New York Times]
- Prices are changing rapidly. More shoppers are caught off guard as prices on everyday items are changing more often. Businesses are using a high-tech strategy called dynamic pricing. It enables businesses to change their prices automatically to ensure that they are offering optimal prices for their goods or services.
Prices are varied based on market conditions, taking into account costs, demand and the competition. Dynamic pricing is most prevalent for ride sharing companies, airlines, at the gas pump and in online retailers such as Amazon. Brick and mortar stores are switching to it as well, moving to digital price tags to allow for easily changed prices. [The Wall Street Journal]
- Masks are no longer required on airplanes. Federal officials stopped enforcement of a federal mask mandate in transportation settings after a federal judge in Florida struck down the requirement. Airlines began announcing they were dropping the requirement for domestic flights, select international flights or at US airports.
The decisions to make masks optional on airplanes comes as cases of the BA.2 omicron subvariant, which is more contagious than the omicron variant, becomes the prominent strain in the United States with cases again on the rise. The Centers for Disease Control and Prevention’s (CDC) masking directives have been followed by the Transportation Security Administration (TSA). [The Washington Post]
- Some packages may soon take longer to arrive. The United States Postal Service changed its guidelines in the delivery timeline of first-class packages. A first-class package currently considers a first-class package to be late if it’s delivered more than three days after it was sent. Under the new standards, about 30 percent of the packages will be considered on-time if they are delivered within four or five days.
The change takes effect on May 1. It’s part of the structure that the USPS came up with when the mail carrier delayed letters two years ago in order to become more efficient and less reliant on air transport. As part of the changes, the cost of a first-class stamp will increase from 58 cents to 60 cents due to inflation and operating expenses. [NPR]
- Double-digit rent spikes are happening all across the United States. Nationwide, rent for a one-bedroom apartment between March 2021 and March 2022 rose an average of 12 percent. Average rent prices for one-bedroom apartments have hit an all-time high 11 times in the last year. Many renters have been priced out of their apartments, not able to afford to pay rent.
The problem is a lack of affordable places to live and it’s not going to get better any time soon. Housing construction has slowed since 2009 and was exacerbated by the pandemic. In order to meet demand, the National Apartment Association said that 4.6 million apartments need to be build by 2030, while 10-plus million more need to be renovated. Some cities are considering ballot measures to cap annual rent increases, though that could have unintended consequence by decreasing competition and increasing prices in the long run. [TIME]