Prices increase

I have spent two years in the UK and I have recently come back to live in Spain. The news that Spain exports of crisis are more than justified because when I arrived to Málaga I came across with a country living in a deeply economic recession.  There used to be towns where prosperity came from construction and tourism. Now the first one is almost nonexistent, the other one have decreased. As a consequence, the so-called domino effect has triggered the collapse of a country that was on the tightrope, supported mainly for those two sectors.

I was amazed by the fact that even though around six million of people are unemployed, it seemed that nothing happened. The wages make me laugh, but the prices make me cry. The publicity on TV continuous advertising products that nowadays are luxury for most people. Retails, bares or restaurants instead of doing  a price adjustment to the current moments of crisis, they increase the prices. I believe their theory must be "if I have less customers, I increase the prices to make the same cash at the end of the day with less customers". Completely wrong thought. To my understanding there should be the opposite: low prices to low incomes. Businesses prefer to close down to do that.  The result of this is more and more unemployed people and population that don´t spent money.

I worked for hospitality sector and the thinking of my boss in this crisis times was to do the cakes smaller and to charge more for them, to use orange juice from a bottle instead of fresh squeeze (but at the price of a fresh squeeze), less food in the dishes. Regular customers stopped coming to the coffee shop and many complained. Was this way the best to fight the crisis?. The answer to me is it wasn´t. The coffee shop started to loose customers and consequently to have less cash.

 

Businesses that have adapted their prices are the most successful. I know that entrepreneurs struggle with taxes, but there should exist a balance. In nowadays society middle class tends to disappear leading to two poles: poors and riches.

But not everything is bad news; Spain is the fifth country with most self employers last year, 52.000 new businesses have arisen. People are more entrepreneurs than never, but not enough. What will be the next stage of our civilization? All the big civilizations had an end and I think we should think in a change of the events before the events change us. Meanwhile I would like to have a coffee with a fair price.