Lemonade stand economics
My neighbor’s kids had a lemonade stand set up at the end of their driveway. As it turns out they were selling iced tea and you had your choice of either sweetened or unsweetened. We pulled up and rolled down the window and asked, “How much?” For 50 cents I had one of the best, and one of the coldest, glasses of iced tea I’ve ever had! It was even served in a red Solo cup, just like the one made famous in the Toby Keith song.
As we drove off and headed to town, my wife Drenda commented, “Now that is genuine American free enterprise!” We talked about how lucky we are to live in a country where anyone can start up a business and with a little luck, and a lot of hard work, make a living.
Then we commented that in the adult world, that little lemonade stand would have to pass a Health Department inspection, where an inspector, whose salary depends on his finding violations, would come out and probably mandate running water be piped to the stand. Well, the owner might have to raise the price of the tea to 65 cents to cover that expense. Hopefully that will be enough to also cover the food-handler permit.
Soon here comes the U.S. Food and Drug Administration to make them put a label on their tea describing the ingredients, calories, and nutritional value. They could probably cover that expense by raising the price to 75 cents.
Even though it is a drive-through lemonade stand, here come the feds to make sure they build in a handicapped parking space with appropriate signage. The price might be up to 92 cents for a glass of tea now.
Of course before they built their stand they had to comply with the government regulation to get a study to make sure no endangered species or archeological artifacts were disturbed in construction. Boy, those engineers that do those studies are pretty expensive, so the price of the product might have to go up to $1.05.
Of course a large chunk of change has to go to pay workers compensation insurance in case one of the girls gets hurt while working the stand. Yet another check goes to the Oklahoma Employment Security Commission, that agency that makes it hard for a small businessman to fire a bad employee. And don’t forget the Environmental Protection Agency inspections that make sure we are disposing of our unsold product in a safe manner.
Wow, our 50-cent product is now up to $2.00! Perhaps it would be cheaper to just buy the tea from China, where it can be made cheaply without excessive government interference. Too bad the jobs will be filled by the Chinese, rather than Americans.
You know, come to think of it, Lemonade Stand Economics is what reminds me why I support less government interference, and more free enterprise.
Thank you for allowing me to serve as your State Representative. I can be reached at firstname.lastname@example.org or (405) 557-7415.
Lemonade stand economics
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