Re: [Harp-L] Hohner Price Increase

[Joe Leone <3n037@xxxxxxxxxxx>]

On Jul 1, 2011, at 8:37 PM, Vern wrote:

> I don't think that you can attribute the increase in harmonica prices to the increased cost of raw materials.
> 
> A diatonic harmonica weighs about 2 ounces or .12 lb.
> The most expensive material of the harmonica is the copper in the brass reeds and plates.
> The current price of a pound of copper is $4.30
> If the harmonica were made entirely of copper, its raw material cost would be only about 54c.
> Actually, the harp also contains far cheaper zinc, steel, and plastic.
> About 25c would be a pretty good rough estimate for its raw material cost.
> 
> The rest is the cost for tools and facilities, labor in all of its forms, marketing costs, and...of course...profit.  Because they are made in foreign countries, currency exchange rates are...as you say...a factor.  
> 
> If people are buying fewer harmonicas, the fixed costs become a higher proportion of the total and the price must rise. It is my guess that this is responsible for the increase.
> 
> It is easy to attribute a price increase to manufacturer greed.  A free market is pretty good at controlling greed.  We have plenty of competition including a struggling American startup and a failing Brazilian startup. If prices get outrageous  the startups and the repairers will flourish.  
> 
> Vern

As one who made his own allowance by stripping scrap metals from discarded appliances at the dump (while other boys played ball), I have kept abreast of these costs. Vern is correct. I extrapolated the costs to be the same as his estimate.
 
Years ago, when the average wage was 2400-2500 a year, the CEO would have expected to have an income of approx. 24-25 K (about 10X). When the average wage was 8300 a year, the extrapolated CEO income would have been 83 K. Well it wasn't. It was more like 125 K. (about 15X). Now that the average wage is hovering just over 28 K, that would extrapolate to 280 K. Well, it isn't. It is more like 630 K. (about 22.5X). With a CEO staying only a few years and taking a balloon of several million dollars. 

That has to come from somewhere.

On another hand, Elizabeth is correct. While incomes have risen 11.4 to 11.5 over a certain time period, costs have also risen about the same...with a few exceptions. Gas (about 15), cigarettes (about 38), coffee (about 17). Food, on the other hand, has been steady at around 9.5. Exceptions? butter (about 5), bread (about 6), milk (about 6.5). People are buying and paying fees for so many things these days..things they never had before..that it SEEMS as if the walls are closing in. If they were living like we once did, they would see an immediate increase in spare cash. It's all relative.   

My high priced nephew corporation lawyer tells me that the problem is corporate greed and insurance companies.
My one daughter (an economist who spends every other 2 years in a third world country) tells me that the problem is..
guess what?..corporate greed and insurance companies.   

MY personal feelings? Harmonicas are junk, made out of junk, will eventually break, are disposable. We live with it.

smo-joe