Lessons from the Economics of Cardboard

Often you will hear political leaders warn of some pending shortage, as though the free markets can't handle greater demand, falling supply or both. Prices are a very powerful signal for people to act, something that political leaders don't get, or don't want to get.

I was recently on a business trip in the San Francisco area and one thing that struck me was what was happening after dark in downtown SF. Out of nowhere, old beat up pick up trucks appear and the occupants start picking up, from the sidewalks, cardboard that has been left with the other trash by merchants at the end of the day. These cardboard scoopers get to the trash spots before the regular trash haulers and pick up the cardboard. I spoke to one of the cardboard scoopers, JIm.

Jim told me he was retired and worked only a couple of hours a night, for a little extra income. He said his pick up holds about 400 pounds of cardboard and he gets 7 cents a pound, roughly $28 a load. He told me that those that put wooden sideboard on the sides of the bed of their pick ups can hold 1300 pounds.

Jim did not want his picture taken.

Alfredo, whose pick up had the wooden sideboards, was not camera shy.

He told me he didn't know how many pounds his truck held or how much he got per pound, but he knew a full truck got him $85 a night (Which roughly works out to Jim's estimate of 1300 pounds). He told me that this was part time work for him, from 7:00PM to 10:30PM. He has a day job on a landscaping crew.

SF is an interesting city. You have many homeless who I'm sure have been taught by society that there is nothing they can do about their predicament, meanwhile you have hustlers, some of who may have snuck over the border to earn money, who have not only found day jobs, but have figured out a way to make even more money, before they finally go off to sleep.

But the big lesson is that prices create the signals that push people into action, without a politician or other government official anywhere in sight. The job gets done. By 11:00 PM, you can't find a piece of cardboard anywhere on the streets of SF. And the cardboard is on its way to be recycled without a rule, regulation or agency to make sure the job gets done.

Update: Steve sends along this video from the treehugger.com site and they seem to be, get this, anti-cardboard scoopers. You see, they want the cardboard to go to the city unionized haulers. Also of note, the video interviews the same Alfredo that I talked to and snapped a picture of. The one difference, I spoke to Alfredo in English. His English was perfectly passable. He understood me, I understood him. So why does the video outfit interview him in Spanish for what appears to be an American market? Are they attempting to give the impression that the haulers are not only pre-dominantly Mexican, but just over from the border? My guess is that Alfredo has been in the U.S. at least 10 years, given the comfortableness he had with the English language, when I spoke to him.

And Jim, the other cardboard hauler I spoke to, is a caucasion. I'm guessing born and raised in America.