Thursday, July 5, 2012

What would you do for five cents?

Now that I have resigned from my formal job, I have a lot more time on my hands.  I have a planned reading schedule in addition to doing small errands.  In the past three days, I have finished a book, re-filed some documents, borrowed out a book and fixed the shower faucets.  Most of these things required some amount of time that I did not have due to the work schedule that I have had.  Most libraries and hardware stores are not open past 8pm, my family requires round the clock use of the bathroom and it is difficult to read when my children feel like sleeping in our bed and by the time I move them, it is even more difficult to read more than 4-5 pages of a serious book.

In between the all of the tasks that I have performed in the past 3 days, I have been able to observe the lives of others.

Just sitting  and looking out the window in the early evening, I noticed some strange economic activity taking place across the street.  Living in a big city, we are accustomed to seeing various people going through garbage to collect cans or bottles and redeem them for the the deposit of five cents.  Most of us can live without redeeming the bottle/can deposit for five cents and because of that, an economy was created where people rummage through garbage and collect the bottles and cans.  Most supermarkets have machines set up outside and away from their entrances to collect the bottles and cans where there are long lines of people with overfilled shopping carts making the redemption. 

It is quite predictable that these collectors become quite frustrated with each other and displays of unpleasantness result.  In order to avoid semi-violent confrontation, redemption schedules are arranged among the groups who utilize this service.  But what happens if the redemption machine becomes the problem and refuses to cooperate.  There is no overnight storage facility for their collection and they must make room for the new inventory for the next day.  This can result in a loss of a day's work for a person who derives their income from such activity. 

Let us estimate the possible income from such activity.  It is five cents per can, so 20 cans is equal to 1 dollar.  200 cans is 20 dollars.  The volume of a typical can is 12 ounces and a typical large garbage bag can hold 30 gallons.  If 1 gallon is 128 ounces, it is possible that each large garbage bag is equal to 15 dollars in redemption fees.  Let us consider the amount of labor that goes into collecting 300 cans and the sordid behavior at a can redemption center, can that be worth 15 dollars?  Usually, a day's harvest can be 6 bags of cans which can bring in 75 dollars.  For 30 days work, that is 2100 dollars.  So, if the machines at the redemption center are not working or if you lose your turn, you can lose at least 2 days of harvest.

Luckily, there are even more industrious people around who can help.  Since scrap metal can trade at a premium and the quality of the metal collected in the cans has already been sorted out by the harvesters, a "grey" market can be created for those who do not want to deal with the redemption centers.  Every evening at about 6 pm, a the can harvesters wait along the street and a box truck drives up to collect their harvest.  Looking at the back of the truck, it does not seem that this is is first pickup, nor will it be his last for the day.  Whatever he pays, it cannot be more than what they get at the redemption center, but upside for the harvesters is that they do not have to deal with the seamy and surly behavior of those who monopolize the redemption machines.  Even if they receive 80 % of their harvest they will be receiving 1680 per month.  This is approximately 20000 a free!!!!  That may not seem like a lot of money, but if one is collecting cans for income, they are probably not sitting back watching CNBC nor are they reading BusinessWeek.  For the trucker, at 20% per bag and consider that a truck can hold 128 bags, that is approximately 140,000 annually before the the cost of fuel and truck maintenance.  Everyone wins, the harvesters receive cash, the trucker/aggregator make money on the difference paid out and the actual redemption fee, cans are recycled, and the environment is greener.  Possibly the only loser is the consumer who pays the 5 cents and does not redeem.

Collecting and redeeming cans is a completely sustainable industry. As long as beverages are delivered in metal cans and consumers are forced to pay the 5 cent deposit, but not redeem the cans themselves, there will be a whole industry centered around the redemption cans. 

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