The story of two Covid tests
Free Lunch will be closed in the summer and will return in the second half of August. When I come back, I will not promise you “what did I do in the summer”, but will use today’s article on topics related to travel and vacation-at least if you try to sort the popular summer across borders in this second.
A few years ago, I wrote an article about the humble service that I found helpful in understanding economic differences: car wash. Depending on the country/region (or actually the time period), are you more likely to find that your car was cleaned by an automatic giant roller brush, or by a group of low-paid people holding rags and spray bottles? The answer can tell us a lot about the different models of capitalism, especially whether they are organized around the intensive use of low-productivity work or based on increasing productivity by substituting capital for labor.
I have been looking for similar examples-readers of free lunch, send me yours-in a recent trip, I collected a new example. Appropriately, it involves the economic activity that flourished in the pandemic: coronavirus testing.
After obtaining the EU digital Covid-19 certificate, I recently managed to take a quick trip from London to Oslo to visit family members I haven’t seen in a year and a half without having to quarantine when entering Norway. On the way back, I need to perform multiple tests before departure and after returning to comply with the UK’s quarantine requirements, and to ensure that the self-isolation rule is lifted when the test is negative on the fifth day after the trip.
So here are two stories of PCR testing. First, I booked a promised turnaround time of one to two days in the center of Oslo; second, close to London King’s Cross station, 24 hours guarantee. Online booking for both is equally simple-although bookings in Oslo cost only 800 Norwegian kroner (£65), while bookings in London are twice as much as £129.
However, the bigger difference lies in the test center itself. These spaces are small, formerly compact storefronts or street offices. In Oslo, there was only one staff member at the reception, who checked in for me and took a swab. The only “paperwork” involved double-checking my national ID number and verbally confirming that there were no symptoms and my travel history. Participation in Central London is even higher. It has a security guard locking and opening the door, a receptionist checking me, and a medical staff taking a swab. Before he did this, I had to manually fill in a long paper form, repeating all the information I had entered when booking.
The results of it? Both of them returned soon. Norway is 21 hours an hour, and the UK is 8 hours an hour. The test results in the UK were sent via email. One in Norway with a text alert, which can be found on the public health portal of the country; this has the added benefit that my (negative) result is automatically added to my EU certificate if I go outside Europe Anywhere (except the UK), this may be useful.
The contrast I want to focus on is that for basically the same products, the activities on the UK website seem to be more wasteful. It has 3 employees and 1 employee, but the needs of the day are similar (and one person is being tested). Paperwork meant that the entire visit took me three times or more time. These are big differences-I think they are too big to be seen in an economy. Therefore, they must reflect the differences in the economic structure of the two countries.
Of course, this may be a completely unrepresentative experience. But suppose it is not; suppose it roughly reflects the differences in the organization of the private PCR testing industry in the two countries? If so, what lessons should we learn from it?
First of all, labor productivity is very important. If a service can be provided by one person instead of three, then that person can get three times the remuneration (or the service can cost half the price while the worker’s income is still 50% higher, which I suspect is the case here). The lesson of my original car wash fable is also established here.
Secondly, this is two-way. High wages force companies to make money for every job; in other words, increase labor productivity. A staff member representing three people is an example.
Third, however, this is not about making fewer workers do more. Rather, it is about workers doing less. The automation of paperwork at the Oslo Testing Center meant that the management tasks of swab staff were reduced to a minimum. This means that more total man-hours can be spent on medical tasks that are more dependent on skills and higher value-added.
Fourth, remember the security. The British supplier considers it necessary. Norwegian supplier, no.This is a simple description of the economic value of trust, as shown in the figure below The latest survey of world values Shows that there is a shortage of supply in the UK.
There are many things that I cannot think about. For example, the rent of a testing center may vary greatly. Or there may be major subsidies and tax differences that I don’t know about. Or a certain place may need to plan for different demand patterns that the snapshot experience cannot capture.
Nevertheless, the similarities with my old car wash example are still striking. Do free lunch readers think so too? Please share your thoughts-if you encounter other examples of such differences during what I hope is a relaxing holiday, please send them to me.
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