Pay toilets and NYT: a free market microcosm

Nicholas Kristof in Sunday's New York Times asks a pressing -- often quite pressing -- question. Why are there no public toilets in America? He is right. He calls for a federal infrastructure plan to fix the problem: "Sure, we need investments to rebuild bridges, highways and, yes, electrical grids, but perhaps America’s most disgraceful infrastructure failing is its lack of public toilets."

Now, put on your economist hat. Or even put on your reporter hat. Ask the question why are there no public toilets in America? 

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I hope that didn't take too long. Answer: Because it's illegal to charge for toilets. There were once abundant public toilets in America, as there are in many other countries. And you pay a small fee to use them. A small fee that everyone in Nicholas' stories would have been delighted to pay. 

This answer is not hard to find, and indicative of the spirit at the New York Times that neither Kristof nor anyone else involved thought to find out. My first google search was "pay toilets illegal." The first three results gave the answer.  Aaron Gordon tell the story nicely. It's a classic of 1960s activists demanding that bathrooms be declared free, bemoaning inequities in who needs to use toilets more, and the inevitable result. (Interestingly  many pay toilets were introduced by railroads, who first tried to give them only to customers and employees, but then learned they could make money allowing everyone to use them.) Also  Sophie House at Bloomberg City Lab, Marginal Revolution covering the same. 

But you have to ask the question!

The absence of pay toilets is in fact a delightful encapsulation of so much that is wrong with American economic policy these days. Activists decide free toilets are a human right, and successfully campaign to ban pay toilets. For a while, existing toilets are free. Within months, upkeep is ignored, attendants disappear, and the toilets become disgusting,  dysfunctional and dangerous. Within a few years there are no toilets at all. Fast forward, and we have a resurgence of medieval diseases that come from people relieving themselves al fresco. Now let's talk about rent control. 

You will jump to "what about people who can't afford to pay?" as House did, consuming the majority of her article that should instead have been about practicalities. This too is a great teachable moment. One of the top 10 principles of economics is, don't silence prices in order to transfer incomes.  That dictum is particularly salient here because we're literally talking about quarters. Let's add: especially, ludicrously small amounts of income. Is it really wise to silence the incentive to create, provide, and maintain clean safe toilets, in order to transfer a few dollars of income to the less fortunate? 

Maybe, you say. But look how well requiring toilets to be free has worked out. Before, a person experiencing homelessness had to beg for a nickel to use a toilet. Now there are no toilets. They are worse off than if we had pay toilets and them no money. And, really, does your and my life need to be so screwed up, does the government have to interfere in a business' desire to provide a clean restroom and make a little money, and your and my desire to pay a small fee to relieve a bursting bladder, because of the problem of transferring a few dollars' income? Now let's talk about health care and insurance. 

If you wish, though, the answer is simple enough. Let us add to the stimulus bill a $5/month additional to every resident of the US to compensate them for the cost of using public toilets. Oh, you worry they'll spend that on something else? Well, we could talk about paternalism, but let's just cut to the chase and distribute tokens or bus-pass cards. 

Kristof and the Times, of course, would prefer a national infrastructure project to provide free toilets. If you've followed this over the years, you will see many efforts at government provided toilets. Costs are often hundreds of thousands of dollars, and the effort falls apart. There are some free toilets. In Chicago, the park district still had some. Without the incentive to charge a bit of money, they were typically disgusting and dangerous. Now let's talk about $80 billion dollar high speed trains to nowhere. The problems of public infrastructure are not money. (See the SF Chronicle article "$28.50 per flush" on one experiment in California.) 

Well, you might say next, ok, but the toilets of course must be built to standards, certified, regulated, inspected, licensed to ensure quality. Hmm. Now we face the inexorable tragedy of public goods. Toilets, like everything else in life, come in gradations, gradations of clean vs. cheap. Not everyone wants the same thing. Some might want $28.50 trips to beautiful refreshment stops. Some might be willing to put up with a bit of smell and grunginess if it only cost a quarter. No public allocation can bring itself to admit that gradations in quality vs. cost are desirable. So we get nothing at immense cost. 

The ban on pay toilets is only part of the problem. As the articles or basic commonsense make clear, the key to clean safe bathrooms is attendants. Real, human attendants. This is not a fun job. It is well suited to new immigrants, especially who don't speak English, are not well attuned to American culture, and have little education or training. We have quite a few of those.  But now ask, will this work if the attendants need to be regular employees, paid $15 an hour, with 8 hour schedules, rest breaks, health insurance, retirement plan, overtime, e-verified immigration status, and the full rest of US labor regulation? How will it work if in addition they are unionized government employees? That's pretty much where the $28.50 per flush went. Doesn't everyone deserve such a decent job you say? Indeed they do. Everyone deserves $50 an hour. But at $28.50 per flush, you won't have pay toilets. And the immigrants will not have any jobs at all. 

Like so many problems in the US, this one can be solved with one simple policy: Get out of the way. Allow businesses to build, maintain, and charge for toilets. Allow people to pay for a service so dearly needed. If we can't free a market for a service that literally costs 25 cents, heaven help the rest of the economy.  Now let's talk about housing. 

Indeed, a good place to start would simply be to let restaurants, bars, gas stations, or even retail stores charge for the restrooms they have now. The current system (legal or no) that you have to buy something to use the restroom dramatically raises the price -- now you need to buy $10 of something you don't want, instead of 50c for the thing you do want. And most stores just don't let people use restrooms at all. 

I keep waiting for America's libertarian moment. We'll know it has arrived when pay toilets return. 

Update: Emperor Vespasian introduces pay toilets to Rome. He also coined the phrase "“Pecunia non olet” (Money does not smell), an important lesson for these guilty times. Thanks to a correspondent. 

Another aphorism, arising from a twitter exchange: Regulation to transfer incomes by tipping the scales of bilateral negotiation always has unintended consequences. Much (most?) economic regulation attempts to do that -- to privilege workers, renters, car buyers, tow truck customers, and so on in bilateral negotiations, thereby to transfer income or "surplus" of the bargain to one party or the other. And now, to privilege toilet-users vs. toilet providers, in the transfer of a trivial amount of income. It often destroys the provision of the service over whose rents we squabble, and the lost consumer surplus far exceeds any rents one side may have gotten, especially with free entry.