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AdLib On February - 9 - 2012

My all-in-one printer needed new ink cartridges. It’s served me fine over a number of years but had also developed a minor problem of creating a thin scratch of a line on the scans it produced. So, out of curiosity, before taking out a loan to pay the substantial cost for new ink cartridges (I have tried paying for refills but more than once have ended up with unusable cartridges), I looked to see how much a new all-in-one ink jet printer would cost instead.

I found one on sale at an office supply store, from a major manufacturer that was at a very low price. A very, very low price. It hardly made sense not to buy it when it cost less than three sets of ink cartridges…and came with a set ink cartridges as well…so make that, it cost less than two sets of ink cartridges.

There was however a sense of guilt that came with doing this, the idea that a piece of technology that was so sophisticated could be so easily tossed away and replaced (I’m actually donating that printer to my daughter’s public school…guilt level reduced by 10%).

Consider cell phones and smart phones. Just ten years ago, the technology in the devices we use today would have been seen as incredible. Today, we can upgrade to a new high tech phone (with a 2 year commitment and assignment of our eternal soul) for little or even for free and flick the technological genius in our last phone into the garbage.

We have become sociologically conditioned to expect that electronics should be cheap despite their complexity and this, combined with the much more expensive cost of repairs, often makes it common sense economically for one to just buy a new item instead of repairing the old one.

This sensibility isn’t confined to electronics though, at the supermarket and stores like Walmart, Target, Kmart, etc, we expect to be able to buy clothes, food and all nature of things at remarkably low prices despite what we may think deep inside is much less than they should be.

Paying little for what should be more expensive products has become a self-sustaining machine where most people only look at what the machine provides without considering what it consumes to do so. And the sneaky truth is, what it consumes is the wealth, employment and standard of living of most people in America and in many places throughout the world.

Why is something cheap to buy? Of course, the simple answer is that it’s cheap to make…but the next step is often overlooked. It’s cheap to make because the people who are paid to make it are paid cheaply. So when you buy that cheap pair of pants or bargain smartphone, you are giving the corporation that is selling it, a profit and economic support for paying so little for the labor of the workers it employs. So in effect, those people who shopped at Walmart to buy inexpensive Chinese-manufactured products and later lost their jobs, were unknowingly incentivizing the corporation they worked for to take away their jobs.

It can be interesting to sometimes step back, zoom out and look at the big picture, how things are interconnected and the unintended consequences of one’s actions. Where one shops and what one buys is indeed directly and necessarily interconnected with what jobs are available and how much they pay. For example, if 10% of current Walmart shoppers chose to buy only from American based companies that provided good wages, there would be billions in revenues for such companies to create more and more well paying jobs. It’s simple economics and math.

Corporations may have designed this mousetrap but as long as consumers keep going for the cheese they set out, they continue to be the victim of this trap.

The vicious circle is well known, people are unemployed, underemployed or underpaid and so they need to be able to buy things cheaply to get by. However, by buying things cheaply, they are affirmatively financing the outsourcing of their own and millions of other jobs to China and elsewhere, the only places where products can be made so cheaply because of brutally low wages and conditions. By supporting outsourcing in this way, Americans in fact create a greater supply of unemployed and available workers in America who are willing to work for whatever wage they are offered. This dynamic of supply and demand in a flooded workforce allows companies to depress wages and increase “productivity” (that means doing more work for the same money) because as they often say, “If you won’t do it, there are plenty of people out there standing outside who would be happy to work more for even less than you!”

Publicly, corporations exclaim, “People want things at super low prices so we’re just giving people what they want. That’s why we outsource our jobs to other countries! I mean, paying people in America a living wage or God forbid, union wages, would mean we’d have to charge a higher, more sensible price for things and then Americans wouldn’t be able to ‘have it all’…and that would be an unthinkable hardship on all Americans.”

As for actual hardships, especially when you factor in inflation as well, the wages of most Americans continue on a slow decline.

It is the Henry Ford model of business in reverse. Though a famous pro-Nazi/anti-Semite, Ford did have a good idea about paying workers enough so they could buy the very cars they built. Today’s corporate thinking is just the opposite, it is to find ways of making things cheaper so that the people who used to make them but are unemployed or have low or declining wages now, can still afford to buy those products.  It’s a race to the bottom where the only winners are the corporations sponsoring the race. They reduce the wages they pay Americans and their solution to their reducing their employees’ buying power is to make products cheaper.

Just as with the economic crash of 2008, this is a path to eventual destruction. It can’t be sustained indefinitely. If people’s income keeps declining in real terms, it will eventually reach a point where it will be literally impossible to cheapen the price of products sufficiently for them to be able to afford buying as much as they’ve been buying and consuming will also be on a steady decline. Then, as we saw on what would be a smaller scale in comparison, with the crash of 2008, there is a domino effect on businesses closing and jobs and pay declining even more and rapidly when consuming declines.

70% of economic activity in America comes from consumers. The American economy and in turn, the world’s economy would collapse and have no conceivable path to recovery if Americans reach a point where they can afford to buy less and less. No matter how cheaply a corporation can pay for plastic, steel, foodstuffs, chemicals, etc., there is a bottom line cost to everything that can’t ultimately be reduced. So there is a cliff out there somewhere in the distance that our economy will eventually drive off of if wages of consumers keep declining (again, even stagnant wages decline each year due to the standard of inflation).

Of course, corporations live only for the next quarter’s profits so they naturally love this circular dynamic that they’ve trapped our society in since it is currently stuffing their pockets with incredible amounts of money. They are certainly not seeking to change it and in fact are seeking to make it worse by outsourcing more, destroying unions and promoting “right to work” in more states and even loosening restrictions on the hiring of teens so they can increase the competition for jobs and drive down wages even farther.  Add to that their avoiding paying taxes and campaigning to cut what taxes they can’t escape, which slashes public sector jobs, funding for social programs, maintaining our infrastructure, etc.

So…if the corporations will never change this destructive cycle on their own, it is their customers that have to seek change. It’s time we recognize that things being disposable because they are so cheap is a two way street,  as our value as employees simultaneously becomes cheaper and cheaper, we too become as disposable as what we buy.

So, I’m throwing out a simple concept and name for this proposition.

Pay More.

That is, pay more for American made goods from companies that pay more to Americans for their work.

It would entail some financial sacrifices in the near term, paying more for things but the more it finances companies where Americans have good paying jobs, the more tax revenues there would be to pay more for many good-job-creating situations such as rebuilding the nation’s infrastructure…which could pay more for building materials from American businesses and create more jobs from them that pay more, as well as pay more to construction workers who are underemployed or unemployed…which would provide more tax revenues to states and the nation that could be invested in schools…which could pay more salaries for more teachers and shrink class sizes which would better educate our children to get better jobs…which could mean companies that hire them when they graduate could pay more to them for being well educated…and on and on.

The cycle of economic decline has to be broken in a deliberate and organized way.

One way that could be accomplished might be by combining President Obama’s tax credits and incentives for manufacturing and small businesses that start up, grow and hire in this country, with an organized, active and growing community of Americans who are committed to supporting American jobs, good wages and businesses that provide them.

If there was for example, a group and website consumers could join (like Groupon for example) which presented an array or e-mall of products and services only from American companies that were certified to pay good wages and benefits to their employees,  Americans could express their support for good wages and their opposition against the corporate depression of wages whenever they need to buy something or use a service. Such a growing coalition of consumers pooling buying power to benefit a growing coalition of businesses that pay workers well could become a very powerful dynamic.

Also, as Choicelady and KQuark have championed along the way, it would create a great environment for employee-owned businesses which is another great path to reversing the economic plundering by the wealthy and giant corporations. It could also put economic pressure on corporations to either compete with businesses manufacturing and operating in the US or lose a growing segment of consumers.

Admittedly, it’s unrealistic and impractical to suggest to people across the country who are already dealing with severe financial pressures to pay more for everything right now. This is not a transition that could or should be made overnight, it would need to be gradual and incrementally by each American, as they can find ways here and there to buy things that support good paying American jobs, building up to buying more and more from good-citizen American businesses as their wages hopefully improve. The key is that people realize that paying more for something to a company that pays good wages, can help make the society they live in better and could help them indirectly, if not directly by eventually providing more opportunities for good paying jobs.

I am far from a nationalist or conservative, in fact, I burn flags on a daily basis (I get them by the gross cheaply at Walmart who buys them from an American flag manufacturer in China). I am also not vowing to stop buying products made in China and other countries, there are many things that simply don’t have American-made counterparts or even if they do, may not be of comparable quality or the company may not pay their employees decently. What I am saying is that in the meantime, until or unless there is a broader movement, it can be a great start simply to keep in mind shopping local and at small businesses, eating at local non-chain restaurants, etc. Purism is not required, doing it at least some of the time, when you can afford to, can make a difference.

And this is not at all intended to express anything negative towards the countries that have been the recipients of outsourced American jobs (they’re being exploited and oppressed by these same corporations), it’s only meant to present an affirmative proposition on improving the standard of living in our society which, if it spread around to other nations like Occupy Wall Street, could help improve their standards of living too.

It would take the pulling together of a lot of threads to make this happen on a big scale but at this point in time, a difference could still be made by each person who has a choice to pay more for something American-made that will help pay more to fellow Americans for their work…and by deciding to do so, that person is so simply and easily supporting the idea that we will pay more if employers pay more.

Written by AdLib

My motto is, "It is better to have blogged and lost hours of your day, than never to have blogged at all."

10 Responses so far.

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  1. jjgravitas says:

    Adlib, you make a very interesting point. The easy availability of cheap products made overseas is another example of a bubble economy. Remember when the bubble economy burst? That was the one made possible by the loosening of regulations for housing construction (think MacMansions) and for home loans. The bursting of that bubble put millions of people out of their homes and nearly destroyed the banking system, leading to the worldwide depression that we are still digging our way out of. For simplicity, let’s call this current bubble the import-export bubble, since that’s the crux of the issue. Cheap overseas labor is only part of what makes this possible. One must also consider how cheap and easy it is transport those goods here, thanks to the easy availability of jet fuel. Imagine what could happen when the rising cost of jet fuel makes air transport too expensive for transporting products, at which point import/exports would revert back to being dominated by ship or train, in both cases slower, more laborous, and also more expensive with the rising cost of oil. That would drive up the cost of imports even if the actual cost of manufacturing products overseas remained cheap.
    Buy American!

    • AdLib says:

      You make some excellent points, jjgravitas.

      One thing I didn’t address is what you did, that the economics that sustain cheap products can change.

      If fuel costs rise substantially, it can sabotage this dynamic. If labor costs rise as a third world country develops, it can do the same. Wars, tariffs, on and on, many things can force the price of cheap things to rise which could gradually or abruptly, price Americans out of many purchases, accelerating a downward spiral on jobs, salaries and expendable income.

      As we saw in 2008, what works best to make corporations wealthy today will eventually destroy our economy. Changing the way things are before that time comes could save us from having to go through that.

  2. kesmarn says:

    Thanks so much AdLib, for raising the issues you have here. One additional thing occurs to me, too. It’s easier to pay a bit more for an American made item if we can resist the temptation to own lots of any given thing.

    I think women can fall into the trap of “collecting” more easily than men. We can go all Imelda Marcos on shoes — especially if they’re not all that expensive. Why not have 3 dozen pairs?

    Really?

    Same with tops, pants, coats, whatever. How many of each do we really need? 20 sweaters, when four would be plenty?

    If we resolve to buy fewer (but high quality local) items, we free up dollars that can be better spent.

    One woman I know has a collection of 250-300 teddy bears. Another has over 300 Santa figures.

    Is it just me, or is this nuts?

    • AdLib says:

      Oh yeah Kes, that is nuts! However, it does provide an extreme example of how, for too many people, buying things has become a substitute for doing things of value in one’s life.

      What is more common in places like Europe, instead of buying things as a hobby, they do things like paint, play music, garden, cook, etc. There are plenty of Americans who do things instead of buy things in their free time (I know a few folks who use their free time creatively and constructively, writing at a web site to share insights and ideas with a community of similar conscientious people and the world at large).

      I also know people who have an extra bedroom in their apartment to display their Disney collection or use their converted garage as a showcase for their Star Wars collection.

      I’m not faulting having a hobby collecting things but when buying and acquiring things is seen as accomplishment, as equivalent to doing something or creating something, it reflects the superficial programming of our society.

      Owning things or buying things as a reflection of one’s worth serves the corporate interests that would prefer for us simply to be shopping drones who are easily pointed at the next thing to buy and provide them with more profits.

      I do think that it is the child-like nature of our consumer society, where people are like kids who think they should have whatever they want and that’s the priority.

      There is an irony about American consumerism. If people were willing to accept that they don’t need to have all the things corporations advertise to them that they “need” to have, they would have more money to spend on the things they do want most and wouldn’t “need” to buy cheap products made from cheap labor…and if paying a little more for American made products was doable, they could find their own wages rising as more jobs were created that paid more.

      We’ve seen that there aren’t going to be big changes in our economic system that come from government, they will have to come from the people and how they choose to spend their money.

  3. choicelady says:

    Excellent advice, AdLib, and right on the money, so to speak! This is a very useful and clear discussion of how we can reverse our descent into a 19th-Century nation. It chilled me when you wrote above about how productivity has to go up or The Boss reminds you of all the people outside who want your job. That is a line right out of Upton Sinclair’s “The Jungle” about the 1906 Chicago stockyard workers. Damn. Another “forward to the past” moment!

    It is almost impossible to find goods made in the USA in lots of categories. Even if it has a US manufacturer, it’s often still made for real in China or elsewhere.

    One thing we also can do -- look for Brazilian shoes (lots of emphasis there on unions -- not that they ARE there but there is a movement) or European, Canadian, or Australian and New Zealand goods. Venezuela, El Salvador, and other countries are moving toward worker ownership, though it’s incomplete, and I don’t know WHAT they make that is exported here. Many “Second World” nations are bringing back manufacturing to their nations or never outsourced it in the first place. If you can find a Mennonite store that sells handmade things from cooperatives, that’s good, too. That is an option when US items are not available but those are. These are options when US items are not available but those types of merchandise are.

    Write to companies that are planning to close and move such as New Balance. Say you won’t buy their goods anymore. What you will find is that a lot of things -- especially, I note, women’s clothing -- is actually NOT cheaper. What they have done is keep the same price but widened the profit margin with cheap labor. The REALLY cheap goods also don’t last, so buying American does save over the long run.

    I do agree that wherever a US made item exists alongside one made in China, buy what you can afford. I KNOW times are hard and often the goods are more than you would like to spend, but we can help our own bottom line by buying LESS overall and MORE of US made items.

    There are directories of US made “stuff”. One is http://americansworking.com/ OK -- the SECOND item is US made ammunition, but hey. You don’t HAVE to buy it, right?

    You can find worker owned companies at:
    http://www.nceo.org/main/article.php/id/11/ A few are supermarket chains -- SueinCA notes she shops WinCo that is local in northern CA, and various chains are all over the US. Even if you don’t go all the time, go sometimes if you can.

    All you Ohio folks (and we know who you are) OH has one of the largest collections of worker owned and managed businesses in the US. The Ohio Employee Ownership Center can be found at:
    http://www.oeockent.org/esop-data Unfortunately, their founder and guiding light, John Logue, just died recently. But I do believe his work will definitely live on.

    But whatever you CAN do, please do. AdLib is right on the money. You can help reverse the hemhorrage of jobs and standard of living. We do NOT need to “Race to the Bottom” at all. But it WILL take all of us making our desire for US made goods known.

    Oh -- and if you’re interested in a very good book that is also a very hard slog as a read, I do recommend Alan Tonelson’s ‘Race to the Bottom’. It is hard going, but it’s well worth it. It’s also not very long!

    It’s our choice to make. Make it!

    • AdLib says:

      CL -- Thanks so much for all the references you listed!

      It is indeed hard right now to find American-made products in many areas so this has to be a gradual and tax-credit-supported process. The key thing is that the connection between buying cheap things and declining wages/unemployment is solidified.

      We can’t increase wages or bring back manufacturing in America if we aren’t willing to pay the price for a product that is made by Americans who are paid fairly.

      Again, I’m not a purist on this, I patronize corporate stores like Costco and buy corporate merchandise that’s made in China. The proposition is to support companies when possible that provide good pay to their workers and be on the lookout for new companies.

      What fascinates me about this is how much power people actually have to start moving things back in the right direction despite the power and wealth of corporations. We can actually start changing things just by choosing to buy from “good” companies.


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