Saturday, October 30, 2010

Tuesday, October 26, 2010

Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell

I am currently reading In Cheap We Trust: The Story of a Misunderstood American Virtue by Lauren Weber in the hopes that it will give me additional insight on Shell's book. I will have a new post by Friday about the issues raised in both books.

Tuesday, October 19, 2010

Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell

Outsourcing and Fashion:

In the book, Shell connects the ephermeral nature of products with outsourcing. In the past, clothes were bought with the expectation that they would be an investment - something that would be worn for a long time. However, as fashion evolved, courtesty of the marketing industry, clothing became ephemeral. People bought clothes to stay in fashion, not as a long-term investment. Once again, clothing manufacture was outsourced in order to keep prices down.

Today at noon, a rally was held in the Garment District as part of an attempt to fight the dissolution of that area as clothing manufacture is outsourced:

http://mas.org/join-the-rally-for-garment-district-jobs-tomorrow-at-noon/#more-6650

A panel discussion about the rally (which is supported by several designers) as well as the outsourcing, will take place on the 22nd.

Some questions:

  • If you recycle your clothes when you're bored with them, then is ephemeral fashion OK?
  • Is it possible that people will be willing to pay more for ethical clothes and resign themselves to buying fewer?
  • Is vintage really more ethical - is it OK to buy used clothing because it is one more step away from a factory?
  • should NYC focus on something besides the fashion industry and resign itself to the days of the Garment District being those of the recent past?

Monday, October 18, 2010

Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell

Outsourcing:

Shell discusses the outsourcing of jobs from the US to other countries. Because the US pays higher wages than many other countres, it is cheaper for companies to have their goods made outside of the US. This, in turn, reduces prices for American consumers, which is good in the short-term. However, it also puts many Americans out of jobs, which is bad in the long-term.

A previous poster notes that s/he always looks at the hidden costs. Outsourcing has hidden costs - the destruction of the American workforce and increased unemployment. Questions to consider:

  • why do American companies continue to outsource despite its negative effect on the US economy?
  • why do they continue to outsource customer service centers when so many Americans are unsatisfied with their experience with such centers?
  • Is it all tied to a growing lack of empathy in US society? See:

http://www.guardian.co.uk/commentisfree/michaeltomasky/2010/oct/18/empathy-deficit

  • does the desire for cheapness conflict with and stifle empathy?
Once again, let the debate begin.

Sunday, October 17, 2010

Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell

Big Box Stores - Walmart, Trader Joes, and saving money


Shell devotes a chapter to the destruction of mom-and-pop stores by big box stores such as Walmart. Small stores go out of business because they cannot compete with Walmart's low prices. The big-box store provides less customer service because it dehumanizes its employees.


Up until about a year ago, I would agree with Shell's assessment of Walmart. However, in the past two years, Walmart is selling locally produced food (grown within the state) in its store. While some people might quibble that within a state is not local, it is still more local than Mexico, Holland, or Canada, and it does boost the economy of the state. It also may provide a higher quality product at a lower price.

http://www.nytimes.com/2010/10/15/business/15walmart.html?ref=dining


In addition, while I do not shop at Walmart (I've never been in one) I do know people who are regular Walmart customers. Last night, as I was buying cat litter in my local supermarket, a man checking out bird seed told me that he normally buys a month's worth of pet food at Walmart and only comes into the supermarket if he runs out of food before the next shopping day. We discussed a local pet food warehouse where I shop for cat food, and he told me that the Walmart prices are still lower. He estimated that he saved $500/year at Walmart - a significant savings. We both agreed that the supermarket was twice as expensive as the other stores and that it was taking unfair advantage of the many people in the neighborhood who own pets and did not have cars or time to take the highly unreliable bus to the petfood warehouse.

On one hand, I agree that big box stores can be soulless. On the other hand, $500 saved could make a difference between getting veterinarian care for a pet or waiting out a potentially fatal pet illness. The same issue can apply to people who buy their medicine from Walmart- they may want to buy at a small store but they may need the savings they get from using Walmart. It is easy to advocate using more expensive local alternatives if you have a good income.

The same issues can be applied to Trade Joes. There have been recent protests outside of NYC Trader Joes because of the ethics of their produce suppliers (suppliers who also supply the NYC area supermarkets). Once again, the issue (at least here in Queens) is whether to buy pricey goods at local supermarkets who are using the same suppliers but have a lower media profile, buy cheaper items at Trader Joes, or resign yourself to a lengthy trip via subway to a farmers market to buy a week's worth of produce. Is it wrong to look for the cheaper alternative when there is no real viable ethical alternative?

In addition, it looks as though supplying health care for employees under the new health care plan may make it even harder for mom-and-pop store to stay in business. Big box stores will have an easier time although their profits may drop. With this health care bill, consumers may have little say in the survival of small stores in their community.





Wednesday, October 13, 2010

Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell

IKEA: Evil Empire - Part 2

Ikea keeps its prices down by having its goods made in countries where wages are extremely low and there is less oversight of working conditions. As Shell points out, a US carpenter could not get the raw materials for a table for the price that IKEA sells the table. While part of IKEA's lower costs are due to their buying raw materials in bulk, their cheap labor also keeps costs down.

In addition, IKEA deliberately designs its items to be ephermeral. Buyers are paying for the attractive design, not for the quality of the workmanship. As Shell correctly notes, IKEA furniture does not move well (I've heard this from other people) from apartment to apartment. Most IKEA products end up in the trash and ultimately in landfills. It does not reuse or recycle well.

On the other hand, in the current bedbug plagued NYC, cheap and disposable furniture may be necessary. Is IKEA furniture the forerunner of an era when we must be prepared to throw out our furniture (or burn it)?

Wednesday, October 6, 2010

Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell

IKEA - Evil Empire? Part 1

Brooklyn recently became home to an IKEA. While I have not been this particular store, a friend of mine has happily taken the trip many times. She raves about the product design and the price. She even remembers some product names. (I do own an IKEA bed and stool, but had to unload the down comforter because it terrified a cat.)

Shell devotes an entire chapter to IKEA. She visits the corporate headquarters, where upper management appears to be doing its best to indoctrinate the employees. She gives a detailed description of an IKEA commercial about a homeless lamp (my response was totally opposite the one that IKEA wanted - I felt the urge to rescue the newly abandoned lamp).

More importantly, she casts doubt on its environmentally-friendly reputation. It is possible that the wood is being logged from the rapidly depleting forests of Siberia. It is hard to document the origin of the wood, and in fact IKEA ignores a local downed forest in seach of foreign woods. It did, however, hire Brooklyn locals to work at the store.

Sunday, October 3, 2010

Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell

Cheapness and Unions

In order to reduce the price of an item, it is necessary to cut the cost of producing the item. Traditionally, the easiet way to cut production costs is to cut the cost of labor. Replace the people with machines. Replace the people with people who are paid less. Replace the people with not only people who are paid less, but with people who cannot complain about the unsafe conditions in which they work (making the conditions safer would, of course, cost money and thus raise the price of the item).

Unions exist to insure that people make what they view is a reasonable wage and to insure that they work in safe working conditions. In the Middle Ages, craftsmen's guilds existed. These guilds trained their employees to industry standards through a master/apprentice relationship. They provided some assistence to elderly craftsmen and their widows and children. A master craftsman produced work of a certain quality although not necessarily at a low price. These guilds evolved into labor unions.

Unions can beviewed as a double-edged sword. If you are a union employee, you are guaranteed a certain protection from being fired (although not from being laid off), safe working conditions, usually a decent health plan, and a pension. On the other hand, all of this drives up production costs, which is why companies have begun outsourcing and union-busting. While this trend means cheaper items, it does come at a price. To quote Shell:

Wages and benefits were sinking, and job security a happy memory. A focus on deregulation and unfettered free markets had made unions and their protectors almost a thing of the past, particularly in the private sector. Global markets, in which goods were produced far away from the eyes and sensibilities of those who purchased them, made it difficult or even impossible to enforce environmental precautions, worker protections, or health and safety regulations. Few of us knew where our food was being grown and processed. But this ignorance was not so much a matter of not knowing where to look as of our simply averting our eyes." (p. 184).

However, Shell goes on to point out (also on p. 184) that while we are not subsidizing people through their union benefits, we are subsidizing giant agrobusinesses . These agrobusinesses are passing on the subsidies to consumers through lower food prices. However, their workers are not well-paid, and there have been numerous example of environmental harm from agrobusiness farming techniques.

Some questions to consider:

Can subsidizing agrobusinesses be viewed as the good of the many (cheap food) outweighing the good of the few (the employees, the environment).

Is the lack of job security and the outsourcing of manufacturing jobs actually good for the American economy? Is it forcing us to become a more creative, technologically-driven culture?

Is there anything really wrong with buying cheap stuff? It does let us save money.

Let the comments begin!




Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell

Introduction:

Shell begins her book with a quote from the late US president William McKinley:

I do not prize the word "cheap". It is not a badge of honor.

However, cheapness has become ingrained in the American character. Even before the 21st century recesssion began, paying full price for an item was almost viewed as a sign of stupidity or laziness. With 10% unemployment around the country, imminent layoffs, and rising utility bills and taxes, people are economizing more than ever by refusing to pay full-price.

However, this obsession with cheapness is what led to the undermining of the American economy. Shell's book documents the destruction of American industry due to conspicuous consumption of the cheap. At the same time, she offers some remedies for the situation.