Thursday, November 24, 2011

A Good Deal

Today being Thanksgiving, tomorrow is Black Friday - the day the Christmas sales officially start.

Personally, I hate to shop, and shop only to replace things I need.  I rarely buy anything on impulse (and often regret it when I do); and I certainly never go near a store on Black Friday, because I dislike crowds.  Boy, am I in the minority.  This year some stores (yes, Target, I mean you) are actually opening on Thanksgiving Day itself, in hopes of squeezing a few more dollars out of the ravening hordes.  Someone wrote an appalling "be grateful you have a job, punk" editorial in the Twin Cities StarTribune (Target's home town), after a part-time Target employee put up an online petition asking Target not to open quite so early, please, so he could have a Thanksgiving with his family.

People are camping out in front of stores, hoping to be first in line for the deal.  A friend of mine posted a shot on Facebook of a bunch of people in tents, lined up outside a Best Buy - which was still open...

Why are we so fixated on getting things cheaply?  What ever happened to paying a little more to get good quality?

I concede that a lot of people have to count pennies these days.  In their cases, standing in line for sales is a reasonable choice.  But most of the people I hear quoted in the news seem to be focused, not on getting something they normally couldn't afford, but on buying anything at all - as long as it's on sale.  As long as it's cheap.  It's a game - how much can I get away with?

If you don't need it, it isn't cheap, now matter how much it's marked down.

And it's a self-reinforcing downward spiral.  The lower the price of an item, the less the workers who make it generally get paid, labor being a major cost.  When the price goes low enough, the amount the workers can get paid is less than the amount you can live on.  The factory closes and reopens in China, or Vietnam, or Mexico, paying local wages.

When you're competing on labor price with people who think $50 a week is a lot of money, you have to be able to live on $50 a week yourself.  Yes, I'm over-generalizing, but not by much.  I'm not the only one who thinks that's why so many manufacturing jobs are now in China, or Vietnam.  In fact, some of the manufacturing jobs are moving out of China - Chinese workers are starting to ask for higher wages!  Wages for Indian computer programmers started rising a decade ago.

The same principle applies to buying from small local merchants, as opposed to stores like Walmart and Target.  The merchandise from the little guy will never be as cheap as the big chain can price it, because he can't buy in that volume.  But you almost always get better service from the little guy - isn't that worth a little more?

If you refuse to buy things except at the lowest possible price, you will eventually destroy your own ability to make a living.  Henry Ford understood that his factory floor workers were also his customers; many firms these days have forgotten that. (It wasn't widely understand it then, either - a lot of people thought Ford was raving crazy to pay those wages.)  And then they cry that the American Consumer isn't spending enough.  The American Consumer has either been out of work for awhile or is wondering how long she'll have a job.

Shop the local stores.  Pay a little extra for "Made in America," if you can find it.  And Happy Thanksgiving.

1 comment:

  1. Dear K: Two typos--"now matter how much" and "It wasn't widely understand it then, either" but thanks so much for this opinion piece, which, despite its exaggerations, contains several grains of truth.

    China now exerts a powerful force over our government. This is a new situation for America, and Americans, who once dominated the rest of the world through its/their economy and military. It's a drag being told what to do. During the Clinton Administration, there were huge outright purchases of influence by Chinese proxies in Washington. The Chinese basically "own" Wal-Mart, for instance, because the vast majority of goods sold there originate in China.

    For decades, America acquired raw materials abroad, and manufactured things here. Post-colonial policies designed to raise the standard of living abroad mostly didn't work, until China reared its ugly head, and smart entrepeneurs figured out how to use "globalization" policies to exploit national economies (and work-forces) by pitting them against one another.

    Americans are just now beginning to wake up to what this "globalization" actually means. It doesn't mean a rising sea-level raises all the boats. It means America begins to resemble Brazil. Concentration of capital in the top 1-3% of the population, suppression of all kinds of political dissent (in Washington, by lobbyists), people in authority being bought off, sloughing off of social obligation and responsibility in the name of "freedom" etc.

    But the American economy only actually thrived when lots of people in the middle (the Middle Class) had money to spend, and good things to buy.

    The current paradigm will, as you point out, lead to a lowering of standard of living for everyone.

    And this is only one aspect of our corrupt relationship with Mexico, which leads to so much refugee migration. The "globalization" advocates want us to think this is wonderful--open up our borders. But exploiting people isn't confined to Third World countries. Mexicans coming here want higher wages and higher standard of living. But American companies will exploit them wherever they can, whether that's in Juarez or Chicago. Eventually, if you keep pushing down wages and shoving people around, everyone loses. We're seeing the concrete consequences of the de-capitalization of America right now, in lower state and federal revenues. The problem isn't "overspending"--the Republican mantra--but declining overall wealth as a country. We've given away our manufacturing base, and that's resulting in less wealth for everyone (except the top 1-3% who can afford to leverage their excess capital).

    It's ugly, and getting uglier.