The Gross National Debt

Friday, January 13, 2012

Where the wallet goes...


.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
She railed about the lack of jobs, the poor economy and so forth and so on. Then, she pulled into the store I refuse to enter and bought more than $100 worth of stuff.
Maple-glazed bacon-apple donut. Mmmmmmm

When I pointed out that "stuff" used to be made in America, providing American jobs and American livelihood until the companies were forced to move to China, her eyes took on the appearance of a glazed donut.

The companies moved to China because of an incessant demand by American consumers to get it cheaper. Period. Spend less money right now. T'hell with the cost down the road, gotta save them greenbacks right now.

That attitude has cost 5 million American jobs over the past decade and the job loss is growing.

The very people who are making the most noise about this are also the ones driving the job loss.

"The decision (laying workers off) is not made by us," he says. "The decision is made when the consumer walks into Wal-Mart and there's two products on the shelf and one is made in this country and one is made in China. And the one in China is 50% cheaper than the one that's made here, and they choose the one that's made in China."

He, in this case, is Larry Sills, CEO of Standard Motor Products, a company which has started outsourcing some work to China. Standard Motor is a company on the edge. Read the whole story here.

Now you can say a company (not necessarily Standard Motor) should do something. The company did. It tried to stay in business. But when the cost of making the product in the US is more than twice that of making it in the US, and the price at the store reflects that, well...
Insanity is doing the same thing over and over

You can argue that US companies could also make less profit. I agree. But the profit companies make is far less than what they shell out each year in employee pay, benefits & etc. You can cut profits in half and still not make the impact cutting employee-related expenses by one-quarter will make.

I can't make this any more clear. US consumers want it cheaper. The only way to do that is to make stuff overseas. Or, get US workers to take home less pay.

Pay cuts to the point of getting costs down low enough to compete with China ain't likely.

I told another person this, a mother of 5 kids. Each child has a different father by the way. I told her she was killing her children's chances of getting a decent job down the road.

She looked at me. "As long as it's cheap, I don't care," she said.

Ah.

The great majority of American consumers think exactly the same way. They lead with their wallet. They don't bother to think.

So, g'head, continue to spend your money where you wish. Don't buy American, don't support the small Mom & Pop stores.

When people in your family can't find a job, do not come to me complaining. I will laugh and laugh viciously at you.

For where your treasure is, there your heart will be also. Luke 12:34

1 comment:

  1. You and I have knocked this subject around a bit. I maintain that we could get back to a better system if we A) abolished the minimum wage, and B) considerably reduced the amount of regs a business has to put up with, and C)abolished the current tax code. I believe meddlesome government is largely to blame, and I don't blame a consumer for wanting a bargain, because that's just good business.
    The effect of my 3 points would make it easier for a business to not only hire but also keep a new person, price products cheaper to compete with foreign labor, and retain more profits to continue to do those things. Local markets would in turn have to respond to the sliding wage scale with lower prices on everything, or they would not be able to sell anything to folks who couldn't pay.
    Yes, a new generation of labor would have to accept a lower beginning wage, but they would have something to shoot for, and that, I think, makes all the difference. I started out making .50$ a bushel picking peas and corn by hand, and I know you did similar. If we can, so can those behind us.

    ReplyDelete