In Discussions, Discussions, Discussions, Discussions, Life, Minimalism, Money, Shopping, Style

We really only have ourselves to blame

I’m not even talking about universities and colleges preying on unsuspecting parents and students who think a higher education is the be-all and end-all…

…..or that we watch TV and get sucked into advertisements and unrealistic lifestyles making $30,000 a year (*cough* Sex and the City *cough*)…

I am talking about the reason why most of our manufacturing has moved abroad, and why we are having problems trying to figure out how to get quality goods from Third World countries (China and India in particular), for dirt cheap prices.

IT JUST SIMPLY ISN’T POSSIBLE TO GET THE HIGHEST QUALITY FOR CHEAP

Guess what? The Emperor has NO CLOTHES!

It is NOT possible to obtain the same quality of goods that we have been used to, or the high quality of food safety, if we are not wiling to pay the price.

You can’t have the best quality and the lowest prices.

They’re opposites.

You can have average quality with average prices, or the highest quality with the highest prices, or the lowest quality with the lowest prices.

That’s how it works.

However whether or not the highest price always means it is of the highest quality, is a question up for debate.


(For the record: I don’t really believe that high prices equals high quality.)

This is why I am willing to pay $30 for a plain, Made-in-France Alpico plate, because I know it is of the best quality I can purchase and I am safe in knowing they didn’t try to cut corners in making something that I am heating my food upon, and using on a daily basis.

WHAT DO COMPANIES HAVE TO PAY FOR ON A DAILY BASIS?

Companies that make garments have to pay their workers (Labour), on top of things like:

  • Building / Factory and all the materials that go into it
  • Land for the building
  • Machines to make said garments (if made in-house)
  • Utilities to run said factory / building
  • Equipment – Laptops, Cellphones, Cables
  • Raw Goods – Fabric, Zippers, Thread, Dye, etc

Photograph-Travel-Thread-Sewing-Tailoring-Clothes-Shop-Things

  • Furniture – Desks, Lamps, Chairs etc
  • Annual registration fees (for a business) with the government
  • Lawyers to draw up legal papers and agreements
  • Buyers to source fabric or to deal with problems with their suppliers
  • Executives who run the vision of the company
  • Accountants to keep the books
  • Research & Development to come up with new ideas for the seasons
  • Design Department to create the fashions and ideas (the “fun” part I guess!)
  • Marketing department to sell the goods and think of the selling points
  • Public relations firms to handle their image
  • Advertising department or firms to create advertisements
  • IT — Not just for their website or computers, but for their system infrastructure
  • …and the list goes on and on and on.

Not to mention MAKING A PROFIT off all of the above!

This is what goes into a corporation, or a company that has decent revenues selling a garment.

THEY NEED TO ALWAYS BE CUTTING COSTS SOMEWHERE

Companies are not in the business of selling services and goods, to make $0.

As a shareholder, that’s just ridiculous to imagine a successful company that makes $0. They still need to eat and live!

Much like how when we tell ourselves it is TIME TO CUT the budget, we go straight for the easy pickings like cutting back on Groceries, Gas, Cable TV or Telephone?

We don’t really want to do the harder cuts like finding a cheaper apartment, selling our house, selling our car, or anything that takes more than an hour to complete.

So is it any wonder that to cut on costs, companies move things to China?

When the cost of labour goes up even a penny, it is a change that ripples throughout the entire company, increasing overhead costs, which makes their margins even thinner.

Labour is pretty easy to chop.

tailor_women_clothes_measure

Granted, the fashion industry is a bit more flexible in terms of margins because they can make a t-shirt that costs $5 in materials, and sell it for $100, but if we moved this to another industry that made plates, or cups, does it ever bother us that if a cup is made in China, it costs $1, but it’s $15 here?

It’s not just labour that they’re cutting on, it has to be on the materials and safety checks as well.

How can it be possible that something costs less than ONE DOLLAR to make, and they are STILL turning a profit?

Maybe it’s razor thin, 2% margins made up for by sheer volume, but even so, a CUP for $1?

I don’t think I can even buy the raw materials for $1 to make a cup, let alone factor in the cost of labour.

CASE IN POINT: BUYING A SIMPLE COTTON BAG IS HARDER THAN YOU THINK

I replaced all my plastic reusable bags recently with cotton ones.

I went into at least 8 stores to touch cotton bags and try them out (I like long handles, not short dinky ones), and to make sure the fabric is thick and can hold my groceries.

For a bag made in the U.S.A., of cotton (organic or not), and only PLAIN cotton bags, the retail price was $18 – $20.

For a bag made in China of cotton (never organic), and with a myriad of cool designs to choose from, the retail price was $5. All $5. No change in price. $5.

It was 1/4th the price of a plain cotton bag made in the U.S., or a $13 – $15 difference in price.

Is it any wonder that we scoff at the $20 price tag for “organic cotton”, and buy the cheap $5 one that looks way cuter?

Then I researched into buying material that is made as ethically as I can buy it, and the RAW COST of the materials is $60.

Never mind thread, zippers, labour, or any of that. $60 was the base price of the raw fabric in yards.

All of the above, gave me a headache recently, and strengthened my resolve to buy vintage clothing over just thrifted or used pieces.

WE ARE JUST GREEDY, PLAIN AND SIMPLE

We want it all. We’re greedy.

We want to pay $5 for something when the real price is $20 for fair labour.

We don’t want to think about what goes into what we’re buying, but in reality, it matters more than you think.

We’re voting with our dollars, and frankly, the vote is speaking loud and clear about what we care about: PRICE.

woman-golddigger-money-cash-bills-rich

Not quality.

Not labour at fair wages.

Not anything we say and universally believe to be “bad”.

DO WE ACTUALLY NEED EVERYTHING THAT WE BUY?

But really, do we need everything that we’re buying? I could live without 90% of my things, technically speaking.

I don’t NEED another t-shirt. Or a cotton bag. Or a dress.

All I really need is basic shelter, basic clothing and food.

I think that’s the best way to sum it up — is for me to really ask:


Could I live, LITERALLY LIVE and breathe without this item?

If not, then I don’t need it to survive. I can do without.

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Sherry of Save. Spend. Splurge.

Am my own Sugar Daddy. Am a millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using TheBudgetingTool.com. I have worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I have 11 side incomes that are on track in 2020 to make me $50K - $75K. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

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Posted on September 16, 2019

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11 Comments

  1. NZ Muse

    One great thing for me about earning more is having more ability to vote with my dollars – eg buy more ethically, donate to causes, support creative work. Hard to do that even in a first world country if you aren’t making more than a living wage. For me food is the thing (less so than clothes etc) being so close to my heart. I’d like to start growing more food for both financial and flavour purposes. In the meantime I shop a lot at Asian grocers which have dirt cheap produce and I hope it’s not too exploitative.

    Reply
    1. sherry@savespendsplurge.com

      They did a study that says Chinatown produce is the most locally grown you can get without the cutthroat prices

      Reply
  2. Taylor Lee @ Yuppie Millennial

    I think it is hard for individuals to research every item that they buy for meeting their own ethical standards. Like, you know where an item might come from but it is pretty impossible to verify the entire supply chain. Plus there are plenty of people who simply don’t have the money to buy a $60 cotton bag, but might need one.

    The thing I hope happens is that the US leverages trade agreements to encourage trading partners to address the big environmental, sanitary, and worker’s rights issues in their own countries (incentivized or disincentivized with tariffs). I don’t much care if my plates or whatever were made in the US or Bangladesh, but I do care that they were made by individuals making a living wage, working in safe conditions, with environmental protections in place all the way down the supply chain.

    Reply
    1. sherry@savespendsplurge.com

      And how do we make sure they are not slaves in Bangladesh ? Owners of factories need to make a profit and win contracts and are constantly underbid by unscrupulous competitors

      Reply
      1. Taylor Lee @ Yuppie Millennial

        Well much of that happens because there isn’t a strong regulatory framework in place or because the country’s government looks the other way for the benefit of increased trade. But if the US intervenes by saying, “Hey you must do X, Y, Z and continue to live up to those standards or we will raise tariffs on your products which will make them more expensive to buy in our country than goods in this sector from other complying nations” it creates an incentive for them to change their behavior and for that country (whether it be Bangladesh or whatever) to actually enforce proper regulation.

        Reply
        1. sherry@savespendsplurge.com

          Interesting. I know Wal-mart has started demanding things and get it, as they’re a huge retailer.

          Reply
  3. raluca

    I am, for my sins, one of those people who have benefited most from jobs relocating from First-World countries.

    Since I live in a developing nation, I can’t really complain about globalization. After all, the only reason that I can still live next to my family and have a well-paying job is that companies from the UK and Germany have decided that software can be developed anywhere in the world so they might as well give us a try. And, with all modesty, we’re good enough at what we do and what we don’t know, we can learn.

    Before the Internet, people like me would have had to physically relocate in one of those countries, because that’s where the jobs were. In fact, 12 people out of my 24 highschool class have emigrated, most of them for good jobs in the USA or Western Europe. It’s a terrible brain-drain for a country to have, to lose it’s best students that it has spent 12-17 years to educate.

    I think globalization will, in the end, help more people than it hurts. Because there are more poor people than well off people in the world. And because capital investments in the poorest countries have lifted millions out of poverty, even if their jobs are, of course, much worse that a job in a First World country. If they can retain just 10% of that invested capital in their own economies, then that investment can grow and help future generations live better lives.

    Of course, this does not mean that globalization is good for everyone, or indeed, that it’s a good thing in itself.
    If you live in a First World country and see your factory closing out because it’s been relocated to Vietnam or China, then of course you are going to be resentfull. It’s normal and it’s human and I can definitely empathize.

    But then you really need to ask yourself everytime you’re at Wallmart if what you’re buying is going to beggar you and your neighbours pretty soon, or it is going to sustain your country’s economy for the long term. You can’t have well paying jobs for yourself and your familly AND cheap consumer goods. You have to choose one or the other, because that’s how math and the economy works. Consumerism, coupled with globalization is the scourge of any economy. When one country’s people consistently over-consume and do not produce enough value in the global economy to pay for their share of goods, so they take on more debt, well then, that country will have to make adjustments sooner or later.

    No matter what Trump tells people, you can’t keep on winning all the time. Because other people exist and matter too.

    Reply
    1. sherry@savespendsplurge.com

      I completely agree. I just wish it was more transparent and less desperate for third world nations to develop and gain business. Why are we so greedy?

      Reply
      1. raluca

        Because we lack empathy?
        Because we never think of those who have less but only look at those who have more?
        Because we’re bored?
        Because we’re trying to hide our insecurities by showing?

        Take your pick :).

        We can’t change the world in one generation, but I do believe that the world is becomer a better place every year that goes by.

        Reply
        1. raluca

          * by showing off?*
          “is becoming”
          Ugh, that’s what happens when I write before I had my coffee.

          Reply
        2. sherry@savespendsplurge.com

          And it is our duty to educate our kids as well. I read something interesting that younger generations of men are in larger numbers, quite upset with the low wages and inequality of salaried women, but not for the reasons we think. Every generation gets better. It’s my job to help Baby Bun.

          Reply

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In a nutshell…

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