Most people always like to save some money. While shopping we look for sales and deals trying to get the best we can for the money we have. Large discount retailers are often not far from even the most remote small towns offering everything from furniture, clothing and everyday household items.
There are not a lot of things made in America any longer. Furthermore, large discount stores are importing most of the items they sell to not only offer them cheaply to the buyer but also improve their bottom line. The unfortunate truth is that having things made overseas and importing them is much cheaper than manufacturing items in America.
We are a capitalist society. This is not necessarily a bad thing. It creates competition, enables people to prosper and provide for their family. But it seems that we have lost our way during a point to continually put profit above people.
Large retailers have forced many small businesses to close when they could no longer compete with the low prices big box stores offer. This has led to a shift in the quality of the things we buy as consumers. As a result, throw away items have become the new standard in life. Sure, lower priced items do enable us to buy more. But does it really save money?
Chasing Profits and the Bottom Line
It should not come as a surprise to anyone that CEO’s and top executives at companies in America have had their compensation continually rise at an accelerated rate.
According to The Atlantic some of the highest paid top executives at U.S. companies make 1,000 times as much money as the average American worker. With taking into consideration their salary, bonuses, and stock options it is only going to keep going up.
People should be compensated for their work. However, when will it ever be enough? A CEO that gets a two-million-dollar bonus one year and a six million dollar bonus the second year seems a little excessive. This is taking into consideration that often they even have a golden parachute to fly away in the event that something happens. We all would sure like to have a job where we can go away with millions for being let go.
It’s Not Just High Compensation
It is not just the high compensation that causes an issue. It is the expected compensation by many CEO’s and the greed at the cost of lower level employees and consumers to show a profit. Many high executives are compensated for the performance of a company and the profits. Receiving stock options and bonuses based on this profit.
Heads of companies are motivated to show profits. This is the way it should be. Although, they often show profits in ways that hurt the average employee and consumer. It is not uncommon for a company to lay people off at the end of the year often hiring again once the new fiscal year starts. The people let go are very often not the people hired back. Why do companies do this? One of the quickest ways to improve the bottom line is to cut salaries. This is typically done with mid to lower level workers. Get rid of enough of them and the bottom line is increased.
In addition, more outsourcing for workers outside of the U.S seems to be on the rise. According to the Washington Post, studies have shown that outsourcing jobs to other countries actually helped create more positions in America. Doing this also makes companies in the United States more competitive globally. This was the case until the last decade.
Does Outsourcing Jobs Hurt? Statistics Show It Might
A Commerce Department study showed that in the last decade U.S. based multinational companies added 2.4 million overseas positions even while 2.9 million were cut in the United States. It could be argued that the saving by outsourcing benefits investors, executives and even consumers by lower costs. This is a valid argument by economists with them stating the saved revenue goes back into the economy. But the key is the benefit to the executives.
Public companies or companies that are traded and have shares of stock motivates executives to show profits for the shareholders. Their bonuses often depend on this with an added motivation because they will often receive shares of stock. Regulations stipulate that they cannot sell shares immediately usually, but within time large amounts of stock options are accumulated. Showing more profits resulting in higher share prices fills their pockets even further once they are able to unload some of their stock.
It has become normalcy to keep increasing the bottom line at many large companies even though good profits are already shown. Why is this and when is it enough? When do the lives of mainstream America become important again providing them with stable employment and income? Life to one day retire and enjoy their golden years. Also, to bring back goods that are quality made.
The staggering rate at which CEO pay has increased and keeps rising has created a silent world of buying cheap imported consumer goods. The savings by importing these items increase the profit on a balance sheet.
Buying Less Expensive Things May Not Always Be a Good Thing
Many people would believe that the decreasing price of many everyday items is a good thing. But I am not so sure.
Take for example buying items from one of the largest chain discount stores I will not name. Look at most of the things they sell and you will find a majority of it is imported from one particular country. For instance, something as simple as a microwave oven you could pick up for $100 or less. Chances are in a few years it will break. There was a time you could get a well-made microwave oven for a few hundred dollars more and it would last five times as long. The result is saving money by not having to continually purchase the same throwaway item time after time.
There is nothing wrong with importing goods. There are many quality made products being imported. However, there are also inferior items made of cheap plastic that will break or wear out quickly resulting in a continual circle of having to repeatedly purchase the same thing. This results in more money being spent over a period of time.
There is some truth to the saying “You pay for what you get.” With today’s mindset of the throwaway mentality and large companies looking to make things as cheaply as they can it pays to evaluate many purchases. It will save you money. You may have to pay more upfront in some circumstances, but it will be worth it.
Don’t get caught in the circle of purchasing throw away items when you can. This is especially the case with larger priced goods. A piece of furniture is one example. Instead of buying a pressed wood piece of laminated sawdust that will fall apart if you try to move it in a year, find the best price on quality solid wood furniture. It will last a lifetime and you can often find it at a lower price used. If it has scratches, refinish it. It will be worth the time.
Purchasing Power Makes People Rely On Low Quality
With executive compensation not seeing a slowdown more things will continually be made cheaply. The years of more quality made affordable goods has been over for some time and it does not appear that it is going to get better.
Millions of dollars in compensation and bonuses to CEO’s being one thousand times the average worker compared to just 20-1 or 30-1 fifty years ago is something to think about with many mid-level worker’s salaries not keeping up with these same statistics.
I am not necessarily a conspiracy theorist. However, statistics show that most Americans purchasing power has not gone up much even though their paychecks are bigger than years past. This is even the case today with very low unemployment rates. With inflation and many services raising prices each year, consumer goods are one place to save money. By buying low priced cheap imported goods, people can get what they need.
As long as wages remain the way they are, many people will have no choice but to spend more in the long run. With companies continuing to make cheaper things and finding ways to increase the bottom line to fund the elite one can only think that a lot of American workers will pay the price. It keeps us in a cycle of relying on inferior products.
Lower Prices, Quality and Hope
Although the elimination of many Mom and Pop businesses has lowered prices on countless goods, it has also lowered much of the quality. In addition, it has decreased the loyalty of the employer. When every corner had a small business, the owners knew their workers and their families. Therefore they felt connected and a sense of pride helping people provide for their families.
Loyalty is gone along with the pride and sense of responsibility in many cases. Large conglomerates for the most part no longer care. As a result, we are expendable for profit and greed.
The good news is there may be hope. Technology can have arguments with it being a good thing or a bad thing. But it seems that in the case of finding better quality items at an affordable cost and helping many small businesses make a come-back it may be helpful. With a reduction in overhead costs many small businesses are able to operate on the internet. It has also made the prices of big discount stores with their low grade products not the only place a person has to shop.
If you take away anything from this article, just stop and think about the things you buy. The items that fall apart and are thrown away on a regular basis that only need to be replaced over and over. Stop to think if you are really saving money. Consider something different. It might even be an item that costs more. This might be the case, but it may last three times as long. It will also reduce the amount of trash filling up the landfills.
Taking the time to make smarter buying decisions and not for just price and convenience will save money. It may just even eventually send a message to large discount stores that no longer care about providing quality made things and only about filling their pockets.
Some people say the “Customer is always right.” Yet, the truth is that in many cases the customer is always trained and groomed to buy low grade things.