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T-shirts and hamburgers
December 5, 2013 - 8:21pm

What follows is a bit fragmented, because my thinking here isn't yet fully integrated.  Still, due to events in (and insufficiently in) the news, the subject seems timely.

The subject?  Low wages for workers, and the impacts they have on all of us.

The events?  Recent worker protests against Walmart, upcoming worker protests against McDonalds, and ongoing protests against garment manufacturers in Bangladesh.  

Wages so low as severely to limit a family's consumption choices aren't just an issue of social sustainability.  Sure, there are major implications for the health of a society, but there are also big effects in terms of economic and environmental sustainability.  A family in which the adult(s) barely make enough to pay for the essentials of life (didn't Marx say something about that?) has little ability to make consumption choices.  It's often forced to make due with a steady diet of inferior goods -- goods which survive in the marketplace only because they're available at the lowest possible prices.  If your family has no discretionary income, you lose the ability to buy something a bit better, even if it will last a lot longer.  You get trapped in a cycle:  buy cheap stuff, use it (very briefly) until it breaks or is exhausted, then throw it out and replace it.  The sheer amount of material embodied in an endless stream of cheap shoes (to take one example) far exceeds the material necessary to make one good pair of shoes that might last ten times longer.  The goods economy can be seen as an engine which takes the real wealth of natural resources and turns it into the real pollution of waste, slag and dross.  Within that engine, the part that cycles the fastest might well focus on the supply of inferior goods.

Worse, the fact that inferior goods compete solely on the basis of price makes it ever more imperative that manufacturers externalize every possible production cost.  There's no leeway in the situation -- if you're in the business of making cheap shoes and you pay to dispose of your tanning chemicals responsibly, you're likely to lose out to your competitor who has found some way (however environmentally and socially destructive) to dispose of his chemicals effectively for free.  Manufacturers who compete on some combination of price and perceived quality may have some flexibility here, but companies whose products have only one virtue -- the lowest possible price -- simply don't.

So low wages, and the increased prevalence of low wages around the world, constitute a multi-dimensional sustainability problem.  But is there a way out?

In the pure goods economy, I don't know.  NPR's "Planet Money" team is currently doing a somewhat sophomoric series in which they follow the processes by which a lot of T-shirts is being manufactured.  One of the points they make is that garment manufacturing is an industry that follows poverty.  Over the course of my lifetime, it's moved from Manhattan and Massachusetts to South Carolina, Mexico, China, and now Bangladesh.  For commodity goods like T-shirts, the place of manufacture -- the location where labor is hired -- need not be anywhere near the point of consumption.  Shirts are easily shipped.  Buyers may look at the label that says "made in . . .", but they don't really see it.  Or they don't care.

But for pure service, or mixed service-and-goods, industries, maybe it's a different story.  McDonalds may be able to source its beef from wherever in the world the price is lowest, but it has to source its labor pretty close to the point where that beef (or chicken, or mystery fish) will ultimately be consumed.  Local regulation or labor agreements could force wages up.  Some localized price differentiation could be created, and some business could transfer from higher-wage chain outlets to lower-wage ones, but how far will the typical customer drive (at today's gasoline prices) to save a quarter on her burger and fries?  Fast food (already a dying concept, in my experience) becomes far less fast if you tack an additional ten miles onto the trip.  And if you're working within a half-hour lunch break, there's even less flexibility.  Food service is, among other things, location-specific.

Food retailing is similarly location-specific.  Customers have proven willing to purchase books, electronics, and increasingly clothing online, and then wait for the UPS truck to show up.  But every time someone tries to make a go of selling groceries and other short-term consumable items online or over the phone, failure is easy to predict.  For food and similar items, convenience, impulse, and what looks good on the shelf all factor into the purchase decision.  And you can't see what looks good on the shelf if the shelf isn't in the same location you are.  (At least, not with today's technologies.)

So for pure-goods industries like T-shirt manufacturing, I don't know that there's a solution to the low wage problem.  Indeed, for those industries, I might even be convinceable that low-wage industries really do provide welcome employment wherever poverty is rife.  But for industries which need to be located near the customer, it seems that society both could and should (would benefit from) take steps to ensure that the vast majority of adult workers bring home a wage adequate to support themselves and their families at least somewhat above a bare-bones subsistence level.

And that's without even considering the (purely theoretical, I assure you) possibility of an armed workers' revolt.  That was Lenin more than Marx.  And we all know how wrong he was.

 

 

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