Tuesday, November 18, 2003

Shopping Ourselves Out of Jobs

In this month's issue of Fastcompany, the headline is The Wal-Mart you don't know {why low prices have a high cost}.

Here is a quote from the article from Steve Dobbins, CEO of Carolina Mills, a textile supplier to Wal-Mart.

"People ask, 'How can it be bad for things to come into the US cheaply? How can it be bad to have a bargain at Wal-Mart?' Sure, it's held inflation down, and it's great to have bargains," says Dobbins. "But you can't buy anything if you're not employed. We are shopping ourselves out of jobs."

I've thought about this a lot. Here in Mattoon the factories are slowly shutting down. I've had almost no training in economy, but I've wondered, "Can you have an economy based only on service?" I'll preach your sermons. You cut my hair. You protect us from fire. You care for the parks. You work for the utility company (which still feels like a service). And we will continue to live at the same level we are used to, except that both husband and wife will have to work, and even that won't help for very long.

Can you have an information/service economy that generates the same level of income that a manufacturing base provides? I don't know.

So our jobs are going to India (can they outsource preaching?). But the deeper problem is that we still have a higher standard of living than those who took our jobs.

My incredibly uneducated guess -- we will have to change our standard of living through a tooth and nail process which will get very ugly. The global economy will stabilize as global incomes raise, and then we might be able to get back to a stellar income level, as the poor become educated and prosperous.

So actually it is a good thing in that it will provide a good standard of living for the world (as long as they aren't oppressed by dictators). Currently most of the world lives on about a dollar a day. That is the real root of the problem. Wal-Mart is just speeding the process, possibly to their own demise, but Wal-Mart isn't the problem.

This isn't how I thought this post would go. I thought I would find the problem in Wal-Mart. If you've read this far, leave a comment. You a real fan of this blog.

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