Monday, November 24, 2008

The High Cost of Low Prices

These are some points I had after listening to a lecture entitled, Youth and Globalization by Dr. Anton L. Allahar, Distinguished Professor of Sociology, at the University of Western Ontario.

He gave an example from his native country of West Indies to show how corporations manipulate people for their own gain.

The West Indies had a fully functioning dairy industry that supplied milk to the population for 18 cents a liter. It also bolstered the economy with decent jobs for many of the people.

The U.S. dairy industry had a surplus of milk and decided to “bless” these people with cheaper powdered milk that cost about 11 cents per liter. The people were so thankful for this improvement in their cost of living. That is everyone, except those whose livelihoods depended on the local dairy industry. Farmers went bankrupt and labourers were unemployed.

Once the local dairy infrastructure was completely destroyed something surprising happened to the cost of powdered milk. It nearly doubled in price to 21 cents a liter.

Due to the higher rate of unemployment, factories that supplied retailers like Walmart could come in and offer the people less pay than they had been making on the dairy farms. A simple way to Roll back the prices.

He also talked about factories that make Nike shoes where the workers that make the shoes can’t even afford the laces for the shoes.

The worst story was what Dr. Allahar called the long shift in Indonesia. It’s 36 hours long with a break at the 16 hour mark. The workers, usually women, have plastic bags under there work table to go potty in. They make less than $5 for this entire shift.

Each one of us has likely bought something made by these workers.

We are thrilled to shop at Walmart because they have RRRRolled back the prices. We should be outraged by Walmart’s Rollback campaign but our ignorance manages to pacify us with cheaper soothers.

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