More outsourcing woes.
The other day I decided I needed more jeans. I was down to two wearable pairs. So off to the store I went.
I happen to like Levis. They hold up really well. A pair can last years, unless you are a dumbass and spill bleach, battery acid, or PVC glue on them. The battery acid is the worst, all bleach does is leave giant whiteish spots, and PVC glue just looks ugly. Acid makes the fabric about as easy to tear as paper.
Anyway, in case you are not aware Levis used to be made in the USA. One of their plants was in a place called Stonewall Mississippi. When the plant closed, the town all but dried up as Levis was the largest employer in that town. Now the only things there are businesses that can survive off people's welfare checks.
The jeans I got are from The Dominican Republic. I know for a FACT that labor costs went down. Not only do people get paid less, but the company probably does not have to include the benefits package that they did in the USA.
Other costs are probably lower as well. Otherwise, there is no reason to move production offshore.
What did NOT go down is the price. The jeans cost $35 a pair. This is not any cheaper than they cost when they were made right here.
What is going on is GREEDY BASTARDISM. Either Levis, the department store, or BOTH are guilty. If Levis did not lower their cost to retailers, then they moved production offshore - at the cost of American jobs - just so that some suit wearing dildos can make a few more bucks in salary and stock options.
If Levis did lower their cost to stores, but the stores did not lower the cost to the consumer, then the suit wearing anal vibrators are guilty of treason. They probably did not raise employee pay, they just took the extra few bucks and stuffed it into one of their pockets.
At any rate, it is the consumer who has to take it up the cornhole. Not only do taxes have to support almost the entire population of Stonewall Mississippi - but the goods that production was moved offshore to lower cost of are not any cheaper.
Who was the savings passed on to?
posted by The Lazy Iguana @ 00:33
13 Comments:
It's not even 7:30 am and now you've got me all worked up! I don't understand economics at all, but this sort of thing seems like nothing more than pure greed.
That kind of greedy crap happens all the time anymore.
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If you try it, be sure to save your original picture first, it's cool.
But it might be fun for a change.
I put it up on mine just as a test and am going to take it down.
You've got me worked up too.
This issue about goods and services not being made in America is another contradiction of our administration in my opinion. Let us be proud Americans, display our flags on the 4th of July, support our troops and the War outside of our country, Bush says, but not make good and services here in our own country to be afforded by the average American.
Makes perfect sense.
I'm usually not bothered by this stuff, but I am beginning to think like you, Iguana. That scares me.
I'm getting more and more upset at how our once great manufacturing segment is disappearing, led by Wal-Mart. It's discouraging to look at everything in your shopping cart and see a "Made in China" imprint. I won’t go anywhere near one of those stores.
I will gladly pay extra money knowing that it benefits my next door neighbor keep a job here.
the usual pathetic excuse is that we have to cut costs to stay competitive but if the price stays the same that's out of the window it's to maximise profits and please the share holders. The next argument is that the share holders are the major pension companies and that's your pension mate. Except as you said previously if you are unemployed you can't afford to pay into a private pension you don't have an employee contributing on your behalf so it's not doing you any good anyway. Great isn't it.
Not that I'm envious or anything but here in the UK a pair of man's Levi 501's from a department store costs from £50 to £60 and that can't be all sales tax cos it is 17.5% repeat that is pounds sterling not US dollars I think at the current exchange rate that's a bit shy of $100!
PS
It makes me very angry, I wouldn't mind so much if the jobs were going abroad to people who were being paid a fair decent wage in their country with commensurate benefits but often as not they are working in the sort of sweat shops that were banned decades ago in both the US and the UK.
I agree with Jane... well said.
Corruption, the govt is not run by the people for the people, its run by the corps for the corps. The ship of state is captained by evil pirates hell bent on plundering every purse, raping every virgin and burning what they left behind.Even pagan Rome built roads and aqueducts for its citizens and that was over two thousand years ago. What has your govt built for you?
Come on now Devil Uno. The government has built great roads. I have running water. he sewage system was also built by the government.
Then there are National Parks. I love the National Parks, I would really like to visit each park at least once.
You made a really good point. And we perpetuate people's low or non-existent wages in other countries. All around, I'm seeing lots of evil in capitalism.
I found you by randomly leafing through blogs and you commented on jevanking's site...thanks for the thought-provoking post.
America is no longer a manufacturing economy so get over it! Americans are no longer willing to produce goods for the same wages as workers in other countries. We have moved on to an economy based upon innovation and service. Unless you want to work on an assembly line, stop mourning the death of manufacturing in the U.S. and embrace the new economy...and take an econ course!
I have taken economics classes.
Maybe you can explain this - IF moving offshore lowers cost, why in the case of Levis did retail prices not reflect this? Not that it matters to those who lost their jobs and had to go on welfare because in Stonewall there are simply not any jobs - but the savings were not passed on to me. Some executive just gave himself a raise.
I know why things are going offshore, it is to exploit the last cheap resource - LABOR. American labor is expensive. If I am only willing to pay $X for a good, and you can produce it here for $X-5 or offshore for $X-15, it is easy to see how you can make the most profit.
Anyway, all jobs are tied together. With fewer jobs, people have less money to spend, and this results in less stuff being bought, which results in less service and retail jobs, and so forth.
Also, what if China decides that it is tired of this Taiwan business and decides to make a point by cutting back shipments to the USA? Will we go to war for Wal-Mart, or just cave in to keep that rubber dog poop flowing in? Do we shut down all steel production in the USA, and risk some crap happening overseas that cuts off the supply?
But economics does not think about these things. It is all theory. And it works - so long as noting happens that the theory does not take into account.
I will post about why I think that capitalism as we know it today will have to morph into something else, but not today. Later.
I was a bit harsh but some of the comments got me pretty worked up. Thanks Jevanking for toning it down.
Lazy I: Did you ever stop to think that the cheaper foreign labor kept Levi Strauss from going out of business altogether? How many lost jobs would that be? Would you pay say, $50 or $60 for a pair of Levi's? Probably not, but that's what they would cost if produced by U.S. union labor. It would be the end of the company.
Levi Strauss LOST $349 million in 2003 so your assertion that the company was pocketing tons of profit at the expense of U.S. laborers doesn't wash.
And by the way, outsourcing in not something that just started recently as some commenters would have us believe. I have an 8 year-old pair of Levis in my closet that were made in Guatemala.
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