Addicted to Cheap Shopping Opinion Summary
Addicted to Cheap Shopping is a documentary that explains the reasons behind the inexpensive products and services that are available for sale in large supercenters. Libby Potter, a British reporter, travels around the world to investigate the reason behind why people of the first-world countries are being given such low rates for things that definitely did not take so little to produce. She gets to the bottom of why the products that we purchase are having such a huge impact on foreign laborers. The video discusses specifically why the prices of clothes, electronics and overall consumer goods that we buy have fallen over the years. For someone living in China a typical day could involve getting up early and starting work in a factory or elsewhere and earning only $2.00 a day. The items they produce however, are very labor intensive to make because they produce mass numbers and if they get injured on the work site, there is no health care benefits. For this reason large international companies see it as a cut on expense when they come into countries such as China with people willing to work for cheap labor and without benefits and healthcare. Large chain companies take advantage of the high population by providing many jobs for cheap wages as they realize how many people need them and will even go below minimum wages to be employed. Another reason for why prices seem oddly reduced on products that should be worth more is due to the laws of the economies of scale.
This states that if products are bought and produced in high volume and there is a high demand for them, there are lower-price set ups. A great example is Wal-Mart, Wal-Mart has successfully lowers goods prices by buying a large quantity of items and saving on individual packaging costs. The next philosophy states that if the retailer is giving its consumers an exceptional deal with good quality products then they should do half the work. This means that the consumers get to view models of furniture and products that they can choose, buy and then take home in boxes filled with all the parts of the furniture/product. By selling products without the labor component of putting them together, stores such as IKEA can make cut backs and sell products that are affordable and of quality. Potter’s last stop was to China, the hub of mass production and manufacturing. When Potter arrived it was visible that the country wasn’t as prosperous as it should be given all the revenue it helps the world create annually. Workers were not being given basic health and safety care as they worked in toxic environments day in, day out. Many were working in large scrap yards that were as a result of garbage that came in from the West. The metals are cheaper to ship to China than to dispose them properly so Chinese workers go through scraps that have films of toxic chemicals that can be dangerous for the ill-equipped. In addition, all of these scrap yards are harmful to the environment as they kill off wildlife and ecosystems that are around them. But no one stops to ever question why or how they are getting goods at such low costs and how someone else in the world may be effected by it. Over all cheaper goods serve as a great short term gain but in the long run it is effecting so many people around the world in a negative way. In addition, cheaper goods don’t last long which is also creating unnecessary waste in landfills.
As far as the impact in relation to International Business that cheaper goods has is that all nations have now become interdependent. With faster technology and ways to import and export faster, the entire world is relying on each other to contribute to all aspects of the production of goods. However, there are moral/ethical problems, and environmental issues linked to this topic. More manufacturing aspects are done in poor countries rather than the first world nations because they require less money for the same labor and they don’t take the health precautious into considerations most times which means cut downs in expenses. Although this is a horrible practice, it is still very much a reality.
Lastly, environmental related issues are not being thought about in the nations it is effecting the most (ie. China/India) because they are basically allowing other countries to make their lands and waters toxic. But we the people of nations that value our voices should speak on behalf of the people of countries with no say. In addition we can help people overseas by buying fair trade products so that they receive fair pay for their labor. I personally prefer buying fair trade products when possible and products that may cost a little more but are of good quality. Now think about it should countries of the West who are richer than third world nations really bargain this much and allow environment and ethical issue to surface due to it? The Western countries should keep in mind that China offering cheap products/services, may not last forever because they are slowly realizing the value of their workers and the investment of good living standards in their country. If China makes changes like higher pay/better benefits for their workers, refusal of e-waste dumped onto their harbors or a drastic change in living standards, it could potentially ruin economies in the West and all over the world because of how heavily interdependent we are of one another.