Needle and ThREAD: Stitching for Literacy

Cognitive dissonance: The feeling of discomfort from holding two conflicting beliefs or a discrepancy between beliefs and behavior.

On one hand, I’m uncomfortable with my ignorance about what products should really cost. On another hand, I’m uncomfortable with the manipulation some sellers use to get me to buy. I think the greatest discomfort for me, though, is the cognitive dissonance I experience wanting to support the environment and fair wages but not always having the resources to do so.

What is the biggest issue for you?

I’ve been wondering what, if any, of my beliefs or behaviors have changed since reading this book. I think I feel more vulnerable to manipulative pricing and selling strategies. The psychological studies presented here convince me I’m not as immune as I’d like to be.

I think more about where my purchases come from and what they’ve gone through to reach me, and I am more interested in economics in general.

I don’t think my actual buying habits have changed, though.

How about you? Have any of your beliefs or behaviors changed as a result of reading this book?

What do you think is in store for our future economy? I don’t think I have a clue!

Do you think our Cheap Culture will carry on indefinitely? I don’t think it’s possible, but I can’t imagine what will happen next.

Cheap has inspired me to read The Worldly Philosophers: The Lives, Times And Ideas Of The Great Economic Thinkers [7th Edition]. I’ve only just begun, but I’m liking it so far, despite the schoolish nature of it. I am terribly ignorant about economics.

For instance, I had no idea that the free market economy is a fairly new system. Prior to the current system, economics was all tied up in tradition and lifestyle; it wasn’t a thing unto itself, or perhaps it didn’t even exist. I’m barely getting my head around these ideas, so I won’t be able to explain it well.

Anyhoo, I’m compelled to learn and think about our Cheap culture more, and this book is my next step. I don’t think I can personally change any of the bad situations resulting from Cheap culture, but I will continue to do my best to act (i.e., buy) in accordance with my beliefs. Does having read Cheap compel you to do anything more or differently?

I’m oh-so-glad I read this book, and I will probably return to it in the future. How about you? Are you glad you read it?

I will begin posting questions about Olive Kitteridge on Tuesday.

What would you say is the one thing that bugs you most about our Cheap culture?

For me, it’s the disposable nature of stuff and thus the waste of resources and accumulation of garbage. Sure, that’s all one thing.

Do you recall the story of the Ikea lamp commercial? I don’t have access to TV, so I never saw the commercial, but it’s described well in the book: An old lamp is set out on the curb with the garbage, having been replaced by a new Ikea lamp. The old lamp is made to look mournful, and viewers are expected to feel sad for it. Then a spokesperson comes on and ridicules anyone feeling sad for the lamp, claiming it’s just a lamp and has no feelings. New is better.

That ticks me off in a couple of ways. First, objects can inspire feelings of nostalgia in people, so being moved by an object does not automatically deserve ridicule. Second, is new really better when we’re living on a huge pile of garbage?

I live the reduce/reuse/recycle life. I would rather re-wire that lamp if it doesn’t function, re-decorate it if the look doesn’t please me, or give it to someone who needs and can use it if I no longer have use of it myself. Replacing it and throwing it away is a last resort, the least desirable option in my book.

Renew is better than new. So there, Ikea.

Then there’s just the sheer volume of useless stuff we humans are creating. Parents, you probably know this better than anyone: How many cheap five-minutes-of-interest toys have collected in or passed through your house? Think of all the little prizes in an arcade, gumball machines, cereal boxes, Happy Meals. How many plush animals does a kid need? Does a child with twenty stuffed animals value them more than a child with just one?

I suppose we can say, “Hey, it’s someone’s job to make and transport those things.” But what about the fuel that’s being used for this? What about the landfill that’s already too full? I’m not on the fence about this: I vote to cut the job and eliminate the garbage.

There was a time when families did very well on a single income. I want that to be true now: have one income be sufficient to sustain a whole family. Can we stop producing so much garbage, reduce the number of jobs available, and raise the salaries of those remaining jobs? What would this look like to consumers? Fewer stores? Less stuff on store shelves? Do we really need a gazillions kinds of cereal anyway?

This is something I notice when I travel in other countries: there aren’t as many product choices on store shelves. Is this really such a hardship? I’m Miss Make-Do-or-Do-Without, so you know what I think. What do you think?

One thing this book teaches me is that I need a better understanding of economics. It seems our economics are dependent on perpetual growth. I don’t know what that means, exactly, but my gut says perpetual growth is an impossibility. It conjures visions of balloons bursting and giant blobs growing, growing, growing until they consume the planet.

Why does an economy need to grow? Can’t an economy become full size and just maintain that size? What would that look like to consumers? Anyone know?

And, finally, is there any way for a culture to come back from Cheap to Reasonable?

The farming section of the book was another eye-opening and fascinating section for me. The idea that food is going to waste in some places while people are starving in others is hard for me to reconcile.

It seems inappropriate to ask if you had a “favorite” part in the farm discussion, but were there any sections that stood out for you? The shrimp farming, rice, and Monsanto sections are what stick with me.

Personally, I find the Monsanto issue very disturbing. Farmers who want nothing to do with Monsanto or their GMO seeds are being absurdly penalized because seeds spread via wind, birds, and other uncontrollable ways, and when it happens, Monsanto claims infringement on their patents.

By all means, sue the entities responsible for the infringement (wind, birds…), not the victim of the infringement (farmers who don’t want your seeds in the first place). Why isn’t Monsanto held accountable for contaminating other farmers’ fields? Let’s call this pollution. Don’t we have laws for that? I’m ranting, but, really, if this is the “system,” then the system needs fixing.

Seriously, this issue makes my blood boil. Here’s an anti-Monsanto article from a site I like if you want to read more.

And people on the planet—in our own country—don’t have enough food.

The shrimp farming stood out to me, mostly because we’ve been catching our own wild shrimp here in Alaska. As you probably know, food is something we like to provide for ourselves as much as we can, whether by hunting (salmon, halibut, shrimp, and moose), harvesting (blueberries, cranberries) or growing (garden veggies to fill a large freezer).

We are now beginning to make yogurt, sour cream, and cheeses with milk from local dairy farms. So excited!

I heard a statistic once that went something like this: The human beings on the earth will consume more food this year than all humans have consumed since they inhabited the earth.

Now, I could be mangling what I read, and I had no proof it was true in its original form, but just consider the premise: Human population has grown to a size that puts more pressure than ever on the earth to provide food. Commercial fishing is big here in Alaska, and we’re keenly aware that wild fish populations are declining, to put it lightly. Might we be the last era of humans to collect and consume wild food? I think we might be. I think humans are moving more and more toward manufactured food: Think baby formula, PediaCare, Herbalife, etc.

I read an article last summer about vertical gardening that suggested produce could be grown in tall city buildings with controlled temperatures, lights, and moisture. I think vertical gardening is cool, but the whole “controlled environment” gives me pause. I love the idea of more locally-grown food: fresher, less energy to transport, etc.

Do you think our future food production will be more global (mega-farms growing all the world’s rice and transporting it) or local? I wonder if transportation costs will force more local growing.

What do you think?

I’ve failed to extract quotes for the book bits I’m going to talk about today. I may get some things wrong. So be it. You’ve been warned.

Henry Ford wanted to retain employees. They were trained in their jobs, committed to the company, and he wanted to keep them that way. He also wanted his employees to be customers, able to afford the cars they made.

His method for keeping employees was to offer a bonus for “good” employees. This included not only being good in one’s job but good in the family and community as well. Ford hired…well, essentially stalkers and spies to follow employees around town to ensure they didn’t drink and gamble, that their wives didn’t work outside the home, and so on. The employees, it seems, didn’t mind, and “good” employees were rewarded.

Okay, I’m not keen on the employer-as-Big-Brother. I think Ford was overstepping his bounds. But I do appreciate his commitment to retaining and supporting employees. This kind of employee support and appreciation exists today, too. The reason I continue to be involved off and on with Alaska Wildland Adventures and will forever recommend the company to people visiting Alaska is because the owner values employees in a similar—though not Big Brother-ish—way. The experience is spectacular because the service is spectacular because the employees are spectacular because the owner is spectacular.

On the other hand, in creating his discount stores, Woolworth was committed to lower-wage employees. When a worker got so good she could earn more elsewhere, managers were encouraged to let her go and hire someone less skilled.

Today, though WalMart pays it’s high-level employees and investors very well, the low-level employees are disposable. WalMart doesn’t consider itself a company for long-term, advancement-seeking entry-level employees.

I realize no company has to care about its employees. Low service is one way discounters cut costs. But I sure wouldn’t want to work at a place that regarded me as disposable, and when I hear stories of WalMart employees being treated badly, it makes me want to not shop there. I don’t want to give my money to a company that treats employees badly. We raise a stink over child labor and horrible work conditions overseas, which I’m pretty sure are worse than those at WalMart, but what is the minimum level of employee care and support that is acceptable?

What do you think? Do you think about these things when you decide where to shop?

I sometimes shop at WalMart, but not often. More and more, I deliberately avoid it. I wonder, too, if going to Fred Meyer or Carr’s/Safeway is really all that much better. I truly don’t know.

Ultimately, I feel as though my best option is to simply re-use, recycle, or do without. As a consumer, this is where I’m most comfortable.

Here it is mid-January, and we haven’t named a book for February. I’m going out on a limb and naming Olive Kitteridge, by Elizabeth Strout, as our February book. I haven’t read this myself, but it’s on my TBR list, and comes highly recommended.

This is billed as a “novel in stories.” Thirteen connected stories, to be exact. Publishers Weekly says, “…the collection is easy to read and impossible to forget.” It was pubbed in 2008, so it should be fairly easy to find.

What do you think? Anyone willing and able to read and discuss this one with me?

Now back to Cheap: The High Cost of Discount Culture.

As I mentioned before, I liked the biographies of various people in the Discount Culture. Eugene Ferkauf was in the leather business with his father before opening his New York discount store, E. J. Korvette.

When they were in business together, Ferkauf’s father discouraged him from deeply discounting their goods because it would upset their competitors. He believed their sales were sufficient and that enough was enough. He didn’t want to risk angering others to increase his own profits.

What do you think of this?

I admit I like it to some extent. I like the idea of playing fair and everybody doing well, having enough. But I don’t think that should prevent anyone from trying harder or trying to do better. I believe in doing one’s best. The problem is going to come in how we define “doing better.” It’s coming.

Ferkauf disagreed with his father and went his own way, opening E. J. Korvette, which sold mostly luggage, household appliances, and jewelry, all at deep discounts. He cut prices by following a low-service business model, but he also received products at deep discounts because he claimed his store was a members-only store. He and his employees handed out membership cards to anyone who would take them. If you walked in the door without one, they’d hand one to you. There. Now you’re a member, so you can shop here. There wasn’t so much as a form to fill out to become a member.

This tactic enabled Ferkauf to circumvent discounting regulations that other department stores had to abide by.

What do you think of this?

This is where I have a problem. I don’t consider this playing fair. Technically, he may not have broken any laws, but I believe he’s breaking the spirit of the law, and I don’t approve. I think his motivation is greed, and I think his selfishness is reprehensible. The problem is with the regulations he’s skirting, but he’s the one exploiting the weakness for personal gain.

I imagine plenty of people will claim that he’s also doing a service for his customers by making products they want and need more affordable. Anyone here think that?

I wonder if that isn’t short-sighted. There are underlying costs for selling those products at such deep discounts: costs like putting other stores out of business and thus their employees out of work. There’s the pressure on manufacturers to make deep discounts available so the likes of E. J. Korvette will purchase and push them, which may mean the manufacturers lower wages, cut benefits, send jobs overseas, etc.

It’s these underlying costs this book is all about, of course.

We’re Costco members. We pay a membership fee to shop there. I don’t know what purchasing advantages this gives Costco, but having read this, I’m now curious. I’ve always liked Costco. We tried Sam’s Club for a while, but I prefer Costco, because I prefer their products. Sam’s Club hours were better for us. I guess this means I value what products I buy over when I’m able to buy them.

Does the Korvette story relate to any of your personal experiences today?

You can read a bit more about the rise and fall of the Korvette company on Wikipedia.

I mentioned in the last post that WalMart was selling DMC floss at retail prices below the wholesale price Indie shops and designers had to pay. As a chain store, WalMart has the power to bargain for (or insist on) low prices from manufacturers because they buy in tremendous bulk. This is common practice. I’ve offered deals to shops when they buy greater quantities, and I’ve gotten deals for items I’ve purchased in bulk.

However, when chain stores can sell products at lower prices than non-chain stores that don’t buy in that kind of bulk, non-chain stores can’t compete and often go out of business. In recent months, I watched a small gas station go out of business after a large Fred Meyer gas station was built across the street. I’ve seen many, many Indie needlework shops close their doors.

Believe it or not, I actually thought the chain store issue was a somewhat modern issue. Boy was I wrong!

Chain stores rose to prominence with startling speed after WWI, growing in number from an estimated 50,000 in 1920 to 141,492 in 1929.

Protestors in the 1920s called the chains “privilege-seeking tycoons and would-be dictators.”

Station KWKH owner and operator, William K. “Old Man” Henderson of Shreveport, LA, proud forefather of the modern shock jock, warned listeners of the ruinous and devastating effect of sending the profits of business out of our local communities to a common center: Wall Street.

Were you aware that this chain store controversy has been around for so long?

I shop at some chain stores. I appreciate being able to buy some things in bulk at Costco. I live far from town, and I prefer to shop infrequently. While traveling in South America a couple of years ago, I shopped for food almost daily. One day, I had four items on my list and had to go to three shops to get them. They were all food items. The biggest store in the area was about the size of an average American living room. I confess I prefer one-stop shopping.

But I also appreciate the friendly atmosphere and personal attention I can get from a small locally-owned business. One of the things I liked about that trip to South America was that shop owners got to know me, and I got friendly, personal service. When I was in a hurry, I grabbed my usual loaf of bread at the paneria, showed my $2.00 to the owner, reached over the shelf, and put it on the counter. She smiled, nodded, and waved, continuing to wait on the slow, indecisive customers. Can you see me trying to do that at Costco?

Then there’s the issue of my money supporting the local economy or supporting a large corporation located who-knows-where.

I feel pulled in two directions: I like the low cost and convenience of some chains, but I like the personal service of small local businesses, and I like supporting the local economy.

What’s your position on chain stores? Do you fall in one camp or the other, or are you also divided between the two?

I am struck by the following claims:
Generally speaking, consumers don’t know what things cost, and we all tend to believe we’re paying too much. We associate price with profit, not realizing all the costs that go into production. In fact, consumers grossly overestimate profit margins.

How often do you think you’re paying too much for something?

Honestly, I rarely think I’m paying too much for something, unless, say, I’m paying full retail when I know very well there’s a coupon available that I simply haven’t taken the trouble to get.

I think my opinions about paying too much changed upon starting my business and manufacturing printed patterns and embroidery kits. I think my opinion changed again after reading this book, which I first did a year or so ago. I probably have a better sense of production costs than many consumers. In fact, I am often dismayed at how cheap things are, well aware that I, as a manufacturer and publisher, can’t compete. Similarly, no independent needlework shop could compete with WalMart in selling DMC fibers: The wholesale price we paid for DMC fiber was greater than WalMart’s retail price.

The book claims consumers believe we pay more for goods and services than our parents and grandparents.

However, prices of most consumer goods, even food and fuel, have been trending downward for decades. Compared with the early 1970s, in 2007 we spent 32% less on clothes, 18% less on food, 52% less on appliances, and 24% less on owning and maintaining a car. Technology-driven globalization has pushed real prices to rock bottom in almost every category.

As a consumer, while I’m keenly aware of the increases in gas prices, I was not aware that we currently pay so much less for clothes, food, appliances, and cars. Were you?

Aside: And speaking of fuel costs, as someone who has been driving from the Lower 48 to Alaska for twenty years, I have long been aware of how much cheaper US gas has been than Canadian gas. I always wondered why that was and if it was really a good thing.

So what does it mean that consumers think they’re paying too much when, in fact, prices have never been lower?

Do you believe that technology-driven globalization is solely responsible for the drop in prices, or are there other factors contributing to current low prices?

Consider this:

Despite widespread corporate prosperity, median family income, adjusting for inflation, dropped by $1,175 between 2000 and 2007. At the same time, that average family spending on basic expenses grew $4,655. Meanwhile, corporate profits doubled.

So wages have also decreased in addition to production costs. Yet corporate profits have increased.

It seems consumers are partly right, then: profits from goods are, indeed, greater. However, it seems we don’t understand exactly where those profits are being made.

So, prices for goods have decreased, wages have decreased, but our basic expenses have increased. Basic expenses, I presume, include fuel, housing, medical expenses, education, etc.

What do you think about this? Is this news to you?

Why do you think the push to reduce the cost of goods doesn’t extend to reduce the cost of basic expenses?

Do you think this push to reduce the cost of goods is responsible for the wage decrease?

I was surprised—and skeptical—when Ellen claimed that outlet malls were not only the fastest growing segment of retail but also the fastest growing tourist destinations. Really? Really?

Upon further consideration, though, I guess it could be true: Many people shop for entertainment and fun. If that’s what someone does for recreation, why shouldn’t it influence where and how s/he vacations?

Are you a recreational shopper? Do you enjoy it and seek out opportunities to shop? Is the experience fulfilling? Does it cheer you up when you’re down? Is it a social thing—do you shop with friends and family?

I am not a recreational shopper. I avoid shopping, on vacation and in everyday life. I’m oh-so-happy to let Mike do it. I tend to let the shopping pile up, and then I feel badly about all the money I’m spending when I finally get around to doing it. There are some bad repercussions for this. I sometimes don’t buy things I should when I should and wind up spending more in the end because I was too cheap to solve the problem in a timely fashion. I definitely have money issues—a dysfunctional relationship with it.

But to have shopping opportunities influence vacation choices is something I cannot relate to. How about you?

Here’s a link to a ten-minute YouTube video where Ellen Ruppel Shell explains what led her to research and write Cheap: The High Cost of Discount Culture.

Ellen acknowledges that she is what psychologists call a “deal-prone person.” The prospect of getting a good deal can motivate her to buy, and thinking she’s gotten a good deal is extremely satisfying to her.

Would you call yourself a deal-prone person?

I think I have been in the past, but I’m much less so today. As a teen, I began working at age 15 primarily so I could buy my own clothes, shoes, etc. I loved big sales and outlets. I know I bought things I didn’t need, and I suspect I bought things I didn’t love, just to have something new and because it was a good deal.

Somewhere along the road to adulthood, I decided I would rather work less—or do lower-paying work that I enjoyed—and do without than work more and have more. And I decided I would rather spend my money on travel and experiences than new clothes, new cars, electronics, and other stuff. I like a good deal on something I need to buy, but a good deal is not by itself inducement to buy, nor is it a satisfying end in itself.

In truth, I’m an impatient shopper, and real deal hunting requires patience. I tend to buy the same things, visit the same stores, and not pay a whole lot of attention to prices, satisfied that I consume relatively little and thus am less subject to being screwed on prices.

Even though I don’t consider myself “deal-prone,” I do consider myself Cheap simply because my income is fairly low. The things I choose to buy generally aren’t the most expensive of their kind. I would like a good-quality toaster that’s going to last for years, but am I willing and able to pay for a very expensive one? Not necessarily.

What about you–do you consider yourself deal-prone like Ellen, Cheap like me, or something else?

Woo-hoo! Finally! I am so eager to discuss this book.

First of all, I had to twist some arms to make this discussion come about. Did you wind up liking the book, and are you glad you let me twist your arm?

Also, is it what you expected?

I think there’s more to the book than the title suggests; although, I’m not sure any other title would have been better or more descriptive because I think the book comes at the issue of Cheap from many different angles. This is one of the things I especially liked about the book, all those different angles.

For instance, the author spent a good deal of time on the psychology of good deals, low prices, the concept of value, etc. She also covered some economic history including the rise of department stores and the evolution of farming. And then there were biographical portraits of some of the people and companies that have had an impact on the introduction and growth of Cheap culture.

What was your favorite angle?

I liked them all, but I think what drew me in personally was the psychology. I think I felt somewhat immune to manipulative pricing and deal strategies, as though I am harder to manipulate than the average consumer, or I can see through trickery. I no longer feel that way. Some of the studies the book relates convince me that I am vulnerable, that everyone is. This bothers me. Who wants to feel vulnerable? But I’m also glad I know. Knowledge is power, right?

Do you come away from the book thinking differently somehow?