Wages, work force and cost of goods

The reality of the costs of goods is rarely acknowledged in the eyes of the consumer.   Back in my garment center days, we made a jacket (style number 196) that was one of our best selling items.  The large department stores knew what price they could sell that jacket at all day long.  It was a winner.  The issue was each store had to hit certain margins for them to be profitable and so did we.  The department stores really did not care how we got that jacket to them at the price they needed because their job was to sell it to their customers.  Our job was to make the garment so we figured out how to get less expensive fabrics, beat up our manufacturers for better labor costs down to the buttonhole.

Here is the thing, in order for those laborers to feed their families, pay for a roof over their house, have health insurance and all the other amenities needed to live, they can’t be below a certain price either. Consumers, aka Americans, can’t have their cake and eat it too.  You can’t expect to buy products at extremely low prices that are Made in America and dis employers for not paying their workers enough money.

I am all for paying the workforce the right price for the work done but that first cost bleeds downhill until it gets to the consumer.  That goes for restaurants that now must pay everyone in their staff $15 an hour, including the dishwashers.  The long tail of that is the cost of a restaurant meal is getting more expensive.  This is the same thing with making cars, manufacturing t-shirts, making furniture and more.

There was a great quote from an Omaha roofer I read this weekend when it came to his reliance on immigrant workers on temporary visas.  He summed up exactly my thoughts.  “In my experience, the same people who ask me why I don’t pay my employees more (I’m a farmer) are hypocrites.  If you are buying goods on Amazon or at Costco, for example, you are supporting the lowest-paying employers that produced those goods.  Most often those employers are not even U.S.-based.  You can’t bargain-hunt for everything you buy and then turn around and bash employers for not paying their workers more.  Paul Underhill, California.