The high cost of low prices
Wal-Mart is front-page news in my valley in southern Oregon. The nation’s number-one retailer plans to close its two sprawling warehouse stores and open two gigantic "supercenters" instead. One of them will go on top of the baseball field where our local farm team used to play. These plans have aroused both protests and anticipation. Some fear that the supercenters will bring choking traffic and force out local businesses. Others look forward to the chance to — what else? — buy for less. Both sides are right.
Wal-Mart towers over American retailing like Shaquille O’Neal at a middle-school pick-up game. Its sales in 2003 were $245 billion, which is about the same as Home Depot, Target, Sears, Costco, Albertsons and Safeway combined. The corporation plans to add more than 50 million square-feet of retail space this year alone. Wal-Mart is the largest private employer in the world, with over 1.5 million workers. Not a single one of them is allowed to belong to a union.
For all its superlatives, Wal-Mart is just one manifestation of a value system that touches every part of American life: the supremacy of price over every other consideration. This is the basic tenet of consumerism, and most of us rely on it without a second. After all, who wants to buy for more? But lately, I’ve begun to think about the high cost of low prices.
The relentless pursuit of low prices rewards economies of scale, helping the big get bigger. The resulting huge corporations are organized to protect their low-price supremacy by whatever means necessary: by moving jobs overseas, by suppressing unions, by fighting or escaping environmental regulations, by negotiating or relocating their way out of tax obligations. Many things that we, as individuals and as a society, think of as good, including decent wages, medical benefits and clean air and water, are to these corporations simply costs that must be cut.
But that’s not all. In the past 20 years or so, the exaltation of low prices has extended into the public sector, fueling the tax-cutting fever that has busted state budgets around the country. Nowhere has been hit harder by this low-tax (low-price) mania than Oregon.
During the Great Depression, when economic conditions were far worse than today, Oregon never imposed the kind of cuts to the school calendar that we are now experiencing. Back then both Democrats and Republicans accepted that decent public education was a responsibility of government that simply could not be sacrificed. Not any more. Today, many legislators proudly boast that they will never vote to raise revenues to support public services. As school years are shortened, as students are asked to pay to participate in sports, as art and music programs are eliminated — in short, as Oregon’s public schools are dismantled, piece by piece — this does not strike me as a reasonable set of priorities.
Many of us have a nagging sense that while our "standard of living" has risen, our quality of life has declined, and we are beginning to do something about it. Well-known firms, including Wal-Mart, have been the target of protests demanding humane working conditions at overseas factories, even if that means higher prices. More consumers are seeking out high-quality, local products and paying for them. Organic foods have dramatically increased their market share nationwide, and I find it very encouraging that farmers’ markets in Oregon have grown by over 500 percent in the past decade.
Sadly, I see no such glimmer of hope for the public sector in Oregon. A ballot initiative authorizing a modest tax surcharge to support schools and social services was just overwhelmingly defeated. Oregon schools will lose $300 million more, and thousands of elderly and disabled citizens will lose health benefits. The majority of Oregon citizens apparently still believe that nothing is more important than low taxes. It will take yet more damage to our institutions and our quality of life to change their minds.
The bottom line is, some things are worth paying for. A life ruled by price places us at the mercy of those who will do anything to cut costs. In the end, that is no life at all.