While Americans often complain about our jobs getting shipped overseas, the simple fact is that the global marketplace lets us receive goods for an incredibly low price.
We are paying less than our parents and grandparents did for goods, yet we have more debt and less money.
What happened?
I recently watched the movie King Corn, a documentary in part about the way our crops are grown and our animals are fed.
Regardless of how you feel about genetically modified crops and conventionally grown beef, the documentary was informative about the agricultural policy change in the 1970s. While the United States used to carefully rotate crops and limit the crops that came to market, all of that changed when Earl Butz became the Secretary of Agriculture in 1971. He urged all farmers to plant as much corn as they could, and as a result of his policy changes, food prices dropped radically. Butz said in the movie, “The basis of our affluence is that we spend less on food now. . .We feed ourselves with approximately 16 to 17% of our take home pay.”
The documentary goes on to say that in our grandparents day, people used to have to pay double that amount for food.
As things get cheaper, life should be good, but financially, it often isn’t.
We buy toys at the lowest price we can get them, and then we get angry when we find out about lead contamination or workers in overseas factories who are treated inhumanely.
We buy cheap junk food filled with genetically modified ingredients and high fructose corn syrup, but then we lament how many people have diabetes and how our children might be the first generation to have a shorter life span than we do.
Sure we get “things” cheaply, but then we buy too much and our basements, spare bedrooms and closets overflow with “stuff”.
Clutter.
Sometimes people even buy bigger houses to accommodate all of their “stuff.”
What if we take a step back and really look at the situation?
Take toys, for example.
If your children are like most American children, they have a play area overflowing with toys. They might play with 20% of them on a regular basis. What if we quit buying cheap toys from other countries and instead bought fewer toys that were of higher quality? Toys that are made in America and are durable?
What about food?
Yes, buying high quality, organic food is expensive. However, if we eat those high quality foods, chances are we will need less food. Cheetos and Doritos are not exactly filling foods. If we instead eat high quality protein, grains and produce, our health will inevitably improve and our children’s life spans will increase.
Yes, Earl Butz was proud that 16 or 17% of our income covered all of our food needs including those foods that we buy at the grocery store and eat at restaurants, but the low price has actually come with a very expensive price tag–our health. Isn’t it better to buy high quality foods but less of them to improve our health?
And what about our stuff.
Americans love to shop, and we all buy things we don’t need. If we cut back on all these things that we buy because they are on sale or we got them at a good price, we could live in a smaller space and actually have more room.
Maybe then we would have more money to save and improve our financial situation?
Let 2013 be the year you get off the low cost treadmill and realize the effect all of the cheap products that are available are having on us both physically and financially.
