Friday, May 27, 2011

The American Dream for consumers creating the American Nightmare for employees

A common misconception that exists in this country is that we're entitled to the "American Dream."  While there is some variance from person to person what that dream entails-- for most it does entail at least a basic level of comfort with one's circumstances, for some it's a bit more posh (fancy cars, decent sized McMansion, a collection of bling worth greater than the GDP of several small countries combined, etc.).  We aren't entitled to the dream though.  What we are entitled to is the access to that dream.  The access to succeed or fail by our own hard-work, intuition, gumption, toil... or in the case of failure-- the lack thereof.

I've heard an argument that states the economic collapse was driven by corporate America being too greedy.  And I can't deny there's some truth to that.  The trouble is "corporate America" is just a very convenient scapegoat.  Corporate America is driven by the profit motive and who drives profits?  The consumers.  While corporate America is one of the dominos responsible for toppling the economy, it's not the original and direct cause...  Consumer America is the driver of the economy. 

Businesses are supposed to make money that's their goal.  In order to make money they have to keep the consumers happy with the product or service they offer and in order to do that they have to keep costs low and still provide at least a moderate level of customer service. With the ever escalating rise of salaries, keeping costs low is becoming increasingly more difficult for companies and the easiest way for them to do so is to reduce payroll and the easiest way to reduce payroll with the least negative impact on productivity and profitability is globalization.

Let's say a company wants to do right by its employees so it adjusts its costs to allow for it to maintain its domestic workforce. As time passes that company's competitors move overseas to keep their costs low. The consumer in the store looking at 2 products from 2 different companies isn't looking at the "Made in the USA" vs. the "Made in India/Tawaiian/China/etc." label the consumer is looking at the price tag. That price tag will drive the consumer to purchase the foreign made product. In trying to keep their employees happy the company starts to lose its profitability. With its prices being undercut by competitors who have opted for a more affordable workforce somewhere in SE Asia, the company's sales plummet and they're forced to increasingly lay off more and more of their work force until they eventually go out of business.

This ends up limiting the access to the American Dream.  Was it the fault of corporate America or consumer America that led to this limited access to that dream?

Where the fault DOES lie on corporate America-- through much of the 20th century several American companies were run by a conceit that Americans would buy their products first regardless of quality because those products were American made.  As the quality of goods from overseas improved the quality of American goods stagnated largely due to this nationalistic corporate conceit.  This was driven largely by the big 3 American auto manufacturers but it certainly wasn't limited to them. 

As consumers we want the biggest bang for our buck-- the best quality at the lowest price.  As we've shifted from a largely single-income household culture to more of a dual-income/dual breadwinner culture our perception of needs and wants have also changed accordingly.  Things that would have been considered luxuries by previous generations are today considered to be more necessities today.  With that shift has also come a shift in our expectations for what we believe we are entitled to as individuals and as a culture.

Our government, in its attempt to improve our access to the American Dream has taken the somewhat misguided tack of not trying to merely improve our access to that dream but to reduce the work we have to do to attain that dream.  Unfortunately, we have a government that is unable to look past the next election cycle that is driven by an electorate with an ever-shrinking attention span that wants instant gratification.  As such, as consumers we've been mortgaging our future for our present. 

Don't get me wrong, I'm not pointing fingers at individual consumers.  Nor am I placing blame.  This is the nature of the beast.  It's human nature.  We want bigger, better, faster, more and we want it for less!  This "need" has forced many of our employers to look overseas to give us what we want as consumers.  So in addition to mortgaging our future for our present.  We've been mortgaging our need for more income/benefits (as employees) with our employers ability to deliver us the bigger, better, faster, and more we crave so deeply as consumers. 

1 comment:

Voice of Doom and Gloom said...

Perp,

I agree fully with this. But, I really feel you overlook the incredible power and influence the advertising industry has in this whole fiasco of the American Dream. Are we sheep under their direction? I think many of us are (I do drive a Mustang after all...).

http://www.wired.com/wiredscience/2011/05/ads-implant-false-memories/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wired%2Findex+%28Wired%3A+Index+3+%28Top+Stories+2%29%29