The Social Cost of Frugality

Scott writes:

I’m curious to see what the Simple Dollar’s opinion is on the social cost of purchasing cheap items.

I tend to be rather frugal in my purchase of everyday goods, including clothing, electronics, food, etc. This usually means I buy the cheapest of whatever item is available. That’s normally a good thing, right?

Except I then hear stories about worker and child exploitation, and the poor working and living conditions of the people that actually MAKE those goods. We hear stories of worker exploitation and human trafficking in companies like Patagonia, the use of sweatshops by Gap and Nike in the 90s, and even stories of garment factories collapsing.

I’m wondering what your thoughts are on what happens when the pursuit of frugality has a possible negative effect on the livelihood of those who produce those goods purchased with frugality in mind. 

First of all, I feel it’s necessary to point out that for me, frugality doesn’t usually equate to buying cheap stuff, it equates to buying less stuff.

I don’t shop at “dollar stores” for much of anything, for example. I buy most of my food from a local discount grocer (Fareway, usually). I buy a lot of my clothing secondhand or directly from retailers with a reputation for lasting quality (like Land’s End or Darn Tough Socks).

The only items in my home that would keep me from living in a 400-square-foot apartment are my board games, and even that collection takes up 15 square feet or less (it’s just that the shelves would make a tiny apartment feel crowded). Aside from that, I could pretty easily compress my belongings to fit into a couple of duffel bags.

Having said that, you’re absolutely correct in identifying a connection between cheap goods and worker exploitation.

It is a problem, and it’s one that people overlook for several reasons. It’s convenient not to think about it. It’s often easy to be completely unaware of it in the store. It’s seen as part of the “cost” of buying a cheap item and is accepted on some level.

Here’s the problem: Higher social standards have a cost that’s reflected in the sticker price of an item, whether you find value in that sticker price or not.

It costs more to have an item made in the USA, where there are lots of worker protections and a relatively high minimum wage law. That cost is reflected in the sticker price of the item.

It costs more to have your produce grown organically or to have your eggs come from a farm that uses ethical practices for raising livestock because those facilities simply incur a lot more expense. That cost is reflected in the sticker price of the item.

It costs more to guarantee that the full supply chain that makes up the item you’re buying is compensated fairly for their materials and their efforts, such as fair trade coffee. That cost is reflected in the sticker price of the item.

In the end, the consumer in the store has a choice. They can pay more money for the ethically produced item or pay less for the item that was partially or wholly produced in a sweatshop or came from a factory farm.

It is up to the person making that purchase to decide which one is the right choice for that person’s situation.

This isn’t a new dilemma, either. Bad working conditions have been with us since the dawn of the industrial revolution. Bad food production practices have been with us since food production moved to a mass scale.

Why do these things occur? Companies have a profit motive, and as long as you can find just a person or two who believes that the profit motive is worth doing things like running a sweatshop or mistreating workers or animals, you’re going to have situations like this.

The real question, I suppose, is: How can frugal people avoid this without spending a mint? Here are the strategies I use to try to make my purchases more ethical.

Research What You Buy

If you’re considering making a purchase, take the time to find out more about that purchase. Where was it made? How was it made?

Obviously, this is more worthwhile for some purchases than others. It can be really hard to do this when looking at a random food item at the grocery store, for example, and it’s probably not worth it for that kind of small purchase unless it’s something you buy over and over again.

On the other hand, it’s well worth it for larger purchases or for consistent repeated purchases. If it’s something you’re sinking significant money on, it’s worthwhile to learn how it was made and whether that process is something you’re okay with.

Over time, Sarah and I have moved toward buying many of our items locally. We participate in a CSA and buy most of our dairy items and eggs from local sources. We’ve been to those places and have seen how they operate.

Grow and Raise Your Own Food When Possible

If you have a garden, you know the food from your garden was raised ethically. We fertilize our garden with compost, actively weed it with our own hands, and use fences and natural sprays to keep pests and animals that would eat our vegetables out of the garden.

If you have a chicken coop, you know those chickens are treated well and you can enjoy the eggs they produce and the meat that comes from those chickens. You control the ethical choices.

Yes, it’s a lot of work, but it can save you money and can ensure that your items are produced in a way that’s up to your ethical standards.

Don’t Buy Useless Stuff, Especially Mass-Produced Stuff

Just be selective with what you buy. With every purchase you make, ask yourself whether you really need this. Is it something that really serves a purpose in your life? Or is it likely to just sit on a shelf or in your closet in a month or so?

Decorate your home with items that are actually meaningful to you. Instead of buying something “cute” from an unknown manufacturer, buy vintage items that reflect your interests, photographs and art made by friends and family and known craftspeople, and so on. You can carry this to a lot of your possessions – for example, our dinner plates and bowls were made by a local potter.

If something goes into your home, make sure it’s useful to you and meaningful to you. If it’s not, why are you buying it?

Buy Secondhand Items

Rather than heading to the store to buy a new version of an item that you need, start at a secondhand store for most things. The shirt and (I think) the jeans I’m wearing as I write this came from a secondhand store and they basically looked new when I brought them home.

The slow cooker we used for many years came from a secondhand store, as did our first batch of dinner plates and bowls. There are many other items around our home that started off at a secondhand store. (The only items I won’t buy at a secondhand store are mattresses and electronics.)

If you buy a secondhand item, you aren’t supporting questionable supply chains in any way. Instead, you’re adding to the lifespan of a product that’s already been purchased and essentially discarded by the original owner.

Buying secondhand doesn’t mean you can’t have a discriminating eye. Be picky. The thing is, the more you look, the more items you’ll find that meet whatever standards you have.

Buy Long-Lasting Items

If you’re going to buy a particular item (and you can’t find it at a secondhand store), buy something that’s going to last. This, of course, means that you’re going to do some research into the item, which will tell you many things about how and where it’s made, but it will also tell you whether the item will last for a long time.

If you buy an item that lasts, you won’t be replacing it anytime soon, which means that there is less opportunity to put your money into unethical products. It also means that, over the long haul, you’ll be spending less on that particular type of item in total. You’re also (usually) supporting manufacturers and craftspeople with ethical and high-quality manufacturing and supply chain practices.

Over the years, Sarah and I have gradually been filling our home with items built to last for years and years and years, replacing the cheaper versions we bought earlier in life.

Is This Necessary?

The question that many people will ask is whether such concerns are really necessary. Does a person need to worry about where the stuff at the dollar store came from? Does a person need to worry about where their food items came from?

The answer is easy: it’s up to you. Maybe you care about such things, and maybe you don’t. There is no “right” or “wrong” answer here.

Having said that, it is something that I care about, and something that Tom cares about as well. If it’s something that you care about, then use smarter practices. Those practices will not only ensure that the stuff you buy and own was ethically made, but they can also save you money over the long haul.

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