The True Cost of Cheap Products

Have you ever thought about the true cost of the products you buy? Beyond the price tag you see on the shelf, each product has a cost associated with its production, raw materials that go into making the product, the working conditions of the factory, and distribution to get that product to the store. Our economic system does not capture the true cost of each of these factors, especially when it comes to working conditions and polluting the environment.

Case in point: I was in the market for updating the bathroom and had selected a shower curtain and liner, but could not find curtain rings that would fit. In the store, I found a set of $2.00 rings that seemed to be the right size and shape. And then it happened. The shopper's dilemma (totally ripping that from the Omnivore's Dilemma). The rings were plastic and made in China. They were the only rings in the store that would work, but all I could think about is how much petroleum went into the production of these rings, and how far they have been shipped and distributed to get to the shelf in front of me. "Certainly the $2.00 price tag isn't the true cost of all the damage these rings have caused. It shouldn't be so cheap to buy such a damaging product."

It dawned on me right there in the store - we aren't factoring in the pollution these products cause into the price. If price is a signal to buyers, why are the products that cause the MOST harm the CHEAPEST? At $2.00 each, not only were these rings bad for the environment, they are priced at a point that makes them completely disposable - who puts value on re-use if the product is cheaper to replace than to fix or maintain?

If we want to motivate people to buy the products with recycled materials, that are made locally, that aren't disposable, companies have to hit them where the decision is made. At the price tag.

Here is an interesting article on the subject.

The alternative case in point: If you've never been to Whole Foods, you may have this impression that everything is much more expensive than in other grocery stores. If you are looking for organics with natural ingredients (no high-fructose corn syrup, xanthan gum, or other synthetic additives that are often slipped into our foods as a cheap substitute for a natural ingredient), Whole Foods is actually very price-competitive. The store comparison shops and puts up labels to let you know where they are cheaper.

Now, without getting into the issues with Whole Foods (they don't use local farmers as much as one would like, for one example), there is something to be said for paying for the true cost of raw materials and production of the food. As I sat there staring at the $6.99/lb chicken breast, remembering the last sale I saw at Harris Teeter ($1.99/lb). I had to remind myself that this chicken was not fed animal parts, was allowed to 'live like a chicken', wasn't de-beaked, de-clawed, or de-anythinged. This chicken is more healthy for me and my family. Then I remembered all the recent salmonella outbreaks (the most recent one being in pistachios. Ouch!) - my decision was made for me. I could skrimp somewhere else, but when it comes to feeding my family, I want the healthiest food I can get.

So, back to the point of this post. I was paying for quality, knowing my purchase would go to the farmers who are making a living out of breeding my future dinner in a healthy way. When it comes to those curtain rings, at $2.00 each, what is that paying for? Petroleum-based plastic product, unknown pollution in production, poor working conditions (that's where they skrimped to keep the product cheap), shipping to the US, then distribution to the shelf - what if I actually had to pay both for the petroleum use in that equation + the damage to the environment + damage to the workforce? Those curtain rings certainly would not be $2.00 each. In fact, they would be much more expensive than the recycled content aluminum rings hanging right next to them.

No one would buy them if they thought about the entire equation. I challenge you to think about the entire equation next time you are in the market for...anything. Find other places to skrimp and save - energy efficiency comes to mind, or doing without some of the things you didn't really need in the first place. If you start thinking about the entire equation, you will (hopefully) begin to re-arrange your priorities, and think through what it is you are purchasing - in addition to the item in your shopping cart.