Customer Reviews

Cheap: The High Cost of Discount Culture

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I like to read in bed and because the Wife is sensitive to light, I have bought numerous battery operated reading lights - all made in China. No matter what brands I purchase or how much I spend, within a couple of months the lights break and I'm left using a flashlight to read in bed until I go out and buy another. A reading light is quite a simple device consisting of a battery, LED, and wires all linked together in a circuit. This circuit is then encased in plastic, metal or a combination of the two. Although simple, these lights break within a few months. Sometimes the cases break, other times the soldering fails somewhere in the circuit. I try to repair them but the repairs inevitably fail after a few weeks. Over the past 5 years alone I have probably spent $150 on reading lights.

After reading Cheap: The High Cost of Discount Culture by Ellen Ruppell Shell I now understand that my frustration is the result of the replacement of quality goods by shoddy ones made in China in order to maximize profit and minimize expense. This exchange of shoddy for quality has happened as Americans have pursued low price at the expense of all else. We save money in the short term by pursuing low prices but lose much in the process including long lasting quality goods and decent paying jobs.

Shell writes for the Atlantic and is a professor of journalism at Boston University. Throughout the book I searched for Shell's anti-capitalist bias, but didn't find it anywhere. Instead she writes "Trade is and must be free," and believes that regulation and unionization is not the answer to our obsession with low prices. She quotes Adam Smith liberally and suggests that Smith himself would not be pleased with the junk on the shelves of America's superstores. She writes that Smith advocated a system whereby workers earned a decent wage to purchase a decent life, and supporting that system were Smith's heroes - consumers buying the goods and services made by the workers at fair prices. These prices weren't inflated: the consumer received a quality product that performed the job it was intended to do.

Shell discusses the usual suspects - Wal-mart, dollar stores and discount chain stores - but she zeroes in on Ikea as a firm that has built a mythos around itself to shield it from the fact that it uses illegally harvested hardwoods from the Russian Far East and Asia (Ikea is the third largest consumer of wood in the world), and sources production to some of the lowest paying companies on the planet. Shell cites a table that sells for $69. A master craftsman admitted that he couldn't buy the wood for that price, let alone build the table. Ikea headquarters exudes an aura of cultishness that is more reminiscent of Scientology than of a business. There workers design products that are meant to be made and ship cheaply - not to be comfortable. The products are given cutesy names that slaps a "happy face" onto what in essence is a soulless product.

While every move by American giant like Wal-mart is subjected to scrutiny by environmentally minded intelligentsia, she notes that Ikea is given a pass:

"Wal-mart's relentless march toward world retail domination provokes scathing exposes in books, articles, and documentaries. But most media responses to Ikea verge on the hagiographic, swallowing whole the well-polished rags-to-riches story the company wrote for itself."


Everything Ikea does is geared towards lowering its costs. Ikea's store placement outside of cities and away from public transit, as well as its refusal to deliver makes its customers drive to it is a conscious decision by the firm to minimize the cost per square foot of its stores by buying cheap land. It ships disassembled products to save on shipping and on manufacturing. It regularly squeezes its suppliers, thereby preventing workers in some of the poorest places on the planet from getting better wages while encouraging environmental abuses.

Shell's criticism of Ikea hits home because I've bought from there. In fact the table that I'm writing on is from Ikea. Its wood grain is quite dense, unlike that from plantation farmed trees. Of course only its legs are wood; it's top is wood veneer and already shows signs of wear after just three years. Did the legs come from illegally logged old-growth forest in Siberia or Indonesia? How environmentally friendly can this table be if it is already falling apart after 3 years and will need replacement in another year or two? It's not friendly to the environment - but it is to Ikea's profits if I'm stupid enough to go there and buy another table. No, it's replacement will be a nice, well-worn American table from a second-hand shop.

Shell makes a convincing case that America's love affair with shoddy goods is bad for the environment and living standards abroad. Unfortunately she could have made a better case that shopping at Wal-mart and Ikea leads to lower living standards at home. Shell mentions a worker in furniture manufacturing who was laid off by an American furniture maker and picked up by Ikea - at much lower wages and benefits. However families who shop at Wal-mart save roughly $2700 a year on their purchases, and since Wal-mart caters to the lower demographics the savings is a significant part of the demographic's income. Shell argues that this savings is less than the family would have made had Wal-mart and the discount chains not driven jobs abroad, and because the jobs are gone forever Wal-mart consumers are locked into a decreasing standard of living that no amount of savings can justify.

Shell's work is heavily footnoted but because the footnotes aren't referenced in the text, I ended up reading them on their own after finishing the book. This is a small quibble with an otherwise fine and thought provoking book, but it would have made her arguments even stronger had the footnotes been referenced.

Shell's writing style is easy to read and her ideas are well supported and researched. Her conclusion that it is up to Americans to recognize that things that fall apart quickly - like reading lamps - don't provide good value in the long run leaves the decision whether or not to improve the situation up to us.

She believes that we need to educate ourselves on the products we consume - where they come from, how they are made, and what we consume is in line with our values. If we are comfortable buying cheap crap that falls apart, sending our dollars to the Chinese government that funds oppressive regimes in the Sudan, Burma and North Korea, then we have no one to blame but ourselves.

Overall this book is must reading for anyone interested in modern American consumerism.

CHEAP opens: "This book is about America's dangerous liaison with Cheap. In a market awash with increasingly similar-even identical-goods, price is the ultimate arbiter, the lower the better." Shell admits that she has always been a sucker for discount come-ons, but writes: "it's not about thrift. The craving for bargains springs from something much deeper. Low price is an end and a victory in itself, a way to wrestle control from the baffling mystery that is retail.
Alas, that control is largely illusory..."

There is so much in this book it's hard to compress into a few words, but safe to say that everyone will learn something new. It begins with history: You've heard of Frank Woolworth but you probably didn't know that he practically invented the low wage, high turnover model for retail workers. You've heard of White Sales, but you probably don't know why John Wanamaker invented them. You know about bar codes and container ships and shopping carts, but you might not know how they transformed retail.

Cheap shows that price is more than a number, it's a powerful emotional trigger that gets us to buy or not depending on a number of easily manipulated but poorly understood (by us) factors. High "reference" prices compel us to buy things we otherwise would not, under the mistaken impression that we're getting a good deal. "Shrouding" helps us overlook the true price of our purchases, and the right "framing" can fool us into thinking that a mattress or piece of jewelry is our heart's desire, when really it's just a bad deal. And don't get me started on outlet malls!

Cheap food (I work in the food industry and the observations on shrimp farming are spot-on), cheap furniture (oh no, Ikea too?), cheap labor (it's not just China), cheap loans, it's all in there, and a whole lot more. Shell traces the path of cheap from sweatshops abroad to the economic problems we're facing here today; unemployment, job insecurity, flat incomes. What you won't find is preaching. This book is not about setting policy, it's about informing consumers about where we are and how we got here. It will open your eyes a little wider and help you keep your wallet closed a little longer.

I've always considered myself a sophisticated consumer, able to see through the marketing ploys of restaurants, car dealers, department stores, etc. to obtain real value. But then on the drive home from work I heard Ellen Shell on the radio, bought Cheap, and, almost despite myself, read it in two days.
It's frightening, eye opening, and not at all what I expected. I now know that the marketers are one step ahead of even the most savvy shoppers. By masking the true costs and value of merchandise, our perceptions of value are based to a surprising extent on the marketers manipulations. The disturbing thing here is that this occurs at virtually all price points. Whether we shop discount "big box" stores or high end department stores with "designer" merchandise, our perceptions of "beating the system" are illusory. Opening with a fascinating history of discounting, from the days where "cheap" was an insult to its rise as the holy grail of the mass marketer, CHEAP moves on to the economics and psychology that drive our purchasing patterns. It goes much farther, though, looking at the impact on the cultures and environments where these bargains are produced. In an increasingly globalized economy, we can't afford to ignore these impacts as -- CHEAP ably shows--they are already at our doorstep. Extremely well written and thought provoking, this book offers a fresh and alarming perspective not only on our current economic condition, but on our own often self defeating behavior.
It's forever changed the way I'll shop...for the better.

I have to share my recent experience. My mother and I went to a local Italian restaurant for lunch, to which we had never been, as I was in the mood for chicken piccata (chicken in a white wine and butter sauce). As we entered, we past their all-you-can eat buffet table which looked somewhat interesting but it was not what I came for.

After we're seated, our waiter tells us the buffet is $9.99. I saw the menu's chicken piccata priced at $13.99. Immediately, I found myself WEIGHING the pros and cons of the buffet, even though I had no real desire for it.

My mind went through the PRO side: the buffet was cheaper than the chicken piccata; there was more variety than "just" one dish; it would give me a greater sampling by which to judge the restaurant.

Then the CON side: pasta that stays in buffets usually becomes mushy (hate that); it did not have the piccata dish; I really did not want spaghetti, macaroni, or some other dish with mussels.

I admit I was ABOUT TO order the buffet (because it was cheaper) when my mother said that she was going to order eggplant parmesan (not from the buffet). Somehow, that "snapped" me out of the buffet and I ordered what I really wanted: the chicken piccata.

This book has inspired me greatly, as I now see with much greater clarity the "system" we live in. I have also been remembering how many, many, many times, I have wanted one thing, but made a different decision because another thing was at a lower price. The experience at the Italian place was astonishing, as even though I was 3/4 done with your book, I feel into the "cheap trap"----- almost.

This book is marvelous... and also ominous, as I "get" how what happens in China affects us here. It is no longer some nebulous concept, but a basic understanding of cause-and-effect.

I have never liked places like Wal-Mart (although I worked there briefly) and am just as happy NOT to shop there, as I really WANT mom-and-pop stores to exist. I shop at Whole (Paycheck) Foods when I can, but still "die" of sticker shock at some of their stuff; nevertheless, quality matters greatly. The book talks about our lack of exposure to good products. I know the difference between freshly grated Reggiano Parmesan cheese versus the "green can" and cannot go back.

I feel great trepidation as to our country's direction now, more than ever, as offshoring seems to be "the norm". Cheaply produced foods, goods, services, etc., are firmly "ensconced" (yes, I remember Circuit City -- and Best Buy is following them right down the drain, in my opinion). I hope that we don't have to have a complete "crash" before we can collectively awaken and adopt a higher-and-better path, but I am grateful for the information in this book.

This book covers to exhaustion the fact that we ARE cheap, giving histories of the likes of Walmart, Ikea, and outlet malls and their role in our discount culture. I think we all knew that. I hoped to find an analysis of what that attitude is doing to our culture and our future. Is it hurting us? Is it the boon to our economy that we think it is? Does outsourcing cheap production overseas free us up for more leisurely service industries, or does destroying our manufacturing base ultimately cut the legs off the middle class? Where will our cheapness lead us - down or up? That analysis is conspicuously absent. Only in the final chapter does she take a tentative stab at it. I only labored through this book to find answers to those questions. If you're looking for answers, skip it. Find another.

In "Cheap" Ellen Ruppel Shell asks a fundamental question: when is a bargain really a bargain? Sure, price is one indicator but there are many factors which play into that low price that don't reflect the genuine broader costs to a society. Beyond that, do we really need all the things we buy or are there larger psychological and sociological impulses that drive such consumerism? Thinking of the old adage that a smart customer is an informed customer then Shell feels that Americans penchant for consumerism has blinded us to larger realities. In a nation where storage units sprout like weeds and people rarely park their cars in their garages because of all the stuff crammed in them, isn't it time we reassess what we really need?

That's the point Shell is getting at, but it's broader than that. Examining the nations that make much of what we buy there's unfair labor practices, non-existent environmental laws, inequitable trade policies and other practices that give them a distinct and unfair advantage compared to goods produced by developed nations. We're thrilled to get more for less but are oblivious to the human and environmental tolls in those developing nations and to the loss of jobs in those nations that play buy the rules. Compounding the environmental cost is moving goods to market via semitrailers and other modes of transportation. While that's factored into the low cost, locally produced goods would reduce the carbon footprint even while saving domestic jobs. These are all arguments heard before condemning consumerism and there certainly are counterarguments that are equally valid. As with all things there has to be a balance and that is the crux of "Cheap": we've ceased to rationalize our purchases. Shell advocates taking a time-out before buying to determine if we genuinely need the item or are attracted by a tantalizing bargain price. It's easy to think of purchases made that turned out to be poorly made which break and cannot be easily repaired. The low price means we can throw it out guilt-free and buy a new one, but why not buy quality items that won't break in the first place?

What saves "Cheap" is the crisp concise and insightful writing. Much of what is contained here has been said before, but not perhaps as well or as persuasively argued. "Cheap" follows on the heels of other books on the true cost of our consumerism such as Garbage Land: On the Secret Trail of Trash and $20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better that argue for a reassessment of the way we shop. Given consumers rethinking their purchasing habits in this economic recession "Cheap" is well timed, as its essential reading for anyone wanting to become a more informed consumer.

Ms Shell's background as a journalist comes through clearly and convincingly. Her writing style is very easy and enjoyable to read. Like a journalist, she spends most of the book describing the what and why of her subtitle, "The High Cost of Discount Culture." She explores how the consumer based economy has evolved over the past century from one of high service and quality products to a consumer driven run toward lower prices.

And like a journalist, she frames the resulting problems in a narrow focus. The book repetitively describes how discounting has caused workers to suffer a declining lifestyle. It also presents a consistent drumbeat of how unions have been prevented (perhaps unjustly) from maintaining a reasonable middle class standard of living.

The observations which she makes are thought provoking, and the book is worth reading for them alone. However, it left me wondering when it comes to the potential future for the global economy. There are many avenues left unexplored. Ms Shell does make an attempt at what we as consumers can do about it, but my impression is that her editor asked for it while her heart (and analysis) lagged. In her last chapter she briefly stated that solving the problem in the future lies in the choice each of us has to bypass the cheapest products. By favoring higher cost options, consumers would elevate living standards for workers around the world. It left me feeling like the train stopped before it reached the station.

We may think that we are getting a bargain shopping at discount stores, but Ellen Ruppel Shell gives a well-researched and convincing argument that quality trumps bargains. When we think we pay lower prices, we may actually be paying more. When we think we benefit, we don't think about those who sacrifice for our benefit. It's difficult to change our ways by paying higher prices for better quality goods and a better world, but pretending that all is well and that we benefit by saving a few pennies only hurts everyone's children and grandchildren.

Shell says, "You have to check prices online or elsewhere before you shop. But consumers tend not to check prices. That's a huge mistake. When it comes to prices, background knowledge is absolutely critical." Once the consumer finds out what the actual cost of a product is, she is often distracted by the reference price, related to markdowns that make it appear that she is getting a great bargain when she really may be paying even more than the retail cost. She says, "We are more likely to buy a mattress--or any number of items--with a high reference price than an item with a lower, more accurate reference price, regardless of its quality or even our real preferences. And as a result of these very high reference prices, our concept of prices of all kinds remains skewed, biasing our thinking on future purchases."

Shell reports that shopping at discount food and outlet stores may take our hard-earned cash faster than if we were to shop where the store values the customer by providing accurate information and high quality goods; values the employee by providing health care, retirement, and living wages; and values the community by making each store representative of the area's needs and culture. She identifies Wegmans, a grocery chain in the Northeast, and COSTCO, a chain that sells items in bulk, as examples of stores that hold these values as opposed to IKEA that uses wood from endangered forests and creates cheap products that fail to hold up.

Shell also identifies the events that led to the American labor movement that increased wages followed by higher prices as good for the consumer. She indicates that our hunger for more cheap products leads to thousands of...tragedies killing and injuring workers in Cambodia, China, and other low-wage countries [that] happen out of sight--and out of mind--of the American and European consumers who purchase the fruits of their labor. All we see is the price, and few of us stop to think about how it got to be so low."

Shell convinced me that I want to continue shopping locally by her criticism of factory farming. She stated that "In 2000 the U.S. Department of Agriculture tracked disease on 895 hog farms, comparing farms with fewer than two thousand animals with those that had more than ten thousand. No one expected the larger farms to be healthier for the animals. Still, it was sobering to learn that when compared with smaller farms, the mega-producers had three times the incidence of mycoplasma pneumonia, six times the cases of swine influenza, and twenty-nine times the cases of a new flu strain. That young pigs tend to die under these circumstances is part of the calculus, mere collateral damage. The survivors live just long enough to stumble over the finish line--and onto our dinner plates."

Shell also critiqued twentieth-century technology such as using chemical fertilizers and herbicides. She acknowledged that we need large farms as the world will continue to want meat and grains, "But it is time to acknowledge that food grown on the factory model is costly--directly in the form of inputs, and indirectly in long-term erosion of our health, environment, and humanity. We need to be more honest about these costs and bear them bravely, rather than externalize them and pass them down to our children or impose them on the poor here or overseas. And we need to build a system in which small farm producers can survive and thrive."

What we can do after reading this well-researched book is to "revisit Adam Smith's concept of enlightened self-interest, the idea that fulfillment of individual wants in the aggregate can serve society's needs." By subscribing to that philosophy, we may pay higher prices for goods, but we also show our support to the companies and employees that value good practices. "In 2005, Wegmans snagged the number-one spot on Fortune magazine's '100 Best Places to Work,' and it has remained fairly close to the top ever since." Wegmans spends about twice what other stores spend on training, benefits for full and part-time workers, retirement, tuition reimbursement, and a college scholarship program. In addition, their employees have a 6% attrition rate compared to more than 30% industry-wide.

by Susan M. Andrus
for Story Circle Book Reviews
reviewing books by, for, and about women

Ms. Ruppel Shell has done a fantastic job of shedding light on the hidden costs of our "discount culture". Many things I had either heard before or had imagined to be the case, but many other hidden costs associated w big box stores & Asian imports I was unaware of. Living in Michigan I see the consequences of mass production in Asian nations daily. If you are a big Wal-Mart or Ikea fan you may want to avoid this book. The book opened my eyes to the vagaries of retailing. Ms. Ruppel Shell points out that low price alone does not constitute a bargain & we as a nation are the worse for it. She uses fantastic logic & quotes David Ricardo as well as Adam Smith in her arguments. She also quotes factory owners in China as well as Wal-Mart & Ikea execs. More people need to read this book, or @ least sections of it. It is quite a thought provoking piece of work. If more read it we would most certainly hold our leaders, both elected & business, to higher standards. Not a light, casual read, but well worth the effort expended.

In the intro Shell says that she hopes the book will "serve both as cautionary tale and road map" for us tourists in Discount Nation. She certainly maps out the territory, but she does so much more. Shell relates the history of retail in fascinating detail (including the inventions of the price tag and the shopping cart), the psychology of pricing, the lure of outlets and the shell game of mark-downs. She chronicles, with meticulous reportage and keen insight, the devastating effect of buying cheap: the death of craftsmanship and the toll that our relentless search for a bargain has taken on the world's economy, its people, and the environment.

Read the book for the details that will inform you and change your thinking about the real value of the cheap desk at IKEA or the all-you-can-eat shrimp fest at Red Lobster. But, read it also for the engaging and engaged voice that lets us know we are in the hands of a sharp thinker and master writer. Shell takes on the big guns of Discount Nation and does it with such a sure hand and that it takes a while to realize how thoroughly they've been eviscerated.

Read the book also for Shell's conclusions--that all is not lost. If you are convinced by her closely reasoned argument that "cheap" has wrecked havoc on our world and our souls (how could you not be?), then she provides the beginning of a road map to change. Companies exist, like Wegman's and Costco, who do it right. Shell writes, "We have the power to enact change and to chart a pragmatic course."