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The Hidden Costs of Bargain Electronics
Fill Dirt writes "Mike Langberg of Knight-Ridder newspapers wrote an interesting article on the the hidden costs of bargain priced consumer electronics. I saw it in the Seattle Times business section with the title Can't lose with bargain DVD player, but low cost carries price ."
Seems to me the biggest thing is the pollution generated by these bargain electronics. If it's dirt cheap, then if it dies, you throw it away, you buy more dirt cheap.
Not so good for our environment.
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All DVD players are now made in China, so there's no "Made in the U.S.A." option.
This must be the same way a store like "Steve and Barry's" can sell all new clothes and the like for under $13(US). I never knew how it all worked, however..
Sometimes you get what you pay for, but you have to pay attention.
One thing the article doesn't seem to mention is that it is usually the no-name less expensive DVD players that allow you to play other region DVDs.
Is there a middle ground where you can get a cheaper DVD player that plays foreign DVDs, doesn't allow blocking of skipping commercials that some DVDs force you to watch, and is made with "fair-trade" labor practices?
Being able to play PAL formats as well as divx cdrs would be nice too.
Oh, and if you buy a cheap DVD player, or whatever, and it doesn't work then take it back.
Nobody died when Nixon lied.
I'm meeting you half way you stupid hippies!
Shit is so cheap these days, I actually feel bad when I shop now. I'd rather pay a lot more for niceties like DVD players knowing that they weren't built by slave labor. Workers in China are treated like shit, but what the hell do you do? Every damn thing you see is made there these days...
Below is a response I recieved from the CEO of an american toy company I contacted after I read about the conditions of a factory used by them in China. It reeks of bullshit, but what can you say in response?:
Dear Mr. XXXXX:
We were very concerned to read your e-mail regarding some misinformation you
may have received regarding our manufacturing practices.
We are a global provider of game and toy brands for children, and the
conditions under which our products are manufactured are a matter of serious
and long-term concern to XXXX. We are committed to ensuring that our
products are manufactured under safe, humane and non-exploitative
conditions.
In fact, as early as 1993, XXXX established its Global Business Ethics
Principles ("Code of Conduct"). Participation in the XXXX program is
mandatory for all of our suppliers and vendors. Among many important areas,
the Code of Conduct governs:
* child labor --no person younger than 15 or younger than the age for
completing compulsory education in the country of manufacture (where such
age is higher than fifteen) may be employed to produce XXXX products -- In
China the minimum school age is 16;
* working hours and compensation --employers must comply with all
applicable wage and hour laws or, if prevailing industry wage standards are
higher, then employers must comply with or exceed these standards --In
China, minimum wages are set by province or by city, which may cause some
confusion, when reported by those unfamiliar with the process.
* forced, prison, or indentured labor --any person employed to produce
XXXX products must be voluntarily employed, except that rehabilitative
programs which provide for employment may be assessed by XXXX on a case by
case basis;
* health and safety --employers must operate facilities in a healthy
and safe manner, including, but not limited to, providing fire prevention,
first aid, and hazardous waste disposal;
* abuse and discrimination --employers must treat employees with
dignity and respect and shall not subject employees to abuse, cruel or
unusual disciplinary practice, or discrimination;
* freedom of association --employees have the right to choose (or not)
to affiliate with legally sanctioned organizations without unlawful
interference; and
* monitoring by XXXX --XXXX has the right to conduct periodic
on-site visits of working and living conditions, audit the production
records and practices of the employers, and require employers to promptly
address compliance issues or face termination by XXXX. Following initial
audits to approve use of a factory, XXXX conducts unannounced follow-up
audits.
As indicated above, XXXX's Code of Conduct clearly sets forth the
standards under which vendors may manufacture XXXX products, with auditing
and monitoring rights for XXXX. All factories located in the Far East
manufacturing XXXX products are audited by XXXX and by independent firms
hired by XXXX
Over the years, XXXX has successfully worked with its manufacturers to
correct any unacceptable practices discovered during the course of our
audits. New factories must correct any audit findings before they are given
any XXXX orders, and existing vendors must correct any findings within a
specified time frame depending upon the severity of the issue. Although
serious violations or failures to make corrections are rarely experienced,
XXXX has in fact terminated vendors for failure to comply.
XXXX has also been a leader in the worldwide toy industry as a member of
the Toy Industry Association, Inc. ("TIA") and
Your hybrid is not saving the environment. Its purpose is to make you feel good about buying something.
What a lightweight piece. It tells us to beware of these hidden costs, with no facts to back that warning up. Then concludes by saying if we did pay attention to these hidden costs, conditions in China would get worse. Huh?
If they could afford to pay the workers more, they'd probably move production up the chain to Singapore or Korea or Mexico or Canada or the US or Japan, depending on just how high those wages would be. China is probably not going to get those jobs unless the labor is as cheap as absolutely possible.
Also not mentioned is that poor people (not dirt poor) around the world are able to afford TVs and DVD players because of cheap labor. Paying $250 for a DVD player doesn't affect me and my middle class paycheck very much. It would have a huge impact on the working poor in richer countries and the middle class in other countries.
BTW, I was sure that the US Customs Service would certainly block any inbound shipments that hadn't paid their ransom to the DVD Forum. How do these "untaxed" units sneak through?
The average consumer doesnt care they just want unit that plays dvds. and as far as the cheapies breaking in a couple years at there price pick it up throw it away and get another one. I love my Apex works great plays all region dvds and best of all if it breaks im I can get another one for sub 50 bucks.
The country of origin has little to do with it. Do you honestly believe the quality of goods would improve if they were made in the USA as opposed in China? no. The only thing you are going to see if they're made in the USA is a higher price tag because of the higher min wages.
If you want good qaulity products, look at the brand, reviews, other peoples experiences etc.
The only thing the country of origin tells you is how much of the products manufacturing price went into wages.
Europe and the US went through periods of horrendous exploitation and abysmal working conditions before workers demanded, and got, improvements. China will probably follow the same path if given a chance.
Amen! Although I would say that the reason developed countries' workers received improvements is due to increased productivity; i.e. the workers were more valuable then the pitence that they were paid.
Same thing should happen in China and other third world countries if the US, Canada and Europe give them a chance. The Chinese workers will gain some skills on the assembly line and then they'll protest for and get higher pay or better working conditions.
Now before I get flamed for being naive or what not, I must point out that this is happening in the Chinese toy industry. Workers their have to master the skills to put together the current "hot" toy whether it is a Furby or an XBox. They've gained some skills in doing this and now they have better working conditions. The Economist had an article about this a couple of years ago.
Fry's stocks the loss leaders throughout the day. It pays to ask a clerk if there are more in the back (using the tone of voice that you KNOW there are more). Last week they had 250gb WD drives on sale for $149 after rebate ($219 OTD). Of course the shelf was empty when I got there. I asked the clerk and hung out 20 minutes, until he brought out four more from the back (spying the screen, I saw they had 140 units on hand).
After burn-in (do NOT cut out the UPC for rebate until after burn in) I realized I had no way to back up a drive this size. So two days later I went back and got another, using the above process.
Complaints of low wages usually come from higher-paid workers in modern countries. In Cambodia, for example, those well-publicized Nike sweat house jobs are highly sought after by Cambodians looking for work. But US workers wouldn't want to work there, no doubt. I know I wouldn't. How can you compete against cheap labor? Quality. What if quality difference is minor? Legislation!
-- @rjamestaylor on Ello
You are right, you get what you pay for---Unless you buy a Dell/Gateway or something.
If you make an educated purchase list based upon several of the great HW sites out there, wou can have a killer machine for $600, using all name-brand, respectable hardware that will last for years.
Modern hardware (usually) just works.
Or you can get that $1000>$3500 Dell/Gateway, which will be full of the lowest common denominator, bottom of the barrel hardware, even if you get the topline machine.
You will not find a std retail MB in these machines, no Abit, Asus--- You will get a "custom" MB made for Dell in one of those sweatshops, and pay 2-3x more for low performing junk most likely.
If you are lucky, you'll be able to swap it out and at least reuse the $20 case, and maybe the power supply.
More $$ != more quality, just sometimes.
Consumer electronics is a LITTLE better, but only to a point.
That has to be the most insightful yet resigned statement I've read all year.
Does this mean that if we buy MORE dvd players, the Chinese folks making them will have a better life? Maybe this is a rare instance where the opposite isn't true.
I was going to post a comment on this very question. If they are unlicensed, is it not possible to ask the chains to stop selling them or sue them?
Take a look at the licensing website of philips. There are 76 licensees of dvd players in china.
Would it not be easy to spot the licensed and unlicensed players from their price difference itself?
Take a look at this article-nytimes.
I think the reason they don't have the necessary licences is due to them not qualifying for them rather than the cost of obtaining them.
Found this little tidbit on the web
pdf
about another license that is needed to build dvd players. It says:
In order to manufacture any sort of DVD related item, whether it be DVD discs (i.e. the movies) or the players (DVD Players or DVD-ROM's), the manufacturer must obtain a license from the DVD Copy Control Association (DVD CCA). The DVD CCA is a non-profit organisation responsible for licensing CSS to such manufacturers. It is not possible to use the DVD logo, or even the word DVD without this licence.
When the manufacturer make players that can skip/ fast forward anywhere, advertise prominently how to change the region code etc, they can have their license revoked. In reality this only really prevents them from using the logo and the word dvd. Like your article mentions it doesnt stop grey importing of these products.
The CSS license is more expensive too, at $15,000 a year.
look at point 3 here
These raw materials will have been abstracted from many parts of the world using a mixture of Japanese, European and US mining technology. Many of the companies would be US influenced even if its for geological technology (assaying, and other high tech geophysics fields like seismics, microgravity).
The chips are probably fabricated in a plant that uses US technology even if its physically located in a cheaper country like Malaysia.
Metal pressing plants maybe Japanese or Korean but stamping dies may be cut with tool bits from Europe using US origin CAM. You wouldn't know unless you looked at a specific plant but you can be certain that the computers were probably not Chinese and most precision machine tools are not Chinese.
The semi/finished parts shipped from wherever to China using Korean or Japanese made ships. Flagged as Liberian or Panama using British officers but cheap locals. Ship runs on Saudi fuel traded out of Singapore using US made computers to settle transactions. Trucked from dockside to wherever in China and now its assembled in factories. The factory conditions may not be perfect by US middle class standards but its a job. That ship could equally easily drop off those parts in any country in South east Asia and the local truckers would be happy to transport those parts. Thats an important point !
Assembled, boxed and shipped to US. Trucked from US (LA) dockside to transhipping warehouses, then to stores. All the way US labour used at US ports, trucks and warehouses. No one questions the LA dockers pay conditions !
The author is just looking at one or two intermediate steps in the whole of the product life cycle in what looks like a political agenda. The whole system is tuned to shift the parts to any country at the drop of a tool. This is capitalism (well Adam Smith's form of competitive advantage) and it works because the alternatives have been repeatedly shown to not work. Eventually China will be too expensive and work will flow to even cheaper countries. Until that time you'll do a lot more harm by denying the Chinese labour force their cut because you don't feel you could stomach that work.
He seems quite happy to try to export US labour laws into China but I imagine there would be a bit of a cry from him if Europeans tried to export EU labour laws to the US !
EU is on the right track here;
All durable goods (well, at least electronics, computers etc - I'm pretty sure it covers lots of other products as well) have 2 year 'warranty' pretty much required by law. Basically the law states that regardless of actual warranties given by the manufacturer/importer, the retailer is responsible for the product to last the expected life of such product. If it fails earlier, it's assumed that the product had a manufacturing and/or desing defect, and the consumer is entitled for a repair, replacement or (as the last resort), refund. For consumer electronics and computers this period has been translated to 'two years' - obiviously excluding such consummables as batteries, ink cartridges etc.
Unsurprisingly not many retailers carry POS chinese 'no brand' crap, because if the manufacturer does not offer a solid 2-year warranty, the retailer will end up paying the replacements out of his own pocket. That, or they get blasted to bits by the consumer watchdog organization. So for manufacturers to do business in the EU area, they have to give 2-year warranty, or retailers won't stock their stuff.
Which is good for the consumer, as you can realistically expect certain durability from the stuff you buy.
Of course in the USA, your legislators could never pass such pro-consumer laws. The manufacturers would pay off any such attempts so they can keep churning out the cheap crap that is designed to last three months and then blow up.
>This is a forumla for making the rich richer and the poor poorer in the long run.
I won't disagree with your argument at all (it's very correct), except this point.
Doesn't it seem obvious that this is a formula for improvement? The "bottom" will always get higher. Heck, look at minimum wage. Most people measure minimum wage for Chinese workers in cents. Imagine getting paid like that at the start of the industrial revolution in the US! You'd be a tycoon!
As these manufacturers look for cheaper wages, the bottom will rise. The fact is that in life there is always a bottom and a top (unless you live in a communist country, like Cuba, and even then that's not at all true). That's the way things go. The best you can do is improve living for the bottom while you improve living for yourself.
That's what this formula does. When China unionizes, it will be *because* of this formula. Other countries a little slow on the start of the revolution have already been forced to improve workers rights, for example, look at Japan. This formula will be what forced China to get workers rights. Without this formula that would never have happened! And then, the next country it "preys" on will benefit. And then another, and another, and so on. The amazing synergy continues.
It really is a miraculous system, when you think about it.
If you could be told what you can see or read, then it follows that you could be told what to say or think - BoC
There are other UK manufacturers who almost certainly assemble their own DVD players. These include Arcam and Roksan.
...with our insatiable appetite for bargain prices. The Milwaukee Journal-Sentinal just had an excellent article on this subject. One item to note from the article is how Wal-mart ran a "Buy American" campaign through the 1980's, and now, if Wal-Mart were a nation, it would be China's eighth-largest trading partner, ahead of Britain and Russia. Kiss your American job goodbye!
It seems quite obvious from reading responses to this article from members of the community that you simply do not understand the simple principle of economy of scale.
Countries like China (with over 1 BILIION people) and India (with over 1 BILIION people) are able to keep mass production costs low ( and thereby keep their manufactured products ultra competitive against 'Western' nations) because they have a larger segment of population who are willing to work for lower wages.
There are numerous reasons why wages are lower in China and India:
1) Their domestic currencies are kept artificially low to encourage foreign investments and export based industries.
2) The cost of living is significantly lower than the 'West'.
3) There are very few powerful labour unions and labour union based disputes are relatively few and far between.
4) Their government's keep the prices of raw source materials (including water and electricity) low for industry and the infrastructure costs (sewage, garbage disposal) are also kept low.
The bottom line is that India and China will not simply disappear because Vietnam decides they can match prices. The simple fact is that both China and India have BILIION + populations and that population (including their relative growth rates) can far exceed the supply of other competing nations like : Vietnam, Indonesia or Romania. These countries may try to pose a threat to the India or China but, they simply can not match populations (larger populations = larger segment of population that will work for lower wages).
In the West we can see this in competitive industries: there are always people or pockets of population who will work for less money than you or I will.
What few people understand at Slashdot is that India and China will simply not disappear from the manufacturing world because they are being challenged by South Africa or a country as such. Both India and China have booming economies because they have booming populations..chock full of people who that keep labour prices ultra-competitive (sometimes as is the case in China..this translates into gross humanitarian violations - something we mostly forget when shopping for bargains).
I am always amazed as to where people in here think India and Chian will go once Vietnam decides to challenge either or both on the basis of lower labour rates?! China and India outnumber other countries and therefore, challenge directly the power of other nations to compete in the labour market for manufacturing jobs.
Just look at what is happening in the programming world. How many jobs have been sent to India (India pumps out an astonishing 25 000+ programmers yearly). You simply can not compete against this ( no matter how much we complain that are quality levels are better in the 'West' there are still companies who will outsource to India or China simply because they save $).
Please remember that history tells us that the 'West' came looking for the 'East' and not the other way around.
I once had a very smart University Professor who warned about the power of India and China. He simply said that if everyone in the USA drank one coke can each/day this would translate into 250 million+ cans per day. But if either India or China were to do the same, this translates into 1 Billion+ cans/day ( if both do then we are talking about 2 Billion + cans consumed). This is why he argued, the West will always want market share in India and China and why 'Western' nations view these countries in terms of economics when setting foreign policy regarding them.
I bought a Sony Grand Wega III LCD Rear Projection television this fall. Within a week it had failed, and as I learned on the AVS Forum ("GWIII buzz" thread, still active), many other people have had the same problem.
At the current time nobody knows what's REALLY wrong with these sets, since Sony isn't saying -- their customer service people continue to deny problems and offer the typical scripted responses about unplugging, resetting or "normal" behavior (like degaussing, which an LCD set would never do...).
At this point, there's a service bulletin but at least to forum participants have had the "fix" NOT fix their TVs, and there's a strong (but, of course, unverifiable through Sony) rumor that they have gotten so many returns on this set that they have actually halted production in order to figure out what's wrong.
What's appalling about this is that it's not a $89 VCR or DVD player, but televisions costing as much as $8000 that are failing! It's apparent that the design engineering and reliability testing is nonexistant or is the equivilent of selling the sets as betas to unsuspecting customers in order to figure out what's REALLY going to break on them.
Of course this hasn't prevented them from still selling the sets from production runs known to be rife with problems, denying the problem to customers and failing to inform people about multu-thousand dollar televisions which are like ticking time bombs.
I have a 12 year old Sony Trinitron that still looks as good as the day I got it as an open-box showroom special. I replaced the power supply last summer when it blew out as I knew that I'd never buy another set as well made as this for even 3 times the cost of repair.
Sony used to mean quality, now it seems like its been infected by the crappy US manufacturing standards and business leadership we all know and loathe.
Tho just because it's a mom and pop doesn't mean you'll *necessarily* get any better value for your money.
Example: A friend was shopping for a digital camera. She went to the local shop and was looking at an Olympus and a Pentax (which cost $100 more). The shop owner went on and on about how much better the Pentax was. A bit of independent research revealed that the Pentax was in fact a cheap HP camera body with a Pentax lens tacked on the front. Our conclusion was that the Pentax is a much more *profitable* item, because it sure as hell isn't any *better* than the Olympus. Hence the shop owner's enthusiasm for the Pentax.
Any time someone earns a direct commission on the merchandise (and if you're the shop owner, ALL of your income is effectively "direct commission"), there is incentive to push the most profitable item rather than the best item. Some mom and pop shops are honest enough to push the best item regardless, but many aren't, or can't afford to be when competing against the likes of Walmart.
~REZ~ #43301. Who'd fake being me anyway?
You can get the same thing in any competitive environment.
I work in electronics retail and am paid commission for my sales. Yeah, I have an incentive to push the higher end, higher priced products. But you can gain a person's trust (and subsequently their money) if you can speak intelligently on their problems or issues. Being able to chat shop with the guys who want the best sounding speakers for a specific setup and show the people who haven't a clue how to connect their DVD player have made me numerous sales since I've started working here.
But there's a problem with my situation: I get paid to sell, not know. And people abuse it constantly. You can bet those "mom&pop" stores feel the same abuse, too. People will come in, ask near every question on a product or product line, and as soon as they know all the parts they need to set up their home network (or what have you) they leave and go to a Wal*Mart or other super discount store and buy it all there.
I hate selling for my competitor, but at least it's better than clerking.
Oh, and I picked up a CyberHome DVD player last year. Only thing it's lacking is an optic out for surround sound speakers -- and it's been working fine so far. And I've only had one ever returned broken.
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