Monday, October 13, 2008

$14

My husband buys everything at Sears, including clothes. He just bought a pair for jeans for $14.

Is it possible that the full cost of producing a pair of jeans can be less than $14? I know, I know. Economies of scale etc. But $14?! Someone prepared a field, planted cotton, tended cotton plants for a season, picked it, transported it to a processor, processed it into thread, wove it into denim, dyed it, transported the cloth to a manufacturer, cut the denim and sewed it into a pair of jeans with added metal hardware, attached labels, transported them to stores, had a worker unpack them and display them on shelves and a worker to attend to checkout lane. And all along the way, there was inventory tracking and software and data entry to keep track of materials and accounting systems. There was probably a trip or two across an ocean and a pass or two through Customs, not to mention miles traveled on our freeways and a bunch of packing, loading, unloading and unpacking. There's all kinds of electricity for lights and fossil fuels for boats and trucks.

It just doesn't seem possible to me. It looks to me like not all the costs incurred are paid by those reaping profit from this pair of jeans.

8 comments:

Scooter said...

"Someone prepared a field, planted cotton, tended cotton plants for a season, picked it, transported it to a processor, processed it into thread, wove it into denim, dyed it, transported the cloth to a manufacturer, cut the denim and sewed it into a pair of jeans with added metal hardware, attached labels, transported them to stores, had a worker unpack them and display them on shelves and a worker to attend to checkout lane. And all along the way, there was inventory tracking and software and data entry to keep track of materials and accounting systems. There was probably a trip or two across an ocean and a pass or two through Customs, not to mention miles traveled on our freeways and a bunch of packing, loading, unloading and unpacking. There's all kinds of electricity for lights and fossil fuels for boats and trucks."

Everyone of them reaped a benefit assuming a fair market. Else they wouldn't have done it. The beauty of it staggers.

Would I want one or a hundred bureacrats trying to govern all those decisions? Nope.

Stephanie said...

I'm saying that they were able to reap a profit because they didn't have to pay all the real costs. For example, their property taxes probably didn't pay all that much for the roads they used were would have been paid for in greater part by homeowners. But I don't hear anyone complaining about that as a redistribution of wealth.

Scooter said...

But if someone somewhere didn't have to pay the real cost (such as property taxes due to some lodal gov't tax break), the fault doesn't lie with the market. The market real/fair would have them paying all the real costs.

Scooter said...

My jeans cost me $15. Time to move to Sears.

Scooter said...

Ugh. That was suppose to have been "local."

Stephanie said...

All companies should build their own roads and bridges?

Scooter said...

Well, I suppose if limited to only their handling/transport of the cotton/jeans. Otherwise, the companies should pay their taxes.

I don't deny that government has a role especially in infrastructure, just the less that role the better.

Stephanie said...

OK. I'll have to think of a different example of transfer of wealth up the chain.