The REAL price of buying inferior goods- IT IS AMAZING!!!

tankman1989

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Due to the fact that the majority of the products which are sold in the US are made outside of the US, there is an ever increasing reason to build products with a shorter life span and some items have what is called planned obsolescence. An example of this may be an electric can opener. Your grandmother may have one which she purchased in the 50's of 60's and it is a solid, heavy appliance. She may have paid $30 (in today's dollars) for this piece of equipment. Now you, being a young adult, may just have purchased a new electric can opener (let's say an Oster Metallic Electic Can Opener, from Target) for $19 + tax. Now this can opener may look a lot nicer than your grandmothers and does the same job but I am willing to put good money on that this device will not last more than 3 years with the same use that your grandmother's can opener endured. When this item breaks, most people don't look to get it fixed, they simply throw it out.
Now what I want to know is why can we not build a can opener that is as good as the one your grandmother had, that will last just as long, for the same price as the one you just bought at Target. With the advances in technology and manufacturing, surly this can be made to last basically forever under normal use (not trying to cut the edge off a car rim or something like that). I think there are a number of factors at play here. First is the use of plastics. While they are great for some applications because they are cheap, light in weight, easy to produce in the shape which is needed, and plastic is somewhat plentiful. The problem with many plastics is that they are not as durable as metal. In the case of the can opener, there are gears and cogs that have teeth on them. When the can is mis-aligned or some other mal-function happens within the machine, these teeth can be stripped rendering the device useless. Now if these were made of metal, the same thing could happen, but it is much more likely that it would cause a built in protection breaker to pop and the gears wouldn't be ground down. Even if there wasn't a breaker, the metal gars can take magnitudes more abuse than the plastic gears.
To make things even worse, the plastic isn't that much cheaper than the metal as steel is very cheap and plastic, which usually is a petroleum based product, can fluctuate with the cost of oil which is manipulated by investment speculators, wars, governments, etc.
Anyway, now that you have a destroyed can opener, you have to dispose of it and buy a new one. You may look for a better one but you are probably going to find that all the good ones still utilize a lot of plastic somewhere within the product. Only when you find a commercial product, which may cost you $150-300 FOR A CAN OPENER! Will you find one that has all metal parts and will hold up to the one that your grand mother had. Why is this?
Let's estimate that a family of 5 will go through one can opener ever 4 years for 30 years (we will say 8 can openers). Now lets figure out how much these can openers actually cost you over the long run, and where the money is going. (I am not figuring in inflation as that is too difficult and doesn't really effect the outcome as we are talking in REAL dollars)

Target $19.00 x state/local sales tax (7.35%) = 20.40 ($1.40 state sales tax)
8 purchases from Target = $152
8 Purchases Tax collected = $11.20
Total for the 8 purchases = $163.20 out of your pocket
(Note avg state sales tax is calculated using a weighted system where the state's population is taken into consideration, eg California's 9.15% is weighted greater than Wyoming's 5.4%

Now compare that to Grandma's 55 year old $30 can opener.

Now, you also have to realize that the government makes a lot more money than the $11.20 on these can openers. I will list what I know of but I am sure that I will miss some. This will be the last list after we figure out the total cost of these pieces of junk.

Unseen expenses in acquiring the can opener
Consumer drives to and from store (15 miles) ¾ gal gas @ $2.75 = $2.06
8 trips = $16.48
Wear and tear on car 21.4 cents / mile = $3.21 (Figures from a government commuting cost site)
8 trips = $25.68
Total gas wear & tear = $42.16
Now the total that is being spent on these can openers over the 30 years is money that is available to you AFTER tax. I am going to assume that the average tax rate is 28% (Fed, State, Local, Social Sec, unemployment, etc)
Total Out of pocket after tax money = $163.20 + $42.16 = $205.36
To buy these can openers, you need to make money. Figuring a 28% tax rate, you would have to make $285.22 at your job, as a 28% deduction would leave you with $205.36. This would take you14.5 hours @ $19.75, or 43.5 hours at minimum wage.
So the actual cost you you is $285.22 (before taxes) for these cheap pieces of crap can openers.

Now you have to factor in your time to acquire these can find and acquire these can openers.
Time spent going to Target, in store, buying, at home unpacking, etc = 50 mins
National median income = $39,509 or $19.75/hr
At 50 mins per trip this equals $16.46 or $131.68 after the 8 trips.
I am also going to assume that many savvy shoppers will look for the best deal and I am going to include 1 hour total for all 8 can openers researching for sales, ad's INTERNET etc = $19.75
The total time lost in this process is 7.67 hours at the median income level of $19.75/hr your out $151.43

At the end, here is what these inferior products are taking from you: $436.65!!!!!
That comes out to $54.58 per can opener! You could have purchased two commercial/industrial quality can openers for this price and they would have worked much better and probably looked nicer. They probably would be much more functional and not leave sharp edges on the opened cans.

Now, here is where the money goes:

Gas tax
transport from china (shipping)
Shipping from docks to warehouse distribution center for manufacturer
Manufacturer distributes to retailer
Retailer distributes to Local store/outlet
Consumer drives to/from location

Import Tariff

Tax that goes to the Fed to bring product into country

Federal Corporate Income Tax

Retail store pays cooperate income tax on product sold

State income tax
Retail store pays cooperate income tax on product sold

Local Income Tax
Retail store pays cooperate income tax on product sold

Now, tell me, is it in the GOOBERMENT's best interest to create products which last a VERY long time and are the best quality?
 
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got to be honest, you lost me. when did this turn into a political post?

also one reason it would cost more today is the fact that metal simply costs more.
 
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One of the major influencing factors here is the CONSUMER.

Many of them think "Why should I pay $30 for the can-opener, when I can buy one for $19" - they don't think about longevity (until it breaks).

The manufacturers KNOW that price is a large factor in the consumer's buying decision, not QUALITY. - So they make their product as cheaply as possible, and sell it as cheaply as possible. All the manufacturers have to follow suit to keep selling their can openers.

I have used this to explain about hard disks to customers. - Customers have said to me "Surely they can make a hard drive that lasts longer than x years?". To this I say, "I'm sure they can make hard drive that would last a lifetime, but it would cost tens times more. and be 3 times the size. Would you buy it?"
 
got to be honest, you lost me. when did this turn into a political post?

also one reason it would cost more today is the fact that metal simply costs more.

Lol, I see your point. I was posting this in another forum where we were talking about taxes and where the gov makes it's money. That wasn't the main point of the post though, it was more the cost of inferior products and their unseen/hidden costs.

I guess one of the points was that the government makes money on each of these transactions as well not just in the sales tax/ retailer income tax, but also all the gas tax to get it, ship it, etc. If that were removed I'd be curious as to the actual price of the unit. I'm not saying that it is bad, as we do need roads, but just curious.
 
But you forget to include the female randomizer function :)

Example: my wife bought a sofa (3+2+1), very expensive stuff.
Now 7 years later she is bored with it and wants to get a new one.
Its going to last much longer, she just needs a new "style"...
 
tankman, I think you're correct insofar as the government is not going to complain about repeated purchasing by consumers. However, I don't believe that government has anything to do with this directly. This is simply how the market MUST be in the Keynesian economy that we have, worldwide.

Of course, that then introduces the question - "Why are national governments, without exception, so intent on maintaining an obviously flawed Keynesian economic system? Why not introduce Austrian economics?

Read "End the Fed" by Ron Paul.
 
You forgot to calculate how much an electricity a can open used back then and what one uses now. And the cost difference in electricity.

J/K

I do agree with the other post. There is no reason to make things last that long. People like to upgrade what they have and get the latest and greatest. I bet even if someone had one that old that worked, it would be replaced anyways.
 
We are all consumers, and its a good thing too. It keeps the economy rolling and everyone has a job.

However I agree with you, I don't like someone to decide for me how long I use the items I buy...
 
tankman, I think you're correct insofar as the government is not going to complain about repeated purchasing by consumers. However, I don't believe that government has anything to do with this directly. This is simply how the market MUST be in the Keynesian economy that we have, worldwide.

Of course, that then introduces the question - "Why are national governments, without exception, so intent on maintaining an obviously flawed Keynesian economic system? Why not introduce Austrian economics?

Read "End the Fed" by Ron Paul.

Great read! This whole thread is also one of the reasons I'm a fan of the "Fair Tax" plan. (I know some will want to flame over this, but so what.)
 
Us Americans have to keep our corporations going somehow so they can run our government.
 
Hehe... I remember reading a story about a reporter doing research on a piece about Government Fraud, Waste and Abuse and got a backseat ride in an F-14 Tomcat. After they'd taken off (near vertically, if I remember correctly) the pilot came on the intercom and asked, "So, how do you like riding in an airplane that was built by the lowest bidder?"
 
yep, he hit the head, your not going to get much resistance from us. Most small business owners are the same....

I'm a recent libertarian convert. It's not easy to get into libertarian thinking while reared and living in a social democracy. Many thanks to some Technibble members who pointed me to mises.org and Lew Rockwell!! In particular, Skyhooker.
 
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What attracts me to the libertarian movement is the idea of self responsibility and the lack of government interference in our daily lives. It's a common sense style of thinking. I just hopes it gains more ground.
 
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