Recently, two different family members from the big city visited us here in suburbia. Both commented that the prices at the stores and restaurants were too low. Cheapskate that I am, I found the idea absurd. How could a price be too low?
My husband’s brother, a bachelor with expensive taste who believes that city living is far superior to country living, seems to believe that lower prices mean lower quality (even for grocery store items of the same brand he buys!) I didn’t have any trouble dismissing his views on low prices.
However, when my sister commented on too-low prices, she had a stronger argument – if the prices are as low as they are, how can the store afford to pay its bills, including a decent wage for the staff? After she returned home, I thought more about the subject: are my frugal habits denying others their living expenses?
Perhaps I am justifying my own tight-fistedness, but I don’t believe that my spending habits do harm others. Here’s why:
First, our blue-collar area has a lower cost of living than the cities where my big-spending relatives live. The average salaries are lower here, and so are typical prices. Compared to both my sister’s and my brother-in-law’s households, our family supports at least twice as many people on less than half the income. The cost of eating at a chain restaurant, for example, is much lower here, but it is a larger proportion of our income. The staff at the restaurant probably does make less than staff at similar restaurants in cities, but the money they make can also buy more.
Second, wise business owners have done cost analyses and know their areas. They know that if they charge too little, they will not be able to pay their bills, and they will go out of business. Likewise, they know that if they charge too much, they will lose business to their competitors (or to family savings accounts). I know that our family, for one, would eat out far less often if we had to pay the prices that my sister and brother-in-law pay at restaurants in their cities.
From the perspective of the staff, yes, I’m sure many employees of these businesses would like to make more, and many probably deserve more. However, the employees at the businesses I frequent are not forced to work there. Those who are able to find higher-paying jobs can leave, and those who are unable to find higher-paying jobs are at least able to earn something, which is better than being unemployed.
I had similar concerns about my spending habits resulting in others being underpaid when I considered the minuscule wages paid to laborers overseas who produce goods that are sold at dollar stores here in the United States. Certainly, I would be willing to pay a higher price if I knew that the money would go to those laborers, but I have very little confidence that it would. Even the makers of high-priced items are often underpaid. (Here in the U.S., my mother-in-law earned just above minimum wage to make clothes sold for more than what I would be willing to pay.) And the employees of the stores where I shop will only make more when I spend more if they are working on commission. Realistically, I can’t research the wages paid to the people who produce and sell every item I buy or every service I enjoy, so I choose to buy according to what is best for my family, which means getting the most value for my money.
Having considered the idea of too-low prices, I still believe that (except under rare circumstances) prices cannot be too low for a particular item. Businesses would not sell me their goods and services at a low price if they did not profit in some way. I can do much more to help those who are living in poverty by saving money and donating some of it to non-profit organizations that provide food, housing, and education than by spending more for expensive items when I’m not certain that the higher price will benefit the workers with the lowest wages.