RAISE YOUR STANDARDS!

But how soon we forget. We are now barraged with cheaply made, poor quality products and services from both domestic and third world suppliers, and this time we appear a lot more timid about objecting to it, and about demanding better.

To understand what’s behind this (no, it’s not a conspiracy) we need to appreciate the economics that produce this declining quality in today’s global, oligopolistic marketplace:

1. Most large corporations are public companies trading at huge, almost unprecedented price/earnings multiples.
2. The shareholders (that’s us!) demand that management take all necessary action to keep these prices up, and take them even higher.
3. This means profits need to continue to rise annually (and unrealistically) by double-digit amounts.
4. Companies have done this by broadening markets and by squeezing suppliers to lower their prices. They have maxed out this mechanism of growing profits.
5. Then they exploited record-low interest rates to ‘leverage’ profits, borrowing at record levels and using the proceeds to buy out competitors and redeem their own shares, hence artificially increasing per-share profits. They’ve also maxed this out, and are now hugely vulnerable to interest-rate spikes.
6. Then they squeezed domestic labour, defaming and crippling unions and threatening layoffs to force longer hours and push wage rates below the current record-low inflation levels. In some case they have effectively decreased wages by laying off senior workers and hiring cheaper, younger replacements. This technique, too, has been maxed out.
7. Then they started giving out more of their wages as share options, which, because of their fierce lobbying of the government and accounting industry, they are not legally required to treat as expenses, which further artificially inflates reported profits.
8. More recently they’ve been buying out competitors and using their oligopoly power to raise margins, effectively gouging consumers. This has been done in various subtle and underhanded ways, such as replacing a product with an inferior product, downgrading warrantees, worsening service, and reducing the amount of product you receive in a package without notification (deceptive packaging).
9. And of course more recently still they’ve been outsourcing and offshoring manufacturing, service and support to businesses, mostly in the third world, which have execrable social (labour) and environmental standards, and poor production quality standards.

Inevitably this has resulted in much lower product quality, poor or non-existent service, less value for money, domestic unemployment, and unwanted garbage. But it’s happened so slowly that you probably haven’t noticed that as large corporations have been lowering their standards, they’ve gradually coerced you into lowering yours as well. Anyone who blows the whistle on this fraud (that’s exactly what it is — an intentional deception of consumers) is sued by an army of corporate lawyers (as in the famous Nike case where that company sued for the right to lie to consumers about its sweatshops, and the pending Suzuki case where Consumers’ Union has been sued for reporting safety defects on Suzuki SUVs). Anyone who tries to get around this high-price, low-quality quandary by creating their own markets (knock-offs and file-swappers for example) is also sued. And all because the management of these companies are constantly forced by greedy shareholders (that’s us!) to use any method at their disposal, whatever the consequences, to increase profits by utterly-unsustainable double-digit amounts every year. Sound like a ‘bubble’ to you?

Here are just a few examples:

• I’ve been told that the average life expectancy of Christmas lights is two years. Most people upgrade to the ‘newest thing’ every year or two and simply throw out their old lights anyway. Almost all this junk, including the big 100-200 light figurines, is made in China, and the quality is atrocious, but according to a retailer I spoke to, almost no one returns defective bulbs and strings. It all just goes into our landfill sites.
• Reality TV shows cost less than one-tenth as much as quality dramas, but in most time slots they attract more than half the audience of a drama and therefore command close to half the advertising revenue. That’s money in the bank for networks, and debased quality for viewers. When I ask people why they don’t just turn off the TV instead of watching this crap, they tell me (a) they have it on as ‘background noise’, (b) they multi-task with their computer or a book or music, so they’re not really watching, or (c) they’re broke so it’s all they can afford to do. What’s scary is they say they wouldn’t admit to the ratings services that they had it on, which means the actual number of viewers is probably even higher. Talk about imaginative failure.
• Most small electrical appliances have dismal repair records, and even Consumer Reports admits that it’s uneconomical to get them repaired. Phones, CD players, irons and kitchen appliances like blenders are among the worst offenders.
• Outdoor seasonal products — shovels, sleds, sprinklers, gardening tools etc. — are “only designed to last one season”, I was told by a neighbourhood retailer. Customers “just won’t pay twice as much for a metal tool with a 10-year life as one that will probably break in a year”, he said, and “even if there’s a 1, 2 or 5 year warrantee on seasonal goods, people don’t keep their receipts, so they don’t return things”.
• The big ticket items with the worst repair records, according to Consumer Reports, are laptop computers and lawn tractors. The magazine cites the exceptionally poor service from the tiny handful of companies that control both these consumer product industries, and their inability to get repairs right the first time. My Dell story will be coming up in a few days.
• The latest way of discouraging customers who demand fair treatment is the ‘runaround’. This game can be played on the phone, as AT&T did with its recent phony billing scam, or in person, when each of two, three or four parties points you in a circle to the other — parts, service, the manufacturer, the installer, the outsourced delivery service, the ‘customer care’ department that is ‘not authorized’ to do anything for you or to refer you to anyone higher up etc. The objective is to wear you down by using a bunch of low-paid lackeys, and it usually works.
• Almost all of the suppliers to the upcoming Olympic Games use sweatshops and similar irresponsible methods to cut costs (and the quality shows). Despite a fierce and coordinated program called PlayFair to get them to clean up their act, they are universally unrepentant, so you can expect to see the brand names of some of the worst social and environmental offenders on the planet flashed in your face constantly during the Olympics, and adorning the ‘honoured’ athletes’ attire.
• Yesterday two large breweries, Molson and Adolph Coors, decided to merge to ‘increase efficiency’. They’re both profitable, but they’re in a saturated market, so to keep profits growing (and shareholders happy) they’ll need to fire lots of now-redundant workers. The irony is that when the other large Canadian brewery, Labatt, was sold two years ago to the Belgians (for the same reason as yesterday’s merger), Molson built its success on rebranding itself around the ‘I am Canadian‘ slogan (pictured above), and wrapped itself in the flag with award-winning commercials that proudly showed how Canadians were different from Americans. But, hey, what’s a slap in the face to the consumer if it keeps shareholders happy? And none of a sample of Canadian beer drinkers surveyed by the media immediately after the announcement got the irony. *sigh*

As consumers, we can either wait for the bubble to burst, and the stock market to move down to more reasonable levels (taking half of our savings with it, alas), or we can start raising our standards and refuse to put up with this crap. What are some of the things we can do (without being sued)?

• Send or take stuff back — most people find it easier, and less intimidating, to just buy another brand instead of returning something relatively inexpensive. This lets the manufacturer of junk off the hook. And keep all your receipts in an accordion file with a brief note what each item on the invoice is and how long it’s warranteed for.
• Write letters of complaint. It takes a bit of research to find who and where to write to, but people who do it usually get a response, and if enough people complain it might just make a difference. And when you do write, keep your cool — hystrionics, exaggeration and profanity will get you nowhere.
• Buy less, higher quality stuff. In the long run, you save that way, and this was the method that ultimately improved the quality of Japanese products. Research the quality and repair records, and the vendors’ records of corporate responsibility, for alternative brands before you buy.
• Ask questions. If the retailer doesn’t carry a quality brand, or doesn’t carry a domestically-made or local or organic brand that you know exists, ask them why not. Invest the time and follow the shuffle until you reach the level where someone can actually answer your question. So few people bother to do this you might be surprised: They might order the product you want in, or give you a credible reason why they can’t.
• Communicate with other consumers. Make a list of brands and products and suppliers that have proven to be high quality, and a Boycott List of those that haven’t. Share it with friends, family, neighbours. Answer surveys about quality, especially independent ones from trustworthy independent consumer organizations — but be fair.
• Refuse to watch cheaply-made, low-quality TV programs and movies that pander to an uncritical audience. There are much better uses for your time and money. Ultimately in the price of the advertisers’ products, you’re paying for this drivel.
• Defer your purchases. Even at the grocery store, never buy anything on impulse, even if it’s on sale. You’ll usually regret your impulse buys, and if you don’t, the stuff will still be there next time (and probably still on sale). How many times have you bought a CD or DVD that you’ve only ever listened to/watched once?
• Many, perhaps most of the magazines you see on the racks are paid for by advertising, and are full of it. They are essentially advertising flyers with a few, poor quality articles thrown in to make them look like legitimate reading material. Don’t pay for advertising. Buy a book instead.
• Learn how to fix things instead of throwing them out. Or save money by buying and upgrading something used.
• And of course, support local small companies that have to be responsive to consumers or they’ll be out of business.

Corporations won’t raise their standards until and unless we raise ours. And they won’t take responsibility if we don’t. We’re being inundated with messages to make our voice count in the ballot booth this year. We need to make it count in the corporate boardrooms and shopping malls as well. The best way to do that is to teach them what we taught the Japanese — that we won’t buy junk at any price. We have our standards. It’s time to live up to them. Just do it? Just don’t buy it.