Shop till you drop? - Lillyanna Paulino

When we think about shopping we might think about the clichéd and over used montages in movies and the silly character in the movie, which is obsessed with shopping. Well she might not be so silly after all. The retail industry encompasses the sale of all kinds of goods is one of the biggest industries in business and one of the most directly connected to consumers and buyers. It is estimated that two thirds of the U.S.’s GDP comes from retail consumption. But in recent years due to the economic recession the retail industry has been lagging behind. According to the latest annual report from the U.S. Census Bureau (calendar year 2009), the total amount of sales for the U.S. Retail Industry (including food service and automotive) was $4.13 trillion. This is the second consecutive annual decline for the retail industry. Most major multi-store retail chains had sales declines in the first part of 2009, but saw improvements toward the end of the year, which have extended into 2010. In the retail industry, the recession caused record-breaking declines in sales, inventories, and consumer confidence, and stock prices. Experts are estimating the after effects of the recession will last from 18 months to 11 years.

Maintaining good business ethics while keeping consumers happy is a key challenge for the retail industry. Since they have to find a way to sell good quality products at low prices and also produce them at low prices too, one of the main ethical issues that this industry has faced in recent years is that the production of low priced products means that many of these articles sold in stores like Walmart or Kmart come from places around the world where the wages paid to workers are dismal and the working conditions border on abusive. These pricing pressures, in turn, fall upon the backs of workers who also have strong incentive to continue working these jobs. While earning one dollar an hour may sound low to Americans, that might be a good wage for employees from places where economic opportunities are scarce such as rural China or the slums of Manila. So they also have a powerful incentive to keep quiet when abuses do occur. But here’s where the ethical dilemma gets trickier. Our growing demand for these  products triggers some labor abuses. But it also creates economic opportunities for people trying to feed their families, escape poverty, boost their living standards and perhaps one day make the same buying decisions that many Americans will consider this holiday season. Enter a consumer Catch 22: buying more may exploit some workers. But a boycott of those same products could also harm those it was trying to protect. So what is the right answer?

By Lillyanna Paulino