The High Price of Low Prices

China's factories are pretty soulless affairs. Into one end are fed sweatshop workers and the world's raw materials. Through their stacks pour smog and greenhouse gases. The local environment is hideous, and the industrial pollution is so thick that plumes of dust and aerosol particles are making their way to California. The products of this manufacture get stamped with familiar American brand names.

None of these realities has aroused U.S. consumers as much as news that lead paint has been found on made-in-China toys bearing the Mattel label. Now the matter is personal — that is, about the health of people's children. And, suddenly, parents are checking dolls and toy cars for country-of-origin labels

But let's back up. The story isn't simply about Chinese suppliers using lead paid, which was against Mattel's rules. It is about American society's obsession with low prices.

Consider the whole picture. Big-box stores fight every penny increase in manufacturers' prices. That immediately knocks the American worker out of the game. Wal-Mart has actually told its U.S. suppliers to move their factories to China. This price mania has also cost jobs in Mexico, where workers are still better paid than in Asia

So Mattel now makes two-thirds of its toys in China. (It closed its last U.S. plant in 2002.) But there's still more price-scraping to do. Even the Chinese factories have to undercut each other.

Mattel owns 12 Chinese plants, which make about half its toys from that country. The rest are produced by outside vendors. These other suppliers were responsible for the lead paint in Barbie's accessories, Pixar cars and other toys. These factories cut corners because labor and material costs had recently risen. Rather than just charge more for the toys, the factories used lead paint, which was cheaper, if hazardous to children.

Why didn't Mattel produce all its Chinese toys in company-owned factories, where it had maximum quality control? Because the subcontractors did the job for less money.

Wall Street had even been urging Mattel to sell its 12 factories and subcontract all the work.

And so what are the remedies here?

Politicians in Washington demand stiffer penalties for companies that sell dangerous products, but is that really necessary? Mattel can face no greater torture than having its CEO testify before Congress on the nightly news, following recalls of its Elmo Light Up Musical Pal — and all in time for the launch of the holiday shopping season.

We can go after China, but why bother? Seeing its giant American market in jeopardy, China just signed an agreement to ban lead paint in the toys it exports. But China also has "laws" mandating a 40-hour week and paid vacation for all workers.

"It's a game. It's a joke," says Charles Kernaghan, executive director of the National Labor Committee in Support of Human and Worker Rights.

Reports on China's globe-threatening environmental degradation haven't moved the public. Chinese exports to the United States have nearly tripled over five years to $288 billion. Stories of abused labor in Asia and the collapse of factory employment here haven't changed the buying habits of flag-waving Americans who fill the big-box parking lots.

Perhaps the specter of dangerous toys will make the difference. Even Wal-Mart's customers worry about the safety of the toys, according to the retailing giant.

The solution, ultimately, is for Americans to vote with their credit cards against a production system that trolls the earth for the most downtrodden labor force and lowest environmental standards. Rather than zero in on one country or company, let's zero in on ourselves. American consumers must understand that low prices come with a price.

To find out more about Froma Harrop, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com.

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