The End of the Ultra-Cheap Stuff Era Is Coming

It was never sustainable anyway

Photo by Remy Gieling on Unsplash

If I asked you why you think the ultra-cheap stuff era is coming to an end, what reasons would you give me?

I did ask a few people. They guessed:

• Less demand — younger generations want better quality products.

• Inflation — cheap stuff isn’t cheap anymore.

• Logistical issues like lack of raw materials thanks to certain wars, or pricey shipping.

• Differing politics between us and the countries responsible for cheap stuff.

Whilst all of these have a nugget of truth in there, there is one other — major — reason why cheap stuff is coming to an end that no one guessed.

It’s because factories can’t get the staff. 

They’re off doing more interesting, better-paid things.

The effects of that are soon going to be felt around the globe.

Fabulously famous, not factory fodder

Two decades ago, in China, factory work was the normal way of things. But things are changing. In 2022, 83% of Chinese factories were down between 10-30% of their workforce.

The reasons for this are long and complex, including an aging population. Yet young-people unemployment is at an all-time high.

It seems that social media plays at least a part in this. As the CEO of Lovesac Furniture — whose factory is based in China — says:

Once they can see the Kardashians, they don’t want to do that [factory] work anymore.

Influencer marketing in China is growing at a remarkable rate — it’s projected to hit 3.9 trillion yuan ($540 billion) before the end of the year. Gen Z has way more employment options than their parents — whose only chance at making any money at all might have been factory work — and they’re the ones watching social media influencers coin it in.

Just like in the West, the idea that “anyone can make it as an influencer” is pervasive. Being fabulously famous appears infinitely better than factory fodder.

It’s not just the temptation of online fame. The rise of the Asian service industry means more jobs in shops, restaurants, and hotels, all of which are better paid than factory work — and often offer much better working conditions.

Which means factories are having to up their game. 

We are trying to make our factories a little bit more sexy, open up the partitions, give it more glass structure, give it more light, give it some nice music, create a kind of Apple environment — Syed Hussain, president of the Malaysian Employers Federation

Some factories have introduced yoga classes and childcare facilities. They’ve built cafeterias that rival New York specialty coffee shops in a bid to entice younger workers. Wages are increasing whilst pressure on the factory floor to work harder and faster is decreasing. 

Finally, the power lies with the employee, not the employer. 

But with fewer workers and better conditions come higher prices. 

If you’re used to fast fashion or buying brand-new TVs for a few hundred dollars, this is about to hit you hard.

The ultra-cheap stuff era was never sustainable

We in the West have enjoyed undervalued goods for far too long.

We all know the appalling conditions factory workers are subjected to in the likes of China, India, and Vietnam. The long hours, the dangerous machinery, the terrible wages.

We accepted it as the price other people have to pay for our cheap clothing, tech, and household goods.

And it’s not like all of us in the West have it easy. There’s plenty of relative poverty in the US, UK, Australia and Europe. There are millions of people who can’t afford to buy anything more than ultra-cheap goods made on those Asian factory floors.

But there are also plenty of us who can afford to buy better, we just never had to because cheap goods were so readily available.

Available, but not sustainable.

Honestly, I’m amazed the era lasted so long. For around four decades we’ve had access to cheap goods at the expense of those who make them. Mattel for example moved its operations to China in 1988. Nike did the same in 1981. For those of us who were born in the eighties or later, we’ve never had to know what it’s like to pay high prices for our goods.

But cheap always means someone is getting screwed along the supply chain. Not least those working grueling hours for little pay so we can enjoy our $20 novelty Christmas sweaters.

And when someone is getting screwed, it’s only a matter of time before they say enough is enough.

This is not a disaster, it’s an opportunity

In 1929, the General director of General Motors Research Laboratories wrote an article called Keep the Consumer Dissatisfied. In it, he writes:

The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization

In other words, keeping consumers dissatisfied makes them buy more. They fill their homes with stuff because everything is always new.

But to do that means buying as cheap as possible. If you’re going to buy a new outfit every week, you can’t pay as much for each one as you could if you buy one every two months.

If ultra-cheap stuff becomes less cheap, there’s an opportunity for people to change their spending habits. To spend better less often. To shop sustainably. To buy better quality.

I’ve already noticed the gap closing. Sweaters in my go-to high street store last year were perhaps €20, now they’re €40 and quality is down. I’d be lucky if I get a season’s worth of wear out of them.

At €40, I might as well save a little more and buy a sustainably made sweater that lasts me three seasons or more.

This is no bad thing. Not for me, not for the people making, shipping, distributing, and selling the goods. If I go for better quality, it’s not even worse for my wallet.

I’ve long been uncomfortable with my contribution to ultra-cheap stuff. This is my opportunity to stop buying it entirely.

It could be yours too.

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