The Rembis Report And Other Fascinating Topics - Volume CXVIII

As we head into the American “Holiday Shopping Season” this newsletter is the first of six weekly editions in a series about the cost of everything, overspending, corporate profits, and general wastefulness. I am looking at what we do to save money while companies try to get us to spend more and will examine why cars and houses cost so much. Is the price of food fair? What about everything else? Is there anything we can absolutely do without? Who can afford to buy anything, really?

I am not buying anything new.

Well, that is not entirely true. I do buy new stuff, like clothes, for example. I used to go to yard sales and resale shops because sometimes you could find something that looked good, fit right, and was a good deal. But when I turned fifty I gave up buying used threads. At that point I had plenty of clothes and was able to dress in a fresh outfit daily, only repeating my wardrobe selection every month or so. I also felt like I had finally gotten too old to shop for hand-me-downs. When you wear a garment, maybe only ten or fifteen times a year, it lasts a lot longer. So, even though I have a lot of old clothes (the shirt I am wearing today is at least ten years old, and my boots are twenty), as long as they are not threadbare, or full of holes, still fit, and look okay, I am going to keep wearing them.

My jeans are new. This is only the second time I have worn this pair. Somehow, I wear jeans over and over, so they do wear out, and once a hole appears, I am not one stylish enough to walk around with ripped jeans, so I toss them. No patches. No repairs. They are trash. But they do last several years, so I feel like I get my money’s worth out of them. It is rare for jeans to quickly go bad.

But when it comes to other stuff the hoarder in me yearns to eke out every last moment of utility in every item. I have a pen I like that I have ink refills for. My Gillette Atra razor is ancient. I also have a bunch of blade cartridges for it, enough to last for about the next two decades, I think. I’m not talking about the Atra Plus with that stupid Lubrastrip for guys who don’t know how to handle a twin blade. I have a stockpile of genuine Atra cartridges in their original packaging.

I started shaving with my first Atra in 1984. When the Atra was discontinued in the early 1990’s, I noticed that blades got scarce and harder to find. They were still on store shelves, but few and far between. I started buying out the shelves once I found a store that had them. It was probably K-Mart where I got the most. I shopped there often. I never ran out of blades for my Atra. And it kept working.

Until it didn’t. One fateful day, the mechanism that held the cartridge snapped. My razor handle was dead. What to do? I had no idea how to fix it or how to find a repair shop. There was no place to buy a new Atra razor, and Atra blades fit nothing else, so I was stuck. I was certainly not interested in growing a beard. It was some time in the mid-2000’s. My Atra had lasted around twenty years. Such a great product! Why would they discontinue it?

To make you buy a new model. That’s why.

Well, not this guy. I knew there had to be one out there somewhere, and that was when I discovered eBay. There was a lot of stuff on eBay back then, and there still is. I had the blades, I just needed the razor. Sure enough, there they were. New. Still in the box. Some with starter packs that included five blade cartridges. I bought two.

Then I made sure to order more blades. I keep an eye out for bulk package deals and buy more blades every few years now, because eventually, these discontinued items will truly be gone forever. I will be one of the first and last of the gentlemen to ever know the precision and comfort of the Gillette Atra and what a smooth shave is truly meant to be. I sometimes lament for those who nick themselves with inferior blades or choose to forego the practice altogether. Those poor bearded devils. But some guys like beards, so, to each, their own.

Besides the joy it brings me to feel groomed to my own specifications, I also like to think that I am keeping perfectly good product from going to waste. It was manufactured with a purpose and it was built to last. There is no good reason to toss this stuff onto a trash heap as long as it still works, no matter how much new product is out there for sale.

The concept goes far beyond shaving implements. Pots and pans, kitchen utensils are another good example. I have had some pieces for almost forty years. If I could make everything last, I would. Once you find something you like, you stick with it. My TV set is sixteen years old and it works great. Go Panasonic! My Sharp VCR player is even older, maybe thirty, and also in perfect condition.

The list of stuff I am not buying goes on and on.

I guess this is why it surprises me when I hear such grave concern about the United Auto Workers strike. I am not sure that it will affect me so much. I already have a car, or rather, I have one to drive. I have not purchased a car in twenty years. My dear, sweet wife has, and when she decided it was time for a new one, I got the old one. Sure I draw the line at second-hand clothes, but vehicles? Who cares. If it runs okay, take it. If it doesn’t, get it fixed.

As long as parts are still readily available any car can be fixed and maintained for a long time unless you smash it. Then, of course, it is time for a new one. But as long as this old Hyundai Santa Fe keeps running, I am going to keep driving it. Strike all you want. It does not affect me.

This is true for most everyone else, too. Nobody really needs a new car until they need a car. Yet, most vehicle owners don’t hang onto their equipment as long as possible. They upgrade, they switch styles, they dislike their used vehicles and just want something new. Not need. Want. Desire, more than necessity, is what keeps the automotive industry humming along.

We need vehicles for everything. Not just for you to get where you want to go, but for everyone to bring you everything else you want, too. That delivery driver who dropped off your package last week probably didn’t ride up on a bicycle. They had a car or truck. To keep bringing you stuff to your door, to your local grocery store, to supply the hospital with emergency medical supplies, transportation is a must.

The UAW knows they can stall the economy and supply chains by cutting off parts suppliers from the manufacturers. They have implemented this tactic to get more money for their workers. The idea is that without people making cars and trucks and parts for cars and trucks, nobody is going to get anywhere.

If a strike lasts long enough it can cause a ripple effect that impacts everyone, everything, everywhere.

When I first saw the news reports on TV, I also heard that the average auto worker make upwards of $50 an hour. It startled me to hear this because that is over double my earnings as a state of Florida employee. In fairness, I don’t do anything like building cars, so it would be an apple to pumpkin comparison.

Nonetheless, hearing that, my kneejerk reaction was how can they not get by on a $2,000 paycheck every week? Then I realized that the key word in that statement was average. Whoever was doing the research was including high-level engineers and executives along with the grunts on the production lines. Yeah, overall $50 an hour could be the average when you look at it that way, but that is not the way to view this debacle.

The low end of the UAW scale is $17 an hour. I know lots of people who work for about that much, and it is no picnic. Anything under $25 an hour are low wages now.

According to the U.S. Energy Information Administration, the average monthly residential electric bill for Americans was $117.46 in 2020.

According to 2021 data from the Bureau of Labor Statistics, which is the most recent available, the average spending on food at home is $5,259 annually, or about $438 per month for U.S. households.

These are the basics. I assure you that I spend above average and would also bet that you do, too. Anybody spending less than these averages is probably really struggling.

Should UAW workers get the 40% increase they seek? Considering the hefty bonuses and salaries executives enjoy while these companies are in a boom, the answer is yes. There is no way the big three American auto manufacturers can not afford it. General Motors has $32 billion cash on hand. Ford has $42 billion cash on hand. Stellantis, whose 16 brands include Chrysler and Jeep, has $53 billion cash on hand. Even if they tapped into these reserves to give permanent raises, it is almost certain they would never run out of money.

How do you know they won’t run out of money, Mike?

Because the government will always come to the rescue and bail them out if they must. That is how it works. There is no way for the auto industry to lose. People will keep wearing out vehicles and buying new ones, and they will constantly finance them through the auto companies themselves, so that they make an extra 10-20% on top of the sale price.

Not everyone finances their vehicles through the manufacturer, but many do. In many cases, the premiums paid over the cost of the car are what keep people shopping at resale stores for everything else, like clothes.

This is just a microcosm of the economy. Everything that contributes to pricing makes for extremely complex calculus. But it is simple to know when you need more money. And it is easy to see that many big employers, like auto companies, can afford to pay more. Cash reserves in the tens of billions are tough to deplete.

American auto workers are the highest paid in the world. According to CNN reporter Fareed Zakaria they get paid 25% more than Japanese workers, and five times what Mexican auto workers get paid. Do the math on that for a second.

$17 / 5 = $3.40 cents an hour to pay people to make cars in Mexico. So, why aren’t we buying more Mexican cars? *SPOILER ALERT* We are. You may be driving a car that was made in Mexico right now, but you paid for it like it was made in the USA. Car prices are not that far apart, but wages are miles away from each other when it comes to borders and labor unions. It is no wonder that a Mexican auto worker would want to come here and build cars once they find out they could make five times as much for doing the same job.

There is a lot of disparity and despair out there.

Not everyone can afford to buy everything they need. It can be tough to find a job that pays enough to get an economic edge. But they can still get by.

As long as the bottom rung on the economic latter remains crowded, the resale shops will stay in business, and used stuff will always be for sale.

That’s about it for now. Please join me again next week when I examine exactly why cars cost so much. It’s not just a markup on labor. It is a markup on everything in the supply chain. Every time you opt to buy a vehicle, or a part for a vehicle, you pay for it in more ways than one.

If you are shopping for a new rig right now, have fun haggling with the dealership.

Thanks for reading.

CLICK HERE to read If It Ain't Broke, Don't Fix It - Part II

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