America loves a good deal. From Dollar stores to Prime Day and Black Friday, the American economy is powered by the appetite for cheap goods. However, there is a hidden cost behind an underpriced T-shirt that is free of same-day delivery. The relentless demand for low prices worsens the labor crisis that threatens the workers who keep the system running.
The economic model that helps Americans get cheap consumer goods relies heavily on underpaid but overworked labor in the U.S. and foreign countries. In the U.S., retail, warehousing, agriculture, and fast food sectors have depended on low-wage workers to maintain profit. But, as the cost of living rises and working conditions remain the same, fewer Americans are willing to accept these jobs. Instead of raising wages or improving working conditions, companies are doubling down on cost-cutting measures and automation solutions that will only profit in the short term but deepen long-term labor shortages.
In 2024, the Bureau of Labor Statistics reported that over 9 million job openings remain unfilled. Sectors of the workforce offering low pay and minimal benefits are especially hard-hit. Warehousing and transportation are essential to our e-commerce community, but they continue to struggle with recruitment and retention, even right now with record demand. Amazon is the cornerstone of fast and cheap retail, and due to high turnover rates, it reportedly spent over $10 billion in 2023 on recruiting and replacing workers.
Now, consumers expect convenience at no extra cost. A 2023 McKinsey report showed that over 60% of U.S. shoppers say price is the number one factor in their purchasing decisions, and rightfully so. But this demand exerts downward pressure on wages and standards across the supply chain.
If America wants to solve its labor crisis, it must confront its addiction to cheap goods. This might mean rethinking how it produces and consumes. Paying fair wages will make goods more expensive, and so will ethical sourcing. However, the alternative: economic instability, workforce shortages and worsening inequality is far worse in the long run.
