Bridgewater Review

Volume 2 | Issue 1 Article 5

Oct-1983 The onsC umer Movement in the United States Kathleen Browne Ittig Bridgewater State College

Recommended Citation Ittig, Kathleen Browne (1983). The onC sumer Movement in the United States. Bridgewater Review, 2(1), 7-11. Available at: http://vc.bridgew.edu/br_rev/vol2/iss1/5

This item is available as part of Virtual Commons, the open-access institutional repository of Bridgewater State University, Bridgewater, Massachusetts. ~ . HE MOVEMENT\\l ~nf1(k4_ In The United States

hat ever happened to the consumer of the Attorney General have been W movement in the United States? In ineffective in getting convictions in most stark contrast to the high visibility and cases. The weaknesses of government widespread support enjoyed by the bureaucracy, not to mention the well­ during the last two documented industry bias in most decades, overt concern for consumer government agencies, seems to work protection seems to have disappeared since continually to the disadvantage of the election of President Ronald Reagan. . To answer this question it is necessary first to identify the market conditions that abor, as well, has reacted to oligopoly currently dominate the U. S. economy and L by organizing workers into unions so second to review the history of the that union members are effectively consumer movement as it has evolved in protected on the job and in the face of a this country during the last eighty years. rising cost of living. Once labor had While most modern economic theory is established its own power base it showed little interest in controlling oligopoly or in based largely on the ideal of the competitive economy, in actuality the U. S. economy is recognizing its dual role as consumer­ producer. increasingly moving toward domination by oligopolies. Oligopoly is the market Consumers, then, are the least powerful condition in which an industry is dominated segment of the national economy. by relatively few firms in matters of price and Consumers have been the least organized output. Some of the effects of oligopoly are sector in the economy and thus easily clearly to the disadvantage of consumers. esides controlling our oligopolistic dominated by the other sectors. Because of Some economists argue that oligopoly B economy, most industries in this its lack of power and inability to organize fosters non-price competition and that this country are well organized and well effectively, the consumer movement got a results in economic waste. Economist represented inside and outside local, state late start in this country and experienced Almarin Phillips has written in the Journal of and federal agencies. Of course, this uneven growth. Since its initial phase that Economic Literature (December, 1971) that concentration of power has not been began in 1890, the consumer movement economic "waste appears in the use of too ignored by other sectors in the economy. seems to be following a cyclical pattern of many resources in the production of a Both government and labor have made evolution in which periods of consumer multiplicity of differentiated products, in attempts to halt or at least countervail this influence on the economy were followed by excessive sales promotion, in high trend. For example the federal government periods where the American public distribution costs, in excess capacity and in enacted anti-trust legislation but both the appeared tired of pushing for quality, safety slow rates of innovation." Federal Trade Commission and the Office and reform. 7 I)ecent ORT LOWER FOOD THE INl11AL PHASE Hoosinq The Early 19005 SUMER PRICES NOW! .~ sA. Riqht NCY uring this period there was a great interest in a variety of consumer D protection laws and regulations, including weights and measures standards, usury laws, rudimentary pure food and drug regulations, meat inspection laws and laws against misbranding. III .S The initial pressure for these laws, ~ however did not come from consumers but I from b~siness interests attempting to III <: protect themselves and their industries .:! from the escalating bad publicity being &I ===:::::=;;,~"_II~fl!lm~ generated by less scrupulous competitors. I':: A look at some of the events surrounding the passage of the Pure Food and Drug Bill many citizen institutionalize consumer representation of 1906 provides some insight into forces groups, although not primarily consumer and passage of a stronger Pure Food and operating to improve consumer welfare at organizations, became involved. These Drug Act. the beginning of this century. In this period, groups included the Federated Women's Apart from government activities there the advent of both refrigeration and new Clubs of America and the National were several other significant developments chemical preservatives fostered the Consumers League. Belying what its name that took place in the private sectorthat had development of a centralized food industry might imply and despite its support of such a positive influence on consumer welfare. and a national food distribution system. As pro-consumer legislation, the main thrust of Consumers Research was formed in 1929 the industry expanded there were the National Consumers League was by F. J. Schlink and following increasing complaints of adulterated foods. improving the working conditions and wage the publication of their book, Your Money's The most common problem seemed to be policies of the garment and food industries. Worth, which attacked advertising and the use of chemicals to make rancid food high-pressure salesmanship and called for salable in interstate commerce. State scientific testing and product standards to regulations governing the local food supply s a result of the passage of the Pure provide consumers with technical became increasingly ineffective in the face of Food and Drug Act, however, information they needed to make decisions. the burgeoning national food market. Initial A several consumer organizations did Schlink and Chase also formed Consumers pressure for the law came from organized form in an attempt to see that the law was Research to carry out this needed testing farmers interested in protecting their enforced, and to lobby for additional work. Then in 1935 after a bitter struggle reputations as quality food producers. consumer legislation. These short-lived between Consumers Research and its However, the most publicity was generated organizations consisted mainly of employees during which the Consumers by the chief chemist of the U.S. Department housewives; in Chicago, for example, the Research management refused to of Agriculture, Harvey W. Wiley, and his group was called the Housewives League. acknowledge a National Labor Relations "poison squad" through a series of Their primary concern was the "sanitary Board or engage in collective bargaining, a experiments designed to show the effects of conditions of food stores" but their concern group of subscribers broke off and formed a preservatives in the diet on human expanded to include excessive pricing new organization called Consumers Union. development. In addition, the timely practices. Their activities in 1912 to break Consumers Union concerned itself with publication of 's expose on the high price of storage eggs provides an both consumer and related social problems. the unhealthy conditions in the meat example of their method ofaction. To break In three years it was bigger than Consumers packing plants, The Jungle, served as the the price of storage eggs which were being Research and was able to help other new final catalyst for the passage of the bill. sold as fresh at thirty-four cents a dozen, consumer organizations including the Milk Throughout the campaign for passage of the they sold eggs on street corners at ten cents Consumers Protective Commmittee of below the prevailing price. Interest in consumer issues dissipated during the period that included , the soaring inflation of the twenties, and the . Family energy was focused first on the war effort and subsequently on economic survival.

THE SECOND CONSUMER MOVEMENT

hirty years after the birth of the consumer movement, it experienced T a resurgence that was fueled by the New Deal. The policies of President . Franklin D. Roosevelt included the first federal govenment attempts to Consumer rights crusader 8 New York, High Cost of Living 1 The Right to Safety· econdly, he required twenty-two Conferences, and the Consumers National to be protected against the marketing agency heads whose actions could Federation, an information clearinghouse of goods which are hazardous to Saffect consumer welfare to appoint a on consumer issues. health of life; special assistant "to insure adequate and 2 The Right to Be Informed· effective attention to consumer interests in to be protected against fraudulent, the work of the agency...." onsumer groups oriented to local deceitful, or grossly misleading The Consumer Advisory Council was problems were also organized during information, advertising, labeling or C this period. Such an organization other practices, and to be given the assigned the task of translating Kennedy's originated in Detroit in 1935 in response to facts he needs to make an message into action. To do this the rising price of meat. Housewives choice; they selected six topics mentioned in the message for priority. These were: organized a meat-buying strike which 3 The Right to Choose' involved picketing to demand a twenty to be assured, wherever possible, 1 Consumer' standards, grades and percent cut in meat prices. Although their access to a variety of products and labels. twenty percent demand was not met, meat services at competitive prices; and in those industries where competition is 2 Two-way flow of information and supplies increased, prices stabilized, and opinion between government and the idea spread to other major cities. not workable and government regulation is substituted, an assurance consumer. The growing influence of the consumer of satisfactory quality and service at fair 3 Effective consumer representa­ movement was temporarily stunted by prices. tion in government. another war, World War II, and the 4 The Right to Be Heard· 4 Consumer credit. subsequent recovery period. The consumer to be assured that consumer interests had occasional representation in the federal will receive full and sympathetic 5 Interrelation among federal government through the Council of consideration in the formulation of agencies and between federal and Economic Advisors which had a Consumer government policy, and fair and state agencies in areas of Advisory Committee intermittently expeditious treatment in its . between 1947 and 1956. administrative tribunals. 6 Acceleration of economic growth.

OYCOTT MEAT

f particular relevance to this study fter Kennedy's as!>dssination, the "DECADE OF THE are Kennedy's remarks emphasizing administration of President Lyndon CONSUMER" O the need for consumers to be A B. Johnson had the responsibility of organized and also to participate in designing legislation that would begin to government decision-making processes. address some of the major consumer t wasn't until March IS, 1962, that His message pointed out that consumers concerns. These efforts were further consumer representation received "are the only important group in the augmented by Johnson's "War on Poverty" I attention from a President of the economy who are not effectively organized, which emphasized community organization United States. On that date John F. whose views are not often heard." and education. This made federal funding Kennedy sent a message to Congress Kennedy's response to the problems of available for many programs with consumer entitled Consumers' Protection and consumers was initially in two areas. First, organization and Interest Program. The message pointed out he ordered the formation in The Council of components. some of the problems facing the American Economic Advisors of a Consumer consumer including our rapidly changing Advisory Council to " ... provide advice to President Johnson also established the technology and modern marketing the government on issues of broad President's Committee on Consumer practices. economic policy, on governmental Interests and created a new post at the As part of this message to Congress, programs protecting consumer needs, and executive level, Special Assistant for Kennedy presented a statement listing four on needed improvements in the flow of Consumer Affairs in January, 1964. Esther rights of consumers. These rights have been consumer research materials to the Peterson was appointed to fill this position widely quoted since and include: public ... and proved to be a very effective 9 spokeswoman for the consumer. One of her interest by business and governmental first assignments was to promoteJohnson's groups continued to grow, Nader formed THE OPEC twelve-law package of consumer legislation. the Center for Study of Responsive Law as RECESSION YEARS The laws included "truth-in-lending, meat the main umbrella group. inspection, drug inspection and pesticide control." In the private sector in the Sixties, the hile Ralph Nader's influence spread he last decade, The OPEC number and size of consumer organizations W the Consumers Union also began to T Recession Decade, has been a increased at a very rapid rate particularly at flourish. It expanded its consumer difficult one for consumers. More of their the state and local level where consumers education program which supplements the attention has been focused again on the organized for a variety of reasons. Some operation and increased issue of economic survival. The consumer lobbied for legislation and others protested the readership of to four focus has been learning to cope with the !ising food prices. Ralph Nader became a million subscribers. It also developed a widespread inflation brought about largely word. In 1965, after publishing program to educate consumers about life by the OPEC orchestrated rise in oil prices. Unsafe at Any Speed because of his As in earlier downturns in the business concern with the poor engineering design insurance, drugs, medical care, guarantees and warrantees, and product safety. cycle, overt consumer was and construction of automobiles and their weakened. relationship to automobile accidents and Consumers Union continued to organize injuries, Nader's book was instrumental in local consumer groups as well as an While consumers were concentrating on the passage of the Highway Safety Act of international federation of consumer testing day-to-day survival, corporate lobbyists 1966. While continuing to monitor agencies, International Organization of mounted a massive assault on "big automobile safety, Nader has applied his Consumers Unions. In addition, government." Paralleling President Carter's technique of researching and documenting Consumers Union frequently presented call for deregulation in the business sector, through industrial and governmental expert testimony in the consumer interest organized corporate interests lobbied sources, enlisting Congressional support, at government hearings on consumer strongly for deregulation of the newly publicizing the findings through the press, legislation. acquired health, safety and economic rights book·length reports and public The Decade of the Consumer came to a of Americans. The basic business message appearances. At the beginning Nader was close with the election of President Richard was that Americans could not afford doing much of the research himself, but in Nixon. Few consumer advocates believed consumer protection in a period of that any progress in federal consumer economic difficulty. The Carter The new Congress was not protection would be made during his Administration was pro-consumer and administration. Many were, therefore, appointed a number of consumer leaders to receptive to consumer surprised when it was Nixon who finally important posts but little was accomplished. legislation ... raised the status of consumer affairs within The new Congress was not receptive to the federal government to an official consumer legislation and consumer the late Sixties he expanded his activities to executive rank by creating a new Office of organizations seemed to be temporarily include the supervision of "Nader's Consumer Affairs in the Executive Office of weakened by the government skimming off Raiders," a group of young law students the President. It appears that this was done their leadership. and graduate students who used his model to help defeat legislation for establishment For example, Carole Tucker Foreman, of research to investigate many areas of of an independent Consumer Agency. Executive Director of the Consumer consumer concern including the regulatory Because the Democrats controlled Federation of America, was appointed to a agencies: the Federal Trade Commission, Congress, however, some important high-ranking post in the U.S. Department of the Food and Drug Administration and the consumer legislation was enacted. The Agriculture, and Joan Claybrook resigned Interstate Commerce Commission. As the most important legislation passed at this her position heading Nader's Congress size of his organization as well as the scope time was the law establishing the Consumer Watch to head the National Highway Traffic of its research into abuses of the public Product Safety Commission. Safety Administration.

SOl/rn>· LOlliS Harns and Assocrores

;:::::;:;;1982 77% Consumer Concerns 11976

Adopted/rom Changing Times chart by Pam andJaclc Lefkowitz

51% 48% 49% i 46% .sII .l!! .~ 38% 40% 39% Q. 39% ~ r~ 35% .!! filllllilif l 29% ~ 3IJ'Yo .s 26% i lllj~jlll! I

~ ,'.:.:.:.:. ~l:l:l:~;: 10 II Q. II il il if vital concern to consumers was adversely THE CONSUMER MOVEMENT affected by the Administration's relentless THE FUTURE OF IN THE EIGHTIES drive to deny the role of government in protecting citizens." Highlights of the study include the following anti-consumer actions natiOnal survey of consumer taken by the Reagan Administration during uturist John Naisbitt has predicted attitudes conducted by Lou Harris in 1982: in his popular book, Magatrends, that A October 1982, and sponsored by F "Consumerism will increase during Atlantic Richfield Company (ARCO) HEALTH the 1980s with the distinct possibility that it revealed that the Americans have Increased the proportion of health care will become extremely militant late in the coi-lfidence in the consumer movement and costs that elderly Medicare beneficiaries decade." Harris also concluded from the two-thirds of those polled say they believe must pay; hospital coverage deductiblef ARCO poll that, "There is every sign of yet the movement has grown stronger in the rose twenty-seven percent from 1981 another explosion of consumer concern." past five years. Despite this, consumer levels, and out-patient deductibles rose For the last centuryconsumer movement organizations have not been hopeful about twenty-five percent. activism has waxed and waned in response the passage of new consumer legislation to the business cycle. In periods that the during the Reagan Administration. The Denied Medicaid benefits to nearly seven economy has been expanding the consumer focus is instead on holding the line but some million people as a result of cuts in welfare slippage is occuring. programs. movement has flourished, and in periods of economic downturn, as consumers have Sharply reduced workplace safety and A current case in point is the issue of tire had to focus their energy on the economic health inspections and enforcement grading. In 1966, Congress mandated that a survival of their families, the consumer activities; the total number of inspections comparative grading system of tires be movement has experienced some developed. Finally, fourteen years later in fell twenty-five percent, citations for willful violations declined eighty-nine percent, retrenchment. The current recession has 1980, during the Carter Administration, the been no exception. National Highway Traffic and Safety and the number of backlogged complaints As the economy recovers, the consumer Administration issued the regulation. Tire rose 189 percent. movement will revive along with it. When it manufacturers were required to test their does, the focus is likely to be on the areas tires and assign grades to them in three FOOD attracting a high level of consumer concern performance areas: traction, heat - Eliminated three million children, forty such as those identified by the Harris Poll resistance, and tread life. This allowed percent of whom were from low-income including poor quality products, poor consumers to compare types and brands of families, and2,700 schools from the school quality service and repairs, products tires more easily. lunch program. breaking or going wrong, and dangerous This grading system came under the Dropped almost one million low-income products. attack of the Reagan Administration almost people from the Food Stamp Program immediately. The Reagan Administration through eligibility changes. views were surprisingly similar to two of the largest tire advertisers, Goodyear and TRANSPORTA TlON Michelin, who were opposed to tire grading and tread-life grading, in particular. Smaller - Rescinded NHTSA rules to require air tire manufacturers such as Uniroyal and bags in 1983 cars, a proposal that could Kelly-Springfield favor tire grading and used save 100,000 lives and prevent 600,000 it successfully to expand their market share. injuries over a ten-year span. Consumer groups have actively supported tire grading. In a recent article Consumer ENERGY Reports chided the Reagan Administration . Caused steep price hikes in natural gas for on the one hand defending its free because of revisions in pricing policies. market philosophy that frequently states, "consumersshould be provided information Proposed to cut over thirty percent from an energy assistance program to help the and left to make their own choices," while at poor pay energy bills. the same time defying a Congressional mandate, "is taking away one of the most important pieces of information consumers CONSUMER INFORMATION Dr. Kathleen Browne Ittig, Associate have had in their shopping for tires." As Eliminated more than two thousand Professor ofEconomics, receiued her Ph.D. capsulized by a New York Times editorial: government publications and reduced and M.S. from Cornell Uniuersity and her "The Reagan Administration would availability of many previously free B.S.Ed. from Framingham State College. evidently prefer our shopping for this government publications. The author of ouer twenty publications in technically complex product to be guided Drastically reduced funding for consumer Consumer Economics, Dr. Ittig has been an solely by advice from authorities suchas the education programs in every agency. inuited participant in many national and Blimp and Michelin Man." international conferences and has frequently serued as a consultant to even national consumer groups led arbara Warden, NCL's executive business and gouernment agencies by the National Consumer League director and coordinator of the including the National Science Foundation S (NCL) organized a coalition and in B coalition, asserted, "The Reagan and the U. S. Office of Consumer January 1982 and 1983, issued analyses of Administration is clearly turning back the Education. She is currently completing a the Reagan Administration's impact oncon­ clock on nearly a century of progress in study of Consumer Health Insurance sumer policies and programs. The report's consumer rights, damaging our economy Choices. introduction states, "Almost every area of and the welfare of the American people." 11