Why's it hypocrisy?

Simply doing nothing is only hypocritical if that's contrary to other actions or statements I make.

Doing nothing as an action is hypocritical because it's not really an action. You're declaring you are trying to do something [to rectify that which you object to], but in fact are not doing anything. It's like a politician saying "i'm going on a fact-finding mission to resolve this issue of pollution of the watershed", when in fact they have no intent of finding any facts or solving any issues. But it sounds nice.

I guess my point is I find embracing consumerism at the expense of cheap labor to be more honest than refusing to admit my role in not being a solution.

Doing nothing is an action if it's a concious decision rather than just idleness.

You need to distinguish "I believe there are things I can do but I'm not doing them" (which is hypocrisy) with "I've thought about it and I don't think there is any meaningful action I can take" (which isn't).

I think I'm in the second camp. I may be wrong in my assessment of the situation and what I can do, but if that's true it's misguided rather than hypocrisy.