Posted on 06/02/2004 7:26:39 AM PDT by .cnI redruM
In a recent poll on the CNN website, viewers were asked the "poll" question of whether or not they believed that Wal-Mart stores were "good" for the "community." Perhaps it is not surprising that a large majority answered "no."
Now, this by itself does not mean much, since these online "polls" are not scientific and reflect only the views of the moment by people who choose to participate. What is more significant, however, was the anti-Wal-Mart content of a speech recently given by Teresa Heinz Kerry, John Kerry's wife and an influential person in her own right. Speaking at a Democratic Party rally, Mrs. Kerry declared that "Wal-Mart destroys communities."
Indeed, Wal-Mart bashing is in vogue. Whether one journeys to the sight of Sojourners Magazine or reads even mainstream news publications, the charges against Wal-Mart abound. According to the consensus of the critics, Wal-Mart is guilty of the following:
Paying low wages to workers, and generally abusing them.
Intimidating shoppers by having them "greeted" by an elderly person at the door. (As one writer said, the real purpose of that greeter is to let shoppers know that they are being watched.)
Putting small stores out of business, as shoppers stop patronizing the little "mom-and-pop" boutiques for the big box, thus "destroying" the look of "Main Street" in small towns and cities.
Purchasing low-priced goods from abroad, which puts American workers out of jobs.
Contributing to that allegedly harmful disease known as "consumerism," in which Americans are constantly purchasing goods that the Wal-Mart critics insist that they really don't need. As the bumper sticker of one of my faculty colleagues proclaims: "Mal-Wart: The Source of Cheap Crap."
Of course, what really bugs the critics is that people choose to shop at Wal-Mart instead of the places where they would want people to spend their money. (Activists on both left and right often will invoke the name of the "people" when their real goal is to restrict the choices of those "people.") Yet, while up front I question the real motives of the Wal-Mart haters, it still behooves us to answer the charges using economic logic, since many of the arguments against this chain store also appeal to economics.
In a recent article, "Always Low Wages," Brian Bolton declares that Jesus would not shop at Wal-Mart, since the company's employee pay scale is not up to Sojourners' standards. Furthermore, he all but declares it a "sin" for Christians to patronize the store because it imports cheap goods made by people who make even less money than Wal-Mart employees. As Bolton writes, "lower prices equal lower wages."
Nearly all of us would accept higher payment for our services, and Wal-Mart employees are no exception. Yet, that condition alone hardly makes a company's pay scales illegitimate, as Bolton and other critics contend. If my employer were to double my pay tomorrow (which is highly doubtful), I doubt I would object, although I'm sure that most of my colleagues would see the event in a different light. That Frostburg State University does not make that offer to me does not make my current salary illicit, nor does it make my employer the second coming of Silas Marner.
The point is this: payment for services involves mutually agreeable exchanges. They are not manifestations of power, as some would say. No one is forced to work at Wal-Mart; people who choose to work there do so because they prefer employment there to other circumstances.
At the local Wal-Mart where I shop (contrary to Bolton, I do not believe that shopping at Wal-Mart violates the Holy Scriptures), I have noticed that many employees have stayed with that company for a long time, and there does not seem to be much turnover there. Furthermore, from what I can tell, they seem like normal people, not the oppressed slaves that the critics claim fill the ranks of Wal-Mart workers.
Now, my personal observations hardly constitute proof that Bolton and the other Wal-Mart critics are wrong, but unless they can repudiate the opportunity cost argument, they have ground upon which to stand. Wal-Mart is not engaged in a grand conspiracy to push down wages in any given market, and twisted logic cannot prove otherwise.
For example, Bolton writes that part of the problem faced by recent striking union grocery store workers in Southern California was that Wal-Mart super centers in the area paid lower wages, which placed pressure on the other grocery stores. Thus, he reasons, it was Wal-Mart that ultimately kept workers from receiving "just wages" for their work.
No doubt, Bolton can appeal to the anti-capitalist mentality of many people, but his work stands economic logic upon its head. By paying lower wages, Wal-Mart makes grocery stores like Vons and other places that pay union scale more attractive to workers (although labor unions do not exactly welcome some potential employees with open arms). The success of Wal-Mart does not have to do with the pay scale of its employees, but rather with the perception by consumers that the store will have the goods they want at an affordable price.
Bolton claims that Wal-Mart can charge lower prices and still be profitable because it pays its employees less than do other companies. As anyone with even cursory training in Austrian Economics knows, such an argument is false. As Murray Rothbard points out in Man, Economy, and State, economic profit exists because of temporarily underpriced factors of production. Over time, as the owners recognize their position, they will either refuse to sell their factors at current prices and look to other options, or accept the current price because the opportunity costs of selling to other buyers may be higher than they wish to incur. If it is the latter, then one cannot say that these particular factors are even underpriced, as their owners are not able or willing to do what is necessary to gain higher prices for their employment.
In places like Southern California, where there are numerous employment opportunities, to say that workers are "forced" to work at Wal-Mart for "slave wages" is ridiculous. As noted before, the fact that workers there would be willing to accept higher pay is not evidence that they are enslaved. That they would prefer more to less simply means that they are normal, purposeful human beings.
One can easily dismiss the charge about the "greeter" at the door—unless one truly is intimidated by the presence of a diminutive 60-year-old grandmother. (What I have found is that if I select merchandise and actually pay for it, then no one there bothers me at all. If activists are upset that Wal-Mart does not like individuals to steal goods from their shelves, then they are advocating theft, and one does not have to pay attention to their arguments at all.)
The "Wal-Mart destroys the community" charge, however, needs more attention. It goes as such: Wal-Mart enters a geographical area, and people stop shopping at little stores in order to patronize Wal-Mart. The mom-and-pop stores go out of business, the community is left with boarded-up buildings, and people must leave the small businesses and accept lower wages at Wal-Mart. Thus, while a shiny new store full of inexpensive goods is in the locality, in real terms, most everyone actually is poorer.
Again, these kinds of arguments appeal to many people. For example, all of us have heard of the theoretical owner of the small, independent hardware store who had to close his shop when Wal-Mart or Home Depot moved into his community, then suffer the indignity of having to go to work at the very place that put him on the streets. The former owner has a lower income than before, which is held up as proof that the "big boys" create and expand poverty.
A few items need to be put in order. First, no one forced the hardware owner to close his shop; he closed it because it was not profitable enough for him to keep it open. If the new chain store meant that many of his former customers had abandoned him, that is not the fault of the new store. Instead, consumers faced with choices and lower prices that they had not previously enjoyed freely chose to patronize the new store.
Second, while the owner of the smaller store has suffered a loss of income, everyone else has gained. Third, if the employees of the smaller store go to work at the new chain store, it is almost guaranteed that their pay will be higher than before and they will enjoy new benefits that most likely had not been available to them previously.
Third, the presence of Wal-Mart means local consumers will pay lower prices for goods than before, and also will benefit by having a wider array of available items than they had previously. (And they save on time by being able to stay under one roof while shopping for different items.) Whatever the reason, we can safely assume that consumers in that particular locality are exercising their free choices, choices that they perceive will make them better off than they were before the store existed. Activists may not like their reasoning, but that is irrelevant to our analysis.
Having dealt with the "Wal-Mart" creates poverty argument, we now turn to the more nebulous claim that the chain store "destroys" communities. Now, I have never seen a place that has been severely damaged or "destroyed" by Wal-Mart. (I have seen places that have had their quality of life spoiled by rent controls, "urban renewal," and other statist interventions that so-called activists have championed, but that is another story for another time. Suffice it to say that activists are unhappy that individuals freely choose to shop at Wal-Mart, and they want to restrict their choices in the name of "community.")
In fact, I would like to make a reverse argument; Wal-Mart and stores like it add to the quality of life in large and small communities because they provide consumer choices that otherwise would not be available. Take the area near Cumberland, Maryland, where I live, for example.
Cumberland is something of a time warp, a place that 50 years ago was a manufacturing center and was the second-largest city in Maryland. Today, most of the large factories are long shut down and the population is less than half of Cumberland's heyday numbers. Furthermore, the area has a relatively high unemployment rate and many jobs do not pay very well.
The presence of Wal-Mart and Lowe's (a large hardware store), along with some large grocery chains, however, means that people here can stretch their incomes farther than we would if those stores did not exist. If they suddenly were to pull out, one can be assured that our quality of life here would not improve in their absence. Furthermore, the fact that Wal-Mart and other large stores are willing to locate in smaller and poorer communities also makes these areas more attractive for people who wish to live here but do not want to have to give up all of the amenities of living in a larger city.
Others on this page and elsewhere have dealt with the charge that Wal-Mart destroys American jobs by purchasing goods from abroad, where the goods often are manufactured in what activists call "oppressive" conditions. (In fact, Sojourners elsewhere has openly stated that Third World peoples should simply be supported by American aid, and that the West should do all it can to make sure that the economies of these poor nations do not grow, all in the name of environmentalism. In other words, none of us are poor enough to satisfy the anti-Wal-Mart activists whose real goal is to eviscerate our own standards of living and "turn back the clock" to an era when life expectancy was lower and people generally were more deprived.)
The last objection—that Wal-Mart helps create "mindless" consumerism—is easily refuted by Austrian economics. The very basis of human action is purposeful behavior; to call human action "mindless" is absurd. Consumers at Wal-Mart and other chain stores are not zombies walking aimlessly through the building with glassy stares. They are human beings with needs and desires who perceive that at least some of those desires can be fulfilled through the use of goods purchased at Wal-Mart.
In a free society, activists would have to try to convince other individuals to change their buying habits via persuasion and voluntary action. Yet, the very history of "progressivist" activism in this country tells us a story of people who use the state to force others to do what they would not do given free choices. Yesterday, Microsoft was in their crosshairs; today, it is Wal-Mart, and tomorrow, some other hapless firm will be declared guilty of providing customers choices that they had not enjoyed before. A great sin, indeed.
It's always interested me how the demise of the mom-and-pop store was followed a few years later by the rise of the convenience store. Maybe the mom-and-pops didn't really need to go out of business, they just needed to target a different type of customer, i.e., the impatient male who just wants a half-a-rack, a Playboy, cigs, and a hot dog, and doesn't really care how much he pays for them.
Everyone likes to pick on Number One. It's one of the more unseemly aspects of human nature.
There was someone, the name is not important, it could be the King of Morovia, who would spend $200 every Saturday just because it was the weekend and he should get some R&R. But one day he realized he never had anything to show for his $200, so he began to go to Sam's Club every weekend and spend $200 there on gadgets, camera stuff, computer stuff, camping gear, whatever Sam's Club had thoughtfully provided that day for his entertainment. Now it has gotten to the point he can't park his car in his garage anymore because there isn't room. At least he has something to show for his money.
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to say that workers are "forced" to work at Wal-Mart for "slave wages" is ridiculous.
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No, they aren't 'forced' to work there like a slave camp in China would, but if the choice is between working at a minimum wage job (although I'm sure wal-mart workers at stores start out a little bit above the minimum) or walk the unemployment line their isn't much of a 'choice' now is there? Yes, some people exaggerate the use of words like 'forced' and 'slavery', but some people have limited choices of where they can work. There is unemployment, isn't there? (meaning there is more people than jobs available, so the employer has more choices than the employee). Would you rather them use the term 'financial suicide' instead of 'forced' or 'slavery'?
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Having dealt with the "Wal-Mart" creates poverty argument, we now turn to the more nebulous claim that the chain store "destroys" communities. Now, I have never seen a place that has been severely damaged or "destroyed" by Wal-Mart.
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Bringing a Wal-Mart into a community turns 'rural' areas into more 'urban' areas. There is some good things about this, and also some bad things. Both the pro and anti Wal-Mart sides exagerrate the good or bad, depending on the viewpoints they want to support.
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Here's one I hadn't heard until last night. Did you know that if your non-profit organization arranges for a fund-raiser at Wal-Mart (car wash, for example) that Wal-Mart matches donations dollar for dollar?
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Only for a few pre-approved (by Bentonville) charities.
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With Walmart many of us realize those smaller shops were making a ridiculous profit before competition came in and spoiled their little monopoly.
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Maybe true for some, but not true for most. Wal-mart (and other large chains) can buy their products at cheaper prices (due to the quantity they are buying at one time...'wholesale/bulk' prices) so that the large stores can sell the products at lower prices than what the small store can even buy the stuff at. For some of the small stores to sell the same stuff at Wal-mart prices they would lose money.
I think some of the Wal-Mart haters are worried/paranoid about what will happen when Wal-mart has a monopoly.
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...quality goods..
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Cheap, yes, but not always 'quality'. Some things I will never buy at Wal-mart.
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I miss Small Town America but WalMart didn't kill it alone.
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Very true, Wal-Mart is the 'Target'(pun intended), because it was the most successful one of the bunch.
The other comments:
I work at Wal-Mart, but I work at a distribution center (DC), not at a store. Those working at a DC make much, much more (close to union wages if you do my job, in fact much higher than some of the bad unions I've worked for in the past) than those working at a store (but working at a DC is also much harder and more skilled-required work). Some of the stuff in the article (the anti-walmart stuff) is total crap, which I had never heard before and is rediculous, but there is a tiny bit of truth in some of the anti-Walmart stuff. Unfortunately, due to some of the anti-Walmarter's exaggerations they say about it is what ruins their credibility. The greeter doesn't need to watch you, there is cameras all over the place that is watching you (ever hear of the 'Loss Prevention' department?).
From my experience at Wal-mart, this is what I will say is the truth:
67% of Wal-Mart employees can not afford Wal-Mart's health insurance. If you are a single person, it is reasonably priced, but for family insurance it is rediculous (family insurance is at least 5X higher than for a single person). Many people use the insurance of thier spouse (who works somewhere else) rather than Wal-mart. Their solution for fighting the increase in medical costs last year was to cut part of our benefits (chiropractic). 'Unlimited' benefits (after your deductible, Wal-mart will pay all your hospital bills, regardless of how high it is, even if it is in the millions of $) is one thing I feel is rising the cost for the rest of us that will probably never, ever need that much coverage.
While there has been several lawsuits over the years from employees, you have to keep in mind that Wal-Mart has over 1 million employees. There will be isolated cases of 1 individual doing something that does not represent the entire company. In the last few years, Wal-Mart headquarters have been increasing sending the message to it's stores and DCs (both managers and employees- which they call 'coaches' and 'assossiates) that these kind of things will not be tolerated.
I just got done watching a video where they tell us that we aren't allowed to do ANY work off the clock and we could be disciplined (up to and including termination) for doing so. In the past, if a manager was doing some paperwork during his lunchbreak (to help get caught up if he was behind schedule) it might have been ignored, now they will tell you that this is WORK and you can't do it if you are punched out. Common sense for most people, but some individuals felt they needed to 'get the job done on time', regardless of the circumstances and will do whatever it takes (including working through breaks if that was needed). They have also begun strictly enforcing the rule that we must take our FULL lunch break (we must be off the clock for a full 30 minutes, not 29 minutes or 28 minutes).
Some of the Wal-Mart management is an egotistical bunch, that is for sure. Their 'open-door' policy is a joke if the manager you are making a suggestion of what Wal-Mart could do differently, then mocks you, is condescending, and basically says "We are number 1, so EVERYTHING we do is right!"
The first 2 years I worked there, the company didn't seem to give a crap if we worked 14 or 16 hour days "Some days are busier than others is just part of the business" was their mentality (nevermind that it was sometimes long hours everyday for weeks at a time). Morale was at an all-time low and a pat on the back doesn't make up for it. They said they care, but actions speak louder than words.
Then they finally got the 'brilliant idea' to hire part-time workers for the busier days (ironically, something other companies do) and now life is good. Now it is pretty consistently the same, regular hours day to day, with no overtime unless we really want it.
Good point, If Wallys has the monopoly they will then charge more because they can.
It seems to me that Walmart could raise wages $3-5 an hour without significantly raising their prices. A good clerk probably processes 7-12 "full load" customers per hour, so each customer's grocery bill would go up less than a dollar to make up for the increased wage. Walmart could deflect some of the criticism if they did that.
I've yet to have a $15 made-in-China telephone last longer than a year.
For about 3x that price, or $45, I can get a made-in-USA telephone with a real "gong" style ringer, very similar to what Bell used to supply. They'll last at least 10 years, if not 20--and they're repairable too.
I found a bunch of them on Ebay, lightly used, still in the box, for $5 each so I bought 4 of them.
Now I never have a problem hearing the phone ring! :)
They are the same model, what in your pompous little world don't you seem to understand that Costco is the same model as Sam's club? That Target and Kmart buy from many of the same suppliers as Walmart and as such price the product similiarly? That these stores impact communities in the same manner as Walmart?
Please use your amply freedom to explain how these stores are different, I seriously doubt you can, but I am anxiously awaiting your attempt.
/whiny rant off
I shop at Target because it's clean, the staff is friendly, the merchandise is of a better quality than Wal-Mart, and I don't need to fight through crowds of people to buy stuff. WalMart is usuallly my last choice, as a rule. There are about half-a-dozen Wally Worlds in my area. Only one is worth a flip, all the rest remind me of a K-Mart, circa about 1978. Cruddy, with surly staff and junk merchandise.
It might just be the local owners and not an indictment of the entire chain. However, I choose to vote with my $$ and go elsewhere.
Given this self indulgent stance towards purchasing, I can really see you as one of those mouth breathers who frequent Walmart. I hope, for your sake, that your job is not producing widgets, of which there is a cheap knockoff available at Walmart. Becasue the vast unwashed(yourself included) will not think twice about purchasing the Chinese widget over yours and thus cost you your job. At least I will look to buy your widget if it is at least "competative" with the Chinese knockoff.
Some of them, at least hereabouts, did just that.
You didn't read the article, did you? Let me know when you do. Until then, I think your use of the word "pompous" is a bad case of projection.
Please use your amply freedom to explain how these stores are different, I seriously doubt you can, but I am anxiously awaiting your attempt.
Simply put, Wal-Mart makes bigger demands on its suppliers that they can't ignore because Wal-Mart is such a substantial segment of the US retail market. It is similar to what Microsoft has been able to get away with because of their dominance of the software market. Monopolies are bad in a capitalist marketplace and near monopolies are often nearly as bad.
Music companies put out special versions of albums with censored lyrics so they can sell them at Wal-Mart. While I personally think this is a good thing (in this case, it gives parents a way to buy sanitized music for their children), can you imagine a K-Mart, Target, or Costco demanding and getting such a concession from the music industry? They didn't and I can't.
Big box centers are built on "the best farmland" for the same reason that most suburban housing subdivisions and office parks are built on "the best farmland" -- because it's the cheapest land to develop. The land is already cleared and graded.
If you look at old town centers that have been revived pver the last few years, you'll find that they all have one thing in common: they didn't bother trying to compete with retailers like Wal-Mart, Costco, etc. They've basically recognized that the "town center" general retail model doesn't work anymore. Instead, these places are successful because they focus on things where "big box" simply doesn't work. Nobody wants to eat in a restaurant with 3,000 other people, or shop for antiques with 3,000 other Wal-Mart shoppers -- these are the types of businesses that will thrive in an area where pedestrian access is more important than highway access.
I am not worried about their economy. There are some built-in cultural and political contradictions that will serve to put a lid on it at some point in the next few years. The Chinese economy is crossing over into borrowed time.
"If you own an American Flag where was it made?"
Funny that you asked that...I did a considerable amount of shopping before and throughout the Memorial Holiday weekend. I looked at many American flags on display for sale in several different stores....ALL of them were "made in the US".
I would also add that the typical small-town experience you described is different than what older cities experienced. Wal-Mart may be driving the "Mom & Pop" store out of business in rural areas, but that's because most of rural America seems to have skipped a "generation" in the retail industry. In older urban and suburban areas, these small businesses were already driven to extinction by the post-WW2 generation of regional shopping centers. In most areas of the northeastern U.S., the primary "victims" of Wal-Mart are not small family businesses -- they are Sears, JC Penney, Macy's etc.
You too, eh? And here I thought that I was the only Pavlov's dog out here ...
8')
History has proven the Sear's catalog to have been more useful as toilet paper than as a marketing medium.
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