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.
China's military is preparing to hold large-scale war games
Intended as a "political message" to Taiwan, amid heightened tensions between the island and mainland, according to U.S. intelligence officials.
The military exercises are part of China's annual maneuvers involving large numbers of troops, ships, aircraft and missiles, and will take place on Dongshan Island. The island is located off the coast of Fujian province along the southern Chinese coast near Taiwan.
Just look at towns who vote down Wal-Mart and see who is traveling to the neighboring towns that have a Wal-Mart to do their shopping.
Wal-Mart is wanted by consumers because they know how to best spend their money. If it weren't so, Wal-Mart would go bankrupt.
ampu
We've got a nice Wal-Mart here right next to the Supermall of the Great Northwest. (Honest, that's its name.) People can choose whether to go to the mall or go to Wal-Mart. Both are doing very well.
"the marvellous help US shoppers are giving to the Chicom Army Inc"
Suppose Walmart were full of goods made in India instead of China. Would Walmart be ok with you, then?
Gee, I guess only Walmart buys goods from China. Some of these people just want to blame Walmart for everything.
As long as the Indians didn't use the money to produce weapons to threaten us with, I'd have no problem with W-M buying their junk in India.
I guess you don't shop much, because if you don't buy goods from China you must have a pretty empty cart.
The "cost somebody their job" argument is a mathematical falsehood. It just doesn't work in the real world, because in the real world there's more than one American company. Look at jeans, in the world of genes you've got Levi, Wrangler and some Mexican junk. Now the theory is that if I buy the Mexican junk some American will lsoe their job, but if Levi and Wrangler are both so hard up that they can't afford to lose my one single jeans purchase going to Mexico then they're also so hard up that the can't afford to have my one single jeans purchase go to the other. So, using the logic of buying American to save jobs, if I buy from Levi somebody at Wrangler is out of a job, and if I buy from Wrangler somebody at Levi is out of a job, so no matter where I buy somebody in America is out of a job. So I'll just use my money where it's the most effective for me and my family and let others do the same. And if Levi goes under because they aren't an effective place to spend money that's their own damn problem for being a poorly run company. My duty with my money is to provide for me and mine, that's it.
Wal-Mart's market share in the retail sector today is a fraction of the market share of the Great Atlantic & Pacific Tea Company (also known as A&P supermarkets) at the height of its domination -- and that company has been a story of almost constant decline since World War II.
I agree. Walmart doesn not destroy communities. Look, mom and pop stores never paid a "living wage". As a kid, I worked for them and was paid minimum wage-as were the "grownups". Prices are high in mom and pop stores. My family could not afford the luxuries we have without Target, Kmart or Walmart. In January, I was at a locally owned gift shop. Everywhere, calandars were on sale except this one store-full price was over $20.00 (nice Lange wall calandar). This was quite a markup even before January 1st! I went down to Barnes and Noble and got my calander 70% off. I saved enough money to buy my kids two books. If you believe in the free market, you should admire Walmart.
Walmart has changed. All businesses must adapt in order to prosper- so what.
Recently, our Walmart closed. They are opening up a super Walmart in September near our house in September and opened a super Walmart to replace this one last week, but it is miles and miles away from our house. I really miss the convenience of a nearby Walmart. None of our stores-local or otherwise-can take Walmart's place.
The elitists (leftists in many cases) sneer at Walmart. However, for the middle class, Walmart has raised our standard of living quite a bit.
I don't think that shows the Sears catalog was a bad marketing medium, it just couldn't compete with TV, but the catalog had a LONG history of being the primary connection between rural America and urban America. Just because it was no longer good in the 1970s doesn't mean it wasn't good in the 1900s. Check this out, they used to sell HOUSES by the Sears Catalog, and sold quite a few of them too. http://visitor.vil.downers-grove.il.us/searshomes.htm
I know what you mean about the lines being long, and there is always some unmarked item that everyone has to wait for, or someones debit card isnt going through etc..
Its a great opportunity to learn more patience for me, being a type A also.
The Walmart threads do bring out the opinions on both sides. Both have their strong arguments I reckon.
FRiends. Sorry if I came across the wrong way. I should have taken more time to edit.
They are helping us with our foundation golf outing in Cleveland...Marine Corps-Law Enforcement Foundation(www.mc-lef.org) since it's main mission is to help raise scholarship money for children who have lost a parent in the line of duty....I must say I was surprised at the generosity they showed us....
Wranglers are 90+ percent manufactured in Mexico. There's only one production plant in the because the Professional Bull Riders Association (Wrangler's a huge sponsor) requires a US presence.
There's only one jeans brand completely made in the USA. It's based in Texas, I think.
That's one plant in the United States.
Gee Sandy, Walmart is doing well? That's a relief!
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China's military is preparing to hold large-scale war games
Intended as a "political message" to Taiwan, amid heightened tensions between the island and mainland, according to U.S. intelligence officials.
The military exercises are part of China's annual maneuvers involving large numbers of troops, ships, aircraft and missiles, and will take place on Dongshan Island. The island is located off the coast of Fujian province along the southern Chinese coast near Taiwan.
Understand what, exactly?
BTW, why do you take this article as gospel?
The whole thing? No. But what is factually wrong about the specific examples such as product quality or the suppliers being run out of business (mentioned by someone else in the thread) by Wal-Mart's hardball tactics? Are you saying that these things do not happen or are you claiming that they don't matter?
Wal-Mart pushing its suppliers to modernize and streamline their own businesses is a good thing. Wal-Mart using the strong-arm tactics of a semi-monopoly to force suppliers out of business and lowering the quality of goods to meet Wal-Mart's pricing demands are not a good thing, in my opinion. When any business gets government-like control to demand harmful changes from other businesses, I get as concerned about them as I am about the government. Concentration of large amounts of power concern me, whether that power is conentrated in a government, individual, or corporation.
Doesn't rain on my parade at all. The math is the same, pick any product with with more than one company in America and at least one not in America, it all works out the same, the "buy American to protect a job" method only works if the American company in question is a monopoly... and then they probably can stand to lose a couple of sales.
Glad I could help.
The Red Chinese thank you Sandy.
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