A brief defense of Walmart
In my ‘wealth and moral character’ post, the discussion quickly turned to the Walmart debate, and whether Walmart was bad or good for local economies, communities, etc. Let me first say that I understand the impulse to blame Walmart for many perceived ills in local communities. Walmart is not an attractive place. I am instinctively turned off by the aesthetic of the big box store. Nevertheless, I am aware also that my aesthetic concerns can cloud my judgment, and that perhaps we should think more in terms of basic human welfare rather than purely aesthetic (big box vs. small mom and pop). A few of the critiques of Walmart include:
- Walmart puts small businesses out of business.
- Walmart depresses wages. Walmart employees are treated badly and paid badly.
- Walmart and other big box stores have an averse impact on communities both aesthetically and because they are big corporations.
- Walmart receives unfair advantages from government in zoning and tax treatment.
Let’s address each.
#1)– there is an assumption that because a large, cheap retailer moves into a community it will drive all its small competitors out of business. First of all – this is quite possibly very true. That is why whenever one big-box retailer moves into an area, we should hope its followed by one or two more. These competitors will keep the costs of goods at the other big box retailers low. The reason that the mom and pop retailers are driven out of business by Walmart in the first place is that they can’t compete with both the lower cost of goods, but also the much wider availability of goods that Walmart (or Target, etc.) can provide. Typically these mom and pop retailers were local monopolies in the first place, and had poor selections and high prices. Walmart, Target, and other big businesses come in with a much better selection of goods and so consumers freely choose to shop there instead.
And voila! Consumers now have more money in their pockets. Poorer or working class people suddenly have cheaper clothing, furniture, medicine, and even groceries. This means they have more money left over at the end of the day to spend on other goods. Clever local business people can capitalize on this by starting up businesses that are not in direct competition with Walmart – like restaurants, bars, or novelty stores. Indeed, the leftover money from cheaper goods can quickly translate into a more robust local business climate than ever before. It results in a changed local economy, not in the death of a local economy altogether. The cheaper retail goods (and books, if you want to include Amazon in this critique) and so forth lead to new services being available to consumers because these consumers have more money to spend on leisure, on massages or movie tickets, or nights out on the town. In other words, this idea that Walmart destroys local business is simply not true. It changes local business, but it certainly doesn’t destroy it. Indeed, restaurant owners may find that they can purchase some of the food-goods cheaper from Walmart (or Sam’s Club, or Cosco) cheaper than ever before….
(As an example: Let’s say I have $50 to spend. I need to buy some things for the house. At the local retailer these items will cost me $35 leaving me with $15 to save or spend. At Walmart they will cost $20 leaving me with $30 to save or spend. If I buy the goods at Walmart I can then go spend $30 on other goods or services around town. I can spend twice as much on going out to eat. Hell I might even be able to do dinner and a movie. If I’d bought the goods at the local retailer, I would certainly have been limited to dinner or a movie.)
#2) The idea that Walmart depresses wages or pays their employees worse than local retailers or mom and pop shops do is completely unverifiable. Having worked and known plenty of people who have (or still do) work for local retailers, I can assure you that most of these companies pay their employees as badly or worse than Walmart does – and many (if not most of them) provide no benefits whatsoever. I recall a local book store I worked for whose owner would find reasons to fire any employee who started asking about those promised health benefits. This was not uncommon. Of course, many of these local businesses don’t have the resources to pay their employees that well or offer benefits. The tradition of small business has historically been one of family-owned and operated, with most of the wealth garnered from these businesses going straight into the family’s bank account.
This is not to say that small businesses are bad. They do create jobs, and good (savvy) small business owners are quite likely to reinvest in their community, something that big box stores often don’t do enough of. But to claim that the actual workers who are employed at Walmart are somehow treated or paid worse than by the local businesses is simply untrue. Workers who have more skills and more education are paid better, whether or not they work for a local firm or a national firm. That has always been the case, and will always remain the case. That may be an argument for investing more in education, but it’s not one against Walmart.
The notion that all the workers at Walmart are doomed to a life of low wages is also somewhat misguided. Many of these are students or part-time workers. Many go on to do other things later in life. Those that don’t wouldn’t necessarily have done anything better or more profitable had Walmart not started up shop in their town. I see no evidence to suggest that these life-long low-wage workers would benefit magically from the lack of a Walmart. They would simply be life-long low wage workers in some other retailer. If they were capable or motivated to become more skilled, they would do so with or without Walmarts presence. Indeed, the low cost of goods at Walmart might assist them in their efforts to get the education necessary to do something better in the future. Either way – where is the correlation?
#3) I hope that communities don’t let Walmart set up shop in their historic downtown. I hope that communities are savvy enough to think of themselves as brands that need to be cultivated. I’m all for mixed zoning, keeping big boxes out of the nice walkable areas of town. Let them set up shop on the outskirts. Let them set up shop where people can drive to shop. Cities should be sensible when they consider how they want their towns developed, and putting a Walmart at the heart of the city is bad business. But that again is no argument for keeping Walmart out altogether. If cheaper goods (and more goods) can help a town’s poorer population, and Walmart can provide this, then our sense of aesthetic or our own aversion to the Walmart shopping experience should take a back seat.
And that’s what most Walmart-hatred really is. It’s either because Walmart is the most visible and easily demonized target of people who despise capitalism (these same people often love capitalism if it’s a shiny new Apple or a Hybrid car) or for those who are devout localists and feel threatened by the presence of big corporations and big boxes. I am a localist. But I can say with conviction that Walmart has not harmed my home town in the least. Nor have any of the other big boxes here. Indeed, we are as vibrant and local a place as any I’ve ever been, and the diversity of places to eat and drink and entertain oneself is greater than ever. Walmart has not hampered this. Certainly it could have had they placed one in the center of downtown, but they were wise enough not to let this happen.
Are there problems with Walmart? Of course. Nothing is perfect, least of all a giant corporation. They do receive preferential treatment over small businesses (#4) – as do many outside firms looking to invest in a community, including research centers, etc. This is not necessarily a bad thing, especially if the result is more money floating around the community. Sometimes cities make shady zoning pacts with Walmart and other big boxes, and of course the cities in question should be condemned for this. Government at all levels can be corrupt and make bad decisions on behalf of powerful corporate interests. Is this an argument against Walmart, though, or an argument for greater transparency in government?
In any case, though I do not often shop at Walmart, I do not condemn them either. I am a localist, but I believe national corporations can still work with local economies and cultures – though it will largely be the responsibility of local communities to make sure that this is done well and wisely.
I’ve been at the computer far too much lately, especially today, a gorgeous almost-spring Saturday, so I’m not going to spend too much time on this one — unless I get sucked in, which won’t be the end of the world.
But I wanted address a couple of points.
This is a study done in 1997 about the effects of (a) Walmart supercenter(s) on small businesses in Mississippi. And 1988 study, by the same economics professor, on the effects on small businesses in Iowa.
It results in a changed local economy, not in the death of a local economy altogether.
But what use is the word ‘local’ anymore when the major — if not only — players in said economy, however true the arguments you present be, funnel a good portion of their profits back Bentonville, rather than keeping them in town?
I hope that communities don’t let Walmart set up shop in their historic downtown. I hope that communities are savvy enough to think of themselves as brands that need to be cultivated. I’m all for mixed zoning, keeping big boxes out of the nice walkable areas of town. Let them set up shop on the outskirts. Let them set up shop where people can drive to shop. Cities should be sensible when they consider how they want their towns developed, and putting a Walmart at the heart of the city is bad business. But that again is no argument for keeping Walmart out altogether.
But then do we really want to encourage additional driving, traffic build-up, and æsthetic degradation on the outskirts, perhaps at the cost of farmland, woodlands, or prairie?
I am a localist. But I can say with conviction that Walmart has not harmed my home town in the least. Nor have any of the other big boxes here.
But what about the towns twenty miles out, where the local businesses there are losing business to the Walmart, Target, and Home Depot in the regional center? All of a sudden, we have a changed, perhaps even ostensibly “stronger” not-really-as-local-anymore economy in Town A, but also not just changed, but dying local economies in Towns B, C, D, E, and F. (And this is discounting, for now, the costs, financial and environmental, that we incur, individually and collectively, when half the people in Towns B-F are driving twenty-plus miles in each direction.) I can honestly say that Walmart (and its ilk — I’m not interested in focusing solely on Bentonville —), while certainly not having done so at the only factor, has harmed my hometown, even though it’s thirty-some miles away — and now we have one even closer.
Are there problems with Walmart? Of course. Nothing is perfect, least of all a giant corporation. They do receive preferential treatment over small businesses (#4) – as do many outside firms looking to invest in a community, including research centers, etc. This is not necessarily a bad thing, especially if the result is more money floating around the community.
It certainly becomes a bad thing when Nathan’s Lumber and Hardware pays local taxes, which the local government then funnels to a company, for reasons however just, dubious, neutral, or all of the above, will undersell him.Report
re: WM swallowing up farm land etc.
I always observe that if you come across a SUPER Wal Mart (Kroger, etc.) there’s often an abandoned building a mile down the road where the old “regular sized” Wal Mart sits abandoned.
I’ve driven through some suburban and small town areas where these big box caskets stretch for miles. Depressing.Report
And this link has a number of papers/studies by Professor Stone, not necessarily pertinent, but possibly of interest.Report
Walmart also offers opportunities for advancement within the company. I was general manager of an 800,000 sq ft distribution center at one point in my life and we provided third party distribution right off the port here– Walmart was our largest client, and I had to deal with regional employees all the way to Bentonville employees. Many of the Walmart employees I had to deal with were making good money and had moved their way up from retail stores, or truck loaders, to very good positions.
I’ve often wondered why a NAPA type business model doesn’t develope to give local retailers buying power and the chance to compete with Walmart. One thing we don’t have to worry about here is Walmart entering the historic district — there’s no space, plus the Historical Society would bomb them.Report
Mike: I’ve often wondered why a NAPA type business model doesn’t develope to give local retailers buying power and the chance to compete with Walmart.
They sometimes do. Both of the grocery stores in my town (Don’t ask me to explain how we still manage to support one, let alone two.) belong to a cooperative — the same one since the two in the Chicago/NW Indiana area merged —, but it’s still very difficult for them to compete on prices with the Walmart thirty miles away. (And the same is true, of course, of Ace, TrueValue, and DoItBest hardwares.) Cooperatives have their benefits, for sure, including buying power, but the buying power never seems to equate that possessed by the big individual retailers.Report
Were any of them women? My gut says no, but prove me wrong.Report
You mean the employees who advanced at Walmart? Yes, there were women who advanced — the quality assurance lady I worked with closely is one example, but distribution and warehouses seems to be male dominated all over. But many of the people I corresponded with regarding billing, over-seas buyers, and other financial matters were women – not sure how many of them advanced through the ranks, though, because I didn’t hear their stories.Report
Thanks E.D. good arguements.Report
I’m going to be honest here. I hate Wal-Mart are there is nothing they can do to change it. It’s not the aesthetics (although they do cultivate bad ones to induce both a feeling that goods are cheaper even when they aren’t, and anxiety-based impulse purchases). You may know this already, but Maricruz’s father – who has a Masters in biology, mind you, and was a science teacher in Cuba – is stuck working there, even though they recently demoted him from deli to greeter, for no reason other than his age. And she used to work there as well. So I’m quite intimately familiar with how Walmart employees are treated – an issue entirely separate from pay and benefits, which you don’t address at all. After watching what they went through, I would rather make $6 an hour or less working nearly anywhere else than work at Wal-Mart for $9 an hour.Report
Joe, I agree they’re really crummy. But they serve a function and I don’t think they suck or have a bad influence to a degree that is either criminal or requires government intervention through some kind of special regulation.Report
I don’t know. I recall seeing a documentary, featuring a region that seems like the kind of place John Edwards talked about growing up in — small, southern, textile-industry town. Wal-mart came, and the folks shopped, and the stores that they made clothes for closed and their jobs went away.
Perhaps we don’t need to regulate it; but instead, to comprehend it. Because the fewer pennies you’ve got to spend, the more important it might be to spend them wisely — meaning spending them in a manner that invests in your own future. It’s kinda like teaching a man to fish instead of throwing his wife a fish to fry.Report
No, I’m not saying they do (unlike certain other jobs – tomato picker comes to mind). And obviously Ismael’s predicament is better than the alternative of being imprisoned and worse for opposing Castro.
What I am saying is there’s a huge gap between “we need the government to fix this” and “this is actually not a good thing, people!”Report
Hey I’m with you and Zic 100%. Educated shopping choices are vital. Wal-mart extracts not one slim dime from me. But we probably don’t have any business dictating those choices to the people who do choose to shop there.Report
Every time I think I am learning to be open to other cultures, I visit Wal-Mart and realize that, no, I am very much an aesthetic snob.
I always feel like I’m in the waiting room of the local P.O.
If I can shop somewhere else, I go out of my way to do so… but, sometimes, you need Advil and a shower curtain at 1AM and there’s noplace else to go but Wallyworld.
And, somehow, you still see parents with 10-year olds in tow even though it’s a school night. Drives me batty.Report
Amen Jay, I can’t stand shopping there. But then again as half of a double income no kids urban couple I have to keep in mind that they’re not marketing to me.Report
Another problem is feeding Wal-Mart’s voracious appetite. Small retail chains used to rely on smaller manufacturers — north-eastern clothing brands that were common included Carhart, Woolrich, Columbia, Carter’s. But smaller manufacturers cannot easily meet the demands of Wal-mart; and as small competitor retailer close, smaller manufacturers loose their market. There can also be serious business problems with scaling up a business to meet the demands of a bigger retailer like Wal-Mart.Report
Zic – so far as I can tell, all of those companies are still around and doing pretty well. It’s true that smaller manufacturers cannot meet Wal-Mart’s demands, but those don’t seem to be very good examples. It should be added that some small manufacturers may not want to meet Wal-Mart’s demands even if they could, by the way – it’s generally bad business practice to be so heavily dependent on one customer. A savvy small manufacturer who is interested in long-term growth rather than a short-term big hit may well choose to decline Wal-Mart’s business on those grounds.Report
I never shop at Wal-Mart, for two reasons:
1. They do pay and treat their employees abysmally, and they’re extremely hostile to any attempt by employees to improve their situation. They shut down an entire store in Quebec when the employees tried to form a union. And wages and benefits aside, working at Wal-Mart is, from what I’ve heard, far more dehumanizing than working at a small local retail store. In addition, I do draw a distinction between small stores that don’t have high wages because they have low profits, and Wal-Mart as a gigantic business that makes immense amounts of money and refuses to pay its employes decently out of simple greed.
2. A large proportion of their products come out of sweatshops in China and elsewhere, so the people who actually make the things they sell suffer from far worse conditions than even their retail employees.
Another problem with them is that they give absolutely nothing back to the community, as opposed to (for example) Thrifty Foods, a BC grocery store chain that funds local events, supports food banks, etc.
The fact that they’re hideous doesn’t help either, of course.
I think your point #1 is overly optimistic, as well. People who have more money because things at Wal-Mart cost less are likely to buy more things at Wal-Mart rather than spending their money elsewhere in the community.Report
Mark Steyn once referred to Quebec as a place in thrall to North America’s laziest unions. There might be a legitimate reason that Wal-Mart would rather not do business with them. The scandal of public employee pensions and work rules and the scandal of the deal the United Auto Workers received courtesy the Democratic Party last year are indicators that Wagner Act unionism is an idea whose time ought to have passed in favor of company unions and producer co-operatives.
The employees at Wal-Mart are there engaged in a transaction with the corporation that is uncoerced. Over time, the compensation they are paid is going to reflect productivity. Wal-Mart may be a price maker in local labor markets, but I tend to doubt it. 99.2% of the American workforce is not employed by Wal-Mart.
If the distribution of cash income and certain services (e.g. medical care and primary schooling) are a concern, these matters can be addressed through common provision by the state rather than by strategems to manipulate market transactions. A reconstruction of the tax code in an equalitarian direction is much to be desired; such is not Wal-Mart’s responsibility.Report
I have a family to provide for and am more than happy to shop at WM and take advantage of their low prices. I stayed in school and got an education so I didn’t have to work someplace that that. Why should WM pay their marginally educated workers any more than than the market will bear? Also, let’s not forget the purpose of any corporation like WM is to make a profit for their shareholders.Report
I actually rarely shop at Wal-Mart, though I may here in a few days be going to one to buy a vacuum cleaner, specifically a Dirt Devil. The last time I priced one, it was 64 dollars. I hope it hasn’t increased, because guess what? There’s absolutely no other place around where I live, at least not in my town, where one can buy a new vacuum cleaner. Or a used vacuum cleaner. Or for that matter, vacuum cleaner bags or belts. Is that the fault of Wal-Mart? I don’t know, but I do know that they aren’t cheap on everything. Unless I’m mistaken, their food prices are quite high, or at least comparable to most other grocery stores. Thankfully, there’s always Save-A-Lot.Report
They obviously serve a need or they wouldn’t be so successful. I don’t like the special deals they get from local governments, though, but, there I blame government for making it possible.
I still think a sophisticated, NAPA-like operation could compete with them with the right effort and strong marketing to gain the people who don’t like Walmart but buy there for price.Report
Firstly….may I say…Retail makes nothing.
Now, to the person tat is defending tat 5 & Dime from the Ozarks….here are a few facts!
On their China web page under “About Us”….
“Wal-Mart China persists in local procurement which provides more job opportunities, supports local manufacture industry and promotes local economy. So far, 95% of merchandising sold at Wal-Mart China store are local products by which Wal-Mart has established business relations with nearly 20,000 suppliers. At Wal-Mart, we treat suppliers as partners and would like to develop with them. In 2008 Wal-Mart won the Supplier Satisfaction published by Business Information of Shanghai for five consecutive years.”
Does tat support American export and American jobs?
Did they mover their Global Procurement Offices to Hong Kong and than to China years ago in order to buy made in America products?
If it takes $9 billion in hidden taxes from all Americans each year to clean the fish from ballast tanks of ships…..does tat really make so-call cheap items from foreign lands…..really tat cheap?
If 15 of the largest cargo ships pollute as much as 760 million automobiles….yes…760 million…does tat
make made in China cheaper than made in the USA?
Can you tell everyone what Helen wus thinking about while she wus watching Sam listening to tat squiggly line song for the first time in a factory east of Seoul back in 1975?
Now, look up the year Sam’s “Made in America” campaign started in America……
If Sam’s first store wus call 5 & Dime and later wus changed to Wal-Mart….Who took the “hyphen” from the name and replaced it with tat big single star? Wus it done before or after they moved their Global Procurement Offices to Hong Kong…or after they moved it to China?
Tis leads me to the paragraph in tat article by Lance Winslow….
“Now let us look at Wal-Mart again; you buy a product there, 6% goes to the employees, 10-18% is profit to the company, 25% goes to other costs and 50% goes to re-stock or the cost of goods sold. Of the 50% about 20-25% goes to China, a guess, but you get the point. Now then, how long will it take at 433 Billion dollars at year for China to have all of our money, leaving no money flow for us to circulate? At a 17 Trillion dollar economy less than 40-years minus the 1/6 they buy from us. Some say that if we keep putting money into our economy, it would take forever, but if we do not then eventually all the money flow will go. If China buys our debt then eventually they own us, no need to worry about a war, they are buying America, due in part to our own mismanaged trade, so whose fault is that? Not necessarily China, as they are doing what’s in the best interests, and we should make sure that trade is not only free, but fair too.”
Also, think for a moment about George Washington….yes the man tat is on the US dollar bill…. “Washington had been reelected unanimously in 1792. His decision not to seek a third term established a tradition that is now embedded in the 22d Amendment of the Constitution.
Take the time to read his farewell address after only eight years of serving his country and than ask yourself tis….How do you think George feels being sent overseas in return for all tat foreign so-call cheap items and being left in a foreign bank because the American worker doesn’t make anythig for the foreigners to buy. Cheap items didn’t make tis great union of 57…oops! 50 states the greatest place on the face of tis Earth…..the American worker (union and non-union) did.
You can’t have a strong country without having a strong currency and you can’t have a strong currency unless you keep it floating around within your 50 states. Tis is why the store with the star in the name puts 95% China made items in their stores in China….to keep their “yuan” in their country helping the nice people there. And with only 5% left for all the other 182 country’s tat make stuff including the United States of America….tat doesn’t produce very many jobs outside of China.
Being an old person myself and knowing how it wus back in the 40’s, 50’s and 60’s in tis union of 50 states….I look at George each time I pull him out of my billfold and make a promise to send him out for items made in America so after floating around helping each hand he touches jus maybe one day he will shake mine again.
Which leads me back to….Retail makes nothing!
“It is the aim of good government to stimulate production, of bad government to encourage consumption.” – Jean Baptiste Say, French economist 1767-1832
And if you the type of person tat is thinking….well, America doesn’t make anything….I’ll be the first to let you know….
“the U.S. manufacturing base declined from 30.4% of GDP in 1953 (when we had a trade surplus) to 11.7% in 2006 – also a 61% drop in the manufacturing share of GDP – and more is foreign-owned than before.”
“# Since 1952 the international reserve position of the U.S. has fallen from 50% of the world’s total to a 2.4% ratio – – a 95% drop. The decline continues.
# Many other productive nations now have up to 23 times more foreign reserves backing up each of their children than we have backing ours, and their lead is increasing as the U.S. continues with massive trade deficits and record high internal private sector debt ratios, with nil savings.With 5% of the world’s population, America consumes over 20% of world imports.
# The U.S. is the world’s largest debtor, a long fall from being the world’s largest creditor when I was a young worker.
# For the past 30 years the U.S. has been unable to adequately compete internationally to balance its trade with the rest of the world by at least exporting sufficient goods to balance imports. Massive deficits soar. Even the information technology sector is in deficit, and for the first time food imports exceeded exports.
# The U.S. economy is less independent than prior generations yet one quarter of the economy depends on international trade in goods, 3 times more than before – and foreign entities own more and more of our assets than we do theirs – while our education quality suffers relative to others.
# Meanwhile, the U.S. manufacturing base has declined 60%, leaving the economy significantly less able to compete abroad in goods.
# And the U.S. has become more dependent on imported foreign oil and natural gas than ever before, as graphically shown in the Energy Report. The oil consumption-production gap is a whopping 71%, as consumption soars and production and reserves continually decline. The U.S. is more dependent on energy produced by others than ever before – – but not exporting sufficient goods to pay for it. At the time of World War II the US produced all the oil it needed, even exporting to others. No longer.
# For most of the 20th century the U.S. ‘wrote’ most of the rules for world trade. No longer ! ! For a long time the U.S. dollar was unchallenged as the world’s reserve currency. No Longer !”
The above quotes came from Michael Hodges Grandfather Economic Report series….
http://mhodges701.home.comcast.net/~mhodges701/
“Not many today remember having to drive at 55mph on a Interstate highway and even less remember mandatory gas rationing “A, B, C, X” from December 1, 1942 to August 15, 1945 with a speed limit of 35mph.
Chrysler made fuselages. General Motors made airplane engines, guns, trucks and tanks. Packard made Rolls-Royce engines for the British air force. And lets not leave out Ford turning out one B-24 Liberator long-range bomber that had 1,550,000 parts every 63 minutes.
It really is amazing that the hydrogen-fueled internal combustion vehicle has been around since 1807 and Germany had a thousand running the streets doing World War II but after 200 years “oil” still rules.
What if today… the United States of America sold “Save America Petroleum Bonds” to individuals and the GM,Chrysler and Ford’s of the World get off their lazy @ss…..oops!
It takes bout $1000 to retro-fit automobiles to run on natural gas….and with America having enough of tis energy for another 100 years….and with the price cheaper than gasoline….if half the people in America put more of tis in their automobile tanks besides tat damn tiger from the Arabian sands….the price of Americans freedom would be worth a 1000 fold and a gallon of gas to those people skiing inside tat man made Aspen ski slope in Dubai worth bout 2 RED CENTS…..
Well, it’s time to let my bird dog Licker out to pee but before I go jus one more thing….
With the founding fathers under King George being taxed up to their eyeballs at all most 50%….and sitting down with hand-cut goose quill pens and writing the American dream with the title “Constitution” and on September 17, 1796 George Washington writing his farewell address after only eight years in office which he never spoken cause he wus to embarrass for not having teeth….
read tis from a person tat wrote from his heart….and never had a need for a teleprompter….
“Observe good faith and justice toward all nations. Cultivate peace and harmony with all… The Nation which indulges toward another an habitual hatred or an habitual fondness is in some degree a slave. It is a slave to its animosity or to its affection, either of which is sufficient to lead it astray from its duty and its interest … Tis our true policy to steer clear of permanent alliances, with any portion of the foreign world.” – George Washington, Farewell Address, 17 Sept. 1796.
The only way America can have jobs….is for the American people to start taking more pride in what made America great in the first place….
and I can sure as hell tell you…..it wusn’t a 5 & Dime from the Ozarks…
Good night and God Bless!Report
That is certainly a very… interesting read. Very full of character. It’s too late to try and touch on the substance of the post, maybe in the morning. Thank you for sharing it.Report
What bothered me about WalMart, the few times I’ve been to one, is that they treat many of their customers as if they were paroled shoplifters, particularly the ones whose dress suggested lack of financial means, and especially when that was combined with dark skin.Report
You actually noticed that, huh? Any particular experiences you care to share with us? I usually go in and buy what I need and leave, along with the 70% African Americans here, and I have never noticed any difference in how customers are treated, perhaps because 80% of the employees at our 2 Walmarts are African Amercian, or perhaps because I wasn’t attentive enough to see the employees throwing black customers up against the wall and patting them down for stolen toothbrushes.Report
I did notice the extra scrutiny a few groups of shoppers got; e.g, not being allowed to leave the store until they produced a receipt, when I wasn’t even asked for mine. All were dark-skinned and clearly badly-off, where I’m white and appear vaguely middle-class. This is quite different from the atmosphere at other discount stores I’ve been to: Target, Ross, etc..Report
I would not necessarily extrapolate from ‘a few times’. That sort of thing also seems the sort of phenomenon that might vary with location and personnel, as a certain amount of discretion is involved.Report
There are four Waltons that have a total net worth of over 70 billion dollars and have several hundred thousand 39 and 1/2 hour per week workers that are eligible for state aid. Walmart is also more than a little responsible for the race to the bottom sweatshops that plague the world. While I am not sure that new laws are needed, I do wish those Waltons acted like the Christians they claim to be. Also, for Scott, You don’t sound like a pleasant person. I hope that you always have the luck to have your great brain and appreciate that your parents that instilled such a great work ethic. I just with that they could have instilled a little empathy.Report
A minor point Dex. We’ve had “sweatshops” for as long as we’ve had the concept of industrialized labor. It’s only in recent times that we as a species have advanced economically to the point where we have the luxury of differentiating “sweatshops” from other factories. A century plus ago we didn’t call em sweatshops, they were just the job.Report
I don’t think that’s necessarily true…
For example in the UK…
Arguably what helped nudge industrialization along was the enclosure of the commons all throughout the country that made it very difficult for traditional tenant farmers to continue working for anything other than wages. (As they could no longer keep their own live-stock) This of course then created an additional supply of wage laborers, who were then available for industry to harness.
Granted being a tenant farmer, even with a commons is no picnic, but there’s a significantly different dynamic when you’re able to own some livestock of your own and when all your income comes from wages paid by your landlord.Report
Well yes I’m certainly not saying that sweatshop labor was the only work there was to do Nob. But all the things we deplore sweatshops for; unsafe working conditions, brutal hours, low wages, employment of children, were completely typical in our own countries until the populations developed enough, both in terms of wealth and in terms of consciousness to be able to demand better treatment. Are we in any position to demand that the current developing world do as we say not as we did so to speak?Report
My problem with this post is that focuses almost entirely on the consumption end and ignores a lot of the very real and very large supply-chain issues that are generated by an institution like Wal-Mart.
The latter are very large issues that create massive displacement in local economies as much as the consumption side.Report
In my real life I work in the logistics field for a big Fortune 500 company. Wal-Mart has done a LOT to improve on the way logistics work in the US. They, along with several other companies, have revolutionized supply chain management. The streamlining of the movement of goods around the country is something that American consumers benefit from greatly, whether they realize it or not. Every day people’s lives are affected in a positive way because companies are able to move goods in faster and more efficient ways.
I love the idea of mom & pop stores and they are a quaint part of Americana that I hope remains on some level. With that said, Wal Mart plays an important role in a lot of local communities, especially in rural areas. As several commenters said, their lives are better because they have access to goods they once would have waited months for or not gotten at all.Report
They also made tat deal with China, Mexico and tat container company from Hong Kong back in 2006 on tat port in Mexico….
Wus tat to make more jobs in America?
And one needs to think about Warren Buffett….he had interest in tat company with tat star in the name before tat port deal and later invested in China than turn around and double down on Wal*Mart again…..and out of the blue…bought a dang Choo Choo!….
Ask yourself….does tat Choo Choo! run in and out of Mexico each day…and if it does….with Congress not letting the nice truck drivers in Mexico run on the highways of America and Canada….
what better way to get all those containers to the Wal*Mart Distribution Centers than by a Choo Choo! train.
And tat container company from Hong Kong is also the company expanding the Panama Canal….do a little research and you will see….
you ain’t the only one at The Big Stick!
🙂Report
Is your keyboard having issues with the “h” key?Report
maybe I have the problem tat George Washington had….no teeth!
Tis wus around long before tat dang “h” showed up…
The only thing I have a issue with is made in Malaysia on the bottom of my computer.Report
“They do receive preferential treatment over small businesses (#4) – as do many outside firms looking to invest in a community, including research centers, etc. This is not necessarily a bad thing, especially if the result is more money floating around the community.”
This is simply wrong. Retail stores do not bring new jobs or new industries to an area like other outside firms. They replace existing firms and existing jobs. This eliminates the local entrepreneur and sends the profits out of the community. Given Walmart’s scale and efficiancy, it’s generally going to be a net job loss for the community. A Walmart with a tax break is almost always a losing deal, because they replace businesses that do not have tax breaks. The only situation where this works out well is for destination Walmarts, where people travel from outside the community.
But comparing a subsidy of Walmart with a subsidy to Nissan or another company which is adding jobs to a community is just false.Report
You are thinking only in terms of the supply side. You ignore all the savings made on behalf of consumers.
Indeed – virtually every critique made here vis-a-vis Walmart takes into account only the production and distribution and sale of goods, and assumes that this is the long and short of it. You all forget about the consumer, especially the poorer consumers, who save money that doesn’t simply disappear but is transfered into some other utility, some other good or service. This will undermine every one of these arguments, save a few more unorthodox ones – such as the problem with our car culture, and how big-boxes may (or may not!) contribute to this. That’s an argument worth having. But whether Walmart is undermining its competitors and thereby “destroying jobs” is really not at question. Whatever jobs they do upset will be replaced in some other sector, some other good or service.Report
Did you know tat back in the sixties the government did a survey on the US Dollar and how it floated around towns….
Did you know at tat time the George Washington picture floated around towns 6 to 8 times before leaving….
Now….fast forward to today and what do towns have to show for it….
well, if a Wal*Mart supercenter takes in $250,000 to $300,000 a day….all those dollars are wired to Bentonville,AR each night so to pay all the vendors tat are 90 days due the following day….
Back in the 50’s when tis O’fart went to school tat wus call kite flying money….but to day…it’s call sound business…but the only problem with tat sound business is the same problem companies had back than…it only works with growth…and a growing economy.
A person also needs to look at what a company gives back…wusn’t it not back in 2008 tat tis company had profits of $13 billion….and with most people in daily life….most give 10% back whether it’s to a Messiah, Ghost, Dogs with three legs or a Wishing Well on the square….which brings us back to tat store with the star in the name…wusn’t it not $177 million tat wus given in tat year….and if my third grade education is right….tat is a far cry from 10%…
So, you may come with all the post tat you would like and make fun of the way I type, the spellin’ I use and even try to make other people agree with you….but it ain’t gonna make a bit of difference….cause tis is what the comments and replies are all about….
and may I add your last sentence….”Whatever jobs they do upset will be replaced in some other sector, some other good or service.” tis is the problem…cause retail makes nothing and until America gets back to the manufacturing base tat made tis country the powerhouse of the world….$8.5 trillion George Washington’s are floating around and not one of them is in Americans hands.
Guess….North is having a hard time digesting the so-call substance from one of my last post….
go figure!
“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” — Sam Walton
The nice people of Germany and South Korea took tat quote to heart and the nice people of Japan for the past seven years are gettin’ close to doing it themselves.
Support your town…………shop around!
American made……………………………….priceless!
Have a gr8 week going up and God Bless.Report
I’d love to chat with ya Madmilker, but I’m sorry, your effected “accent” or online voice is kindof throwing me for a loop. Is it intentional or is english your second language?Report
well, it could be tat I didn’t go to Yale, Harvard or Princeton….but on the other hand tat could be the main reason for the way tis O’ fart types. Sad tat you have no backbone in your fingertips to question any of the things tat I wrote….but jus maybe you took Sunday afternoon to do a little research and while scratchin’ your head and googling over the web a little light bulb for the first time lit up in your head.
Funny tat a lot of people go through life thinkin’ tat their sh!! don’t stink only to realize after being put in their place by someone’s tat does…it wus from having their nose stuck up in the air so high and their little pinkie away from the cup tat cause the aroma to run down from their lower lip to their crotch rather from their nostrils.
good day….my son!
Who in their right mind would want to be stereotype ordinary in the first place…..
“My boy, treat everybody with politeness, even those who are rude to you. For remember that you show courtesy to others not because they are “gentlemen”, but because you are one.
-A father’s advice to his son
I’m gone!Report
Er well neither did I. But they did teach spelling in my highschool and I would guess that they taught it in yours. I would of course love to go down your posts merrily demolishing your assertions but it’s important to know what one is getting into before one commits to such an endevor. Especially when there are such copious quantities of assertions to demolish.Report
the more you type….the more you remind me of a ….
duh!
Spodoptera ornithogalli…….tat’s it…
armyworm……
tat distinguish color on their backs is a dead give-away….Report
Dude! I thought you said you were gone?
Also in your cruel persecution of the letter h shouldn’t you be pronouncing the as “te”?Report
Also “ornithogalli” has a th in it so you’re breaking verbal character.Report
North, I’m more or less on madmilker’s side on the substantive side of the argument — to the extent that his posts have any coherent substance —, but pleeeeeease stop baiting him. I don’t mind receiving six hundred League notification e-mails — not at all —, but his affected “dialect” is driving me crazy, and surely others, too.Report
You got it Nate. Email notifications? You’re a braver man than I.Report
it’s a blog…..my feeble-minded one…..
only a blog!
and yes….
with the help of George Dickle and the number 12…..
i’m gone.Report
“But whether Walmart is undermining its competitors and thereby “destroying jobs” is really not at question.”
Huh? I didn’t make this argument. I argued that tax payers shouldn’t subsidize retailers because retailers don’t bring new employment, new retail shuffles money and jobs around in an area. In the specific case of Walmart, I’m assuming their scale and efficiency will mean a net loss of employment. I don’t like handouts to companies in general, but with subsidizing retailers you have the classic government picking winners and losers in a market. The same would be true for subsidizing Crate & Barrel or Williams Sonoma. I thought conservatives were against that sort of thing, I certainly am.
Re-read the post, you’ll note I didn’t say that Walmart jobs are bad. Go ahead and look, it’s not there – because I don’t think that. I live in a poor community and fought to bring in a Walmart our neighborhood (Walmart Neighborhood Market actually).
Subsidizing a research center and subsidizing Walmart are still not comparable acts. One brings in jobs and encourages entrepreneurship, one shuffles jobs and discourages entrepreneurship.
On a rhetorical note, the appeal to supply side is a nice pivot, but you can’t back that up with anything other than …well, rhetoric. Hayek was against government planning because he thought the predictive powers of social science were all bullshit. So, are you actually making an economic argument for societal planning (cue rolling corpse of Hayek) that includes giving tax payer support to already profitable firms in established industries? Or is government planning all so silly it all just looks alike? I appreciate heterodoxy, but watch out for the pitchforks and torches from the right.
Gotta get the kids to sleep. Later.Report
If the new retail concern incorporates productivity improvements in the distribution of goods, it improves the real income of its customers.Report
Productivity in retail usually means fewer jobs, a point I made originally. So prices go down and people lose jobs, some win some lose but I would call it a wash overall. But Walmart is not a “new” entity in most cases serving unmet needs. It serves currently met needs with fewer employees, no local entrepreneurship, lower wages and lower prices.
My point is not about the value of a Walmart; it is about giving subsidies to retailers which I is substantively different than the example given of a research center.Report
Additional employment would be generated by the increase in the effective purchasing power of the customers of the retail outlet in question (Kain’s original point).Report
I would suggest that in the case of Walmart putting “mom and pop stores” out of business and that being good because the little stores were local monopolies with even crappier selection than Walmart has, there’s an implicit assumption that we’re talking about stores which are little tiny versions of Walmart. That isn’t necessarily the case.
Take the example of a town bookstore. It’s not a huge store, but it’s got a bigger selection than the book section of the Walmart, which by design concentrates on bestsellers, and of course it can special order things and do provide the customer service that bookstores do. (A “big box” bookstore like Borders can do these things, but Walmart, not so much.)
Now when Walmart comes in, it can’t really compete with the selection of this bookstore–but it doesn’t have to. The books that Walmart *does* sell, it can sell at a price that the town store literally can’t match without losing money. A certain percentage of book buyers, are going to switch to buying books from Walmart when they’re available there because of the better prices. But for Walmart to put the town bookstore out of business, it doesn’t have to take away most of the existing store’s customers. It doesn’t even need to take away half. If the town bookstore’s revenue drops by 20 or 25%, it’s probably not going to be able to stay in business. And there won’t be any incentive for any local business to take its place, because the same financial dilemma awaits them; the only kind of store that can compete in a way that brings greater choice back is a big bookseller like B&N or Borders. But a lot of rural areas have Walmarts, but they don’t have the demographics to support a Borders.
Now, repeat this scenario with a good chunk of other individual departments that Walmart has. I don’t believe the scenario above is intrinsically immoral, and I’m not passing a value judgement on Walmart for having the audacity to undercut prices that they’re able to undercut. But Walmart really *can* reduce the available choices of consumers in a given area.Report
I suppose you must be referring to all those towns and cities which do not have access to Amazon.com.Report
I’m never been wholly satisfied with the VR part of Amazon that replaces browsing in a bookstore, in order to find books I didn’t know that I wanted to read.Report
And it’s all about you. 🙂Report
Who else?
But, honestly, as great as amazon and abe.com are, they’re not a replacement for a local, well-stocked, bricks and mortar bookstore.Report
It’s true. I can’t speak with a proprietor who studied under Jacques Maritain when I’m at Amazon, but I can when I’m in his store, which occupies the great bulk of his wonderful Craftsman bungalow in South Bend.Report
No, they aren’t, and don’t need to be. If you had bought them at $40, you’d love ’em, though. I know, I know — just a crass capitalist who doesn’t appreciate the virtues of real bookstores. Actually, when I know what I want, I go to Amazon — when I want to browse I go to a bookstore and pay 20% more. It’s all good.Report
It’s always most convenient to have a store dedicated to something like books or hardware or what-have-you. But you’re talking about pretty small towns that cannot support both a book store and a Walmart book section or a hardware store and a Walmart home improvement section. Towns that small rarely get a Walmart anyway. Unless they’re close to a bunch of other small towns, in which case there’s probably a decent chance that one of them is going to have a book store or hardware store or whatnot.
I almost never shopped at Walmart until I moved to small city America. Cities of 30-50k without much around them except mountains. Setting prices aside entirely, Walmart made cities like this much easier and more convenient to live in. You never realize the importance of having something open after 8pm until you’re in a town where everything closes at 8pm.
I’m now moving to a town of less than 10k. No Walmart. There is a town an hour away (pop 30k) with a Walmart, but they’ve also got a hardware store, independent bookstores, etc. These places are helpful because sometimes you need a drill that Walmart doesn’t sell.
In my experience, most of the concern about what Walmart does to small town America is felt by those that do not live in small town America. Not everybody likes it when a Walmart moves in, to be sure, but anti-Walmart sentiment is far less pronounced the further out of the city you get.
(Alas, I will not be able to continue in this conversation. When I say I am “now moving” I am being quite literal. I arrive tomorrow. No Internet access.)Report
I think a big part of the discussion in the other thread is being avoided here, and that is the fact that Walmart is heavily subsidized by the government. They generally secure property through eminent domain; they offer almost zero benefits and use employment strategies that are specifically intended to shift that cost over to the government; and their sheer size offers many tax breaks that small businesses cannot get.
On the other end of it, while their minimum pay may be the same as mom-and-pop stores, their median pay certainly is not. As someone who worked at a Walmart briefly (as a lucratively named “Inventory Control Specialist”, i.e. stock-boy) I can attest to that. Back of the envelope: about three cashiers per register, 10 stockers, 1 assistant per department – these people all make minimum wage; 1 “manager” per department makes $1-$5 over minimum wage; two real managers and one store manager are the only ones to make actual management salary. They also have a nice system where people are given very small but mandatory raises every year to help employees forget that the chance of actual promotion is extremely slim. Likewise, once a year they’ll donate a couple grand to a local charity so that agitation from the locals is kept to a minimum. Unions are fiercely fought against (during orientation, equal time was given to anti-union videos as was to safety training; anybody looking to start a union is to be reported to the manager to “address their concerns”) and gender discrimination is institutional.
To be clear, I don’t consider most of these practices unethical, they’re merely profitable strategies, but Walmart is no harbinger of the free market, nor is it a fair employer just because their lowest wages is equal to that of the neighborhood grocer. They perpetuate a pretty terrible working environment while shifting as much cost as possible to the local and federal governments.Report
You must not have read the part of my post wherein I admit to Walmart’s preferential treatment by many governments across the country (and globe, to be sure.) I ask again – is this a problem with Walmart or with the governments in question?Report
I guess I missed it because it didn’t seem like much of a criticism. Preferential treatment by government is what makes the other criticisms valid: their stranglehold on local economies allows them to homogenize the resources and offer a generally inferior product; their ability to shift the cost of benefits onto government allows them to keep poor working conditions while maintaining profits; the aestheticism argument, frankly, I think is an anti-elitism straw-man.
Is government the problem? Yes, but without the government Walmart too would not be able to exist. I do not see that as a defense.Report
So you’re asserting Trizzlor that Wal-mart is successful and profitable only because of governmental support?Report
Maybe you need to ask yourself tis….
Why did they have an office in Italy and no stores there……Report
They liked the wine?Report
So you’re asserting Trizzlor that Wal-mart is successful and profitable only because of governmental support?
No, I’m merely saying that Walmart, as it functions now, could not exist without government support. I think hypothetical statelessness experiments are fun, but generally unproductive; discussing Walmart in this context is like asking of the Military-Industrial Complex would exist without government. So, depending on how you were raised – either Walmart would take advantage of stateless de-regulation and more extremely monopolize the supply chain, or it will not even be able to expand to the size it is currently. My point is that you cannot defend Walmart from some kind of pseudo-libertarian perspective as it’s current function is essentially that of a government agency which funnels profits to a select minority of people. Saying Walmart’s low-cost goods are an example of free-market convergence is like saying the same about General Dynamics’ high-quality submarines.
If anything, Walmart is either an example of an over regulated market converging to the optimal form through government guidance, or converging to a shoddy anti-competitive form through government intrusion.Report
For what it’s worth, Walmart was one of the topics my undergrads had a very hard time discussing. They could do abortion, war, religion, etc. But when I brought up Walmart, the gloves came off and the fists flew. I had one freshman, a perfectly lovely young lady in all previous interactions, stand up and shout, “You’re nothing but white trash” at a bunch of kids who liked Walmart. The kids who liked Walmart were equally vicious.
Who knew?
This inability to address the topic reasonably extended beyond that semester. I brought it up in a few different classes, just to see what would happen. Same thing.Report
thank you Nathan ….
for the wonderful flowers.
Stew Webb and Tom Heneghan luv them…
and loosen your top button on your shirt….
are the blood vessels behind your ears are gonna pop….Report
One thing I haven’t seen mentioned is what is the long term effect of training people to buy the cheapest possible widget for the lowest possible price. It creates a consumer race to the bottom. Consumers expect to pay no more than pennies over the per unit cost for a widget and in order to meet demand, suppliers must go to the cheapest possible distributor — which often means using distributors outside of the country where labor conditions are abysmal, standards are low and quality control is virtually non-existent. As a result, the consumer buys a widget at Wallyworld for bottom dollar, but 18 months later must buy a new one because his first widget was so poorly made it has broken/worn out. It creates a cycle of dependent consumers (where’s the choice there?) and conditions people of lower means to expect to buy cheap crap. Where is the fiscal responsibility in encouraging a group of people who are already cash strapped to spend $50 every two years because the cheap widget they bought broke instead of encouraging them to save for and buy a $100 widget that will last at least 5 years if not longer?Report
No one makes you buy the cheap widget. You have the freedom of choice to buy whichever one you want. And if you don’t learn after the first widget breaks then maybe you deserve it.Report
Think he’s saying cheap items breed cheap wages. People working and not having money to spare most likely are looking for the cheapest price not from knowing it ain’t gonna last but from this is all they have in their pockets.
Remember, meatcutters made $18 in 1980 and if wages went up with inflation those meatcutters of today would be making $46.26. Most today make less than $14 even though that cut of meat went from $1.89 to over $4.86.
That wasn’t wabbit meat!Report
“cheap items breed cheap wages”
That’s exactly what I’m trying to say. Thanks!Report
If the employees don’t like the wages, they can always go someplace else.Report
or they could organize a union.Report
Oh yes, one of those great organizations where the workers collude to fix wages.Report
…which oppose industry trade organizations that collude to fix laws and corrupt markets.Report
Companies colluding is illegal under any number of federal laws and is prosecuted. I don’t see why colluding to fix wages isn’t any less illegal.Report
I’m going to take on good faith that you believe this, so here are some facts. Unions only come to be by a vote of the workers and can be decertified by a vote of those same workers. Unions ratification only allows the union to negotiate with their employer as a group about wages, benefits and working conditions. The employer and union signs the contract – unions do not posses the Jedi mind trick, though it would make things easier.
I was using collusion in the sense of say the better business bureau representing numerous employers at once and lobbying for legislation to benefit them collectively. Businesses organize to promote their self interest and so do workers. If you are willing to state that businesses should never be allowed to organize for self interest, then we disagree but at least you will have an intellectually consistent position.
And of course, if you don’t like a union then work somewhere else – just like you were saying about wages above. No one is forcing you to enter a union, it’s ultimately your choice.Report
I find this to be an odd argument if it’s not made in jest. Do you really think there’s no external cost to changing employers that keeps one in a position where they are over-qualified and under-paid? Is it not in the employers best interest to exacerbate these external costs? We can’t all be graphic designers and professional bloggers.Report
“We can’t all be graphic designers and professional bloggers.”
speak for yourself….Report