Saturday, October 06, 2007

Is Wal-Mart The Real Enemy?

I was recently invited to watch a documentary on "Wal-mart : The High Cost of Low Price", which also included an opportunity to find out more. I watched the small preview and here is my reply:

I am not going to get behind a movement against Wal-mart. As a matter of fact I will stand on the opposite side. Here is the reasons why. I have worked retail for over 13 years. IF Wal-mart is taken to task, so should all of retail, including Safeway (Randalls Grocers), Kroger (Fred Meyers here in Washington state), Kmart, and many others. BTW, in Texas it is hard to find an english speaking employee at Wal-mart, which I don't like, so they are employing probably without their knowledge, illegal, I repeat, illegal aliens.

I have never once thought twice about shopping at Wal-mart until: at a Randalls employee meeting about the different companies that we had competition from it was told to us to not shop at Wal-mart for various reasons, one of them being that Wal-mart has it's own employees health insurance subsidized by other companys. Personally I saw no difference between what Randalls was doing and what Wal-mart was doing.

So here is my take on all of this. I am not a highly educated person therefore my income is limited. I expect that, and understand that as well. Why others expect to make money for no education I don't understand. I am not sure why companies like Safeway are trying to demonize Wal-mart and create an atmosphere of activists where there don't need to be any. Could it be simply because they are losing money in the capitalist world of America, because a small company is making huge leaps and bounds in the retail and grocery industry?

I will continue to use my rights as an American citizen and shop where I get the most for my money. It is not always Wal-mart, but for the most part it is. I also get my gasoline from there gasoline partner Mirastar for which I get a very tiny discount for using a Wal-mart gift card, and since I travel so much it helps me a little. Wal-mart is not my enemy. To try and go down the path of ridding ourselves of a company makes me wonder, just what is next??????

Socialism is not the answer.

Oh, and when I shop my local Wal-mart now, I will not be silent about people that bring their dogs into the store. Since the activists have demonized and discriminated against cigarette smokers, I will do likewise with people that force their dogs into places they don't belong.

I feel that we are in the midst of a silent civil war. Socialism verses a free democratic society. Sad to say the democratic party has almost completely gone socialist, which is communism. I only pray that it doesn't bring bloodshed.



LewWaters said...

Freedom and Liberty is the foundation of America. Without it, we are nothing more than another thrid world country existing under Socialistic Dictators, being led around like sheeple.

For WalMart to have acheived the success it has they have to have appealed to a large base of customers. People are free to shop there or go elsewhere, plain and simple. Why spank consumers because you don't like that someone else built a better mousetrap?

I too looked into this so-called "documentary" and was disturbed to see research quoted that was compiled by "UC Berkley," home of much leftist discontent. Amazing too that they from UC Berkley harbor grudges against capitalism, but offer to sell this DVD AT A PROFIT!

As is seen in much of Socialist Leftist rhetoric, they often excuse for themselves what they complain about for others.

Bottom line, don't shop at WalMart if you don't like them. We have that freedom. But, if we fall into another leftist trap like this, our choices will one day be restrictedto who the left tells us we can shop at.

Jeff Hess said...

Shalom Witchywoman,

That's true. You're absolutely right. Wal-Mart is not the only bad actor in retail.

It is, however, the largest and most threatening to our American values as can be seen in the recent revelations concerning Wal-Mart's dominance in China and the poisonous product that Communist nation ships to American consumers.


Jeff Hess

u∃∃l!∃ said...

ok Lew,
I would agree, that Wal-Mart ALONE is not the enemy.
They are bad for our economy.
But I agree that they are not alone.

Profit is not bad, but in the case of Wal-Mart, a significant percent of their employees are on tax subsidized assistance.
(This is an indirect way of having my tax dollars subsidize Wal-Mart.)
They use their power to manipulate suppliers.
They sell a bunch of cheap junk, and we are flooded with more cheap junk than we even need in this country.

Wal-Mart is NOT the only culprit.

The forces in Capitalism can work multiple ways.
Suppose that WE (as consumers) consider the treatment of employees when we make purchasing decisions. This can cause the treatment of employees to go up to the highest point it can go, while still allowing the company to profit?
Suppose companies knew that people were making purchasing decisions based on employee treatment?

I have decided, that when given the choice, I will choose to solicit companies that treat their employees the best.
I will consider such things as the gap between the top paid and bottom paid employees (of course I expect a gap, some do add more value); percent of employees who are allowed to work full time; environmental practices and more.

The problem is getting correct information.
There is so much information spread based on one groups self interest, that getting the truth is really hard (if even possible).

It is not at all Socialist to form movements in favor of making purchasing decisions based on employee treatment. In fact it is very capitalist.

If capitalism was such, that profit was actually a close measure of value added, I would be 100% in favor of absolute pure capitalism.
But it doesn't really work that way.
There are lots of ways to profit more by adding less value (or even by taking value away).

In a very simplistic model;
Let me compare two processes for getting a chair to market.

Process 1)
Tree cut down in US
Tree shipped to China
Chair assembled in China
Chair shipped back to US
Chair sold in US

Process 2)
tree Cut down in US
Chair assembled in US
Chair sold in US

Process 2 clearly takes fewer resources. Less overall labor, less fuel.

But process 1 yields more profit, even though no more value was added.
In fact, I would argue that less value was added (in that more resources were consumed), yet more profit is obtained.

Should we have regulations?
What if our current capitalist model, leads to behaviors that have a high risk of sending this country into a major depression.
Should the government act?
If by sending a significant number of jobs, out of the country, meant that we would loose our middle class, causing a loss of enough people to buy the products, leading to the eventual downfall of the companies which make the products, leading to even fewer people who could buy the products ...
Should the government act?
Should balancing forces be used?

I am only socialist when it comes to natural resources, I am actually very libertarian when it comes to the value-added market place.
But externalities need to be accounted for. It is very hard to measure them. But we don't even charge for what we do have a clue about measuring.

What if we required that all products imported into this country be made under the same pollution and labor standards as we require in this country
(That doesn't mean the wages have to be as high, if the cost of living is not as high. Minimum wage should be based on cost of living anyway, and does not need to be so high that a person can afford a house. Renting a room in a building with adequate sanitation, and obtaining adequate food, clothing, and medical insurance should suffice for the lowest skilled, non disabled, adult workers.)

LewWaters said...

Jeff and Coboble, do we really need or want the government mandating private business? Shouldn't the consumer do that?

Both of you agree hat other merchants purchase their goods from China (and elsewhere, I might add), but why is it only WalMart under fire for it? Why not target, KMart, Fred Meyers and the lot?

One problem we now have in the nation is that we expect high paid jobs for everyone, but we aren't willing to pay the prices for goods produced by high paid workers.

China and other nations with cheap labor have stepped in and filled that void by supplying lower priced items for us to buy.

We cannot have our cake and eat it too. If we demand higher wages for workers and don't want goods imported to us, we will have to accept much higher prices for goods we use and want.

No one is forced to work for WalMart or anyone else, not yet. Other jobs are available to workers that don't want to work for them. But, a person that fell into the old hippie attitude of don't worry about tomorrow, just live for today and didn't get a good education or master a skill, will be very limited in their choices. Retailers can't be the blame for that.

The more people fall for the left's ploy of "government protection," the closer we get to full blown Socialism where the government will make your choices for you and decide what is best for you. That isn't America, it was the Soviet Union.

WalMart isn't the only store in town, either. They are not always the cheapest, I have found out. But, expecting government to step in and "correct them" is a Pandora's Box you may one day regret.

Consumers will decide what is best for them and shop accordingly.

In the meantime, I don't saving a few bucks of my hard earned money where I can. I work for it and I wish to decide where to spend it.

u∃∃l!∃ said...

I am willing to pay higher prices and consume less.
I have taken a serious look at this lately.

I am advocating that WE (the consumer) start considering employee treatment when we make our purchasing choices.
That is what I ask of you and others.
Start making this a real element in your purchasing decisions.
If enough people do this, market forces will take it from there.

If you are willing to do this, I am willing to consider that
Government regulation is not necessarily the answer.

Don't be pro Wal-Mart just because the left is so ani Wal-mart.

However, clearly there are some cases where it is ok to have government regulation.
What about pollution?
What about stuff that effects our ability to defend ourselves (such as implementing certain technologies in other countries)
What about the risk of a huge depression?

If we do away with regulating how companies treat employees, we must also do away with subsidies that make this treatment tolerable to the employee.
I am anti government subsidies for workers employed by Wal-Mart (and other employers), which enables the employee to be available to the employer
(i.e. subsidized housing).

I am not even certain I am in favor of a minimum wage.
However IF WE are going to have one, it needs to be implemented such that it is based on cost of living in an area, and apply to products imported as well.
I am in favor of the SAME standards for products imported as those produced here.

Wal-Mart achieved a really good level of success operating as a great company. It hit a peak, then in order to grow more it had to adapt values I do not like.
It was about wanting more when they had enough.
(The company I work for has done the same thing).
This idea that a company has to keep growing, is a major problem.
There is a "best size" for maximum value added.
If only companies would recognize that when they achieve that size.
Go back to rewarding stock holders of such companies with good dividends.

My guess is that Sam Walton would not approve of the direction Wal-Mart has taken.

I won't shop at Wal-Mart, but I have not yet decided where I will shop.
Last Christmas I did so little compared to prior years.
This year I may do even less.

I have to do some research still.
I don't think I want to resort to weaving my own cloth (Didn't Gandhi end up weaving his own cloth?).

LewWaters said...

Coboble, while you have every right to shop where you please for whatever reason you please, ifyou adopt the stance of "considering employee treatment" to determine where you will and won't shop, you will be unable to purchase anything as you cannot find a business that does not have employees complaining about mistreatment, real or perceived.

If you stop shopping and everyone else joined in, where will all the taxes come from for unemployment as we will all be unemployed.

I understand your emotion in your stance, but logically, unless you pick and choose and ignore mistreatment elsewhere, you will find that no business passes your muster. Not shopping at these retailers, and it will have to entail more than just Walmart, will result in their reducing their working force and depriving employees of a paycheck, placing them even more on public subsidies.

Remember, no one is forced to work anywhere. We are all free to seek better employment anywhere we choose, so far.

u∃∃l!∃ said...

I don't think you completely got my point.

The movement I propose, does NOT require that one NOT shop anywhere that they feel employees should be better treated;
but ONLY that they choose the place which comes the CLOSEST to meeting their criteria.

The more people who take this into consideration, and let it be known that they are taking this into consideration, the more control we (the middle and low income folks) gain over how corporations treat us.

Of course we have a choice where we work, but only so many choices.

I am guessing that those in the factories in China have less choice.
Wal-Mart employees in the US have it really good compared to those who make the stuff in China. I

LewWaters said...

Let’s take a closer look at your proposal, Coboble.

The movement I propose, does NOT require that one NOT shop anywhere that they feel employees should be better treated;
but ONLY that they choose the place which comes the CLOSEST to meeting their criteria.

Beyond the obvious that you would never get enough people to agree to this, you are cherry picking one corporation out of several you admit also do as WalMart does. People already do this anyway as I won’t spend my money where the company mandates employees off hours conduct i.e.: Scotts Corp for banning any smoking of their employees off the job. That’s my quirk and no one else’s.

Another point. Who within your movement makes this “choice” of who to not shop at? One person’s mistreatment may not be another’s. You are proposing what could easily slip into full blown mandating by government officials as to who may and may not operate a business.

The more people who take this into consideration, and let it be known that they are taking this into consideration, the more control we (the middle and low income folks) gain over how corporations treat us.

Sorry, it doesn’t work that way. If their sales go down, the first thing they do is reduce cost. How do they do that? Lay off employees. Put people out of work.

Now, if you really want to have “control” over corporations, and I disagree with us controlling companies, it has to be employees doing it, not shoppers. If companies can’t get employees and shoppers are lined up and going elsewhere, then maybe the corporation would make necessary changes to attract employees.

That is what Unions were supposed to be, but they have gotten out of hand and are causing us all higher prices, which drove jobs overseas. In some regards, Unions have become what they started out to fight.

Secondly, WalMart and other companies are private companies, owned by individuals or stockholders. The shopping pubic has no interest in the company and has no business mandating what they company does. If for any reason, the shopper doesn’t care for that company, they should shop elsewhere.

The pubic isn’t investing in these companies and has no right to dictate profits, benefits or anything else. It would be the same if your neighbor mandated what you earn. I’m sure you wouldn’t appreciate that.

Of course we have a choice where we work, but only so many choices.

Our choices are only limited by us. It is up to the individual to strive for the education or OJT to learn a skill. As I recently heard on the radio, the companies, not us, own those jobs. We are not owed a job, only the right to seek one and if we impress the company enough, we may get one, for the time being. But, no company owes anybody a job.

I am guessing that those in the factories in China have less choice.
Wal-Mart employees in the US have it really good compared to those who make the stuff in China. I

My guess is that Chinese employees have it better than we realize. Yes, we are better off. In fact, comparatively speaking, even our poor have it really good when compared to poorer nations.

I also find it odd that so many worry about the Chinese worker while demanding we abandon the Iraqi people to their own fate. Maybe not you so much, but many others.

Again, if the Chinese employee feels they are being mistreated, isn’t it up to them to fight their corporations for better conditions? If their companies can’t get decent employees, they too will have to change in order to attract the people they need.

In the meantime, refusing to buy their products ends up costing and hurting the little guy every time, not the company. Just look back to the luxury tax of the early 90’s. Instead of drawing more into the treasury from the wealthy, small companies that built quality products went out of business, putting many out of work and leaving those that imposed the tax begging fellow Congresscriters to repeal the tax.

You may not realize it, but your proposal is at least semi-socialistic and looking at history, socialism always hurts those it claims to be helping in the long run.

witchywoman said...

Well, let me start by saying that I am Lew's wife. Not Lew. He and I don't always agree on all topics, but on most.
I just came from my local Wal-mart and bought an oil filter for $2.89, to be used for 3,000 miles or 3 months, which ever comes first. A true bargain.
As I said once before, I stand on the opposite side of Wal-mart haters. I will take my money where I can get the most for my dollar, period.
I don't understand your discriminating against a company that appears to this person to be a threat to other companies. As far as having power, Walmart is only a business, and has to abide by the same laws of other retail and grocery outlets.
Sam Walton created an American dream, to own a successful business, to make a profit and be in the black.
The reason trying to rid America of one retail giant is dangerous, is because once we begin doing this kind of thing for advocate groups, it will not end with Wal-mart.
If you have a bank account, savings account, momey market account, or save at all, you are part of the capitalist America. Like it or not. We are in a world that revolves around making a profit, or none of us would have jobs.
Coboble, I am afraid that I can not follow your line of reasoning.
We do not buy Scotts lawn products because the have fired, and yes, said that all employees had to stop smoking to work there. Now how they got away with that, I would say is that employees allow it. For this reason we choose to not purchase anything they make.
As far as Wal-mart, I like the prices and will continue to shop there, and the Super Wal-mart is the best!! :)
Oh for the record, like the woman in the documentary, I too was told that I am not management material. Well, guess what? I left the retail and grocery business, and am now a manager with a another company.
As long as we live in America we have choices, (for now).

Socialism is NOT the answer.

u∃∃l!∃ said...

I read all of your arguments and I still don't think that what I am proposing is socialism.
In fact, I see it as very capitalistic.

Why not make employee treatment part of the model?

Suppose store A treats employees better than Store B.
So I choose Store A.
Am I punishing store B because Store A has a better mousetrap?

Suppose Store A and B get the same employee treatment score, and store A sells the item cheaper?
Then I buy at store A.
That is really the better mousetrap, if they can figure out how to sell the item cheaper and treat the employees better.
So what might be sacrificed so there is more money to pay the employees.
I might start with the multi-million dollar salaries and severance packages for the top executives

I am in favor of improving the human condition wherever I have the power to make a difference (and even more so where I have the power to make a difference without sacrificing much myself).
If I was convinced that continuing the war would improve the lives of more people than it hurt, I would be in obvious favor of continuing it.
As it stands now, I am not anti-the-war, but I am not a strong pro-the-war advocate either.
I see it as a volunteer force, costing me only money.
If people's rights could be purchased with money, I would purchase as much as I could afford.

Back to my semi-boycott:
everyone would make their own choices as to what fair treatment is.
Certain measurements might be suggested, but each individual would decide what they considered fair treatment.

We do agree on one thing
That if an individual does not like the way the company does business they should not shop there.
We just have different ideas of what the treatment should be.
(Although I don't buy Scott Lawn Products either.)

I know that higher wages cost a company more and raise the cost of the products.
That is why the gap between the top paid and the bottom paid might be a good measure to use.

Of course I don't expect the CEO to make the same wage as a cashier.
But the gap between the very top and those actually inventing the products is also growing.
Why do those who are on the "Business" end of things end up with more than those who invent the stuff?

I get why a store clerk makes less than I do, and why I make less than a Doctor.
But why does an executive of an insurance company make more than a Doctor?

I don't only have a bank account, savings account, money market account, and stock; I even own property.
I don't believe in land ownership, but I have to adapt to the society I live in and look out for myself.
If I were not to own land, I would have to pay someone else so that I could occupy some land.
(Yes, my views on natural resources ARE socialist, just not my views on the value added portion of the economy).

I don't want to see Wal-Mart put out of business, I want to see them change some stuff about the way they do business.

LewWaters said...

Coboble, what you propose is okay, provided it is why you deisre for yourself. Advocating everyone else accept your standard and adhere to what you claim is correct in shopping, isn't. That's where th socialism comes in.

In the case of my not shopping Scott's products, I don't expect it to be a movement and when I made my decision I contacted them by mail explaining why I will no longer purchase their product. If others do, fine. If not, fine.

The disparity between executive and hourly workers wages isn't always purely the luck of the draw. Often, executives spend years in education and working their way up the ladder to be able to head a large corporation. If they mishandle it and cost the company more than they make, they may recive a bonus to step down, or be fired by the Board, but they are gone nonetheless and may now be unemployable in that capacity.

Another dangerous aspect of your proposal is that it very closely resembles "citizens committees" that popped up after the Bolshevik Revoultion that launched the Soviet Union. Often, they either were or became manned by members of the Politburo, not actual citizens and carried over to everything, except the ruling committees, of course.

Earlier you said that you don't think Sam Walton would approve of the ay they do business today. I think he would. I say that because at the time of WalMarts meteoric rise, I was managingan Auto Center for KMart and it was common knowledge that Walton declared he was going to put KMart out of business. Back east, most every WalMart you find will be either directly across the street from or very nearby a KMart.

Obviously, he didn't succeed, but his vision is growing.

You say you are "in favor of improving the human condition wherever I have the power to make a difference." Did it ever occur to you that shopping companies like WalMart is doing that? They employ a lot of people, often in areas that need jobs. Items purchased for retail from overseas supplies jobs and wages, even if small, that weren't there before. How is that not improving their human condition?

You asked, "why does an executive of an insurance company make more than a Doctor?"

Besides the apples to oranges comparison, Doctors have to carry a large amount of very expensive insurance to cover the potential of a malpractice lawsuit. Sometimes these suits are waranted, sometimes frivolous, someone wanting to make money for a minor offense. Doctors don't have a responsibility to a Board of Directors and Stockholders to produce a profit and make their company grow, either.

But, let's address Dotors and Hosptials. I'm curious why your call for citizen oversight doesn't apply to Hospitals especially. They operate at a profit, overcharge for medications and stays, work nurses and interns like dogs, are often understaffed and often treat patients like they are prisoners.

Your call of "everyone would make their own choices as to what fair treatment is" is already being done, isn't it? By people like yourself, my wife and I choosing not to shop a company for whatever reason, didn't we decide for ourselves already and act on it?

The fair market will adjust and smother unscrupulous business, it always has. Citizens committees ultimately end up putting good businesses out of business and often cronyism keep the unscrupulous in business by removing our choices.

As I have said many times before, liberals and their calls for action usually end up hurting the very ones they propose to help. Don't fall prey to their shenanigans.

u∃∃l!∃ said...

I will give it more thought.

I will watch my stock grow, and not feel as guilty.

I think that if Karl Marx was writing today, he would see stock holders in the same light he saw land owners.
The idea of owning and profiting without adding value.