Gourmet's Wal-Mart article

[marlowe]

Let's make it simple. It appears that individuals want to make as much money as possible, and to keep as much of it as they can. We employ tax strategies to maximizie disposable income, and then shop for the lowest price goods and services, in order to maximize our savings.

But if the suppliers of those goods and services are bid down to the lowest profit margins, or are forced out of business entirely, then they can't buy the high margin goodies produced by the people who want to make as much money as they can. This puts the jobs of the people who make and sell things, especially high value added things like automobiles, for example, at risk.

Much of our consumer transactions are made by credit already. Interest rates are rising. Less money will be available for everyday consumables when that borrowing has to be repaid. I think you can surmise the rest of this scenario.

Doom.

[TPO]

True, but those costs can be hidden as opposed to the immediate "savings" at the cash register.  For those living paycheck to paycheck, saving an extra few cents per item means bus fare to get to work.  Yes we should all think about the future but there are some who don't have the luxury, especially in small towns where the shopping choices are few.

Without Wal-Mart's labor practices influencing other corporations, these people might be earning enough money so that they don't have to choose between food and bus fare. But until they earn enough, they are stuck making such choices. It's a vicious circle.

As far as unions go, here's my opinion. Many companies don't want workers to unionize. Happy employees don't usually feel the need to unionize. Therefore, a company's best defense against unionization is to treat their employees well. The fact that we all have the legal right to unionize is our best guarantee that we will be treated well.

When companies like Wal-Mart skirt the laws that guarantee us this right, the damage is far more serious than just one company trying to keep unions out. Without a right to unionize, we all are at the mercy of companies and have to trust that they will treat us well out of the goodness of their hearts. And judging by the current maximum-profit-no-matter-what-the-cost atmosphere in today's society, I'm not confident about what those hearts would have in store for us.

[hjshorter]

True, but those costs can be hidden as opposed to the immediate "savings" at the cash register.  For those living paycheck to paycheck, saving an extra few cents per item means bus fare to get to work.  Yes we should all think about the future but there are some who don't have the luxury, especially in small towns where the shopping choices are few.

Without Wal-Mart's labor practices influencing other corporations, these people might be earning enough money so that they don't have to choose between food and bus fare. But until they earn enough, they are stuck making such choices. It's a vicious circle.

I wasn't speaking of Wal-Mart employees.

[TPO]

True, but those costs can be hidden as opposed to the immediate "savings" at the cash register.  For those living paycheck to paycheck, saving an extra few cents per item means bus fare to get to work.  Yes we should all think about the future but there are some who don't have the luxury, especially in small towns where the shopping choices are few.

Without Wal-Mart's labor practices influencing other corporations, these people might be earning enough money so that they don't have to choose between food and bus fare. But until they earn enough, they are stuck making such choices. It's a vicious circle.

I wasn't speaking of Wal-Mart employees.

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I wasn't either. I have read articles about how many businesses are following the Wal-Mart model for lowering employee wages. Wal-Mart's labor practices and their fight against the right to unionize drive down wages and benefits in more than just the retail industry.

No matter where an American works, they make a contribution to our society. That's why I feel it's tragic that in the richest country in the world anyone would receive pay at any job that is so low they have to make such difficult choices.

[DTBarton]

Here's an interesting (and loooong) article on the anti Wal-mart battles being fought in the greater DC area.  The major drivers are the food workers unions.  The bill passed in Maryland mandating health care spending by private employers with over 10,000 employees was lobbied heavily by the unions (including hefty donations).

Here's some wage and benefit data from the article:

Unionized grocery chains do the same, but they simply cannot match Wal-Mart's buying power or its lower labor costs. Wal-Mart's hourly wage in the Washington region is $10.08, while Giant's and Safeway's is $13.19, the companies said. With overtime, the figure rises to $16 an hour for the union chains. Giant's and Safeway's health care plans cost the chains $12,249 for every full-time employee, nearly twice what Wal-Mart pays for a typical family plan, the companies said. Wal-Mart's cost for health benefits depend on the plan and deductible chosen by employees. While Wal-Mart workers have a 401(k) plan, with the chain matching up to 4 percent of employee contributions, depending on annual profit, Giant and Safeway are required by the union contract to pay into a more expensive pension plan.

So, the unionized stores do pay more, don't know how much of that goes back in union dues, but still, $10/hour is twice the minimum wage.  The health care plans for the union cost twice as much.  I wonder if they're twice as good?  I bet they're about the same and the extra expenditures mandated by the union contract provide the extra money needed to slush around in your lobbying efforts.  Same for the retirement benefits, gotta keep the money flowing to the union bosses and the politicians!

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I don't see how that last paragraph goes with the rest of your post, which seems to detail a successful fight by unions to increase pay and benefits for workers. For some reason, you "wonder" and "bet" that the unions are actually harmful to the workers, although the facts you cite would seem to show them as having benefitted the workers. And if you want to complain about pay for union leaders and lobbying and campaign contributions by unions (which seem to have benefitted the workers in this case), what do you think the money Walmart pays to its executives and to contribute to and lobby politicians is costing workers?

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My point was:

1. You would think from the comments about Wal-mart that they were paying slave wages with no benefits. This data shows that they're paying twice the minimum wage and offering benefits. Let's say a young couple in Virginia decides to make their way with the evil Wal-mart. Both of them making $10 dollars an hour equates to an annual wage of $40,000 with health coverage, 401K, and profit sharing. The federal poverty level for a two person household is $14,000/year.

2. One would also think from some of the comments herein that the opposition to Wal-mart is grass roots Mom-n-Pop. This article shows that the opposition is well organized, well funded, politically connected large companies (Giant food (owned by multinational behemoth Ahold), Safeway) and their workers' unions trying to muscle out competition.

I don't have a dog in this fight, don't shop at Wal-mart, go in to Sam's club about twice a year. I just think that the Wal-mart (and only Wal-mart) bashing is irrational.

All these notes above about what Wal-mart is "costing" the government. OK, same situation for every business that employs people at $10/hour or below. But let's look at the numbers.

From an earlier post: "$420,750: the estimated federal taxpayer cost to operate one 200-person Wal-Mart store for one year"

From the Washington Post article: "The supercenter employs 500, will generate as much as $1 million a year in county sales tax revenue and has already given $12,000 to local charities, according to the county."

So, the Wal-mart is well in the black on a cost/benefit ratio, and they're only looking at local taxes, not the federal and state taxes that the store would pay over and above the county tax.

[hjshorter]

OK, I understand where you're going and I agree.

I think marlowe's scenario is right on:

Let's make it simple. It appears that individuals want to make as much money as possible, and to keep as much of it as they can. We employ tax strategies to maximizie disposable income, and then shop for the lowest price goods and services, in order to maximize our savings.

But if the suppliers of those goods and services are bid down to the lowest profit margins, or are forced out of business entirely, then they can't buy the high margin goodies produced by the people who want to make as much money as they can. This puts the jobs of the people who make and sell things, especially high value added things like automobiles, for example, at risk.

It appears that individuals want to make as much money as possible, and to keep as much of it as they can. that's where the problem lies - almost no one thinks beyond this part. It's an uphill battle getting people to look past their own pocketbooks, for a variety of reasons - corporations know that and exploit it.

[corinne]

Why are we so shortsighted? I'll eat this "delicious" mcDonald's hamburger today and won't have to deal with the health consequences for twenty years,... I'll buy cheap at Walmart today and worry about the downstream effects when the yuan starts trading at its real value sometime in the future.

I think many of us are paralyzed by fear and ignorance, but at least admit there's a BIG problem.

Having just read "Fast Food Nation", I was fuming to learn how America subsidizes loans to fast food franchisees who may go bust. Everyone loses but the corporation. Now we are subsidizing Walmart.

I went with a friend last week. It was my first time in many years. The prices were so low that it was scary, now I see why.

[CharityCase]

I don't endorse wal-mart bashing for bashing's sake. And I respect that for me to have this discussion and make certain shopping and consumption choices puts me squarely in an income bracket that is capable of making these choices at all.

What Wal-Mart represents, in its ethical code of conduct, McDonald's-like approach to unionization attempts, willingness to erect windowless and completely depressing store designs, preaching of moral and religious dogma through highly selective product and service offerings (as per the morning-after pill example), methodical destruction of rural economies and what's likely to be monopolization of the world's consumer spending....it represents the worst of humanity. Is a corporation a human being? No. Is my experience in a store a real human experience? Yes. Do I value a shopping experience that is convenient, fairly-priced and accesible? yes. Am I willing to "brave" Wal-Mart and take on unforeseen levels of cognitive dissonance? No. Are my resons based in both factual and opinionated arguments? Undoubtedly.

Now admittedly my opinion is not based squarely in the per capita costs, average annual employee in come and other statistics that have been presented on both sides. And to repeat myself these obervations are valuable in stemming the rhetoric that anti-walmarters have put forward that rubs skeptics like me the wrong way, mainly that wal-mart is evil hjust because of its size.

As for solutions one of the posts pointed to something that interested me:

"I don't shop at Walmart because I find it dingy, messy, and crowded and the staff isn't very helpful."

Certainly the "evolve or die" mentality has to be firmly in place for smaller independents to survive in the face of an organization gauranteed to reduce their profit margins to the size of a thimble. I would never think to just prop up a poorly maintained and poorly serviced store simply because it's independent. And my reasons for not shopping at Wal-Mart are two-dimensional:

1. I disagree with Wal-Mart's business practices

2. I frequent Mom and Pop stores that have a distinctive competence in product knowledge, customer service, availability of new or hard-to-find products, and lastly an improved overall shopping experience.

The once or twice I have been to a wal-mart I've left feeling disenchanted with humanity. That may not be a rationale that suits all of you but I've been fine with a 10-cent premium if it left me smiling on the way out the door.

[laurenmilan]

We don't have a local Target but I prefer to drive the 45 miles to the nearest Target than shop at Wal-Mart for ALL the reasons you mentioned.  What's even more terrifying is that our dirty and dark Wal-Mart is about to become a Superstore.  God help us all.  We'll lose at least one grocery store because of it I have no doubt.  You couldn't pay me to shop at our Wal-Mart now, but I won't shop for food there - ever.  Just the thought of it makes my skin crawl.

I have a Wal-Mart 5 minutes away from me... I go in there maybe one every 2-3 months.

About once every other month, I make a huge provisions run, spending around $100-200... at the Target 30 minutes away.

Why? Quite simply, you go into Target, everything's clean, orderly, and there's a lot of cool, stylish stuff. Going to Wal-Mart puts a knot in my stomach. Annoying people hanging out in the parking lot and the front entrance, the place is always overcrowded, the aisles packed and messy, and the employees, even by retail standards, are dumber than dirt. My local Wal-Mart doesn't have a grocery store, but I cannot imagine how bad it would be considering what's already there....

Edited May 24, 2005 by laurenmilan (log)

[Osnav]

Ok, I started reading this thread at 6AM this morning and have been biting by tongue, starting and deleting replies, and trying to temper my response. I spent some time elsewhere on eGullet talking about Food. But I'm back and NOW...

Damn right I'm a Wal-Mart basher!!

The bastards deserve it!

(sputter, sputter)

1. Anyone who puts Wal-Mart, Target and Cosco in the same barrel is a Moron. Other than being big companies there is nothing remotely similar about them.

2. To those who say "You don't have to shop there". you too, are Morons. Just because I don't shop there doesn't mean Wal-Mart does not profoundly affect my life. I have a friend who lost his job because Wal-Mart demanded that the vendor my friend worked for cut cost (ie outsource production to China).

Wal-Mart does not give a damn about America. Wal-Mart cares about Wal-Mart, and Wal-Mart only. That is why so many of Wal-Mart's products are foreign produced.

Wal-Mart thinking is in lockstep with the 19th century robber barrons Andrew Carnegie, JD Rockefeller, et al. only instead of hiring Pinkertons to beat&kill unionizers Wal-Mart simply threatens then closes stores that vote in unions.

Why do you think the giant strikes in S. Cal. supermarkets happened? Wal-Mart's anti-union, low pay jobs make it impossible for supermakets to compete. There is only a 1-2 percent margin on food item sales in supermakets and they pay a living wage to their checkers and employees. Wal-Mart with its low wages can undersell the supermarkets. The supermarkets caught in a corner have tried to take back some of their employees wage and benefits packages in order to compete with Wal-Mart. Thus, we had this long horrible strike. This affected ME!

The full results of Wal-Mart's food expansion has not been felt yet. We are moving in the direction of low end (read Wal-Mart, Aldi, box store type grocers) and high end (read Whole Foods, high end speciality stores, etc.) with the middle class supermarkets being squeezed out. The supermarkets, the traditional home of middle class food purchasing are not long for this world.

The results will be no choice at the bottom end and very expensive choices at the high end.

Let me repeat, this affects ME!

And lastly, because I've been holding my breath while writing this and I am beginning to feel faint, Wal-Mart is a leader in the homogenization of America. The same thing available everywhere. Damn it! I like regionalization. I like going to PA. and getting Herr products, and Jays potato chips in Chicago, and Gates B-BQue Sauce in Kansas City. I don't want everything the same everywhere.

(BIG GASP of Air)

Ok, I feel better. Bye

[TPO]

I think many of us are paralyzed by fear and ignorance, but at least admit there's a BIG problem.

Having just read "Fast Food Nation", I was fuming to learn how America subsidizes loans to fast food franchisees who may go bust. Everyone loses but the corporation. Now we are subsidizing Walmart.

And that, in a nutshell, is what is funny about America. We claim we are a capitalistic society but in reality, we aren't. We are a society that privatizes profits while socializing risk and cost. A corporation such as Wal-Mart can open up a new store and we'll give them subsidies and tax breaks and and pay for the health care, reduced school lunches, and other benefits for their low-paid employees. Meanwhile, they get to keep the profit and benefit from the labor of their employees. Then in the end, if the store fails, the taxpayers will be there to pick up the pieces.

Fifty years ago corporations paid 50% of the taxes in this country. Now they pay 15%. Who do we think is picking up the slack?

The full results of Wal-Mart's food expansion has not been felt yet. We are moving in the direction of low end (read Wal-Mart, Aldi, box store type grocers) and high end (read Whole Foods, high end speciality stores, etc.) with the middle class supermarkets being squeezed out. The supermarkets, the traditional home of middle class food purchasing are not long for this world.

The results will be no choice at the bottom end and very expensive choices at the high end.

This very true, and very sad. Not just for food selection, which is very important, but also for prices. In my experience, when other grocery stores close, Wal-Mart prices go up. Significantly. They aren't offering low prices out of some sort of duty to the human race, they do it because they want to undercut the compeition. Without competition, there is no need for lower prices in that particular store.

[DTBarton]

"1. Anyone who puts Wal-Mart, Target and Cosco in the same barrel is a Moron. Other than being big companies there is nothing remotely similar about them.

2. To those who say "You don't have to shop there". you too, are Morons. Just because I don't shop there doesn't mean Wal-Mart does not profoundly affect my life. I have a friend who lost his job because Wal-Mart demanded that the vendor my friend worked for cut cost (ie outsource production to China).

Wal-Mart does not give a damn about America. Wal-Mart cares about Wal-Mart, and Wal-Mart only. That is why so many of Wal-Mart's products are foreign produced."

I'll have to go to Target and Costco, I didn't realize they had an 'American goods only" policy, ha! Hard to run a retail store these days without foreign made goods, the foreign making brought about in large part by union contracts that demand wages far above the value of the worker's production.

Well, I'm glad that if I have to be a moron, at least I'm a proper, capitalized Moron!

I give up. You all win. Wal-mart is an evil corporation that will indeed (per some of the thoughts in this thread) result in the destruction of the food supply, possibly cause a potato famine, and generally lead to the ruination of life as we know it. They will eventually enslave us all in giant, flourescent lighted, inadequately windowed gulags patrolled by fat, unnattractive, pasty faced, big haired, slack jawed, impolite corn dog and twinkie eating, white zinfandel drinking Morons from Arkansas wearing ill fitting, foreign made polyester clothes and non-stylish footwear. We'll be paid in Wal-mart scrip and forced to buy everything from the company store (aaaah! Wal-mart!) and live in dingy barracks constructed from blocks of industrial cheese and disposable diaper boxes. They're coming for us, platoons of undead blue dots cutting prices willy-nilly!

I have decided to join the ranks of the officially afraid.

At least until cocktail hour, which is coming right up.