October 19, 2003

the Wal-Mart effect

Every thoughtful citizen ought to ask themselves: Is it OK for me to shop at Wal-Mart?

The decision to shop or not to shop at Wal-Mart carries so many consequences for ourselves and for our society that the decision should not be made lightly or unconsciously.

Why should we care about Wal-Mart? Consider the recent California grocery strikes, which were apparently spurred by Wal-Mart's decision to enter the Golden State's grocery market. On one hand, it seems clear that consumers will benefit from prices that are 14 percent lower than at Wal-Mart's competitors. But on the other hand, employees will be hurt by wages and benefits that when taken together are 50% less than the current average of unionized grocery workers.

It may seem at first glance to be a no-brainer. Wal-Mart is cheapest! As consumers, we want the best prices we can get. Wal-Mart has earned our business by selling us the things we want for less.

But that's not the whole story. Wal-Mart's low prices are bought at a high cost. As the world's largest retailer, its business decisions affect the entire economy. Not only do its low wages tend to pull down wages for other retail workers, its clout with suppliers tends to force down their suppliers' wages too. This downward drag on employee compensation eventually involves all of us.

Of course, Wal-Mart isn't some external force acting on our society, even though it's often described this way. Wal-Mart only succeeds because we choose to shop there. Their "clout" and "weight" is our clout and weight, collectively.

So we have a decision to make. Do we want the kind of society where wages and benefits are so low that our only real choice is to shop in low-end retailers like Wal-Mart? Or will we say: "Wal-Mart, I've heard about you. I know your low prices are at the expense of worker salaries and benefits. And I've decided that I don't want to buy things from people whose hard work is rewarded with bare-bones wages and virtually non-existent benefits."

And remember: Wal-Mart includes Sam's Club, too...

Posted by Carey at October 19, 2003 08:35 PM

I agree that we, as a collective society, have some decisions to make concerning where we "shop" and do lower prices actually benefit society as a whole, when those particular employees struggle financially, given their low pay and lack of benefits. It is, however, a catch 22 as those employees, and others of minimal education, especially in these tough economic times....don't have too much of a choice. The very people who are working there to keep the establishments open are the very people who need to shop there. What's your solution???? as you can't dictate what society does or how it thinks. Do you ever shop at these "establishments" or benefit from people who do?

Posted by: anonymous at October 21, 2003 10:52 AM

You always have a choice. I'm an impoverished law student but I still manage to do most of my shopping at a coop.

Carey's solution is obvious--don't shop at Walmart if you have any other choice. If you literally don't have a choice, well... um, really, what are you supposed to do?

Posted by: Heidi at October 21, 2003 12:34 PM

I think my point, and the point made in the American Prospect article to which I linked, is that the lack of choice imposed on low-wage workers of the sort employed by Walmart is in part due to the fact that we as consumers continue to support Walmart when it insists on paying their employees rock-bottom wages and offering minimal benefits.

Even if this is a chicken-and-egg situation, I believe the vicious cycle of low wages leading to lack of choice as to where to shop can be broken if consumers make the decision not to shop at places that drive down wages.

Is there a cost? Sure. Consumers might have to buy less, because they're spending more for everything they buy. Someone might wish to argue that the result will ultimately be the same, but since I don't agree, I won't engage that argument unless it's made by someone else.

Posted by: Carey at October 21, 2003 12:47 PM

Okay, I think the question really here isn't "how do we change society". Because, let's face it, sometimes it's not easy to change, since we have so little control.

But I have ultimate control over my life and my money. I know I don't have to shop at Walmart, and so I don't. Period. End of story. Do you really have to shop there?

These are answerable questions. Stick to you and me, and we're fine. Maybe we can't say about John and Jane Doe, but right now, we can't control John and Jane. Don't justify the fact that you won't regulate your behavior because you can't control John and Jane.

Posted by: Heidi at October 21, 2003 12:51 PM

I think the root of the problem is the growing gap between rich and poor in this country. As Heidi stated, "If you literally don't have a choice, well... um, really, what are you supposed to do?"

What you're supposed to do is vote in the damned elections. Vote for candidates who will protect American jobs and wages. Vote for candidates who will require trade partners to pay responsible wages, open their markets to our products, and conduct business in a socially and environmentally responsible manner.

Of course, with the two party political system having such an iron grip on our election process, those same candidates could very well hold to other policies that are damaging to our country as a whole, but that's an entirely different can o' worms.

Another entirely different can o' worms is the very real problem of drastically unequal global distribution of resources and knowledge. Many potential trade partners simply *can't* currently pay their workers what we would consider fair wages or require environmentally responsible business practices and still remain competitive in a global market. Thus the ceaseless clamor of American companies to ship their factories (and recently their tech support and R&D centers) overseas. I mean seriously....how else can they afford their CEO's salary, or "make Bill Lumburg's stock go up a quarter of a point"?*

Of course, all those incredibly cheap goods need a market, and regardless of how cheap they were to produce, you know damned well that the workers who produced them can't afford them. So where do they go? Walmart.

*Gleefully shameless "Office Space" quote.

Posted by: Brian at October 27, 2003 08:30 AM

All "Office Space" quotes, shameless or not, are actively solicited on this blog.

Posted by: Carey at October 27, 2003 08:33 PM