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Pencil_Pusher

Walmart.com

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Nice argument, Jay. I'd love to see some facts to back it up, though. Someone do a long-term economic study of several real small towns and learn how big the impact of a new Wal-Mart really is. Any such data in that muckracking book you mentioned, Allison?

 

Fence, you bring up a good point again about the number of displaced workers. It's hard to argue that Wal-Mart does a better job than a small shop with customer service. A bunch of low-wage drones with no vested interest in the company just can't serve a customer as well as the local old-timer mechanic or bookseller. (I wonder how Wal-Mart's turnover rate compares to similar low-wage employers, like McDonald's...) Not only are the workers less well-trained and motivated, but there are probably fewer of them per retail area. Wal-Mart can staff the whole music section with one cashier and deal in more volume than the two indy music stores that used to employ three punk kids and one burnt-out ex-hippie.

 

Let's say that one young community college grad, stuck in Pittsburg, KS, loses his job at the local record store because Wal-Mart muscles in. He used to make $8/hour -- not too much, really, but enough to live on if you work full-time and live with your folks. Because he's got experience, Wal-Mart hires him on in the music section, but pays him $7.25/hour, just about minimum wage. Now he's making (pre-tax) $290/wk. vs. $320/wk. He'd have to save $30 in living expenses per week by shopping at Wal-Mart to break even with respect to his previous lifestyle. Assuming he doesn't mind spending his cash on the cheap, disposable, sweatshop products lining Wal-Mart's shelves, he still might be hard-pressed to save $30 every week ($120/month!).

 

He won't save much on the CDs he likes -- Wal-Mart's selection is basically limited to "Christian rock", country, and Top 40 shit that will make your brain melt (no Parental Advisory stickers either!). Say, $10/month in savings.

 

Food: he buys all his Mac'n'Cheez at Wallyworld. 10% off his monthly food bill is $30.

 

Car: can't buy gas at Wal-Mart (or can you?), but maybe he can get an oil change for less and stocks up on those pinetree air fresheners. $20/month.

 

What other expenses are there? Beer ($10/month if he drinks the cheap shit at home, nothing if he hits the one bar in town). Rent, utilities, movie tickets, taking his girl out to Olive Garden, phone, car insurance, AOL -- none of these major expenses have Wal-Mart discounts. We're only up to $70 in savings so far (Jay suggested $100).

 

Anyway, it's close, but doesn't seem very likely to me that Joe here is getting the better deal thanks to Wal-Mart.

 

He probably didn't have much of a choice in taking the job, either. There is a net job loss when a more efficient megastore moves into town. Whether that's a small or large net loss is not really relevant. The small town's economy is probably not terribly vibrant, anyway, so Joe can either fight for the Wal-Mart job that replaced two small-business jobs, leave town, or sponge off his parents, collect unemployment, and drink himself into a stupor every night.

 

In any of those cases, someone loses. If he gets the job, someone else doesn't. If he leaves town, there's one less young person in the community (hard to measure the impact of this, but when the people leave, there's not much of a community). If he gets depressed and angry, he could help raise the local crime rate.

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This has been a really stunning little conversation to observe.... I'd say that more than a few of you need to invest some time in a remedial economics course.

 

You sound just like the luddites who worried about all the displaced blacksmiths and buggy producers when cars started becoming more popular.

 

If Walmart can serve the retail needs of a community at a net loss of retail jobs in that community, then that is a GOOD thing. The displaced workers will suffer in the short run, but the economy as a whole will benefit. In fact, it is the capacity to accept just this type of displacement which has enabled all economic growth and development, throughout history.

 

Walmart has found a more effecient means of delivering goods to consumers, perminantly lowering prices for the majority while temporarily displacing a minority. It's called PROGRESS, folks - you might want to hop on board...

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Ralph:

 

It is certainly true that the income of an individual employed by a business that competes directly with Walmart might indeed see his or her disposable income reduced when Walmart goes to town. However, this will not be true of anyone who does not lose their job as the result of direct competition with Walmart, and in the case in virtually every real town, this group will constitute the vast majority of the population. So my original argument still holds. Bottom line - it sucks to be a record-store clerk living in your parents basement no matter who you work for. grin.gif

 

I just don't think that it is fair to impose artificially high costs on the vast majority of the working people for the sake of the few that benefit from such an arrangement.

 

j_b:

 

Who's quality of life? Restricting consumer's options and forcing them to pay more for the goods and services that they need greatly enhances the quality of life for those that benefit from a lack of competition, but diminishes the quality of life for the vast majority of the population when they are forced to pay artificially high costs for the things that they need. When working families can save money by buying the same goods at a lower cost, the amount of money that they have available to spend on health care, clothes for their children, books, vacations, recreational equipment, or to save for hard times increases in direct proportion to their savings on these items, as does their quality of life as they define it. For most people, the fact of the matter is that the amount of money that they have beyond bare subsistence requirements plays a large role in determining their quality of life. You may feel differently, and you of course are free to live your life differently than they do (voluntary ascetic in a vegan commune?), but I fail to see how any self-annointed Friend of The People can argue on behalf of curtailing their liberty to do so.

 

End of response to j_b's query.

 

In all seriousness - and don't take this the wrong way - but where did everyone study (or not study) economics? This is pretty basic stuff, and the argument concerning free-trade, whether it be in small towns or nation states, was settled conclusively centuries ago. Arguing that restricting consumer choice and maintaining artificially high prices in small towns will lead to prosperity in those said towns is perfectly analagous to arguing that imposing draconian tariffs on imports will make a nation more prosperous. This is the economic equivalent of Creationism, a creed long since abandoned by anyone competent to asses the validity of the theory. If you believe such things, do yourself a favor and do some reading - seriously. Henry Hazlitt's "Economics in One Lesson" would be a good place to start, followed shortly thereafter by "The Wealth of Nations" and topped off with Bastiat's "Economic Sophisms" for extra credit.

 

Done. I win. bigdrink.gif

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Stefan said:

marylou said:

Stefan said:

These other small business that are being left behind have had the exact same opportunities, but they were just not smart enough.

 

 

Don't you mean to say unethical enough?

 

Nope. What's unethical about Walmart? Your ethics are different than other people's ethics.

 

 

Didn't you read anything I wrote. Walmart has there own Industrial Insurance. They don't have to answer to Labor and Industries. They have a pattern of denying there employees legitimate work related injury claims. They've lost in court multiple times yet they continue with this practice.

 

Also they change workers time cards so they don't get overtime pay.

 

I run a business and I consider both of these actions unethical. I guess you think fucking your employees is ok Stefan. thumbs_down.gif

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Kurt, for what it's worth, from what you've told me, I'll never shop Walmart again. Thanks for the heads up. thumbs_up.gif

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Well I do agree with AlpineK that Walmart has too often done some unethical things to employees....the time card thing is just pure BS.

 

But as far as having thier own Industrial Insurance, that in and of itself is not a bad thing, its how they manage it that can create probelms. Anyone can be a self-insured company (You have to be able to demonstrate certain things like a certain cash liquidity, no chance of BR, etc.).

 

I don't see Walmart as unethical per se...but some of thier actions have been unethical. frown.gif

 

And as far as the lawsuits go, keep um coming. They help to keep companies, like Walmart, in line. I know many think that sounds crazy, but when Walmart starts shelling out more in jury awards and attorney fees, they'll change thier ways fast...because its more economical to change. shocked.gif

 

Times change and we can't try to stay the smae. Don't fight change, you'll loose.

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Rodchester said:

Times change and we can't try to stay the smae. Don't fight change, you'll loose.

Maybe I'll lose by not accepting change, but at least I won't compromise my principals while I'm going down. That's more important to me personally.

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One of the practices that WalMart has used over and over is mislabeling goods as "made in the USA". It is unethical and illegal.

 

Is that the kind of thing that makes a company a leader in business?

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AlpineK said:

Didn't you read anything I wrote. Walmart has there own Industrial Insurance. They don't have to answer to Labor and Industries. They have a pattern of denying there employees legitimate work related injury claims. They've lost in court multiple times yet they continue with this practice.

 

Also they change workers time cards so they don't get overtime pay.

 

I run a business and I consider both of these actions unethical. I guess you think fucking your employees is ok Stefan. thumbs_down.gif

 

Hmmm......I don't know those exact situations. Is it in the book? Each state has slightly different laws, but mostly they are the same. If a company does something illegal, then they must pay up, and change the practice.

 

As for being self insured. No laws against that. I worked for a company that was self insured. The company was self insured becuase it was cheaper. Walmart likes to do things cheaper and have lower overhead--that's why they can bring lower prices. Walmart doesn't have to pay up for suspicious claims--just like those people you see on TV that have a bad back and our out at their home lifting stuff. I never got into knowing about injuries and such at my work, because I wasn't in the loop.

 

Do you have examples of employees being paid legitimate claims? I am sure you don't. And I am willing to bet that the legitimate ones far outweigh the ones that go to court.

 

Changing working time cards is bad. As with any business and any community you will have a few bad apples--even managers. Many companies have done it--not every person is good. Just becuase a few people out of thousands do it, doesn't mean the whole company does the practice. Get real. And I am sure to believe that many small business in small towns have changed the time cards on their employees--and continue to do it. You just never hear about it.

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It sounds like there are two seperate issues that people have with Walmart:

 

a.) Walmart destroys small towns - this belief is simply false and demonstrates a stunning lack of basic economics comprehension

 

b.) Walmart mistreats their employees and/or engages in other specific unethical business practices - this appears to be at least somewhat accurate; although, if it was really as bad as implied, I doubt if they could keep any employees. In general, if I have to choose between believing a bunch of union activitists and lawyers or a corporation, I'll take the corporation. However, in this instance, it appears that the complaints may be valid.

 

So, if it bothers your conscience to shop at Walmart, just head to Costco or Target; don't needlessly pay extra for the same stuff at some outdated Mom&Pop.

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marylou said:

One of the practices that WalMart has used over and over is mislabeling goods as "made in the USA". It is unethical and illegal.

 

Is that the kind of thing that makes a company a leader in business?

 

Mrs RW,

 

I never bought that bologna from Walmart about USA products. If you believed that, then you believed the Ford truck was made in the USA--but a lot of parts came from Canada/Europe. I think the rule was that 80% of the product had to be from the US--but I am not sure.

 

The problem with the "made in the USA" label is this:

WalMart is a retailer. Not a manufacturer. They bought stuff from the manufacturer assuming the manufacturer was legitimate in their claims. Walmart has probably 150,000 SKUs for every store and probably over 2MM SKUs for all its stores--and in no way can they check out the claims of every manufacturer if what they say is true.

 

Hell, look at what big R has to do with just a certain brand.

 

 

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Stef,

 

I'd suggest you just read the book. The author knows what he is talking about.

 

I am familar with what my SO does to get the good made for the Evil Empire. We talk a lot about it. This, however, is not the place to discuss that. Perhaps over dinner next Tuesday if the offer still stands!

 

It appears that "In Sam We Trust" is no longer in print. given that it was a very popular book, I'm surprised to see it out of print. I'd suggest the county library system, I'm sure they have a few copies of it.

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PLC said:

Walmart has found a more effecient means of delivering goods to consumers, perminantly lowering prices for the majority while temporarily displacing a minority. It's called PROGRESS, folks - you might want to hop on board...

 

Is the development of antitrust legislation and enforcement also considered PROGRESS? Until antitrust laws enabled government to break up unethical abusers of commercial power, the few rich robber barons were able to control prices to benefit themselves.

 

In order to cooperate with a democratic political system, capitalism must have checks and balances to bring the will of the people into consideration.

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Actually, anti-trust is mostly just used as means of blackmailing successful companies into contributing to political parties.

 

That is not to say that capitalism would work well without a proper legal system (to secure private property, for instance), just that the positive impacts of A/T have been vastly overblown.

 

Big monopolies inevitably fail, because there are very few true monopolies (there are none in the long term) and because size and market power lead to beaurocracy and stagnation.

 

If you look at the history of retail, you'll see that Walmart has maybe 10 more years before the decline starts. In 20 years, they'll be K-mart.

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JayB said:

Bottom line - it sucks to be a record-store clerk living in your parents basement no matter who you work for. grin.gif

 

Word.

 

JayB said:

I just don't think that it is fair to impose artificially high costs on the vast majority of the working people for the sake of the few that benefit from such an arrangement.

 

I agree, but it's easy to shift the costs to someone else or to something less measurable by economic indicators. The usual economics is not sophisticated or forward-thinking enough to account for long-term environmental damage, for example, or social degradation.

 

Again, I'd really like to read an in-depth economic assessment of Wal-Mart's impact on small towns. Until then, we're all just bs'ing.

boxing_smiley.gif

 

JayB said:

In all seriousness - and don't take this the wrong way - but where did everyone study (or not study) economics? This is pretty basic stuff, and the argument concerning free-trade, whether it be in small towns or nation states, was settled conclusively centuries ago. Arguing that restricting consumer choice and maintaining artificially high prices in small towns will lead to prosperity in those said towns is perfectly analagous to arguing that imposing draconian tariffs on imports will make a nation more prosperous. This is the economic equivalent of Creationism, a creed long since abandoned by anyone competent to asses the validity of the theory. If you believe such things, do yourself a favor and do some reading - seriously. Henry Hazlitt's "Economics in One Lesson" would be a good place to start, followed shortly thereafter by "The Wealth of Nations" and topped off with Bastiat's "Economic Sophisms" for extra credit.

 

I never studied economics in school. Too much else to do at the time. I did get a broad education, though, with plenty of science in the mix. So I have a hard time believing that "the argument concerning free-trade... was settled conclusively centuries ago" just by hearing that JayB's selected sources say so. Evidence to the contrary suggests that there may yet be arguing to do. There's no evidence to back up Creationism, that's just dumb.

 

Tariff barriers have a long history of helping developing nations improve their economies. When competing against industrialized nations, countries with weaker economies (less cash) impose tariffs to favor their nascent industries until those industries have a chance to mature and the government can use the tariff income to develop sufficient infrastructure to allow the growing industry to become competitive. Only then is "free trade" a reasonable economic choice.

 

Remember how Bush passed tariffs on steel and softwood imports that got Canada all huffy? Where's the free trade, George? The US (through the WTO, World Bank, etc.) pushes for free trade because it knows it can dominate smaller economies (most of them), but feels free to be protectionist when it needs to. Duh, capitalism.

 

I need to do some more reading. Want to lend me any of those books, Jay?

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The essence of the "all capitalism is good" argument for Walmart deftly ignores the social costs, as if all that matters is the cost of toilet paper and canned green beans. As if life in rural areas was somehow oppressed by local merchants before Walmart came to liberate them.

 

And ignored is the economic data that wages drop when Walmart comes to town and that 2-3 local jobs are lost for every gained Walmart job. Check out "In Sam We Trust" it's very well documented.

 

I'm not against capitalism but when pushed to it's logical Walmart conclusion it favors profit (usually for a small elite) over any social benefits. Gotta save costs so keep wages extremely low, fire anyone who smells of union, fore employees to work off the clock. If Walmart really cares for its employees then why don't they provide a reasonable health plan, a livable wage, and drop their slew of questionable business practices (for which they'er in court all over the US).

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Jim said:

Gotta save costs so keep wages extremely low, fire anyone who smells of union, fore employees to work off the clock. If Walmart really cares for its employees then why don't they provide a reasonable health plan, a livable wage...

 

I think the vast majority of people are smart enough to decide if wage and benefits are good enough for them.

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Stefan said:

Jim said:

Gotta save costs so keep wages extremely low, fire anyone who smells of union, fore employees to work off the clock. If Walmart really cares for its employees then why don't they provide a reasonable health plan, a livable wage...

 

I think the vast majority of people are smart enough to decide if wage and benefits are good enough for them.

 

That's a cop-out not an argument. If you mean tough luck that's the way it works - that's an opinion - and in my opinion still ignores most of the issues I raised.

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slothrop said:

I never studied economics in school. Too much else to do at the time. I did get a broad education, though, with plenty of science in the mix. So I have a hard time believing that "the argument concerning free-trade... was settled conclusively centuries ago" just by hearing that JayB's selected sources say so. Evidence to the contrary suggests that there may yet be arguing to do. There's no evidence to back up Creationism, that's just dumb.

 

I did study economics. In fact, I am an economist. And I can assure you that Protectionism has LESS evidentiary support than Creationism. It is a settled fact that free trade leads to prosperity for all parties involved. This is not disputed by economists.

 

Trade barriers have a long history of leading to poverty and misery. There is no history of trade barriers leading to development.

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While this may be true, "free trade" as practiced by the big players, especially the US is not "free" at all. We force the hand of small countries to open markets to our products but then refuse to stop our subsidies that can, and do, have large effects to their economies. Case in point is Ghana where they dropped their barriers to agriculture products from the US, where cotton produciton is heavily subsidized. So there went local profit centers. They don't have the resources to prop up their agriculture as we do and have little recourse. Oh yea - they could take it to the WTO - they have lots of resouces for that too. As usual we apply the rules of free trade as we see fit to meet our "national interests".

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Jim said:That's a cop-out not an argument. If you mean tough luck that's the way it works - that's an opinion - and in my opinion still ignores most of the issues I raised.

 

Its not a cop out. It's the truth. It's not tough luck either. It's called the market. The market reflects the most information to the consumer. If wages are high and the skill level to enter a job is low, then people will go to that job. A general merchandise retail employee does not need a lot of skills.

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PLC said:In fact, I am an economist.

 

Hey PLC, gotta question. I remember in my economics class that tarriffs inevitably hurts the country that puts the tarriffs on. Is this generally correct? What about subsidies? Just interested becuase of the recent tariff war on lumber with Canada.

 

 

 

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But they were doing just fine without Walmart, likely had a higher base wage, and had more jobs not less. Even from a narrow view of economics only what's is the benefit to these people. Oh yea, cheap toilet paper. No thanks IMO ethical choices should be a part of business and personal decisions - the dollar doesn't rule all.

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PLC said:It is a settled fact that free trade leads to prosperity for all parties involved. This is not disputed by economists.

 

Trade barriers have a long history of leading to poverty and misery. There is no history of trade barriers leading to development.

 

Hmm... I seem to read an awful lot of controversy over free trade these days, and whether it works economically for developing countries. The World Bank's free trade policies have left many developing countries in poor shape. I don't see every economist agreeing that free trade is unassailable.

 

Why do trade barriers exist? Is there ever a good reason for tariffs?

 

Are state industries (one way to be protectionist) always a bad idea, even in the short term?

 

What are alternative methods of keeping international competition from overwhelming developing industries?

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