Monday, August 28, 2006

How being anti-Walmart is hurting the Democrats

A Washington Post columnist explores an issue I've been talking about for years here.

Basically, my issue has long been that people love to unfairly single out Wal-Mart because they wouldn't shop there anyway and that Wal-Mart is, on the whole, good for the poor and that the politicians bitching about Wal-Mart are doing it because poor people mostly don't vote and upper middle class people mostly do. I do still believe that Wal-Mart should be punished when it breaks the law, though I don't believe in writing new laws that apply only to Wal-Mart.

FWIW, I'm still having this argument here, though my latest response hasn't gone through moderation yet.


CC

16 comments:

LaReinaCobre said...

Wal-mart is like the Microsoft of the retail industry.

Bill Baar said...

We've been going over it here in Chicago were the City Council voted a min wage requirement target just at Walmart.

It amounts to driving Walmart out of impoverished neighborhoods where there is no retail to begin with.

It boils down to red lining which is what Mayor Daley rightly called it.

ogre said...

Wal-Mart is not good for the poor. It can look that way--as long as one operates in a narrow context, kind of like throwing garbage away... and it's gone, right?

There's no away. That garbage is still complicating your world.

Wal-Mart screws the poor in complex ways. It screws their society, their community.

If they all burst into flames, including their distribution centers, I'd call it an act of God.

Cerulean said...

Given what fuel costs have been doing in the last two years, Wal-Mart's extensive distribution systems must be getting more expensive to operate every day. Their windowless large-volume stores have mammoth HVAC demands, and their expanses of parking lots are lit up like the World's Fair 24/7. The same can be said for Target, Winn-Dixie, and many others.

Most American businesses have built their business models on cheap plastic, gasoline and electricity (and the same goes for suburban developments). If the Long Emergency is truly upon us already, then the business models that thrive over the coming decades are the ones who are least dependant on energy costs.

If those costs continue to rise, big-box retailers will either have to raise their Everyday Low Prices in order to make up for it, or they will have to find greener ways of operating. Being the 500lb gorilla, Wal-Mart is in the best position to instigate change for the better. Turn off 25% of the parking lot lights after hours. Run the trucking fleets at night when there is less traffic. Cover the store roofs with solar panels and skylights. In fact, if they did this now, they savings they'd make could translate to even lower Everyday Low Prices.

Conservation isn't just for liberal treehuggers. It makes good business sense... "the money you save might be your own". And if you are right, CC, then the poor will benefit the most.

Epilonious said...

ogre: Such complaints are lovely when backed by evidence.

Early Riser said...

cerulean - I'm in the Logistics industry and I can tell you from an industry insider's perspective that Wal-Mart is VERY forward thinking when it comes to reducing any and all forms of economic waste... and that includes their enormous spend on energy.

Whenever I speak to non-corporate folks (most UUs), I'm always frustrated by the general perception that senior corporate managers are dolts. Wal-mart knows several orders of magnitude more about how to squeeze more MPGs out of their truck fleet than you can fathom.

If anything, higher fuel prices will make wal-mart MORE dominant due to their commanding scale and innovative nature.

PG said...

CC,

Matthew Yglesias noted the donkey in the living room: Wal-Mart and similar retailers are extremely anti-union, and aside from whatever you may think of organized labor, the Ds recognize them as a big help politically.

epilonious,

The evidence is mixed. For example, "Overall, there is some evidence that Wal-Mart stores increase total employment on the order of two percent, although not all of the evidence supports this conclusion. There is stronger evidence that total payrolls per person decline, by about five percent in the aggregate, implying that residents of local labor markets earn less following the opening of Wal-Mart stores. And in the South, where Wal-Mart stores are most prevalent and have been open the longest, the evidence indicates that Wal-Mart reduces retail employment, total employment, and total payrolls per person."

Also, I don't think cerulean's concerns are addressed simply by saying that Wal-Mart's management is much smarter than any of us. Wal-Mart surely can squeeze for bulk discounts on fuel, just as it does for everything else, but the fact that Wal-Mart can keep its costs down does not mean that its actions are good for the rest of us. If I can get gas cheaply, good for me, but that doesn't address the problem of resource depletion and pollution.

Michael Pollan had an interesting piece on Wal-Mart's move into the organic market: on the one hand, it would make better food accessible to families, and hopefully make more sustainable practices the norm in agriculture; on the other hand, Wal-Mart's insistence that no organic item be more than 10% higher than the cost of the non-organic is going to push providers to the absolute limit of what the government still will allow them to certify as organic. Even more stuff will be shipped in from the cheapest place in the world for Wal-Mart to get it, rather than from the cheapest place -- accounting for negative externalities that don't affect Wal-Mart's profits -- for the planet.

Some values just don't show up on a balance sheet, and to assume that the pursuit of profit always will result in the best results for the entire society ignores factors like environmental impact.

Joel Monka said...

The thing I notice most in the Walmart debates are the false choices. For example, it's almost never a choice of paying a little more to buy from a mom & pop shop; the M&P's usually don't have the products at any price. I grew up with the little neighborhood grocery stores, and you can still find them in rural Indiana... your produce choices were lettuce, celery, onions, and potatoes. Corn in season. Period- all else was canned. Meat choices were deli bacon, hamburger, porkchops, and a roast. Steaks if you order ahead. Period. Fish choices were Ms. Paul or Gorton's- never fresh. Appliance stores carried only floor model TVs, because there was no profit in smaller ones, and the smaller stores had to make more per item.

It's another false choice about Walmart as employer- your real choices outside of Walmart if you have no/few skills are unemployment or working for a M&P- and Indiana is a "right to work" state, which means you can be fired for any reason or no reason; absent provable racial discrimination, you have no legal remedy whatsoever. You can have your hours cut for a week as punishment, causing true hardship, for such offenses as attending the wrong church, or because your child snubbed another worker's child. Walmart's corporate personnel policies are actually superior to the state's support for the M&P's employees. Oh, and by the way, the M&P's don't have health insurance, either; go to an insurance company and try to buy coverage for a group of five employees.

I had a real laugh at a flyer a year back protesting the new Walmart in Greenwood, again arguing that it would drive the local grocery store under. The local grocery was a Kroger's- another multi-state chain! Few remember that Kroger's drove A&P under, or that A&P put the independent butcher and baker out of business... let's all return to 1910!

Fact: Walmart (and Meijer, and the other heartless corporate chains) are giving the working poor product choices and low prices they have never had before.

Fact: Working conditions at Walmart are almost always better than at any other non-skilled job available; that's why there's always 20 applicants for every position.

Fact: If the above facts were not true, Walmart would still be a small appalachian M&P.

SC Universalist said...

"Fact: If the above facts were not true, Walmart would still be a small appalachian M&P."

huh? when was Wal-Mart even a small Appalachian M&P? Or is this some sort of odd geography joke? Does calling this a fact discount everything else?

Joel Monka said...

In 1962 Walmart was a single store in Rogers, Arkansas, not even incorporated, owned by Mr. & Mrs. Walton- it wasn't incorporated until 1969, which makes it a Mom & Pop. I did mispeak as to geography; I had meant to say "Ozark" and my mind wandered. So I guess that invalidates all the rest of what I said.

Epilonious said...

SC Universalist:

"And in 1962, the first Wal-Mart store opened in Rogers, Arkansas." - Wikipedia.

Otherwise, I see most Anti-Walmart movements as a simple "follow the money" scheme: "Wal*Mart is Huge and Visible, everyone knows it, so if we spread horrer stories as if something bad is happening at ALL Wal*Marts... we get attention and money for Our Cause"

SC Universalist said...

Eplionious: my comment was based on only on the line "Fact: If the above facts were not true, Walmart would still be a small appalachian M&P." Which of course (as later admited) not true at all - as Wal-Mart was never Appalachian. Thus to my eyes pretty darned funny! - in a logic debating society kinda way, of course. (to explain humor is to kill it, but if you dont get it, then it isnt funny anyway is it?)
oh well, carry on....

PG said...

Multiple mom and pops foster competition as well as small-business ownership. I don't know if this is an immigrant's kid thing (or maybe an unconsciously Marxist one), but I do see a value in widespread ownership. I like that the private company for which one of my friends works allows the workers -- and workers only -- to buy in and have partial ownership. Even after working at an HMO, I prefer doctors to have their own practices in which they are partners, rather than being employees and managed by people who are not practitioners.

I like that my town still manages to have multiple grocery stores to compete on the freshness and variety of products. I went to Kroger's today because of the sale on hothouse tomatos; I may go to HEB next week because they're the only ones who carry Naked juice, and to a third grocery the week after if I need brie cheese because it's the only place in town that sells it. Wal-Mart's tilt effect (bring as much commerce under one roof as possible -- now with banking!) stems that competition in the name of efficiency.

My boyfriend has the same feeling about Wal-Mart that Joel does, so I've heard the argument many times before. For people from really tiny towns, less than 10k population, Wal-Mart can be an enormous boon. But in my town of 30k, it's dried up the mall and downtown, so now in addition to the swamp that was drained to build the Wal-Mart (which made my environmentally- minded 5th grade teacher swear never to shop there), the old sites of commerce are being dropped and new land cleared to be closer to the Wal-Mart. I know it seems weird to be nostalgic for a mall, but when it was a center of the town, the Waldenbooks in it did fine. About a decade after Wal-Mart came to town, the Waldenbooks closed, and we have no store dedicated to selling new books. You can get some new books at Wal-Mart, or at the video and music store that also has a book section.

I'm not sure that Wal-Mart is a political abstraction, except to people who never have lived in a place that has one (New Yorkers). I think most people have their reactions to Wal-Mart based on actual experiences with one, the claims about "upper middle class people" who "wouldn't shop there anyway" notwithstanding. I end up stopping at Wal-Mart almost every time I come home. My mom gave my little sister and me Wal-Mart gift cards for Christmas (she didn't realize that there were parts of the country desolated of Wal-Marts, and that her daughters were living in such parts).

Chalicechick said...

If it took TEN YEARS for the Waldenbooks to close, are we really sure that Walmart is responsible?

Waldenbooks is a chain after all, and chains don't hesitate much in closing unprofitable stores. Were Walmart the direct cause, I suspect it would have closed earlier.

CC

PG said...

To make the connection stated here:

"But in my town of 30k, it's dried up the mall and downtown, so now in addition to the swamp that was drained to build the Wal-Mart (which made my environmentally- minded 5th grade teacher swear never to shop there), the old sites of commerce are being dropped and new land cleared to be closer to the Wal-Mart. I know it seems weird to be nostalgic for a mall, but when it was a center of the town, the Waldenbooks in it did fine. About a decade after Wal-Mart came to town, the Waldenbooks closed, and we have no store dedicated to selling new books. You can get some new books at Wal-Mart, or at the video and music store that also has a book section."

more obvious --

Wal-Mart comes to town. Commerce moves from mall and downtown to Wal-Mart area. Other big box stores like Lowes and Staples pop up in Wal-Mart's vicinity. Mall and downtown areas gradually die out. Waldenbooks closes.

Wal-Mart is not the direct cause of the Waldenbooks closure; the direct cause is the decline in profit such that the bookstore no longer is profitable to keep open. Whether you think my chain of causation is a) accurate, and b) sufficient to lay the blame at Wal-Mart's door, is up to you.

PG said...

Also, it seems odd to grump about a behavior that every other large retailer had engaged in before the behavior was legally required. If there were only one soda fountain in a Southern town that continued to exclude people of color before a local equivalent of the Civil Rights Act of 1964, should that law be seen as an unfair strike against that one soda fountain?

"It is possible, because of its indirect social or moral effect, to prefer a system of small producers, each dependent for his success upon his own skill and character, to one in which the great mass of those engaged must accept the direction of a few."
-- Judge Learned Hand, U.S. v. Alcoa