Sunday, October 09, 2005

Business Week Report - Walmart

Business Week just figured out Walmart is not good for the American economy, communities or our people.

In Wal-Mart's Giant Sucking Sound they cover the familiar litany of Walmart's negative impacts on the American people.

The "giant sucking sound" is the sound of American jobs moving overseas. It comes from H Ross Perot's comment in the 1992 presidential election where he said if NAFTA was passed we would hear a giant sucking sound of jobs escaping out of the U.S. to Mexico.

Walmart has moved a lot of American jobs off shore and is today China's eighth-largest trading partner.

Walmart is compared to Costco, a company that pleases investors and employees alike. Costco pays an average wage 65% above Walmart and also provides their employees benefits and health care coverage.

Walmart on the other hand depends on the U.S. government to subsidize them by providing programs like Medicaid, housing subsidies and food stamps for their employees. In 2003, according to a U.C. Berkeley study, California provided Walmart employees $86 million in those types of subsidies.

Costco is a better run business that averages just about double annual sales per store compared to Walmart ($106 million vs. $54 million per store).

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I found this offcial Walmart fact site interesting. It's stated intent is to learn what it's like to be a Walmart associate, but I couldn't find many non-management types giving the "facts". According to the Business Week article only 38% of Wal-Mart's nonsupervisory workers receive health-care benefits. The Walmart "fact" site implies something over 90% of the employees have great benefits in my random sample.

I'm guessing the associates making less than, or even equal, the Walmart average wage of $9.68 an hour with no benefit package that have to apply for food stamps, Medicaid and housing subsidies don't have the kind of facts Walmart wants to provide.

There are some tradeoffs to buying at Walmart with their "Always Low Prices - Always" promise; supporting Chinese Communist slave wage labor, subsidizing the Walmart Corporation with U.S. tax dollars by providing basic benefits for the people working in their stores, moving what were once living wage jobs to other countries that don't have labor laws, shutting down main street businesses who can't compete, contributing to sprawl as Walmart opens their big box stores on the edge of town.

PBS Frontline presented a series, "Is Walmart Good For American" that described the sea state change in American commerce as a result of the Walmart model. The U.S. has always been a global trading partner looking for the lowest prices for raw materials and low-skill production items.

With the lowest price at any cost model there is no longer a forward looking view saying we need to keep our people employed at a living wage so they can buy products, support government rather than receiving government support, and hopefully fulfill some part of the American dream for themselves and their families.

With Walmart it's all about low prices - now. Actually that's pretty much the corporate model anywhere to some degree or another.

Corporations sole reason for existing is to make a profit. In order to maximize profit (assuming you only think in the short term) a corporation can follow a three step plan -

1. Import the cheapest raw materials possible for skilled manufacturing or assembly operations in the U.S.

2. With WTO and NAFTA approval move skilled manufacturing jobs off shore to the lowest bidder. This works for awhile because you have some props in the economy to hold up the house of cards, in the form of low paying service industry jobs, administrative/management jobs resulting from this flow of material, jobs for "knowledge workers" and a government that is for now able to subsidize the growing poverty class working people.

3. The end game is when we move the knowledge, design and thinking jobs off shore. It leaves us the world's greatest consuming nation with very few people who can afford to consume. Maybe that's good if you are a "back to the land" type, but it won't be without pain for people looking for the good life in the form of a job, a car, a house, education, medical care and retirement benefits.

At some point people need to wake up. We can't wait for too many people to find themselves in the same situation as the 1000 workers who lost their jobs in a T.V. production plan in the town of Circleville Ohio (population 13,000). The plant was competitive in the global economy if we excluded trading partners who pay slave wages, don't provide basic benefits and don't have any national labor standards. We can't compete with that and we wouldn't want to.

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Mama's don't let your babies grow up to be CEO's.

Corporate leaders in a position to aid and abet the degradation of not just our way of life but the lives of our children and our children's children, have to dumb down or numb themselves to the point where they don't have to think about the future.

There will always be survivors in this necessarily Darwinian, survival of the fittest, view of life. That survival comes at a huge cost to them and us.

It's probably not of much solace to someone destitute because of a medical condition, loss of a job, or the working poor, but it's more honorable to be poor, honest and smart, than to be numb and dumb, and more importantly trading your personal integrity, your honor, your self in the interest of furthering corporate greed.

You have two choices (a) opt in to the corporate culture, dumb down and numb down and have a lot of stuff or (b) speak up, elect a government not beholden to the corporation and look out for your fellow man, woman and children.

Walmart - Just Say No.

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Postscript: At some point it might make sense to start thinking about abandoning the hope that government can save us, if we could just vote in the right set of candidates.

The Aims and Means of the Catholic Worker Movement states,

"Because of the sheer size of institutions, we tend towards government by bureaucracy--that is, government by nobody. Bureaucracy, in all areas of life, is not only impersonal, but also makes accountability, and, therefore, an effective political forum for redressing grievances, next to impossible."


and

"In contrast to what we see around us, as well as within ourselves, stands St. Thomas Aquinas' doctrine of the Common Good, a vision of a society where the good of each member is bound to the good of the whole in the service of God."


That kind of change is possible because it starts with one person - you, not changing the government or a corporation or a church or anything else, just you slowing working from the inside out.

It's slow hard work and there are lots of areas to fail. You can get distracted because it's more fun to kibitz, critique, joke, complain and rant about the political and human condition, but years and years of that have gotten us where we are today, not such a bad place to be sure, but could be better. I am very guilty when it comes to the not practicing what I preach. I like to talk a good game but when it comes to the real thing I fall short...a lot.

As that individual interior work happens, the dominant paradigm will evolve to embrace; non-violence in all areas of life, holding human dignity paramount, providing meaningful work for those who can work and looking out for those who can't look out for themselves. Like St. Thomas Aquinas said, a society "where the good of each member is bound to the good of the whole."


Now that's powerful.