Wednesday, August 03, 2005

I owe my soul to the company store

That poor mistreated company WalMart has found some new apologists.
Today in the NYTimes
, you can read:

NOWADAYS, mighty Wal-Mart's headquarters in Bentonville, Ark., must feel less like a hotbed of retailing than like a war room. The company faces a groundswell of criticism, largely focused on its treatment of workers. From low wages to limited health care coverage, Wal-Mart has some issues to tackle, and it has mostly responded with feel-good television advertisements and denial. But to chalk up Wal-Mart's success simply to the exploitation of its work force, as many of the company's most ferocious critics do, is simply wrong, for two reasons.

First, Wal-Mart hasn't just sliced up the economic pie in a way that favors one group over another. Rather, it has made the total pie bigger. Consider, for example, the conclusions of the McKinsey Global Institute's study of United States labor productivity growth from 1995 to 2000. Robert Solow, a Nobel laureate in economics and an adviser on the study, noted that the most important factor in the growth of productivity was Wal-Mart. And because the study measured productivity per man hour rather than per payroll dollar, low hourly wages cannot explain the increase.

I'm pretty sure that galley slaves were productive workers, too. The lash is an effective incentive.

Here's a guy who might have a valid opinion on "productivity":

Looking back to that night, Michael Rodriguez still has trouble believing the situation he faced when he was stocking shelves on the overnight shift at the Sam's Club in Corpus Christi, Tex.

It was 3 a.m., Mr. Rodriguez recalled, some heavy machinery had just smashed into his ankle, and he had no idea how he would get to the hospital.

The Sam's Club, a Wal-Mart subsidiary, had locked its overnight workers in, as it always did, to keep robbers out and, as some managers say, to prevent employee theft. As usual, there was no manager with a key to let Mr. Rodriguez out. The fire exit, he said, was hardly an option — management had drummed into the overnight workers that if they ever used that exit for anything but a fire, they would lose their jobs.

"My ankle was crushed," Mr. Rodriguez said, explaining he had been struck by an electronic cart driven by an employee moving stacks of merchandise. "I was yelling and running around like a hurt dog that had been hit by a car. Another worker made some phone calls to reach a manager, and it took an hour for someone to get there and unlock the door."

The reason for Mr. Rodriguez's delayed trip to the hospital was a little-known Wal-Mart policy: the lock-in. For more than 15 years, Wal-Mart Stores Inc., the world's largest retailer, has locked in overnight employees at some of its Wal-Mart and Sam's Club stores. It is a policy that many employees say has created disconcerting situations, such as when a worker in Indiana suffered a heart attack, when hurricanes hit in Florida and when workers' wives have gone into labor.

So much for productivity. As Wall Street says,

Combining high quality with stunningly low prices, the shirts appeal to upscale customers - and epitomize why some retail analysts say Mr. Sinegal just might be America's shrewdest merchant since Sam Walton.

But not everyone is happy with Costco's business strategy. Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco's customers but to its workers as well.

Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."

The shills from the NYTimes continue:

Second, most of the value created by the company is actually pocketed by its customers in the form of lower prices. According to one recent academic study, when Wal-Mart enters a market, prices decrease by 8 percent in rural areas and 5 percent in urban areas. With two-thirds of Wal-Mart stores in rural areas, this means that Wal-Mart saves its consumers something like $16 billion a year. And because Wal-Mart's presence forces the store's competitors to charge lower prices as well, this $16 billion figure understates the company's real impact by at least half.

These kinds of savings to customers far exceed the costs that Wal-Mart supposedly imposes on society by securing subsidies, destroying jobs in competing stores, driving employees toward public welfare systems and creating urban sprawl. Even if these offenses could all be ascribed to Wal-Mart, their costs wouldn't add up to anything like $16 billion.

Forcing the competitors to lower prices. How brave, how noble, how altruistic. Bullcrap. Here's some clarification from the sad state of Ohio:

It’s an unbelievable article that shows the crunch that Walmart puts on even those who do business with them, such as Vlasic pickles and Huffy. Vlasic sold more pickles with Walmart, but they lost millions in profits because of their heavy handed pricing approach. Fewer profits mean fewer jobs. Huffy had bicycle-manufacturing plants in Ohio, Oklahoma, and Missouri before it partnered with Walmart. Huffy now imports 98% of all their bicycles from other countries due to cost cutting measures they had to partake in because of Walmart. Looks like Walmart has been rolling back American jobs as well as prices.

Here's another perspective:

Year after year, Wal-Mart’s low pay and meager benefits force hundreds of thousands of employees to resort to Medicaid, food stamps, and public housing. We call it the "Wal-Mart Tax." And it costs you $1.5 billion in federal tax dollars every year.

That doesn’t include the cost to states. And it doesn’t include the millions of dollars every year that communities pay to provide new roads, electricity, sewer, and water lines for Wal-Mart stores. The company has a $10 billion annual profit, but still relies on taxypayer subsidies to even build driveways to some stores.

"Wal-Mart is the world's largest corporation, with more than 1.3 million employees around the country. It had gross profits of $10.5 billion during 2004. It is also the largest employer of people on Medicaid or state-run child health insurance programs in about a dozen states...Customers may be getting bargains at Wal-Mart, but they're paying for it on April 15." (St Louis Post-Dispatch - 7/9/05)

"Wal-Mart’s blowing people out of the water and if they’re doing that by having the public sector subsidize their health care, that’s wrong." (Speaker Bruce Newcomb - R, Idaho House)

And here too:

New figures disclosed in Arizona reveal Wal-Mart, yet again, tops the list of companies with employees on state-funded healthcare. The Arizona Daily Star has the details:

Close to one of every 10 Wal-Mart employees is getting health insurance paid for by Arizona taxpayers, according to figures obtained Friday from the state.

The nearly 2,700 Wal-Mart workers represent about 1.9 percent of working people who are getting benefits from the Arizona Health Care Cost Containment System.

The company is the largest private employer in the state and has more workers getting state-paid health care than any other.

By contrast, other retailers in the top 15 list of private employers had rates of AHCCCS enrollment among their workers about half that of Wal-Mart's.

Predictably, Wal-Mart responded by casting doubt on the government’s statistics:

Dan Fogleman, a Wal-Mart corporate spokesman, questioned the accuracy of the numbers. He said there is no way to know whether those applying for AHCCCS, the state's Medicaid program, were telling the truth.

Nice. "They're lying about us! Poor poor pitiful us!"

But the NYTimes idiots continue:

This last point suggests that the debate around Wal-Mart isn't really about a Marxist conflict between capital and labor. Instead, it is a conflict pitting consumers and efficiency-oriented intermediaries like Wal-Mart against a combination of labor unions, traditional retailers and community groups. Particularly in retailing, American policies favor consumers and offer fewer protections to other interests than is typical elsewhere in the world. Is such pro-consumerism a good thing?

The answer depends on who these consumers are, and Wal-Mart's customers tend to be the Americans who need the most help. Our research shows that Wal-Mart operates two-and-a-half times as much selling space per inhabitant in the poorest third of states as in the richest third. And within that poorest third of states, 80 percent of Wal-Mart's square footage is in the 25 percent of ZIP codes with the greatest number of poor households. Without the much-maligned Wal-Mart, the rural poor, in particular, would pay several percentage points more for the food and other merchandise that after housing is their largest household expense.

So in thinking about Wal-Mart, let's keep in mind who's reaping the benefits of those "everyday low prices" - and, by extension, where the real conflict lies.

(Note: Boldface by me)

"American policies favor consumers?"

Where the hell was I when the Energy Bill just passed?

Where the hell was I when Tort Reform was proposed?

Where the hell was I when Enron was looting my state?

Where the hell was I when corporations were granted person hood? (Note to "Strict Constructionists: Huh? Where in the, hell, forget it)

You pinheads, this isn't about helping the poorest Americans, it's about taking advantage of them, by making sure that they have no other options.

Here's the logic, follow me, it's really quite simple: WalMart goes into low income areas because that's where they can make the most money, by killing off any competition. One may pay $.02 per pound less for bacon, but what are the real costs?

I think they are higher than these twits present.