Thursday, May 24, 2007

... The High Cost of Low Prices

"Always Low Price, Always"

Wal-Mart's tag line has to be one of the best kept promises in corporate history. We're all familiar with the smiley face that skips around the store knocking a few pennies off the prices of our favorite products every day. Each and every year product prices drop an average of 5%. Ever wonder how they do it? I did. So I spent that last few months researching.

What I found is that the price tags on products lining Wal-Mart's shelves do not represent the entire cost of the product. Wal-Mart is able to sell products cheaply simply because they excel at keeping their overhead (expenses) down. How do they do it?

Wal-Mart is the largest retail buyer ever known to the world's economy, they are a monosopy. This power gives them control over the market allowing them to set prices vs. letting the market bear what it can. Control = Low Prices.

Setting dramatically low prices leaves the manufacturer little money left for innovation. In fact, many producers facing price pressure have switched to foreign made parts - effecting the quality of the product. You may have experienced that the Singer sewing machine sold at Wal-Mart is not the same Singer sewing machine sold at another retail location. Cheap Parts = Low Prices.

Some Assembly Required
You also may have noticed that a lot of the products purchased now require assembly. This allows for less labor in the manufacturing of the product. Less Labor = Low Prices.

The statistics for American companies who have filed bankruptcy stating price pressure from Wal-Mart is jolting. Wal-Mart sets the price, sets the shipping requirements, sets the turn around time, sets the.... you get the picture. If a company is unable to compete, they are out. If they are outed they oftentimes find that they've made so many compromises to meet Wal-Marts demands, they can no longer survive as a business. Price Pressure on Manufacturers = Low Prices.

American Jobs
In order to stay in business, American companies are increasingly outsourcing labor to foreign countries. Pushing business overseas isn't necessarily bad - unless you like high paying jobs and the luxurious lifestyle they afford. Cheap Labor = Low Prices.

But wait, doesn't Wal-Mart create jobs? Yes, Wal-Mart does create jobs, sort of. Of the 480,000 new retail jobs per year, 70% are Wal-Mart jobs. At the same time, however, there is an annual decrease in U.S. manufacturing jobs of 3.1 million.

Employee Practices
Wal-Mart has acknowledged locking employees inside the store with they work. Less Shrinkage (stealing) = Low Prices.
Wal-Mart has admitted to hiring illegal aliens as independent contractors. Low Pay = Low Prices.
Wal-Mart has confessed to forcing employees to work off the clock. Fewer Wage Hours = Low Prices.
Wal-Mart was found guilty on charges of child labor. Underpaid children sewing clothes = Low Prices.

Employee Wages
There has been a lot of discussion regarding how much Wal-Mart pays their employees. The truth of the matter is, they can't afford to pay more. The low prices mean low profit margins. The low profit margins means the overhead has to be kept low. The truth is, Wal-Mart would go bankrupt if they tried to give their employees a $2/hour raise. Low Wages = Low Prices.

Foreign Human Rights
Wal-Mart currently finds itself in court again, this time defending themselves in the foreign human rights arena. The outcome remains to be seen but the accusations include beating employees with the clothes they are sewing if they aren't working fast enough. High Output = Low Prices.

A peer reviewed academic magazine study reported "the presence of Wal-Mart [in a city] unequivocally raised family poverty rates in the US counties during the 1990s". An increased poverty rate puts a larger strain on our social welfare programs. Government Payed Benefits = Low Prices.

Farm raised Salmon. That is all I'm going to say because the process of how it works is so gross that I don't even want to speak of it. Feel free to do your own research if you're interested. No Clean Up Costs = Low Prices.

The way I see it, those great deals at Wal-Mart aren't such great deals if you know the whole picture. In order to save a few pennies on our favorite items, we are asking quite a bit of our fellow man, economy, and environment. We are passing on those costs to others. I say we because Wal-Mart meets the demands the consumers are asking of it - low prices. We are the ones profiting.

In a sense, Wal-Mart is a form of democracy - we vote yes and support their practices every time we make a purchase. I just would like to see us make more informed votes.


Bethany said...

Have to say I RARELY shop at Wal-Mart. I think I have been there once in three and a half years. I find....low prices equals low service and time is money for me. I don't want to spend and hour waiting to check out. HEE HEE. I have had so many rude and awful encounters there. No thank you.

Jennifer said...

I used to be a regular buyer from Wal-Mart. In fact I was hooked... because not only could I get groceries, but I could purchase socks, motor oil, stationary, and a birthday present all at the same store. Since we've moved to Philly I've shopped there 3 times, if even that. I don't even miss it. I've come to appreciate stores where they treat their workers well (Trader Joe's) and places where I get good service as well as a good price (Target). I'm getting a documentary on Wal-Mart soon (from Netflix)... will be interesting...


Ashleigh said...

Michelle, my years of grad work and dissertation proofreading, leave me wanting to see references. :-) Guess I've been conditioned to look for them. I always like to be able to view the source myself. Plus, I think it's always good when negatively reporting on a company, to point to where you got your information.

Could you please provide sources for where you found this information? Specifically:

1. You wrote, "The statistics for American companies who have filed bankruptcy stating price pressure from Wal-Mart is jolting." What are the statistics? Where did you find them? Please give a link or at least info on where they can be found.

2. You noted, "Of the 480,000 new retail jobs per year, 70% are Wal-Mart jobs. At the same time, however, there is an annual decrease in U.S. manufacturing jobs of 3.1 million." Where are these statistics from? Is it simply Wal-Mart influencing the decrease in manufacturing jobs, or are other stores to blame also?

3. You stated that a "peer reviewed academic magazine study reported 'the presence of Wal-Mart [in a city] unequivocally raised family poverty rates in the US counties during the 1990s.'" What peer reviewed academic magazine? Can you give the magazine name, article name, and a link if available?

4. I'd like to read the stories about their employee practices. Can you give links to each of these.

5. How does Wal-Mart selling products needing assembly differ from Target doing this, or other similar stores. I guess I want to hear why Wal-Mart is being singled out for this. While I am not a fan of products made in China and needing assembly, seems like a standard packaging practice for many stores.

Thanks for sharing your research with us!

Ashleigh said...

Oh, one more. Can you give a source for this:

"The truth is, Wal-Mart would go bankrupt if they tried to give their employees a $2/hour raise."


Ted Slater said...

I'm puzzled that you'd be demonizing a company that offers my family low prices. I actually appreciate that I can save some money on certain items at Wal-Mart. I'm not too proud to say that I like saving money, frankly, something necessary when you have two daughters and a mortgage and are living on one income -- an income from a ministry, nonetheless.

There are some things I don't like about Wal-Mart, of course. I hate that they import so much from China, a country that forces employees, some of whom are little girls, to work long hours at low wages. And I've found that Chinese-manufactured goods are of signifantly poorer quality than those made elsewhere. That's probably the biggest thing for me.

I've also found that we can save more money by shopping at local grocery stores, using coupons. Wal-Mart doesn't always have the lowest prices.

Now, on to my complaints about your one-sided misrepresentation of Wal-Mart....

Michelle -- some of your "facts" are just wrong, to put it bluntly. You wrote, for example: "Of the 480,000 new retail jobs per year, 70% are Wal-Mart jobs." Hm. The truth is that, according to Charles Fishman’s The WalMart Effect, From 1997 to 2004, the US added 670,000 new retail jobs. 480,000 of those — 70% — were at Wal-Mart. Sloppy reporting, Michelle. If you're so "fast-and-loose" with your "facts," it makes me wonder how much of your other "facts" are sloppy as well.

Well, let's take a look, then.

Your implication that the 3.1 million lost manufacturing jobs (not in one year, as you imply, but between 2000 and 2006) is Wal-Mart's fault is just silly. The truth is that manufacturing jobs world-wide (China, Brazil, Japan, etc.) have been decreasing. One factor is automation, which leads to increased productivity; another factor is decrease in total manufacturing output.

"Locking employees inside the store"? Of course, every store does that after hours. I did that when I managed a Burger King in Houston. You don't want people just walking into your store after you've closed for the night, do you? And to seemingly come to the defense of stealing, or "shrinkage," is just silly.

"Low wages" is another reason not to shop at Wal-Mart? It's a free country, Michelle. Employees can choose to work at Wal-Mart, or choose to work down the street at Target. They choose Wal-Mart. My nephew chooses to work at Wal-Mart. The truth is that the average Wal-Mart wage is between $8.50 and $10.00 per hour (probably closer to $10 per hour) -- significantly above minimum wage. Target pays about the same amount per hour. I earned less than that per hour when I worked in the Media Center at Regent University.

Your comment about the peer reviewed academic magazine study is also misleading, Michelle. The truth is that poverty rates didn't actually **increase** in those counties -- they decreased at a slower rate than in other counties. That's still a **decrease**. During the 90s, family poverty rates in the US declined from 13.1 per cent to 10.7 per cent; in counties which had a Wal-Mart, the poverty rate fell only to 11 per cent -- a 0.3 percent difference. Insignificant, in my opinion.

And as far as I can tell, the study wasn't published in a "peer reviewed academic magazine," as you say, but in a "staff paper" written by Stephen Goetz of Pennsylvania State University.

And what's wrong with "farm-raised salmon" (besides the added food coloring)? Whole foods and Costco sell farm-raised salmon as well. You *can* buy "wild" salmon at Wal-Mart as well, for what it's worth. Some could argue that farm-raised fish is better for the environment, in that wild fish populations are less likely to become wiped out by over-fishing.

I don't mind saving money by assembling an item myself. I put my daughter's bike together for her birthday, for example. Took 15 minutes. I may have saved $20. I think it's worth it.

We don't, as you write, save "a few pennies on our favorite items." We save lots of dollars.

Michelle, I'm concerned that you're buying into the Marxist ideology that large business are bad and that small ones are good. This is classic class warfare, a key component of Marxism, something that "liberals" have been pushing for years, something that has become "hip" to espouse.

I, for one, am grateful for certain large organizations. I'm grateful for Focus on the Family, a large organization. I'm grateful for Exxon, which helps me drive to work, and who makes a relatively **small** profit on their investment dollars. I'm grateful for google, a huge money-maker, since they help me find stuff online. And I'm grateful, for the most part, for Wal-Mart, as they help me feed and clothe my family.

Michelle -- where would you recommend we purchase our food and other items? I suspect those stores also buy from China and offer low costs at the expense of their employees. And -- gasp! -- they're in it for the money! Damn capitalists!

(For what it's worth, we've been buying our milk from a local organic farm, and are looking into buying our meat locally as well. We prefer it this way, but aren't going to ridicule those who buy their milk and meat at Wal-Mart....)

Michelle said...

haha. I was waiting for these types of responses Ashleigh and Ted.

Ashleigh, I debated stating my references but then figured it would be a little lengthy (and maybe more boring) to read and, after all, it was a blog post not an academic or published paper, so I decided not to. But, I'll gather together my info and email it to you if you're interested.

Ted, I obviously can't address all your comments here but if you want to continue over email, let me know. I do, however, appreciate your question re: where to shop. Once you start looking into corporate practices, it becomes quite complicated and difficult, doesn't it? But I don't think that means it's not important to do the research and make the best choice possible.

One BIG point I'd like to make is that I'm not necessarily advocating or rejecting Wal-Mart or any store but encouraging that we the consumer become more aware of the many choices we make. I'm encouraged that you guys are willing to research and discuss. I imagine your family uses this approach often, but I also would guess that others may not. My intent isn't to ridicule or judge anyone, just to give some food for thought.

Just to clarify:
I don't recall saying big business is bad and small good. Or that it's bad to save money. Or to assemble your bikes. Or that we should only buy America. Or that Wal-Marts employees are underpaid. Or that it's wrong to for companies to profit...

I only recall stating one opinion and one deduction. Opinion: I would like us to make more informed decisions. Deduction: Wal-Mart's prices don't reflect the entire cost of the product. [Oh, wait, I did say the way they farm raise Salmon was gross too...]

Ahhh Ted... I miss our debates, it hasn't been the same since you guys moved out to CO.

Ashleigh said...

Sure, Michelle, I'd be interested in looking through the references when time allows. You can email them at your convenience. No hurry.

Catherine Marie said...

Sounds like a heated topic!

I know many people who shop at Walmart and feel absolutely fine about it - honestly, that's ok with me. Personally, I agree with Jenn and Bethany - I find Walmart unpleasant. The long lines are enough to turn me away for good!

About the other issues - I don't think there's anything wrong with wanting to save money, but as you suggest, Michelle, I don't think that's THE most important thing when considering a purchase. Cheap does not always = better. Seems that the citizens in poorer countries suffer when America and Europe want things cheap. I'll never look at diamonds the same again after watching the movie "Blood Diamond." Now I could never, in clean conscience, buy a conflict diamond (that could potentially have cost many people their lives) just because it's cheaper than others. I know that's a much bigger purchase than the small, every-day items that we would buy at Walmart, but I think the principle is the same. Informed consumers make wiser decisions about what they purchase.

Makes you stop and think... and I think thinking is good :) Keep the dialogue going!

Judy said...

Ummmm, wow. Don't really know what to say. ;)

So, I read this post last night, right after returning home from... WAL MART!!!! Ha!! Man, did I feel guilty. Let me tell you this, I HATE, HATE, HATE shopping there... But, we're always flat broke & as the chef & menu maker of this household, I have to do what I can to stretch the grocery budget.

Anyway, I won't get into the debate. I liked your post though. I read an article about Wal Mart on MSN last month & it really made me think. It was about how Wal Mart's extremely low prices really hurt other companies, especially last Christmas ( I think that was the gist of the article anyway). Wal Mart is extremely unpopular out here. Signs everywhere saying, "Wal Mart is a bad neighbor", even a car with that written all over it. People are always writing negative letters to the editor about Wal Mart. Yet, the parking lot is full & the lines are always long when I go. Makes you wonder. :)

We still don't have a Trader Joes out here. We do have a Wild Oats though, which has just been bought out by Whole Foods. I like shopping there, it's just so pricey. I know I'm getting quality products though. I have to say, I like Safeway. :)

Thanks for the post Michelle. I admire you for having the guts to post on something like this. I'll have to come back to read all the comments... I'll be in the debate audience. :)

Ashleigh said...

I wanted to add that I think the shopping "experience" at Wal-Mart varies Wal-Mart to Wal-Mart. There have been some Wal-Marts that I've hated and have stayed away from. However, we actually have a nice Wal-Mart near our house that is clean, organized, and for the most part, those working there are friendly.

Judy, have you gone to King Soopers? Here they are actually cheaper than Wal-Mart in stuff such as milk. I got a gallon of organic milk there today on sale for $3.99. Or is that the grocery store you said you'd never go back to? I can't remember ....

Leslie said...


Are you still in California?

Michelle said...

Hey Leslie, no... I came back about a week ago....

Leslie said...

Shoot... I needed someone to housesit for us while we are in VA.

Danny said...

Hey Michelle...I really like the "debate", and actually see both sides. Since I am involved in a ridiculously competetive field, I understand the "whoring" of market values, and Wal Mart seems to take the cake in the discount department store arena. But at the same time, I need to save the money, or there wouldn't be provisions for the Lyman's. I wish we could buy everything from co-ops, organic food distributors, and high quality boutiques, but I can't afford it. It is a "sink or swim" mentality living in the U.S. these days, and I choose to swim, and if that means that I support Wal Mart in some small way, I'll support the hell out of them as long as it benefits my family. Once that benefit is broken, then Wal Mart loses interest really quick...this goes for any other company, or person out there. Just finished reading a book called "Communism" by Richard Pipes. In a country, teetering between capitalism and socialism, it brings some interesting points to light. It's a short read...I read it on a three hour plane ride. Anyhow, I am not arguing with you, or with the Slater's, I just wanted to share my view point on the whole matter. Thanx!

Ashleigh said...

Danny, I'd say you are coming at the issue from a similar place Ted and I are. :-) For some of us, it comes down to we need to eat. We need to be careful with the limited finances we have. Hence, we shop at Wal-Mart for certain things.

Brian said...

"I only recall stating one opinion and one deduction. Opinion: I would like us to make more informed decisions. Deduction: Wal-Mart's prices don't reflect the entire cost of the product."

Come on, Michelle. After your confident criticism of Wal Mart's practices, don't get wimpy. You are not just suggesting open-handedly that we research companies in general and make shopping decisions accordingly. You are clearly saying that there are moral reasons for not shopping at Wal Mart. If that wasn't the conclusion you wanted us to come to, you sure wasted a lot of keystrokes.

I don't agree with you, but I respect you for opening up the discussion and coming strong with your perspective. Stick to your guns! :)

Michelle said...

Hey, thanks for sharing your thoughts Danny. Any one else? I've been getting a lot of emails and phone calls from people sharing but feel free to post any thoughts you may have here. You can post anonymously if that makes you feel more comfortable.

Brian - you're right. That wasn't a very good overview of what I said. Here you go.
Observation - Wal-Marts prices are low.
Question- How do they do it?
Research - I type it as I find it.
Deduction - The entire cost of the products are not reflected in the prices we pay.
Deduction - In order to receive personal benefits we are passing on costs are high to others.
Deduction - Purchasing products at Wal-Mart supports their practices.
Opinion - I would like us to make informed decisions about the companies we are supporting financially.

And, let me say right now in black and white, I do feel there are moral reasons not to shop at Wal-Mart. Not all the reasons I blogged about are negative or immoral but some are. We all seem to be in agreement that shopping there benefits our families. But what I keep going back to is - benefits me at what cost. I'm having a hard time willingly standing in line to receive those benefits now that I know how they affect other people. I don't pretend to know about your individual financial situations but personally I'd rather eat one less meal a day, or eat smaller quantities, or poorer quality, or move money from my home decorating budget, or drive less, or drive a cheaper car, or stop buying cds, or sell my house and move into an smaller house in a less desirable neighborhood or whatever .... than bear the burden of contributing to the harm of others. For those of you who are ok with Wal-Mart, I genuinely and humbly ask you to share with me how you process this? Does anyone have any ideas or thoughts on how to reconcile scriptures commands to love your neighbor as yourself and shop at Wal-Mart (or any store that has shady corporate practices- there are many.)? I ask this in a non-accusatory way. I really would like to hear some of your thoughts.

JMN said...

Thanks for facilitating this discussion, Michelle. At this moment, I won't comment on Wal-Mart specifically, but I have also recently been reading and researching company (and government) practices that have far reaching effects. Christ broadly defined neighbor in the parable of the good samaritan as any human person: enemy, friend, family, stranger. All are neighbors. And if I know of a neighbor that is robbed and beaten, I have a duty to help them in whatever way I am able. I also have a duty to protect and provide for family. But these things are not, and never will be, mutually exclusive. The tension comes in regarding the time we are willing to take to do the research and study and put that love into practice. Our globalized world puts a burden on us not shared by those in the past, but it is what we have to bear. And the practices of large, multinational corporations should be scrutinized just like your friend who owns a small family run businesses. I have known of corruption at every level of business, great and small, and I am responsible for that knowledge. I do not have the option of turning a blind eye to the truth, no matter how good I am at it, or how convenient it is for me. This is not a knock against those who shop at Wal-Mart, but it is a knock against us all, culturally, who refuse to do homework and listen when a beloved retailer or grocer is proven to act in a way that is contrary to loving our neighbors (again, not a reference to Wal-Mart, specifically, just a general principle). That is why I appreciate your post, Michelle, and your responses, Ted and Ashleigh, b/c it shows that information can be obtained and tested and scrutinized. Living in America does not give anyone a pass to buy indiscriminately, just as having a license does not give us the right to drive how ever we want. There are laws and commands, and if we stand on what the Lord has commanded us and do what is right in obedience to him, he will always provide. There are good practices of companies as well as bad, and both are worth knowing about. But with economics and consumerism, neither are devoid of morality, b/c how you spend your money effects peoples' lives and livelihood and ability to function around the globe. If I had a friend who owned a business and hired ten year olds to work, and made them work twelve hours a day and paid them jack squat, how guilty would I be sit by and benefit from his business and not say a damned thing? What if my friend was stealing from his brother, taking money out of his wallet every other day, and I knew about it, but he was buying me cool gadgets or taking me out for drinks with the money. What is my responsibility here? Can I blindly say, "Well, I am not personally effected, so it is alright." I am not pointing fingers at anyone in this discussion (other than maybe myself). It comes down to knowledge and making responsible, God-glorifying choices. If I would not support a dictator who enslaved his own people, how could I support a corporation who did the same (and if you don't think corporations enslave people, economically, please read a book called "Confessions of an Economic Hitman" by John Perkins). We all have responsibility to love our neighbors as ourselves, and if I lived in Peru and a corporation forcibly put me out of business and destroyed my livelihood, not using fair business practices, I would find it puzzeling, if not enraging, to see fellow brothers and sisters supporting that same company. And if I knew a mom and pop business was undercutting other business, global or local businesses, large or small, by bribing city/county officials to make sure they were at the top, I could not in good conscience continue supporting that business. It does not matter what level the business is at, or what immoral or ungodly practices they enact, it should all be treated in the same manner: loving your neighbor (which a corporation is not) as yourself, and standing for God's commands above all else. Like it or not, we all have a responsibility to make right choices with the money we are stewards over. An informed consumerism is the only option we have, I believe, as followers of Jesus Christ. Otherwise, how can we honestly say we are loving our neighbors?

From the West Coast...John M. Napier

Ashleigh said...

Wow! This conversation sure offers a lot of different perspectives and arguments. I agree that we should be informed shoppers and should love our neighbors. John, I think you make some great points.

However, I have difficulty buying Michelle's argument when there hasn't been any explanation for the incorrect information that was used to support the argument (Ted pointed these out). Being someone who has to read a lot of doctoral level research in my proofreading and to check a lot of references, giving the right information is important to creditability and when some of the info isn't correct, it's hard to trust the rest, especially when no explanation or acknowledgment is offered or made for the incorrect data. Does that make sense?

Michelle said...

Hi Ashleigh, I've been working on my email to you but I guess I'll address your most recent comment right now.

Ted disputed two of my facts. It may look like he disputed more, but as I went back and re-read it I saw that the rest of his comments were expressions of his point of view or his opinion about the facts - not a dispute of the facts. But let me address the two disputes.

- I said jobs created per year. Ted correctly pointed out it was over the course of 7 years.
- I said jobs lost per year. Ted correctly pointed out it was jobs lost over 7 years.

My mistake. Whether it was 1 year or 7 years however, does not change the point made in the particular context it was used, or the larger context of the post. (actually, one could even argue that because I made the mistake on both sides of the equation and the ratio remained the same, I should be in the clear mathematically speaking. hehe.)

No one yet seems to disagree with the point of the post, that is to say, with the idea that Wal-Mart's low prices come at a high cost. Even Ted, in fact, expressed an agreement of sorts when he voiced his dismay over and acknowledgement of their involvement in child labor.

I realize that I made an error in two of my facts and for my "sloppy reporting" I apologize. I am afraid now that my human error is going to tempt people to skip over or ignore the moral implications. I do agree with Ashleigh's in that it's good to know where your information is coming from - we do want to be correctly informed - but what we don't want is a red herring.

Anonymous said...

Hey gang:

It's good to read some of these comments--a little bit of a "blast from the past" now that we've all gone our separate ways.

Just a couple of thoughts:

1) re: child labor
During the Industrial Revolution, the atrocities of child labor were widely documented. But what apparently isn't always acknowledged is that families sent their kids to the factories because the work there was actually much easier than farm life. When labor laws were implemented to curb the hours, people allegedly went illegally to work at factories where they could get those extra hours in.

My Point: even some of the criteria being used to discuss this issue may need further discussion themselves, which is not a happy thought

Source: Imprimis magazine--a publication of Hillsdale College (sorry Ashleigh, I'm out of town right now and that's all I've got)

2) I'm sitting here with Brian and Billie and we're talking about how difficult it is to research all of these issues. Ted and Michelle are just scratching the surface on this one. I have some other debates that I really want to pursue as well, like a better understanding of how the Bible was canonized. I feel like I need another degree just to adequately answer that one question. I find it very frustrating--I need more time, or I need that program on the Matrix where they could just force knowledge into your head (that way I could also be a ninja).

My point: all of these issues require a lot of research and analysis.

My prayer: Lord have mercy!

3) Some final words from me to those of you who know me best: worldview, covenant, the Gospel, and unicorns.

Good evening,

JMN said...

I emphatically agree. Unicorns all around. And I also agree, these issues are difficult to research. But difficult does not equal absolving us of responsibility. I will coordinate with Michelle and see if we can get some good resources to publish/distribute. But a forewarning: if you automatically dismiss a source b/c it has offended or disagreed with you in the past, please be *have mercy* open minded (a term that means exactly what it means here, i.e., give it a chance). We all know we are called to be Burreans (spelling?). Point being - I share your frustration, Kahlib. But that makes me want to press harder to know and not be deceived and be just another consumer. Knowledge is powerful. Ideas change the world. Don't eat uncooked pork. (insert other pithy sayings here)

Ashleigh said...

Thanks, Michelle. Just for the record, I'm not against the idea of not shopping at Wal-Mart for moral reasons. We actually stopped shopping there for awhile last fall because they teamed up with the National Gay and Lesbian Chamber of Commerce. In fact, they sought out the arrangement. And making the decision to not shop there was inconvenient for us, since they are two minutes from our house. However, Wal-Mart ended up pulling out of that, which is when we started shopping there again. However, I just like to make sure I've personally researched and read about issues and facts (or that Ted has) before making a decision. Being truly informed means taking what someone else has shared and looking into ourselves.

Kahlib, fun to see you on here. Unicorns. Haven't heard you mention that in awhile ....

Ashleigh said...

Oh, and I re-read Ted's comment. It seems that you dismissed what he had to say without reading it very carefully. From what I could see, it wasn't just the number of years jobs were created and lost that you had cited incorrectly. It was also:

-- The number of jobs Wal-Mart created per year was reported incorrectly.

-- You were misleading in the employee wages section. The way you write it makes it sound like they are paying their employees low wages. According to Ted's research, Wal-Mart wage is between $8.50 and $10.00 per hour. From what I could find, the highest amount a state pays for minimum wage is around $7.80. So Wal-Mart is paying more than they legally have to.

I'm not trying to be argumentative, I simply don't like to see Ted written off as throwing only opinions and facts that don't make a difference into the argument.

Michelle said...

Hey Again, I'm packing for my flight (been working out of town this week- hotel living, ewww), but I wanted to respond to Ashleighs remark about employee wages.

Ted's response the "Employee Wage" section did not dispute or even address the point I was making. I didn't say that Wal-Mart is underpaying their employees. What I said was that Wal-Mart could not pay their employees much more due to their low profit margin. (References forthcoming).

Keep the discussion going. I'll catch up with I'm back in town.

Zoanna said...

A new voice here in the mix. Is this conversation still taking place? If so, let me say that I am thoroughly enjoying this intellectual, moral, and spiritually stimulating volleyball about Wal-Mart. Before I get into addressing your points or any of your commenters' points, may I say that aesthetics are a big reason I hate to shop WalMart. I could never put my finger on why exactly I didn't like shopping there, except for the narrow aisles and long longs. But the other things: Poor lighting. Everything looks grey. A friend of mine (Beth at calls it the Ugly Store. I feel ugly, everyone looks ugly there. Okay, not ugly, but not pretty. Put those same people in a well-lit, wider aisled Target, and you've got pretty people.

Skinny aisles = low prices.
Poor lighting = low prices .

One other thing, the employees at Walmart seem so grouchy. Maybe the lighting? Not that I single them out, because there are grouchy employees everywhere, but it makes me wonder about a company whose employees are characterized by frowns when there are smiley yellow faces all around, just how are they being treated by management? Or is it just my local Walmart?

My daughter and I go round and round about Target vs. Walmart. She is the bargain hunter of all bargain hunters and likes Walmart. I will pay a little more to get good lighting, wider aisles, cleaner environment, less grouchy cashiers.

What I've wanted to do for a long time is research ALL the companies I do business with and see if there are practices I morally disagree with if I only knew? Or view their annual reports to see who and what they're funding. I didn't shop Walmart during the Gay Lesbian rallies, but I fault myself for not researching whether Target does also, or BAth & Body Works, or my fave local grocers, or BJ's or whatever. The fact is I'm too lazy to do the research. If I hear about a particular moral outlash, even if James Dobson or Pat Robertson or the ghost of Mother Teresa publicizes it, then I do my own research. I don't automtically jump on their bandwagons. So I won't jump on the moral bandwagon of banning Walmart until I've put the others under the same microscope.

But good for you for opening the subject. I, too, would appreciate seeing attribution of your facts. As a former journalism student, I would contend that you have editorialized (put forth your facts as opinions, or mixed your opinions in with facts) which is okay since it is a blog post, but not okay that you made some accusations that you didn't provide your readers the sources you were quoting. It might be boring or lengthy, but at least it doesn't verge on libel.

Thanks for posting truly "chewable'! I like this kind of stuff.

bwasko said...

I agree with John and Michelle that there is a degree of obligation on our part as consumers to know something about the places where we do business. I also agree that if we have evidence that a business is engaged in illegal/immoral/unethical practices, it is our moral duty to withhold our support by redirecting our dollars. I already do so--I don't eat at Hooters, for example, or buy clothes from Abercrombie and Fitch because I hate the way they advertise.

And as much as I agree with Ted that Michelle's original critique of Walmart is rooted in the liberal knee-jerk against large corporations, I don't believe there is anything inherently "liberal" in boycotting businesses out of moral concern. In fact, it is a soundly conservative, free-market approach. It is a way free citizens can influence the market without government interventtion--it is why capitalism and democracy go hand-in-hand.

All that said, I've yet to be convinced that Walmart is doing anything that merits a boycott. Whether or not I like shopping there seems irrelevent. Consumers look for three things: price, service, and quality. Walmart offers the first and neither of the other two. That's their business model and they have been so successful that the only way to compete is to offer the other two. Thus a Harris Teeter next door can stay in business.

I don't care about salmon unless it's the way it's cooked.
I won't condemn Walmart because of any instances of "beating employees" or "hiring illegal aliens" unless I am convinced that these are a result of corporate policy (I wouldn't stop eating at McDonalds because a manager in Boise slapped the burger-flipper). The "poverty" argument is a clear case of "post hoc ergo propter hoc". I.e., poverty increased after the Walmart opened, therefore poverty increased BECAUSE the Walmart opened.

And the argument that Walmart's low prices are bad for the economy is a bit silly. If consumers save money by shopping there, it leaves more money to be spent elsewhere, adding to the health of the economy. Walmart's success also benefits its millions of shareholders.

They pay above the minimum wage--one more piece of evidence that increasing the constitutionally questionable federal minimum wage is needless.

I don't have a problem with outsourcing manufacturing jobs overseas either--that seems like a strategy that is economically sound and globally beneficial.

BUT, if it can be established that Walmart is engaging in or winking at human rights violations or engaging in illegal or unethical practices here or abroad, I'll join the boycott until changes are made. But I need to see proof.

bwasko said...

One more thought:

Thank God for a free press and freedom of speech!

Michelle said...

About a year ago, I found myself in a conversation where I was defending Wal-Mart. Using some of the very same arguments, in fact, that some of you did. However, after a lengthy and exhausting discussion, it became clear to me that I had a lot more investigating to do. I wasn't as knowledgeable as I might have thought. There were so many nuances. So many perspectives. So I spent the next 6 or so months reading everything I could get my hands on. Gathering information. Considering. Praying. That was the background for this post.

John made some great points about responsibility. We are responsible to be ethical consumers, we can't claim ignorance. The good news is, we don't have to be doctoral candidates, reporters, or authors to do our own research and come to our own educated conclusions. The accuracy of some of the information on this post was challenged, however, if even all the information ended up being inaccurate, it doesn't mean the premise is necessarily false. So how do you know? You research yourself.

I promised support for my comments so below is a list some of the material I read in preparation for this post. It should be a good launching pad for you to begin your own prayerful research...

The Wal-Mart Effect by Charles Fishman
Sam Walton: Made in America by John Huey
In Sam We Trust by Bob Ortega


CNBC - The Age of Walmart with David Faber - 11/10/04
Wal-Mart: The High Cost of Low Prices (didn't see this but heard about it afterwards)

Magazines/Published Papers:
"Retailer Power and Supplier Warfare: The Case of Wal-Mart" - Journal or Retailing vol 77 issue 3 Sept 2001
"Wal-mart and Country-wide Poverty" by Stephan Goetz and Hema Swaminatham - look on Penn State Center for Community and Economic Development website.

Google Robina Akther or Western Dresses factory to read first hand accounts of a plaintiff in a lawsuit against Wal-Mart.

"States are Battling Against Wal-Mart over Health Care" by Reed Abelson - New York Times 11/1/04
"Wal-Mart Stands Out on Rolls of Peach Care" by Andy Miller - Atlanta Journal constitution - 2/27/04.

There really is soooo much material out there. Gobs of it. Good luck!

bEka said...

why don't we just sew our own clothes from dusty curtains, purchase an organic milk cow and pretend this debate never was.... shhhh..... i will leave you with three words.... SIMMMA DOWN NOW

Sarah said...

Wow! I just had so much fun reading this and all of the comments. I think that you and I would be good friends if we actually knew each other! I'm with you on this one.

I don't think it matters if we are saving a few pennies or hundreds of dollars each year. I don't think that it is ever okay to knowingly benefit from others suffering (I'm not someone with a lot of disposable income...I save, scrimp and stretch to make our budget work).

When I was in college, I went to Honduras over Christmas break. The people were poor. They lived in mud huts with no electricity or plumbing. They were hungry. They wore rags. Across the field from the village was a paved road. Several times a day, 18 wheelers with Dole logos would pass by carrying locally grown fruits. I couldn't help but think that part of the reason that these people live in this kind of poverty is so that I can buy a pineapple for less than $3 and not have to pay more than 49 cents a pound for bananas.

The question of where to shop is a good one. So many companies contribute to organizations that support things that I do not support. Check out who gives money to Planned Parenthood...

Great post, great debate...I have to get my hands on a copy of the book you just wrote about!