Cig, I would argue that WM got “sheer size of capitalization and the ability to control markets - NOT leave them free” as a result of smart management. Note that I did NOT say they put the welfare of the communities or of their employees above profit. Had they done that, they would not have grown to the 500 pound gorilla they are now.
It’s a mixed picture. But WM is not in business to better the world. They’re in business to make money.
Um, 1776 was the year we declared our independence from King George III. 1787 was the year the Constitution was ratified.
Yeah. At some point there probably was some. Like back when Sam Walton was still around. It doesn’t matter. Without the laws of incorporation as we know them, it is very difficult to become the kind of behemoth that companies like this become.
"Um, 1776 was the year we declared our independence from King George III. 1787 was the year the Constitution was ratified. "
Yeah. And…? Just saying. 1776 - the wealth of nations. 1776 declaration. A banner year for Classical Liberalism
I’m kinda in Cig’s court. It started out smart, but then became ruthless. They operate at a low cost level due to government subsidies to its underpaid employees and overseas purchases, not necessarily smart management. People couldn’t work there without food stamps, earned income credit, rent subsidies, and now Obamacare, not to mention tax increment financing on their developments.
However, we broke up Ma Bell when they became too much of a monopoly and none the worse for wear now. We can do the same to WM, especially in smaller market areas. I’m not a big regulation fan, but there are purposes for them. OTOH, it doesn’t take much for a massive organization to sustain crippling blows. Last year with a small decline in sales was enough to press the panic button for them.
Raise the minimum wage, institute single payer not for profit healthcare where we could afford to pay for our own healthcare without employer based contributions and pass comprehensive immigration which introduces millions into the income tax roles and you minimize the negative effects of all the Walmarts who prey on abundant labor with low wages. They then have to work with a stonger tax base in local communities with out raising one cent on the rest of us. A strong mobile work force with higher wages and affordable healthcare would force them to compete in labor force with better wages. Not something most of you would favor, but it levels the playing field by helping the middle class without govt. intervention into the corporate world. It reinforces the free market system and brings competition back where it should be. Let the Walmarts then compete for their labor and become part of the solution and not the problem.
@wesw Iron Age boots were the best. I had an appointment to be fitted with steel toe work boots (paid for by my employer). Their factory (Portland, OR) burned to the ground early that morning.
Why is Wal Mart any different than K-Mart, Target, Best Buy, AutoZone, any convenience store or fast food operation on the planet, mom and pop bric-a-brac business, or the plethora of other similar jobs out there?.
“Why is Wal Mart any different than K-Mart, Target, Best Buy, AutoZone,…”
It’s not. And it’s not comforting to know that what passes for “market competition” these days is one corporate behemoth against another.
“mom and pop bric-a-brac business”
A whole different planet.
"the plethora of other similar jobs out there?. "
I have no idea what that is. The corporate chain model stamps itself around and there isn’t a plethora. There’s just the same generic, standardized labor. That’s part of the point. And it comes with costs to consumers unmeasured by POS price. Go to Lowe’s and find someone who actually knows anything. That’s not the point. The point is mass, lowest price POS. Same with WalMart. Same with Autozone.
And its the difference between “mom and pop” and corporate chain that is important. Mom n pop’s are proprietary businesses. They are still actually people and for a host of reasons treat their business environment (customers, suppliers, community) as if they are people. It is also much more difficult to build up the size and power advantages needed to control markets - labor markets included. They are also still actually people who, because they specialize in a business - rather than the mere movement of widgets - they often do know what they are talking about.
The behemoths use their size to kill off everything on POS price. In the end the true costs are never reflected. And that’s not even getting into strategies for ringing extra savings along down the supply chains all the way to the sweatshops.
The 8th grade civics or Econ 101 warm and fuzzy versions of economics does not apply. I don’t know why anyone still tries to teach it with a straight face.
My point about the mom and pop stores is not the more personal business relationship they have with their business environment. It’s about employee pay and benefits.
It’s simply that 9 bucks an hour at Wal Mart is no different than 9 bucks an hour at a mom and pop store and in actuality, WM may provide better benefits and treat their employees better.
WM has a procedure for terminating someone after a period of time and the mom and pop policy may be to point to the door at any time with no reason needed.
My personal opinion of the problem? Trade deficits, outsourcing, trying to be at one with the global economy, etc. Wealth needs to be produced (manufactured) rather than just service (sales).
Personally, I would rather pay a bit more for something made in the U.S. but unfortunately, everything is Hecho en Mexico, India, China, Lower Slobbovia, etc.
I am preparing taxes this season…which means I get to see a lot of W2s. I cannot ethically comment directly on any one person’s return, but wal-mart employees, as a class, do at least as well as other discount-store workers and fast-food employees.
Their wages have to be better than minimum wage, based on W-2s, and most that appear to be “more than half time” workers have block 12 indicating health care checked…supposedly crappy care, but the “mom-and-pops,” and the dollar store workers, almost never have anything checked.
I don’t see where they pay substantially less than industry standard.
@cigroller “mom and pop bric-a-brac business”
“A whole different planet.”
I am an “obsessive” in this day and age supporter of local small businesses. The big corporate stores are really hurting them. Internet shopping is killing them. I have friends and relatives who own small businesses. I live in a small town of 9,000 and want the local businesses to succeed. Most times I pay a bit more, sometimes not. There is a city of 150,000+ 15 miles away (if the river literally don’t rise or about 20 miles if it does) and a city of 600,000+ 60 miles away. The big city has dozens of auto dealerships. The closer city has a handful. My town has none. In 2002 I received attractive offers from 3 big city dealers I first visited the mid size city dealer, showed them the offers and truthfully stated I would rather have my money go to a local business that paid local taxes and employed local people who were local consumers. They matched the big city dealers price. In 2010 I made a different mid size city dealer the same proposition. They beat the big city dealers price by $1,000! I own a rental house in the mid size city and needed a refrigerator. I got a quote from Best Buy. I went to my local small business appliance store. I didn’t even mention the Best Buy price. They quoted the same price with free delivery (20 miles one way) Best Buy wanted $60 delivery (3 miles one way). No brainer there!!!
What I was saying about mom & pops / chains and the plethora of jobs is not that they pay more - they don’t. The effects are on broader labor markets, and work on wages in general across those labor markets. The more the world is made over into the chains, what might appear to be a plethora of jobs isn’t. And it also reduces entrepreneurship, which plays into that. Once one store is a grocery store, and an auto parts store, and an electronics store, and a toy store, and a stationary story, and a kitchen supply store, and a clothing store etc. etc. then about a dozen other business opportunities and employment options are gone. WalMart manager to employee: “Look, if you don’t like your pay you are free to go get another job…” WalMart employee: “Oh, so you’re saying I should go over and apply in the paint department instead?”
In any case, where I started out (and yes, I’m bad at ignoring threads even when I promise myself) was in saying that these kinds of massive business operations are only made possible by the laws of incorporation that allow the production of fictional legal “persons” and the piling up of massive capital in one place. The kinds of powers afforded corporations by our legal system were feared in the early days of the US partly because they carry the potential of easily destroying markets and private enterprise. We were trying to get rid of aristocracy. And many feared that the corporate form just made the basis for a new aristocracy. And they were right about that.
The abilities of these places to achieve the economies of scope and scale to bring low POS prices to consumers does not primarily derive from brilliant business. It’s about size. And it destroys markets - it is not reflective of the operation of them. When Big Retail sets up in a town, it’s not Big Retail business savvy against Local Business business savvy in the same way a demolition derby match between my escort and a semi is not actually a competition.
And when our main criterion for a “good” business is sales volume based on lowest POS price, this is a huge problem because it does not take into account the broader costs - such as the disappearance of opportunities for entrepreneurship and of true markets for labor. But there are many others - not to mention the other stuff posted about the extent to which tax dollars constantly subsidize these things in many ways. A lot of your tax dollars end up at corporate offices. But even those thrifty consumers lose in the long run. The quality of goods and services is long on its way down because the choices keep getting to be less and less like choices all of the time. The more this goes along the more consumers lose options. What appears to be rational in the short run (lowest POS prices) becomes very irrational in the long run.
Like most others I have to visit these places but like @sgtrock21 and others I try desperately to avoid them. And I happily pay more to do it. And it’s not because I think the employees are paid more. But they will be treated as people rather than points on some 7 or 8 figure cost accountant’s spread sheet, and my money will not be shipped off the Arkansas.
I just think that businesses should still be people - actual de facto corporeal people, not de jure legal fictions that become place holders for economic power but pretend to be “people.” Then maybe we could really have something closer to an actual market economy.
I also try to buy American-made products whenever possible. Admittedly it can be very difficult to find those products, but they do still exist in some categories.
For instance, if you are looking for American-made work boots or work shoes, Duluth Trading Company has both, although they are pricey. Here are a few examples of what they sell:
Additionally, LL Bean (my favorite retailer) still makes their famous Bean Boots in Maine.
Again, they are pricey, but the quality is really good. And, everything that they sell has a lifetime return policy. If you decide 10 years from now that you don’t like the way that one of Bean’s items has held up, you can return it for a full refund.
Please note that many (perhaps most) of the items sold by both Duluth Trading and LL Bean are foreign-made, but if you are very selective, you can definitely find some American-made products on their websites.
I could throw a rock from my shop’s front door to the loading dock of a factory employing more than 200 production workers who made clothes for LL Bean, JC Penney and Hart Shaffner & Marx when I opened more than 30 years ago. When I closed a few years ago the factory was shut down and the city will soon auction the building off for the unpaid taxes. And while garment workers are notoriously underpaid they made considerably more than shelf stockers at Walmart.
Cig, let me start by saying I reread your comments about 1776 and apologize for having misinterpreted them. I own up to my mistakes.
As regards WM, I haven’t yet read anything that reflects immoral behavior. Everything I’ve read so far IMHO has described good, albeit aggressive, business practice. I would argue that Bing’s example of Ma Bell is irrelevant because they were a legally protected monopoly, whereas WM is an unprotected enterprise operating in a free market. The description of the difference is simple, the difference in practice is immense.
Besides, at least when I buy something at WM I actually own it. Microsoft no longer sells its software, they only lease it. I discovered this recently when I bought a new computer and decided to get MS Office. I’ll be darned if I’m going to pay MS $99/year for something that to them represents a one time cost perhaps approaching a penny (admittedly, that’s a guess). Kindness is not rampant in the management of huge corporations. Never was, never will be. But both WM and MS sell honestly presented product at honestly presented prices. I hate to have to point it out, but if one wants to find dishonesty and lack of integrity, it is far more rampant in the automobile business than it is in retailing or computers. Dishonest dealership and dishonest repair shops are common enough that anyone who’s owned cars for more than 15 years has run into one. I’ve yet to be treated dishonestly at a WM. I can accept aggressive business practices, even if I choose not to access their offerings. The businesses that disgust me are the dishonest ones.
All good points and I hesitate to keep spouting off, but lets think about what it would be like if WM took a different tact. What if they used their scale to promote US products like they used to? What if they paid a higher wage than other retail shops in the community? So what if it would cost me an extra 10%. The result could be a tremendous catalyst for improved economic activity. Instead they choose to race to the bottom for their own personal, not corporate, profits.
Probably told the story before but we are in a town of about 20K, with 5-10 major employers including manufacturers. Some of these are family owned started by the grandparents in the 1800’s. They have tried to keep wages in check with each other for their own benefit. Some years ago we had an international can plant come to town, paying union scale wages. The heads of five of these businesses marched into the plant managers office one day complaining that he was paying his people too much and that they didn’t pay that much in this town. The plant manager showed them the door and said he’d pay his people what he thought they were worth and they could do the same. That plant has had a positive effect on the wage levels and economic activity in the town.
WM is just attempting to do the same thing on a larger scale. Good business in the long run? I doubt it-like eating your young.
Well, well, well. I am beginning to see what my fellow commenters are thinking about Wal-Mart, and the evolution of our economy. I did often wonder at the oddly intellectual tone of the helpful repair comments, and now I know for certain that I am in the company of some very educated and very insightful people. What a joy!
The evolving corporate system is certainly changing the democracy. It was to be “one person, one vote” but now is “one dollar, one vote”. With recent Supreme Court opinions giving corporations First Amendment protections, the whole political system shifted.
Just today it was announced the something called Cerberus has purchased the Safeway Food store chain. In addition to an investment company enlarging its hold on our food (a frightening idea) it is called “Cerberus”, a three headed monster that sat at the Gates of Hell and made certain no one escaped. Not even an attempt at the Big Lie of 1984.
Because I live in Northern California, I get to read local news about the burgeoning tech industry. The government recently began investigation into a secret pact that Steve Jobs of Apple had with other local tech giants (HP, Google, Adobe,etc.) where they agreed not to hire each other’s employees, in order to control payrolls.
Henry Ford, a nasty old fascist and certainly not a model for progressive management, raised his workers’ pay to fight unions and to make it possible for them to buy the cars they were making. It wasn’t really quite so generous a raise, as he then made a profit on each car, and probably on the financing he offered. They were coerced into buying Fords by a rule that did not permit any employee to park a non-Ford product in a company parking lot.
No wonder I enjoy repairing aging machinery. I can study it, diagnose it, and maybe fix it, and it’s done. There are so many other issues that I can’t fix.
Bing, if WM used their economic prowess to promote U.S. products and paid their employees higher wages, someone else would undercut them with the same business practices that they currently use. And someone else would grow to the 500 pound gorilla and WM would shrink and die. And as long as it’s all done openly and honestly I have no qualms with that. The option is a highly regulated no-longer-free marketplace. The results of that business scenario would be economic disaster. Personally, I’ll take a free marketplace anytime.
I remember many years ago when F.W. Woolworth was a big fish. Like all businesses, they grew, prospered, and eventually, when more aggressive competition came along, shrunk and died. Eventually the same will happen with WM. Meanwhile, I plan to enjoy their lower prices and good selection without guilt. As I mentioned before, they are not a social services agency, they’re a business, and we all benefit in the long run from their aggressive tactics.
I respect others’ decisions to forego their benefits on social conscience. Me, I’m not out to save the world, just to pick up an occasional shirt or two at a good price. The price of a free marketplace is that an occasional company will grow to a 500 pound gorilla. The option to a free marketplace scares me.
mountainbike, I have not said a single word about “dishonesty” or “immorality” or people behaving badly. What I have said is that corporations kill markets. So this statement: “WM is an unprotected enterprise operating in a free market.” is what I am trying to say does not reflect reality. The corporate form of business (as we know it) is a radically different kind of animal than the proprietary form of business. I’m sure that Sam Walton was a great guy and great and very smart businessperson and manager. But without the ability to incorporate, it all could not have morphed into what it is now. And there would be a lot more “market” out there.
Markets vs. capitalism vs corporate capitalism - they are not the same thing and corporate capitalism ends up with little market. No one has to be “bad” for their to be bad effects.