We haven't had a Wal-Mart thread in a while, so here's an article for you.

http://www.nytimes.com/2005/08/03/opini ... mawat.html?

The Price Is Right

By PANKAJ GHEMAWAT and KEN A. MARK
Published: August 3, 2005

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.

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.

Similarly, the savings to customers also exceed the total surplus the company generates for its shareholders- a surplus that would be wiped out if Wal-Mart's million-plus employees were to receive a $2-per-hour pay increase, modest though that sounds. Such a possibility would be unacceptable to Wal-Mart's shareholders, who include not only Sam Walton's heirs but also the millions of Americans who invest in mutual funds and pension plans. Instead, the more than 100 million Americans who shop at Wal-Mart would most likely just end up paying higher prices.

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.

So workers earn low wages and are given limited health coverage but the store operates in an area that is low-income, impoverished and somwhat destitute. Very interesting likeness in the wages of the workers and the econimic zones that Wal-Mart tends to operate in and the prices that are offer'd for their goods are not some noble feat nor are they ignoble but more then anything a reflection.

Wal Mart stores do not exist to provide jobs to Kathy the Cashier and Al the StockBoy, they exist to make money for investors.

I can't really argue with that assesment

Al is a good friend of mine. He someday hopes to make Stockboy Manager before he moves to his retirement position at 85 as WalMart greeter.

Didn't Kathy move up to Stationary Department Manager? I saw that commercial when Wal-Mart was being sued for discrimination.

Wal Mart doesn't promote women, silly B.

Al could have worked for the mom & pop shop across town, but they couldn't afford any health insurance for their workers (let alone themselves being small business owners), can't sponsor a 401(k), or even promise a future with the mom & pop shop after they die.

Does Wal-Mart give health insurance or 401(k)s?

EDIT: I remember when Wal-Mart was opening life insurance plans for all of its employees and listing the store as the beneficiary!

http://www.alternet.org/story/22298/

Emloyers don't have to provide insurance coverage.

Keep people in low income so the only store they can afford is Wal-Mart, so discreetly evil.

Fiendishly effective.

Did you say "keep people"? I didn't know that Wal-Mart drafts workers for their store.

People have a choice of where they want to work last time I check. But people who have low incomes need a dependable job that's close to home. In this case, its Wal-Mart and not some random mom & pop shop that sells batman playing cards which will close in 3 months.

As soon as my fiance and I get married in October, she'll be switching to my insurance. Her insurance is from the state. Some programs are better than others, but some insurance is better than none.

Clarification: Workers earn low wages are have health care coverage dangled in front of them as a 'pretend' option - as in *IF* you meet the weekly hour requirements (Which excludes most anyone who isn't in a management position - as WalMart considers a 28 hour week "full time") AND you have to pay for it, with your shitty low wages.

Plus - $16 billion isn't all that much of a yearly savings divided among 100 million shoppers. Figure all those people slaving away so that you can save less than $200 a year.

When you're too poor to own a car, you live in a rural area with little or no public transportation and Wal Mart puts most everyone else out of buisness - no. You DON'T have a choice of where to work. It's tough enough around here - close to the city surrounded by malls, etc to find a job that'll offer a decent wage.

No one *has* to work there. Period. You stay in any job out of choice.