Hating Wal-Mart

According to Jay Nordlinger, hating Wal-Mart is akin to hating America. No, really. Kevin Drum notes this briefly in his Political Animal blog over at the Washington Monthly, but having spent 4 years of grad school at Wal-Mart University, I'd like to deconstruct Mr. Nordlinger a bit more indepth.

Nordlinger is crying because the voters of Inglewood overwhelmingly decided that they didn't want Wal-Mart to have an individual fiefdom in their midst. This is no "liberal exaggeration"--Wal-Mart funded a "ballot initiative that would have bypassed the government and allowed the construction without the traffic reviews, environmental studies or public hearings required of other developments." They wanted to set up their own kingdom in Inglewood, and that, more than anything, is apparently what drove the rejection of the ballot measure.

But Nordlinger has to make some sort of argument, so he turns to economics.

In addition to a million employees, Wal-Mart has 100 million shoppers a week, and those shoppers don't have guns to their heads, and they're not unhappy. Wal-Mart saves people a fortune — $20 billion a year, according to New England Consulting. And the real number is closer to $100 billion because of the lower prices Sam Walton's company forces from other retailers. I might add that Wal-Mart has made its investors tidy sums.

So let's break this down. Wal-Mart hires a lot of people--true, on its face, but these are hardly high paying jobs. The Atlanta Journal-Constitution did a piece on February 27 noting that Wal-Mart employees had ten times the number of children on the state health insurance program as the next highest employer. As someone who has had his kid on a state program--ArkKids First--let me tell you that generally that means the parent(s) are going without because it's either unavailable or too expensive.

Wal-Mart does save people money with lower prices, and does force other retailers to lower their prices as well, true. But is this necessarily a good thing? Not always.
One big result of Wal-mart's relentless push to lower its prices is that they hardly ever sell anything manufactured in the US anymore. When I was a teenager, Wal-Mart made a big deal of advertising that they sold only US made goods. That turned into US made goods that were competitive with foreign made goods. Now they don't even try anymore. They don't care if what they sell is made by children in sweatshops--they only care about cheap. As a result, more than one US plant has closed because they can't compete with foreign made goods. Wal-Mart also has been known to examine the books of their suppliers in all markets and has claimed that their margins are too high, requiring them to make damaging concessions. The result? Lower paying jobs, or job losses, fewer benefits for those employees who retain their jobs, and that many more people who are forced to shop at Wal-Mart because they can't afford to shop anywhere else.

Nordlinger's only really valid point in that paragraph is that Wal-Mart has benefitted investors. It has. But their monetary benefit has come at a huge social cost.

Much of Nordlinger's column deals with the clash between Wal-Mart and the UFCW. Wal-mart's struggles with unionization have been excruciatingly detailed in the past, and have often involved treading heavily on the law. Wal-Mart is unabashed in its hatred for unions, and California is one of the last bastions of unionization in the grocery industry. Nordlinger acts as though Wal-Mart employees have simply turned down attempts by the UFCW and other unions to organize--that couldn't be farther from the truth. Wal-Mart managers are given detailed instructions on how to remain union free, and their tactics are often questionable to say the least.

Nordlinger acts as though Wal-Mart is a savior for the people of Inglewood, there to bring lower prices, good jobs, and happiness and sunshine throughout the land. I don't know what Inglewood is like--I've never been there. But I have seen Wal-mart up close and personal--Fayetteville, AR has a population of about 65,000 and 2 Supercenters and a Wal-Mart "neighborhood grocery"--and the result is that Wal-mart utterly dominates the everyday life of a large percentage of the population. It's a scary place, as detailed by writer Dan Baum in his Playboy piece entitled "God and Satan in Bentonville." (I can't find a link to the article online, but here's an interview Baum did with Anderson Cooper.)

So Nordlinger, sneer at those of us who don't think that Wal-Mart is the end-all of retail if you wish, and sneer at those of us who think that Wal-Mart ought to be forced to follow the same environmental and zoning rules that everyone else has to--I really don't care. All I know is that the citizens of Inglewood decided that, at least for now, something, anything, was more important than being able to buy a gallon of pickles for $2.97.

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