Saturday, January 1, 2011

Walls, Walmarts, and Nothing In Between

This whole debate involving Walmart is extremely illustrative. It is also, unfortunately, just another example of how shallow that the political discourse has gotten these days. I mean, just think about it here. On the far-right, you have some ideologues saying that Walmart is the greatest thing since sliced bread. And on the far-left, you have equally ideological people saying that this same Walmart is bringing about the end of western civilization. It flat-out can't get any more polarizing than that.........................................................................................................But what's the answer here/who's right? Common sense obviously tells us that the truth is somewhere in between. But how 'bout the research? What in the hell does that tell us? Well, it basically says that, yes, Walmart does in fact put some of those smaller businesses....out of business. But it also apparently says that the net effect is negligible - this, in that a lot of newer/different businesses usually spring up to replace the vanquished ones (according to Economic Inquiry, those states with the largest number of Walmarts actually have more in terms of small firm establishments per capita). In terms of quality of life (as defined by Miller and McCune; social capital, obesity, leisure time, and social/political values), there doesn't seem to be an appreciable difference there, either (this, in terms of Walmart vs. nonWalmart communities)...................................................................................................Of course, we'd be very remiss if we didn't look at one of the more pointed criticisms of Walmart - namely, that the wages and benefits are woefully inadequate. Here, folks, is what I've basically been able to uncover. Bottom-line, a lot of it simply depends on how you choose to look at it. Yes, the pay and benefits ARE week. BUT, when you compare them to other wage/benefit packages in the retail sector, they're actually pretty competitive. Add to that the fact that, without some of these same Walmart stores, the rural poor, in particular would end up paying significantly more for their food, merchandise, prescriptions, etc. In terms of Walmart being TOO big/making too much of a profit, again, a lot of it depends on how you choose to examine at it. Yes, Walmart IS humongous and it DOES makes a crap-load of moolah. But, it only actually nets 1.5-2% of its revenue as profit (compared to 8% by their competitors) - not exactly a gargantuan amount..................................................................................................I think, folks, that we basically have to realize a fact here - the effects of Walmart on our society are probably about a wash (maybe a slightly positive effect). I mean, I know that that doesn't necessarily sell a lot of newspapers, stoke the frigging flames of controversy, etc., but it does in fact seem to be a pretty fair/accurate assessment. Sorry.

6 comments:

Commander Zaius said...

...net effect is negligible - this, in that a lot of newer/different businesses usually spring up to replace the vanquished ones...

Yeah but...Being from the backwoods of South Carolina Wal-Mart came late to my hometown and quickly killed many of the locally owned familiy businesses. Other small businesses did replace them but they were just smaller and specialized versions of Wal-Mart with owners on the other side of the country at best.

I realized that is splitting mighty thin hairs but its important to me since I personally knew the owners of the two department stores in my hometown. One had been in business since the end of the Civil War and the other since the early 20th century.

I personally don't care how much profit Wal-Mart makes but I do have another problem with them. Yeah, a $20 DVD player and $200 dollar 42" LCD television is damn cool except for the fact those products were made in China and add to the trade deficit that is blowing our economy away. Simply put I don't believe that crap about free trade being the best thing since sliced bread. Can we cut off all imported goods? Hell no, but this free trade shit ain't working either.

Wal-Mart's pay and benefits maybe sweet as compared to other retail stores but that is still a long way from paying wages that will allow families to do many things long exported higher paying manufacturing jobs did.

Marcus said...

Will, this a rather interesting piece. A good question is what gives Walmart a big edge beyond price? As a former logistics man I can tell you that Walmart has one of the most efficient and sophisticated distribution systems in the USA...the have their own long haul trucking as well as strategic warehousing and distributions centers. I think beyond this, there is more unseemly issue of their purchasing method....Walmart has choosen vendors and suppliers of which they engage in extreme strong arm tactics. Because they are so big, they can leverage pricing that no one else can. Because the econmy has changed with stagnant and lower wages, people flock there because maybe they are forced to.

In sum, I believe the internet has done far more destruction to the economy than Walmart, eg, Music retailing destroyed by peer to peer sites, a decline in brick and mortal stores, etc.

Mr Beach Bum. I share your outrage of offshoring, eg, we are not good enough to hire but our maarketplace IS good enough to exploit. Our politicians refuse to act because the marketplace is sancrosant. We could have along discussion about this...Guess we can save this for now...

Unknown said...

WalMart is culturally abusive, community destructive and they place false values in the community. I detest them. I boycott them. Interesting piece.

They undervalue the product of American makers and pressure them into either devaluing their product to accomodate WalMart of forget it. And this has lead to the bankruptcy of several small entrepenurial companies whose creative devices / content where then plundered by WalMart subsidy. (sorry about the spelling Will)

I think they are despicable.
:-)

Rusty Shackleford said...

Actually Gwennie I'd guess there are a few people in Bentonville who would deem you despicable.

Wal Mart is one of Americas greatest business stories,along with Ford,GM,Microsoft,Home Depot and a few others.What the Walton family has created is nothing short of astounding.
Unfortunately what some libs cant seem to understand is business is competitive,you have to make your product better,cheaper and faster then your foe or you'll lose.Wal Mart learned that the day then opened their first store.

Ms. Barry claimed Wal Mart "has lead to the bankruptcy of several small entrepenurial companies." Perhaps she could enlighten with the names of these companies,or is she perhaps using the tried and true liberal tactic of talking out ones ass.

I say Bravo Wal Mart...a job well done Walton family.Only in America my friends.

Marcus said...

Mr.Rusty: I think Gwen's point is a bit deeper than you give her credit for...Business is business. We all understand competition, making a good product, offering good service, good value, etc. This can and should be done fairly. In my previous post I commended Walmart for their innovative and cutting edge approach in Logistics. I think some of Walmart's tactics are, well, dubious. It is a fair question. It has ZERO to do with being a liberal...

Will "take no prisoners" Hart said...

Interesting comments, folks - all.......Yes, some of the vitriol directed toward Walmart is no doubt deserved. The fact that they make some of their employees wait several years before providing them health coverage I especially find troubling. And it does kind of suck that some of those moms and pops had to go out of business. But, I also have to tell you, a lot of those moms and pops used to rip me off when I was a kid and, so, no, a fair amount of that purging isn't necessarily a bad thing from my perspective.......As for the newer businesses that come in, a lot of these actually tend to give the community a fuller feel; coffee shops, art galleries, fabric stores, gyms, nail salons, etc.. Yes, the change is hard for some...but it is...kind of is what it is.......Basically, I think that Walmart is the quintessential double edged sword. It giveth AND it taketh away.......Also, the question could easily be asked - is Walmart the cause of our downward spiral, OR is it instead more-so the result?