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    Friday, April 28, 2006

    Where I Continue to Defend Walmart


    Niall Stanage defends Walmart:

    Local pols fall over each other to assert that they will keep us free from the contagion of Sam Walton’s chain.

    It emerged in February that Senator Hillary Rodham Clinton had returned a $5,000 donation from the nation’s biggest retailer—despite the fact that she had served on the company’s board from 1986 to 1992.

    Earlier this month, Councilman John Liu responded to news that the corporation had considered opening a store in his Queens district with the stark assertion that “Wal-Mart is not welcome in Flushing.”

    Council Speaker Christine Quinn won a round of applause at a business breakfast last week by announcing, “I don’t want Wal-Mart in the City of New York unless they change their corporate behavior.”

    Sympathy for Wal-Mart doesn’t come easy. The company makes about $20,000 every minute. Total compensation for the company’s C.E.O. was more than $17 million last year.

    But those numbers are testament to nothing more sinister than the chain’s size and success. Look beyond them and it becomes obvious that the exclusion of the company from the five boroughs hurts New Yorkers.

    Some liberal voices are finally being raised on Wal-Mart’s behalf. None is more persuasive than that of Jason Furman. Mr. Furman was the director of economic policy on Senator John Kerry’s Presidential campaign.

    Now a visiting scholar at New York University, his recent paper, “Wal-Mart: A Progressive Success Story,” is essential reading.

    Mr. Furman—who has never received a cent from Wal-Mart—systematically dismantles the most common accusations leveled against the company.

    He demonstrates that the gains from Wal-Mart’s low prices far outweigh any damage caused by downward pressure on retail-sector wages.
    (Mr. Furman also notes that evidence of the latter phenomenon is “far from clear.”)

    He cites an independent study led by an M.I.T. economist that found big-box stores like Wal-Mart make consumers better off “by the equivalent of 25 percent of annual food spending.”
    Moreover, because low-income Americans spend proportionally more of their money on food, they benefit most of all.

    “Lower prices are the equivalent of higher wages,” Mr. Furman told The Observer. “So, for the 150 million Americans who shop at Wal-Mart, Wal-Mart’s being there is the equivalent of giving them a pay raise.”

    Mr. Furman’s paper also notes that 48 percent of Wal-Mart’s workers have health insurance, compared with only 46 percent in the retail industry as a whole. And it suggests that Wal-Mart’s wages are virtually indistinguishable from sector norms.

    It isn’t necessary to pick through arcane economic data to see that the case against Wal-Mart may be exaggerated. If the company really is the scourge of workers, it seems germane to ask why its job openings are routinely oversubscribed. In January, an astonishing 25,000 people applied for 325 jobs at a new store in the Chicago suburbs.

    In New York, politicians seem to turn a blind eye to the public will. Queens Councilwoman Melinda Katz last summer lectured Wal-Mart that it needed to amend its behavior. “Then,” she said, “you would be surprised about how welcoming a community can be.” But Ms. Katz’s constituents already do “welcome” Wal-Mart—by leaving her borough to spend their dollars at the chain’s nearest store in Valley Stream, Nassau County. According to a survey commissioned by the company, almost 70 percent of shoppers at the outlet are Queens residents.

    Some voices in the anti-Wal-Mart chorus fret about the homogenization of New York as nationwide chains move in. The critics seem to believe that New York is so special that its people have no use for a Wal-Mart, but also so frail that its distinctiveness would be vaporized the moment the company’s logo hove into view.

    But the city already is home to several big-box brands, including Target, Costco and Kohl’s. There is even a Kmart within spitting distance of the heart of the East Village. The sky has not yet fallen.

    In truth, the anti-Wal-Mart campaign is primarily funded by labor unions that are fearful of losing influence. The unions make a disingenuous case, presenting a struggle to protect a relatively small number of workers as a noble battle for the common good.

    The campaign to keep Wal-Mart out is antithetical to the common good. Many more New Yorkers would gain from Wal-Mart’s presence than would be hurt by it. None would benefit more than those residents of modest means who struggle to raise a family in one of the most expensive cities on earth.

    Maybe the New York politicians who take pride in their implacable opposition to Wal-Mart are unaware of that reality.
    Or maybe they recognize it, but are too in thrall to the unions to act on it.

    Shame on them either way.


    I'll admit that I get overzealous sometimes in my defenses of Walmart, but, as a liberal, nothing drives me crazier than my fellows scapegoating. We scapegoat Christianity, we scapegoat first television then reality television, we scapegoat "red states", and we scapegoat Walmart.

    Now, Walmart is not a utopian vision, I'd be the first to admit. But the problem is not Walmart, but the current dismal state of labor laws and, frankly, the more obsessed we become with the importance of Walmart changing its own company policies, the less likely we are to make real legislative change. Sure, it would be wonderful if Walmart employees, just given the fact that there are so many of them, made more money and had health insurance. But it would be even better if we passed a living wage (or just raised the minimum wage, to start) and worked on a national health care.

    Walmart has been shown to be discriminatory in its hiring practices, as have most companies that you and I, knowingly and unknowingly, support with our money everyday. Again, the way to make real change is not for a few liberals to make films and sneer as they drive by the Walmart parking lot and count the SUVs, but to look at legislation and support for lawsuits levied against offending corporations, whatever they may be.

    And let's remember what corporate retail does for unskilled workers, who are painfully underemployed, especially in New York. The opportunity to advance, to move from stocker to clerk to assistant day manager on up - this doesn't happen in small mom-and-pop operations. Since most of the people railing about Walmart experienced retail only as a summer job, rather than a career path, the opportunities to make a career of retail offered by major corporations like Walmart get short shrift. In NYC, where between 1/4 and 1/2 of young black men are unemployed, the vast majority of whom lack a GED or high school diploma, service jobs like those at Walmart are far easier to come by than, say, construction (even non-union) and far better paid than, say, street cleaning.

    I truly believe that the NYC local politicians that rage against Walmart are kowtowing to a knee-jerk anti-Walmart sentiment, rather than a substantive consideration of how the introduction of Walmart would impact their constituents, particularly the most needy. In New York, there is such a conservative ethic around preserving everything about the City the way it was fifty years ago, and every step away from that is considered a step backward, rather than progress. What is most troubling about this is that the New York of fifty years ago was itself a product of great shifts in migration patterns and the real estate market. The very things that are responsible for today's changes.

    Having a Walmart in Queens will not make NYC Peoria. The fear of Peoria is so tremendous in this City, and indeed in the Northeast and Mid-Atlantic overall, that we would prefer vast unemployment to a reconsideration of our cityscape - you see it in the intense opposition to the Brooklyn waterfront development, among other major local conflicts. But who gets listened to in this town? The monied people who would prefer to shop at Macy's or Balducci's because they're oh-so-New-York, despite the fact that 25% of New Yorkers living below the poverty line are unable to shop at Macy's, Balducci's, etc. Indeed, the opposition to Walmart in NYC seems more motivated by middle-class NY superiority than by an actual concern for the workers at such a place.

    I encourage the well-intentioned Walmart-haters to get involved in living wage campaigns in their areas and to work with their electeds to put reform-minded corporate legislation on the table.

    8 Comments:

    Blogger zp said...

    I won't go so far as to defend Wal-mart (I'd say they devastate impoverished communities as well as annoy ritzy ones), but much of your argument rocks. I like this especially,

    "the more obsessed we become with the importance of Walmart changing its own company policies, the less likely we are to make real legislative change"

    And the inverse is true as well. Celebrate Whole Foods benefits packages and what you're doing is making this kind of compensation the choice of individual employers and not the right of all workers.

    On a related note, I get really tired of people's consumption choices standing in for political action. Sometimes a personal choice is just a personal choice. And a movement of organized, broadbased, political action is a movement of organized, broadbased, political action.

    11:21 AM  
    Anonymous Anonymous said...

    "Now, Walmart is not a utopian vision, I'd be the first to admit. But the problem is not Walmart, but the current dismal state of labor laws and, frankly, the more obsessed we become with the importance of Walmart changing its own company policies, the less likely we are to make real legislative change."

    One of the basic tenets of the anti-WalMart literature I have read is that WalMart is larger than the other chains. It therefore wields more power than they do in the marketplace and sets the tone for how the other, smaller "Big Boxes" do business. So I find it strange that you consider WalMart a "scapegoat." For something to be a scapegoat, wouldn't it have to be cast as having much power when it truth it has little ? WalMart is scarcely a powerless entity. By ignoring it, will we have a better chance of changing labor laws ? Considering the millions they spend lobbying politicians, it's hard to imagine.

    Furthermore, what's wrong with making a film about WalMart ? How is that any more a distortion of the modern labor situation than blogging about WalMart (pro or con) would be ?

    What good does praising the potential mobility of a Big-box stock clerk over a clerk at a Mom and Pop store mean, anyway ? Potential mobility is nice enough, I suppose, but no matter how ambitious the stock clerk is, there will always be more of him/her than there will be openings for supervisors. I fail to see how cheering on a corporation that pushes Mom and Pop stores out of business thus translates into a love of class mobility.

    Finally, the assertion that cheap food is the same as a signifigant pay raise might make more sense if the shopper could count on everything they pay for coming down in price along with WalMart's prices, but they can't. When more WalMart's move into my state, rents don't drop suddenly in price. Utilities don't. Gas doesn't. College tuitions don't. Or are you supposing that someday WalMart's reach will be so broad that they will hold direct (and benevolent) influence in those spheres as well ?

    Puzzling. --alsis39.75

    5:26 PM  
    Blogger EL said...

    I'll take the last part first:

    Finally, the assertion that cheap food is the same as a signifigant pay raise might make more sense if the shopper could count on everything they pay for coming down in price along with WalMart's prices, but they can't. When more WalMart's move into my state, rents don't drop suddenly in price. Utilities don't. Gas doesn't. College tuitions don't.

    Let me be clear- cheaper food isn't "the same as significant pay raises". Not at all. In fact, a big part of my argument is that significant pay raises just for Walmart employees might be nice, but wouldn't solve the larger problem which is that the minimum wage is not even close to a living wage, especially if you live in an urban area and/or are raising children.

    At the same time, while not "the same", the equation noted in the article is still relevant: people who save money on FOOD have more money for other things. I mean, is that arguable?

    I find it strange that you consider WalMart a "scapegoat." For something to be a scapegoat, wouldn't it have to be cast as having much power when it truth it has little ? WalMart is scarcely a powerless entity.

    Walmart indeed has less power than the whole of all corporate power. That's why it can be called a scapegoat because it is the actions of corporate power, dispersed and amalgamated as this enigma is, that Walmart is standing attacked for, rather than simply its own actions.

    Do Walmart execs have the best of intentions? Of course not! They're in BUSINESS. And the government is in the business of regulating commerce. Until commerce is well-regulated, it makes very little sense to get angry at businesses for being as profitable as possible in the current climate. We need to change the climate, not one corporation.

    WalMart is scarcely a powerless entity. By ignoring it, will we have a better chance of changing labor laws ? Considering the millions they spend lobbying politicians, it's hard to imagine.


    Okay, so you've made my point for me. We need lobbying regulations. We need better labor law. What we don't need is simply going, "Walmart sucks." Why? Not because Walmart doesn't, in many ways, suck, but because it doesn't mean anything to keep saying it, and, indeed, it isolates the argument from its likely proponents, who may shop at Walmart, in order to save money, but are also fed up with their low wages, their lack of health care, and the blank check given to mega-corporations by the federal government. Instead of counting on their support, we say without exactly saying, "Well, come back to us when you specifically hate Walmart enough."

    Potential mobility is nice enough, I suppose, but no matter how ambitious the stock clerk is, there will always be more of him/her than there will be openings for supervisors. I fail to see how cheering on a corporation that pushes Mom and Pop stores out of business thus translates into a love of class mobility.

    I think I made it clear that I'm not quite "cheering on" Walmart, so much as I'm questioning the overall tactics by which we deal with things like income inequalities, labor, corporate greed, etc.

    That said, not everyone can be Mom and Pop. Okay? Most people can't. Just as many people don't want to be. A lot more people can be "Assistant Manager at Big Box Retailer" than can be "Pop". If your argument against the mobility offered by Big Box Retailers is simply that there isn't enough opportunity, I'd agree that, yes, someone's going to be on the bottom. But it's better than mass unemployment.

    So, as someone who is all in favor of a dispersal of money and in favor of the ability of the working classes to support their families, I think that corporate retail can be a good way for the unemployed to take a career path, as opposed to a momentary job.

    And if you're so concerned about Mom and Pop, the focus on Walmart hurts them. Here's how: by pushing "better" policies on individual businesses (health insurance for employees, better pay, and other benefits), small businesses are even less able to cope. If we were working for a health care system that would be out of the hands of employers, the Mom and Pop businesses would be MORE rather than less competitive. Same goes for labor laws and corporate monopoly considerations across the board.

    6:58 PM  
    Anonymous Anonymous said...

    "Okay, so you've made my point for me. We need lobbying regulations. We need better labor law. What we don't need is simply going, 'Walmart sucks.'"

    Bear with me, El. I don't know as much you do about your local politics. Has that actually been the sum total of the local officials' interest in labor-related issues ? That's it ? A lashing out at Wal-Mart ? If so, wow. I thought *my* view of elected officials was justifiably jaundiced, but...

    I'm ex-AFSCME myself (currently unemployed) and I have to say that whatever its other flaws (that's a whole other treatise, right there), the bulletins I read and the actions I attended as part of the union were definitely not limited in content to "WalMart sucks." Honestly, they weren't.

    "people who save money on FOOD have more money for other things. I mean, is that arguable?."

    I suppose not. But it doesn't really deal with the fact that for them to save cash on food and get a little breathing room, because they're underpaid, other laborers millions of miles away also have to be even more underpaid. I think that emphasis on that point sort of mistakes a barnacle for a ship.

    "That said, not everyone can be Mom and Pop. Okay? Most people can't. Just as many people don't want to be. A lot more people can be "Assistant Manager at Big Box Retailer" than can be "Pop". If your argument against the mobility offered by Big Box Retailers is simply that there isn't enough opportunity, I'd agree that, yes, someone's going to be on the bottom. But it's better than mass unemployment."

    No, my argument was more related to the sense of despair at thinking that perhaps lots of those clerks would love to be small business owners, but the climate is too inhospitable for them to make the jump. Not only could they not afford the start-up costs, but they couldn't afford the necessary costs of keeping somebody else legally employed at a living wage, either (ie-- healthcare costs). Of course, I'm trying to get a small business off the ground myself, so I'm a little biased there.

    (Unemployment is actually quite enjoyable, except for that pesky knawing fear of ending up on the street once your savings run out. :p --alsis39.75 )

    8:40 PM  
    Anonymous Anonymous said...

    P.S.-- I have never considered the fight against the Big Box mentality and the fight for single-payer healthcare to be mutually exclusive battles. I have always thought of those things as interconnected, as you obviously do. Not everyone in the halls of labor agreed with me, but like I said, another rant for another day... --alsis39.75

    8:42 PM  
    Blogger EL said...

    I am glad you said what you said about small business owners. I think you're right about the inhospitable climate and how large corps are a party to keeping the environment hostile to smaller start-ups.

    As far as whether ALL politicians are doing is saying "Walmart sucks" that's untrue, of course, among many of them. The sad truth is that, in NYC, a lot of the folks railing against Walmart and other development really AREN'T involved in solving problems. And that's what I hate. They think that simply keeping Walmart from NYC is itself a victory. Maybe it is, when it comes to some concerns, but it certainly is a small one when it comes to labor at large. So, I am definitely shrill on this, I admit it. But I think it comes from being frustrated with how little local politicians (make that electeds in general) have to do to actually get mass support from people who call themselves "progressives". Maybe this is just another variation on the whole "Dems don't stand for anything except being against the Republicans" line.

    When I was unemployed for three LOOOONG months, I did adore being able to go for long walks in between resume-sending, but it stressed me the hell out money-wise to the point that I could hardly eat. I actually admire you for being so relatively chill about it.

    I really wish you all the luck in starting your business. It would be such a gift to have another socially-conscious business owner.

    By the way, if you don't mind my asking, where do live, Alsis?

    9:03 PM  
    Anonymous Anonymous said...

    EL:

    "...Maybe this is just another variation on the whole "Dems don't stand for anything except being against the Republicans" line..."

    Can I buy you a beer now ? Or a sasparilla, if you don't drink alcohol ? :D

    I live in Portland OR, just like Ampersand. But I got here first. :p Oh, and it's easy to chill when you have five months worth of savings left, and a generous spouse. I'm ahead of nearly everyone else stuck in this limbo. Which may be the problem. I need more of a stench of desperation about me so I can impress the employers. :/ --alsis39.9

    2:04 PM  
    Blogger EL said...

    I'd love a beer. And a sasparilla, actually. :)


    The stench of desperation - yes, it probably depends on the type of job you're seeking.

    :)

    12:17 PM  

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