|"We are shopping ourselves out of jobs."
||[Nov. 29th, 2003|08:59 pm]
A long, but worthwhile article on Walmart, particularly interesting because it focuses on the impact Walmart has on the companies who supply the goods on the shelves:|
Whether you want to argue the WTO party line about overseas factories or not, I can't help but think that if a company feels it has no choice but to close American factories in order to fulfill a Wal-Mart contract, that's no good. It's one thing that Walmart is putting mom-and-pop retailers out of business, but when Levi's and Vlasic are hurting too, it makes me wonder.
Our company made an interesting decision in the face of a contract offer from Walmart. We said no. It would have increased the size of our company manifold, but it would have cut our profitablility down and basically made Walmart our only customer.
Rather than take one year of breathtaking money, our owner decided in favor of long term viability.
There are two things that will bring Walmart down. If people stop buying from them or if people stop selling to them.
I applaud the wisdom of your company managers. Yes, the Walmart deal would have made big money for one year, but it's a deal with the devil, with the company signing on the dotted line becoming a soulless slave with no choice but to do the bidding of their only remaining client. BRAVO.
Here's an editorial about this subject from the LA TIMES. The three-part article "The Wal-Mart Effect" referred to is well worth reading.
November 26, 2003
At What Cost Bargains?
Las Vegas hotel worker Chastity Ferguson earns $400 a week and depends on Wal-Mart's low prices to feed and clothe her four children. Isabel Reyes, a Honduran laborer who struggles to push fabric through a sewing machine 10 hours a day, makes the bargains possible with her low salary, equal to $35 per week. The two women chronicled in "The Wal-Mart Effect," a three-part series by Times reporters in the U.S. and abroad, put human faces on the painful dichotomy being created as Wal-Mart reshapes how the retail world works.
In the Southern California supermarket strike, established grocers demand wage and benefit cuts to stay competitive as Wal-Mart lays plans for 40 "Supercenters," with full grocery sections, in California. The 70,000 union workers walking picket lines fear their middle-class comforts are about to slip away. Yet union-conducted surveys show that their members shop at Wal-Mart. Wal-Mart's ceaseless pressure for lower-cost goods speeded the shift of domestic apparel production to lower-cost plants in China and Central America. Yet workers and governments in countries where $35 a week is a good wage clamor for Wal-Mart's business.
The issues are powerful and global but not new. Think of the Triangle Shirtwaist Co. fire in New York in 1911. The deaths of 146 people, mostly low-wage female workers, aroused the public to demand powerful workplace protections, culminating decades later under Franklin D. Roosevelt. It took that long to build social consensus on balancing business and worker rights.
The issues surrounding Wal-Mart are far less dramatic, and not all of them are clear-cut. Certainly Wal-Mart should suffer more than a regulatory slap if, as alleged, it knowingly allowed cleaning contractors to hire cheaper, undocumented workers. The same goes for charges of forcing employees to work overtime without pay and of discriminating against women in promotions. Unions must be allowed to conduct legal organizing drives.
After that it gets harder. Henry Ford's aim when he built his first automobile assembly line was to make a product that his workers could buy. Now, what good is served if low-paid labor cannot afford to buy even the cheap merchandise lining Wal-Mart's shelves? If "always lower prices" also means
"always lower wages," what does it mean to the larger economy that is still being kept afloat by consumer spending? Or to overstressed public health systems caring for workers who can't afford their employers' health plans?
Asking these questions is only a start, as the long debate after the Triangle fire tells us. In the early part of the 20th century, America was deciding whether to keep accepting child labor and grueling, filthy working conditions in its cities and on its farms. The questions have grown more complicated, as have the answers. Wal-Mart is a prosperous business because it responds so aggressively to the demands of consumers. But Wal-Mart's actions fuel global wage competition. Americans must learn to ask themselves — and tell their legislators — what they want, why they want it and what the true costs of an $8.63 polo shirt are.
2003-11-30 10:46 pm (UTC)
I just read that series..fascinating. thanks for the heads-up!
The article mentions quality going down as prices go down - that can't last forever. Eventually some items become low enough quality that no one wants to buy them.
Also I've run into this idea a few times: When capitalism is taken to its logical extreme of perfectly competitive markets with zero profit, it becomes communism.
thanks for that. i read ALL of that article, and have forwarded the url to interested peeps. one of britain's bigest supermarket chains was recently absorbed by walmart, so now when you leave ASDA, huge banners say "Now Part of the Walmart Family".
i just don't like to shop in store that big. i don't mean the economic size, or the number of stores, i mean the building. i think all my economic justice stuff follows on from a basic aesthetic reaction/phopia, that number of people in a space that size gives me the choking heebs.
That was fascinating. Being an NC resident, I'm particularly aware of the Carolina Mills situation. It's putting amazing numbers of North Carolinians out of jobs.
All Walmart needs to do now is monopolize the cigarette industry, and we'd be completely penniless as a state.
Of course, considering that Walmart owns half the actual land in western NC anyway...
Fast Company is a good magazine, I find it an interesting read even though business and economic stuff often bores me to suicide.