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November 24, 2003 WAL-MART PART 2....Here's Part 2 of the 3-part LA Times Wal-Mart story. First there's this:
But then there's also this:
There are no simple answers to the questions raised by this article, but it does show that American outsourcing can work for both good and ill. It's just that it would be nice to raise the proportion of good a little bit. Posted by Kevin Drum at November 24, 2003 09:11 AM | TrackBackComments
If only Isabel had worked harder in school. She could be designing satellites! Posted by: wetzel at November 24, 2003 09:24 AM | PERMALINKWhy, she asked, would a company in the richest country in the world care about a few pennies on a pair of shorts? Because companies don't care about people, they care about profits. Silly girl. Furthermore, Americans don't (by and large) care about people either. As long as the merchandise is cheap, it could come with actual blood-stained price tags and there'd be no decrease in sales. Check out the automobiles in the Wal-Mart parking lot. For every rusted out single-mother vehicle, you'll find 20 suburban-mom SUVs. It's not because they couldn't afford to pay a few cents more to help out workers. It's because they just don't care. Posted by: chris at November 24, 2003 09:33 AM | PERMALINKI don't see how the second passage displays the good side. If they're truly good those conditions wouldn't have existed at time of contract signing. It shouldn't take complaints (and I'm sure threats of publicity) to gain attention. Posted by: bubba at November 24, 2003 09:38 AM | PERMALINKIs Josh Marshall beginning to see the light? Is Wes Clark "unelectable"? Wow. That's not a good sign -- if you're John Kerry, that is. A new Boston Herald poll has Howard Dean beating Kerry 33% to 24% in Massachusetts. That comes on the heels of a Boston Globe/WBZ-TV poll which had Dean beating Kerry 27% to 24%. The only small silver lining for the Massachusetts senator is that I suspect it's been this way for some time. It's just that no one has done a public poll in the state on the Dem primary race in months. -- Josh Marshall
I'm expecting the Bush's polls to fall again because yesterdays horror.
er..I'm expecting Bush's polls to fall again because of yesterdays horror in Iraq. Posted by: Cheryl at November 24, 2003 09:42 AM | PERMALINKThe Morality of Commerce, now there's a course I'd have signed up for. Instead, i had to learn from rare enlightened others or teach myself. Not whether Commerce is moral or immoral--it is and will ever be amoral where pure numbers are your only calculus. I'm talking about how to make it more humane. It can be practiced as a net-plus proposition: profit and principle, even spiritual sense can and do coexist with phenomenal results to margins and P&L. Progressive Insurance, Timberland, Markel and others manage it and gaggle at the top of their sectors. Reyes' "few pennies" can and do matter to the Walmarts of the world. The elephant in the room question is how do we, and they, define why those few additional pennies matter. The answer's coming. Posted by: fouro at November 24, 2003 09:46 AM | PERMALINKChris, those moms are the first to defect from a business model that offends many of their sensibilities--they just don't read business pubs or blogs so they don't understand that the Hallmark style PR TV spots about WMT's "humanity" and "goodness" and the Smiley face are props. When the "You save, but others pay, in more ways than one" message gels, then the veil starts to lift. Critical mass is a ways off yet. Posted by: fouro at November 24, 2003 09:52 AM | PERMALINKFouro: they just don't read business pubs or blogs so they don't understand that the Hallmark style PR TV spots about WMT's "humanity" and "goodness" and the Smiley face are props. You are a true sweetie pie, I have to give you credit for being an optimist. Unfortunately, most of these people do know that others are working for peanuts in ugly conditions. Obviously this is anecdotal, but I have spoken with many many folks about the subject (including my own mother-in-law) and they say, "Well there's nothing I can do to change things," and that's the end of consciousness raising. Oddly, where one shops is one of the few things people can actually do something about. Americans can get all excited about a baby in a well, wring their hands and donate some feel-good money for a one-time college fund for baby X. But when it comes to actually making any kind of a sacrifice, financially or life-style (conserving energy comes to mind), then forget it. Americans are Me First...especially when no one's looking. Posted by: chris at November 24, 2003 10:18 AM | PERMALINKI agree Chris about you can choose where you shop. I choose to not shop at Walmart. I never have; I never will. Posted by: betsarms at November 24, 2003 10:29 AM | PERMALINKWhat a wonderful people are Americans ! And who are you ? Un-American ? you can leave for some other place like Sweden. Posted by: Freedomlover at November 24, 2003 10:33 AM | PERMALINKKevin, on the second excerpt you should post the following two paragraphs. The very same labor activist who recognizes Wal-Mart's assistance in getting three months of wages recognizes that Wal-Mart's pressure is the reason for such abuses in the first place. Posted by: josh at November 24, 2003 10:33 AM | PERMALINK"When no one is looking" Oh but there is a lot of people looking, and they do remember. There
are even people that become so frustrated by this "Me first" thing the
collective america is suffering from that they start doing things like
suicide bombing and flying planes in to big american buildings. Chris-- I've been called "An optimist with brass knuckles" so I'll take your sweetie pie compliment with pleasure. You're right about people, up to a point. Hence, I said "critical mass is a ways off." Those mom's har, but they're not listening yet: The message doesn't have personal traction, yet. Look at Ma Bell. Bigfoot if ever there was one. Only when a critical mass of pissed, underserved and mono-choiced people converged with the interests of hungry burgeoning companies looking for an in all converged did the impossible happen: The Empire crumbled. Walmart's growth over the last 10 years has been exponential with the tech revolution. But their operations foresight led to arrogance, which will be their downfall. They are effectively getting deeper into everyones pocket now, broad and wide. Anti-competitive grumblings are leaking out. Politicians and planners are seeing the shortsightedness of welcoming big boxes with their asphalt desert parking lots and rogue shopping carts and tumbleweed trash. Financial types and chambers of commerce are watching tax-paying small businesses go under and the reassuring steadiness of a diverse tax base go with it. Just you watch my friend. And this optimist will happily be pushing from the other side Posted by: fouro at November 24, 2003 10:49 AM | PERMALINKBecause companies don't care about people, they care about profits. Silly girl. Exactly. Which is why companies need to be regulated by governments. And who is more responsible for regulating the business practices of an American company in Bangladesh? The American government or that of Bangladesh? I'd argue the latter, though both bear some responsibility. Turn the question around: Who is more responsible for regulating, for example, the pollutants created by a Japanese company based in the United States? It seems fairly obvious that the impetus for regulation is on the country where the actual abuses are taking place. Posted by: Derek James at November 24, 2003 11:23 AM | PERMALINKI refuse to shop at Wal-Mart. Mostly because they represent a trend of crushing small and mid size business in their path, just so I can pay $0.50 less for lettuce or some such crap. Frankly I'm willing to pay a little more to support other businesses. I bet the people who think they're saving by shopping there, are many of the people who have large credit card debts and are getting raped by 10+ % interest charges on their outstanding balances. Ah well. Posted by: Bush Rules at November 24, 2003 11:26 AM | PERMALINKThere is nothing inherently right or wrong about the free market, Walmart, and globablization. They can all contain elements that are good and bad. The 'solution', if there is one, is to disseminate better information, so that the WHOLE story, the good and the bad, gets known. As Isabel pointed out, the difference between 'exploitation' and 'opportunity' can be as small as a few cents. There may be a workable middle ground, but without knowledge it will never be reached. Posted by: Tripp at November 24, 2003 11:35 AM | PERMALINK"Why, she asked, would a company in the richest country in the world care about a few pennies on a pair of shorts?" A journalist can quote somebody as saying something they themselves wouldn't ask. I consider this a wee bit dishonest. If the person asked, "Why would a rich company like WalMart want to make a profit?" is it good for a journalist to posit this as if it's a real stumper? A real policy problem? Imagine a new government directive: Thou shalt not care about the pennies. Posted by: me oh my at November 24, 2003 12:31 PM | PERMALINKWow! And I´m curious. Didn´t you have any competition I´m just asking, you see. :) Because Wal-Mart is still losing If rumours in financial papers If the European financial newspapers If Wal-Mart really is that important Detlef Posted by: Detlef at November 24, 2003 01:04 PM | PERMALINKWal-Mart Chief Executive H. Lee Scott Jr. said in an interview
that the trend reflected an inescapable reality: U.S. consumers aren't
willing to pay even a little extra for a "Made in America" label. To paraphrase Atrios paraphrasing Ann Coulter... Why do Americans hate America? Posted by: def rimjob at November 24, 2003 01:15 PM | PERMALINKGee, I have a God Bless America bumper sticker on my SUV. If that isn't loving America, I'd like to know what is! Posted by: chris at November 24, 2003 01:20 PM | PERMALINKDetlef- Are from Germany? Doesn't Germany have fair competition rules that don't allow stores to advertise sales that are not actually sales, etc...? According to a friend from Bonn, Walmart can't compete when their marketing is forced to be completely truthful. (Not to mention that Germany has a much higher minimum wage) My friend also said that Walmart is despised by many who wouldn't shop there if their lives depended on it. Just curious if these perceptions are accurate. Posted by: def rimjob at November 24, 2003 01:22 PM | PERMALINKOutsourcing can do good? Maybe, but is that why firms are falling over themselves to get out of production in the developed countries? I think it's because they think can squeeze more out of workers, extract more concessions from the local authorities, and forget about environmental problems. Country A doesn't like it? Fine, we'll move to Country B. Welcome to the global shell game. Posted by: che at November 24, 2003 02:03 PM | PERMALINKDef, that minimum wage element is key for Germany's annoyance to WMT's model. I've blogged a fair bit today here on their lack of a sustainable global competitive advantage among other things. Speaking as a UK-born, USAF brat of British Mom and Oregonian Dad, I've experienced both sides of the cultural pond and there is a sneering element to European regard for the US price-is-all, quality of product and experience be damned retail ethic that prevails in many large scale retailers. They admire many of the tech and intellectual property elements of what we do, but as my UK-living airline pilot bro says, "American's lack style." I should add, he spent his 6-16th years in places like Del Rio Texas, so he's no inbred Euro-trash. Having just shopped for my kids and bought some very cool german and swiis toys for my kids after comparing side by side with the likes of fisher-price and Hasbro, I can't say I disagree. However, Germany and the EU are exceptions to your minimum wage rule--other continents and economies will be and are welcoming them like a Chamber of Commerce from Smallsville, USA. Posted by: fouro at November 24, 2003 02:18 PM | PERMALINKThe very same labor activist who recognizes Wal-Mart's assistance in getting three months of wages recognizes that Wal-Mart's pressure is the reason for such abuses in the first place. There's also the point that were Wal-Mart shop floor workers in Flatsville, Iowa to complain about conditions or the bending of labour laws, they'd be out on their arses. And as for unionisation... well, forget it. Gotta love 'at-will' employment. Wal-Mart is an economic vampire: the FastCompany piece on its strong-arming of Vlasic is exemplary. This series augments it. And as for Wal-Mart in Europe: well, after taking over Asda, the Bentonville mafia got rather upset that the British government is less eager to turn over green-belt sites to them. (After all, Britain is a smaller, more densely-populated country, and the effect of out-of-town megamarkets is much more profound.) Expect Tony Blair to be sweet-talked into gutting John Prescott's regulations before the next election. What's interesting about Germany is that there's an established tradition of small-selection, big-box, pile-it-high retailers -- the Aldis, Nettos and Lidls. In addition, the mark-up on food is traditionally much lower in Germany than in the US or especially the UK. And like much of Europe, people are more likely to go to specialist retailers than to buy everything under one roof, based upon a long-established belief that butchers sell better meat, bakers sell better bread, etc. Posted by: nick sweeney at November 24, 2003 02:49 PM | PERMALINKA lot of the poverty-level Walmart workers can afford to buy new clothing regularly - because Walmart only charges them $8.50 for pants and $6.00 for a shirt. I'm guessing a lot of Walmart workers spend a significant portion of their paycheck at Walmart. Say Walmart's prices go up. That leads to higher wages - that are then spent on more-expensive clothing. Buying American is expensive, anyways. I buy American because I'm a stereotypical flag-waving bomb-loving patriotic American, and my shoes (made in MA) cost $295 and my khakis (made in PA) cost $100. Posted by: Stone at November 24, 2003 02:51 PM | PERMALINKWell, I'm an ass, that point was made on the main page. "In the mid-20th century, thanks in part to vigorous unionization, American businesses steadily paid their workers more, thus creating a growing class of people who could afford the products they made..." Those products became more expensive as a result, though, right? Which negated (to some extent) the benefit of higher wages. Posted by: Stone at November 24, 2003 03:58 PM | PERMALINKStone: Bill's khakis! Good on ya, dude. Rockports or Timberlands? Exactly on the higher wages thing In my opinion. Posted by: fouro at November 24, 2003 04:02 PM | PERMALINKWhat's most important about this story is that it announces the formation of the best-acronymed organization ever, the Bangladesh Independent Garment Workers Union Federation. Posted by: BIGWUF at November 24, 2003 04:36 PM | PERMALINKI'm guessing a lot of Walmart workers spend a significant portion of their paycheck at Walmart Years ago, I briefly worked for Kroger. Instead of a paycheck, I was given a voucher which I could cash only at the store. There were no fees or extra deductions, but you were forced to have a couple hundred bucks cash in your pocket. The intended end result was for employees to do their shopping right there and then. (This was long before grocers began accepting credit/debit cards, so you always needed cash or your checkbook at the store. How convenient!) I have no idea if that is still common practice. But I'd bet good money that Walmart encourages its workers to cash their paychecks in the store for the same reason. Posted by: def rimjob at November 24, 2003 06:30 PM | PERMALINKA comment about WalMart: It isn't that they merely don't care and are only out for profit, after all, that much is obvious, the key is that as a service company (retailer who outsources all production) Wal Mart has exactly *ONE* source of profit: market power. The *only* way a company like Wal Mart can make a profit at all exceeding the average for clothing retailers is because their enormous size gives them huge market power they can use to leverage prices for imputs (merchandise, clothes produtcion outsourced, labour) downward while retaining sufficient pricing power to have very low, but high compared to imput costs, prices. This nicely explains the way they behave. As for paying workers decent money causing inflation, a statistic for you: Since 1900 inflation has always been redistributive from poor to rich, worker to capital, small capital to large capital. It isn't that the wage increases cause inflation through magic, the inflation is capital taking the money back by increasing prices faster than wages, and large firms increasing their prices faster than small ones. Posted by: Lorenzo at November 25, 2003 01:52 AM | PERMALINKBoth of your examples seem pure good to me. $35 per week works out to about $150 per month. I don't know wage levels in Honduras compared to China, but I can tell you that in China, for an uneducated person, that's an excellent salary. Poor farmers in China often make less than US$50 per month. Moving to a factory where the salary is three times as high and food and lodging is included is a huge step up. (And yes, food and lodging is included - factories want the control.) You need to compare wages with what workers would make if WalMart wasn't there, not with what you make. Posted by: Mike at November 25, 2003 02:04 AM | PERMALINKWal-Mart employees also get a 10% discount on most stock, encouraging them to shop there. I was a cashier at a Wal-Mart for one month. They had a big board on which they put the names of the cashiers who made the most transactions per hour. Well, I mastered the art of turning the register off between customers and scanning things fast, and at the start of my second month I was #2 on the big board... but I was already gone. Now I can't stand Wal-Mart. The narrow isles, the bright lights, the
inconsiderate shoppers, etc. I'm a poor grad student now, but I'd
rather pay a little extra to shop at Target. Check FastCompany Magazine's story on "The Wal-Mart You DON'T Know -- Why Low Prices Have a High Cost" by Charles Fishman. http://www.fastcompany.com/magazine/77/walmart.html The giant retailer's low prices often come with a high cost. Wal-Mart's relentless pressure can crush the companies it does business with and force them to send jobs overseas. Are we shopping our way straight to the unemployment line? Posted by: MS at November 25, 2003 09:03 AM | PERMALINKIt's kind of sick, though, to think about the impetus some of these Walmart workers have to spend most of their paycheck at the store which pays them. That 10% discount makes it even more noticeable. Does Walmart sell cars yet? Can you pay utilities there? I wonder whether they could get into the housing business. It's almost like communism, in a way - instead of paychecks, Walmart might as well just be handing out chits for clothing, food, electronics, CDs, and so on. Imagine Walmart offered two options. You could receive your paycheck in the form of cash, and get a 10% discount. Or, you can receive your paycheck (almost?) entirely in the form of coupons for Walmart goods at a 15% discount - instead of $8.50 in cash, you get a $10 clothing voucher each week. What would most Walmart workers choose? Drive home to your Housing-Harry Walmart-label prefab house, powered by Martha Stewart label electricity, in the used car you bought from Walmart. It's like a more workable communism. Still disgusting, though. Fouro - "Alden", actually, the best ready-made shoes I've ever seen/worn. They're worth checking out. Posted by: Stone at November 25, 2003 09:24 AM | PERMALINKThe company is so anti-capitalist. I can't understand why some Republicans support them, or the Walmart model. Say Walmart moved all production back into the US, and let prices go up as a result of that, and then basically turned itself into the sole provider of goods, housing, and services for its employees. Authoritarians like Pat Buchanan would freak out over that, they'd probably be happy as hell. Walmart could toss a sop to the left by advocating isolationism (what do they need war for?), and guys like Noam Chomsky would probably be happy, too - no more globalization, no more globalization, a semi-workable communist government. As long as the company kept its mouth shut about God, gays, and guns, it'd be something both of those bastards, Buchanan and Chomsky, could support. Not enough people recognize the similarities between the two of them. Posted by: Stone at November 25, 2003 09:48 AM | PERMALINKStone: Haven't heard of Alden, thanks or the tip. So we're talking about a company store for Sam's America!. That's the logical progression it seems to me. Walmart has hurt my head from a lot of practice standpoints for a while now, so I can't say I'm sad to see the villagers looking for torches. I tried to get a bead on their price advantage* on my blog yesterday from a sustainability/social impact viewoint yesterday. (*can't call that a competitive advantage, cuz yer always chasing price to $0.00) I ended up with consumers defecting at the first viable opportunity; foreign gov'ts being pissed at the decimation of their small business communities; and our Local to Nat'l politicians pissed at the mess they had to untangle from all the unintended consequences. Like the fast company article relates, A&P got theirs. Ma Bell, Sears. The only exceprtion right now is Microsoft--and they've got a semblence of national securtiy immunity. Posted by: fouro at November 25, 2003 12:25 PM | PERMALINKWhoops. Do two "yesterday"s make a tomorrow? Need more coffee. Posted by: fouro at November 25, 2003 12:28 PM | PERMALINKIt's a sign of mediocrity when you demonstrate gratitude with moderation. Posted by: Ferguson Sandy at January 25, 2004 01:42 PM | PERMALINKnicole nite nicole nite pics all anal movies anime illustrated asian exotic asian exotics awesomeinterracial awesome interracial boobinspector boob inspector cumshot circus cumshots circus easy elder easyelders easy elders Posted by: mikes apartment at June 30, 2004 06:44 PM | PERMALINKI have found the best online pharmacy for buying Generic Viagra online Best XXX Sites - Is it true or not? Could the pill work for me? Get more information! 3471 check out the hot blackjack at http://www.blackjack-p.com here you can play blackjack online all you want! So everyone ~SMURKLE~ Posted by: play blackjack at August 23, 2004 09:47 AM | PERMALINK6575 Herie http://blaja.web-cialis.com is online for all your black jack needs. We also have your blackjack needs met as well ;-) Posted by: blackjack at August 24, 2004 05:53 PM | PERMALINK6790 check out http://texhold.levitra-i.com for texas hold em online action boodrow Posted by: texas hold em at August 25, 2004 06:01 PM | PERMALINK |
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