My Annual Populist Rant

Dilbert March 1
Makes me no nevermind that Wal-Mart heirs occupy positions 6, 7, 8 and 9 on the Forbes’ 400 list of America’s richest people. God love ’em, they didn’t ask to be born on third base, and the record shows that they are pretty good citizens, actively engaged in philanthropy and other good works. What pisses me off is that their wealth is derived from an enterprise that is driven to fuck up the economy and hold the American consumer hostage to their blood lust to get stuff out the door at the lowest prices on the planet, damn the consequences.

There are business models you can laud. In 1914, Henry Ford doubled his workers wages, a  decision that has been hailed as one of the best business decisions of all time. Ford made it possible for his employees to buy the products they were making. Fortune Magazine claims it triggered the consumer revolution that helped create the wealthiest nation on earth.

Sam Walton, on the other hand, is quoted as saying, “”I pay low wages. I can take advantage of that. We’re going to be successful, but the basis is a very low-wage, low-benefit model of employment.” (Wikipedia). And how does this work out?

Wal-Mart’s poverty wages force employees to rely on $2.66 billion in government help every year, or about $420,000 per store. In state after state, Wal-Mart employees are the top recipients of Medicaid. As many as 80 percent of workers in Wal-Mart stores use food stamps. (www.dailykos.com).

California, alone, provides $86 million a year in health care and other assistance, making Walmart’s employees the state’s largest group of Medicaid recipients. (www.politifact.com)

Employees of Wal-Mart are given handouts and instructions on how to apply for food stamps and Medicaid by the company. What is this? A deliberate policy of shifting the cost of their employees onto the taxpayer. (www.democraticunderground.com)

The fallout in the low-cost retail sector is that Walmart’s presence forces competitors to lower wages to their employees in order to survive. Wonder why incomes have stagnated in the US for all but the superzippers? look no further than Wal-Mart and its copy-cat big box stores.

These guys suck in the job creation department, too:

According a national study led by Dr. David Neumark, an economist at the University of California at Irvine, for each new retail job created by Wal-Mart, 1.4 existing jobs have been lost at competing businesses.  That means every new Wal-Mart store that opens reduces retail employment by about 150 jobs.

How can this be?  The answer is that Wal-Mart relies on fewer employees to accomplish the same volume of sales as the businesses it competes with.  As Wal-Mart grows, and competing businesses downsize and close, the resulting layoffs outnumber the job gains. (Institute for Local Self Reliance).

All of this information is in the public domain, published mainly by liberal organizations. Meanwhile, Economists at the conservative Cato Institute suggest that Wal-Mart is a success because it sells products that people want to buy at low prices, satisfying customers’ wants and needs. (Wikipedia).

Puts me in mind of how my pastor, Dr. Bob Baggott, put it at men’s bible study this week: “One side stands for responsibility, the other for compassion. Isn’t it possible that we could have both?” You decide.

Walmart’s stock, by the way, after going nowhere for 13 years, just made a nominal new high. I’m happy for my young friend who drives a forklift at one of their distribution centers. He’s been a buyer of Wal-Mart in his 401k. Otherwise, it sucks that a smarmy business model pays off in the stock market. Or anywhere else.

Cheers,

Rod

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