September 11, 2004

WM's Impact on Wages Abroad

In a recent study looking at wages paid to Wal-Mart workers in the San Francisco area, researchers out of Cal-Berkeley say that pay scales are about 30% below what unionized workers at competing large retailers get. The study's authors suggest that without Wal-Mart, these workers would be making far more money and be less prone to use public assistance, though nowhere in their extensive study do they offer any evidence of this key assertion. Every employer is subject to the sloppy claim that their workers might have found better jobs elsewhere (and then used less public assistance). But how many? Where is the analysis?

With the concern about these $11/hour workers, it seems we've all but forgotten the hard working people who make the stuff people buy at Wal-Mart. Some of them are only making 50 cents an hour. As I travel in China and find factories in more and more remote areas every time I go back, it is always astounding to see how rapidly an area can change from one with no phones and few bikes and no refrigeration to one in which people have healthful diets, better schooling, and great opportunities for children to grow in mind and body and spirit.

There are huge problems, and still about eighty-million Chinese who live on $75 a year or less... but the progress is unbelievable. It is the purchasing agents for Wal-mart and Target and Home Depot who are pushing incessantly for lower and lower costs that are central to the process. If they weren't pushing so hard for lower prices they wouldn't need to bother with getting new factories on line, back in the boonies where unpredictable problems will arise. We wouldn't see millions of Chinese migrate from the poor areas to the richer areas and then later returning to manage the new plant back home.

If you've never experienced the physical sensation of enduring hunger, or had to decide if you can feed both your children tonight, think carefully before you attack Wal-mart... they may well be the real revolutionaries of our time.

Of course, few are suggesting that we ban big-box stores entirely. Suppose an anti-Wal-Mart campaign were able to slow their growth to a trickle. For the really poor who live in remote areas of China, India, or the Dominican Republic.... their children's hope to live in the opportunity society that now predominates in much of China may be greatly delayed but not necessarily ruined.

The notion that those who care must oppose the companies who cut costs, like Dell or Wal-Mart is only possible if you ignore the vision of a billion people who still live on a dollar a day. We found that singing "We are the World" with Michael Jackson and Bruce Springsteen didn't end the suffering in Africa. Meanwhile we see much of Asia has banished hunger and privation. The hope of those still suffering in dire poverty lies not with the followers of Mother Theresa but with the cost-cutting purchasing agents of Kiichiro Toyoda, Sam Walton, and Michael Dell.

Posted by Dave on September, 11 2004 at 03:38 PM