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
Interested-Participant wrote:Are not these aspects of trade with China that you cite also key considerations in the State Department decision to award the country with Most Favored Nation trade status? I think so.
-- September 12, 2004 08:06 AM ∞
Randy wrote:Those Berkeley economists... what a hoot! If we track graduates of their fine university the first year out of school and find a lot of them living at home and sitting on the couch and even using Medicaid will we then be able to blame the fine professors?
And tell me about the great jobs these Wal-Mart people would otherwise have gotten. Are they telling us if they were working at K-Mart that the taxpayer would be better off? Have you been to K-Mart lately?
Berkeley economists should be aware also that because of environmental regulations, open space requirements and zoning regulations, the price of housing is artificially doubled and so the poor find it difficult to find affordable housing.
I wonder how soon they'll be studying how many millions of people this puts on Medical?
Wal-Mart is a huge net gain for both consumers and workers and probably is the best business in America. The world is better off because Wal-Mart exists. But we don't expect increasingly irrelevant Berkeley economists to study both sides of the ledger.
-- September 13, 2004 01:28 PM ∞
friend of frank wrote:Dave asked me to take a look at his argument and comment, so here goes:
I don't shop at Wal-Mart because (1) I don't like the stores. Never been in one I liked. (2) Their "greeters" give me the creeps - not because sometimes they're disabled or old, but because the give me the impression that I will be followed to discourage shoplifting. I'd rather have staff actually in the store to help me find what I'm seeking or manning the registers so I don't spend more time in line than shopping. (3) I don't like their policies regarding unions and women and part-time work.
As a dyed-in-the-wool liberal, I am not concerned about their low prices as much (or how they get them). I gladly shop at Target, Big Lots, K-Mart, and anywhere I can get a bargain. I'd rather have more information about how these places treat their workers, but I assume that if they were as bad as Wal-Mart, we'd hear about them, too.
-- September 20, 2004 03:28 PM ∞
Frank wrote:The only thing denial jeoporodizes is survival. Most of the time we can indulge our denial and not have it impact our lives. Artificially high wages are a form of denial of the reality of the market place. Sometimes we can continue to live in that artificial world, other times it jeoporodizes our economic survival and lives. Frank
-- September 21, 2004 09:38 AM ∞
rick wrote:henry ford didn't invent the automobile, but invented the most reliable AND a mass produced affordable automobile. pause and think what the 20th century would have looked like without his inventive genius: goods and services BECAME cheaper, jobs WERE produced, upward economic mobility in the social strata HAPPENED, etc. there are other astounding changes associated with his contribution and to the good of society in general. wal mart did not invent the 1 stop super market, but has made an impact the prior business' in this catagory hadn't. there are negative effects with the automobile, there are negative effects with the advance of Wal Mart. there were negative effects with the advent of the candle: house fires increased. should we stop advancing and therefore end all negative impacts?
-- September 26, 2004 10:27 PM ∞
Colin wrote:Every employee that joins Walmart does so simply because it provides more benefits than doing something else.
Hence, the more jobs created by Walmart the better.
If they put less efficient sellers out of business all the better. This way capital flows into its most productive use, and customers benefit with higher purchasing power.
To discourage increased efficiencies is to fall into the Luddite Falacy, whereby we could presumably provide more employment by carting our water around in wooden buckets rather that develop modern efficient plumbing systems.
The only threat posed by Walmart is when it seeks special benefits through the government.
-- September 30, 2004 03:17 AM ∞
Hemlock wrote:The above views make a change from the protectionist, economically illiterate positions we in Hong Kong often hear from some US politicians and labor leaders.
There is actually a growing labour shortage in the Pearl River Delta, where Walmart sources much of its goods, because wages aren't keeping up with Chinese national trends. The following article is from a PRC govt mouthpiece but is factually correct judging from other reports I've seen...
http://www.chinadaily.com.cn/english/doc/2004-09/17/content_375344.htm
-- October 4, 2004 04:14 AM ∞
