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[Rev_DelFuego]

Winner, Best Topic: Economy & Business 2003-2004

I opened this topic in regards to and article I have read in USAToday. It pretty much states that WalMart goes into towns with super competitive prices and puts local competitors out of business.
Do you think this is healthy for a community?

This post has been edited by Jaime: Aug 10 2004, 01:32 AM

[nebraska29]

I believe this was alluded to earlier, but this newest ruling certainly gives some creedence to the claim, a judge felt there was enough evidence to proceed with the class action suit.

I read the article this morning at The New York Times website too Cube Jockey. The article did give more than one study that showed quite a difference in the number of female managers to male managers as compared to other retailers. Wal-Mart claimed the statistics were wrong, but UC-Berkley researchers aren't exactly the dumbest people on the planet. If that research finding was flawed, it would've been pointed out by some over-zealous, tenure-seeking,reputation-desiring troll in a peer-reviewed edited publication. Anyone with even a trace of how college publication works would know that Wal-Mart's claim is truly lacking given the college peer-review process. Wal-Mart should have discredited the claim through research of their own, evidently they resorted to an "is not!.." kind of childs argument since no statistics were put forward to rebut the researcher's claims. Their response as listed in the Times would not have passed muster here at A.D., since we demand actual sources and backing-up one's claim.

[Hero]

Im gonna just spit out some easy rhetoric for this one....

The American Dream is more or less to do what you want to, and to be guarunteed to reap the benefits of your efforts, and the consequences. That said I think on a fundamental level corporations like Wal-Mart destroy this 'dream.' Larg e Business crushing small business is no new thing, but it has become so grossly exaggerated, and Big business so powerful that some towns could run entirely on Wal-Mart and never have need for, or want for local small businesses. Large chains are simply more convenient, and gurantee a certain product selection that most people are confortable with. That aspect is all right... just the fact that thanks to Wal-Mart anyone who is interested in becoming a grocer (fulfillment of their dream) had better wake up and smell the Starbucks, the big boys don't make room for competition, it's bad business.

Do you think this is healthy for a community?
It depends on the community but on average no, since it will ultimately displace small business. That and for all the reasons cited previously, Wal-Mart is evil. I will point again to Barbara Ehrenrich's Nickled and Dimed, where barbara herself was emplyed by Wal-Mart and met some of the most troublingly defeated people, whom barely flounder in the lower class living in abject poverty. Wal-Mart could afford to pay its 'associates' more, and provide more benefits, but it doesn't. That fact alone is bad for a community who is employed through such a company.

[ibelsd]

Walmart is great. If offers me cheap prices on good I wish to purchase. What more could I ask? It hires a ton of people too. Let's face it, its not like the clerk at the mom and pop store was making great money. He could do no worse at Walmart in most cases. And like most companies, Walmart will look for ways to increase their profit. They will do this by raising prices when the competition has been wiped out. Blockbuster sort of did this someone noted. That is the wonderful thing about competition and a free market. As Blockbuster has become increasingly expensive, other companies have ways to compete. For $20 a month one can subscribe to Netflix and get all the movies your want, with no late fee charges. There are now Pay per view services through cable and satellite to compete as well. In response, blockbuster has become more liberal in their return policies. Movies not on the new release list can be held a week without additional fee. Remember when it is 2 or three days? I can't predict who will come in to compete with Walmart or what technology will be used. All I know is that someone will try and the consumer will benefit. In the meantime, I will keep saving money by shopping at Walmart.

[nebraska29]

Walmart is great.  If offers me cheap prices on good I wish to purchase.  What more could I ask?  It hires a ton of people too.  Let's face it, its not like the clerk at the mom and pop store was making great money.  He could do no worse at Walmart in most cases.  And like most companies, Walmart will look for ways to increase their profit.  They will do this by raising prices when the competition has been wiped out.  Blockbuster sort of did this someone noted.  That is the wonderful thing about competition and a free market.  As Blockbuster has become increasingly expensive, other companies have ways to compete.

I wouldn't say that Wal-Mart is a paragon of virtues, undoubtedly consumers do get low prices, but consumers end up paying more after all.

Wal-Mart Stores Inc.'s employee wages and benefits policies cost California taxpayers $86 million annually to provide health care and other public assistance to the retailer's underpaid workers, according to a new study.

and...

California taxpayers contribute an average of $1,952 per Wal-Mart worker - 39 percent more than the average public assistance cost of $1,401 per worker at other large retailers with at least 1,000 employees, the study concluded.

"People understand the benefits of Wal-Mart - they have lower prices," said Arindrajit Dube, a research economist who co-authored the study. "What might not be obvious is those low prices are fed by taxpayer-funded compensation."

-Arizaona Central article

I agree that the government should provide a safety net for those at the bottom without means of their own, but to create such a system is just incredible. There are good things about Wal-Mart, don't get me wrong, but the sales clerk who works a ton of hours should not have to use government aid in any way to compensate for a lack of pay and benefits so that someone can buy a Shrek doll for $10.00 less.

[deerjerkydave]

Walmart is great.  If offers me cheap prices on good I wish to purchase.  What more could I ask?  It hires a ton of people too.  Let's face it, its not like the clerk at the mom and pop store was making great money.  He could do no worse at Walmart in most cases.  And like most companies, Walmart will look for ways to increase their profit.  They will do this by raising prices when the competition has been wiped out.  Blockbuster sort of did this someone noted.  That is the wonderful thing about competition and a free market.  As Blockbuster has become increasingly expensive, other companies have ways to compete.

I wouldn't say that Wal-Mart is a paragon of virtues, undoubtedly consumers do get low prices, but consumers end up paying more after all.

Wal-Mart Stores Inc.'s employee wages and benefits policies cost California taxpayers $86 million annually to provide health care and other public assistance to the retailer's underpaid workers, according to a new study.

and...

California taxpayers contribute an average of $1,952 per Wal-Mart worker - 39 percent more than the average public assistance cost of $1,401 per worker at other large retailers with at least 1,000 employees, the study concluded.

"People understand the benefits of Wal-Mart - they have lower prices," said Arindrajit Dube, a research economist who co-authored the study. "What might not be obvious is those low prices are fed by taxpayer-funded compensation."

-Arizaona Central article

I agree that the government should provide a safety net for those at the bottom without means of their own, but to create such a system is just incredible. There are good things about Wal-Mart, don't get me wrong, but the sales clerk who works a ton of hours should not have to use government aid in any way to compensate for a lack of pay and benefits so that someone can buy a Shrek doll for $10.00 less.

The people at UC Berkeley who made this study obviously have an axe to grind. They also buy into the socialist principle of a "living wage". This is a classic situation of "is the glass half empty or full?" Does Walmart hurt Californians or benefit Californians? The study says the cup is half empty, that Walmart hurts Californians because some of its employees supplement their income through government assistance.

The glass-half-empty crowd is wrong on this one. Metaphorically speaking, it is better to have some water in the glass than none at all! If Walmart suddenly packed its bags and moved out of California, 100% of its 44,000 employees would cost taxpayers a whole lot more since they would then require complete government assistance. So in that light, Walmart is actually saving taxpayers money! Thank goodness Walmart exists in California.

[Cube Jockey]

They also buy into the socialist principle of a "living wage".

I'm curious why you think that is a socialist principle, or that paying a "living wage" is a bad thing?

Put another way, you live in San Jose -- you know how expensive it is to live there and you also know how expensive it still is if you move way out to the middle of nowhere. People commute from Stockton, Tracy, suburbs of Sacramento to work in the Bay Area every day (thats about 4 hours a day of commute) and the houses they live in still cost 400K.

Now given the fact that people work at places like WalMart fulltime as their career are you just going to tell them ok well you spent your entire day with us but that isn't good enough, you can either pay rent this month or eat, you decide.

The concept of a living wage isn't that you are rich, it is that you can afford the most basic accomodations if you choose to work somewhere fulltime. I can't possibly see how you would consider that wrong.

I can see how you might possibly be on WalMart's side as far as paying their employees low wages as "good capitalism". But, they chose to do business in California, they know how expensive it is here and they have a certain responsibility to their workers to help them live. If they don't like it they can pack their ugly stores up and head somewhere the cost of living is cheap.

[Paladin Elspeth]

They also buy into the socialist principle of a "living wage"

How does having under-employed people who can't pay the bills improve our way of life? While it may bring down the unemployment statistics, it raises the statistics of those who have to avail themselves of public assistance, particularly housing projects and health departments. Wal-Mart, while it provides brand-name goods on the cheap, is actually perpetuating more economic problems than it is solving.

The Bible says, "The laborer is worthy of his hire," and "Thou shalt not muzzle the ox while it treadeth the corn." Is the Bible a socialist document?

This post has been edited by Paladin Elspeth: Aug 6 2004, 11:23 PM

[Bill55AZ]

Can anyone refute the following?
everything bad said about WalMart so far in this debate can also be said about other major businesses, even if to a lesser extent.
Same for small businesses as well.
I watched many of my friends children over the last 20 years graduate from High School and go looking for jobs. Mom/Pop and very small businesses rarely offer health insurance, and the minute they don't need you, you are out the door.
Bigger businesses, especially the ones that require some skills of their employees, are more likely to treat them better.
I suppose if we have minimal skills, then we are going to continue to be victims of this kind of situation.
And as long as so many of us think we can get by on minimal skills, these businesses have an easy time "abusing" us.
I submit that most of our problems are self inflicted, and we should not be surprised if there are others out there willing to take advantage of our situations.

[popeye47]

deerjerkydave

The glass-half-empty crowd is wrong on this one. Metaphorically speaking, it is better to have some water in the glass than none at all! If Walmart suddenly packed its bags and moved out of California, 100% of its 44,000 employees would cost taxpayers a whole lot more since they would then require complete government assistance. So in that light, Walmart is actually saving taxpayers money! Thank goodness Walmart exists in California

Aren't you forgetting something in your equation. If there was no Walmart then thousands of individuals would not have lost their jobs in the first place. So those 44,000 employees you mentioned were probably working at another retail store or grocery that was run out of business or lost business and had to cut the number of employees.

So in that light, is Walmart saving taxpayers money? I think not.

[deerjerkydave]

They also buy into the socialist principle of a "living wage".

I'm curious why you think that is a socialist principle, or that paying a "living wage" is a bad thing?

Put another way, you live in San Jose -- you know how expensive it is to live there and you also know how expensive it still is if you move way out to the middle of nowhere. People commute from Stockton, Tracy, suburbs of Sacramento to work in the Bay Area every day (thats about 4 hours a day of commute) and the houses they live in still cost 400K.

Now given the fact that people work at places like WalMart fulltime as their career are you just going to tell them ok well you spent your entire day with us but that isn't good enough, you can either pay rent this month or eat, you decide.

The concept of a living wage isn't that you are rich, it is that you can afford the most basic accomodations if you choose to work somewhere fulltime. I can't possibly see how you would consider that wrong.

I can see how you might possibly be on WalMart's side as far as paying their employees low wages as "good capitalism". But, they chose to do business in California, they know how expensive it is here and they have a certain responsibility to their workers to help them live. If they don't like it they can pack their ugly stores up and head somewhere the cost of living is cheap.

The excessively high cost of living in California is artificially caused by socialism. The solution isn't more socialism. It is not just coincidence that the liberal areas of our nation also have the highest cost of living. Why is that? A fundamental principle of socialism is the elimination of private property. The state of California spends tens of millions, even hundreds of millions of dollars every year to buy up private land (as does our federal government). At the same time, housing developers are slapped with oppressive restrictions on development. Because the supply of property is artificially low and the demand to live in California is high, the price of property goes up up up. The solution is to loose the market from the chains of socialism so that the housing development can meet the demand of the public, where cost of living can become affordable to all, even to those with low skills.

I used to believe in the idea of a minimum/living wage. I now realize that it ends up hurting the very people it is designed to help, as well as the consumer. The reality is that zero dollars an hour is the true minimum wage. If someone's skill set is worth less than the government imposed minimum wage, they will be unable to find work and they default to the true minimum wage of zero. There is no in between. I grew up here in San Jose. I never saw people loitering in front of the hardware store for lack of work until a few years ago when the minimum wage in California rose to 6.75/hour.

A realtor friend of mine just told me that this year there are half the homes on the market in the bay area than there were last year, and demand has remained the same..

Socialist Party USA supports living wages:
http://sp-usa.org/about/platform/economics.html

Socialist Party USA calls for government ownership of all "natural resources" (which is land):
http://sp-usa.org/about/platform/environment.html

California spends hundreds of millions on land acquisition:
http://www.lao.ca.gov/analysis_2002/resour..._3790_anl02.htm
http://www.mercurynews.com/mld/mercurynews.../6904340.htm?1c

This post has been edited by deerjerkydave: Aug 7 2004, 04:58 AM

[nebraska29]

everything bad said about WalMart so far in this debate can also be said about other major businesses, even if to a lesser extent. 

Just because other companies engage in sexual discrimination(see my earlier posting for documentation) doesn't excuse Wal-Mart from engaging in it. The "everybody's doing it" line of reasoning shouldn't be an exercise in washing away the sins of Wal-Mart.

[Bill55AZ]

everything bad said about WalMart so far in this debate can also be said about other major businesses, even if to a lesser extent. 

Just because other companies engage in sexual discrimination(see my earlier posting for documentation) doesn't excuse Wal-Mart from engaging in it. The "everybody's doing it" line of reasoning shouldn't be an exercise in washing away the sins of Wal-Mart.

agree, but why is WalMart the bad guy so often?
I can agree that the Mom and Pop businesses getting overwhelmed is a bad thing, but in my experience the smaller business in small to mid sized towns will take advantage of their having few or no competitors and ill treat the customer and employee just as quickly. I have even seen employees get treated badly in family owned and run businesses, by their own kin! Greed exists everywhere.
Perhaps WalMart is close to perfecting it.

[SWM28WDC]

Here's an interesting link regarding wal-mart stores recieving over $1B in local subsidies. The report also states that walmart returns $30 to the community for every $1 in subsidies.

Competition for work drives the price of labor lower. As long as there are unemployed people who are willing to work, the price of labor will be a minimum, this is particularly evident in non-skilled work. Ideally, the laborer's wages should approach his productivity. This will never happen as long as there's significant unemployment.

Minimum wages keep people out of work, there's probably not an economist on earth who would disagree with this. The real problem is that employers can pay people less than they're worth.

As an example, let's look at a generic publicly-traded superstore in an excellent retail location, making lots of money. We'll compare this one to a similar store in a less desireable location.

Out of the gross profit store has to pay wages to the laborers, interest to the lenders, and taxes to the government.
Competition between laborers means that the wages will be as low as possible: despite the fact that, at this particular location, labor is fairly productive; the store could simply hire retail workers from the less productive store down the road. Relative wages tend to be set at the least productive location in use by any industry.
For the sake of argument, we'll say taxes are similar for each location.
Once the wages, interest, and taxes are paid, the profit goes to the owners.

Why do the owners of the one store make more than the owners of the other, despite the same amount of work put forth by all concerned?