Thursday, May 27, 2004
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Wal-Mart comes to Chicago
As part of my ongoing Wal-Mart coverage, the City Council voted yesterday on proposals for two Wal-Mart stores to be opened within the city limits. The Chicago Tribune's Dan Mihalopoulos -- who seems to have the Wal-Mart beat -- reports on a split decision:
Actually, it reads to me as if the union was just lucky it was up against an inexperienced alderman, and got a temporary victory at best.posted by Dan on 05.27.04 at 03:16 PM
Perhaps Wal-Mart will have to make some more "campaign donations."posted by: Richard A. Heddleson on 05.27.04 at 03:16 PM [permalink]
The way Walmart treats workers is evil - end of story. There is a certain level of support that every company, should provide for all employees, and this should be regulated. Within these humane standards, a company can do what it wants. Without these humane standards, the company should be punished.
Who here believes in no regulation at all? And by NO regulation, I mean NONE. Capitalism is "value-free", remember, so, if there is a "market", for example, triple xxx on network tv, between 12 noon and 5 pm, why not simply "let the market decide"?
Seriously, for all those absolute free marketers, why not let the market decide?
you don't, because the market in this case, interferes with values that we cherish. The same goes for some basic health and worker standards, that need to be incorporated for the United States. I've pointed this out before, but Costco -type standards should be enforced throughout the industry.
posted by: JC on 05.27.04 at 03:16 PM [permalink]
“South Side aldermen who split their votes said they sided with Mitts because she aggressively sought their backing, pointedly noting that Brookins ignored them and took their support for granted--until his proposal became the subject of wide debate.”
These aldermen are a total disgrace. They do not decide on issues based on the merits----but candidly admit that the petitioners had better drop to their knees and kiss their rear ends. I don’t think this would have occurred during the reign of Mayor Richard J. Daly and his Chicago machine politics. The man may have not been a saint, but he wouldn’t do anything that might hurt the city out of pure spite.posted by: David Thomson on 05.27.04 at 03:16 PM [permalink]
The way you discuss WM is platitudinous and unconvincing--end of story. You've assumed that we've bought the union and activist anti-WM slogans and "fact-sheets". I haven't. You assume that we believe that the true and terrible stories of individual cases of rights violations and poor working conditions are representative of the way that WM treats 1.35 million people. I don't.
Have you read the statistical reports trying to demonstrate wage discrimination against women at WM? It's clear women earn less for the same job; it's not clear why, and it's not clear that the wage gap at WM is any more severe than any place else.
What is so horrifying about WM that it deserves to be called "evil"? You don't like their health insurance plan--which actually looks like an insurance policy instead of a top-to-bottom medical facility membership plan?
Here's a thought experiment:
Given that, before 1900, almost all of humanity earned real incomes less than current WM workers, is it safe to say that all companies were evil before 1900?
If all companies weren't evil before 1900, does that mean they met their appropriate "level of support", but WM does not--even though it pays more?
Does that mean the ethical "level of support" continually increases over time? Who is to determine that rate of increase, and why is that political pover people ethical?
posted by: Kevin Brancato on 05.27.04 at 03:16 PM [permalink]
“I've pointed this out before, but Costco -type standards should be enforced throughout the industry.”
The government should stay out of the process. Wal-Mart is almost certainly to opt for the pay structure of Costco. They will do this simply for reasons of self interest: Costco has far less employee turnover! Wal-mart’s very high employee churn rate is costing them a lot of grief. In other words, the free market ultimately, in most instances, takes care of the problem. Happier employees tend to stay with you longer and are more productive.
Wal-Mart is guilty of breaking the law in numerous instances. The company deserves public rebuke. I categorically reject the stupid excuses that the top executives did not know about the abuses in some of their stores. Their public utterances do not pass the laugh test. Still, Wal-Mart is a fantastic company that has done much good for our nation’s economy. My family spends at least $5,000 annually at Wal-mart's stores. As matter of fact, I'm going to my neighborhood Wal-Mart's a little later this very evening. There are indeed problems, but they need to be resolved fairly and not in an adversarial manner preferred by the radical leftists.posted by: David Thomson on 05.27.04 at 03:16 PM [permalink]
Lemme make a wild guess, here.
So should the government "stay out" of regulating triple xxx on normal broadcast channels? Why shouldn't we simply not have an FCC? Again, the point here is that there IS a regulatory structure, that surrounds all of the economic and labor practices that exist in the states. The government is NEVER really staying out, but is simply setting up different types of regulatory structures for different practices and areas.
Also, in no way am I a "radical leftist". It doesn't contribute to any discussion to simply call people names, yes?
On the other hand, I admit the point about bad practices tend to cause people to leave a company - IF there isn't a "race to the bottom" because the practices of Walmart drive out so many competitors, that they either have to adopt Walmart tactics, or fold - thus leaving many workers no options.posted by: JC on 05.27.04 at 03:16 PM [permalink]
The "thought experiment" you suggest is flawed from the get-go. 200 years ago, slavery was not considered evil. Now it is. Going back to "standard practices" 100 years ago, is the same fallacy.
I don't have the reference handy, but I read an article about a very large security company - in Switzerland, I think - that, for the same job - treats its employees in the state, with what it can get away with - minimal health care, no dental, 30 hours, so considered part-time etc - where they also are the largest provider of security guards - don't do this at all, because they would immediately get slapped with fines. In this case, it's an "outsourcing" to the United States, where they can get away with treating employees badly, because it is allowed. My point is, it doesn't have to be allowed.posted by: JC on 05.27.04 at 03:16 PM [permalink]
Missed a point - meant to say "in Switzerland, how their employees are treated are much better" - this would include vacation pay, maternity leave, etc.posted by: JC on 05.27.04 at 03:16 PM [permalink]
Also remember - Walmart operates in England, and other countries, with MUCH MORE FAVORABLE LABOR LAWS to their employees - operating Sam's Club in Canada, some chain in England. In these cases, Walmart is able to adapt, without losing business. Their retail genius & success is loosely associated with treating employees badly. Again, like a good business, they TAKE ADVANTAGE of the regulatory environment. In this case, the regulatory environment of the US, is counterproductive to humane treatment of people in a job, in this day and age.posted by: JC on 05.27.04 at 03:16 PM [permalink]
“So should the government "stay out" of regulating triple xxx on normal broadcast channels? “
This is what I believe:
“ PRINCIPLE OF SUBSIDIARITY
The government should not be involved if the private sector can resolve the problem. There is no reason why bureaucrats should determine the wages of American workers. The free market has a proven track of taking care of these matters.posted by: David Thomson on 05.27.04 at 03:16 PM [permalink]
It's easy to say the Government should stay out of business, but what to do when a company like Wallmart has such poor benifits and low pay that it is effectivly being subsidized by the government, as in pay is so low the workers qualify for food stamps and subsidized housing. When employees with no medical insurance have to go to the emergency room or hospital who pays? the goverment pays and we pay everytime we go to the same hospital. If it costs the government money to not regulate then they should regulate.posted by: Ron In Portland on 05.27.04 at 03:16 PM [permalink]
That's a good point, and one I didn't bring up. Again, society is making a moral choice that - when a person goes to the emergency room, one value that we hold is we don't just let people die, or starve, even if they work for a company that pays them less than subsistence wages. So, without some type of coherent regulatory scheme, this becomes administered "ad-hoc", and ends up being much more expensive to the state, while "lifting" the burden from the company involved. A sort of backend universal health coverage, designed and administered very poorly.posted by: JC on 05.27.04 at 03:16 PM [permalink]
Ron In Portland wrote:
It's easy to say the Government should stay out of business, but what to do when a company like Wallmart has such poor benifits and low pay that it is effectivly being subsidized by the government, as in pay is so low the workers qualify for food stamps and subsidized housing.
Then the government should quit offering subsidized housing and food stamps. It is not a proper function of the federal government to dictate the terms of a voluntary contract between two consenting parties nor to subsidize one party for making a poor choice.
When employees with no medical insurance have to go to the emergency room or hospital who pays?
Generally they and their employers do because companies that do not pay for health insurance for their employees pay higher taxes because they are unable to deduct the cost of the employee health benefits. The tax penalty covers roughly about two-thirds of the cost (which BTW is about the same reimbursement rate that Medicare/Medicaid provide before they pass the rest of the costs along to the rest of us) plus whatever the employee pays out-of-pocket.posted by: Thorley Winston on 05.27.04 at 03:16 PM [permalink]
I commit no fallacy. You fail to recognize that I do hold WM to the higher standard. My question is whether we should hold everybody else to that same standard.
A poor person who works full-time for WM, and makes just above the current poverty line for a family of four, has made a tremendous advance over the poor of 100 years ago. The standard I used--actual current market wages paid by WM-- is much higher than the standard in 1900.
I agree that your standard is even higher, and that relying on markets won't get everyone to your current goal for another several decades. But I submit that, by that time, your standard will be
I don't understand how you determine what income standards are morally adequate at any given time as opposed to any other time, or why you're convinced that they're should be so.
Given what you've written, I suspect that you expect health insurance to be part of total compensation, and that an undetermined minimum level of hourly, monthly, or annual income be required that is above today's market standards.
But I do not understand why WM or anybody else must follow a standard that you, personally, believe best.
Clearly no one "has to" follow my standard. My position is, as the richest country in the world, that the values of this great nation should include "standards" for the normal worker, that are at least equivalent to other countries that are on a rough par with countries that are almost as rich. This is why I use the example of Switzerland, and the standards employed there. At one point, it was acceptable for children to work instead of going to school. Slavery was acceptable. My own value structure would be that it is immoral - yes immoral - for a country as great, noble, and rich as ours, to allow workers to toil for minimal wages, with little in the way of benefits, health care, or unaffordable housing. We are BETTER than that. This is why I raised the topic of triple xxx movies on broadcast media. To allow this, would be immoral, in my view. Currently, most people would agree with me, and this is REGULATED. The same can and should be done with worker's rights.
Right now, you are correct - the majority of people do not consider it immoral that people in this country can work 40 or more hours a week, and yet barely afford to live, have little healthcare, etc. Whenever I get the chance, I point out that this is a CHOICE that we as a society are making, that hasn't been made by many other rich countries - and that from a christian point of view, is a choice that shouldn't be made.posted by: JC on 05.27.04 at 03:16 PM [permalink]
The other implication, is that either myself, or someone is "imposing" this standard upon other people. Quickly (because I have to leave now), there are a multitude of external pressures upon an individual (the rule of law) that keeps a strong civil, stable society. Again, in some sense these are all "regulations". Providing for a common defense, promoting the general welfare, etc. Since a better way is clearly possible here, we are consciously choosing *not* to promote the general welfare in a way that is practical, pragmatic, and in alignment with our shared values.posted by: JC on 05.27.04 at 03:16 PM [permalink]
So should the government "stay out" of regulating triple xxx on normal broadcast channels?
Yes. Of course, regardless of whether it was allowed or not, it wouldn't happen. The demand isn't there to make a XXX channel an efficient use of broadcast airwaves. But if this changed, and XXX was in high demand, and this happened, so what? Don't like it? Don't watch.
Why shouldn't we simply not have an FCC?
We should (not have an FCC).
The other implication, is that either myself, or someone is "imposing" this standard upon other people.
It's not an implication; it's a fact. That's what government does: impose things on people. That you like the imposition doesn't change that. That the government imposes other things on people doesn't change that, nor does it justify this imposition.
from a christian point of view, is a choice that shouldn't be made.
Our government is not christian. You're directing your argument at the wrong target. If it's an anti-christian choice, then churches should be preaching against shopping at Walmart. But the government's job isn't to enforce the christian point of view.posted by: David Nieporent on 05.27.04 at 03:16 PM [permalink]
I won't provide a link, because you have to be registered, but you might have a local Business Journal ("bizjournal" is the part of their internet domain) media outlet in your area.
The KC Bizjournal reported today that WalMart was the recipient of $1 BILLION in tax subsidies.
You can argue the pro's and con's, but I think there is a real story as to how Wal Mart leverages tax breaks -- and exactly what those "low prices" cost US citizens.
After one too many "wrong ring-up at the register, as opposed to what was ticketed on the shelf or advertised as 'sales' within the store" I've sworn off Wal Mart. And I, too, was a $5k/year customer.
But unless/until there is a major investigation into the Wal Mart M.O., many consumers will swallow the "low price" angle without question.posted by: cj on 05.27.04 at 03:16 PM [permalink]
That's $1 billion in subsidies over the long haul. Let's take a very high estimate of $200 million a year. Given that WM had ~$250 billion in sales last year alone, we're talking about less than 0.1% of revenue in terms of subsidies.
Hence, $1 billion in subsidies should have almost no effect on any specific shelf price. However, in the local area where a tax break is given, it is definitely easier for that particular WM store to turn a profit, and makes it easier to compete with small businesses.
Also, items ring up wrong very frequently at my local Harris Teeter, an upscale grocer. Does that mean I shouldn't shop there?posted by: Kevin Brancato on 05.27.04 at 03:16 PM [permalink]
“So should the government "stay out" of regulating triple xxx on normal broadcast channels?
Yes. Of course, regardless of whether it was allowed or not, it wouldn't happen. The demand isn't there to make a XXX channel an efficient use of broadcast airwaves. But if this changed, and XXX was in high demand, and this happened, so what? Don't like it? Don't watch.”
Normal broadcast channels are public and therefore can be accessed by small children. They should not be confronted with the blatant sexual rantings of the radio shock jocks. That's why the government had to become involved in this particular instance. I’m all for private cable programs carrying Howard Stern and other such folks which can be limited to only full grown adults.
“I suspect that the WMs of the world will never meet your expectations.”
Absolutely correct. The radical left will always raise the bar on Wal-Mart. They will never be satisfied because inherently this company is a private sector entity. Tacitly, if not even explicitly, these haters of Wal-Mart want government bureaucrats to control the economy. Nothing less is deemed acceptable. They will not cease until that goal is accomplished.posted by: David Thomson on 05.27.04 at 03:16 PM [permalink]
Joining the discussion late as usual, but I'm still not convinced that every job in America should pay enough to comfortably support a family of four on a single salary. The economic costs of such a policy would be immense and require vast redistribution of wealth. Don't recommend the wage and benefit structure of Switzerland unless you are prepared to accept all that goes along with a European welfare state. Also, don't forget that, unlike most highly-regulated, unionized businesses, Wal-Mart fills management positions almost entirely from within. Thus, you may earn higher starting wages at a unionized grocer than at a Supercenter, but the best you're likely to ever achieve is head cashier. Stay at a Wal-Mart for a while, and you may well enter management, with a lot better pay.
Ultimately, of course, if you think the lower prices at Wal-Mart are worth the societal costs, don't shop there. If the employees don't think the wages and benefits are high enough to support the labor they provide, there are other jobs. Wal-Mart is not some black hole of retail, sucking up everything in its path. Smaller retailers that adapt (and it doesn't mean competing on price or racing to the bottom) can do quite well - despite what they claim, big-box retailers have no intention of providing equivalent levels of service and customer support.posted by: Fred Ochsenhirt on 05.27.04 at 03:16 PM [permalink]
I actually know plenty of people who've actually worked at WalMart (I'm from a rural area) and I can report that WalMart is not evil. Granted, these are areas where union jobs were never or rarely available anyway so a justifiable accusation could be that these folks began with lowered expectations. That said, the blanket catagorization of Walmart as evil and bent on exploiting workers is rediculous. Furthermore, it would be difficult for Walmart to adopt CostCo's labor practices without significantly lowering the number of people employed at stores and charging membership fees a la CostCo.
Just like any large business, Walmart deserves watching like a hawk, because like any human institution abuse may occur.
Why stangle the baby in the crib when you can teach it to grow up right? Why not let WalMart in and then try to amend their ways? Why deprive Chicagoan who need the jobs and goods over this exagerated stance?posted by: AnotherScott on 05.27.04 at 03:16 PM [permalink]
It seems to me that your position on this depends on how you see two issues: first, whether WM's wage and personnel policy is overall as egregious as stories have made them out to be, and, second, whether workers really can, in effect, bargain with WM by leaving. I don't really know the answer to the first question.
As to the second question, it seems to me that the free-market conservatives are making the same assumption that 1930s conservatives took with respect to labor legislation--that WM workers, by staying at WM are making a conscious choice that the wages and policies are satisfactory. I seriously doubt this is the case. The whole idea behind trade unions is that the employer and the worker do not have equal power; unions are designed to equalize the bargaining power to some extent. It's easy to say that, if the workers aren't happy, they can go somewhere else, but that's a rather naive attitude. These people are obviously unskilled and low income. They really don't have an option to quit without having something else lined up. Maybe there are other jobs, but how long will it take to find it? There are lots of reasons people stay at lousy jobs--people are justifiably afraid to just quit. Now, obviously I don't know how much turnover Wal-Mart actually gets--in theory, if they get too much, they would start paying higher wages. But maybe there's not enough to force them to pay higher wages. So, it seems to me that to say this is in effect a private relationship between Wal-mart and its employees with which the government should not interfere is probably a stretch. This is not a contractual relationship between equal parties; Wal-mart has far more bargaining power than the employees.posted by: MWS on 05.27.04 at 03:16 PM [permalink]
Normal broadcast channels are public and therefore can be accessed by small children. They should not be confronted with the blatant sexual rantings of the radio shock jocks. That's why the government had to become involved in this particular instance.
The FCC was not created because XXX shows were being broadcast on network television. The FCC was created because of the idea that "the public" somehow owned the airwaves, and should decide who had the "privilege" of using them.
Normal broadcast channels are public and therefore can be accessed by small children.
There's a "therefore" in that sentence, but it doesn't seem to apply. The second point does not follow from the first. "Normal broadcast channels" are no more or less accessible to small children than cable channels. (Indeed, cable/satellite penetration in the US is approximately 80% of households. For that 80%, the distinction between broadcast channels and cable channels is completely nonexistent.)
You can avoid a given cable channel by (a) not having a television, (b) not subscribing to cable, (c) using a channel-lock provided by the set-top box or television. You can avoid a broadcast channel by (a) or (c).
Of course, that won't prevent kids from being exposed to it at other people's houses -- but then that's true for cable channels, also.posted by: David Nieporent on 05.27.04 at 03:16 PM [permalink]
As for my perspective (if you haven't had enough), the main point is that there are certain standards that a rich country ought to have towards its responsible working citizens - no matter how "unskilled" their labor is. This can and does exist in other countries, and a country as rich and great as ours should not tolerate the inhumanity of responsible, hard-working, and yes, unskilled workers, that lack adequate health care, and don't make enough to have decent housing.
1. This can come about in various ways. Another Scott makes the point that Walmart can be "mended". This may be the case - certainly in Walmart's practices in England and Canada, Walmart is a much more responsible citizen. But of course, they must be, because of legislation in those countries.
2. Fred makes a good point, that it is simply too expensive for a single salary to always comfortably support a family of four. At some point, perhaps the ephemeralization of technology will be such, that just as computers get cheaper every year, this same type of effect will happen on housing (although this never seems to be the case. It's amazing how much progress in technology has been had over the last thirty years - for example the cost of a gig of memory. This would have been obscenely expensive 30 years ago, but now is almost nothing. But the opposite has been true with hosuing. I wish this type of progress would happen with housing - off topic, but still...)
But this isn't an on/off choice. There are incremental, smart, regulatory choices that can be made, at fairly minimal expense, that can radically improve the lives of those least fortunate among us. I simply cannot understand the "laissez faire" attitude that is engendered here.
3. David Thomson, as soon as you agree that the FEC should regulate the airwaves because of the impact on children (which I wholeheartedly agree with, of course) then you have accepted one of my points: that where there is public harm, a regulatory structure is not only needed, but required.
Then it really becomes a question of what is the SMART, correct, practical regulatory structure, that instantiates our values as best as possible, in different areas of life. And this then becomes a matter of evidence - not ideology, of the right or left.
Would you agree with this?posted by: JC on 05.27.04 at 03:16 PM [permalink]
Wal-Mart is a retail giant not that much different from any othe retail giant. They all operate under the same rules for success as does any other money making institution and that is to get the most money out for the least put in. All retail giants have some practices which may seem "inhumane" or unfair but which are within the limits of the system. Wal-Mart simply took some of these to new extremes and thus have benefited the most from them. Is Wal-Mart any more evil than say a Walgreens or perhaps a CVS which saturates an urban area with their stores and causes the stores in between to go out of business because they cant compete? This can be seen especially in minority areas in the city of chicago. I actually know many who work for Walmart on all levels and it seems that the pay and the opportunity for advancement are actually much better than at many other retail stores similar to itself.posted by: Andrew Henderson on 05.27.04 at 03:16 PM [permalink]
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