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America’s Middle-Class Hitting A Wall
Leo Hindery’s op-ed in today’s online edition of Business Week takes Wal-Mart to task:
“Using a multimillion-dollar ad campaign, Wal-Mart’s executives are defiantly blasting back at opponents who have criticized the retail giant’s shoddy labor practices. But most people and even Wal-Mart’s critics are missing the real crisis, which is that the behemoth from Bentonville, Ark., with its nationally destabilizing business model, is a dangerous detriment to America’s local and national economies and to the middle class.”
“Today, if you listen carefully, you can hear a second giant sucking sound: Wal-Mart sopping up the vitality from middle-class American families, local communities, and the national economy.”
“This happens in three different but related ways. First, there’s the clobbering of Main Street: Wal-Mart moves in on the edges of towns, and the much smaller downtown merchants, unable to match its prices, soon go under. Second, there’s the miserable wage and benefits package offered by Sam Walton’s creation. And third, there’s Wal-Mart’s purchasing strategy, which seems to be about buying American-made products only as a last resort—to the point that today Wal-Mart, by itself, is China’s eighth-largest trading partner!”
“Wal-Mart’s success has come at an enormous and painful cost to our national and local economies. From its boarding-up of Main Streets to its failure to pay workers fairly, to its imposing on taxpayers welfare costs for its underpaid employees, to its material contribution to our obscene ballooning trade deficit with China, this “Wal-Martization” of America is leaving us with an economy increasingly characterized by a gaggle of cheap imported consumer goods, shoddy employee practices, and insensitivity to communities.”
Our families and communities deserve better from Wal-Mart. This November raise your voice by participating in “Higher Expectations Week.” Click here to learn more.
Posted by Media Team on Friday, October 07, 2005
Click Here for a Printer-Friendly Version
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COMMENTS
Why hasn’t Nick responded to theses lies?
Bob in Hazlet, NJ
Friday, October 07 at 02:35 PM
My home town is losing their main street and an old time hardward store. Guess what. There is no Walmart. The supermarket is Harps. The hardwares are True Value and the department stores are a Dollar Store and a Freds. All of these locations are convenient. Main street is not. There is a small privately owned home improvement store. All of these are nonunion, by the way. The nearest Walmart is over thirty miles away. We shop at one of the Walmarts, but usually only when we have to go there anyway or what we need is not available locally.
If you follow other respondents to this site, you will find out that Walmart employees like their pay and benefits.
You can’t go to any store and not by Chinese products.
David in Zack AR
Friday, October 07 at 03:43 PM
Who is Leo Hindery, and why can’t he come up with any more original arguments than the Union talking points?
“Leo Hindery Jr., a former CEO of telecom carrier Global Crossing, has been active as a Democratic fund-raiser and organizer and worked on Richard Gephardt’s Presidential campaign in 2004...”
He’s got some business experience ... but the rest of his BIO does not lead me to believe that he knows anything at all about small town America ... most small towns DON’T have a Wal-Mart, but Main Street is dying anyway! Does anyone care to offer a more realistic idea of why?
JJ in Causing damage to liberal bleeding hearts everywhe
Friday, October 07 at 06:24 PM
A very interesting debate - I’ll summarize.
Globalization - parking on main street - product selection, healthcare, taxes, immigration, elections.
I work at Walmart.
I love my pay - love it love it love it. Healthcare - yeah it’s the top. Top o the world ma.
Point of view - and perspective.
Balance.
Hypocracy - allowed on this board for a little while longer.
Anonymous in
Saturday, October 08 at 11:50 PM
Hrmphh!
Never the twain shall meet.
No give and take, no admonissions.
Just one perspective - and a smiley face.
???
WTF?
Anonymous in
Saturday, October 08 at 11:55 PM
How to handle Walmart?
Strong land use planning laws and community involvement!
Walmart is just a big overrated corporation, who thinks everyone should get out of its way.. Not in Oregon!
Oregon is fighting the good fight against Walmart.
For example: Beaverton, Hillsboro, Hood River and Oregon City are just a few cities that fought and won!
Gresham, OR is taking on Walmart right now. Most of these cities have created citizen groups interested in saving their communities.
Other states around the country should look to Oregon and see how we stood up to Walmart. Oregon has been the leader in land use planning since the 1970’s and that helps big time!
I hope everyone who is against Walmart does not forget that there are other Big Box Companies, who sliding into the action and developing all over this country.
This country needs to get back to major land conservation, period! We better start thinking about our future, that is, water, natural resources, animals and human alike!
Greg in West Linn, OR
Sunday, October 09 at 02:04 PM
Greg
I think Oregon cities/towns should put it up to a vote to see whether the people want Walmart. That way the special interests on both sides have no undue enfluence.
David in Zack AR
Sunday, October 09 at 07:08 PM
David - “I think Oregon cities/towns should put it up to a vote to see whether the people want Walmart.”
Why stop there? Why not require a majority vote every time someone wants to open up a business anywhere?
Nick's Disciple in
Sunday, October 09 at 07:17 PM
For normal businesses that would not be needed. However, if the business is controversial like Walmart, let the citizens decide rather than let small groups like city councils decide. My suspicion is that the citizens generally desire the Walmart. It is only the special interest groups which do not.
However, if the citizens do not want a Walmart, it is in Walmart’s interest not to build.
David in Zack AR
Monday, October 10 at 06:34 AM
All I can say is that I work at a SAM’S club, I work there because it paid the best for what I do (Optical) and I do have medical coverage better than my dad did when he worked at a union shop. There is only one union store in the area and that is krogers and the service there is terrible. I don’t mind if people have a gripe against wal-mart, they are not perfect, but I don’t understand the violent rhetoric and the flat out lies........
Alos no one in my club is on medicaid or any other assistance
Kenny G in huntington, wv
Monday, October 10 at 09:25 AM
Where to begin?
Small towns started dying in the wake of WWII as suburbs, highways, shopping malls and strip malls sprang up outside the cities. Wal-Mart was founded in 1962 and by 1970, had just 18 stores. So, 25 years after suburbia started to kill off downtowns, Wal-Mart had 18 stores. How then, can we blame Wal-Mart for the demise of small-America?
Wal-Mart’s business model is taught in business schools today because Wal-Mart is the most efficient corporation in the world. Companies from all over the world have sent their people to Bentonville to learn efficiency from Wal-Mart. They continue to make the lists of Most Admired Companies and they have even trained GE executives in their ways of doing business. If you are showing GE how to run a tight ship, you are very good at what you do. The best.
Wal-Mart is not responsible for small town retailers going out of business. It is the small town retailer who should take the blame. If you allow someone else to put you out of business, you were not doing your job well. You deserve to be out of business in a free market. If small town customers were loyal to their small town masters (store owners) they would continue to shop the small town store. But they are loyal only through default. When given a choice, most people will abandon Mom and Pop because of limited selection and store hours, high prices, poor service and limited parking. Wal-Mart gives people what they want. If that were not true, Wal-Mart would not be able to bring in the business they do when they open a new store.
Wal-Mart to blame for the decline of the middle class? Wal-Mart to blame for the trade deficit with China? Wal-Mart pays low wages? Wal-Mart “dumps” costs on to taxpayers?
The middle class will always be with us. They have just moved to different fields. The days of large scale manufacturing are over in America because it is not cheap to do it here. We will always have manufacturing though.
And since when is a company responsible for maintaining the middle class?
Wal-Mart is the only company trading with China? Hmmmmmmm..........................I don’t believe that is true. 99% of every product you buy, in every store in America, was made overseas. Why blame Wal-Mart?
Wal-Mart pays low wages? So what! They pay what the market will bear. If they were in a neighborhood where there was low unemployment and people had good jobs, they might have to pay $10-$12 hour to get good people. The market will dictate what they pay, not the government. And the market thus far has dictated that Wal-Mart wages should average $9.68 an hour. Deal with it.
Wal-Mart “dumps” its’ costs onto taxpayers? Only if you believe Wal-Mart is responsible for the personal expenses of its’ employees. Did Mom and Pop pay top wages? Did your local grocery store offer luxury health care? I doubt it. They paid minimum wage and no benefits. Wal-Mart pays much better. Something everyone needs to understand is that your employer offers a wage and benefits package. You agree to accept it. That means you agree to work for what you are getting. You don’t accept $10 an hour and then complain because you are not getting $20. Wal-Mart is not obligated to provide anything other than $5.15 an hour. The fact that they offer $9.68 an hour, on average, plus health insurance, profit sharing, 401K and advancement opportunities says that they are doing more than is required by law and just enough to meet the demands of a free market. If the only way Wal-Mart could get employees was to pay $25 an hour and 100% paid luxury benefits, they would either have to do it or go out of business. But the labor market has told them what they need to pay.
By the way, how many union companies dumped billions on the taxpayers through bankruptcy? Just a thought.
Nick in Wheeling
Monday, October 10 at 09:51 AM
I could be wrong here, but the way that I have understood benefits employees recieve, are only in affect if you are working full time. Many of the people that I know that work at Wal Mart are not considered full time therefore they do not recieve any benefits at all. Also my father is a Union member and her much better benefits than my stepmom who is not a member of a union. So before the unions come into the argument you might want to do some research the see all of the benefits unions have gotten for people, then discuss wal mart and benefits versus unions.
unknown in
Tuesday, October 11 at 02:38 AM
So, let me get this staight. You LIKE the idea of only having one store that you have to drive to that takes about 100 acres of paved land to sell you groceries. You think that in your town, it’s OK to ship all the money every day to Bentonville where it will be devided up among 5 of the richest 10 people in the world, and a CEO. Eficiency is just a euphemism for voracious business practices. If you can get people to work for less than they deserve, the ‘market’ considers you a good businessman. I consider you a jerk, and probably a cheap tipper. Walmart is not nice. Walmart treats business like a war. I don’t want war in my country. The ultimate free market is slavery.
George Wilson in Atlanta Georgia
Tuesday, October 11 at 09:14 AM
George,
Business is not war; it is competition among several competing entities. You have to take it very seriously because lives are at stake. If you employ hundreds of thousands of people, you have to make sound decisions so that those people will have jobs tomorrow. In a company with 100,000 employees there are generally about 250,000 people, including dependents and reitrees, who count on the continued success of the company. If you are not running your company in a manner that will assure that your employees will have jobs tomorrow, you are not doing your job.
As for shipping your money back to Bentonville-when you shop at Target, your money goes back to Minneapolis the next day. When you shop at K-Mart/Sears, your money goes to Michigan or Chicago the next day. When you shop at a company owned McDonalds’ your money goes to Illinois each day. When you buy Microsoft software, your money goes to Seattle. When you buy a Dell computer, your money goes to Round Rock, Texas. When you make a deposit at your local Bank of America, it does not sit in a vault. It gets transferred as needed throughout the country. When you pay taxes, your money goes to Washington DC and comes back as a fraction. I could go on and on but your point doesn’t make sense.
As for that money going to the Waltons and Lee Scott, you are mistaken. The Waltons do not serve in an executive fashion and they are not employees of Wal-Mart. Therefore, they receive nothing but dividends on their stock holdings. Lee Scott, like Wal-Mart’s other 1.6 million employees, receives a paycheck and the same health insurance plan. Wal-Mart keeps less than four cents of every dollar you spend. The rest goes to purchase goods to sell, salaries and wages, benefits, expenses, logistics and other items that are included in the cost of doing business.
There is nothing wrong with a free market. That is why you have a computer to type on and an internet to gripe on. There is nothing wrong with efficiency. That is why we can all afford to type and gripe.
Nick in Wheeling
Tuesday, October 11 at 10:46 AM
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