Person of the Week: Dr. David Neumark

How much did the cost of living drop in the area when Wal-mart became a presence in the area. It seems like either Neumark failed to take this into account or just skipped it altogether since this might support Walmart instead of bringing them down. With this conference, at least wal-mart made it fair by having both sides of the issues addressed on their own dime. How many times would a union staged propoganda event have people their in support of wal-mart???

"Wal-Mart is only telling part of the story, which is not the same as telling the whole story,” Sefl said (that’s SEIU’s Tracy Sefl).  Yogi Berra couldn’t have said it better.

Global Insight concluded that over the 1985-2004 period, Wal-Mart’s discounting led to a 9.1 percent decline in food prices, a 4.2 percent decline in prices of other goods and a 3.1 percent decline in overall consumer prices.

The research firm found Wal-Mart led to a 0.75 percent improvement in the overall efficiency of the economy, based on capital intensity and lower import prices.

“Consumer savings for Wal-Mart shoppers were generated through Wal-Mart’s higher levels of capital investment in distribution and inventory control, lower import prices, and greater efficiency of the overall economy through the application of improved technology and processes,” Global Insight said.

So who do you believe, SEIU or Global Insight?

"Living wages seek to raise the income of low-wage workers by mandating higher wages. However, such wage increases may also have adverse employment effects, leading employers to reduce employment of less-skilled labor. This study notes that although living wages deliver some benefits to low-income families, additional policies are needed to help the most disadvantaged.”

Interesting comments from a paper written by their Person of the Week.  Read it here:  http://www.ppic.org/content/pubs/EP_705SAEP.pdf

Steve: That is just more confirmation that when the government mandates wage increases, it forces companies to fire people.

Those WM associates who want the company to overpay its workers instead of pay them just for their work: Next time you go to work at WM, look around. How many of these people you are looking at would have to be fired in order to have a “living wage” or a massive unearned benefits increase?  Make sure to go into the bathroom and look in the mirror, because it could be you.

These are all interesting points pro and con, but I believe they miss a fundamental component of how in fact Wal-mart is acheiving these ‘rock bottom’ prices on the supply side of the equation.  It is on the backs of some of the poorest and most exploited workers in the world- the Asians. 

Not long ago, Wal-mart moved their manufacturing from State-regulated factories to cheaper unregulated plants, where there is little to no govt oversight of working conditions, wages, or human rights violations. Many products are actually produced in prison factories, where of course workers have no rights and are easily exploited.

For example, a class action suit representing workers in Saipan stated Walmart is:

“either knowingly or recklessly and negligently disregarding the systematic violation of human and worker rights at its contractor’s factory in the U.S. Commonwealth of Saipan. Walmart is being sued for conspiring to hold workers in conditions of peonage and indentured servitude.”

It is great to be in a Democratic America and fight for our rights as workers, but what about the millions of Asians who really make such low prices possible through their indentured servitude at the hands of huge retailers like Walmart?

Recall as well, China is notorious for their long history of savage human rights violations, and totalitarian media control to hide the awful truth of what occurs regularly in their factories.  The fact that we as Americans are largely unaware of the virtual slave conditions under which these people work (and which firms like Walmart turn a blind eye to) does not change the fact that it occurs.  As Donald Rumsfeld likes to say, “Absence of proof is not proof of absence.” It is merely proof of government repression of the facts.

Mark

You can make that same argument against almost any company on the Fortune 500. I find it amusing that the unions in this country pretend to care about human rights violations overseas. Unions have historically discriminated against women, minorities and immigrants. They only pretend to care about work conditions abroad because they know that people in China are willing to work 24/7 at lower wages to produce the same product. That frightens the unions. But they know that very few people will listen to them if they say “It’s not fair! They are willing to work cheaper than us!” Most people would take a who cares? approach to such an argument. So the union hides behind this front when in fact they are absolutely against foreigners.

What the unions, and most other Americans, don’t understand is that workers in the US worked for crap wages in the 1800’s. Workers in the Carnegie Steel Mills worked for $1.00-$1.30 per day for unskilled labor-backbreaking labor that was 12 hours per day, 7 days per week. Did they complain? Did they get handouts and government assistance? No. They worked and they saved and eventually they were able to pull themselves out of poverty and own homes and send their children to school. Instead of doing everything we can to bash Wal-Mart and other companies, we should be encouraging economic development around the world. As more people find jobs, economies will grow. As economies grow, many people will work themselves up to a higher level. With a more educated and skilled workforce, workers will eventually be able to command more money, even in China. As their standard of living increases, their cost advantages decrease. At some point, we may be able to match them in cost.

We can take advantage of this global economy, if we want to.

In its study of 24 MSA’s, Global Insight’s analysis concluded that average prices were 3.1% less than they would have been had WMT not had a presence there.  This reduced the average rate of inflation in the areas by 0.1% to 0.2%.  The study also concluded that nominal wages are down 2.2% over the same 20 year study period.  Global then erroneously subtracted 2.2% from 3.1% to conclude that consumers are 0.9% better off.  This is incorrect and cynical.  Whereas wages are 2.2% lower in 2004 than in 1985 (that’s the nominal decrease), prices are only 3.1% lower than they would have been had inflation been 3.1% or 3.2% instead of 3%.  Thus area residents had less money to buy goods that cost more each year.  This is a stark decrease in the standard of living for low wage folks.

"Thus area residents had less money to buy goods that cost more each year.”

All the more reason to have a store nearby with lower prices.

Whether or not the argument about exploiting workers in Asia can be made against other retailers or whether or not the unions are only being cynical in bringing up these abuses does not make them right. Should there be no sympathy extended extended at all for the injustices done to these people? You can always lay the blame on your competitiors I suppose and that will make it okay.

Saying Unions discriminate against women and minorities is a lot of junk. I think where you’re coming from is all the
attention lately on the issue of people hiring illegals for whatever they can get away with. You can correct me if I’m wrong. That’s not discrimination though. Those people hiring them are breaking the law by illegally hiring and by circumventing already set wage standards--a practice that undermines the rest of our society. They should start putting real teeth into enforcing and penalizing these employers who are nothing less than exploiters.

So it would have been better to have more inflation and thus higher prices?  Wages might increase for a few, but overall, as pointed out by the Person of the Week’s article referenced above, employers would hire fewer unskilled workers, thereby increasing unemployment. 

You can argue all you want, but Global Insight is a highly respected, independent economic consulting group.

Larry: I find some agreement with your points on the situation with Asian slave labor. I do not agree with glossing it over by saying “well, all the other retailers do it”. Nor do I roll it into some belief that such trade with China will make China into a friendly country.

However, the illegal alien employment situation is not “a practice that undermines the rest of our society”. It helps build society: any productive work does that. Hiring someone for “whatever they can get away with” is part of the process of paying a fair wage (which often is below the government-set “standard” which is only just a number pulled out of thin air). This being said: while existing laws and policies are in place, they must be enforced. Something needs to be done about the borders. Not because workers are arriving, though.

I don’t think unions discriminate against women/minorities/etc. They do, however, discriminate against individuals who don’t agree with union political stances.

People automaticlly say higher wages will cost the company more, which is 100% correct, but why do the benefits also get ignored? The abseenteeisim rates drop, productivity increase. let us also not forget when ACTUALY insurance is added there are less sick days. Labor costs are some of the highest cost an employer has, if you have commited employees who enjoy their job and feel worthy then thats the beginning of a truly succesful company. Being a bully is far from sustainable.

p.s., it seems aas if wal mart is paying some of its goons to post here. odd.....

James: Just like the UFCW paid you, as a goon, to post here? If one is true, then certainly the other is true, right?

Stan,
just because we work for walmart and are happy with our jobs, doesn’t mean we are paid off goons posting for walmart. We are just getting sick and tired of everyone acting like they know what we need and how we can make our life better. We are capable of thinking for ourselves and don’t have to be told what to say and think by a union leader. All they care for is how to line their own pockets and make it seem like its in the best interest of their union members…

Weird how wal-mart watch forgot to include the fact that wal-mart made 200,000 jobs just last year and has made REAL disposable income go UP in 20 years, not down.  As well as the fact that wal-mart has held down the prices of groceries down by 9.1 per cent over the last 20 years.

Also, wal-mart pays as good as the rest of the industry and gives a much better benefit package.  I repeat, MUCH BETTER.  paid vacation, personal, sick time, discounts,bonus checks, cheap healthcare.

James, stop it man.  We’re not goons paid by wal-mart.  We are associates who like our employer and are tired of hearing people like you misinform the masses and attack our employer who we like working for, saying that our employer “abuses” us and is a drag for the economy when in fact that premise has been proven to be a falsehood.

I am at store 2892 in Parker, Colorado.  Wanna meet me?  My name is Josh.  Come on in.  I would love to give you a tour and let you meet with my fellow associates who overwhelmingly like their jobs and would laugh at you if you said they were being “abused” by the company.  What a joke.  Am I a “wal-mart goon” paid by the company to post in here?  Think again. 

What are you?  A union steward?  Labeling people without knowing the facts is a very slippery slope.

You’re using The 1800’s as an ideal time? 

Are you suggesting that we go back to Slavery as an economic model?  Or how about share-cropping, that was a little better than owning people.

Or maybe your suggesting that we go back to a time when child labor was the norm, back when you sold your soul to the company store.  Back when your wife was given 48 hours to move out of the company supplied housing if you died on the job.

You do realize that the labor practices of the industrial revolution are what led Marx adn Engels to communism, and that the union led reforms of the 1930’s are what stopped that school of thought, right? 

It is absolutely unbelievable that anyone in this country of ours holds up the 1800’s as an ideal time.

Hell, the “golden era” of the United States was th 1950’s, also the golden age of unions, and the age of the New Deal, the Great Society and government programs that raised the poor out of poverty.

Is your vision of America to turn it into Mexico?  The positions that are espoused by the trolls here lead me to believe that you dont believe in everything that makes America as great as it is.

No Joe, I believe you are misunderstanding my point. What I was saying is that at one time our workers were paid almost nothing and worked to death like animals. Yet, they did not rely on government handouts. They worked and saved and helped to grow the economy. I was using this as an example of where workers in China and other places are at right now. Of course China has a horrible human rights record but what are the alternatives? Are we going to tell them to be nice? They will laugh at us. Are we going to go to war against them? Both sides would lose millions of people but they have 5 times as many so they wouldn’t care. We, on the other hand, lose 2,000 lives in a tough war that has lasted more than 2 years and many people in this country are whining and ready to run up the white flag. So the alternative is this:
trade with China and other countries will raise their standard of living. The Chinese government has no choice but to allow free trade; their very survival depends on it. As wages and standards of living rise in China, the people will begin to wonder why they aren’t free. They will overthrow the commies, peacefully, and then move to open their country to freedom and 100% free trade. At some point, their wages and stadard of living will make their wage gap with America almost null. We can then proceed to rebuild dying industries here in America, since the difference in production cost will be very narrow. And we will be dealing with a free, open-market China. Call me an optimist but I believe it will happen.

The “golden era” you referred to was a time before other nations ramped up their low cost manufacturing and invaded the US with low-priced imports. It was also the “golden era” for the mafia, which derived much of its’ power from control of the unions, including Carpenters, Electricians, Laborers, Plumbers, Iron Workers, the Teamsters, Actors, Musicians, Airport workers and Longshoremen, just to name a few. I would be happy to discuss this “golden era” of union corruption with anyone. The unions (and their mafia bosses) were the reason why concrete was 150% more in New York City than it was across the river in Jersey. The unions (and their mafia bosses) are the reason every American paid an extra $2-$3 for each and every garment sold in America. I could go on but do you really want me to?

The version of labor history that is being posted here is laughable. “Workers in the Carnegie Steel Mills worked for $1.00-$1.30 per day for unskilled labor-backbreaking labor that was 12 hours per day, 7 days per week. Did they complain? Did they get handouts and government assistance? No. They worked and they saved and eventually they were able to pull themselves out of poverty and own homes and send their children to school.”
What a bogus view of reality. Andrew Carnegie [steel] and Henry Clay Fricke [coal] were two of the most exploitive & vicious “Captains of Industry” in the latter half of the 1800. Each needed the other and both were cruelly explotative of their workers. And, yes, the workers complained. They also formed unions, fought AND died in strikes against Carnegie and Fricke>>"In the late nineteenth century, labor disputes often erupted into violent riots, and a cottage industry sprang up to serve the paramilitary needs of the modern industrialist. Local sheriffs were usually too poorly equipped or too sympathetic to labor to put down strikes. The Pinkerton Detective Agency, on the other hand, staked its reputation on crushing labor actions. Between 1866 and 1892, Pinkertons participated in seventy labor disputes and opposed over 125,000 strikers.

Even before the Homestead strike, Carnegie and Frick had employed the Pinkertons. Frick used the agency twice in his coal fields: in 1884 to protect Hungarians and Slavs whom he had brought in as strikebreakers; and in 1891 to protect Italian strikebreakers, brought in against the then-striking Hungarians and Slavs. Carnegie used Pinkertons to protect strike breakers in 1887 and hired them twice in 1889 when strikes seemed imminent, facts he later conveniently forgot.”
quoted from THE AMERICAN EXPERIENCE’ available at http://www.pbs.org/wgbh/amex/carnegie/sfeature/mh_blue.h
tml.

It is not as if Carnegie’s or Frickes workers just pulled themeselves up by their bootrsaps as the writer seems to imply. Harldy. It was a bloody and often deadly struggle against inhumane working condtions in both the mills and the mines with employers who fought workers attemps to better their lives with every means at their disposal, including the hiring of agency thugs as strikebreakers.
The perverted view presented of Unions as all being contolled by “The Mob” and as corrupt exploters on the labor side of the equation is equally laughable. The gains made for american workers by unions, from the 40 hour work week to health care provisions in labor contracts to minimum wage and working condtion improvements are the real issue. Yes, there have been corrupt uinons, but those corrupt pracrises could not and cannot exist without the aquiesence of corrupt politicians and employers.

Painting an entire movement that engaged millions & millions of american workers in a struggle for a better way of life and a decent standard of living as being part and parcel of some fantasy of total corruption is not only untrue, it is ignorant of history and an insult to the memories of all those who gave their lives in that struggle.

The labor movement was without doubt, one of the most important phases of American history.

The problem is that unions no longer have such conditions to correct, but they continue to live on as end initself.

In short.  What have the unions done for us recently?  Many, including Walmart, do no think they are worth the cost.  Joining teh union should be the Walmart employees choice, rather than being blackmailed and harassed into submission.

Here’s what we have to decide:  Do we want strong unions (which demands higher wages and benefits, raising the cost of the products they produce) or free trade (lowering wages, but also lowering the cost of the products we import)?  We can’t have both; they are at best incompatible and at worst, mutually exclusive.  All you have to do is look at the steel industry, among others, to see this.
On the workers side, I think most people would side with the unions.  On the consumer side, of course we want free trade.  Thus, this whole debate is one of which is more important for the American economy:  low prices or high wages?  After reading all the blogs, watching several very interesting debates on C-Span, CNN, etc., and reading the various NYTimes, Business Week and Newsweek articles, I’m almost wondering if it isn’t a zero-sum game…

Let me amend that...an almost zero-sum game...not quite, since of course workers are consumers and consumers are workers...but to what extent is the equation out of balance?  I’d surmise that that figure is very small and not really ascertainable, based on the extent of the debate I’m seeing.  If it were as out of balance as the unions and WalmartWatch, et al would like us to believe, there would be no debate.

Josh,

I’m sure you work hard and take pride in your work, and I don’t know what your wage is. But you have to look at the bigger picture.

- the average Wal-Mart worker earns $14K - that’s $1K below the federal poverty for a family of three.

- Wal-Mart shifting health care costs onto taxpayers is costing us millions upon millions a dollars every years.

- Wal-Mart selfish pursuit of the bottom line forces American suppliers to locate overseas, costing us jobs and destroying communities.

- Wal-Mart imports $18 billion dollars worths of goods every year from China, which increases our trade deficit and helps fund the Chinese military, which in turn threaten U.S. security.

Josh, look beyond yourself and witness the greater harm Wal-Mart is causing our great country.

"Joining teh union should be the Walmart employees choice, rather than being blackmailed and harassed into submission.”
David in Zack AR

David: That would be my choice too, except that WalMart actively works AGAINST workers have that choice [by harrassing and blackmailing union advocates I might add...]. Witness the recent closing a WM in canada that was due to have representation election. WM is not just against the unions, it acrtively works to prevent workers from being able to make that decision. Were it a “fair” employer WM would not fight every attempt to bring in a union. Let the workers decide!
Gary

Gary.  How do you account for the fact that most Walmart employees do not want to be unionized? 

One thing I have frequently asked and no one is answered is what will be the salary of a Walmart associate after being unionized and what will be the cost including union dues and giving up free time to participate in the union?

As far as the store goes in Quebec, I is my understanding, that it was a marginal store.  Having had the misfortune to have travelled through Quebec a few times, I go to great lengths to avoid Quebec.  They are unfriendly to all things not French including the rest of Canada and especially the US.  I am surprised that Walmart wanted a store there to start with.

David: What of the salary of the WM worker when the union forces WM to fire him/her, as happened with those meatcutters?

On what empirical evidence is the statement:"How do you account for the fact that most Walmart employees do not want to be unionized?” based? Have you done a survey of the 1.2 million workers?? How do you know that theyThe only way to really know is to allow fair and open elections.

Gary: I’ll grant you the elections as long as you ensure that workers who don’t want to join can stay employed without paying any dues.

Jeb: One by one....

“the average Wal-Mart worker earns $14K - that’s $1K below the federal poverty for a family of three. “

Nice way to spin it. Realize, using your statistic, that a family of one or two earns above the poverty line. Your stats are off anyway: using the $8.23 average, the yearly wage is more than 1k more than $14k: above the povery line for a family of 3. Besides, an “average” means some are below and some are above. Those who are below tend to be bad workers.

“Wal-Mart shifting health care costs onto taxpayers is costing us millions upon millions a dollars every years. “

WM shifts $0 onto taxpayers. (A solution to stop this whining is to ban any WM employee from receiving public assistance. This might shut up those that are making the entirely false claim that WM is costing anyone a cent because it is refusing to give unearned handouts to the undeserving).

“Wal-Mart selfish pursuit of the bottom line forces American suppliers to locate overseas, costing us jobs and destroying communities. “

Any job lost because someone else is a better worker is being given away by the worse worker. The “costing us jobs” is not true at all: there is another WMWatch news item that shows gains in millions of jobs during the era of WM’s huge growth.

“Wal-Mart imports $18 billion dollars worths of goods every year from China, which increases our trade deficit and helps fund the Chinese military, which in turn threaten U.S. security. “

The trade defecit is pretty much a myth; nothing like the budget defecit. Equal value is traded for equal value, so there really is no defecit in trading. I will grant you that there are problems with trading with socialist countries like China, however.

-----
Gary: more than 90% of America says “union no”. Why would WM workers be so far outside the norm? Besides, there is empirical proof: the unions keep getting rejected by WM’s workers when a vote comes up.

Gary: “Carnegie and Frick had employed the Pinkertons. Frick used the agency twice in his coal fields: in 1884 to protect Hungarians and Slavs whom he had brought in as strikebreakers; and in 1891 to protect Italian strikebreakers, brought in against the then-striking Hungarians and Slavs. Carnegie used Pinkertons to protect strike breakers in 1887 and hired them twice in 1889 when strikes seemed imminent, facts he later conveniently forgot.”

Why not be proud of hiring workers to pick up the jobs the lazy strikers had basically quit?

Gary: “The gains made for american workers by unions, from the 40 hour work week to health care provisions in labor contracts to minimum wage and working condtion improvements are the real issue”

The 40 hour work week is nothing to be proud of. How DARE government interfere with my own drive to work and succeed. Nor are the health care provisions. The chickens are coming home to roost when it comes to huge unearned benefits. Someone had to pay eventually. Delphi is only the first.

“Working conditions”??? Don’t make me laugh. Being forced to give hundreds of dollars a year to thugs and politicos who have nothing to do with your job is a pretty bad condition.

The minimum wage? A total disaster. It has resulted in many thousands of workers going from low-wage to zero wage. That is nothing to be proud of either.

Gary said: “Painting an entire movement that engaged millions & millions of american workers in a struggle for a better way of life and a decent standard of living as being part and parcel of some fantasy of total corruption is not only untrue”

It IS very corrupt. Most of the members are forced to join against their will. The rich union bosses use the stolen money to campaign against efforts to protect the workers against such theft. Until union membership becomes the choice of workers (and is never forced), unions deserve no respect and are rich and corrupt with extorted and stolen money.

Whether or not I agree with the ACLU, NARAL, the John Birch Society, or Move On.org, I respect these as legitimate organizations. Unlike the AFL-CIO and the UAW, there is not one single person forced to give money to these organizations against their will. They legitimately represent their members. The unions do not.

Hello Everyone!  Just another Wal-Mart goon signing on.  Wait, am I working off the clock?  Whew!  I’m not, I’m home now.  Ok, I’m interested in hearing exactly what the many critics of Wal-Mart healthcare realy know about it?  And then I would like to know if any study has been done to see how many associates are covered under thier parents’ policies or husband/wife’s?  Rather than Wal-Mart insurance.  There are many people at my store who came to my store already on public assistance who are now able to pay rent and buy a car and pay taxes but because free healthcare is always cheaper than cheap healthcare they nearly always choose that route.  We make choices in our lives and I just don’t think it makes good sense to deny the cost of the consequences.

Jennifer,

That is a very valid point. When discussing Wal-Mart health insurance, we should have all the facts and figures. The UFCW likes to throw out this number “only 45% of Wal-Mart employees have health insurance”. How about this instead:

What percentage of Wal-Mart’s 1.2 million US employees purchase Wal-Mart health insurance?

What percentage of those who do not purchase it already have coverage, be it through a spouse, a parent or Medicare?

What percentage of those who NO coverage CHOOSE not to buy it, though they could afford it?

If you really break the numbers down, I would be willing to bet that much less than 1% have no coverage, want health insurance and can’t afford it. But we will never see a real breakdown like this because it doesn’t jibe with the UFCW sound-bites. If 99.8% of Wal-Mart workers had some form of coverage, health insurance would be a non-issue wouldn’t it?

We need to ask what these 1.2 million US employees would have been earning at Mom and Pop. Most likely minimum wage, no benefits and 20 hours per week. Now, we need to ask what percentage would be on welfare and/or unemployed and a 100% burden on the taxpayers if they weren’t working at Wal-Mart. Let’s face it, you can’t say these people would be earning $25 an hour somewhere eles if there was no Wal-Mart because if they had that kind of earning power to begin with, they would already be working elsewhere.

Just two cents worth from one who has a wealth of knowledge to offer.

Jeb:

I appreciate your civil tone.  Here’s the deal.  King Soopers, which has unionized grocery stores here in the Parker area, barely pays more than Wal-Mart, if they pay better at all.  I don’t know exactly what union members at King’s get in other compensation, but I can guess.  They probably do not get discounts on merchandise and many other services, stock-matching plan, and many of the other benefits that Wal-MArt associates are offered.  Sure they might get marginally better health coverage, but come on. 

There are a few employees who I work with at my Wal-MArt store who migrated from King’s to Wal-MArt and were very disappointed with the union.  They thought that joining a unionized company meant paradise on earth, free health care, amazing pay, and utopia.  They were wrong.  That’s why they are here, I suppose.

Wal-Mart and Kroger here in my home town are comparable in many ways, including compensation of employees.

The bottom line here is that a unionized Kroger distribution center here in my area is paying people 14 dollars an hour.  I am making 11.50, and I am not even working at a distribution center.  Distribution centers tend to pay much better than working at an actual grocery store.  I would venture to say that working at the nearest Wal-Mart distribution center I could make 12-13 dollars an hour at least. 

What is the big fuss about?  Unions don’t offer me all that much more if any more than I already have.  Sure, in union strongholds like California, unions offer much better compensation than nonunion.  But that is because they HAVE NO COMPETITION.  We live in America, where competition is allowed.  Guess what about California?  The cost of living is exorbitant.  Even if I got a union job in California, I wouldn’t be able to live there because the cost of living is so unbelievavbly high, largely thanks to unions.

Anyone know where all those imports that Wal-Mart brings in to the United States go?

I know they import a lot through Norfolk and Savannah, but where are there distribution centers in and around New York?