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There are two important economic discussions going on right now in America, and too rarely are they tied together as they should be.

Not a day goes by without talk in the media of the ‘Wal-Mart Economy’ and Wal-Mart’s role in a recession. Similarly, with the proposed auto bailout being debated on Capitol Hill, we’ve heard endlessly about the supposed failures of GM, Ford and Chrysler to adjust and adapt.

Everyone tends to agree that more Americans are now forced to shop at Wal-Mart - whether they love or whether they hate it. Likewise, the talking heads know that the Big Three are suffering - whether or not they need to be bailed out, or are getting what they deserve.

But the two aren’t separate stories.

A couple of columns by the Washington Post Writers Group over the past two days have done a great job of laying out the differences between Bentonville and Detroit – and what that has meant for the American economy.

Warren A. Brown writes mostly about cars. A lot of his column defends Detroit’s efforts to make greener cars, but more importantly (for this blog post at least) - he draws a more realistic picture of what’s been happening in America:

“Here is where newspaper columnists—Thomas L. Friedman of The New York Times comes to mind—routinely dismiss the idea of federal aid to an ailing Detroit, suggesting that the city and its automobile industry be consigned to the scrap heap of history, having failed dismally in their core mission to design and develop the kinds of cars and trucks Americans really want.

It is sophist nonsense, of course, the kind of tale spun by people who haven’t bothered to check the numbers, and who have paid even less regard to the history of their supposed knowledge.

The truth, all things considered, is that Detroit has done reasonably well. The American Three—General Motors, Ford and Chrysler—still hold an estimated 47 percent of a home market that is wide open to competition from car companies all over the world. Until July of 2007, domestic automobile manufacturers historically held more than a 50-percent U.S.-market share. But in a country where consumers have made Wal-Mart the retail king—that’s Wal-Mart, one of America’s biggest importers of foreign goods—that was bound to change.

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Check out this week’s issue of the Wal-Mart Watch Weekly Update for Elected Officials – a compilation of Wal-Mart news from across the country and beyond.

This week’s issue begins with a Bloomberg report of Wal-Mart being placed on a list of most controversial companies. Also named - the company responsible for producing melamine-tainted milk in China. The list includes companies criticized for producing negative impacts on communities, health, and the environment, and was based on a study by RepRisk, a consulting firm that analyzes companies’ exposure to controversial issues and news.

You’ll also find stories from BusinessWeek and the Financial Times on how corporate giants like Wal-Mart are gearing up to battle potential pro-labor legislation in 2009. With President-Elect Barack Obama and the Democrats taking over next year, retailers are bracing to fight the Employee Free Choice Act – or EFCA – which could make it easier to organize unions in the workplace.

In addition to EFCA, you’ll find stories on Wal-Mart and the economy. And from the legal front, read about a $19 million discrimination lawsuit filed against Wal-Mart and Pepsi in West Virginia. Plus, in the world of product safety, read more about questions raised by the controversial chemical BPA, as well how Wal-Mart has been selling lead-tainted face paint for kids…a no-no anytime, and especially around Halloween.

And finally, check out our “Stateside” and “Wal-Mart International” sections to find out what’s going on with Wal-Mart around the country and across the globe. Chicago city aldermen have a wish list for an Obama presidency; the fight continues over whether Wal-Mart can build near a Civil War battlefield in Virginia; and towns in California and Nevada deny Wal-Mart the ability to sell alcohol on its store shelves.

Wal-Mart Watch Weekly Update for Elected Officials [November 12, 2008]

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Check out this week’s issue of the Wal-Mart Watch Weekly Update for Elected Officials – a compilation of Wal-Mart news from across the country and beyond.

This week’s issue begins on Wal-Mart and the economy, and whether Wal-Mart sales statistics can be used as a new barometer for the U.S. economy. You’ll also find stories on changes in shopper behavior, now that consumers are faced with less disposable income. And, you’ll find stories on Wal-Mart’s slowed growth, and the switch to smaller store formats by retailers across the country.

In addition to the economy, you’ll find stories related to next week’s election. Barack Obama highlighted the story of a 72-year-old man forced to go back to work for Wal-Mart in his half-hour special this past Wednesday night. Meanwhile, according to Reuters Wal-Mart vows to remain non-partisan in the 2008 election season, while the Financial Times reports on the candidates attempting to woo the so-called “Wal-Mart Moms.” Plus, there are suspicions that Wal-Mart is behind a new grassroots group recently set up to fight the Employee Free Choice Act, as reported in The National Journal.

Also: Find out whether a Wal-Mart case in Montana could lead to changes in that state’s campaign finance law.

And finally, check out our “Stateside” and “Wal-Mart International” sections to find out what’s going on with Wal-Mart around the country and across the globe. A California ballot measure could lead to increased demand for more humane animal products, while citizens in Virginia continue to fight Wal-Mart’s attempt to build near an historic Civil War battlefield.

Wal-Mart Watch Weekly Update for Elected Officials [October 31, 2008]

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The biggest oil company in the world and the biggest retailer in the world are loving life as the economy sinks.

Wal-Mart stock has risen 20% since the start of the fiscal year. Exxon Mobile just posted the largest quarterly earnings in American history- to the tune of 14.83 billion dollars.  The recession has done wonders for both companies; the volatile price of oil, puts Exxon Mobile in the position to capitalize on futures from supply-wary market analysts, while Wal-Mart continues to post double-digit profits because of the high number of price-conscious consumers who are forced to trade down - even if it’s against their will.

Many more-upscale retailers, such as Target, are not doing quite as well during the recession.  BusinessWeek reports that looking at the most recent quarter over the past year, Wal-Mart’s same store sales are up 5% while Target’s are down 0.4% and K-Mart’s are down 5.6%.

But these days are numbered. Wal-Mart knows that the recession won’t last forever. This week, they unveiled plans to focus more on renovating existing stores next year than opening new stores. Wal-Mart realizes that when the economy turns up again, many of its new customers will want to shop elsewhere - and they’re trying to stop it. The question is: will it work?

Wal-Mart Wins Big During Downturn [BusinessWeek]

These are heady times for Wal-Mart (WMT). The Bentonville (Ark.) retailer has been enjoying double-digit profit growth and strong sales as bargain hunters crowd its aisles. Its stock is up about 20% since the start of the year. And shoppers like Sal Garcia of Downey, Calif., are joining the growing ranks of loyal customers. “Look,” says Garcia, 52, putting the last of 10 shopping bags into the trunk of his Lexus, “all that for $54!”

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If you happened to catch Democratic Presidential Candidate, Senator Obama’s infomercial last night, you saw a retired couple who couldn’t afford to pay for their medications so the 72-year old husband had to take a job at Wal-Mart. Instead of enjoying their retirement and what should be their “golden years,” this man like many others in these tough economic times had little choice but to join the forces of low-paid Wal-Mart workers. Go in any Wal-Mart and you’ll see many folks just like him – folks working as Wal-Mart sales associates, greeters and stockers.

But, with Wal-Mart’s average hourly wage of around $10 – not the starting wage, which is much lower - this family and others like them are struggling.  An average full-time employee earns about $19,200 a year – that’s living in poverty for a family of four. And, what about those medications and doctor bills?  You can bet this family is still paying them out of pocket – with Wal-Mart’s lousy health care plans and waiting periods.

Part-time workers have to wait a year before they are eligible for health care plans while full-timers still have a six-month wait. And even for eligible employees, the decent plans are too expensive to afford on a meager hourly wage. Most end up with high deductibles and very little coverage, which is why only about half of Wal-Mart’s employees are even covered under the company health care plan. 

As Senator Obama pointed out, this couple’s situation is not an isolated one. But, the sad thing is that so many of these folks who find themselves working at Wal-Mart in these desperate times, find themselves subject to bad treatment, low wages and poor health care plans. The stories we hear from employees every day show a disturbing pattern of Wal-Mart’s willingness to take advantage of these hard-working employees - who are just trying to support their families and make ends meet. All you have to do is read a few of them to understand working at Wal-Mart isn’t always a good option.

We hope that the mention of Wal-Mart in this political infomercial puts the company on notice. People are paying attention: it’s time for a change, Wal-Mart.

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Since the issue of Wal-Mart has been surprisingly muted this campaign season (Wal-Mart Moms?), the retailer has decided to inject itself into the campaign ad fray. Both Obama and McCain have videos running on Wal-Mart’s corporate website. You can find them both here.

Here’s a little summary of the main points of each of the campaign messages you can find on walmartstores.com:

Obama:

Our economy is in crisis, we have two wars, and the American dream is slipping away (starting out on a positive note...nice)
We’re going to fix it by giving a $1,000 tax break to the middle class (YAY!!!! More money to spend at Wal-Mart!!!)
We’re going to allow workers to organize, for better wages, health care, benefits (Organize, YAY...wait, what?!)

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WAL-MART AND THE ‘POORING OF AMERICA’
I’m not sure where the phrase “Pooring of America” came from, but it’s perfect to explain Wal-Mart’s effect on working families. Seeking Alpha ponders why Wal-Mart and McDonald’s are doing so well right now.

What are McDonald’s and Wal-Mart Telling Us? [Seeking Alpha]

I am very intriqued by our top 2 choices for the “Pooring of America” trend - Walmart (WMT) and McDonalds (MCD) - what exactly are the charts above telling us?  If we are to enter a long drawn-out recession, which I have believed, these seem to be screaming buys here. The only question is credit - how does a lack of credit potentially hurt both. They are not expanding a ton, in the U.S. at least - perhaps with Wal-mart it’s financing of inventory, but I cannot wrap my mind around this behavior.

Wal-Mart gets downgraded while stock up in 2008 amid the turmoil [BloggingStocks]

Will Wal-Mart weather the storm? To a point, it already is. Sure, all retailers are expected to have a dismal holiday season this winter, but Wal-Mart will do better than the competition. It has more stores, more pricing leverage and more wherewithal to hold customers hostage with lower prices and inventory turns at a time when it’s needed most. Perhaps we’ll see WMT return to the $60/share level by Thanksgiving—if not sooner.

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Check out this week’s issue of the Wal-Mart Watch Weekly Update for Elected Officials – a compilation of Wal-Mart news from across the country and beyond.

This week’s issue focuses on Wal-Mart and the current economic crisis. You’ll find stories on how Americans are shifting to thrift stores in order to save money, and whether September’s retail sales figures reflect a downturn in consumer spending. You’ll also find an article from CNN Money discussing whether the state of the economy will affect Wal-Mart’s hiring, especially with the holiday season coming up.

In addition to the economy, you’ll find stories on Wal-Mart’s move to small stores. Are Wal-Mart’s Marketside Stores the wave of the future? And in health care news, Wal-Mart is rolling out electronic personal health records to all of its employees, and has announced changes to its health plan for 2009.

And finally, check out our “Stateside” and “Wal-Mart International” sections to find out what’s going on with Wal-Mart around the country and across the globe.

Wal-Mart Watch Weekly Update for Elected Officials [October 10, 2008]

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A story out today from Advertising Age has an in-depth break down of Wal-Mart’s current business and marketing strategy. Most retailers are scrambling to stay afloat as the economy declines, but in the last month Wal-Mart has seen rises in both its stock price and profits.

Shoppers are trading down, and Wal-Mart is as low as they can go. A bad economy has always been good for Wal-Mart, and today’s recession-like atmosphere is no different. Wal-Mart’s execs claim the recent boost in sales is due to a “strategic three-year plan,” but most analysts agree: when the going gets tough, the tough go to Wal-Mart.

“But,” says one analyst quoted in the article, “there is a chink in the armor of Wal-Mart, which is these customers are not saying they necessarily feel loyalty.” Though more people are shopping at the low-price retailer, they’re not likely to stay. Wal-Mart’s only advantage is its prices: customer service, product quality and company ethics are all secondary objectives, and shoppers know that. Brand loyalty might not be a problem for Wal-Mart now, but once the economy improves the company could face the consequences for putting low prices above all else.

Wal-Mart Grinning Big Through the Tough Times [Advertising Age]

Looking for a silver lining in the economy? It’s shining brightly from Bentonville, Ark.

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An article in today’s Wall Street Journal reports Wal-Mart recently conducted a survey to “test the voting preferences of men and women who are shopping at its stores.” Wal-Mart asked shoppers which candidate they’ll most likely vote for in November, and which issues facing the U.S. today are most important. The move not only gives politicians a look at a sought-after demographic - “Wal-Mart Moms” - it also places Wal-Mart at the heart of American politics.

Not surprisingly, the economy takes center stage for many of Wal-Mart’s shoppers. Like so many people living in the U.S. right now, Wal-Mart’s customers are trying harder than ever to make ends meet. And as the economy gets worse, many people are “trading down” to shop at Wal-Mart, even if they disagree with the retailer’s business practices.

Low wages, poor health care, and job losses are a major part of this picture. Despite Wal-Mart’s recurring suggestions that its low prices are a solution to our economic crisis, the retailer is actually a big part of the problem. By paying its workers so little and failing to provide health coverage for many of its workers, Wal-Mart is making it even harder for many families to stay afloat.

Congress is searching for answers to the economic problems we now face - whether they be emergency bailout measures or more long-term solutions like passing the Employee Free Choice Act. In the mean time, if Wal-Mart really wanted to help its shoppers with the issue they care about most, the company would start improving conditions for the lowest-earning members of its work force. That’s something Wal-Mart Moms on both sides of the political spectrum could support.

‘Wal-Mart Women’ Vote Remains in Play [Wall Street Journal]

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Remember back in June, when the FDA warned consumers about eating certain kinds of tomatoes coming out of Mexico due to potential salmonella contamination? And then expanded that warning to include certain peppers as well?  All vendors of these products, including Wal-Mart were to halt the sale of such items.

Cheryl Grubbs is filing suit against Wal-Mart Stores, Inc, alleging that her husband, Brian Grubbs came close to death after eating several jalapeno peppers that were purchased at a Wal-Mart and tainted with salmonella in an article published today in LawyersandSettlements.com.

[An earlier version of this blog post mentioned that the FDA recall in question occured on June 25, 2008. This was incorrect: we apologize for the mistake.]

Tomato-Pepper Salmonella: Why the Grubbs are Suing Wal-Mart

Dolores, CO: “Truckloads of contaminated jalapenos were turned back at the border before we bought them at Wal-Mart,” says Cheryl Grubbs, “so why did Wal-Mart still have them in their store?” Her husband, Brian Grubbs, almost died from the tomato/pepper salmonella outbreak, and Cheryl is furious because his illness could have been avoided.

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A few weeks ago - Wal-Mart Watch had an inside source in a Wal-Mart focus group who clued us in to some new ads the company was planning to release. Several stories over the weekend tell us how Wal-Mart is ready to roll out the new series of ads - just in time for the the Democratic and Republican Conventions.

It’s been clear that Wal-Mart is trying to take advantage of the political atmosphere and cast itself as a fixer of America’s economic problems and combat its reputational woes. The company has been pushing the “Wal-Mart as government” theme for a while, and these latest ads are the most direct effort yet. (Of course, Wal-Mart’s ad team probably didn’t intend to roll out the new campaign just a week after the store’s low wages led to the first North American union contract, and while embroiled in a massive electioneering scandal.)

We asked readers on our blog to vote on which one of the new ad themes were the most deceptive. The results were as following:

42% (319 votes) “Some believe that fixing the economy starts in DC, we believe it starts closer to home.”

32% (242 votes) “We started $4 prescription plan; now others are following our lead. We believe a healthier America is a better America”

24% (181 votes) “Most people live pay to paycheck, we help your paycheck go further.”

2% (16 votes) “Wal-Mart saves you money—that’s our economic stimulus plan.”

Wal-Mart to air economy-focused ads [NW Arkansas Morning News]:

Wal-Mart Stores Inc. said Friday it is launching a series of economy-focused TV ads during the Democratic and Republican national conventions.

The 15-second ads highlight some of the company’s top initiatives, including its $4 prescription drug program, and communicate how supercenter shopping saves on gas.

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Don’t box us in: A Wal-Mart in the emerging cultural center would be a giant step backward for Miami [Miami Herald]

Miami has always been a city on the verge, and it’s never quite clear whether it will embrace greatness or mediocrity. Drive up Biscayne Boulevard, a street with the potential for beauty and dignity, and you can see both possibility and stupidity—whole blocks given over to fast-food franchises, sprawling corner gas stations and more. It somehow seems like a high-stakes game of Mother-May-I, with baby steps forward and a giant step back.

But no backward step is bigger than the one the city is confronting now, a Wal-Mart next to the Adrienne Arsht Center for the Performing Arts, on parking lots still owned by The Miami Herald with a sale expected to be consummated next year. Of all the bad ideas ever proffered for downtown Miami, this is the worst.

And shockingly so in a time and a place where we have already invested more than $500 million (counting the Arsht Center and the preliminary work on Museum Park) in public funds to create a downtown cultural precinct.

SEEKING URBANITY

At a time and in a place where we should be seeking to create urbanity, a Wal-Mart—even the nicest superstore ever built—would mean instant squalor.

Big-box stores may be a fact of suburban and—in far too many places—small-town life; they may be a fact of economic life. But a big-box store does not belong on this prime urban site. For decades, the civic and cultural leadership of Miami has worked to create what is still an emerging downtown cultural precinct.

The public investment in the Arsht Center is nearing $500 million (and this is not small change by any way of accounting); another $200 million in public funds is aimed at new buildings for the Miami Art Museum and the Miami Science Museum with further significant investment in improving Museum Park. Four condominium towers in varying stages of completion look out over the future park, ultimately prime locations for lovers of the arts and sciences. What is missing from the equation is the urban context—the street-level amenities that would lead one to walk a few blocks to a restaurant and the theater or lunch and an exhibition—to wit, urbanism.

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Earlier today Wal-Mart, the largest company in the world by revenue, announced its earnings figures for the second fiscal quarter of 2008. Between April and June, the company earned a whopping $3.45 billion, and sold an almost unfathomable $101.6 billion worth of merchandise. Prospering as American consumers are forced to downgrade, Wal-Mart has been enjoying a rare window of prosperity in a declining economy.

The Walton family, which holds a majority share of the company’s stock, stand to profit greatly from Wal-Mart’s sales. The company’s stock rose $17 a share between November 2007 to June 2008, and with 43% of the company’s stock in its possession, this means the Walton family made around $29 billion off the stock price increase alone. Also standing to benefit is CEO Lee Scott, who earned a total of $59.8 million last year - 1646 times what an average Wal-Mart hourly employee earns annually.

Despite the company’s massive profits, Wal-Mart’s wages remain shamefully low. In fact, when accounting for inflation, wages for Wal-Mart’s hourly employees has actually fallen since 2004. Our newest fact sheet - “Wal-Mart: Low Wages, Always” - provides more details about the company’s efforts to keep wages low.

Wal-Mart depends on low wages to keep profits high, and the company is willing to go to extreme lengths to keep it that way. Wal-Mart’s recent anti-union propagandizing is just one such example, but it’s part of a larger, cohesive company policy to keep benefits poor and wages low. Learn more in our fact sheet: click here to download “Wal-Mart: Low Wages, Always.”