Sunday, 01 March 2009

“One of the all-time enlightened American employers”

Charles Platt, long-time journalist and former senior writer at Wired, went undercover as a Walmart employee, and discovered the company is not as bad as it’s been made out to be:

I found myself reaching an inescapable conclusion. Low wages are not a Wal-Mart problem. They are an industry-wide problem, afflicting all unskilled entry-level jobs, and the reason should be obvious.

In our free-enterprise system, employees are valued largely in terms of what they can do. This is why teenagers fresh out of high school often go to vocational training institutes to become auto mechanics or electricians. They understand a basic principle that seems to elude social commentators, politicians and union organizers. If you want better pay, you need to learn skills that are in demand.

The blunt tools of legislation or union power can force a corporation to pay higher wages, but if employees don’t create an equal amount of additional value, there’s no net gain. All other factors remaining equal, the store will have to charge higher prices for its merchandise, and its competitive position will suffer.

This is Economics 101, but no one wants to believe it, because it tells us that a legislative or unionized quick-fix is not going to work in the long term. If you want people to be wealthier, they have to create additional wealth.

To my mind, the real scandal is not that a large corporation doesn’t pay people more. The scandal is that so many people have so little economic value. Despite (or because of) a free public school system, millions of teenagers enter the work force without marketable skills. So why would anyone expect them to be well paid?

[…]

You have to wonder, then, why the store has such a terrible reputation, and I have to tell you that so far as I can determine, trade unions have done most of the mudslinging. Web sites that serve as a source for negative stories are often affiliated with unions. Walmartwatch.com, for instance, is partnered with the Service Employees International Union; Wakeupwalmart.com is entirely owned by United Food and Commercial Workers International Union. For years, now, they’ve campaigned against Wal-Mart, for reasons that may have more to do with money than compassion for the working poor. If more than one million Wal-Mart employees in the United States could be induced to join a union, by my calculation they’d be compelled to pay more than half-billion dollars each year in dues.

Anti-growth activists are the other primary source of anti-Wal-Mart sentiment. In the town where I worked, I was told that activists even opposed a new Barnes & Noble because it was “too big.” If they’re offended by a large bookstore, you can imagine how they feel about a discount retailer.

The argument, of course, is that smaller enterprises cannot compete. My outlook on this is hardcore: I think that many of the “mom-and-pop” stores so beloved by activists don’t deserve to remain in business.

When I first ventured from New York City to the American heartland, I did my best to patronize quaint little places on Main Street and quickly discovered the penalties for doing so. At a small appliance store, I wasn’t allowed to buy a microwave oven on display. I had to place an order and wait a couple of weeks for delivery. At a stationery store where I tried to buy a file cabinet, I found the same problem. Think back, if you are old enough to do so, and you may recall that this is how small-town retailing used to function in the 1960s.

posted on March 1, 2009 1:13 PM




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