FC NOW: The Fast Company Weblog
February 28, 2006
The Wal-Mart of Persuasion
Another sign bad PR is getting to Wal-Mart? The giant retailer recently tapped former Atlanta mayor and United Nations ambassador Andrew Young to head its new Working Families for Wal-Mart committee -- a group charged with defending the store's wage and health-care policies from mounting criticism by labor groups, filmmakers, and others.
"I've watched the attacks, and I think the critics have it wrong," Young writes in today's Atlanta-Journal Constitution. In Young's telling, Wal-Mart founder Sam Walton brought poor, rural folk the same goods available in big city stores at prices they can afford -- a veritable modern-day retail Robin Hood. He praises the store as the nation's largest private employer and quotes surveys showing its regular shoppers are low-income earners who "need Wal-Mart's low prices the most."
Young urges those who care about the poor to "step up, speak out and join this national discussion."
So what do you say?
Posted by Angus Loten at February 28, 2006 12:58 PM | Category: |
20 Comments
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Sure Wal-Mart is the top private employer, but who has the data for jobs lost because a Wal-Mart popped up in a town and shut down other retailers, or when a Wal-Mart supplier had to outsource its manufacturing to keep up with the Rollback! mandate? Perhaps Wal-Mart is also the largest source of de-employment.
I refuse to shop at Wal-Mart, but that is a luxury of my means. Some people can't afford to not shop there, and usually because all other low-cost retail options in a locale have been wiped out. Wal-Mart is Poor America's Company Store, so to speak. That term should raise hackles like the phrases "slumlord" and "profiteering" do.
Wal-Mart punches people in the mouth and then sells them gruel.
> Wal-Mart punches people in the mouth and then sells them gruel.
Wow. I couldnt have said it better. After shopping at Walmart (earlier today) and feeling like a bit of a prostitute, I can only agree.
It;s the effect that Walmart has on smaller rual areas that (in my mind) seems to be the most devistating. In larger cities, there still seems to be room for the market to breathe -- but when you bring this to a "one corner town," it seems to become the leech that gives you life.
Who knows.
the low prices are great but they come at a huge price.and now they have andrew young talking about how great they are.that man sold his soul to the devil and in my opinion lost all the respect it took him a lifetime to get.the other discount store in my town gets 99%of my business.if that store doesn't have what i need i will go to wal-mart,get the item and leave.i buy at those holes.i don't shop at those holes.
THERE IS NO VOID!
I always get a kick out of those who become defenders of Wal-Mart. They tend to refer back to Sam Walton's intentions to bring good product at great pricing to the poor. That might have been the case when he built his first store in Bentonville in 1962.
It is now 2006, and with 3800+ US stores (and another 2400+ overseas) the company is no longer at the edge of small poor towns, offering "big-city goods at everyday low prices", but in the heart of almost every major metropolis in the country. When met by any resistance Wal-Mart takes it to the courts, forcing themselves into the lives of millions regardless of their financial wellbeing.
I often wonder how this affects the poor. How much does it cost the citizens of a community to have their tax dollars redirected to fight these battles? Who pays for this political and legal debate, the courts, lawyers, court officers, public services and time of those souls who actively participate in their own defense by showing up to town hall meetings to share their thoughts? Aren't the services in the poorer communities the first to get hit by budgetary challenges?
Let’s be clear, there is an argument to be had. Everyone likes low prices, but at what cost? Wal-Mart is big business, with serious bottom line intentions; at the same time every community has the right to decide whether a Wal-Mart plan is right for them.
It is ridiculous however to have one of our former politicians wrap this debate in something as noble as looking out for the poor, even if he’s simply referring to someone else’s writings.
Make a better argument for Wal-Mart as this one is full of holes.
When you think about how heavily leveraged WalMart is for the financing of new stores, you realize that they have to keep expanding just to survive. It is a company that is entirely at the behest of the forces which have brought it to the fore. It's geared towards the internationalization of domestic commodities provision plain and simple.
When you think about WalMart in the macroscopic sense, all you see is a warehousing schema fueled by a electronic system of needs identification that is at least more efficient that what has existed before. If those needs seem petty, it is because consumers have dictated this. I don't say this as some sort of free-market utopianist. Rather, it occurs to me that as networks similar to WalMart have to speculate and roll downhill into new markets, the needs of those whom they have previously RolledOver, will by necessity become less petty. Concerns about quality or other aesthetics will become moot so long as the network operates at the border of affordable provision of basic needs.
In time, such networks as WalMart will have nearly swept through every market and either close shop, remodel themselves, or adopt non-speculative practices in order to maintain themselves. Their network is geared towards rapidly identifying and reidentifying the needs of an individual locale. Hence, it would not be surprising if WalMart type networks did more than pressure municipal governments for more than tax breaks and sought to provide their own social development services, but on a comparatively tailored basis compared to that offered by government. How this will happen I'm not sure, but eventually, they will need to look for ways to prompt regions to develop more capital in order that it may be extracted from them.
It will be quite some time before they have rolled through all markets for the first time though. If you want my opinion on the subject, I find networks such as WalMart to be an historic innevitability.
I don't believe that wal-mart is a low cost leader any longer. I think they are hanging their hat on convenience (one stop shopping) and impulse buying (I came in for milk and ended up spending $100)
Lower prices can be found at smaller retail outlets that are in a less mature state of the retail cycle like Freds & Big Lots. Better produce can be found, almost anywhere.
Wal-Mart would remain the dominant retailer even if they paid higher wages, because of efficiency, fast response to changes in market demand, & distribution.
Wal-Mart's big disadvantage is Sam Walton's cult of personality has become distorted into something that is at the rare extreme draconian and more commonly something that destroys a culture of candor that must exist to prevent self delusion.
What I think Wal-Mart needs a another Mrs. Walton. I think I read somewhere that it was Sam's wife that convinced him to give ALL his employees stock options to reward them for success and make them feel vested in the company. Mr. Walton is famous for exalting leadership, Mrs. Walton was pointing out that leadership is a much easier if the those being lead are happy about it.
Wal-Mart is kicking the butts of their competition in so many ways it's laughable. Health care for employees is a minor part of the picture. When I see a self-serving politician unloading on Wal-Mart, it only cements the fact that the other companies in the space can't compete on a level playing field--they have to enlist political cronies and muckrake to weigh Wal-Mart down so they can dream of catching up. The truth is, the other retailers are just plain inferior. If they were superior in any way, they would grow and be able to lure Wal-Mart's workers away, but they're nowhere close to being able to do so. It's also sickeningly obvious where the unions will stand on this matter. They have no concept of competiveness either domestically or internationally. If allowed, they would drag Wal-Mart down just as they did GM and Ford. Wal-Mart established a place in the market by finding a way to serve consumers better. They broke the old, inefficient molds, using technology and superior planning and execution to do a clearly superior job. I say let them run, and if any other company has the stuff to face them and beat them fairly, then step up and show the better way, instead of whining and throwing bricks.
Well they do provide just about any type of "nic-nac" you need...but what tripped me out was the recent case I read about where they didn't want to up their employees benefits while companies much smaller than they were already doing it? Sounded like they're only in it for the $$$ and could care less about their workers. Perhaps they think there's always someone needing a job so if a current employee(s) doesn't like it, screw 'em they simply hire someone else. I realize they give employees stock options,but let's face it, you could work there your whole life and still not cash in big with those stock options! Never-the-less I still will continue to earn commissions for driving traffic to their site as an affiliate --visit my website to see how-- because the average person does shop at WalMart...their name has become synonomous with getting the things you need for low prices regardless if it's true or not. One thing is for sure,being an affiliate is definitely better than being their employee!
I think the goods and services that wal mart and sam's club bring to areas is a good job well done by all wal mart employees. the low prices that are offered in wal mart stores are crucial to many families living in todays society, so the prices and the large amount of products that wal mart offers is definetly a helping hand, and i hope they continue to provide the same great low priced products and introduce new products to the many shoppers that wal mart has added to their " routine buyers " list.
thanks for taking comments.
kurt
I agree with you Kurt...but like Caleb I didn't understand the employee health benefit issue either?
The problem is that it is so profit and growth-driven that they will not relent to raise wages/benefits without a huge fight. The only good thing I have to say about the new face of Monopolism is that at least their CEO is not overpaid, as compared to other CEO's. But what they need to do is allow their growth to slow, and let that profit margin go down a little bit to cover the needed employee expenses.
The worst thing is that America's largest private employer has most of its employees and their families on medicare! Our taxdollars are supporting their low prices. So the money you save by shopping at wal-mart is still coming out of your pocket, just going to wal-mart via uncle sam.
I happen to work for Wal-Mart. 7 years now. Before I started working there, I worked for a small grocery store accross town, (a mom-and-pop). We used to call Wal-Mart the "Evil Empire", but after working for the company I can honestly tell you that they are indeed an empire, but certainly not evil. Having worked for several retailers over my career, I've found that Wal-Mart has much better benefits and healthcare than most. It's an 80/20 style co-pay with selectable deductibles. perscriptions at $10 or $30. I pay $22.00 Bi-weekly to have a $500 deductible and prescription plan. Now tell me how horrible the insurance at Wal-Mart is. In addition to health care. I also have a profit-sharing option. I can choose to invest it anyway I choose and 100% of the money comes from Wal-Mart contributions. If I were to leave the company today, after 7yrs, I would recieve a check for no less than $8500. 401k is offered, with a company contribution, whether you contribute or not. there is also an incentive program that nets me a $300 bonus every quarter. And to top it all off I am a Pee-on making over $15 an hour in rural Iowa. Now tell me how horrible wages are at WM. The propaganda you all see in the media is just that, Propaganda. Union Lobbyists performing smear campaigns against a business that actually provides such good benefits that most of the associates I work with would not want to risk those benefits by unionizing and putting them on a negotiating table. It is indeed a fact that when Wal-Mart comes to town. A lot of businesses fold. It's not because Wal-Mart drove them out of Business. It's because the other businesses ignored the market changes that Wal-Mart embodies. As a former business owner, I can tell you that when you get competition in the area that is overwelming. You need to respond, with better service, better advertising, or better product. That kind of thinking is what will keep small business thriving in a Wal-Mart economy. Not throwing stones.
Like it or not, agree with it or not, "low prices" are reflected in the hard fact that near 40% of Walmart employees are on some sort of public assistance. That's part of the job. When they are hired, most receive local assistance guidelines such as where to food stamps, aid to dependent children, etcetera. The "low price" phenomena comes from the wage sacrifice of the employees wearing the blue blouses, that is the largest cost factor in any store.
Those wonderful folks from Arkansas are the cleverest blood suckers in the retail marketplace in America. They have somehow duped city councils in San Luis, Arizona, Evergreen Colorado and Chekotah, Oklahoma into admitting superstores thereby bankrupting each small community of it's individuality and all of the attendant mom n pop stores. Been there, saw it. How it ever happened in Evergreen is beyond me, it is comprised of Environmentalists with a burn and torch mentality that should have not permitted it, but then again, Money Talks, and City Councils walk.
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i read the above blog entry but certainly didn't read all of the comments. it is truly amazing how many people have such strong statements about wal-mart. does everyone think about this company day in and day out?
One fact that everyone has overlooked is this: The so called "everyday low prices" is just for the cheapest item (usually with inferior quality) in each product category. Once your feet walks into the aisle where the "low priced" product is located, your eyes will glaze almost unavoidably to the next item in the same product category located next to the so called "low priced" item. Now, look carefully at the price of this other item. If you are a smart shopper, you will notice that the price is not so "low" after all. It is comparable or even sligtly higher, to other stores selling the same item in your neighborhood.
Often times, the shopper will lean over to pick up this other item, and not the 'low priced" one.
So all WAL-MART did there was a classic bait and switch on unsuspecting shoppers.
The smart shopper is dead..Long live the smart shopper !
Each and every one who shop at Walmart is a main
character in this " Walmart Effect" drama. Without
we the shopper, Walmart would not exist. So let the discussion begin. How we the shopper want
Walmart to treat the employees "better pay, better
health benifit", how to treat the supplier "higher cost" and are we willing to pay more on the items.
I am also an associate of wal-mart, upper management. As i read these comments, I want to respond to the fellow from Iowa, that medical info is correct if you are single, however to add on a family and children is very costly as a wal-mart employee. I had a deduction of almost $700.00 monthly being taken out, now for me that was ok, but for some of my associates who I knew had families to support it was not ok with them, they simply could not afford it and therefor have gone on without it. I have seen this over and over again,lets face it the company should take better care of their associates, it's what Sam would have wanted and always preached. But the board of directors will not budge for cynical reason. That is my opinion. Money can always be better spent and I see money being wasted in the stores simply because someone in the coperate office is always handing down new direction which cost money. Carless decisions and poor leadership always backfires in stores,therefore money is thrown away irresponsibly.
I admit I am a frequent shopper of wal-mart and other retail stores. When you look at structure of how most RETAILERS have they're business set up, it is to profit largely from supply and demand of poorer community, with them selling the mentallity that they are the cheapest place to buy. In addition they hirer from those communities; People with the lower education in which they are treated differently because of this meaning: It is harder to get a promotion because of lack of education, low self-esteem, and the commitment of the company to compensate fairly between those people with education and those who is less educated. I have worked all of my life and realize in these times it takes a combination of events to be promoted, depending of the percentages of where you are. It takes who you know (70%), what you know (20%), and the other (10%)how well you communicate. For instance, a poor person may have been doing the same job for years and knows all the ins and outs of the company but the company would rather hirer a 4 year graduate out of college and have the company man train someone else for the higher position. The people with the education gets a salary plus bonuses. The poorer, less educated only gets the minimum and gets stuck with high cost of so called benefits to take care of their families at a lesser wage in which our country is saying that's ok, work until you get hurt or sick. Forshame on walmart, from not doing the right thing to say more poor people shop there than anywhere else.
I work at Walmart for about 9 months now and I can not afford health benefits. I make 8.95 an hour. By time they take the taxes out, there is hardly enough to live on.
I was making $8.00 in the 80's, it's now 2006. I think Walmart should raise their wages to meet the higher living.
If you want to read about the future of this sort of thing read Marshall Brain's Manna. Brain is the guy who did the "How Stuff Works" website and books.
http://marshallbrain.com/manna1.htm