The Wal-Mart You Don't Know

Fast Company magazine ^ | november 2003 | charles fishman

[Dead Dog]

Oops, the link is in the archive; Here's an exerpt:

"We just operate everywhere," he said. "We need to include everybody around the world in the asset utilization. They buy our products and pay up. We can't just extract wealth from other countries and pay ourselves.

"And the United States has no divine right to our standard of living," Mulally added, defending Boeing's overseas parts production.

......... "Because that's what we believe in. That's capitalism. That's market forces."

Strange brew between shrewd business (not a bad thing), and a total lack of understanding/acknowlegement that his products are in fact wealth more useful to his customers than the cash paid for them. That both the shareholders and customers gain wealth from the transaction.

[cashion]

You obviously have never talked to a W-M employee.

Actually, I have talked to a Wal-Mart employee. Have you talked to any that didn't have a chip on their shoulder?

They all think of themselves as trained customer sevice experts, and deserving, but not getting good salaries and bennies. Many W-M people I know have two jobs just to make a modest go of it.

It doesn't matter how they consider themselves. If you are working as a cashier or customer service at Wal-Mart, your skills are worth $7.50/hour (in central Oklahoma). Last I heard, Target employees in the same area are starting at no more than $7.00/hour. You're kidding yourself if you think unskilled labor is worth much more than that. Wal-Mart jobs of this type should consist of high-schoolers, people working their way through college, and retirees looking for a little extra cash. If one wants to support themself (or their family) on a Wal-Mart hourly wage, that is their decision. Wal-Mart doesn't force anyone to become an associate.

The prez gets a mere $17.7 million a year plus bonuses etc. The Walton family members are all billionnaires.

$17.7 million for running the largest company in the world? I'd say Wal-Mart's stockholders are getting a deal. The Walton family members are billionaires because they hold large portions of a stock that has skyrocketed since opening. Are you faulting them for that? Do you have a problem with "the rich" or just everyone that makes more than Wal-Mart unskilled labor?

[newgeezer]

never passing along ssvings to consumers, just stuffing the difference in their own pockets.

Oh? Why doesn't competition take care of that? Last I checked, your automotive "cartel" was still trying to fight off the import threat (and losing, bigtime).

[Fester Chugabrew]

"I've gone through countless vaccuums in my life."

FYI, you're supposed to turn them off when you're done using them.

[malia]

I wish they would.

[Mamzelle]

yup--but I've worn them out the other way, too...

[kempo]

Let me tell you why I love Wal-Mart. I managed to buy 50 shares of Wal-Mart back in 1980. I sold those shares in the year 2000. I paid off my house, my vehicles, I'm debt free with a nice nestegg in the bank. With the salary I make I could never have done that without investing in a growing company like Wal-Mart. I honestly believe that the biggest reason alot of people hate Wal-Mart is because they didn't invest in the company.

[Dead Dog]

NOW, I'm envious. Congradulations, 3 years late.

[Paulus Invictus]

Nope, I'm not faulting the rich W-M execs or criticizing the Waltons. All of them are stockholders and deserve their take. I just find it hard to understand why the lower levels, including a number in supervisory positions, can't make a go of it financially. The best way to stay ahead, perhaps, is do what my neighbor does--both he and his wife are W-M supervisors and do quite well. In their absence, their kids run wild.

I talk to many W-M employees including relatives so I think I have a good understanding of the plight of the lower ranks and not a one is a teenager or a retiree. Three of them have college degrees.

[Paulus Invictus]

Oh, and how is that true? Are you a member of the Club? If you are anti W-M, does that make you a Club member? Your post is obtuse.

[TopQuark]

Paulus, I do not know whether you even realize that, but you spew pure socialist mantra. It's you right, but why do you even fancy yourself being a conservative?

At the other end of the W-M salary spectrum are the prez and numerous high officials, all of whom get the real salaries and bennies. The prez gets a mere $17.7 million a year plus bonuses etc.

True. This is because "at the other end of the spectrum" the job requires talent --- much like being a basketball or a movie star. Talen is unique and therefore very expensive.

It is a favorite thing among Marxists to think that the cashier register operator and a CEO of Wal-Mart are comparable jobs. Unions love it too. You should not.

The Walton family members are all billionnaires. These billions are from a different category altogether: risk-taking by a enterpreneur. You should not think of this wealth when you think of jobs and salaries.

[TopQuark]

Oh, and how is that true? Are you a member of the Club?

As many people who have been betrayed by our system of education you do not even know what education is: not all knowlege is experiential; that is, one does not have to belong to club to know what it is.

If you are anti W-M, does that make you a Club member? NOt at all. Once again, you think in terms of taking sides. It is not the side you are on but the reason for your choice that matters. Your argumentation of your position is what makes it socialist.

Your post is obtuse. Look who's talking...

[TopQuark]

B-Chan, before you make such strong concl;usions, you should understand what you are taling about first.

With the destruction of the medieval guild-artisan economy and the duty-based feudal system that created it, labor became a commodity As evidenced by what?

If anything, the opposite is true --- and has always been so. Just as goods are differentiated, so is labor. Just as some goods become "commodities," so is labor in some sectors. It is in these, and only these, sectors that the third-world economies are compatible with ours. And it is in these sectors that outsourcing is possible. Most of the labor supplied by Americans is differentiated from that supplied by Chinese or Indians.

and in a world of six billion people the commodity price of labor inexorably trends toward zero. Again, if you should make jugements of this kind, they should be based on something better than Econ 101.

Firstly, the price of a differentiated good need not tend to zer0. And, secondly, that picture is static; in a dynamic environment even the price iof a "commoditiy" need not tend to zero either.

sophistication of automatic manufacturing and service systems, which offer the ultimate in low-wage labor — mechanical "slave" labor. Correct. But the humans need not compete for it: they should avail themselves of other labor that is sorely needed and well-rewarded.

Thanks to the ever-cheapening price of labor,

Again, this is false. The price of talent has skyrocketed in 1990s.

Professional positions are enjoying a notable growth in salaries as well.

It looks like you first decisded on the picture of the world and only started to look for evidence.

ere will in time be no opportunity for employment left in the United States: all manufacturing jobs will be done by electronic/mechanical "slave labor",

Again, you miss the point: only "commoditized" labor can be delegated to a machine. How do you delegate to a machine product innovation? If we ourselves do not know how innovation is done, how can we write a computer program that would do that?

All knowledge jobs (banking, accounting, customer service, sales, etc.) will be similarly outsourced to developing nations or performed by electronics. This is not even funny. You should (i) read up a bit, and (ii) take a vacation: you are depressed.

[Paulus Invictus]

Socialist? You must de deranged! I'm so far right invariably anger the pinkos I find everywhere, even on FR. My argument is not against capitalism, it's all about huge monopolies like W-M wherever they occur, The gummint once went after such monopolies when they got out of hand and had a negative effect on the nation's economy. W-M does that by sourcing from the Chicoms and other third-worlders to the detriment of US business, the balance of trade and our tax money. Can't you understand that?

[TopQuark]

My argument is not against capitalism, it's all about huge monopolies like W-M

It should be clear to you by now that you should stop talking about this: more you speak more silly you look.

Wal-Mart is not and cannot be a monopoly. If at all it may become a monopsony.

Buy yourself a book and make sure it does not have pictures.

Can't you understand that? The question is not what I understand but what you do.

[CSM]

"The automotive cartel has been squeezing the lifeblood out of its suppliers for years, never passing along ssvings to consumers, just stuffing the difference in their own pockets. Of greater importance than pickels, they're the ones who are subverting our domestic steel industry, and jeopardizing our national security in the process."

Yep, and the cost increases related to the UAW Cartel haven't been fully passed on to the customer either. Nor has the increases caused by the Government Cartel. Instead the profits are shrinking.

[JakeWyld]

You are not free to shop there if all you care about is the lowest price, and you don't care who has to be squeezed, or how hard, in order for you to have it.

Good point. This is the impression I got from the article as well.

[Paulus Invictus]

Err, I have many books and they all define a monopoly as "the possession or control of a trade or service." Does that make W-M a monopoly. If they aren't one now, they will be soon as they continue to build super stores everywhere. They are now the largest corporation in the world and the largest by far in the US. Their intent is to put all competitors out of business however they can. They have been very successful using this strategy in many cities in the US. As they eventually eliminate all major competitors, are they then a monopoly in your books? What, pray tell, is your definition of a monopoly and how is W-M not one or soon to become one?

By the way, your childish insults are contrary to FR policy, or do you know the policy re personal attacks?

[TopQuark]

Firstly, please accept my apology if the sarcasm of my previous past went too far; it was not my intent, but apparently a result, to insult you.

"The possession of control of a trade or service" is too loose of a definition. What is control? The government regulating trade has control but is clearly not a monopolist. Moreoever, the term "monopoly" is typically appied to a single SELLER of a good or service. The corresponding terms for a single BUYER (which is where Wal-Mart's strength partly lies) is monopsony.

I may have stated my thought too directly in the previous post, but the thought is valid: (i) you are reading wrong books, and (ii) the streangth of your opinions is (way) out of proportion with factual knowledge. Suspend jdgement until you study more economics -- that is what the scientific method dictates.