Wal-Mart and the Middle Class

Tuesday, November 25, 2003
I don't normally like to touch on similar topics relatively close together but I read several articles about Wal-Mart in the past week and it made me do some thinking. The first article, by Fast Company, is a nice, albeit long, article about Wal-Mart's tactics in the Market Place. The Los Angeles Times did a three part story where it too addressed Wal-Mart's tactics but also touched on its Global influence as well as it's Global Image.

Here is the topic of the day. Why do people who should know better shop at Wal-Mart and what should be a middle-class job?

Wal-Mart is a behemoth. It is the largest company in the world. Notice I didn't say "largest retailer", it is the largest company period. Bigger than Microsoft, bigger than GM, even bigger than GE. It's revenue tops $245 Billion a year.

The only way it does this is through pure volume. That means a lot of people are shopping at Wal-Mart. Even though I have given up shopping at Wal-Mart I don't hold it against anybody if they do because you can't argue that they don't have lower prices. My problem is that I don't think people realize what they are doing. Or maybe they do but they just don't care. I don't shop at Wal-Mart, partly out of deference for Sergio, but partly because I have problems with some of their practices. The economist in me thinks its great, they eliminate waste at every turn, but I realize that there is a human cost to that.

American's are funny. We want high-quality products. We want them to be environmentally friendly. We want them to be humanely produced. We want a good lifestyle. However when push comes to shove we will forgo some of these things for a great bargain. I don't think people realize that cheap prices have a cost. Something has to give and with Wal-Mart they push so hard for quality that it almost inevitably comes from someone's lifestyle, the worker who produced the good. They not only use cheap labor in their stores but they basically force their suppliers to have cheap labors in their plants. Its a double-edged sword. Wal-Mart has such low prices that people will shop there to stretch out their dollar more. This in effect makes them "wealthier" because they have money for other things. However, everything is interconnected so eventually to sustain these low prices cost must be reduced at the supplier level which eventually leads to lower wages. Of course this makes shopping at Wal-Mart even more of a necessity and the cycle continues.

Not everyone has the luxury I do in that I can choose to pay slightly more for products by not shopping at Wal-Mart. I'm sure some people think that there small little purchases won't make a difference. Well let me tell you something, it does. That's how Wal-Mart gets you, Billions and Billions of small little purchases.

Like I have said, I don't really have a problem with Wal-Mart, at least not like some people do. I kind of agree with them that if you can do it for less than you should. If someone is willing to do the same job for less money why shouldn't an employer hire the other person? Don't argue that the quality of the work won't be the same because if that were the case the consumer wouldn't buy the product, the consumer has the loudest voice of all, their money.

One of their VPs, Robert S. McAdam, said "If we have an advantage,it's that we are offering what people want." I couldn't agree with him more. In the end it is the consumer which decides what will and will not work. The basic point of this rather long blog is this. What is a middle class job? Is packing groceries deserving of a middle-class income? How about a check out clerk? If Americans believe that these are then they would need to make that decision and be willing to pay more for their groceries and other sundry items. However, I think America is speaking loud and clear, they want what is best for themselves RIGHT NOW, and that means the low low Wal-Mart prices. I think the middle-class is about to get a lot smaller.

Union Clarification

Thursday, November 20, 2003
I light of my stand on the current California labor strikes I have been labeled by some to be "anti-union". I want to clarify my position a little.

I am not anti-union. In fact I believe Unions are a good thing under certain circumstances. If the employer has a monopoly on employment then I believe the workers should have a monopoly on the labor. This is the case in pro sports and in small towns where one factory is the life-blood of a community. I believe that unions have created a strong middle class in America and are responsible for many of the gains that workers now enjoy.

However, my belief is that people need to be somewhat realistic. In this day and age unions make less sense. With people having the ability to find work at a variety of places I believe that if you are unhappy with your employer you should find a new one.

That is not my point. I actually have no problem with Union grocery workers on strike. In fact, I really hope they win because what they are fighting for is health care, and everyone should have health care.

But this is my point. They have to realize that there union drives up prices at their stores. Don't believe it? Go to a Wall-Mart superstore where they don't have unions. The prices there are significantly less.

Now I believe most people if given the choice will shop where there are lower prices. A few people, myself included, refuse to shop at Wal-Mart because of what they stand for. But not everyone has that luxury. I can easily see a scenario where the Grocery Union wins (which by the way I don't think will happen because the grocery chains seem adamant) but they really lose because the Grocery stores will be unable to compete against non-union labor and be forced to close. That will leave everyone unemployed and probably working at Wal-Mart anyway. Worse, it will reduce competition in the market making things worse off for the average consumer.

Basketball Double Standard

Tuesday, November 18, 2003
I really don't understand why when it comes to sports there is a double standard in regards to the age in which people can start playing professionally.

Every time the NBA draft comes around and the latest High-school phenom gets drafted people are up in arms about how he should go to college and he is missing out on so much by not attending a university.

Today a 14 year old soccer phenom, Freddy Adu, signed a 6 year contract with MLS today. The kid is 14 years old but nobody is saying anything. This happens all the time in sports like Tennis and Golf but nobody says anything then either. In Baseball, kids go straight out of high school into the farm systems of Major League clubs and guess what .... nobody says a word.

So how come when some kid comes out to play some hoops all of a sudden it's the end of the world?

Local Number Portability

Thursday, November 13, 2003
Local Number Portability is about to take effect at the end of the month. For those of you who don't know what this is it basically gives you the right as a consumer to take your cell phone number with you to a new carrier. It used to be that if you switched from say Sprint to T-Mobile you would lose the number associated with your cell phone.

Well all that is going to change. And my comment is, big deal. I think people over-estimate the importance of their phone number. I recently switched my cell phone number and you know how many people called me on my old phone looking for me? 0. I kept the old phone for a month and I didn't receive a single call as soon as I sent out an email telling everyone that my number had changed.

All the important people in your life will just update their own cell phone or organizer with your new number and not even think twice about it. The only concern are those few people who you might talk to once a year or something but how important is it that they be able to call you anyway. If they are that important I'm sure you would have emailed them to the change in your number. If they really want to get a hold of you I'm sure they could if they tried.

I Knew Microsoft Was Evil But This ....

Friday, November 07, 2003
I actually have a whole list of topics I could talk about but I don't really feel like any of them today. So I'm going to write about something interesting that Sergio sent me.

Here is a page that describes what software all the different presidential candidates are running on their websites. Now I kind of doubt that they have any say, or even really care, what software their ISP is running but I think it is kind of funny that W is running Microsoft and IIS while most of the Democratic candidates are running some flavor of Unix and Apache. Gephardt isn't but isn't he really a Republican anyway?

Now most of you know how I feel about Microsoft and how I feel about Republicans. I just think that this is pretty funny. My favorite fact though is how the RNC is also running Microsoft and it measures its uptime in days where as the Democrats run Linux and have an uptime measuring in Months.