What are those low prices really costing us?
Froma Harrop:
Wal-Mart's everyday high costs
01:00 AM EDT on Wednesday, October 22, 2003
AMERICA WORSHIPS at the altar of Everyday Low Prices. That's how Wal-Mart can get away with ravaging American wages, benefits and the jobs themselves. That's how Wal-Mart can go on hollowing out America's downtowns -- and with taxpayer subsidies, to boot.
Wal-Mart is not the only big-box discounter turning the American countryside into a "crudscape" and its working people into paupers. But the monster leads the pack in terms of size and its holy crusade to cut costs. With $245 billion in revenues last year, Wal-Mart is the world's largest company. Sales at the Bentonville, Ark.-based giant are bigger than the combined total of Home Depot, Target, Sears and Kroger.
Business Week described the "everyday low prices" slogan as the core value of "a cult masquerading as a company." All those yellow smiley faces and front-door "greeters" are part of a bigger strategy: to get rich off America's workers while undercutting them at every turn. What am I talking about? Here are the particulars:
-- Wal-Mart likes to call its sales clerks "associates," but "serfs" would be more like it. The company paid its salespeople an average $8.23 an hour in 2001. At that wage, a full-time worker made only $13,861 a year. The poverty level for a family of three was $14,630. Only 38 percent of Wal-Mart's workers have health coverage. It should surprise no one that nearly half of Wal-Mart's employees quit every year. (Before the recession, the annual turnover rate was 70 percent.)
-- Wal-Mart is destroying factory jobs in America. Example: Levi Strauss was one of the last apparel makers to actually produce stuff in the United States. But the made-in-America label means zip to Wal-Mart, which scours the globe's sweatshops for the sweetest prices. Demands for the cheapest jeans have forced Levi Strauss to shut down about a dozen U.S. plants. A factory in San Antonio is about to become the latest casualty.
Wal-Mart lobbies furiously in Washington for free-trade deals that guarantee a flood of goods made by pennies-an-hour labor ($12 billion worth from China alone last year). Small wonder America's manufacturers call Wal-Mart the Beast from Bentonville.
-- To Wal-Mart, unions are the devil and must be destroyed. Three years ago, meat cutters in Jacksonville, Texas, tried to establish the first Wal-Mart union. Eleven days after they joined the United Food and Commercial Workers, Wal-Mart closed all the meat-cutting departments at its stores and started buying pre-cut meat.
Wal-Mart is now on a rampage to devour the nation's supermarkets, and so threatens workers everywhere. Its Supercenter stores, which sell groceries, have already sent more than 20 national supermarket chains into bankruptcy. Wal-Mart has plans for 1,000 new Supercenters.
Terrified of a Wal-Mart invasion, California's three biggest supermarket chains have tried to lower their own costs by demanding concessions from their unionized employees. The result is a strike by 70,000 workers at supermarkets in southern California.
-- Wal-Mart is paving over America and destroying our communities. Its ugly boxes, plopped down on the edge of town, vacuum up business from local shopkeepers. (So much for any notion of customer loyalty.)
A group named Sprawl-Busters was formed 10 years ago to block Wal-Mart from forcing itself onto Greenfield, Mass. Every day, five or six towns from across the country contact Sprawl-Busters for advice on stopping a Wal-Mart, according to the group's founder, Al Norman. "It's not even about shopping," Norman says. "It's about how we relate to the places we live in. These towns are being changed economically, physically and socially."
-- Wal-Marts hurt surrounding communities. Iowa State University economist Kenneth Stone has studied the impact of Wal-Mart on rural Iowa. He found that some business districts benefited from a Wal-Mart but other towns within 20 miles suffered badly, with retail sales plummeting 25 percent after five years. Having lost their local merchants, the people in surrounding areas find themselves driving long distances to the Wal-Mart.
The line of groups calling for a boycott of Wal-Mart and its Sam's Club subsidiary grows by the week. As a former Wal-Mart customer, your author appreciates the lure of a good price. But there are competing values. When we understand the real cost of these "everyday low prices," they don't seem much of a bargain at all.
Froma Harrop is a Journal editorial writer and syndicated columnist. She may be reached by e-mail at: fharrop@projo.com.
Froma Harrop:
Wal-Mart's everyday high costs
01:00 AM EDT on Wednesday, October 22, 2003
AMERICA WORSHIPS at the altar of Everyday Low Prices. That's how Wal-Mart can get away with ravaging American wages, benefits and the jobs themselves. That's how Wal-Mart can go on hollowing out America's downtowns -- and with taxpayer subsidies, to boot.
Wal-Mart is not the only big-box discounter turning the American countryside into a "crudscape" and its working people into paupers. But the monster leads the pack in terms of size and its holy crusade to cut costs. With $245 billion in revenues last year, Wal-Mart is the world's largest company. Sales at the Bentonville, Ark.-based giant are bigger than the combined total of Home Depot, Target, Sears and Kroger.
Business Week described the "everyday low prices" slogan as the core value of "a cult masquerading as a company." All those yellow smiley faces and front-door "greeters" are part of a bigger strategy: to get rich off America's workers while undercutting them at every turn. What am I talking about? Here are the particulars:
-- Wal-Mart likes to call its sales clerks "associates," but "serfs" would be more like it. The company paid its salespeople an average $8.23 an hour in 2001. At that wage, a full-time worker made only $13,861 a year. The poverty level for a family of three was $14,630. Only 38 percent of Wal-Mart's workers have health coverage. It should surprise no one that nearly half of Wal-Mart's employees quit every year. (Before the recession, the annual turnover rate was 70 percent.)
-- Wal-Mart is destroying factory jobs in America. Example: Levi Strauss was one of the last apparel makers to actually produce stuff in the United States. But the made-in-America label means zip to Wal-Mart, which scours the globe's sweatshops for the sweetest prices. Demands for the cheapest jeans have forced Levi Strauss to shut down about a dozen U.S. plants. A factory in San Antonio is about to become the latest casualty.
Wal-Mart lobbies furiously in Washington for free-trade deals that guarantee a flood of goods made by pennies-an-hour labor ($12 billion worth from China alone last year). Small wonder America's manufacturers call Wal-Mart the Beast from Bentonville.
-- To Wal-Mart, unions are the devil and must be destroyed. Three years ago, meat cutters in Jacksonville, Texas, tried to establish the first Wal-Mart union. Eleven days after they joined the United Food and Commercial Workers, Wal-Mart closed all the meat-cutting departments at its stores and started buying pre-cut meat.
Wal-Mart is now on a rampage to devour the nation's supermarkets, and so threatens workers everywhere. Its Supercenter stores, which sell groceries, have already sent more than 20 national supermarket chains into bankruptcy. Wal-Mart has plans for 1,000 new Supercenters.
Terrified of a Wal-Mart invasion, California's three biggest supermarket chains have tried to lower their own costs by demanding concessions from their unionized employees. The result is a strike by 70,000 workers at supermarkets in southern California.
-- Wal-Mart is paving over America and destroying our communities. Its ugly boxes, plopped down on the edge of town, vacuum up business from local shopkeepers. (So much for any notion of customer loyalty.)
A group named Sprawl-Busters was formed 10 years ago to block Wal-Mart from forcing itself onto Greenfield, Mass. Every day, five or six towns from across the country contact Sprawl-Busters for advice on stopping a Wal-Mart, according to the group's founder, Al Norman. "It's not even about shopping," Norman says. "It's about how we relate to the places we live in. These towns are being changed economically, physically and socially."
-- Wal-Marts hurt surrounding communities. Iowa State University economist Kenneth Stone has studied the impact of Wal-Mart on rural Iowa. He found that some business districts benefited from a Wal-Mart but other towns within 20 miles suffered badly, with retail sales plummeting 25 percent after five years. Having lost their local merchants, the people in surrounding areas find themselves driving long distances to the Wal-Mart.
The line of groups calling for a boycott of Wal-Mart and its Sam's Club subsidiary grows by the week. As a former Wal-Mart customer, your author appreciates the lure of a good price. But there are competing values. When we understand the real cost of these "everyday low prices," they don't seem much of a bargain at all.
Froma Harrop is a Journal editorial writer and syndicated columnist. She may be reached by e-mail at: fharrop@projo.com.