Wal-Mart didn't really need Chicago anyway

[KendallJ]

By Kendall J from The Crucible & Column,cross-posted by MetaBlog

From August 16th, 2006 Wall Street Journal Article "Big Box Rebellion", responding to a new Chicago law,

Target was the first big chain to react, recently cancelling plans to open a new superstore in a run-down area on the city's North side. Only a few months ago the project was hailed by city leaders as an anchor for redeveloping that depressed neighborhood. Now it gets to stay depressed. Wal-Mart has also announced that its plans to build 20 new stores in the city over the next five years are "on hold" until the wage issue is resolved.

This isn't what the politicians said would happen when they mandated that certain mostly non-union "big-box" retailers pay a minimum of $13 in wage and health benefits by 2010, or more than two-and-a-half times the national minimum wage...

The entire "living-wage" movement is the latest product of upper-income politicians who want to stick it to non-union companies in the name of helping the poor. But the working poor lose twice in Chicago: first, in lost retail jobs and then in less access to low-cost goods. Alderman Carrie Austin, who represents the area where the Target store was supposed to locate, puts it this way: "My colleagues are saying, 'Don't worry they [the big box retailers] will come.' Well, mine just left."

There is a contradiction in thinking that lawmakers didn't realize until they actually saw the effect of their actions. Commonly, blamed for "exploitation" of the working class, big box retailers actually help the working class first by providing jobs, and second by figuring out how to deliver the lowest cost goods possible to stretch the working dollar. Retailers cannot simultaneously hurt the community and help it. Punish them for being bad, which they are not, and you'll get to find out just how good they were.

The other thing these lawmakers missed was that any entity that makes investments, whether an individual or corporation, has options. Would Wal-Mart like to have a store in Chicago? Sure, but only if it's a good investment, i.e. only if it can make an above average profit. Investment choices are driven by returns, i.e. profits. A money-losing store is something no investor will invest in, regardless of location. If Chicago wants to turn its city into a bad investment option, well then don't be surprised if investment capital dries up. Now, who really needs who? and who is the bad guy in this senario?

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[Prometheus98876]

Fools! They expect a company that still has a choice to throw their money down the drains of an unworthy investment?

They want to raise minimum wages here all the time too. This is in a country where they raise Interest Rates at the drop of a tiny bit of inflation (which they caused) and a little bit of growth (which they beleive overheats the economy, which is a handy excuse for them). And they wonder why so many companies move overseas. It is possibly because to anyone any good they need an environment of significiant economic growth and atablity, where the government isnt taking actions that would penalie the investers (the banks absorb most the interest rate raises, but thats not very good for everyone, as a strong economy needs a strong banking system, which that is undermining).

[bobsponge]

Ahhh, good old chi-town. Sometimes I miss it, and then stuff like this just cements the heaping piles of good I feel knowing I no longer live there. Let's all leave the looters to wallow in their own filth, and let's also hope Jesse Jackson stays there with them.

[Prometheus98876]

Ahhh, good old chi-town. Sometimes I miss it, and then stuff like this just cements the heaping piles of good I feel knowing I no longer live there. Let's all leave the looters to wallow in their own filth, and let's also hope Jesse Jackson stays there with them.

see, leaving the looters to their own filth is a good reason to get out of this country New Zealand, which is kind of a huge version of california.

[Inspector]

Hahaha! Brother, you asked for it!

Witness how when a hugely productive company stands up to government bullying, how damned effective it is. Bill Gates could have toppled anti-trust if only he had any spine.

[Korthor]

It's been difficult, but so far we Chicagoans have managed to survive without WalMart. I know what you're thinking, "Life without WalMart, won't the survivors envy the dead?"... but there are still plenty of places to buy discount tube socks, and plenty of "Help Wanted" signs everywhere I look.

Obviously what the government did was wrong, but I'm not going to cry myself to sleep over WalMart tonight... Much more disturbing is the Illinois governor's proosal for a new "receipts" tax (somewhat similar to Europe's VAT) that would represent the largest state tax increase in living memory.

[Strangelove]

Didn't Mayor Daley veto this law?

This why I love Chicago, the Daley's know how to run the city and keep it from making decisions like this.

[Korthor]

I'm not sure, but there are certainly no WalMarts in Chicago. I remember a few months ago there were negotiations between WalMart and the city, but they ultimately broke down.

The Daleys are corrupt. I moved here from Louisiana... hardly a model for clean government. But I find the amount of corruption in Chicago and Illinois government shocking. Not a month goes by without a new scandal (our last governor, Ryan, is currently in jail) but no one seems to care.

Edited March 27, 2007 by Korthor

[D'kian]

I'm a fan of WalMart.

Let me tell you what it's done in Mexico. For a very long time there existed three large supermarket chains: Grupo Cifra, Gigante and Comercial Mexicana. They were all very similar, except Cifra had subdivisions. The regular store was called Aurrera, there was a chain of smaller supermarkets called Superama, and huge stores that sold at discount known as Bodega Aurrera (meaning Aurrera Warehouse -sound familiar?).

In time it added restaurants (Vips and El Porton) and a chain of clothing stores (Suburbia). It had several business failures, like an ice-cream parlor chain, an upscale restaurant chain, an ill-conceived expansion of Suburbia, and a few others. Later on, it made a joint venture with WalMart to set up a copy of Sam's Warehouse Club, known at the time as Club Aurrera (it was identical to the typical Sam's in America, down to distribution and decor, except that there were many local brands). In time WalMart bought out Cifra, renamed the corporation WalMart de Mexico, changed the Aurrera stores to WalMart and WalMart Supercenter, changed Superama from merely small to high-end small stores, and changed Club Aurrera to Sam's Club. It also lowered prices and, for the most part, did away with frequent sales.

And then something else happened. The other grocery chains, Gigante and Comercial Mexicana, plus some newer ones (Chedrahui, Soriana and others) began to lower their prices to remain competitive. There's a veritable war going on between WalMart and Comercial Mexicana (known popularly as La Comer). That has been a big boon to a very large part of the population.

Now, WalMart did not lower prices on its restaurant chains or the clothing chain. And some of the others ahve restaurant chains of their own. Overall their prices are similar.

come August, WalMart will open a banking operation in Mexico. There are expectations that it will offer drastically lower costs in commissions, interest rates and such. I'd be more hopeful were it not that another discount chain, Elektra, already tried that with its Banco Azteca operations, and it failed.

Still, maybe you've heard of the remmitances that illegal aliens send to their home countries? The competition for those money orders is fierce in Mexico. All banks are in it, as is WalMart (already), other supermarket chains, currency exchange houses, and discount stores. already the fees involved have dropped dramatically. So I think if WalMart tries to lower banking costs it will succceed (I hope so, too, because the fees and commissions and rates that banks charge now are very high).

[bobsponge]

I'm a fan of WalMart.

Me too. Nowhere else can you find such a grand example of capitalism. Despite all the crap they catch for not pandering to whiners who want more than they deserve, despite it is the most-sued entity in the world, they still manage to push ahead, innovate, and do everything they can to keep their bottom line. They have changed and improved upon so much in order to become so efficient. Mom and Pop can kiss my arse-- if they can't provide what I need cheaper, then send them packing and bring on Wal-Mart.

[Korthor]

I don't know about Mexico, but I don't like WalMart when compared to other stores in the US.

1. Every time I'm in a WalMart, I look into people's eyes and they are dead inside. This might be a bit of an exaggeration, but I find WalMart aesthetically displeasing--kind of like a trip to the DMV.

2. They do treat their workers badly. I don't think the government should be cracking down on WalMart, but as a consumer I prefer to shop at places that treat their workers decently (just as I wouldn't shop at a place that practiced racial discrimination). It is certainly not in our interest to support businesses that give capitalism a bad name.

3. I'm skeptical of all the Chinese goods in WalMart... not because I hate the Chinese, but because I'm worried a significant amount might be from prison slave labor. Moreover, China will be America's rival within the next twenty years, and I would prefer not to do my part to build up the Chinese war machine.

4. They're not really that much cheaper, and I can certainly afford the marginal increase of costs (if any). Certainly in the age of the Internet anyone with computer access that can't find a good deal is just not looking hard enough.

I don't feel an obligation to defend WalMart just because the left attacks them. While their rights shouldn't be violated, I can't help but thinking "they kind of had it coming"... sort of like a guy who gets his ass kicked at a bar by deliberately picking a fight with Bruno.

Edited March 28, 2007 by Korthor

[LaszloWalrus]

Paying workers low wages (assuming that's what Wal-Mart does) is not remotely the same as a company's discriminating based on race. What do you mean by "treat their workers badly"?

How do they give "capitalism a bad name"?

I don't think there's anything particularly wrong with Wal-Mart aesthetically. As a college student, it can be a life-saver. If I wanted an aesthetically pleasing place to shop (and if I wanted to pay way beyond what I could afford) I'd go to Dean & Deluca.

[KendallJ]

I don't know about Mexico, but I don't like WalMart when compared to other stores in the US.

1. Every time I'm in a WalMart, I look into people's eyes and they are dead inside. This might be a bit of an exaggeration, but I find WalMart aesthetically displeasing--kind of like a trip to the DMV.

I'm not sure what this means at all. Luckily I don't go there for the asthetics.

2. They do treat their workers badly. I don't think the government should be cracking down on WalMart, but as a consumer I prefer to shop at places that treat their workers decently (just as I wouldn't shop at a place that practiced racial discrimination). It is certainly not in our interest to support businesses that give capitalism a bad name.

hmmm. I've heard this claim before. What does it mean to "treat a worker badly"? Do their workers have other options that they are leaving Wal-Mart in droves.

3. I'm skeptical of all the Chinese goods in WalMart... not because I hate the Chinese, but because I'm worried a significant amount might be from prison slave labor. Moreover, China will be America's rival within the next twenty years, and I would prefer not to do my part to build up the Chinese war machine.

Potentially viable argument. Taxes from Chinese producer do go to a dictatorship. However that cuts both ways. The U.S. is China's biggest export market and Wal-Mart is China's biggest single channel to that market. I'm one of those "engagement guys" but I have crossed wits with Objectivists who think we should barricade China in and let it rot.

4. They're not really that much cheaper, and I can certainly afford the marginal increase of costs (if any). Certainly in the age of the Internet anyone with computer access that can't find a good deal is just not looking hard enough.

Well that's great if you have the luxury to afford the difference. Does that have any bearing on the decision for those who don't. Part of a brand's equity is not having to search to know you're getting the best deal. Added cost or added effort. My question is "What ever for?".

[dan_edge]

City Council of Chicago Contact Page:

http://egov.cityofchicago.org/city/webport...elName=HomePage

I sent them an earful.

--Dan Edge

[D'kian]

I don't know about Mexico, but I don't like WalMart when compared to other stores in the US.

1. Every time I'm in a WalMart, I look into people's eyes and they are dead inside. This might be a bit of an exaggeration, but I find WalMart aesthetically displeasing--kind of like a trip to the DMV.

That's one of the most bizarre statements I've ever read.

Granted WalMart, in America, looks a bit cheap when compared to other stores. That's a visible indication of one way it keeps costs down.

I don't feel an obligation to defend WalMart just because the left attacks them. While their rights shouldn't be violated, I can't help but thinking "they kind of had it coming"... sort of like a guy who gets his ass kicked at a bar by deliberately picking a fight with Bruno.

"First they came for the Jews. I am not a Jew, so I said nothing...."

[Strangelove]

The Daleys are corrupt. I moved here from Louisiana... hardly a model for clean government. But I find the amount of corruption in Chicago and Illinois government shocking. Not a month goes by without a new scandal (our last governor, Ryan, is currently in jail) but no one seems to care.

Chicago is called "The City That Works" for good reason. Because while there is corruption, the up sides have been great. With Millenium Park alone, business has been booming in the loop with people moving in for the first time in ages.

And the current Daley is the lesser evil compared to his father anyway.

[Korthor]

"First they came for the Jews. I am not a Jew, so I said nothing...."

The WalMartians are a strong and resilient people. If the Jews could recover from the Holocaust, then WalMart can get by without Chicago.

But seriously, I'm not saying that what the Chicago council did was right. I just wanted to voice my dissent from the right wing consensus that WalMart is great. I don't like low-wages, they do discriminate against women, I don't like union busting even if I don't believe in government-backed unions, and in general... they treat workers badly. Are you saying you can't tell when someone is being treated badly by another? I'm not saying that companies have a "moral obligaton" to sacrifice their profits for my beliefs, but it's also my right as a consumer to vote with my buck. I'm willing to pay an extra quarter for tube socks if it makes the world slightly more pleasant for others and myself... This isn't altruism, but the Aristotelian virtue of benevolence.

The fact that some companies are emphasizing "corporate responsibility" is an indication that people like me are having an effect. I don't think we should dismiss this as "hippy bullshit" just because hippies hate WalMart. If you can afford to pay a little more, the monetary cost to yourself might be outweighed by the psychic reward of your generosity (another Aristotelian virtue). If we want to convince people that capitalism isn't evil, then we should stop sticking up for companies that make people think capitalism is evil.

Look at Bill Gates and all the wealth he created for himself and others. Now he's giving up much of it that he doesn't need to make the world around him better. That isn't altruism. It's virtue in the fullest sense of the word.

Edited March 28, 2007 by Korthor

[D'kian]

The WalMartians are a strong and resilient people. If the Jews could recover from the Holocaust, then WalMart can get by without Chicago.

Surely. But can Chicago get by without WalMart?

But seriously, I'm not saying that what the Chicago council did was right. I just wanted to voice my dissent from the right wing consensus that WalMart is great.

I've a lot of problems with Windows and the way modern PCs are configured. In large aprt, I blame Microsoft for this state of affairs. But just because I dislike MS, doesn't mean I can's see or acknowledge its virtues.

I'm not saying that companies have a "moral obligaton" to sacrifice their profits for my beliefs, but it's also my right as a consumer to vote with my buck.

this is true. However, then you go on to say:

The fact that some companies are emphasizing "corporate responsibility" is an indication that people like me are having an effect.

The "social responsibility" BS is nothing but a way to appease altruists and statists. That is, in fact, an acceptance of a moral obligation (a false one). And I'd say you support it fully.

I don't think we should dismiss this as "hippy bullshit" just because hippies hate WalMart. If you can afford to pay a little more, the monetary cost to yourself might be outweighed by the psychic reward of your generosity (another Aristotelian virtue). If we want to convince people that capitalism isn't evil, then we should stop sticking up for companies that make people think capitalism is evil.

I won't call that "hippy bs," because I don't need to. It's regular altruist bs.

I've no idea how WalMart treats its employees, and frankly I don't care. What I do know is that there are an awful lot of WalMart employees. Surely if they were all treated as badly as you claim, we'd hear a great big clamor about it. Instead we get sporadic stories in the MSM, and most of the actions reported are backed by some liberal group or another. I also know any time a WalMart opens, there are many more applicants than there are jobs. Surely this wouldn't be the case if WalMart were the labor ogre it's made out to be.

But the crap in your post comes down to this: we won't convince people that capitalism is good by accepting it is evil. That is, we will not succeed by blending capitalism with altruism. Appeasement never works.

[KendallJ]

I don't like low-wages, they do discriminate against women, I don't like union busting even if I don't believe in government-backed unions, and in general... they treat workers badly. Are you saying you can't tell when someone is being treated badly by another?

I certainly don't quibble with your right to do whatever you like, but it is the evaulation that I am questioning. That is, if Wal-Mart is an actual example of capitalism at work, and peole are just mis-evaluating it, then it is certainly right to go out of your way to stick up for Wal-Mart. Just because some have a negative view of it, doesn't mean it actually is negative in anyway. They just might be evaluating it completely wrong.

So what I want to understand is how do you arrive at the conclusions such as the one above. The "Are you saying you can't tell when someone..." is an argument from intimidation. I am saying I don't think Wal-Mart mistreats its workers through their wages, and I have no problem with "busting" a union in the right context.

How do you evaluate a "low wage"? Low relative to what?

My first piece of evidence for that is that in a voluntary employment contract, a sure indicator of mistreatment is if employees are leaving in droves. Is that happening? Last I heard every time a Wal-Mart opens, there are tons more applicants for the jobs (like by a factor of 100 or more) than openings available. Is that the sign of mistreatment?

But the crap in your post comes down to this: we won't convince people that capitalism is good by accepting it is evil. That is, we will not succeed by blending capitalism with altruism. Appeasement never works.

Exactly, if it is good, then you defend it in spite of the people who don't like it.

[D'kian]

I am saying I don't think Wal-Mart mistreats its workers through their wages, and I have no problem with "busting" a union in the right context.

About unions, here's my take:

I see no problem with employees voluntarily organizing or joining a union. I also see no preblem with an employer deciding not to allow a union in his business.

As a practical matter, unions are necessary for both employers and employees when the company reaches a certain size. Suppose you are the sole owner of a textile factory employing 25 workers. You could easily deal with each one, negotiate each contract, vacation time, bonuses, incentives, etc. But if you had 250 workers, and a human resources department, it would still be best to bargain collectively with them. Therefore a union.

Now, if employer X does not want any kind of union, that's his prerogative. He can hire each worker separetly, negotiate pay and such with each one, etc. It will make his company less efficient in labor relations, but that's his lookout. Also, if enough employees want a union, the employer will probably have to give in. Disatissfied workers tend to change jobs at the first chance; hight turnover is very bad for business.

[Korthor]

1. Chicago will survive without WalMart. It has never had WalMart and it still prospers. It would prosper more with less government regulation, but that's beside the point I'm making.

2. I disagree with the notion that helping other people, even people you don't know, is altruistic: benevolence and generosity are Aristotelian virtues, even if Objectivists don't talk about them as much as they should (although Rand occasionally acknowledged benevolence). Helping strangers if selfish if 1) you aren't sacrificing yourself or your values and 2) your help is rooted in the affirmation of your own sense of self rather than a substitute for it. If the world is sunny, why don't i share some of that sunshine?

3. If the contracts are non-coercive, I agree that we don't have a "moral obligation" to condemn them, and they don't have a "moral obligation" to give a damn about my point of view either. But I also have a right to pay a few more cents for tube socks as an act of generosity and benevolence. I'm not advocating anything coercive. While i'm sure some "corporate responsibility" is motivated by statism/altruism, I had in mind things like "Fair Trade Coffee." I'll enjoy my coffee more if I know that when I was drinking it I was helping peasants raise themselves out of poverty rather than pushing them further into it. The fact that thet Muhammad Yunus won the Nobel Peace Prize last years indicates that the world is waking up to the fact that the best way to help others is through benevolent capitalism: helping the poor to help ourselves.

4. Ultimately, each person has to make up their own mind as to whether WalMart's practices are worthy of condemnation. I just wanted to make one more comment about union-busting. What I object to is WalMart's spying on unions and firing people who try to form unions. Yes it is their right and I'm not advocating that the government stop them. But I find the practice distasteful, so I choose to withold my dollars.

5. I find the WalMart creates wealth argument irrelevant, since I'm advocating giving my money to other companies that are also creating wealth... not donating it to Greenpeace.

Edited March 28, 2007 by Korthor

[softwareNerd]

Wal*Mart should not simply fire people who try to organize unions, they ought to have a clause in their contract prohibiting employees from starting a union. Unions have destroyed so much wealth, it is not funny. Today Michigan is in the dumps because of the unions and short sighted managements that went along with them.

If not for teachers unions, there might be some hope of pushing through school-reform and giving good teachers a place to work productively. The NEA has played a huge role in destorying the US education system.

The airlines are in such a mess primarily because of past demands from unions and weak managements that went along. The good airlines are generally not unionized.

Unions played a large role, once again alongside short-sighted managements, in killing the large steel firms in the country, leaving the field open to the non-unionized NUCOR.

Unions are destroyers of wealth. Period.

[Korthor]

I think there are contexts where unions are too powerful, especially backed by government force. That's why I'm advocating non-coercive unions. Moreover, there are contexts (e.g., low-level workers in the service industry) where unions offer the only possibility of workers not living in abject poverty. If someone worked 60 hours a week (although companies like Walmart like to employ them for 39 so the won't be full-time) at $6/hour, that would be $360 a week and roughly $14k a year... and that's if they can fine a second job since WalMart won't give them fulll-time. 14K pre-tax for a 60 hour work week and no vacation... That kind of sucks...

On the other hand, the unions in Detroit do seem hell-bent on destroying the American auto industry. In particular, the auto industry (and the airline industry) face problems because of their massive pension liabilities that their competitiors don't have to bear. Hopefully, companies will learn from the mistakes of their collapsing brethern and not offer promises of generous pensions as a way of appeasing unions.

While the teacher unions are a destructive force, they are, as a Marxist would say, "superstructural." I thought the problem was compulsory schooling because of the inefficiences and lack of choice in the current system. Moreover, when schools can pay to get good teachers, students do well... that's why rich kids succeed and poor ones fail in America (on the whole).

[KendallJ]

3. If the contracts are non-coercive, I agree that we don't have a "moral obligation" to condemn them, and they don't have a "moral obligation" to give a damn about my point of view either.

Korthor, once again. I acknowledge your right to do as you choose. However, if you do so, you do so for a reason right? If they are non-coercive, you seem to be ambivalent or negative, even if you aren't obligated to be. Why? Is the contract unfair? Shouldn't those who enter into the contract be more qualified to judge their own circumstances. What makes you believe that the contracts themselves are in any way negative, if they were entered into (and can be exited) voluntarily?

4. Ultimately, each person has to make up their own mind as to whether WalMart's practices are worthy of condemnation. I just wanted to make one more comment about union-busting. What I object to is WalMart's spying on unions and firing people who try to form unions. Yes it is their right and I'm not advocating that the government stop them. But I find the practice distasteful, so I choose to withold my dollars.

Yes, each person has to make up their own mind, but that doesn't mean that the answer is subjective. If you think they are worth of condemnation, then please defend your point. This isn't a subjective world. If they are, they are, and if they aren't they aren't.

Why is the practice "distasteful"?

[softwareNerd]

... I'm advocating non-coercive unions.

Unions are bad because they support the status quo. They support existing workers at the expense of potential new entrants.