Free Markets, Free People

Hey consumers, it’s your fault if Wal-Mart strikes

Jordan Weissmann has a piece in The Atlantic entitled “Who’s Really to Blame for the Wal-Mart Strikes? The American Consumer.”

Balderdash.

While I will admit that the demands of the American consumer being partly responsible for the wage scale paid by Wal-Mart, I frankly see no consumer liability in that responsibility.  Wal-Mart saw a need, constructed a model and has successfully fulfilled that demand.   And last I checked, no one has twisted anyone’s arm or marched them into Wal-Mart and made them take a job.

The American consumer’s role?  It is like us saying “you can have open borders or you can have a welfare state, but you can’t have both”. You can demand the lowest prices or you can demand “mom and pop” be saved and pay their workers more (but then you have to commit to voluntarily doing business and paying higher prices) but you can’t have both.

Weissmann is essentially claiming that the consumer is to blame for impending strikes by demanding lower prices. Lower prices mean lower pay and because Wal-Mart isn’t paying a “living wage”, it’s employees are striking. Again it’s a part of the left’s disingenuous”fairness” argument.

But by now, that low-price, low-wage model has become the industry standard among discount retailers, or at least close to it. The median retail worker earns $14.42 an hour, but at big box chains, the pay is significantly lower (the notable exception being Costco, which commendably pays its employees a living wage). Walmart, for instance, says it pays full time sales associates $11.75 an hour on average. But independent analysis peg the figure much lower, closer to $9. According to IBISWorld, that puts it a bit behind companies like Home Depot and Lowes, but ahead of its nearest competitor, Target, which has managed to put a more fashionable face on the same abysmal pay for its workers.

First a “living wage” is different for different people. If husband and wife are both working, the one working at Wal-Mart may be supplementing the higher wage of the other spouse. Who is to say what the Wal-Mart employee earns isn’t sufficient to live quite well on?  If it is a teenager living at home, what’s a “living wage” to him or her?  What, in fact, the Weissmann’s of the world are claiming is that any wage paid to anyone should be sufficient to “live on” based on whatever arbitrary standard they choose to apply.  My reaction?  None of your business – everyone goes to work and accepts the wages they do for their particular reasons.  If they aren’t satisfied, then they can leave.

That brings us to point two, if you don’t like the pay at Wal-Mart, seek a job at another employer. I doubt that most “big box” companies look at their employees as permanent. Wal-Mart and others are, for many, a stop on the way (for experience) to higher paying jobs. If it’s not, if it is all someone is qualified to do, then that’s their problem, not Wal-Mart’s and not the shopping public’s.  My suggestion is to seek out further training or schooling elsewhere.  But it isn’t the job of the public to subsidize your wages just because you think you’re worth more than you really are.

Wal-Mart doesn’t exist to pay a “living wage”, whatever that is. It exists to serve it’s customers and turn a profit. It is that profit that allows them to provide what is demanded by their customers and to pay their employees. If  wages are too low, workers will likely look to an alternative for employment. Yet, somehow, Wal-Mart remains fairly consistently fully staffed.

Like it or not (and the complainers usually don’t) that’s the model. It works. It provides consumers what they demand.

But that’s not what the fair police want, you see. And that’s where you see this sort of an argument:

There are many reasons why pay in retail is often paltry. Among them, it’s a low-skill industry with high turnover and a lot young workers. But the sector’s utter lack of of union presence certainly plays role. And for that, we can thank both Wal-Mart and Washington. From its earliest days, Wal-Mart has taken fiercely antagonistic stance towards organized labor, keeping its stores union free by using every ounce of leverage Congress has given employers — so much so that, in 2007, Human Rights Watch called the company “‘a case study in what is wrong with U.S. labor laws.”

In essence what Weissmann is arguing is workers should be paid more than their worth in a competitive labor market  (low-skilled young workers with little experience).  It’s a matter of “social justice” – that nebulous term used to justify intrusion into markets because they “care” (with your money, usually).  And their go-to vehicle for achieving this “social justice” and upsetting a business model that favors the consumer is the union.  Other than grow fat and demanding, that’s what unions are there to do.

See Hostess and GM for how that usually ends up.

But to his point, there’s a reason Wal-Mart is “fiercely antagonistic” toward unions. That’s because unions would wreck the model they’ve so painstakingly put together over the years, the one which their customers demand. Customers don’t show up there because they love Wal-Mart.  They show up because they get more for their hard earned money.

Unionize, demand wage and pension increases and all the other concessions that put GM in the poor house and Hostess out of business and you’ll find one thing to be true – Wal-Mart’s customers will go to Target.  Or Kohls or some other “big box” retailer.

But they’re not going to pay higher prices.  They like the model.  It works for them and their situation.  And they will seek out the next best alternative when and if they see prices go up at Wal-Mart.

So, perhaps it is time for those like Weissmann to figure out what Wal-Mart is – it is a store that offers deep discounts on thousands of items that its customers demand.  Oh, and by the way, it also has employees who are paid according to that customer driven model.   The  workers have choices, if they’ve prepared themselves – work at Wal-Mart to gain experience and move on, or go do something else.  For those who haven’t prepared themselves for anything else, it isn’t the customer’s job to subsidize their wages just because they believe they should get more even if they haven’t earned it.

But for those who can’t let this go, I have an idea.  Each and every Wal-Mart store ought to establish at least one check-out line which is for those who want to pay the highest retail price found for the items they’re going to purchase.  Wal-Mart could research that, have the cash register price the items according to that research and at the end the Wal-Mart associate could say to the person, “and you over-paid by $53.00, have a nice day.”

Wal-Mart would then promise to take the difference between their prices and the premium prices and apply it to the pay of all Wal-Mart associates.

How’s that for fair?  And people in that line wouldn’t have to feel like hypocrites when they diss Wal-Mart for it’s presumably low pay while they continue to buy at the store.

Of course, that particular line would likely to look like something out of a Halloween display, all covered in cob-webs and the like.

~McQ

29 Responses to Hey consumers, it’s your fault if Wal-Mart strikes

  • You can probably debate the issue with liberals while waiting in line at Wal-mart for that $250 new iPad.  Not unlike how liberals seem to have no trouble using any tax deduction/shelter/loophole they have available to them.

  • This is a prime example of Collectivist “thinking”.  Never mind that workers…WORKERS…have increasingly rejected union membership in the private sector.
    And every worker is also a consumer.  It is they who have made the WalMart model the success it is, across the economy.  For instance, Office Depot, PetSmart, Lowes, etc. all follow the same discounting model.  Nor are low wages the only means by which prices are kept low by WalMart.  Their distribution system is simply amazing.
    The town I shop in has a WalMart, a Lowes, AND several grocery stores.  An old line hardware store (at least one) thrives there, too.
    I wonder, too, what Weissmann World would look like WRT on-line commerce?  Would he insist that everyone engaged be paid “a living wage”?
    But, as I pointed out on another thread, WalMart and Wall’s heirs are funding the very groups dead set on demonizing them.
    http://michellemalkin.com/2012/11/23/wal-mart-vs-the-mob/

  • Y’know, I think it’s time for the chickenhawk meme to come home to roost.  Just before reading McQ’s post I was reading an article about major employers cutting hours in response to Obamacare, and all the lefty commenters who weren’t crying into their organic vegan beer about how evil it was for companies to actually make a profit were pontificating about how ‘inefficient’ WalMart’s operating model is.  McQ’s post (and Weissman’s idiocy) clarified my ire nicely.
     
    By their own reasoning, all the sniveling leftist twits who’ve never run so much as a lemonade stand need to STFU about businesses (especially highly successful ones like Wal-Mart).  I’m still looking for a catchy epithet to call them, but for anyone who hasn’t served in the company owner trenches, let the sneering begin.
     
    You think I’m joking?  All you armchair progressives who claim to know better how businesses should be run (yeah, I’m looking at you, taddy-boy), time to put up or shut up.  Go build that.  Invest your time and your money in building a business that operates on your oh-so-enlightened principles and see how that works out for you.  You know so much?  Go on, show us blind, heartless capitalists how it’s done.  I’ll stock up on popcorn.

  • Perhaps a higher price wouldn’t be such an issue were the government not extorting the majority of our paychecks.
     
    That said, I do note the case of the strikers at LAX who such down that airport. They were all bussed in by the SEIU, because the actual workers at the airport voted to remove themselves from the union and were not interested, thereby in protesting to reinstate the union.  They arrested 13 of these folks, and found to their amusement that they didn’t even know what it was they were protesting against.
    In fact, the only place where Unions are thriving, right now is government unions.. and yes, I include the UAW in this.
    As Billy Beck noted the other day; does anyone think that Hostess folded because the union wasn’t powerful enough?
     
    IN the end, unions eventually kill their hosts, like any other parasite. Or, (chuckle) the Hostess.
     

  • You know who’s gonna be to blame if strikers inconveniencing the public wind up in the hospital? The unions. So this argument works both ways, which I believe they’re close – closer than they can ever suspect – to finding out

  • And you know what else really grinds my gears? Wal-Mart is hated, vilified by the left, yet Wal-Mart had donated millions in product and cash to hurricane Sandy victims. To the same scum that would sit there and trash and work to destroy Wal-Mart if given the chance. The mart (and all big business) would’ve done better to not donate a single dime to help these undeserving people. They hate big business so much, fine. Let FEMA and Obama take care of you. Foul hypocrites.

    • Relief to Sandy victims was blocked by (Hold on to your seats) the UNIONS.
      Talk about thuggery! What’s that bitch we hear ballyhoing the  welfare state and denigrating free markets, that “You’ve got yours so f*#k everyone else”?

    • I am always pissed off when a corporation donates anything. That is for individuals. If a corporation I have stock in gives away money that is reducing it’s fiduciary responsibility to me to pay a larger dividend.  I am aware of the public relations angle, but it is overblown. As you state Walmart donates a lot and still gets negative press.

  • Another excellent article, Bruce.  linked…

  • They show up because they get more for their hard earned money.

    True enough, but few Americans work “hard”; since FDRs “Four Freedoms” Americans have believed they have a right to their job, or at least “their” job. Too, they want to consume like capitalists but work like SOCIALISTS.
    In the 80s, when the scourge of workers was McDonalds, who [paid $6.75 an hour when the minimum was $4.35) a suvey of Fortune 500 CEO’s found that over 100 of them had their first jobs at McDonalds. If nothing else, they expected and taught good work skills/ethics.
    The MTV/TVLand crowd today expects to waltz in and make “Big Bucks” as if entitled. No skills necessary, just a big mouth and lots of demands.
    When Walmert opens a new store, it usually hires about 315 new employees. They get, on average, over 8000 (eight THOUSAND) applications for those jobs. Most employees who start there last less than six months, 80% are gone in one year and over 90% gone after two years.
    On the other hand, my nephew, as one example, started there in 1992 when seventeen, stayed through college, and by 2005 was pulling down six figures as a manager. He now pulls in a lot more as a regional manager.
    The key is YOU HAVE TO STAY ON and you have to PERFORM. His grandfather started at Merck, Sharp, Dohme in the mail room right after WWII and finished up as the western regions vice president. That work ethic doesn’t exist (though few companies seem to endure as a stable environment anymore).
    Tom Sowell pointed out in his “Basic Economics” that unions and corporations (and bureaucrats) HATE, HATE, HATE free markets. This story is a good example of why that’s so.

    • “few Americans work “hard””
       
      Speak for yourself.

      • He has a point.  Market innovations leave very few of us doing the kind of labor our fathers did as a matter of course.
        Nobody digs ditches in the classical sense any longer.  An operator in an a (usually) air-conditioned cab can open more ditch or clear more land with a tracked excavator than many men could, and at cheaper rates.
        A farmer in an air conditioned tractor, linked to the farmhouse where his wife monitors futures markets on a nearly real-time basis, can open and cultivate much more land than dozens of hands with mules and plows could even as recently as just before WWII.

        • “Nobody digs ditches in the classical sense any longer.”
           
          And, of course, that is the only kind of hard work.
           
          “A farmer in an air conditioned tractor,…”
           
          Yep, that’s all there is to farming these days. Driving around in air-conditioned tractors. Just ask one.
           
           

          • tim, I earned my living…and raised a large family…working with my hands.  I practiced most trades you could name, including working in agriculture.
            People still work hard, but few of us work anything like as hard as our ancestors.  Do they?

          • So people don’t work as hard as their  Neanderthal ancestors, and they live longer and better. So what? That doesn’t mean that people don’t work hard now. Even some union workers. And most of us work  longer than their ancestors due to the increased life span.
             
            “People still work hard,”
             
            That’s all I was saying. Glad you agree.

  • Pardon, but one last rant: As for the bitching that Walmart drives out Mom and Pop stores who charge too much …go figure that one out, I can’t) those Mom and Pop stores do quite well near a Walmart that brings in shoppers to their newly reorganized BOUTIQUE stores.

    • Our locally owned Ace Hardware has built quite a large addition.  Do they charge more than Wally World?  Sure, but hey have everything you need and the service is outstanding.

      • We have one of those stores too. Lots of staff who can actually help and know stuff. Their wages are much higher than Walmart I would imagine.

  • Maybe some of these people need to visit a Wal-Mart. In my area, if you raised wages at Wal-Mart, the Wal-Mart would slowly begin hiring a different class of employee, and the current employees, or many of them, would be let go.
    Also, the lefties forget that not everyone wants a full time job. Many of the employees are students or retired and just want some spare cash.

    • I think another part of the problem is there are far too many government, non-profit, or university sinecures out there for lefties to “work” at for high salaries doing very little work. This leads them to assume the rest of the economy should be like their job.

  • And someone needs to go explain to the socialists that CART PUSHERS at Wal-Mart get shares of stock through the employee program.   #2 son’s benefits as a guy who retrieved carts from the lot floored me.    EVIL Wal-Mart.

  • I never let a Leftie use the term “living wage” to my face. I immediately go ballistic and say “There is no such thing, it is a meaningless term.” Walmart does not owe anyone a living. If they could not find enough people who wanted to work for them then the price would go up. Most Walmart employees I have ever encountered were very young people who didn’t know anything and were no help, so they were probably overpaid.

    • “Most Walmart employees I have ever encountered were very young people”
       
      So that’s where they all went. Most of the ones I have seen are quite a bit older. You must shop at the WalMart hatchery, where they grow the employees and then ship them to other stores as they mature.

  • The one major issue I have with all of this…. does the flop of the Union protests,… being essentially overwhelmed by a lack of support, mesh with the re-election of Obama?
     
    I mean, in a loose way, it seems to me to fly in the face of that re-election. If Obama’s ideas and policies are so popular as to create a re-election, where, then was the same degree of support for the Unions? Are they not in each other’s pocket?

    • Very much an apples/oranges thing, Eric.  One big factor leading people to vote FOR Obama was goodies.  A lot of people get their government provided goodies AT WalMart.  See?