About Rationally Speaking

Rationally Speaking is a blog maintained by Prof. Massimo Pigliucci, a philosopher at the City University of New York. The blog reflects the Enlightenment figure Marquis de Condorcet's idea of what a public intellectual (yes, we know, that's such a bad word) ought to be: someone who devotes himself to "the tracking down of prejudices in the hiding places where priests, the schools, the government, and all long-established institutions had gathered and protected them." You're welcome. Please notice that the contents of this blog can be reprinted under the standard Creative Commons license.

Sunday, November 06, 2005

I simply had to write something about Wal-Mart

And the occasion has been given to me by a recent article in the New York Times by Joseph Nocera, who has brought up a couple of important points that we liberals tend to ignore or sweep under the rug. True, Wal-Mart's sheer size is something to frown upon, if nothing else because of the enormous, supra-national, economic power that it engenders. Consider that it is now the second largest company in the US (interestingly, after Exxon Mobil), employing more people than the US Army.

The typical things to worry (much) about, when it comes to Wal-Mart, include its low wages (less than $10/hr), abysmal benefits (so much so that some of its employees have to rely on food stamps and Medicaid -- the government's health program for poor, which incidentally means that some of Wal-Mart's "savings" for its customers are paid for by the rest of us in the form of taxes), and its notorious union-busting policies. Indeed, recently an internal Wal-Mart memo has been leaked to the NYT, and it read in part: "[we might start] discouraging unhealthy people from working at Wal-Mart," in order to cut on the residual health care expenses. Never mind that such practice would be illegal, besides being obviously unethical.

For all this, however, Nocera points out that Wal-Mart has -- for the most part -- played the game by the rules. It rarely engages in outright illegal practices, though its whole ethos is, again, way beyond the ethical borderline for a supposedly civilized country like the US (and Wal-Mart knows it, which is why it engages in sleazy tv and radio commercials to defend its social record, even supporting National Public Radio!). In fact, Robert Reich, a former labor secretary under Bill Clinton and currently at Brandeis University, said that "If we are not happy about the results, then the real question we ought to be asking ourselves is whether we should be changing the rules. Wal-Mart is an invitation to have that debate."

Indeed, Americans -- unlike Europeans (just recall the housewives' boycotts in France and Italy to bring down the price of red meat) -- simply can't seem to be able to pass a bargain, regardless of the fact that their neighbors and community suffer from low wages and closure of local shops. Although surely more labor-friendly and better anti-trust legislation would help, ultimately we could drive Wal-Mart out of town in a matter of weeks simply by not showing up (the same, of course, has been said about wars).

We have indeed met the enemy, and -- alas -- it truly is us.


  1. Interesting post. I read about some of these issues on Marginalrevoltion.com, imo the best economics blog on the net.


    I don't agree with Tabarrok's characterization of Wal-Marts health benefits as "reasonable", however, they could be better than what the competitors are offering. I think Tabarrok's ultimate conclusion is correct, that tying insurance to the employer is a no-win situation. Anyhow, that post on Marginal Revolution is an interesting read.

    My own feeling is that until we get a single payer national system, more and more employers are going to-ethical or not-try not to hire people they deem as high medical risks. So, imo, the problem isn't Wal-Mart per se, the problem is that tying health coverage to a job is an incredibly bad way to provide health care. Wal-Mart is doing what any smart firm would do, trying to minimize their costs. I can't say I really blame them.

    The only answer is a national single payer system. Other Western nations spend about half of the % of their GDP on health care that we in the US do, and they cover everyone. On the whole we pay more, get less, and reduce our competitiveness in the global economy. Toyota chose to build their latest plant in Canada over the U.S. in large part because health care costs made it cheaper to go to Canada. GM is going to go bankrupt next year largely due to health care costs for their retirees. Things are going to get a LOT worse before they get better, but sometimes shit has to break before people decide it might be smart to fix it.


  2. I have been in three Wal-Mart sotores:Page, AZ, a dirty store where I bought some necessities on a Sunday evening: Woodburn , OR, my wife just wanted to look around: and Sierra Vista, AZ,(went in with friends) a nice enough store but one that had so many $7 or $8/ hr associates milling around in the aisles you couldn't get a cart through. None of them had the slightest idea where to find any thing. I still wonder what they were supposed to be doing. The Woodburn store was the same, and the Page store,besides being crumby and dirty was nearly deserted.

    I just refuse to patronize Walmart now (not that I ever did) My preference for a big box is Costco, even though you must buy a membership. Their prices are very good, but most of all they treat their employees much better, wages being almost double the Walmart standard and almost all their employee have a fairly decent heathcare plan. Their turnover rate is very low for the retail business, which indicates to me that the employees are reasonably content.

    To get a good idea of Costco's operations go to http://www.seattleweekly.com/ and look up Nina Shapiro's article on Costco titled "Company for the People". If you have any sensativity for retail workers you will never step inside another Wal-Mart after reading the Costco piece. They are not perfect but are a far better company the Wal-Mart

  3. I don't know if the article whose link Massimo provided talks about it, but today I read about this new movie coming out: "Wal-Mart: the high cost of low prices".

    It's from the same director of "Uncovered: The War on Iraq" and "Outfoxed", Robert Greenwald.

    Has anyone heard anything good (or not) about it? Too bad it will probably not make to the theaters, it seems interesting...


  4. http://www.bravenewfilms.org/
    will lead you to the Wall-Mart movie.


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