Clash of the Titans XXIV: Wal*Mart

May 22, 2007, 12:00 pm; posted by
Filed under Chloe, Debate, MC-B  | No Comments

In this corner, arguing for Wal*Mart, is MC-B!

And in this corner, arguing against Wal*Mart, is Chloe!

I’m not a huge fan of Wal*Mart. When I go there, it’s crowded, I often can’t find what I’m looking for, and customer service is subpar. Their business practices aren’t beyond reproach either. But for all their failings, Wal*Mart is a very good thing for America and many, many people. The arguments in favor of Wal*Mart are straightforward: the corporation makes a great deal of money for its shareholders, while employing many and providing consumer goods at rock-bottom prices to those who may not otherwise be able to afford them. But do these benefits offset Wal*Mart’s drawbacks?

The first common criticism is that Wal*Mart shuts down small businesses. Most of the evidence of this phenomenon is anecdotal at best, but even if it really is significant, I question its importance. Most people choose to buy at Wal*Mart because of the prices, and because they see (rightfully so!) that there is nothing inherently more valuable or moral about a local sole proprietorship compared to a global corporation.

But don’t Wal*Mart’s employees have a right to unionize or get health insurance through their employer? At most other firms, the answer is a resounding “No!” Most low-wage service jobs, regardless of source, are unlikely to merit affordable health insurance or company-blessed unionization. Wal*Mart provides employees and stockholders with a choice, and the fact that people keep choosing Wal*Mart proves it’s better than some of the alternatives.

Finally, what about global sweatshop labor? Even here a choice is involved. Globalized agribusiness has made traditional farming unprofitable for many, and after a community is thus devastated, Wal*Mart enters it with promises of a reliable wage. Who wouldn’t jump at the chance? It’s a terrible situation, but it’s hard to say Wal*Mart is morally reprehensible; at worst, they are opportunistic, profiting from the evil globalization has wrought for many indigenous farmers.

Wal*Mart is simply an organization that’s taken the rules they’ve been given and followed them well; they’re on top because they’ve got a good formula. They should not be penalized or demonized, but rewarded as the system demands — if we want to change the rules by which Wal*Mart plays, it must spring from us (consumers and workers), not from inside corporate administration itself.

Can you live on $6 an hour? In a 35-hour job (since most jobs that pay that much don’t allow for anything more than part-time), you would make just under $11,000 before taxes, FICA, Worker’s Comp and health insurance. Before rent, the electricity bill, gas prices or bus fare. Before daycare, the daughter’s new shoes, and the son’s asthma medicine.

One of the strongest arguments for Wal*Mart is that it creates jobs, thus boosting the economy of an area. It’s true, Wal*Mart boasts 1 million workers nationwide. However, Wal*Mart’s wages are only enough to sustain teenagers and college students.

The most pessimistic wage for a regular Wal*Mart employee is $8700 a year; the most optimistic is $15,600 net pay, with no vacation time whatsoever. The U.S. Census Bureau reported in 2004 that “the average poverty threshold for a family of four in 2003 was $18,810; for a family of three, $14,680; for a family of two, $12,015; and for unrelated individuals, $9,393.”

Let’s be realistic. Who needs the jobs in the economically depressed areas Wal*Mart is fabled to help? Not teenagers and college students, but those with families, or the people over 25 trying to support themselves. Have you, assuming you are a single twentysomething, tried to live on $12,000 (my own calculated mean Wal*Mart salary) before expenses?

Let’s say you have a child, since it’s safe to assume some percentage of twenty-somethings working at Wal*Mart have at least one. You’re at the poverty line. Let’s say you have a bum boyfriend or girlfriend. Now you’ve made it under by a good $2,500. So what are you going to do when you can’t pay the bills or feed the kids?

You’re going to go on welfare, and welfare is paid for by everyone else’s taxes. Since you can’t afford Wal*Mart’s health care plan, which is only catastrophic coverage (and you’d be paying 35% of it anyway), you won’t be covered. If you’re over 19 and under 65, you will not be on state-provided health insurance either. You’ll just have to get sick and get over it, or let creditors ruin your credit and the hospital absorb the loss. Your one or two previously mentioned children will receive the school’s insurance, which is once again paid for by taxes.

But let’s not forget the core of the argument. Wal*Mart ‘helps’ the economy.

Which side are you on?
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