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Wal-Mart: it still totally sucks

New Yorker article reminds you why you hate it

Posted by Lisa Hymas at 5:01 PM on 30 Mar 2007

Stacy Mitchell did a bang-up job earlier this week of explaining why Wal-Mart and other big-box stores could never actually be green.

But if you need a more wide-ranging reminder of Wal-Mart's deep and abiding loathsomeness, check out Jeffrey Goldberg's article in the latest New Yorker: "Selling Wal-Mart: Can the company co-opt liberals?" If you've been awake the past few years, you're already familiar with many of the criticisms, but they're neatly packaged up here with a big brown bow on top.

Carl Pope of the Sierra Club, quoted toward the end of the article, sums up some of the key points nicely:

"You can't be a good progressive and support Wal-Mart because Wal-Mart is saving money on energy -- that's all they've done so far," [Pope] said. ...

Environmentalists, he said, should not be swayed by cost savings alone. "You can't say that they have a good business model. Their model is efficient. Henry Ford used efficiency to raise standards, to bring his workers into the middle class. Wal-Mart has that choice. Their game is to say that there's no other way to be efficient. But they've driven down wages across the retail industry, and they don't have to, in order to be profitable."

Pope cited Costco, the chief rival to Sam's Club, Wal-Mart's membership warehouse. "Costco pays their workers well" -- the average wage at Costco is $17.46 an hour -- "and we know they're profitable."

Low Cost Low Pay

Walmart makes good so cheap that higher wages are not needed to buy them.

Walmart has made the poor rich, by providing them with all the luxuries of the rich -- at 1/1000th of the cost.

If you want to find villains -- go track down all the Liberals on the Upper East Side shopping at fancy charcuteries and wearing designer clothing.

The Poor are more Green, because they use Less.   The "eco-celebrities" would do better to stop giving concerts and magazine interviews and move into 1 bedroom apartments.

numbers

It's good to see some numbers about "what's bad" with the big box stores.  But I think the numbers are incomplete.  When you move back out to smaller more distributed shops you add in two source of energy inefficiency: the regional wholesale distribution centers where large shipments are broken to small, and the multiple deliveries from multiple suppliers to those smaller stores.

Even if you walk to that store, you have to add in an extra stage (or historically three) of distribution between you and the "source."

It's like that story about the world's largest container ship.  They said it used less energy per ton to get goods from China to Britain than it did to do the first 100km by truck after the goods got there.

These things are not intuitive.

I'd encourage you to do (or find) some good end-to-end numbers on energy efficiency and pollution.

As a note, I saw one computer guy (Scott McNeally?) claim that Amazon got goods to your door (delivered) with less energy and pollution that it would take you to get them from a local shop.  I'm not surprised, and given the wholesale hops invovled, that might even be true when you take a bike to that shop.

Wal-Mart Redux

Jabailo I follow some of your arguments but that was a major brain fart on your part.  Have you been drinking?  Wal-Mart doesn't "make" a damn thing other than cash register receipts.  You missed the boat there son.

Odograph, I was wondering if there were any numbers that we could use to compare the relative efficiency of different business models when taking into consideration the distribution network in addition to local store payments.  You mention that costs and perhaps emission per ton of shipped good is cheaper when dealing with containerships, but if I was making bread, nails, and tomatoes in my backyard, there would be zero transportation costs to "my" market, right?  By that standard I would win.  And excuse me, don't large ships emit several tons of air pollution a day?

I'll tell you the problem with Wal-Mart and you already know it.  Their buyers are extrememly aggressive.  If you have 10,000 units of product and you want 5 bucks a unit, Wal-Mart will offer you 4.  You either sell or have a whole bunch of potentially old rotty stuff to hang out on the short market.  Most sellers sell just to get rid of the old shit and take a loss.  

But was anybody required to sell to Wal-Mart?  Heck no.  It's just that the business model completely screwed the local entrepreneur who need a 20% profit margin or he or she is out of the game.  It is the exact same game in China or here in the US, except we tend to blame foreign countries for having "sweat shops."  Get real folks, I can show you sweat ships all over the US and we're a leading offender.  I mean dude, with Gitmo and all our prisons (larger population fraction in jail than in the USSR), we're SWEAT SHOP CITY.

What you're going to see in the future is a populist reaction against Global Trade and I don't mean just some hippie demonstrations.  The Wal-Mart business model really screwed our country bad.  Protectionist import fees are already escalating for paper goods from China and those regulations could spread like wildfire throughout the system.  Interestingly, bras and lingerie are next on the list.

If you shop Wal-Mart you'll know they really suck at paper and office supplies.  They knew that was coming and shorted their position there.  But those owners, managers, and MBA's are just as dumb as you and me about the fickle whims of the global economy they imposed upon themselves.  If I had business with Wal-Mart or owned any shares I'd be selling and shorting that crap as fast as I could.  And to you sellers, screw them, raise your price for every penny they knock you down!  Diversify, baby, that's the name of the game.  sammie

Onward through the fog

Facts matter

From an efficiency viewpoint, I very much agree, we would need to look at the careful analyses of transportation costs.  This kind of modeling has been done, and pure intuition about it is a 50% bet on being wrong, as complex systems can be almost impossible to analyze through intuition alone.

That still leaves the issue of Wal-marts treatment of workers, of the standards it sets for manufacturers, and many other issues.  For those reasons I oppose Wal-mart's growth.  Fortunately they have not been allowed in New York City.  Yes, I am a liberal with convictions and the actions to support them, and proud of it.  No, I do not wear designer clothes or drink latte.  Never have, hopefully never will.

David Alexander
PlanetThoughts.org
Love your Planet.

Pardon My Grammar, Mr. Wells


I said "Wal*mart makes goods cheap"; I didn't say "Wal*mart makes cheap goods" which is what you interpreted.    

I support Wal*Mart and I understand why the Grist/Greeners oppose it.   Wal*Mart is a supply-side boon to the poor.   Most people look at the wages for its employees, but the real benefit of Wal*Mart to a community is that it makes many products affordable to the poorest of the poor.   I went to Wal*Mart a few months ago and spent like $200 and bought a whole years worth of clothing -- for business and play.   Shirts for $14, pants for $20.  

Wal*Mart is Robin Hood to many -- taking from the manufacturers and distributing to the poor.

The Green/Grist/Liberal/Global Warming movement is mostly anti-Poor.   These people want to hold onto their positions in owning goods, energy and so on.   The thing they fear is a world made more equitable by cheap goods, cheap housing and abundant energy.


Per Ton

"You mention that costs and perhaps emission per ton of shipped good is cheaper when dealing with containerships, but if I was making bread, nails, and tomatoes in my backyard, there would be zero transportation costs to "my" market, right?  By that standard I would win.  And excuse me, don't large ships emit several tons of air pollution a day?"

The whole equation was about transportation costs, with an assumption of equal efficiency in production.  For equivalent goods that might be fair.

The production side might not be that intuitive either (for things like bread and nails).

I actually have a wood oven (Big Green Egg) in my backyard, and I have baked in it.  I have started a fire, heated the thing to 350F, baked a loaf, and shut it down again.  It was rewarding, but I also felt a little bad about it.  That was a big heat cycle, and a lot of smoke, for one loaf of bread.  I was long way from a ton of bread.

Nails ... start to sound like a mini ironworks, not sure how you are zoned ;-), ... but tomatoes for sure ... there (it's tough to be a scientist or engineer) it's most likely water efficiency that you will be facing ... but if you run "drip" you should be good.

Best wishes.

Wal-Mart a boon to the poor?

Let's examine that statement.

For instance, clothes. One of the hallmarks of being poor, or just thrifty, was the practice of hand-me-downs. Third Brother got into First Brother's clothes, which still had plenty of wear in them.

Unless Mom bought clothes from Wal-Mart. These things have a lot of stuff added to trick out the fiber content, including cellulose. Yes, paper. A year of washing later, and it's rags. Back to School has a whole new meaning when it becomes a case of everyone trying to keep their clothes together before they grow out of them.

Or home appliances. The coffee maker at Wal-Mart is five or ten dollars cheaper. Good deal, right? Not when the cost cutters downgraded all the components to make Wal-Mart's price. It's a year later, and the heating element has burned out. Back to Wal-Mart for another cheap coffee maker.

The Wal-Mart shoppers I know go to Wal-Mart a LOT. But it's not because they love Wal-Mart. It's because every time they turn around, that cheap crap they bought has broken, and back they go for more cheap crap.

And they don't go to more expensive stores because the name brands are at Wal-Mart. They don't know the Levis, the Black & Decker, the other stuff they think is the same, isn't the same. The name brand companies downgrade their stuff to make it under Wal-Mart's price guidelines.

Boon to the poor? More like a shell game. And we all know who wins that one.

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