It was a hoot last night at the great debate over the question “Is Wal-Mart Good For America?” I’m not a good crowd numbers guesser so if I said there were 400 people, I might be off by fifty, one way or the other. Each combatant got to make an opening statement of 6 minutes (yeah, sum up the world of capitalism in just 6 minutes), followed by back-and-forth between the two sides and, then, questions from the audience.
Co-sponsored by the Nation and the Economist magazines, the forces of light and goodness were represented by the wonderful Liza Featherstone, author of “Selling Women Short,” the story of the class action gender discrimination lawsuit against the Beast (Buy it. Now. Today.), and yours truly. The forces of dark and evil (also referred to as conservatives) were represented by Ben Edwards, the U.S. editor for the Economist (a nice guy, it needs to be said) and Steven Malanga, from the Manhattan Institute. The whole thing was moderated by WNYC’s Brian Lehrer (who I learned is a fellow Yankee fan…good for you, Brian).
Rather than a blow-by-blow recouting, what stood out for me, the morning after, were these points:
1. In a pre-debate showing of hands, I’d say 90 percent of the audience indicated they had shopped at Wal-Mart–but a subsequent showing of hands indicated that 50 percent of those former shoppers would not shop there now. Whether that’s because people have found other options or they don’t want to support the Beast of Bentonville was not determined.
2. It is striking how the Beast of Bentonville defends the wages it pays its “associates.” The way Chairman Lee (CEO Lee Scott) sees it, only a small percentage of workers rely on Wal-Mart pay as the sole income for a family. So, in the Wal-Mart logic, it’s okay to pay people poverty wages because they can always rely on someone else to be slaving away to lift the entire family out of poverty. Is America a great country with these people as business leaders, or what?
3. Conservatives–hold your hats for this shocker–play a bait-and-switch game all the time. As I said last night, if I had a dollar for every time conservatives argued for local control (as a way of attacking our national social safety net), I’d not be a rich man but at least able to consider a down payment on Manhattan real estate, which is pretty damn good for a life-long renter, what with the nutty housing bubble (but I digress). But, when local communities organize and say we want to determine whether a Wal-Mart comes into our neighborhood, conservatives are up in arms over that expression of local control, branding it, in the words of the Economist, as “municipal socialism.”
4. Lehrer asked the conservatives do they believe that there is room for a social compact in this country? I sort of felt sorry for Malanga as he hemmed and hawed and stumbled through an answer that could have been answered with one word: no.
5. Wal-Mart rants and raves about how it can’t afford higher wages above its miserly $8.50 per hour for full-time workers (by the way, Wal-Mart considers a full-time work week clocking in at 28-32 hours). I told the assembled crowd that a unionized worker in Southern California who makes the exorbitant wage of $13 an hour earns $26,260 a year. I asked the crowd, which included a fair number of Wal-Mart supporters (based on our pre-debate raising of hands) how many people thought that annual wage is high? Not a single hand was raised.
At the end of the debate, Lehrer quoted Chairman Lee declaring that we were at an important moment in capitalism. He asked what we thought of that point. I didn’t get a chance to answer that last night so….I’ll answer that now.
Focusing on the Beast first, Wal-mart is a competitive strategy that’s being emulated by other industries and other countries.
Its marketing ploy is to make people think that our whole lives are shaped by shopping. But, we can’t exist on consumption alone. People are also producers.
Right now, people are borrowing vast amounts of money, in large part money they are pulling out through home equity loans thanks to, in my opinion, an unsustainable housing bubble.
It’s not just to shop but to pay off large debts, huge health insurance costs or medical bills.
We as a country borrow $2 billion a day to pay for things that we don’t produce; we’re borrowing 6 percent of GDP, which is not sustainable.
In the long run, either we produce more at reasonable wages so that our incomes go up—but that isn’t consistent with the WM model.
Or we will have to consume less and we will be in a downward path of living standards.
BTW, as an aside about the foreign debt we are accumulating in the Wal-Mart “everyone is a shopper” model, if one of the countries in Asia starts diversifying away from the dollar, it will be like a fire in a theater—everyone will bolt for the door, with the first one out the door doing just fine and the others taking a serious hit. A colleague of mine recently talked to a very elite banker who said: Japan has got us by one ball and China has us by another ball and they both know how to squeeze.
The larger point, though, is that this isn’t about economics but about politics. We, as a society, make political decisions about the rules of engagement for capitalism–or at least we should be making those decisions and not leaving them to the robber barons to create the world they would like us to live in.
Perhaps a good ending to encapsulate Chairman Lee’s view of the world would be by recalling a Bob & Ray routine that was recently mentioned in an article about Wal-Mart in Fortune magazine. Hudley Pierce, the fictitious CEO of the non-existent Great Lakes Paper Clip Co., was asked in an interview how his employees can possibly live on a wage of 14 cents a week, Pierce responds, “We don’t pry into the personal lives of our employees. But as I understand it, our people live in caves on the edge of town, and they forage for food.”
