It's Too Easy to Blame Wal-Mart
For such a successful and ubiquitous company, Wal-Mart sure seems to catch a lot of grief. Accused of all manner of crimes from driving out local business to exploiting workers, the retail Goliath has image problems to say the least. But in a New York Times editorial, Harvard business professor Pankaj Ghemawat and business consultant Ken A. Mark argue that Wal-Mart is actually very beneficial to individual communities and the nation at large.
Their analysis centers on the fact that Wal-Mart provides the most inexpensive goods around, saving the American consumer a conservative estimate of $16 billion a year. More importantly, from at least a socially progressive standpoint, the writers’ research shows:
Wal-Mart operates two-and-a-half times as much selling space per inhabitant in the poorest third of states as in the richest third. And within that poorest third of states, 80 percent of Wal-Mart's square footage is in the 25 percent of ZIP codes with the greatest number of poor households. Without the much-maligned Wal-Mart, the rural poor, in particular, would pay several percentage points more for the food and other merchandise that after housing is their largest household expense.
Truly, for the rural poor of America, Wal-Mart has been a boon. And this really brings up a fundamental question: what’s better for an economy and nation, cheap products paired with low-paying low-skill jobs OR high-paying, low-skill jobs paired with more expensive products? Through our purchasing habits, America has currently made the choice for cheap products. Even those workers supposedly exploited by Wal-Mart shop at Wal-Mart. As do their families. As do just about all of us
So, if we want Wal-Mart to pay its employees more, we all will have to pay more at the checkout stand. Which would probably lead most consumers to shop elsewhere at whatever store undercuts Wal-Mart’s new, socially conscious high prices. Thus Wal-Mart would be driven out of business, putting all those well-paid workers out of a job.
My point? The issue of the low-paid worker is not Wal-Mart’s invention, it’s not Wal-Mart’s fault and it’s not Wal-Mart’s problem to solve. We as a society have made the choice that we really want cheap goods. Wal-Mart has merely found the best way to cater to that want.
Bash Wal-Mart if you want, but I think the days of the well-paid, low-skill worker is over. Low skill jobs are no longer career jobs. But that doesn’t mean that we have to live in a society where a significant portion of the population is constantly struggling, even as they work two or three jobs. What it means is that the solution is not in trying to force the system in a direction consumers won’t let it go.
We need progressive thinking that moves away from the idea of forcing low-skill jobs into living-wage jobs. I’ve got a few ideas which I hope to discuss in a future post. But for now, I just ask readers to think about ways we might be able to have plenty of cheap goods and plenty of good jobs