WalMart: The High Cost of Low Price

OK, let's rumble.

When I was growing up there was K Mart, and K Mart was an embarrassing place to shop. You never wanted to be seen in K Mart, and if you were there and saw someone else from school that was there, the two of you had an automatic unspoken agreement to never tell anyone that you saw them there...mainly because you would also be implicated as being a K Mart shopper.

Today the masses shop loud and proud at K Mart, Wal Mart, Target, and Meijer, plus a wide variety of dollar and discount stores. Apparently cheap is chic. Nobody tries to hide the fact that they shop for bargains at large stores that carry a wide variety of merchandise. We love our bargains, and in many cases we live by them. Discount groceries make the difference between fed and not fed for a lot of people.

In recent years many people have started speaking out about Wal Mart and even declaring that they were no longer willing to spend their money at Wal Mart because of their impressions of WM's business practices. "They destroy small businesses!" "They don't take good care of their employees!" or, "The stuff they sell is made in sweat shops!"

While it's neither here nor there to me whether or not you buy anything from Wal Mart, I've found it curious that these same people will instead take their business to Meijer or some other discount superstore where the prices are quite comparable to Wal Mart.

So, Wal Mart alone is a great villian of the marketplace, but all the other stores are fine, upstanding heroes who forsake their bottom line in order to make the world a better place?

I find that hard to believe.

Recently I heard about the documentary, Wal Mart: The High Cost of Low Price, and of course I had Netflix send it to me. I watched it yesterday with my 13 year old son. It was our current events and critical thinking project of the day.

Let me start out by telling you that I am a Wal Mart shopper by default, mainly because it's the only store of it's type anywhere near me. I also do probably 30% or more of my shopping at small, local businesses, which I love to do as much as I can. A new, local grocery will be opening near me in a few weeks, and I intend to give them as much of my business as I can. I like to shop local because I like to support people in my community that are investing in my community. I want to support local businesses because they are convenient for my family and we want to help keep them in business.

I do not like Wal Mart. I think it's ugly. I do not get a happy feeling when I shop there. I have found over and over again that they have extremely low customer service. I believe that it is what it is: the place where I can get all the stuff on my shopping list for the lowest price, which is normally all I can afford. So, I go, I shop, and I don't complain about it not being as lovely and happy of a shopping experience at it is if I shop at a beautiful health food store or an upscale Kroger.

The Wal Mart movie shows the viewer several different aspects of the complaints against the company. They start out with the charge that Wal Mart purposely tries to destroy small communities and put mom-and-pop businesses out. We see some sad examples of people that worked hard to start and maintain family groceries or hardware stores and once WM came to their area, they went out of business.

It was really sad, no doubt. But the thing I wondered is this: Do superstores change our values, or reflect our values? Is the superstore to blame, or the people?

Also, if Wal Mart didn't come to town, wouldn't Target, K Mart, or Meijer be next? It's not as if WM alone seeks to expand their sales and build more stores. WM alone doesn't put small businesses out. The way people spend their money puts people out.

As for small local businesses, I believe that just as I experience lack of time and money to go to 4 different stores to get my shopping done, most other people feel the same way. Do we really want to park on a busy street, find a parking spot, get our children out on the sidewalk, and go into one specialty store after another in our local downtown? I don't think many people do that. All small town downtown areas nowadays need to rethink their businesses and figure out what people are willing to come downtown for. It's not for milk and eggs and underwear any more.

Another charge against WM was that they don't take good care of their employees. They have low pay and not very great benefits.

I am always puzzled by charges like this. If someone gets offered a job, they know how much they will be paid, and they know what the benefit package is. If you are not satisfied with the deal, you can choose to not take the job. Or you can take the job but continue to seek employment elsewhere. Nobody is forcing people to work at WalMart! If it stinks to work there, don't.

Frankly, I don't believe that WM is such a bad deal. I know a young woman who has a college degree and had a job as a secretary in a professional environment, and she only earned 25 cents more an hour than starting wages at the nearest WM. Last winter when I considered getting a job at a clothing store it paid a couple dollars LESS per hour than Wal Mart! (yikes!)

Many places do not offer health insurance at all, and most, if they do, do not offer it cheap. While I do not doubt that WM could do better for their employees if they wanted to, I do not believe that what they offer is outside the realm of normal in most places.

Do I wish that Wal Mart was more generous with it's employees? YES! Do I wish that people could get good health insurance at lower prices? YES! If it was my company, generosity would be a cornerstone. But at Wal Mart, the theme is low prices. At my imaginary company, people would not shop there because of the prices.

One thing I noticed again and again in this documentary was the crafty use of statistics to imply things that apparently are not true or could not be proven. For instance, a picture of a toy was shown with the retail price, and next to it was the cost to WM to assemble it. What this leaves out is the cost of materials, the cost of shipment, the cost of packaging, and so forth. The two prices we see are not the only prices to consider.

There are MANY more instances where if the viewer is not using critical thinking they would get an inaccurate message. This type of thinly-veiled lying made it hard for me to respect the overall message of the film.

WM factory workers in other countries were shown as working long hours 7 days a week in unfortunate settings. While I believe that this is probably true, I also believe that it is probably comparable to other factory jobs available in these places. The movie tells about wages in American dollars, rather than within the context of the society the workers are in. Most third world countries have an average living wage that is far lower than anything Americans could live on. It's comparing apples to oranges.

Do I think that it's good for people in Bangladesh to have to work in the heat 12 hours a day, 7 days a week? NO, I do not. And if I had a business like WalMart I would make it my goal that every worker in every country made at least 50% more money than comparable employers would pay. I would want them to be the happiest, healthiest, most satisfied workers in their country.

In the meantime, people take the jobs in these countries and are willing to do the work, and I know that WM is absolutely NOT the only business with these conditions and pay scale. There is no way a Target or Meijer shopper is going to convince me that they are living some sort of higher-consciousness global-compassion way of life than a WM shopper. I do not believe it one bit.

One issue that was not brought up that I have maintained for awhile now is about all of the products that are not manufactured specifically by WalMart. Most of the items WM sells are brand name items that are manufactured by someone other than WM. If there is someone sitting in a third world country making L'eggs pantyhose or whatever, that person is getting paid what they are getting paid and working where they work, and some of those pantyhose are heading out to be sold at WalMart, some at Target, some at Dollar General, and some at your mom and pop store. That worker bee in the third world country is not getting paid a different rate for the items that go to Wal Mart. It's all the same to them. So, does not shopping at WalMart help this person? Or should you just cease to buy L'eggs pantyhose altogether? And, if you do that, how will putting that worker bee out of a job help them?

If people are really, truly concerned about these issues so much that they would not be willing to buy from Wal Mart, then they better forsake every other superstore out there as well. I think they should make sure they only buy from local farmers, local seamstresses, and whittle their own kid's toys or buy from local craftspeople in your own area. Because any time you buy from a product made in a third world country, you would probably find that the wages and conditions would not be acceptable to people in our society. When you buy items made in the USA, you can probably bet that those factory conditions are also not ones you would relish spending time in either. If you believe it, live it. Don't lecture me about Walmart and then go pay 3% more for your groceries at Meijer and think you're morally superior.

Interestingly, one aspect of WM offering low prices that is not addressed is volume discounts. I believe that this is where the true difference lies in the pricing between WM and other discount superstores. If there are twice or three times as many Wal Marts as compared to Target, K Mart, or Meijer, then WM can get a better price when they buy wholesale. Hence, the slightly-cheaper prices than other superstore counterparts. NOT because all the other superstores are so much different in their practices.

There were some things in the movie that I found truly disturbing and confirmed for me my impression that WalMart is what it is, but the thing I kept reminding myself of is that just because the movie's focus was on Wal Mart in no way means that other businesses do not do the same things.

Overall I found the documentary to be manipulative and therefore it lost my respect. My basic philosophy of doing what I can to support local businesses, while not beating myself up over my geographic and financial limitations, will continue on.