More than Wal-Mart

Mrs Behavin · 08-20-2006, 01:08 PM

Quote:

WAL-MART is usefully becoming the symbol of an America where tens of millions of hard- working families cannot make ends meet.

Its wages and health benefits are so dismal that in several states Wal-Mart displaces worker healthcare costs onto tax-supported Medicaid for the poor. Wal-Mart batters down wages not just in the United States, but in Third World countries, where it plays foreign suppliers against one another to demand the lowest possible wholesale price (and wage).

The New York Times reported recently that Democratic politicians from Senator Joseph Lieberman to his winning opponent in the Connecticut primary, Ned Lamont, are making Wal-Mart their nemesis. This focus is certainly helpful in spotlighting one mega-employer that is symbol and substance of an America where the middle-class dream is vanishing, but the problems go far beyond Wal-Mart.

The America of a generation ago had multiple institutions for enabling worker incomes to rise with their rising productivity. More industries were regulated. The federal minimum wage was equal to about half the average wage; today, it is below one - third. The federal government actually enforced workers' right to organize a union. Nearly half of US workers were covered by decent, federally guaranteed pensions, instead of funny-money worker-savings plans. Wall Street was more tightly regulated, and corporate executives were not able to grab such an outlandish share of the total pie. Taxation was progressive, and ordinary workers paid much lower rates. We did not trade with countries that had something close to slave labor, like the Chinese factory system.

Since the mid-1970s, under three Republican presidents and too- often-feeble Democratic ones, this social compact was blown up. Since the early 1970s, real incomes for the top 1 percent have doubled, while earnings for most Americans have stagnated. Middle-class Americans have stayed even only thanks to a second wage-earner -- an average increase of more than 500 annual work hours per household. This is a disguised loss in living standards, cutting into leisure and parenting time, and incurring child-care and transportation costs.

Politicians may legislate special laws, requiring higher minimum wages for mega-stores (as Chicago has done) or requiring them to contribute to health coverage (as Maryland has attempted), but until our political system addresses the larger problems, even reforming Wal-Mart is a drop in the bucket.

The system is now essentially rigged so that workers' productivity can rise, but workers' incomes can't. A study prepared last month for Democrats on the House Financial Services Committee and released by Representative Barney Frank of Newton showed that since 2002 annual productivity growth has averaged more than 3 percent, while real wage increases have been under half of 1 percent. Corporate profits, meanwhile, have risen from 8.5 percent to 14.4 percent of national income.

Whenever wages show signs of rising with productivity, the Federal Reserve whacks them back down. It shows no such concern about corporate profits being excessive. Until this month, when the Federal Reserve announced a ``pause" in rate hikes, our central bank had hiked interest rates 17 times since June 2004, citing fears of inflation, mainly in rising labor costs. But note the sleight of hand. If workers' wages are lagging well behind workers' increased productivity, then rising wages are not a source of inflation. The rising ``total labor costs" include pensions and health insurance. Doesn't that benefit workers? In fact, the increase in recent employer contributions to pension plans is mainly to make up for the corporate looting of plans during the 1990s.

In the stock market euphoria of that decade, corporations used outlandish assumptions about future stock market returns to reduce annual contributions they were supposed to make to pension funds. The replenishing of fund shortfalls in recent years is not a source of true worker compensation -- and it can hardly be burdensome given the huge increase in net corporate profits.

The hike in employer health insurance costs, likewise, is not a true benefit for workers. It reflects a health system out of control, and excessive charges and profits by health maintenance organizations and drug companies. Actual health insurance benefits to workers are being cut back, and not just by Wal-Mart. Corporations generally are hiking the employee share of premiums, and plans are increasing deductibles and copayments.

I hope Wal-Mart does become a poster child for all that's out of whack with the US economy. But we need to go after a great deal more than Wal-Mart if politicians are serious about restoring the dream of an America where people who work hard and play by the rules can aspire to be middle class.

Robert Kuttner is co-editor of The American Prospect. His column appears regularly in the Globe.

More than Wal-Mart - The Boston Globe

BallotDotCom · 08-20-2006, 01:55 PM

Wal-mart is kinda like Global Warming, too late to stop it. Wal-Mart will take over the world.

Mrs Behavin · 08-20-2006, 01:58 PM

If everyone is like me, you cant help but have to go to Wal Mart for things. I absoltely hate that store. I go in for maybe a couple things and walk out with a basket full.

Inkslinger · 08-20-2006, 02:24 PM

Walmart= Crack... ~Inkster

ilikeGW · 08-20-2006, 03:22 PM

What is really horrible is that Sam Walton's vision was ripped apart by his children. After his death, his kids went after every empty lot near a mall or a K-Mart, not going about what their father wanted. What he wanted was to give communites a store they could shop in, not take away the ones they already had. He'd open them in rural areas or in places that didn't have a store such as Walmart, small towns where people needed a place to shop. He didn't try to shut anyone down or cause a hardship for the same type of people he was.

Up here where I live, EVERY Walmart is near a K-Mart. I can shop at 6 within a 50 mile radius and not 1/4 of a mile away from every one is a K-Mart (sometimes in the same parking lot).

He started out as a stock boy and eventually bought the store he worked in and then opened a small chain. He predicted that he would reach a 1 BILLION dollar profit by 2000, his heirs reached over $1 Billion not long after his 1992 death. Now his children and Walmart are worth over $90 BILLION. Walmarts are now in dozens of countries and are literally driving Mom & Pop shops into the ground. The Wal-Mart Sam Walton started building in 1962 cared about employees and the communities they served and now it seems the Walton children are out to destroy everything their father worked hard for and stood for.

I sometimes have no choice but to shop there because the prices are better and feeding a family of 5 is pretty damn expensive.

questionmark · 08-20-2006, 04:00 PM

Forget the store. What about the big ass building they have in Arkansas? What is THAT for? Barbed wire, bomb proof walls, guard towers?

ilikeGW · 08-20-2006, 04:04 PM

If you were worth $90 billion and pissed a lot of people off (store owenrs, etc.), you'd hide behind a barricade too.

Dr.Knuckles · 08-21-2006, 11:10 AM

There are k-marts near your walmarts?

K-mart in Canada is gone. Dead and burried. There are other Walmarts near our Walmarts.

ilikeGW · 08-21-2006, 11:14 AM

LOL.

Yep, KMart and Sears merged (actually, KMart BOUGHT Sears!!) and pulled themselves out of bankruptcy. They closed a few hundred stores and restructured and became Big K.

Green Arrow · 10-06-2006, 12:52 AM

Wal-Mart is a symbiote though, Wal-Mart profits from selling things at a cheap price, however, Wal-Mart doesn't make those things. Untill Wal-Mart starts buying our record companies, football teams, and other industries. Wal-Mart is big but not unstoppable.