Friday, January 21, 2005

Wal-Mart's Propaganda Site

I found an unintentionally amusing web site today, Apparently, this site was created to show how great Wal-Mart is. Their "Nationwide Impact" page makes such dubious claims as
  • "In 2005, Wal-Mart Stores, Inc. projects it will create more than 100,000 new U.S. jobs, compared to 83,000 last year." Okay, but how many jobs are lost in smaller retail stores when a Wal-Mart moves in? Or factories whose production is now in China? I know they don't have the data, but what is the net job gain/loss when other employers are considered?
  • "Last year, Wal-Mart collected $10.2 billion in state and local sales taxes for our communities." Wait a minute. Don't all retail stores collect sales taxes? This number pretends that those sales tax dollars magically appeared, but they were really shifted from other stores. In fact, one could even argue that since sales taxes are a percentage of the price, Wal-Mart is actually contributing less because their prices are lower!
  • "In 2005, we are projecting that our company will spend approximately $4.1 billion on benefits we provide our associates." This is meaningless without context. How much do they spend per employee, and how does that compare with other retailers?
  • "Wal-Mart purchases goods from more than 68,000 U.S. suppliers and supports more than 3.5 million supplier jobs... In fiscal year 2004, Wal-Mart spent over $137.5 billion with suppliers in the United States." Okay, then how much did Wal-Mart spend with suppliers in China? What percentage did they spend with suppliers here versus abroad, and what have those percentages been over the past few years? I have a feeling that a rapidly increasing percentage of business is transacted with foreign suppliers. And I won't even ask about the Marianas Islands sweatshops that produce "made in U.S.A." products at Third World wages (check out Jim Hightower's If The Gods Had Meant Us To Vote...).
  • "Wal-Mart’s supplier development program has grown from $2 million initially to more than $2 billion spent with minority and women-owned businesses." Judging from the above item, that $2 billion is pretty small, just 1.45% of $137.5 billion--even less as a percentage of Wal-Mart's global spending. I wouldn't hold my breath waiting for Jesse Jackson or Gloria Steinem to lavish praise on them for that.

What a joke. Then they add

"Wal-Mart is the greatest thing that ever happened to low income Americans. They can stretch their dollars and afford things they otherwise couldn't.” - W. Michael Cox, Chief Economist, Federal Reserve Bank of Dallas, The New York Times, December 2003.

What Mr. Cox failed to acknowledge was that Wal-Mart isn't the greatest thing for Americans whose factories close due to price-lowering pressure from Wal-Mart, or those whose downtown stores are wiped out by the new Wal-Mart on the edge of town. I love cheap stuff as much as anybody, but we can't be a nation of consumers without being a nation of solid wage-earners.

This web site simply tries to "shock and awe" visitors by reciting big numbers from a huge corporation, larger than most Americans can imagine, without putting them into any relevant context. I hope everyone can see through this misleading PR campaign.


Anonymous said...

Didn't people hear about control groups when they were in middle school science classes? You can't just cite a big number and have it mean something unless it's bigger than another number. That's like saying "The government isn't able to undertake such a project because it would cost $15 million!" Numbers ending in "illion" aren't impressive unless you can compare them to something. Compared to what large governments spend every day on various things, $15 million isn't that much (if I'm not mistaken, which I obviously could be).

Anyway, another great post. If you like reading this type of thing, please check out as well.


Anonymous said...


Anonymous said...

Ah, The FOX News of the retail world!

Anonymous said...

so what would you do about it?
This thing is taking your lives really down. You are dictated to buy things, by economic manipulation. This is capitalist dictatorianism.
It is also destroying diversity in businesses. Business is a creativity for a family. To force majority to abondon businesses by a single major business company is equivalent of dictatorship. What freedom do you have??

You people should think it over!

Anonymous said...

Someone said we need diversity of business. What??? We live in the greatest economic system in the world that runs on competition. If you don't like WalMart, start a store that competes with it. Not only will you be rich, you would be providing convenience and goods that people need at lower prices. That is what Walmart does.

David Johnsen said...

Yeah, sure, Scott. You are missing the point. The problem is that Wal-Mart's dominance is a huge barrier to potential competitors. By virtue of its size and power, Wal-Mart can dictate the terms of competition. You can open a store, but you'll have to find a way to pay personnel even less and put more pressure on suppliers to lower wholesale prices. You will fail because Wal-Mart has much more buying power--so much that they have turned the manufacturer-retailer relationship upside down. Trying to beat Wal-Mart is simply a race to the bottom. It may mean lower prices today, but is it good for America in the long run?

Near-monopolies and oligopolies are evolving in many (most?) industries (oil, banking, retail, food, et al), and that is only good for the people at the top who own them, not consumers or employees. The "competition" that you say America runs on is disappearing. Once Wal-Mart owns the market, what incentive will they have to keep prices down? And what alternatives will consumers have? If you open a competing store, Wal-Mart can lower prices in your vicinity until your new store runs out of money and closes. That is the whole point of gaining control of the market--being able to call the shots and maintain that dominance. It takes government intervention to prevent monopolistic practices, and that just isn't going to happen these days.

sean ghrohs said...

scott your an idiot. people like you with ur artificially inflated ideas of 'a free and diversified economy' are the reason why this country will die, painful a slow death

Anonymous said...

All Walfart stores suck @$$!!!

Anonymous said...

There was a town I used to live in in New Mexico. After WalMart came to town, all but three other businesses closed within a year. The only ones still open were a movie theatre, a bank, and a book store.

To buy anything you needed for day to day living like clothes, cleaning products, food, and even gasoline (The WalMart there brought its own gas station with it, putting the local gas station out of business), you would have to drive over two hours and twenty minutes, and that was if you were speeding.

Whenever I would finish paying for my items at WalMart the cashier would say "thank you, please come again." And that always made me giggle because of the thought that came to my head.

I finally verbalized that thought one day which was "Gee thanks, like I have a choice, as I need food, clothing, and gas to survive" in front of what was apparently some kind of area manager.

Not kidding, right after that, I got a 5 minute or so lecture about how wonderful WalMart was for my town, blah blah blah.

During that time my wife was a social worker. Before WalMart she was mostly handling adoptions and foster care placements for the State of New Mexico. After WalMart, she was mostly helping families with resources on how to find food banks, help them with applications for food stamps, assisting with getting Medicaid, and helping families find HUD housing, utility bills assistance, and the like.

And not some, not most: ALL the famlies she helped had one or more of the breadwinners in the house working at WalMart.

So, the agency had to hire three more employees to handle the larger load in this area so she could get back to her specialty of adoption and foster care and child welfare calls.

Because of Walmart, the state was now supporting all these workers directly with food, medical care, housing, utility bills, as well as now paying almost a quarter million dollars a year for the agency's new social workers. NOT TO MENTION THE FACT that WalMart got a MAJOR tax break for moving there. They paid no local taxes and very very little state taxes.

The state of New Mexico was KEEPING WalMart open through employee food stamps, medical care, etc., the new social workers, and putting over 20,000 people in the position of having no other place to shop, and God knows how much that yielded in taxless profits.

In an ideal world, Capitalism looks great on paper. In reality, this new kind of WalMartesque Capitalism is LITERALLY draining our country. And the speech that area manager gave me sounded scripted and rehearsed which tells me that the work environment there is bordering somewhere between cult and independent political party.

The Scott guy who wrote previously his basic lesson on economics is an idealized version of capitalism this country hasn't seen since somewhere between the 50s and the Reagan era and just plain doesn't exist anymore. This is NOT capitalism, this is a monarchy, ran by the Walton family, plain and simple.