[Homestead] Saying it like it is: Don't Blame WalMart

Gene GeRue genegerue at ruralize.com
Mon Feb 28 08:51:09 EST 2005

This article by Robert Reich is poignant to me. I became aware that the 
Bush administration paid back the huge campaign contribution by the boss at 
Home Depot by fixing it so that the ceiling fans imported from China get an 
exemption on import tariffs. Home Depot is the largest seller of ceiling 
fans in the U.S. I find that kind of quid pro quo--big business money buys 
big political favors at the expense of smaller businesses--offensive to my 
citizenship values and accordingly call the U.S. Congress the D.C. 
Whorehouse. Yet, knowing this, I still shop at Home Depot. Helluva dilemma. 
Shall I beat myself up over this apparent breach of values behavior simply 
accept that I am just another smart American consumer, going where it is 
convenient and money wise to buy what I want? How do you guys feel about 
these things? Do you shop at WalMart and Home Depot? How do you feel about 
the values dilemma?

Don't Blame Wal-Mart

Published: February 28, 2005

Berkeley, Calif. — BOWING to intense pressure from neighborhood and labor 
groups, a real estate developer has just given up plans to include a 
Wal-Mart store in a mall in Queens, thereby blocking Wal-Mart's plan to 
open its first store in New York City. In the eyes of Wal-Mart's 
detractors, the Arkansas-based chain embodies the worst kind of economic 
exploitation: it pays its 1.2 million American workers an average of only 
$9.68 an hour, doesn't provide most of them with health insurance, keeps 
out unions, has a checkered history on labor law and turns main streets 
into ghost towns by sucking business away from small retailers.

But isn't Wal-Mart really being punished for our sins? After all, it's not 
as if Wal-Mart's founder, Sam Walton, and his successors created the 
world's largest retailer by putting a gun to our heads and forcing us to 
shop there.

Instead, Wal-Mart has lured customers with low prices. "We expect our 
suppliers to drive the costs out of the supply chain," a spokeswoman for 
Wal-Mart said. "It's good for us and good for them."

Wal-Mart may have perfected this technique, but you can find it almost 
everywhere these days. Corporations are in fierce competition to get and 
keep customers, so they pass the bulk of their cost cuts through to 
consumers as lower prices. Products are manufactured in China at a fraction 
of the cost of making them here, and American consumers get great deals. 
Back-office work, along with computer programming and data crunching, is 
"offshored" to India, so our dollars go even further.

Meanwhile, many of us pressure companies to give us even better bargains. I 
look on the Internet to find the lowest price I can and buy airline 
tickets, books, merchandise from just about anywhere with a click of a 
mouse. Don't you?

The fact is, today's economy offers us a Faustian bargain: it can give 
consumers deals largely because it hammers workers and communities.

We can blame big corporations, but we're mostly making this bargain with 
ourselves. The easier it is for us to get great deals, the stronger the 
downward pressure on wages and benefits. Last year, the real wages of 
hourly workers, who make up about 80 percent of the work force, actually 
dropped for the first time in more than a decade; hourly workers' health 
and pension benefits are in free fall. The easier it is for us to find 
better professional services, the harder professionals have to hustle to 
attract and keep clients. The more efficiently we can summon products from 
anywhere on the globe, the more stress we put on our own communities.

But you and I aren't just consumers. We're also workers and citizens. How 
do we strike the right balance? To claim that people shouldn't have access 
to Wal-Mart or to cut-rate airfares or services from India or to Internet 
shopping, because these somehow reduce their quality of life, is 
paternalistic tripe. No one is a better judge of what people want than they 

The problem is, the choices we make in the market don't fully reflect our 
values as workers or as citizens. I didn't want our community bookstore in 
Cambridge, Mass., to close (as it did last fall) yet I still bought lots of 
books from Amazon.com. In addition, we may not see the larger bargain when 
our own job or community isn't directly at stake. I don't like what's 
happening to airline workers, but I still try for the cheapest fare I can get.

The only way for the workers or citizens in us to trump the consumers in us 
is through laws and regulations that make our purchases a social choice as 
well as a personal one. A requirement that companies with more than 50 
employees offer their workers affordable health insurance, for example, 
might increase slightly the price of their goods and services. My inner 
consumer won't like that very much, but the worker in me thinks it a fair 
price to pay. Same with an increase in the minimum wage or a change in 
labor laws making it easier for employees to organize and negotiate better 

I wouldn't go so far as to re-regulate the airline industry or hobble free 
trade with China and India - that would cost me as a consumer far too much 
- but I'd like the government to offer wage insurance to ease the pain of 
sudden losses of pay. And I'd support labor standards that make trade 
agreements a bit more fair.

These provisions might end up costing me some money, but the citizen in me 
thinks they are worth the price. You might think differently, but as a 
nation we aren't even having this sort of discussion. Instead, our debates 
about economic change take place between two warring camps: those who want 
the best consumer deals, and those who want to preserve jobs and 
communities much as they are. Instead of finding ways to soften the blows, 
compensate the losers or slow the pace of change - so the consumers in us 
can enjoy lower prices and better products without wreaking too much damage 
on us in our role as workers and citizens - we go to battle.

I don't know if Wal-Mart will ever make it into New York City. I do know 
that New Yorkers, like most other Americans, want the great deals that can 
be had in a rapidly globalizing high-tech economy. Yet the prices on sales 
tags don't reflect the full prices we have to pay as workers and citizens. 
A sensible public debate would focus on how to make that total price as low 
as possible.

Robert B. Reich, the author of "Reason: Why Liberals Will Win the Battle 
for America," was secretary of labor from 1993 to 1997.


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