"Walmart: 50 Years of Gutting the America's Middle Class" by Stacy Mitchell

[applegrove]

Walmart: 50 Years of Gutting the America's Middle Class

by Stacy Mitchell at the Cagle Post

http://www.cagle.com/2012/07/walmart-50-years-of-gutting-americas-middle-class/

"SNIP.............................................

Walmart now captures one of every four dollars Americans spend on groceries. Its stores are so plentiful that it’s easy to imagine that the retailer has long since reached the upper limit of its growth potential. It hasn’t. Walmart has opened over 1,100 new supercenters since 2005 and expanded its U.S. sales by 35 percent. It aims to keep on growing that fast. With an eye to infiltrating urban areas, Walmart recently introduced smaller “neighborhood markets” and “express” stores.

While the big-box business model Sam Walton pioneered half a century ago has been great for Walmart, it hasn’t been so great for the U.S. economy.

Walmart’s explosive growth has gutted two key pillars of the American middle class: small businesses and well-paying manufacturing jobs.

Between 2001 and 2007, some 40,000 U.S. factories closed, eliminating millions of jobs. While Walmart’s ceaseless search for lower costs wasn’t the only factor that drove production overseas, it was a major one. During these six years, Walmart’s imports from China tripled in value from $9 billion to $27 billion.

.................................................SNIP"

[Lionessa]

1. I'm amazed at the number of people who know how Walmart drove away their better paying jobs,

and yet have themselves convinced they can't afford to shop anywhere else.

Boggles the mind.

Proudly have never set foot in a Walmart, ever.

[creeksneakers2]

2. The small retail outlets didn't pay high wages either

The owners might have made some money but it came from charging their customers more. Is it fair for an entire community to pay more so that a few can prosper?

[applegrove]

3. There would be buyers and accountants and other middle class people for each small or medium sized

store Wallmart put under. Plus that money often stayed in the community.

[snappyturtle]

8. There's an old saying: "You get what you pay for."

Frankly I think the Walmart-ism of America has contributed to the
culture of greed that we all now realize we have sufferred from.
Some folks just took their greed to heights way beyond the average
Walmart customer.

[momsadem]

4. I shop at Wal-mart

I admit it. Does that make me bad?

[coldbeer]

13. No, it does not make you bad.

I have been avoiding Wal-Mart because of ALEC


But through this thread I have discovered that Wal-mart
no longer belongs to ALEC. So I will now shop there ....
except, in the meantime, I have been shopping on-line.

I rather sit on my fanny at home than drive to Wal-Mart,
(5 miles on empty backroads)!

[Sirveri]

18. You should still try to avoid it due to their union busting and general dickishness.

Their constant run to the bottom that they force on their suppliers is pretty disgusting. Companies that sell to Walmart have to either create a new product or reduce prices, or they get dropped, which forces people who have no room for innovation overseas in order to cut costs. Then there is the hiring practices, they'll commonly hire illegals and then stiff them knowing that they don't have legal recourse. Locking workers in the store over night and padlocking fire exits. Forced unpaid overtime. Discrimination against female employees. Underpaying and under working their employees and then dumping them into the state welfare system. Refusing to work their employees the 34 hours a week they need to qualify for medical benefits. Back when old man Walton was running the place, he actually tried to promote made in America and other initiatives. Kids took over and it became all about the money, maximize profit and screw everyone else. The destruction of local businesses, local main streets, local communities. Then all the money just gets sucked out of the town and back to Bentonville, AR and China. They outright close any store where there is even a hint of a union forming, otherwise they find the leaders and 'let them go'.

If you have other options that you can do, I'd go for it, but I recognize that not everyone can do that. They just don't have the money to shop elsewhere, or sometimes it's the only thing available in a reasonable distance. That's not your fault, that's Walmarts fault for rigging the field.

If you have netflix you can stream Wal-Mart: The High Cost of Low Price, which is a documentary which describes everything in much greater detail than I went into. Or there is The Wal-Mart You Don't Know which explains the Monopsony effect Walmart creates.

[liberalhistorian]

5. Where it's also had a major effect is in leading the

charge against unions and decent treatment of and pay for workers. The decline of unions and the rollback of rights and pay can be directly attributed to Wal-Mart. The Nation had a review last year of a book that detailed just this phenomenon and Wally World's responsibility for it. And they get those low prices by squeezing and blackballing suppliers, so that they then can't afford to pay their own workers any decent wage.

I will never set foot in a Wally World and I'm amazed at those I know who do and yet complain about the very issues Wally World helped bring about, including, in many cases, the loss of their own jobs.

[snappyturtle]

9. K&R 1000+ nt

[HiPointDem]

6. kr

[HiPointDem]

7. there's always a couple of walmart defenders in these threads.

[WinstonSmith4740]

10. Not trying to defend Walmart here..

their policies are bullshit. But back in the day when Sam Walton was still alive at least everything in their stores was made in America. It was a point of pride with him, was in all their advertising, and on every truck they had. He died and the consultants took over, and that's when everything went to China, and the downward spiral began.

[HiPointDem]

12. Sam Walton went to university during the Depression. His frat brothers called him "Hustler".

Last edited Tue Jul 17, 2012, 10:36 PM - Edit history (1)

He was no poor backwoods boy -- that was all PR.

He married a banker's daughter, and his father-in-law loaned him his start-up capital. He bought at the cheapest price from the beginning, and asked his suppliers to lower prices every year.

Walton's folksy image & "buy american" patriotism were good PR, but fake, and in the service of profit.

"From the beginning, Walton had bought goods wherever he could get them cheapest, with any other considerations secondary," writes Bob Ortega, author of the Wal-Mart history, In Sam We Trust. By the early 1980s, Ortega reports, Walton "increasingly looked to imports, which were usually cheaper because factory workers were paid so much less in China and the other Asian countries."

According to Ortega, Walton himself estimated that imports accounted for nearly 6 percent of Wal-Mart's total sales in 1984. But another observer of that period, Frank Yuan...who dealt with Wal-Mart in the 1980s, puts the number, including indirect imports, at around 40 percent from "day one." Either way, Walton's vision was a harbinger of far vaster global sourcing today.

And it is a far cry from the picture that many Americans have of the legendary founder of Wal-Mart: "Mr. Sam," the folk hero, who drove around the Ozarks in a pickup truck buying cheap goods for his early discount stores and who became the architect of Wal-Mart's highly publicized "Buy American" campaign in the late 1980s and early '90s...

As one retired senior Wal-Mart executive explained: "Sam wanted everything possible [made] in the U. S., but he was not going to pay [extra] for it to stay. The main thing he asked was: 'Is it good for our customers?' If not, we went and made it overseas."

Even as Wal-Mart was pushing its U.S. suppliers to be more efficient and promoting its "Buy American" program through the '80s, the company bought more and more from Asia, according to Jay Moates, a former accountant with Wal-Mart's overseas buying operation.

Following the brutal suppression of Chinese students in Tiananmen Square in 1989 by the Chinese Communist leadership, Walton feared a consumer backlash if Wal-Mart were seen as operating in China... To continue growing in Asia, Wal-Mart needed...a middleman or a buying agency that would purchase Asian products without showing Wal-Mart's hand.... "The main reason for going into [the deal] was not to be exposed as going into Communist China."

Walton needed a trusted friend to act as his Asian middleman. He turned to a close friend...George Billingsley, to serve as the titular head of the operation....To actually run the operation, Walton found Charles Wong, a seasoned Wal-Mart vendor who knew the U.S. retail business well and was at ease operating in Asia. Billingsley would be a figurehead. Wong would run the day-to-day business of procurement out of Hong Kong....Within two years, Billingsley and Wong had set up Pacific Resources Export Limited (PREL) as an exclusive buying agent for Wal-Mart.

...several months after Walton's death in April 1992, the "Buy American" campaign backfired when Wal-Mart became the target of a Dateline NBC expose that revealed "Buy American" signs adorning piles of imported goods from Asia. Overnight, an embarrassed Wal-Mart de-emphasized the "Buy American" campaign.

"Wal-Mart seems intent on managing the total product life cycle."

http://www.pbs.org/wgbh/pages/frontline/shows/walmart/secrets/wmchina.html


Everything walmart says about itself is a big fat lie. hucksters and scamsters from day one.

Their business model is to cut out all the middlemen in all retail sectors -- which means a hell of a lot of job loss. I believe their goal is nothing less than control of all low-end retail, so that the much-vaunted advantage of capitalism -- "choice" -- becomes a thing of the past. You will buy it from wallyworld or go without, unless you have enough money to afford "choice" -- and not only in the US.

there were no "consultants" directing the waltons. sam & the kids did it. the walton siblings are richer than gates & buffett combined.

[WinstonSmith4740]

20. Thanks so much for the education!!

The scales have fallen from my eyes. I'm kind of ashamed I was taken in by the propaganda!

[HiPointDem]

21. i was too. without investigative journalism, everyone is taken in. unfortunately, the investiga-

tion was done long after sammy made his millions trading on his folksy "buy american" BS.

[LongTomH]

23. Thank you!

So many people have bought into this "Sam Walton, Good Old Boy" bullshit!

[darkangel218]

11. yup, most of the stuff they sell is chinese crap but

Don't forget also most veggies they sell are grown in Mexico. I live in FL and I'm being sold Mexican tomatoes

[Art_from_Ark]

14. The Wal-Mart in my hometown in Arkansas sells mainly US-grown produce

from what I can tell--
Lettuce, Carrots, and Clementine Oranges from California
Grapefruit from Florida
Blueberries from Oregon
Cherries from Michigan and California

Sometimes the avocados are from California, sometimes they're from Mexico.

Most of the other food I buy there is made or grown in the US

[JCMach1]

15. Chinese items at many

Multiples of the real cost. And because they are a monopoly they can control the price of those goods coming to the us.

You will be shocked at the real prices you would pay for your walmart items in asia

[JHB]

16. One of the central tensions of capitalism is that it depends on competition...

...but what is best for any one company is to eliminate competition and control its market and suppliers. Individual incentives are at odds with the needs of the system.

Once upon a time some mergers were denied because it reduced competition, and some companies broken up because they controlled too much of their market. But these days, that would be "punishing success".

[HiPointDem]

22. it's been the opposite in the last 40 years -- the regulated monopolies were broken up (airlines,

telephone) -- supposedly to bring more "competition". which there was, for a while.

but inevitably, competition ends with someone winning and increasingly rigging the board in their favor. as has happened in air travel and communications.

[joeybee12]

17. I've stopped shopping there except for cat food...

I get their generic at 70 cents a can...I feed 40 cats a day and that's the only way I can do it.

Other than that, I've made a conscious effort to get everything else at local markets...besides, pretty much everything Wal-Mart sells is junk and falls apart quickly...part of our throw-away society I suppose.

[applegrove]

19. Good for you for saving so many cats. It must feel great.

[Hotler]

24. Many Duers talk a progressive talk, but...

don't walk a progressive walk. Flame away.

[applegrove]

25. I went to Walmart when I couldn't afford a regular department store. It happens. I only went a few

times. I feel bad. I wasn't in the loop and did not know Walmart's reputation for union busting and lowering wages at the time.

[Honeycombe8]

26. "You don't fuck with WalMart." Travolta in the movie "Savages."

He had a point.

There's a point at which an organization gets so huge, that there's no real way to fight it. If it wants something from you, you "don't fuck with WalMart" or bad things will happen.

This is a circle...egg or chicken...chicken or egg. It's too much to expect poor people not to shop at the place where they can get the most bang for their buck. If a mother has $50 to spend on Christmas gifts for her child, it's too much to ask her to pay several dollars more for a toy elsewhere.