Riffed by Dr. Geek
from an idea by Vitriol


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The evils of capitalism

One of the raging debates going in the greater metropolitan area in which Mrs. Geek and I live is whether or not to allow Walmart to "assimilate" us into its mighty empire. When it comes right down to it, I hope the answer is no. Why? Because I tend to think that Walmart is evil. Not in an "the CEO of Walmart is the child of the devil and about to spit up pea soup" kind of way, but evil none the less.

Why? I think it ultimately because Walmart doesn't play well with others. It is not willing to co-exist with other retailers; it wants to destroy other retailers. It does this by offering lower wages and less health benefits than its unionized competitors, and, if certain lawsuits are correct, by hiring contractors who employ illegal immigrants to work unsafe working conditions (janitors locked in the stores at night to work 7-day, 70-hour weeks for $1500 a month.) It also does this by negotiating massive, nationwide discounts with bargain suppliers that other chains cannot match -- which, by the way, drives out the suppliers profit margin and forces them to pay their workers less.

Well, I know someone must ask, isn't lower prices a good thing? After all, that little happy face in their TV ads looks so well, calm and people pleasing. After talking with my parents recently about this, an example from the land of my birth illustrates the problem.

There are four municipalities near where I grew up that we'll call A, B, C, and D. I actually grew up in B, the largest of the four. Just about the time I left, some land developers bulldozed an old drive in movie theater in A (one of the smallest of the four) and turned it into a shopping mall. Walmart showed interest and residents of A were thrilled because they anticipated that tax revenue from the store would reduce their property taxes. The store was eventually built and people in A were enthusiastic. The store brought jobs and the mall prospered beyond everyone's expectations.

Then some not-so-great things happened. People in A found out that their taxes weren't going to go down, at least not immediately. It turned out that Walmart only built their store in exchange for 5 years of tax forgiveness and millions of dollars in infrastructure improvements to the site where the store was built. Not only that, the increased traffic on the roads leading to the mall created increased travel times, maintenance costs and noise that disturbed some residents.

Plus, there was a local retail chain that had stores in B, C, and D that couldn't compete with Walmart, so it went out of business after decades of operation. This created some large empty buildings, which were eyesores on certain aging business districts. These local stores were also "anchor businesses" that were primary attractors of customers, and other nearby businesses in B and C began to feel the pinch. So, more than one major business in B is moving to A next to Walmart so it can continue to compete.

So, let's review the picture in total. Walmart came to A and brought jobs that paid less than everyone else with fewer health benefits, forcing its employees to rely more on government provided services such as health care. Walmart increased road maintenance costs, caused traffic delays, and forced A to pay for material improvements up front, without paying any taxes for five years. Meanwhile, Walmart killed other local businesses in B, C, and D, creating unemployment and leaving those municipalities to deal with large empty buildings and reduced shopper traffic in their business distrcts. This, in turn, forced remaining businesses in B, C, and D to relocate to A in order to remain competitive. Finally, Walmart profits are not channeled into the A, B, C, or D, the way a local chain would... they are sent to Arkansas.

That Walmart smiley face doesn't seem quite the jolly fellow he once was.

Of course, I tend to think that the land of my birth will be spared the final act of the drama that is Walmart. This is the one where Walmart closes up several of its regular stores in a region and puts down a "Superstore" nearby. Hopefully, A will keep their Walmart for some time because A, B, C, and D are the only large municipalities in for at least 60 minutes by highway in any direction.

I think the solution is going to be twofold. First, I think that someone is going to have to unionize Walmart. I know, I know... unionization has been a dirty word for the last 30 years or so. There are just too many memories of big unions in the rust belt resisting cuts in salary or workforce because of changing economic conditions.

Yet, unions exist for a reason -- to avoid the needless exploitation of workers. We have let the pure capitalists have their way, largely unrestricted, for decades now and we find ourselves confronted with legions of upper level managers who see stock price and their own performance bonuses as the sole measure of corporate worth. I tend to believe that the pendulum has to start swinging back the other way one of these days. That will no doubt have negative consequences down the road, but what doesn't?

The other part of the solution has to be an awareness on the part of local government that interest on the part of Walmart is not necessarily a reason to throw a parade. If Walmart is going to be a responsible member of the business community, then these huge tax breaks and need to stop... because communities have bills to pay and Walmart is a part of what's causing them.

said drgeek on 2004-07-28 at 10:16 a.m.


The Wayback Machine - To Infinity And Beyond

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