Is Wal-Mart Good or Bad for You?
As I was reading Rich’s post today “Are You Being Screwed?”, it prompted me to share some thoughts on the book I am currently reading – “The Wal-Mart Effect: How the World’s Most Powerful Company Really Works–and How It’s Transforming the American Economy” by Charles Fishman. While I wouldn’t suggest listening to the audio book when you’re tired and behind the wheel, it is a most enlightening read.
In the book, which is neither pro nor con the retailing behemoth, Fishman delves into the inner workings of Wal-Mart from its early beginnings through the present citing interviews and facts from executives, employees, suppliers, competitors, academics, and statisticians. What is it really like to work there? Is Wal-Mart’s effect on each of us and the economy good or bad? Does Wal-Mart help or destroy suppliers and factory workers? These compelling questions and more are part of this sometimes dry, but always informative book.
Several things struck me about the realities of the world’s largest retailer. I don’t have any definitive answers (I’m no researcher, economist, or anything close), but I certainly have some great questions that are worth considering which I wanted to share with you.
Why would anyone want to work there?
The figures are clear that the jobs for employees doing the grunt work. You’re not only not going to get rich, you’re not going to get ahead, and you can plan on struggling financially while the big giant puts the squeeze on you. Employees at this level of the company are truly nickel and dimed.
What struck me more; however was why would someone want an office job there? After listening to this book, I have come to the conclusion that there is a point at which frugality, efficiency, and a good work ethic turns evil. With intense demands on every level of management, these folks work like dogs. In the early years, you could at least expect an amazing stock appreciation (much like the most successful start-ups in history). Today, however, there is no such attraction. So, what drives talented professionals to trade their blood, sweat, time, and tears for stark cubicles and a chance to play a constant low price game that can’t be won? (The sad truth of this question is that it can be asked in relation to a lot of big companies these days.)
At what point does low price become unsustainable?
It is no secret that the Wal-Mart business model is to have low everyday prices and continually lower those prices year after year. The problem with this model is that at some point all the inefficiencies and waste are removed from both the supplier’s and retailer’s processes. Then what? That is the breaking point – where suppliers fail, employees lose their livelihoods, and ultimately everyone loses. For the happy, oblivious consumer, this is great…until such time as they find themselves out of work as well due to the immense ripple effects of the retailer’s choices.
To shop or not to shop?
I have friends who would never step foot in a Wal-Mart. I probably roam in there only a few times a year, at most. The new NGLCC commitment notwithstanding , it still remains a multi-faceted act when you choose to shop there — it is a financial, political, convenience, global economic and personal preference decision. (And, you thought you were just going to pick up some toiletries and a light bulb!) I’m not sure there is a “right” or a “wrong”, but it sure is a loaded choice which has implications across the globe.
Do we have to take the bad with the good?
Clearly, Wal-Mart has had a positive effect in many ways — raising the bar for competitors, suppliers, and shoppers. Efficiency, frugality, and a commitment to continually setting aggressive goals are Wal-Mart’s game. If you want to play and survive in an economy so tied to the retailer, you need to play that game too. My question is — do we need a sanity check? Does being more cost-efficient have to mean kicking the factory worker? Or, do these shifts simply reinforce the fact that we are no longer in an industrial age or even an information age but rather an innovation age where people and companies need to thoroughly re-pot themselves to succeed?
How can the government ignore the economy’s biggest player?
Here’s a newsflash — the Consumer Price Index and other Bureau of Labor and Statistics (BLS) figures exclude Wal-Mart data. And the best part of this newsflash is that it is done intentionally because the BLS has not yet developed a way to accurately account for the exponential number of combinations and variables that the Wal-Mart effect throws into the mix. According to the book, this little fact alone has a substantial double digit percentage impact on certain measurements that are regularly reported by the BLS (forgive me the nitty gritty details, but it is an audio book after all and I’m no statistician). The biggest “aha” for me in this was that even on a macro scale the effect is not measured nor disclosed. Can someone say monopoly?
When I get most frustrated with the state of the retailing economy and consumer behavior in this throw-away society, I tend to point my angst at Wal-Mart if only because they are a big and easy target. My partner posed a great question when she heard me mumbling all this nonsense from the book (I listen to complex books and give her a 2 second mumble and expect her to be “on board” with all the details — the poor woman!) — wouldn’t it be awful if they all went out of business because who would ever buy and use those mammoth buildings and real-estate? Good point.
While I still have an hour or two left in the book, my biggest takeaway from this read is that of conscious decision-making when it comes to where and how we shop. This isn’t a new conclusion for me as I strive to be as conscious as I can with my money and my actions. Yet, this truly drove home the unbridled power one retailer has on the state of the entire globe and the fact that our everyday actions do indeed have a global impact.