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Why opening a business works in favor of poor people
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| Fir3start3r |
I thought I'd post this since some don't understand how large corporations can actually help poor people (beside providing the obligatory jobs).
When one thinks about this for a second, the coorelation isn't clear, until you read this...
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Progressive Wal-Mart. Really.
By Sebastian Mallaby
Monday, November 28, 2005; A21
There's a comic side to the anti-Wal-Mart campaign brewing in Maryland and across the country. Only by summoning up the most naive view of corporate behavior can the critics be shocked -- shocked! -- by the giant retailer's machinations. Wal-Mart is plotting to contain health costs! But isn't that what every company does in the face of medical inflation? Wal-Mart has a war room to defend its image! Well, yeah, it's up against a hostile campaign featuring billboards, newspaper ads and a critical documentary movie. Wal-Mart aims to enrich shareholders and put rivals out of business! Hello? What business doesn't do that?
Wal-Mart's critics allege that the retailer is bad for poor Americans. This claim is backward: As Jason Furman of New York University puts it, Wal-Mart is "a progressive success story." Furman advised John "Benedict Arnold" Kerry in the 2004 campaign and has never received any payment from Wal-Mart; he is no corporate apologist. But he points out that Wal-Mart's discounting on food alone boosts the welfare of American shoppers by at least $50 billion a year. The savings are possibly five times that much if you count all of Wal-Mart's products.
These gains are especially important to poor and moderate-income families. The average Wal-Mart customer earns $35,000 a year, compared with $50,000 at Target and $74,000 at Costco. Moreover, Wal-Mart's "every day low prices" make the biggest difference to the poor, since they spend a higher proportion of income on food and other basics. As a force for poverty relief, Wal-Mart's $200 billion-plus assistance to consumers may rival many federal programs. Those programs are better targeted at the needy, but they are dramatically smaller. Food stamps were worth $33 billion in 2005, and the earned-income tax credit was worth $40 billion.
Set against these savings for consumers, Wal-Mart's alleged suppression of wages appears trivial. Arindrajit Dube of the University of California at Berkeley, a leading Wal-Mart critic, has calculated that the firm has caused a $4.7 billion annual loss of wages for workers in the retail sector. This number is disputed: Wal-Mart's pay and benefits can be made to look good or bad depending on which other firms you compare them to. When Wal-Mart opened a store in Glendale, Ariz., last year, it received 8,000 applications for 525 jobs, suggesting that not everyone believes the pay and benefits are unattractive.
But let's say we accept Dube's calculation that retail workers take home $4.7 billion less per year because Wal-Mart has busted unions and generally been ruthless. That loss to workers would still be dwarfed by the $50 billion-plus that Wal-Mart consumers save on food, never mind the much larger sums that they save altogether. Indeed, Furman points out that the wage suppression is so small that even its "victims" may be better off. Retail workers may take home less pay, but their purchasing power probably still grows thanks to Wal-Mart's low prices.
To be fair, the $4.7 billion of wage suppression in the retail sector excludes Wal-Mart's efforts to drive down wages at its suppliers. "Wal-Mart: The High Cost of Low Price," the new anti-Wal-Mart movie that's circulating among activist groups, has the requisite passage about Chinese workers getting pennies per day, sweating to keep Wal-Mart's shelves stocked with cheap clothing. But no study has shown whether Wal-Mart's tactics actually do suppress wages in China or elsewhere, and suppression seems unlikely in poor countries. The Chinese garment workers are mainly migrants from farms, where earnings are even worse than at Wal-Mart's subcontractors and where the labor is still more grueling.
Wal-Mart's critics also paint the company as a parasite on taxpayers, because 5 percent of its workers are on Medicaid. Actually that's a typical level for large retail firms, and the national average for all firms is 4 percent. Moreover, it's ironic that Wal-Mart's enemies, who are mainly progressives, should even raise this issue. In the 1990s progressives argued loudly for the reform that allowed poor Americans to keep Medicaid benefits even if they had a job. Now that this policy is helping workers at Wal-Mart, progressives shouldn't blame the company. Besides, many progressives favor a national health system. In other words, they attack Wal-Mart for having 5 percent of its workers receive health care courtesy of taxpayers when the policy that they support would increase that share to 100 percent.
Companies like Wal-Mart are not run by saints. They can treat workers and competitors roughly. They may be poor stewards of the environment. When they break the law they must be punished. Wal-Mart is at the center of the globalized, technology-driven economy that's radically increased American inequality, so it's not surprising that it has critics. But globalization and business innovation are nonetheless the engines of progress; and if that sounds too abstract, think of the $200 billion-plus that Wal-Mart consumers gain annually. If critics prevent the firm from opening new branches, they will prevent ordinary families from sharing in those gains. Poor Americans will be chief among the casualties.
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>>Source<<
...here endth the lesson... ;) |
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| DigiNut |
Impossible. Those corporate fat cat bastards are evil, I don't care what you say. :toothless
(Insert obligatory ear-plugging and loud "LA LA LA"s here) |
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| bourgeois |
| i don't care what it says but walmart is garbage |
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| MarkT |
no doubt they provide value to the consumer, but I won't shop there.
they have quite a history of employment litigation and complaints ranging from wrongful dismissal to outright discrimination...that they refuse to stock "controversial" music and force labels/producers to issue sanitized cover art, title and lyrics amounts to passive censorship (IMHO), particularly when they have (had?) the largest single share of the music market in North America. We're not just talking the obvious Nirvana "Rape Me" case either...they made John Mellancamp's label revise cover art because their was an image of jesus and the devil on one...FFS :rolleyes:
so it's an awful (IMHO) company in many ways too. |
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| DigiNut |
| I don't think the point of this thread was to try to get people to shop there... nobody's making any claims about how good their business practices are or about the quality of their products. The point is that when people talk about things that "only benefit rich white males", they should realize that they may indirectly benefit other groups as well, far more than any government program benefits them. |
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| MLB |
| corporations suck honestly enough they pay lowest wages and expect everything from their workers. |
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| Cosmic Fur |
| quote: | Originally posted by MLB
corporations suck honestly enough they pay lowest wages and expect everything from their workers. |
You haven't read the orginal post at all, have you? |
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| MLB |
| quote: | Originally posted by Cosmic Fur
You haven't read the orginal post at all, have you? |
dont want to, just my thought though they suck..
why is it neccessary to take the internet seriously? or even what a stupid corporation does? |
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| DigiNut |
| quote: | Originally posted by MLB
corporations suck honestly enough they pay lowest wages and expect everything from their workers. |
"Corporations" encompasses almost every business under the sun. Who pays higher wages?
I work for a corporation and I'm getting paid a decent wage and getting treated quite well. Most corporations only pay low wages for unskilled, commonly-available labour. |
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| MarkT |
| quote: | Originally posted by DigiNut
I don't think the point of this thread was to try to get people to shop there... nobody's making any claims about how good their business practices are or about the quality of their products. The point is that when people talk about things that "only benefit rich white males", they should realize that they may indirectly benefit other groups as well, far more than any government program benefits them. |
no dispute that Wal-Mart provides value...if they didn't, they wouldn't be the incredible success story and the business model for countless others.
but I find it beneficial to qualify that with "at what expense?". |
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| Fir3start3r |
| quote: | Originally posted by MarkT
no dispute that Wal-Mart provides value...if they didn't, they wouldn't be the incredible success story and the business model for countless others.
but I find it beneficial to qualify that with "at what expense?". |
Not to put the smaller businesses down at all (they still have their place) but if I had to answer that question, Walmart's lines of distribution are what killed everyone.
They found a way to cut out the middle-man and passed the savings down to the consumer; it's a classic case of textbook capitalism.
The others that faded away simply didn't change with the times or didn't even see it coming... |
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