THEY SAY
Wal-Mart’s Bum Rap
Editor Mark Lacter’s Comment in the April 12 Los Angeles Business Journal:
They’re big and greedy and cheap and you’d probably rather shop at Nordstrom, but Wal-Mart Stores Inc. in the end broke no rules when it asked Inglewood voters instead of city officials to approve plans to build one of its supercenters. All it tried to do,unsuccessfully with last week’s vote,was avoid an obstacle course of zoning and environmental reviews, as well as some likely side deals to appease local activists.
If you insist on pointing fingers at what went down, just aim in the right direction. And rather than zero in on big, bad corporations, the real answer lies on more uncomfortable terrain,like our own wallets and sensibilities.
Wal-Mart’s Inglewood plan was not some callous carpetbagging scheme. The supercenter would have been located in a low-income community where one-fifth of all families live below the poverty level. It would greatly have boosted local coffers (Inglewood gets an average of $410 per person from retail sales taxes, compared with $3,000 in Beverly Hills). It would have generated hundreds of jobs in a city where the unemployment rate stood at 8.4% in February, compared with the state’s 6.5%.
Why, the nerve of those folks from Arkansas!
Wal-Mart’s sin, if you will, is that it’s out to do business as efficiently (i.e. cheaply) as possible. That means paying employees lower wages with much less generous healthcare benefits than the workers at Ralphs. It also means demanding the lowest possible wholesale costs from its suppliers, who often must have their goods produced overseas by workers earning in a 10-hour day what many of us make in 30 minutes.
Yet if Wal-Mart is such a villain, why aren’t more American shoppers willing to forgo the savings on the cost of a shirt or DVD player and visit the more expensive mom-and-pop down the block? We all know why. It’s called your bank account. And eliciting sympathy for underpaid Wal-Mart workers is no more realistic than expecting a day laborer to command $20 an hour when the guy across the street will do the same work for $10.
Rather than face up to those realities, state and local officials, acting as feel-good surrogates for the rest of us, have conjured up ways to restrict Wal-Mart’s incursion. Some of the more extreme ideas are coming from Sacramento, where Lt. Gov. Cruz Bustamante, who happens to have the financial backing of organized labor, is pushing an effort to reimburse state and local governments for the cost of providing healthcare to workers.
Now let’s be clear: Wal-Mart does provide health benefits for its workers. It’s not great coverage, but it’s coverage. What Bustamante wants to do is monitor the benefit packages being offered by the Wal-Marts of the world. If they fall below a prescribed floor, Sacramento will come knocking. And we all know how efficient the government would be in spending those dollars the right way.
Alas, the world is not a neat and tidy place. On its face, it’s outrageous to think that more than 60% of U.S. corporations did not pay any federal taxes for the go-go years of 1996 through 2000, as was reported in a General Accounting Office study. But many of those same corporations were taking the money they saved on taxes and investing it in new businesses that create new jobs. Where does corporate welfare leave off and reasonable financial strategies begin?
I haven’t a clue. But I know the answer is less clear-cut than the Wal-Mart bashers would have you believe.
