Thursday, August 03, 2006


Getting the Ball Rolling

If you have not been following the little discussion under Travis' Change WalMart post, you might be missing out on the news that we are starting up another website to further "educate and indocrinate" the masses.

Our course is that of the contrarian.

We will begin by defending WalMart as a savior of the poor, instead of the popular nonsense spouted off by so many. We will then also touch on the fallacies and mythology of the minimum wage and 'living' wage debate.

Who knows where we will head from there, but as popular ignorance of basic economics increases, this may very well become a full time job.

Here to start us off is an older paper by the Cato Institute titled "Keeping the Poor Poor: The Dark Side of the Living Wage".

Maybe I'm really off my rocker, but I view Wal*Mart as a future social model...Think of it, WalMart's employ a large number of people who each serve a specific purpose in the WalMart community, be they the eye doctor, to the lowly greeter. Walmart also seems to have a knack for extending the services they offer, in the not too distant future, I could actually imagine there being self contained WalMart communities which offer housing (at an affordable WalMart Price), combined with WalMart grocery shopping (thanks to Super WalMart), as well as WalMart Automative, WalMart Health Care, and WalMart Grooming (hair and nail salon), topped off with Walmart Banking.

So what's wrong with a group of people being completely dominant on a company that can produce sheer efficiency from the volume in which they do things? Nothing, although it may turn into another Coal Mining Town, where the mine owns everything.

So back to the issue at hand, sure they offer an abundance of minimum wage jobs, but they also offer low-every day prices, making life affordable even on a salary of minimum wage. I don't see WalMart as being a non-profit organization helping out the poor, if anything their business helps the poor out and they get a small cut from doing business with them.
I never said Wal-Mart was a charity.

Their intent is clearly to make money. My point is that in order to make money, they must offer something people want. They have chosen to specialize in selling things cheaply and in bulk (they have been very good at it), which specifically benefits the poor.

I will go further and say that Wal-Mart does MORE GOOD than any charity, although its actions are guided by the profit motive.

"...sure they offer an abundance of minimum wage jobs, but they also offer low-every day prices, making life affordable even on a salary of minimum wage."

Wal-Mart's jobs pay above the minimum wage. Are "minimum wage jobs" are a bad thing?
Cato's Report is useful, but not for the beginner. It's just not accessible. It's great for those who are willing to put effort into downloading and reading it.

We need succinct, accessible, lazy-man's talking points about minimum/living wage. Otherwise, the libertarian-left is never going to get on board.
I love Wal-Mart. The way that many employees of Wal-Mart grumble about their jobs is commonplace among low-income workers. I have heard similar grumbling at almost every job I have worked, including when I worked for Wal-Mart.
The grumbling is a part of the "poor man's mentality." I know it is cruel to blame a man's poverty on the man, but all too often that is the truth. Their reason for working is to earn money to pay their bills and buy beer. Very few see their efforts as wealth creation. This mentality is what needs to be attacked. It is the root of the problem.
People who are about wealth creation are more successful. They tend to shy away from "9 to 5" jobs and prefer to take risks. We call them entrepreneurs. Have any of you read any of the newer "get rich" books on the market? Rich Dad, Poor Dad? The Cashflow Quadrant? The Millionaire Mind? These books really are taking aim at the mentalities, and the people who succeed after reading these books really have had their thinking altered. The books tend to be gimmicky, and poorly written, but they are doing something right, and influencing far more people than economists' books, Friedman and Levitt included. Try it for yourself, pick up one of these silly books and identify the good economics in them. The Millionaire Mind is particularly accessable, and particualrly gimmick ridden.
How does Nathan always seem to change the subject?
Sorry, I'm just trying to get at the root of things, and find something that will really make a difference.
And I really like that song by Gnarles Barkley, "Crazy".
Minimum wage jobs are not a bad thing in my opinion, they are jobs, and those are always good things, because it presents the opportunity for people to make a living, and also possible room for promotion down the road. In general, we're a society that demands more of everyone and everything, how often do you hear "I deserve better than this"? Sure, we all like to think we're highly marketable people who deserve much more than minimum wage, but at the end of the day, they're positions that are available, and if people are accepting them, then what's the problem?

As noted earlier, WalMart is a business, and would it really make sense to employ an army of overpaid employees? The fact that Walmart can offer such low prices on products far out weighs the possible negative effect that lower wages has on it's employees. The business model is all for efficiency, and if you can hire skilled workers at minimum wage, then the company is keeping their operations efficientt.

What the heck is a bus going cross country going to do about raising awareness? If it was such a horrible issue, then the workers should form a union (if not already in one), and then use their power from that. (Personally I'm not a fan of unions, but just making a point that something of that measure would have far greater an impact.)
"The fact that Walmart can offer such low prices on products far out weighs the possible negative effect that lower wages has on it's employees."

I used to think this too, but now I'm not so sure it's the right way to look at it. Both transactions, selling goods and hiring employees, are mutually beneficial to all parties involved. I don't see how you can call one good and the other bad.

In my opinion, low wages are only bad insofar as they reflect an unskilled, uneducated, unhappy society. As far as I know, no one is blaming Wal-Mart for that.
Travis, just wanted to say I've really enjoyed this discussion! Hopefully I'll start being more regular on here, and maybe then I'll finally reveal my

Anyway, back to the discussion... I do agree with you, the idea of both transactions are mutually benefiscial to both parties involved. Unfortunately using a logic similar to that you could argue the value of sweat shops as well. Personally, while this view may not be P.C., whenever there exists a situation where an employer offers positions and the potential employees are disclosed all of the details of a given position (no having employees clean up radioactive garbage only to disclose it two weeks later), there are mutually benefiscial results derived.

Sure one could argue that the job does not pay enough or is below them, but if there are people who are willing to assume those roles, both parties benefit. WalMart appears to be blamed for the fact that they are paying their employees at low rates, but as you mentioned, low wages are not a horrible thing. I think the key is that there's always going to be a need in a society for roles which do not require significant education, and as long as those roles can be filled, then why should any business be forced to pay more than the minimum required? WalMart is not on some quest to rid poverty, they're a huge business and they got that way by being lean an efficent. They didn't get that way by paying their employees well over what they deserve to appease every person who ever complained that they were under-paid. They'd never survive doing that.

Simply stated, WalMart is doing nothing wrong, they offer thousands of jobs and selling products at a low price. I think some are just getting greedy. If you're being paid too little or want to do something else, then go ahead and do so! Blaming WalMart is a poor excuse for one's own financial problems.

Either way, once again, great discussion everyone, especially Travis!
Sweatshops are a gray area for me, since in general I agree with the argument that "if you legally ban cheap labor, then you create a lot of illegal workers." This could mean creating child prostitutes in the name of ending child labor, which is obviously not the moral high ground. Krugman has a good article on this called "In Praise of Cheap Labor."

But it's impossible, on the other hand, to say that child labor is a good thing. It's just the lesser of two evils, perhaps the best realistic option. The fact that the issue involves children makes it even more confusing.

All I know is, like usual, throwing an ignorant law at the problem (like a minimum wage) will not do anything to solve it.
For a good reference website:

They do good work.
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