The journey from there to here

As the movie "WalMart: The High Cost of Low Price" is debated and promoted on every media news source, I wanted to respond from my OWN experience with the retail giant. I was an employee there for 9 months, not long enough to be a career employee, but long enough to gain some insight into the corporation, which is a far cry more than what most WalMart critics possess.

What I saw at WalMart was a business with a plan, a purpose, and a well thought out approach to what they do.  One of the first things you will note after you are hired at WalMart is that they will show you a video that strongly discourages unionizing. This would seem to be outrageous to union advocates, but I suggest a closer look.

Unions were meant to provide bargaining power for SKILLED labor. They are the modern equivalent of the guilds, and meant to ensure that your labor isn't undervalued. The vast majority of WalMart workers are unskilled, and many of their skilled labor learned their trade FROM WalMart.

Unions drive UP the cost of the product to the end user, and are one of the primary catalysts for loss of American jobs. Don't believe me? Ask any GM worker.

As to the assertion that WalMart managers teach their employees how to apply for welfare and medical benefits from the state, I have to say that, while that may be the case with individual managers, it is NOT universally true.

WalMart DOES offer medical benefits to all full time and a fair number of part time employees who've been employed long enough to be eligible. Although the premiums are high, they are FAR below the cost of what you would pay for your own insurance out of pocket. Frankly, I think this is one point where WalMart could improve, but not for the reasons most critics suggest. WalMart should use the same principles it uses in purchasing goods to "bid out" the lowest possible health insurance premiums from prospective insurers. They could further increase their purchasing power by using the same company to offer small business insurance for the small businesses that use Sam's Club as their primary supplier.

WalMart's management policy offers incentive for the managers to use POSITIVE reinforcement techniques to encourage better productivity from their employers. When management jobs are open, employees are notified and given the opportunity to apply for the positions on the same computers that are used for their training (their CBL -- Computer Based Learning -- training system, by the way, is a very good system).

Employees also have an opportunity to increase their earning potential through a generous stock match program offered to ALL employees. They can have the purchase of stock deducted from their paychecks, and the company matches a portion (if I remember right, it was 15%). There are also profit sharing opportunities and a 401k program.

WalMart offers a Cost of Living Raise to their employees (from 3-5% based on their performance) every year, and offers merit based increases at the discretion of management. Very few quality employees remain at the pay level at which they were hired.

Critics will point to businesses that downsize and close doors because WalMart comes to town, but will fail to point out that most of those businesses downsized BEFORE WalMart opened their doors, in ANTICIPATION of WalMart stealing their business. It's my personal belief (and experience) that the resulting poor customer service makes the decline of their business a self fulfilling prophecy (in our community, one store replace all but one register with self checkout lanes. It's virtually impossible to get a real life cashier. I don't shop there for THAT reason alone, as I personally rarely shop at WalMart for groceries...but I digress).

Critics further argue that WalMart receives huge tax benefits for locating within a community. While that may appear to be a legitimate contention at the surface, the bulk of the blame lies on the communities that PAY the tax benefits, rather than WalMart. Their method of reducing costs is just common sense, from a stockholder's perspective.

As for WalMart buying goods from overseas, this is to me perhaps one of the most ridiculous complaints because it comes from liberals who insist that we need to industrialize third world nations. We obviously cannot industrialize third world nations unless we buy their products.

What I found in my time at WalMart was a corporation with a solid business model and a plan for growth that could well be used as an instructive for other businesses. While I am less than pleased with the end results of WalMart's growth within communities, I'm less inclined to put the blame on WalMart and FAR more inclined to blame the local stores that have failed to adapt to the times and that have neglected the customer service and philosophies that drive good businesses.

When I spend my dollars, very few go to WalMart. The quality of WalMart's goods is usually inferior to that which I can find at specialty stores, and the customer service that often accompanies specialty store purchases is frankly acking at the retail giant. But when my primary purchasing consideration is savings, if WalMart has what I need, I have zero problem buying there.

WalMart is not a perfect company. But, for that matter, perfection is an impossibility, even among businesses with a FRACTION of the employees that WalMart hires. But WalMart has done more to reduce prices for the working poor than just about any other corporation worldwide.


Comments
on Nov 26, 2005

Umm, I work at Wal-Mart....and it sucks....it sucks a lot.

They treat their employees like shit.  But hey, who doesn't, right?

Trinitie

on Nov 26, 2005

They treat their employees like shit. But hey, who doesn't, right?

That could have a lot to do with the management of that particular store. I had a different experience, as have many others I've known. Thanks for weighing in on the issue.

on Nov 26, 2005
"We obviously cannot industrialize third world nations unless we buy their products."

The problem is that the big buyers pay the farmers very little and pass the price benefits customers enjoy on to the provider.
on Nov 26, 2005

The problem is that the big buyers pay the farmers very little and pass the price benefits customers enjoy on to the provider.

Very little by OUR standards. In the case of third world labor, what companies like WalMart pay often amounts to two or three times the average wage in the area.

If we were to require these companies to pay their employees their country's monetary equivalent of $5.15 an hour, we would destabilize the economy and DESTROY those nations. Those nations are where the US was economically about 120 years ago. A FAR simpler solution would be to financially ENCOURAGE (NOT legally force) countries that do business overseas to support an economic development plan to build up those countries' economies over time.

on Nov 26, 2005
Excellent article Gid, though the Wal*Mart bashers will continue to cry about Wally world and will just keep bringing on individual tales of woe.

As you point out, Wal*Mart is in business to do business. They aren't responsible for all of the world's ills, nor should they be. Also as you point out, having Wal*Mart, or any corporation (such as Starbucks, another favorite target of some, for their purchasing of non "fair trade" beans in many cases) over-spend in a target area just because doesn't solve the problems there or here. It just makes the economy worse in both places, and raises costs to levels that gives their competitors unfair advantages over them.

For people that don't like the low wages at Wal*Mart, who do you blame? Remember, as Gid points out, wages don't remain stagnant if the employee merits and increase. If you work for Wal*Mart and carry around an "I don't care" bad attitude, then of course you'll likely never get any merit increase. When you start there with nothing, why should you expect to be paid a fortune just based on your potential as en employee?

The fact is that the U.S. economy, and ones like it, have various rungs for various levels of employees. Those that worked hard, became well educated, and tried to excel likely landed somewhere much higher on the labor scale than Wal*Mart. Those that didn't work so hard, well, they land a lot lower. Who is to blame for that personal failure? Ooops, sorry, I said personal failure and gave away the answer.

Anyway, if want to avoid Wal*Mart for various reasons, then you are welcome to, but keep in mind that having Wal*Mart as a part of the economy provides many unseen benefits to you too. You will still likely see lower prices at other outlets because they have to keep their prices somewhat in line with the competition. Unless you are prepared to walk into a store and pay the full MSRP (Manufacturer's Suggest Retail Price) and never buy anything at "off prices" or "sale prices", then I would suggest your bias against Wal*Mart has no bias in reality.
on Nov 26, 2005
Walmart does target small local businesses and try to run them out. My uncle owned a small independent sporting goods store, more hunting and fishing than balls etc. When Walmart came to town they would run ads and place signs on their counter saying that their prices were better than his and then compare two different guns. It didn't work. He did stay in business, more because of his service level and customer loyalty and ended up selling the business a few years ago.

I'm not saying Walmart is the evil empire but I know in this once instance that they were actively targeting a small local business. And hey I guess all's fair in love and war as the say but is it right?
on Nov 26, 2005

Loca,

If your local WalMart used his business name directly in their in store advertising, that was the decision of the department manager, NOT the corporation. That's not a tactic the corporation actively encourages, especially since it could open the door to further litigation.

WalMart DOES strive to get as much of the business in a community as they can, there's no denying that. That's not ethical OR unethical, it's good business. Your uncle's story, however, shows why the system works. It's clear that the better customer service that he provides (WalMart sporting goods employees know next to NOTHING about the guns they sell, as a general rule) plus his local business status kept him afloat.

About half of the products sold in WalMart are products I would NEVER buy at WalMart, no matter HOW low the price. WalMart simply doesn't provide quality with that price (I have spent over $100 in work pants over the past five months at WalMart because there's no competitor that carries them in my size. I would certainly RUSH to buy a $50 pair of QUALITY slacks rather than the crap that lasts about two weeks from Wally World). 

on Nov 26, 2005
Wally World's too high end for me. Dollar General store and thrift shops, baby!
on Nov 26, 2005

Another Gid masterpiece!  I am surprised you are not in management at a big box store!  You really need to start selling a product.  A Product called Gideon!

I would hire you.  Dont sell yourself short.

on Nov 26, 2005
For my wife and I, working at Wally World was a pretty good time. She worked full-time, working her way up to Lead Customer Service Manager (CSM); I worked as a night stocker.

Because of other situations we didn't need the insurance so I can't say much about that. I do know that we ended up making a lot of extra money from the stock (it was more than enough to finance our move to Wisconsin). The managment of that particular Wal~Mart was as employee friendly as management can be. There were a lot of lunch parties with anything from pizza to T-Bone steaks served.

The yearly inventory bonuses were great too!!


As far as what Wal~Mart could do to reduce the insurance premium, you're right, they could do a lot of things, but until they run into a shortage of workers willing to accept the current terms... why should they?
on Nov 27, 2005

Another Gid masterpiece! I am surprised you are not in management at a big box store! You really need to start selling a product. A Product called Gideon!

Well, this area doesn't have a whole lot of business. I'm hoping to get my foot in the door in writing, to tell the truth.

on Nov 27, 2005

As far as what Wal~Mart could do to reduce the insurance premium, you're right, they could do a lot of things, but until they run into a shortage of workers willing to accept the current terms... why should they?

There's no compelling reason why they should. But I believe WalMart IS a good business and if they leveraged their power this way, they'd definitely show it.

But the critics, of course, would still whine. Socialists do not like any proof that our way of life WORKS!