Saturday, October 29, 2005

Walmart, the high cost of low prices

Robert Greenwalds latest movie is about Walmart. I've written a bit about him and his work here, here, here and here.

I have yet to see the movie, but the trailers on the web site and this review by really has me anxious to see it.

The premiere week is November 13-19 nationwide, and unfortunately I'll be out of the country that week. You can find a screening through the web site, as he's following a very non-traditional distribution system. Rather than distribute through the mainstream movie houses and DVD sales channels, and rather than be subject to the implicit censorship that happens in those channels, he is doing this as direct-to-the-people as possible. Partly this is because a goal of the movie is to build a movement, just like his earlier movies had a goal to build an anti-Bush movement.

Apparently in this movie he documents the image of Walmart destroying small town economics and underpaying their employees. The story has been around for awhile, and occasionally on the news there will be reports of locals fighting against Walmart building a store in their town.

For example (from the buzzflash interview):

BuzzFlash: A couple of things we've read about Wal-Mart astonished us – one in a book that came out this summer, and there's another book coming shortly, on Wal-Mart. But one of the two of the things was that in some states – I know in Arizona - I've read that Wal-Mart is the number-one corporation for having employees on Medicaid.

Robert Greenwald: Yes, there's this whole section of the film where we go into this fact. Wal-Mart - by design, by pattern, by system – and we have managers on camera talking about this – they pay their employees so little – and this is a corporation that made $10 billion last year – they pay their employees so little, that the employees are encouraged and guided to get public assistance, Section 8 housing, food stamps, and various healthcare plans provided by the states. It's scandalous that everyone's tax dollars should be going so that Wal-Mart does not have to pay its employees decent wages or benefits.

There's much more along those lines. To think that people who have a full time job (oh, wait, Walmart forces their employees to work only 35 hours a week max so that they aren't full time) are being paid wages under the federal poverty line... and to think that Walmart is effectively subsidized by the government in this circuitous fashion ... this is outrageous.

At the same time this is not a new effect.

In 1951 or so my Grandparents bought a Hardware store franchise in Harrisonville MO. They ran that store for nearly 25 years. The last few of those years saw competition from large retailers on the edge of town. This wasn't Walmart, as Walmart hadn't really begun yet in 1970, but some other large chain. They were towards retirement age anyway, but that large chain really damaged the business leading to its death. They'd spent 20-25 years building that business, and by all rights should have been able to sell it as a going concern, but instead had to liquidate.

While Walmart may be the most successful of this kind of business, the culprit is really a general wave in retail sales operation. The example in the hardware store business is Home Depot and Lowes, between the two of them the mom-n-pop hardware stores like my Grandfathers store has basically disappeared.

The movie isn't yet available but this book: The United States of Wal-Mart looks to be right up the same alley.