MacCleans on Walmart.
Canada's usually bad weekly news magazine, MacLeans, is being edgy this week (actually, last week now), offering a cover story defending Wal-Mart. To its credit, Steve Maich makes some good points about how the evidence of the Wal-Mart preditary effect isn't necessarily confirmed by data:
In 2002, Ryerson University completed the first major study on the company's impact on nearby small retailers, and found the opening of a new outlet is generally an economic boon for the whole area -- attracting other retailers and driving up sales at nearby eIn metropolitan areas, a new Wal-Mart was generally followed by an increase of $56.8 million in local sales, and the opening of 12.9 new stores. In rural areas, the commercial boost was $74.1 million and 16.7 new stores on average. Meanwhile, economic growth in areas with Wal-Mart stores far outpaced growth in places without them. The final line of the study said it all: "It is difficult to make the case that a Wal-Mart store actually puts other retailers out of business."
That study confirmed what Wal-Mart had long claimed: that its stores are economic generators, not predators. And, it seems, even small-business owners are coming around to that view. A 2004 Canadian Imperial Bank of Commerce survey of more than 1,800 small-business owners across Canada found that just 16 per cent of respondents said they had been hurt by competition from big-box retailers like Wal-Mart and Home Depot. Five per cent said the big boxes had actually helped them, while the vast majority claimed little or no impact.
Maich also cites data from Hewitt Associates showing that Wal-Mart associates routinely report high job-satisfaction levels reletiave to their counterparts at other Canadian firms.
It's good for this data to be out there. But as a serious piece on the Wal-Mart debate, the article misses the boat in more ways than one. The first problem is the sources. MacLeans isn't ideological (though it's been pandering hard to Alberta recently). But writing an article like this is supposed to convert or influence people who have reservations about Wal-Mart. Yet Maich chooses for his opinion-quotes a representative of the anti-union National Right to Work Legal Defense Foundation and economist Bruce Bartlett. Mods like me are open to defences of Wal-Mart, particularly when backed up by yummy statistics, but not so much when the justifications come from former Reagan tax advisors who routinely argue that inequality is a myth. More broadly, the way to defend an institution that's unpopular on the left is not to bring in a bunch of experts from the hard right, or representatives of the institution itself, to defend it.
But the article's bigger problems aren't with the defence of Wal-Mart so much as with the criticism of Wal-Mart's enemies. Maich essentially contends that Wal-Mart's critics -- "a broad array of activist groups and unions" -- are irrational, driven by "near-religious zeal" in their hatred of the corporate behemoth. But the people Maich shows ultimately making the decisions about whether to allow Wal-Mart into their communities are not activist groups and unions (who, the article shows, are relatively powerless), but city and town councils. These local governments are necessarily close to the grassroots, and directly accountable to local voters for their choices. If opposing Wal-Mart is anti-populist, the local population can reject the Wal-Mart opponents in the next election. In fact, the Cleveland example with which Maich leads off the article, supports this theory. There, the 78% of local residents who support the Wal-Mart development get their way in the end. The Democratic mayor who stands up to the United Food and Commercial Workers Union to help bring the Wal-Mart sides with what the people of her town want, the way any smart politician would. There's no evidence of heavy-handed liberal special interests carrying the day.
More generally, Wal-Marts may well be beneficial in the sort of downscale community to which the stores originally catered: areas where unemployment is high and development -- any kind of development -- is a priority. But in more densely populated urban areas where local proprietors can afford to charge higher prices to an upscale clientele and to pay higher wages (a form of market-based wealth redistribution), it can be an ugly, disruptive influence that increases overall income inequality by driving boutique wages down. Carol Foote and her 11,276 petition signers were perfectly justified to lobby to bring a Wal-Mart in Mirimichi. But that doesn't discredit the opinions of anti-Wal-Mart forces in Greater Vancouver where town and city councils have recently rejected Wal-Mart bids. In a way, this is the Tibout Sorting in action: the key is that communities, through their messy democratic process and the locational choices of the heterogenous population, makes the relevant decision.
More offputting still is MacLeans' obvious lack of sympathy for the labour movement and the "gradual death spiral" that makes it so desperate either to unionize Wal-Mart or to keep it out of unionized areas. Maich dismisses UFCW rep Andy Grossman's arguments about the larger "societal" implications of Wal-Mart and basically endorses Wal-Mart's view that its success "is an argument against the need for unionization". But Grossman's point is perfectly valid. The stakes here are not the sort of thing that can be determined by looking at worker-satisfaction surveys or sneering at the hyperbole of some Wal-Mart opponents. Robert Reich (who can be very good when he's not indulging his obsessive Clinton-hatred) wrote about the Wal-Mart dilemma early this year in the New York Times: in his view, Wal-Mart's success and controversy represents the fundamental divide between our rights and demands as consumers and our rights and demands as workers. In any one case, consumers are a huge body of people who gain marginally, while the workers are a relatively small body of people (in any one case) who are hit disportionately hard: about 0.4% of the American population works at Wal-Mart; over a third of Americans regularly shop there. Netting out the overall social cost or benefit is difficult and necessarily depends to some extent on normative or idoleogical judgements, as well as on accurate measures of the spillover between Wal-Mart's policies and those of other retail companies (Maich doesn't actually offer any statistics refuting the unions' claims that Wal-Mart drives down wages in its geographic and industrial vicinity). Netting out the social will -- what we as a society of workers are willing to give up for our consumer-side chasing after low prices and convenience -- is even more complex.
Reich focusses in part on the need for greater public debate. But there's actually lots of debate out there (much of it terrible) if you know where to look. Most people don't look because they aren't sufficiently interested, because they don't see the direct effects of these questions on their lives. And that's where, traditionally, the unions come in. MacLeans is right that the union movement sees Wal-Mart as essential to its survival, but that's not a confirmation of Wal-Mart's claim that it's all a cynical quest for more union dues. Saving itself requires that the union movement achieve a degree of relevance among the workers it hopes to represent. It does so by offering them tangible improvement in their working lives. If successful, this might even entail ending Wal-Mart's corporate philosophy as we know it; Wal-Mart apparently thinks so. It might entail some workers having to pay union dues even though they don't value the union. And -- as Maich's data suggest -- it might well result in majorities of Wal-Mart workers rejecting unionization in fair elections because they are exactly the type of self-selected individuals who value mobility more than stability and who are sympathetic to Wal-Mart's corporate credo of reducing consumer costs.
Right now, though, we can't know if this is the case. We can't know because Wal-Mart routinely blocks fair union elections (by shutting down stores if need be) and because half the Canadian provinces and all the US federal government have legislated difficult procedures for certifying unions, specifically manditory union elections. The empirical academic literature on unions is basically unambiguous in its conclusion that, without a card check regime (wihtout manditory elections), union drives fail to achieve certification except where support is already overwhelming. Some argue that's because of the opportunities for employer manipulation during the election drive; others argue it's because the public nature of card-check forces workers to sign cards even if they would reject a union in the privacy of the voting booth. But the fact remains that, without card check, union drives fail. And, while MacLeans dodges the topic completely, nobody can seriously argue right now that unions have too much power relative to their opponents in business.
So Wal-Mart may not be the evil force its opponents declare it to be. I'm quite open to the idea that it's not. But MacLeans is apologizing for more than Wal-Mart. It's apologizing for Wal-Mart's implicit contention that its model of capitalism -- harsh consumer-driven competition -- is undisputably the best, which in turn extenguishes the need for those who would modify the system to be heard. Taking the position of consumers over labour may well be the "grassroots" position as MacLeans' cover declares it to be. We're all consumers, and our interests are vital. But "consumer" is only one of our identities as citizens, even if it's our dearest and most easily tempted one. I'm not at all convinced that Wal-Mart embodies the best model of post-industrial civil society or that it couldn't be improved by having to go to the negociating table with its workers. Or that all of us wouldn't be better off if it did. Or that government shouldn't make sure those workers and their allies at least have a fair and obvious chance to make that choice.
In 2002, Ryerson University completed the first major study on the company's impact on nearby small retailers, and found the opening of a new outlet is generally an economic boon for the whole area -- attracting other retailers and driving up sales at nearby eIn metropolitan areas, a new Wal-Mart was generally followed by an increase of $56.8 million in local sales, and the opening of 12.9 new stores. In rural areas, the commercial boost was $74.1 million and 16.7 new stores on average. Meanwhile, economic growth in areas with Wal-Mart stores far outpaced growth in places without them. The final line of the study said it all: "It is difficult to make the case that a Wal-Mart store actually puts other retailers out of business."
That study confirmed what Wal-Mart had long claimed: that its stores are economic generators, not predators. And, it seems, even small-business owners are coming around to that view. A 2004 Canadian Imperial Bank of Commerce survey of more than 1,800 small-business owners across Canada found that just 16 per cent of respondents said they had been hurt by competition from big-box retailers like Wal-Mart and Home Depot. Five per cent said the big boxes had actually helped them, while the vast majority claimed little or no impact.
Maich also cites data from Hewitt Associates showing that Wal-Mart associates routinely report high job-satisfaction levels reletiave to their counterparts at other Canadian firms.
It's good for this data to be out there. But as a serious piece on the Wal-Mart debate, the article misses the boat in more ways than one. The first problem is the sources. MacLeans isn't ideological (though it's been pandering hard to Alberta recently). But writing an article like this is supposed to convert or influence people who have reservations about Wal-Mart. Yet Maich chooses for his opinion-quotes a representative of the anti-union National Right to Work Legal Defense Foundation and economist Bruce Bartlett. Mods like me are open to defences of Wal-Mart, particularly when backed up by yummy statistics, but not so much when the justifications come from former Reagan tax advisors who routinely argue that inequality is a myth. More broadly, the way to defend an institution that's unpopular on the left is not to bring in a bunch of experts from the hard right, or representatives of the institution itself, to defend it.
But the article's bigger problems aren't with the defence of Wal-Mart so much as with the criticism of Wal-Mart's enemies. Maich essentially contends that Wal-Mart's critics -- "a broad array of activist groups and unions" -- are irrational, driven by "near-religious zeal" in their hatred of the corporate behemoth. But the people Maich shows ultimately making the decisions about whether to allow Wal-Mart into their communities are not activist groups and unions (who, the article shows, are relatively powerless), but city and town councils. These local governments are necessarily close to the grassroots, and directly accountable to local voters for their choices. If opposing Wal-Mart is anti-populist, the local population can reject the Wal-Mart opponents in the next election. In fact, the Cleveland example with which Maich leads off the article, supports this theory. There, the 78% of local residents who support the Wal-Mart development get their way in the end. The Democratic mayor who stands up to the United Food and Commercial Workers Union to help bring the Wal-Mart sides with what the people of her town want, the way any smart politician would. There's no evidence of heavy-handed liberal special interests carrying the day.
More generally, Wal-Marts may well be beneficial in the sort of downscale community to which the stores originally catered: areas where unemployment is high and development -- any kind of development -- is a priority. But in more densely populated urban areas where local proprietors can afford to charge higher prices to an upscale clientele and to pay higher wages (a form of market-based wealth redistribution), it can be an ugly, disruptive influence that increases overall income inequality by driving boutique wages down. Carol Foote and her 11,276 petition signers were perfectly justified to lobby to bring a Wal-Mart in Mirimichi. But that doesn't discredit the opinions of anti-Wal-Mart forces in Greater Vancouver where town and city councils have recently rejected Wal-Mart bids. In a way, this is the Tibout Sorting in action: the key is that communities, through their messy democratic process and the locational choices of the heterogenous population, makes the relevant decision.
More offputting still is MacLeans' obvious lack of sympathy for the labour movement and the "gradual death spiral" that makes it so desperate either to unionize Wal-Mart or to keep it out of unionized areas. Maich dismisses UFCW rep Andy Grossman's arguments about the larger "societal" implications of Wal-Mart and basically endorses Wal-Mart's view that its success "is an argument against the need for unionization". But Grossman's point is perfectly valid. The stakes here are not the sort of thing that can be determined by looking at worker-satisfaction surveys or sneering at the hyperbole of some Wal-Mart opponents. Robert Reich (who can be very good when he's not indulging his obsessive Clinton-hatred) wrote about the Wal-Mart dilemma early this year in the New York Times: in his view, Wal-Mart's success and controversy represents the fundamental divide between our rights and demands as consumers and our rights and demands as workers. In any one case, consumers are a huge body of people who gain marginally, while the workers are a relatively small body of people (in any one case) who are hit disportionately hard: about 0.4% of the American population works at Wal-Mart; over a third of Americans regularly shop there. Netting out the overall social cost or benefit is difficult and necessarily depends to some extent on normative or idoleogical judgements, as well as on accurate measures of the spillover between Wal-Mart's policies and those of other retail companies (Maich doesn't actually offer any statistics refuting the unions' claims that Wal-Mart drives down wages in its geographic and industrial vicinity). Netting out the social will -- what we as a society of workers are willing to give up for our consumer-side chasing after low prices and convenience -- is even more complex.
Reich focusses in part on the need for greater public debate. But there's actually lots of debate out there (much of it terrible) if you know where to look. Most people don't look because they aren't sufficiently interested, because they don't see the direct effects of these questions on their lives. And that's where, traditionally, the unions come in. MacLeans is right that the union movement sees Wal-Mart as essential to its survival, but that's not a confirmation of Wal-Mart's claim that it's all a cynical quest for more union dues. Saving itself requires that the union movement achieve a degree of relevance among the workers it hopes to represent. It does so by offering them tangible improvement in their working lives. If successful, this might even entail ending Wal-Mart's corporate philosophy as we know it; Wal-Mart apparently thinks so. It might entail some workers having to pay union dues even though they don't value the union. And -- as Maich's data suggest -- it might well result in majorities of Wal-Mart workers rejecting unionization in fair elections because they are exactly the type of self-selected individuals who value mobility more than stability and who are sympathetic to Wal-Mart's corporate credo of reducing consumer costs.
Right now, though, we can't know if this is the case. We can't know because Wal-Mart routinely blocks fair union elections (by shutting down stores if need be) and because half the Canadian provinces and all the US federal government have legislated difficult procedures for certifying unions, specifically manditory union elections. The empirical academic literature on unions is basically unambiguous in its conclusion that, without a card check regime (wihtout manditory elections), union drives fail to achieve certification except where support is already overwhelming. Some argue that's because of the opportunities for employer manipulation during the election drive; others argue it's because the public nature of card-check forces workers to sign cards even if they would reject a union in the privacy of the voting booth. But the fact remains that, without card check, union drives fail. And, while MacLeans dodges the topic completely, nobody can seriously argue right now that unions have too much power relative to their opponents in business.
So Wal-Mart may not be the evil force its opponents declare it to be. I'm quite open to the idea that it's not. But MacLeans is apologizing for more than Wal-Mart. It's apologizing for Wal-Mart's implicit contention that its model of capitalism -- harsh consumer-driven competition -- is undisputably the best, which in turn extenguishes the need for those who would modify the system to be heard. Taking the position of consumers over labour may well be the "grassroots" position as MacLeans' cover declares it to be. We're all consumers, and our interests are vital. But "consumer" is only one of our identities as citizens, even if it's our dearest and most easily tempted one. I'm not at all convinced that Wal-Mart embodies the best model of post-industrial civil society or that it couldn't be improved by having to go to the negociating table with its workers. Or that all of us wouldn't be better off if it did. Or that government shouldn't make sure those workers and their allies at least have a fair and obvious chance to make that choice.
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