----- Original Message ----- From: "Nick Arnett" <[EMAIL PROTECTED]> To: "Killer Bs Discussion" <[email protected]> Sent: Wednesday, December 21, 2005 7:15 PM Subject: Re: Wal-Mart efficiency (was Re: My annual Xmas tirade...)
On 12/21/05, Dan Minette <[EMAIL PROTECTED]> wrote: > > > >That it drives out small businesses that create qualitative and > >hard-to-quantify benefits? > > Sure, it drives out small businesses. Small businesses are rather > inefficient at selling, and have to pass the cost on to the customer. > There is a certain romanticism about small businesses. They still exist, > of course, but they sell to higher income people who don't mind paying a > significnt premium. >You're writing as though efficiency at selling is the ultimate good. What >if it isn't? As a matter of fact, I'm darn sure it isn't. And I suspect >that the economy as a whole is less efficient when sectors become dominated >by a few large players. Game theory, as well as many simulations, strongly >support that idea. But, the efficiency improvement from Wal-Mart is documented. It is really efficiency. >All that we *know* Wal-Mart is good at is getting big >and keeping prices low. Not being a worshipper of low prices, I'm not >willing to let that be the only "bottom line." And cutting unnecessary costs. Wal-Mart has driven up _productivity_. >Why shouldn't working class people shop where their money goes the > furthest? What is wrong with offering something someone wants. >People want low prices; Wal-Mart offers low prices, therefore Wal-Mart is >good. Is that what you're saying? Cutting costs 10% is the same as getting an 11% raise. Wal-Mart's innovations have >What about all the other things people want -- jobs that pay well, health insurance, less dependence >on traveling long distances by car to shop and so forth? People want those, too, and >Wal-Mart isn't delivering. They're taking away. Small businesses offer less in the way of health insurance than big businesses. The hardest hit with health insurance now are those who work for small businesses. In fact, Wal-Mart has now suggested federal involvement mandating health insurance for all retailers. They said that they can compete in that environment, but cannot offer $1000/month health packages to their workers if it wasn't required. I tell you what. If I went around to smaller retail shops and told sales clerks that I was doing an informal survey, how many do you think would be making >$10.00/hour? How many would have health insurance. From talking to people I know who work those types of jobs, I've been told that Wal-Mart jobs look good compared to the average sales job in this area. I've tried to find statistics on this, and I've found from 2002, the following for convenience stores: http://tinyurl.com/d9wdq We see that the mean salary for full time clerks was $7.33/hour. IIRC, this is less than Wal-Mart's average...and not just of full time employees. Part time employees tend to make less than full time employees. > Now, you can argue that lower income people don't know what's good for > them....but a lot of them seem to have as much or more sense than the > folks > I see in designer clothes. >Yes, I could, were I an elitist jerk. So don't go putting those words in my >mouth. Should have been "one can argue"....I didn't mean to imply that you do believe that....was using "you can" as the less formal version of "one can" I've seen the false consciousness arguement come up over and over again, so I wanted to head it off before someone brought it up. From what you've said, you agree that consumers are capable of acting in their own best interest. So, if they want to drive 5-10 miles to save money, then we should assume that's a good tradeoff in their eyes....and that they've made a better choice for themselves than anyone else could make for them. So, Wal-Mart is frequently the best choice for low income shoppers because they make a rational choice to shop there instead of at a higher priced small store. The only national example of small stores that I found (convenience stores), pay their full time clerks less than the average Wal-Mart salary. M >The overwhelming evidence is that Wal-Mart stores improve the economics of > the people who shop there vs. buying items at higher price stores. >So this is the message to the people left behind by Wal-Mart efficiency -- >Sorry you're out of work, your house is in foreclosure and you have no >medical care... but be of good cheer, Wal-Mart is rolling back prices! I'm >sure you'll be comforted knowing that if you had any money, it would go >further at Wal-Mart. So far, efficiency has worked better than inefficiency. Productivity is the only possible foundation for rising average wage. How different is this from people losing jobs, such as secretaries, when computers make things so much more efficient? This is one area in which I agree with Brin strongly....factories and efficiencies created the middle class. >Low prices are not the bottom line. Corporate profits are not the bottom >line. If we're to be a decent society, we have to take much more into >account. If everyone lived as though they truly loved each other, we wouldn't need much in the way of structure. But, people haven't been, are not, and will not be perfect in the future. Any system has to work when folks think more of themselves and their own families than other folks. It's not that we shouldn't care, it's that we should build a system that works with people as they are, not dependant on a general improvement in the morals of everyone. I see inefficiency as money down the toilet. Efficiency is the foundation of the world we live in. Zambia has a much much less efficient economy, mostly separated from world trade, and people are near starvation there. When the average farmer produces 5% more food than his/her family needs, then there is little room for error, as well as little chance for more than a few to rise above hand to mouth poverty. When Dan M. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
