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Wal-Mart, Aiding America's Poor




11/29/09 (By Travis)

Top court backs Wal-mart in union dispute

11/27/09 Wal-mart closes a store in Canada in response to the unionization of its workforce there. Thus, prices remain low for all of us, especially the poorest Americans! A shame the company cannot be more blatant about its anti-union policy, but must converse in innuendo due to archaic labor law.



Posted 3/23/07 (By Travis)

Wal-Mart Pulls Application for Bank, Home Depot stands firm


    Unfortunately, Wal-Mart's attempt to help the poorest of the poor, and of course, make money by doing so, has been withdrawn. One might wonder, why there should be a need to 'apply' for some sort of 'banking license'? If a friend gives me some money to hold on to and I invest a little here and there and keep tabs on it and let him or her 'withdraw' whenever they like, am I committing a crime? I bet I'm committing two! Of course, I'm only joking, I am likely violating dozens of federal laws that could earn me years in prison. 


Posted 2/26/06

Should Wal-Mart Reduce Wages (Required Reading)

2/23/06 Alan Reynolds nails another one. Some highlights:

    Seattle Times columnist Bruce Ramsey notes that Washington's Medicaid plan "enrolls children from families of four with incomes up to $48,000 a year." No private plan can compete with a tax-financed scheme that costs nothing and pays all medical bills.

    The lobbying effort behind these bills comes from competing grocery store chains such as Giant, Safeway and Kroger, and from labor unions that carry their baggage. When Kentucky legislators discovered their Wal-Mart bill would also apply to Kroger, they quickly exempted Kroger by making the bill apply only to firms employing more than 25,000.

    Maryland's mandate does not compel Wal-Mart to spend a dollar more on employee compensation. All it demands is that Wal-Mart pays no more than 92 percent of compensation as wages (or non-health benefits). Compelling Wal-Mart employees to accept a larger fraction of their pay in the form of health insurance rather than cash is a particularly bad deal for housewives and students, who are usually covered under Dad's family plan. It is also a bad deal for seniors covered by Medicare.


    The law injures actual and potential Wal-Mart employees in Maryland, particularly housewives, students and seniors seeking relatively easy part-time work. Students who have low-priced health insurance through college are not even allowed to work full-time.

    Requiring big employers to devote a larger share of paychecks to the fixed cost of health insurance must give them an incentive to substitute full-time workers for part-time workers. That is bad news for those seeking part-time work. Mandating that a higher share of payroll be devoted to health insurance also gives employers an incentive to shun future job applicants with labor market disadvantages -- such as teenagers, elderly seniors, those with little schooling, those in poor health and those with an imperfect command of the English language. That is bad news for those at the bottom of the ladder of opportunity.




Posted 2/23/06

Wal-Mart bank ignites regulatory row

2/21/06 Financial Times 

    I've been meaning to write about this for some time. First, it is interesting how burdened with regulations the banking industry is. It is so complex that I won't even try to understand it. Yet, what is going on is still readily apparent. Entrenched interests are fighting against the creative economic destruction that results in healthy change and lower prices in the marketplace for all Americans. 

    Wal-Mart says it wants to use its Utah bank to cut credit and debit card processing costs and is not seeking permission for an interstate branch network.

    The Federal Reserve has never liked the state industrial banks, which also exist in other states and are exempt from the federal legislation prohibiting commercial companies from engaging in banking activities.

    What other companies besides 'commercial companies' would engage in banking? Isn't banking a 'commercial' activity? Why does the Federal Government care what companies get into banking? 

    Mr Greenspan argued that state-chartered banks “threaten to remove Congress’ ability to determine the direction of our nation’s financial system with regard to the mixing of banking and commerce and the appropriate framework for prudential supervision”.

    He added: “These are crucial decisions that should be made in the public interest after full deliberation by the Congress; they should not be made through the expansion and exploitation of a loophole that is available to only one type of institution chartered in a handful of states”.

    Heh heh... of course, what I would argue is that the public interest is best served when Congress's influence is 'threatened' and its power to do what it thinks is in the public interest is removed. But didn't this 'laissez-faire' attitude lead to the great depression? Only if one believes public school books. In reality, it was Federal control and Federal policies that contributed to the crash and, most importantly, strongly inhibited the recovery. 

Piggy Banker

2/12/06 Washington Post 

    Wal-Mart officials, in letters to Congress, in the company's FDIC application and in interviews, say it too would use the Utah bank for limited purposes, namely to accept large deposits brokered through third parties and, by removing the middleman, to lower costs of back-room operations by tens of millions of dollars a year in the processing of 2.5 billion credit and debit-card transactions.

    But sadly, Wal-Mart had big dreams that have already been scaled back:

    That's a change in plan from a few years ago, when the company said it wanted to enter full-service retail banking because that's what its customers want. A spokesman for the company in 2003, for example, said that because Wal-Mart could not find enough banks willing to open branches in its stores, it wanted to do it on its own.

    At about the same time, Wal-Mart chief executive H. Lee Scott Jr. said in an interview with the Los Angeles Times that the company wanted to be gung-ho into financial services, including mortgages.

    Since then, Wal-Mart has changed its approach, says Jane Thompson, president of Wal-Mart Financial Services. The company has "read the tea leaves," she said. The in-store banks will now be outside partners.

    If in fact, Wal-Mart was able to enter the banking industry and do it better and cheaper than its competitors, who would be the chief beneficiaries? That's right, lower income Americans, who are Wal-Mart's top costumers. Another example of big expanded regulatory happy government hurting the poorest Americans. 

    Charles Fishman, author of a new book, "The Wal-Mart Effect," chronicling how the company's growth and low-price philosophy influences the U.S. economy, is undecided: "I don't know if Wal-Mart would be good or bad for banking in the long run. But I'll bet ATM fees would come down pretty quick."

    But others say low pricing is king. "Wal-Mart sees banking as an opportunity to give the customer a better deal," says Howard Davidowitz, founder and chairman of Davidowitz & Associates Inc., a New York retail consulting and investment banking firm. "That's what Wal-Mart's about. That's why they have demolished the food and toy industries. If it's better for the customers, then that's the way it ought to be."

    The FDIC has received 1,500 comment letters on Wal-Mart's application, the most it's received on an issue. Many support Wal-Mart's bid to own a bank, but most are from banks and bank-lobbying groups across the country opposing it.

    And customers do love having a bank in the stores.
    (added to Wal-Mart, Aiding America's Poor)


Posted 11/29/05

Progressive Wal-Mart. Really. [Required Reading]

11/28/05 Washington Post Sebastian Mallaby, who is on the WP editorial board, writes a fantastic piece on Wal-Mart. I wonder if they will let him stay on after this... :)

    As a force for poverty relief, Wal-Mart's $200 billion-plus assistance to consumers may rival many federal programs. Those programs are better targeted at the needy (I dispute this), but they are dramatically smaller. Food stamps were worth $33 billion in 2005, and the earned-income tax credit was worth $40 billion.

    Wal-Mart's critics also paint the company as a parasite on taxpayers, because 5 percent of its workers are on Medicaid. Actually that's a typical level for large retail firms, and the national average for all firms is 4 percent. Moreover, it's ironic that Wal-Mart's enemies, who are mainly progressives, should even raise this issue. In the 1990s progressives argued loudly for the reform that allowed poor Americans to keep Medicaid benefits even if they had a job. Now that this policy is helping workers at Wal-Mart, progressives shouldn't blame the company. Besides, many progressives favor a national health system. In other words, they attack Wal-Mart for having 5 percent of its workers receive health care courtesy of taxpayers when the policy that they support would increase that share to 100 percent.

   Added to 'Wal-Mart, Aiding America's Poor'.


Posted 11/13/05

Wal-Mart calls for minimum wage hike

10/25/05 CNN Wal-Mart CEO Lee Scott said he's urging Congress to consider raising the minimum wage so that Wal-Mart customers don't have to struggle paycheck to paycheck. Scott told Wal-Mart directors and executives in a speech Monday that he believes "it is time for Congress to take a look at the minimum wage and other legislation that can help working families."

    I have defended Wal-Mart on this site and described them as the company that has done more for America's poor than any other company in this country's history. As pointed out, raising the minimum wage hurts the poorest of the poor the most. One would think that Wal-Mart, being on the receiving end of similarly demagauging tactics for it's own employment practices, would understand the economics of the minimum wage and stick up for the poorest of the poor. However, since Wal-Mart employs no one (or very few) folks at the minimum wage, perhaps the executives have made a calculation that by coming out in favor of raising the minimum wage they gain some valuable PR in the media (by correctly pointing out that Wal-Mart's customer base is with the poorest Americans who save big by shopping at Wal-Mart) without the possibility of hurting their business. (Added to 'Wal-Mart, aiding America's poor').


Posted 10/21/05

The strange business of protesting jobs that may be better than yours

9/14/05 Las Vegas Weekly A well written story that illustrates the hypocrisy of the Unions better than anything I've posted thus far. To add a personal element, this Wal-Mart is so close to me I could walk to it and I shop there regularly. Ever since I've been here I've noticed what I thought were Union members picketing the Wal-Mart with signs urging people not to shop there. But I was mistaken on who the protestors were. This story explains:

    They're not union members; they're temp workers employed through Allied Forces/Labor Express by the union—United Food and Commercial Workers (UFCW). They're making $6 an hour, with no benefits; it's 104 F, and they're protesting the working conditions inside the new Wal-Mart grocery store.

    The Union criticizes Wal-Mart for not paying high wages and then the same Union hires people at $6 an hour with no benefits?

(added to 'Wal-Mart, Aiding America's Poor', 'Unions', and 'Required Reading')





Posted 8/19/05

Wal-Mart struggles while retailers shine

8/16/05 Seattle Post-Intelligencer Wal-Mart Stores Inc. struggled in the second quarter and muted its earnings outlook on Tuesday, again blaming higher gasoline prices for curbing the spending plans of its low-income shoppers. In contrast, shoppers at moderate-price department store retailer J.C. Penney Co. Inc. and at upscale Nordstrom Inc. focused on fashion rather than fuel, resulting in strong results and an upbeat outlook.

    Besides repealing socialism and limiting government 'help' to the poor, what event has helped all of these folks the Democratic party care about the most? What company has done more for poor Americans than any other company in the history of the world? The answer: Wal-mart. Wal-mart saves low income people billions of dollars each year which translates into higher economic growth and better lives for these populations.

The Price is Right

8/3/05 New York Times (Op-Ed) First, Wal-Mart hasn't just sliced up the economic pie in a way that favors one group over another. Rather, it has made the total pie bigger. Consider, for example, the conclusions of the McKinsey Global Institute's study of United States labor productivity growth from 1995 to 2000. Robert Solow, a Nobel laureate in economics and an adviser on the study, noted that the most important factor in the growth of productivity was Wal-Mart. And because the study measured productivity per man hour rather than per payroll dollar, low hourly wages cannot explain the increase.

    Second, most of the value created by the company is actually pocketed by its customers in the form of lower prices. According to one recent academic study, when Wal-Mart enters a market, prices decrease by 8 percent in rural areas and 5 percent in urban areas.

    Wal-Mart's customers tend to be the Americans who need the most help. Our research shows that Wal-Mart operates two-and-a-half times as much selling space per inhabitant in the poorest third of states as in the richest third. And within that poorest third of states, 80 percent of Wal-Mart's square footage is in the 25 percent of ZIP codes with the greatest number of poor households. Without the much-maligned Wal-Mart, the rural poor, in particular, would pay several percentage points more for the food and other merchandise that after housing is their largest household expense.

   Wal-Mart sponsored a study which estimated that: "Wal-Mart's entry into the local market would save county shoppers about $1.78 billion annually and southern California shoppers $3.76 billion annually, or nearly $600 per household." The study argues that those savings, redirected to other spending, would create up to 36,000 jobs, compared with the maximum of 5,000 jobs lost among competitors.

    Why would a political party work to deliver such a debilitating blow to the poorest Americans? If you are a regular reader of this site you probably already can guess the answer: Unions


Posted 8/20/05

Added to 'Wal-Mart, aiding America's poor'

Wal-Mart's Calif. Supercenters Delayed

3/19/05 Associated Press Special interests use environmentalism for their own ends: In many cases, the suits have been filed on behalf of obscure, often secretive community groups. Some have been backed by labor unions leading an anti-Wal-Mart fight in California, while others have few apparent sources of money. They're delaying the opening of some stores by months or years and slowing Wal-Mart's plan to build up to 40 new supercenters in a state that's one of the company's few major U.S. growth opportunities. The suits also come at a time when the unions representing grocery store workers, primary the United Food and Commercial Workers, and Wal-Mart's competitors are worried about the effects of the discounters in California. 

    The UFCW, a 1.4 million-member union of grocery store workers, is one of Wal-Mart's biggest foes nationally, claiming that nonunion supercenters threaten their jobs. The union's Web sites are filled with anti-Wal-Mart sentiment and the union's members show up at California's city halls to oppose supercenter plans.

    While Texas has more than 200 and Florida more than 100, California has only three of Wal-Mart's 1,700 supercenters nationwide.


See also 'Free Trade'

See also 'Unions'


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