View Full Version : WAL-MART vs AMERICA
rusdancer
05-15-2011, 11:23 AM
Very interesting discussion!You know,there are no Wal-Marts in DC.In MD and VA,yes,but not here.
eagle2
05-15-2011, 01:04 PM
It's important that the blue collar workers and retirees who hold WalMart shares in their 401k's and pension funds to get their 2.6% payout.
No it isn't. It's not Walmart's responsibility to provide for the pension funds of others or 401k plans. If investors are looking for stocks with dividends, there are plenty of others besides Walmart.
A. every 'poor' American will be worse off if WalMart raises prices for basic foods, clothing etc.
Again, Walmart can raise employee's pay without raising prices.
B. some REAL WORLD US 'poverty' statistics ...
(snip)"The following are facts about persons defined as "poor" by the Census Bureau, taken from various government reports:
Forty six percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a threebedroom house with oneandahalf baths, a garage, and a porch or patio.
Seventy six percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.
Only 6 percent of poor households are overcrowded. More than two thirds have more than two rooms per person.
The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
Nearly three quarters of poor households own a car; 30 percent own two or more cars.
Ninety seven percent of poor households have a color television; over half own two or more color televisions.
Seventy eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
Seventy three percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.
As a group, America's poor are far from being chronically undernourished. The average consumption of protein, vitamins, and minerals is virtually the same for poor and middleclass children and, in most cases, is well above recommended norms. Poor children actually consume more meat than do higher income children and have average protein intakes 100 percent above recommended levels. (snip)
from http://www.heritage.org/Research/Reports/2004/01/Understanding-Poverty-in-America
According to the site, these figures are from 2001. Things have gotten much worse for the poor since them. I'm also skeptical of how accurate these statistics are. I don't think it's likely that many poor people own a house worth $86,000.
Well in global economic terms, they don't !!! The business definition of the 'economic value' of an employee is the amount of additional revenue they can generate for their employer. In more than a few cases, $7.50-$8.00 an hour US minimum wage pay rates ( plus mandated employee salary based worker's comp, disability, employer SSI tax etc. which the employer must also pay ) cost the employer more than the minimum wage employee is able to generate in additional revenue for their employer. This is why WalMart continues to add 'self-check out' automation !
~
I have yet to see a Walmart with a self check-out line. The store I've been to that have self checkout lines haven't eliminated any cashiers, they just added more checkout lines.
Hungryeyes
05-15-2011, 01:10 PM
Originally Posted by Melonie
Well in global economic terms, they don't !!! The business definition of the 'economic value' of an employee is the amount of additional revenue they can generate for their employer. In more than a few cases, $7.50-$8.00 an hour US minimum wage pay rates ( plus mandated employee salary based worker's comp, disability, employer SSI tax etc. which the employer must also pay ) cost the employer more than the minimum wage employee is able to generate in additional revenue for their employer. This is why WalMart continues to add 'self-check out' automation !
~
Nooo, its b/c they are cheap and greedy!
minnow
05-16-2011, 12:23 AM
Personally, I'm amazed that some people have no problem at all requiring a billionaire Walton heir to give up their inherited wealth or WalMart stock dividends, while at the same time giving fellow billionaire Steve Jobs or Bill Gates a pass. Where WalMart employs hundreds of thousands of US workers ... albeit at low pay rates ... Apple and Microsoft have ELIMINATED US jobs by the tens of thousands in favor of <$2 an hour outsourced labor writing code in Mumbai or assembling I-Pads in China. Where WalMart must set prices at levels below their competitors, Microsoft and Apple have a de-facto US gov't sanctioned 'monopoly' market where they can charge whatever they choose knowing that they are legally protected from direct competition. Where WalMart must pay US corporate taxes on virtually every dollar earned from US sales, Microsoft and Apple are provided with a legal loophole that allows them to transfer 'ownership' of their software / intellectual property to a division in a low tax country like Ireland thus escaping billions in US corporate tax liability.
But nobody seems to be calling for Jobs or Gates ( or their stockholders ) to make a 'sacrifice' in order to restore former US jobs or to collect US corporate taxes on software sales. Remember that every US job that Microsoft and Apple eliminated is one more underemployed / unemployed American that may be eligible for those expensive taxpayer funded social welfare benefits.
Why is that ? ( hint - check political contributions made versus the recipients of those contributions @! ). Obviously compared to WalMart's 3.89% net profit margin, Microsoft's 31.8% profit margin or Apple's 24.3% profit margin, the latter ( and thier stockholders ) are in a far better position to make such a 'sacrifice'.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
OK, Mel, I'll do it: I think that Bill Gates could (should) have forgone ~ $10B or so of his ~ $50B fortune made over several decades in the form of price reductions on his software passed on to Microsoft customers. Furthermore, I doubt that having net worth of "only" $40B would cause anyone to pack up their marbles and "go John Galt" on everyone.
I'll also correct my earlier post- erroneously transposed ~$2K figure per Walmart store worker into cost per taxpayer. My bad. Actual cost per taxpayer for supporting low WM wages is probably more like $20/taxpayer. I've likely saved a few Benjamins per year with my WM purchases. Myself (and others) shop at WM for reasons other than low prices, especially the 24/7 store hours. This likely improves WM bottom line in ways that several other stores with more limited hours don't do. As for my 401K, ONE of my funds (conservative stock fund) has WM comprising just 0.4% of fund total holdings. So, many retirees aren't that dependent on WM for retirement income.
That said, I don't think its a terrible ammount of skin off peoples bones to improve the lot of WM workers somewhat.
Melonie
05-16-2011, 03:38 AM
I think that Bill Gates could (should) have forgone ~ $10B or so of his ~ $50B fortune made over several decades in the form of price reductions on his software passed on to Microsoft customers
Yes ... but ! Thanks to a de-facto US gov't monopoly 'license' for Windows and other software, Gates could charge high prices and achieve a 31% profit margin with little or no risk of losing market share to a competitor. This is NOT true for WalMart.
I have yet to see a Walmart with a self check-out line. The store I've been to that have self checkout lines haven't eliminated any cashiers, they just added more checkout lines.
Apparently they started implementing self-checkout automation in states that have an above federal level state minimum wage and/or above average costs of state unemployment / comp coverage for employees. Every WalMart in NY has them already. And while the original number of 'human' check out lines may still be in place, half or more don't have 'human' check-out clerks available unless it's 'black friday'. Don't worry because wherever you are your local WalMart store will get them eventually.
rickdugan
05-16-2011, 06:32 AM
No it isn't. It's not Walmart's responsibility to provide for the pension funds of others or 401k plans. If investors are looking for stocks with dividends, there are plenty of others besides Walmart.
Again, Walmart can raise employee's pay without raising prices..
Nor are the poverty statistics in America Wal-Mart's responsibility. Nor, for that matter, is it the responsiblity of Wal-Mart to pay more for a particular job than the market deems it is worth.
But Wal-Mart's shareholders, including the mutual funds held in my kids' college plans as well as my retirement plan, would probably disagree with your assessment as to who Wal-Mart is responsible to. Company management reports to a board of directors, who is elected by the shareholders. If Wal-Mart starts placing personal or social goals over financial ones, management may be replaced by the Board. And if the Board is not doing its job in overseeing the company's management, it may be replaced with one that will through the shareholder proxy voting process.
According to the site, these figures are from 2001. Things have gotten much worse for the poor since them. I'm also skeptical of how accurate these statistics are. I don't think it's likely that many poor people own a house worth $86,000.
And how is this relevant to a discussion of Wal-Mart? Wal-Mart is not responsible for poverty in America.
Eric Stoner
05-16-2011, 07:30 AM
It's ironic that Eagle posted those poverty stats. Under Obama, one in six Americans now gets Food Stamps. Obama has become the "Food Stamp" President.
Kellydancer
05-16-2011, 11:46 AM
It's ironic that Eagle posted those poverty stats. Under Obama, one in six Americans now gets Food Stamps. Obama has become the "Food Stamp" President.
Because there aren't as many jobs now courtesy of outsourcing and H1-B visas (and all the other visas). That's not the only reason there is an increase but many people now getting any form of assistance were people that in the past had jobs, including SKILLED jobs.
eagle2
05-16-2011, 11:59 AM
It's ironic that Eagle posted those poverty stats. Under Obama, one in six Americans now gets Food Stamps. Obama has become the "Food Stamp" President.
All you're doing is repeating idiocy from that ignoramus Newt Gingrich. I don't know how anyone can take him seriously. It's obvious to most Americans that Bush and the Republicans are the ones responsible for wrecking the economy.
http://money.cnn.com/2011/05/06/news/economy/economy_poll/index.htm
Despite the amount of time Obama has been in office, 55% of Americans say that former president George W. Bush and the Republicans are more responsible for current economic problems than Obama.
Melonie
05-16-2011, 03:09 PM
^^^ that must be the 47% of American tax filers who don't actually have to pay income taxes, plus another 8% of unionized gov't workers whose paychecks are being paid for via Obama stimulus spending of money borrowed from our children and grandchildren !!!
At any rate, this entire discussion boils down to one basic point ... in a 'free market' absent gov't protections and subsidies, no corporation can survive in the long term if it pays its workers more money than those workers are able to produce in terms of 'added value' / additional revenue for that corporation. WalMart's financials indicate that the corporation is already close to the tipping point with a 3% profit margin and a 3% stockholder dividend payout rate.
And in every highly publicized recent case of new WalMarts posting job openings for 'unskilled' labor at minimum wage pay rates, there have been far more applicants lining up than job openings available. The pay rate is 100% legal. The job applicants are willingly accepting that pay rate.
It's ironic that Eagle posted those poverty stats. Under Obama, one in six Americans now gets Food Stamps. Obama has become the "Food Stamp" President.
Because there aren't as many jobs now courtesy of outsourcing and H1-B visas (and all the other visas).
This is a permutation of my earlier point about Bill Gates and Microsoft or Steve Jobs and Apple eliminating US jobs altogether in favor of outsourcing hardware production to China and software support to India. At least WalMart is still providing US jobs ... albeit that the media hue and cry about minimum wage pay rates is prompting them to automate some of those US jobs out of existance. Thanks to their HUGE profit margins, Microsoft and Apple could have easily afforded to retain US electronics assembly jobs and/or software support jobs without jeopardizing the profitability of the corporation. But the same media that rides WalMart about minimum wage pay rates is strangely silent about Microsoft and Apple.
Kellydancer
05-16-2011, 08:58 PM
^^^ that must be the 47% of American tax filers who don't actually have to pay income taxes, plus another 8% of unionized gov't workers whose paychecks are being paid for via Obama stimulus spending of money borrowed from our children and grandchildren !!!
At any rate, this entire discussion boils down to one basic point ... in a 'free market' absent gov't protections and subsidies, no corporation can survive in the long term if it pays its workers more money than those workers are able to produce in terms of 'added value' / additional revenue for that corporation. WalMart's financials indicate that the corporation is already close to the tipping point with a 3% profit margin and a 3% stockholder dividend payout rate.
And in every highly publicized recent case of new WalMarts posting job openings for 'unskilled' labor at minimum wage pay rates, there have been far more applicants lining up than job openings available. The pay rate is 100% legal. The job applicants are willingly accepting that pay rate.
This is a permutation of my earlier point about Bill Gates and Microsoft or Steve Jobs and Apple eliminating US jobs altogether in favor of outsourcing hardware production to China and software support to India. At least WalMart is still providing US jobs ... albeit that the media hue and cry about minimum wage pay rates is prompting them to automate some of those US jobs out of existance. Thanks to their HUGE profit margins, Microsoft and Apple could have easily afforded to retain US electronics assembly jobs and/or software support jobs without jeopardizing the profitability of the corporation. But the same media that rides WalMart about minimum wage pay rates is strangely silent about Microsoft and Apple.
I don't know why the media talks about Apple and Microsoft outsourcing but I blame them for doing that. They are all to blame for what is happening in this country.
rickdugan
05-17-2011, 05:23 AM
I don't know why the media talks about Apple and Microsoft outsourcing but I blame them for doing that. They are all to blame for what is happening in this country.
I actually share your frustration with this. I am your age and have been watching our manufacturing base close down and move overseas for as long as I can remember. Where I grew up, shoe, clothing, hat and other manufacturers moved overseas and closed down factories that had been major contributors to the local job bases. The small cities that they once occupied are, to this day, destitute and crime ridden, with high percentages of their populations collecting government assistance.
But it is hard to blame these companies. They are forced to compete against overseas manufacturers paying next to nothing for labor and benefits. If they did not adapt, they would have gone out of business anyway.
The reality is that the real "culprit" is the American consumer. We have shown no loyalty towards American made goods and almost always flock to whatever can be had for the cheapest cost. And as long as this continues, manufactureres will continue to be forced to assemble their goods wherever it is cheapest to do so.
jester214
05-17-2011, 10:36 AM
Someone said it already, Walmart is a lightning rod because they are so big... But get used to it, because eventually they're going to figure out how to run a Grocery Store and they'll put everyone out of business. They are already a good 10% or 15% cheaper than the lower grocery stores around here.
They also do often pay better for equivalent jobs, than other companies do. I know a few people who got $2 or $3 an hour bumps to go work for Walmart. That said they all claimed to hate it there, and at least two of them quit in less than a year. I do generally beleive that the management in those stores actively treats the employee's pretty shittily, and probably has the tacit approval of Corporate.
Kellydancer
05-17-2011, 11:07 AM
I actually share your frustration with this. I am your age and have been watching our manufacturing base close down and move overseas for as long as I can remember. Where I grew up, shoe, clothing, hat and other manufacturers moved overseas and closed down factories that had been major contributors to the local job bases. The small cities that they once occupied are, to this day, destitute and crime ridden, with high percentages of their populations collecting government assistance.
But it is hard to blame these companies. They are forced to compete against overseas manufacturers paying next to nothing for labor and benefits. If they did not adapt, they would have gone out of business anyway.
The reality is that the real "culprit" is the American consumer. We have shown no loyalty towards American made goods and almost always flock to whatever can be had for the cheapest cost. And as long as this continues, manufactureres will continue to be forced to assemble their goods wherever it is cheapest to do so.
Unfortunately, Americans would rather spend less and that is why they left, you are right. I'm not like that but most people think "hey that's cheaper". They don't realize that buying cheaper means in the long run they may not have jobs themselves because it's spiraling out of control. As much as it pains me to say this, while I blame the corporations I also blame the unions. Way too many wanted salaries far above what they deserve.
I've seen several towns around me go from booming towns to ghetto and it's very sad. I saw the suburb my parents grew up in go this way. It went from a suburb with a few famous people to a ghetto.
jester214
05-17-2011, 09:06 PM
Unfortunately, Americans would rather spend less and that is why they left, you are right.
I know this is nitpicky, but in a lot cases it's not "would rather" it's "don't have much of a choice".
People that have a choice are not the people shopping at Walmart, and its ridiculous to even imagine a world where people spend more because in the distant future it might somehow save their job?
Melonie
05-18-2011, 02:35 AM
I know this is nitpicky, but in a lot cases it's not "would rather" it's "don't have much of a choice".
^^^ exactly ! Thus my earlier point that forcing WalMart to provide higher pay rates and higher benefit levels to its employees, which in turn results in a 10% price increase in order to keep stockholders from 'losing money', will directly 'harm' the poorest Americans who 'don't have a choice'
its ridiculous to even imagine a world where people spend more because in the distant future it might somehow save their job
For better or worse, this same economic 'truth' effectively dooms the future of any US 'goods' industry ... where the US producer is forced to pay higher taxes, higher energy costs, higher environmental and worker safety compliance costs etc. than their offshore competitors are able to pay. In this situation, as was pointed out earlier, the only way that the US 'goods' producer can remain economically viable in the long term is if gov't uses its authority to restrict foreign competition via tariffs and/or quotas on lower cost imported 'goods'. This is essentially already the case for imported trucks, for imported tires, for imported ethanol etc. In essence the US gov't is forcing Americans rich and poor alike to pay higher than necessary prices for all of these items in order to protect the economic viability of US producers, albeit often without the direct knowledge of the American rich and poor consumers.
Kellydancer
05-18-2011, 01:03 PM
I know this is nitpicky, but in a lot cases it's not "would rather" it's "don't have much of a choice".
People that have a choice are not the people shopping at Walmart, and its ridiculous to even imagine a world where people spend more because in the distant future it might somehow save their job?
The people at the bottom of the income need cheap so they go to Wal-Mart. Many of them don't even realize that when they do it hurts people they know by costing more American jobs. I know for me I'd rather spend more on American products.
Eric Stoner
02-17-2012, 08:29 AM
Another classic from Paul Krugman. Or as those of us who love the the little retarded munchkin like to call him : "Krugie".
In this month's Playboy Interview Krugie outdid himself with probably his loopiest statement ever. Ready ? The government should mandate that workers at Walmart get paid on a par with workers at GM including all the benefits. I am NOT making this up. Read it for yourselves. I can't think of a better way to assure that Walmart cuts its workforce and raises prices so high that nobody will shop there anymore.
Melonie
02-17-2012, 02:26 PM
Well, if the FED goes for broke on QE3, printing up new US dollar bills at warp speed, it's not inconceivable that future $40 an hour union auto wages won't be too far ahead of a future $30 US minimum wage. Of course, this would also mean that a gallon of gasoline would cost $20, a loaf of bread would cost $8, and an ounce of gold would cost $10,000, and a bargain basement new car would cost $50,000 !
slowpoke
02-17-2012, 03:25 PM
Wal-Mart has caused many manufacturers to go overseas, which has caused many job losses.
Right
And unions had ABSOLUTELY NOTHING TO DO WITH IT!
Kellydancer
02-17-2012, 06:11 PM
Another classic from Paul Krugman. Or as those of us who love the the little retarded munchkin like to call him : "Krugie".
In this month's Playboy Interview Krugie outdid himself with probably his loopiest statement ever. Ready ? The government should mandate that workers at Walmart get paid on a par with workers at GM including all the benefits. I am NOT making this up. Read it for yourselves. I can't think of a better way to assure that Walmart cuts its workforce and raises prices so high that nobody will shop there anymore.
I don't feel Wal-Mart workers should make as much as car manufacturers. However, there is a movement where people (mostly the OWS people and the like)where they feel Wal-Mart workers and other restaurant and retailers should pay the same as a skilled job. I am opposed to this because why then go to college if you can make the same at Wal-Mart?
jimboe7373
02-17-2012, 06:30 PM
Again, the point remains that the lower food prices made possible by WalMart enables 'those people' to take home more food for the same number of Food Stamp / SSI dollars ... thus increasing their de-facto standard of living without calls for additional costs to other Americans ( to increase the level of Food Stamp / SSI benefits ). The very first post in this thread attempted to make the case that low WalMart wage levels allowed WalMart employees to become eligible for all sorts of social welfare programs at significant cost to US taxpayers. My point is simply that only looking at that side of the taxpayer costs equation, while ignoring the reductions in potential taxpayer costs that WalMart makes possible re ALL WalMart customers who are eligible for social welfare programs, is disingenuous.
~This to me is a "chicken and egg" thing. Are the people who are poor well served because Walmart enables them to by cheap goods alongside; how many people need to buy cheap goods because Walmart made them poor by either putting them out of business or getting them fired/reduced salary because it puts so much pressure on suppliers to lower price?.
pinups4
02-17-2012, 06:48 PM
Isn't this really "amerca vs america'? Or rather AMERICAN VS AMERICAN?
Lower prices for goods=lower pay and fewer benecits
Big sprawl buildngs= less downtown
National chain=less local business, more $ leaves your town
Lots of cheap,, often imported products=cash strapped vendors do what they got to = lower wages, overseas suppliers, cheaper quality. THIS MEANS FEWER GOOD AMERICAN JOBS
But sure, saving $1 fels good if u don't think about it
Melonie
02-17-2012, 08:18 PM
Bill Clinton let the global economy 'genie' out of the bottle almost 20 years ago. Wal-mart is just one of many different manifestations of the US now being open to global competition ... both in terms of relative prices of goods, as well as in terms of relative prices for labor. Arguably, the points concerning Wal-Mart are not about 'American' versus 'American' at all. Instead they are about mexican tomatoes, vietnamese furniture, chinese big screen TV's etc. simply costing far less to produce.
eagle2
02-17-2012, 10:29 PM
Well, if the FED goes for broke on QE3, printing up new US dollar bills at warp speed, it's not inconceivable that future $40 an hour union auto wages won't be too far ahead of a future $30 US minimum wage. Of course, this would also mean that a gallon of gasoline would cost $20, a loaf of bread would cost $8, and an ounce of gold would cost $10,000, and a bargain basement new car would cost $50,000 !
It is inconceivable. You're just randomly pulling numbers out of thin air.
Melonie
02-18-2012, 04:55 AM
It's not inconceivable in the least ! It's just a matter of the 'slope of the curve'
http://static.seekingalpha.com/uploads/2009/5/8/saupload_purchasing_power.png
Also note that the most rapid historical declines in US dollar purchasing power occurred circa 1933 ( i.e. 4 years into a severe economic downturn ... kinda like ??? right now ??? ), and also circa major changes in the US dollar's 'global role' ( a la Bretton Woods, or today's efforts at 'replacement' of the US dollar as the world's 'reserve currency' by China et al ).
Please note that I'm not even talking about hyper-inflation ... of which there are many examples of a country's currency being devalued by a factor of 100 : 1+ . I'm only talking about a 4 : 1 or 5 : 1 devaluation. Arguably, where global commodity prices are concerned, the FED's QE programs have already precipitated a 2 : 1 devaluation of the US dollar's purchasing power over the course of the last 4 years. The closer the 'end product' is to the 'commodity' itself, i.e. $4 gasoline, $2 loaf of bread, $4 copper tubing, the faster the US dollar's loss of purchasing power translates into higher prices. Prices of 'end products' that are farther removed, i.e. oil based petrochemicals, grain fed beef, autos and appliances with copper coils and wiring, may lag the price increases of the 'commodities' themselves, but they won't lag forever.
But the bigger point is this. With high 'structural' unemployment, as the US dollar loses purchasing power, workers who still have jobs have absolutely no 'leverage' to force pay increases to offset the rising costs of food, energy and everything else linked to global commodities. Granted there are a handful of exceptions. In terms of this thread about Wal-Mart, one huge exception is 'minimum wage' workers - where the gov't essentially legislates a pay increase for unskilled workers ... a pay increase which is totally 'disconnected' from the global value of their unskilled labor as well as 'disconnected' from the actual added value their unskilled labor creates for their 'employer'.
And as has been alluded to by other posters, if legislated pay increases for unskilled workers aren't mirrored in similarly rising pay rates of higher skilled workers ( which they won't be due to global competitiveness concerns plus persistent high unemployment ), the 'incentive' for unskilled workers to invest in obtaining higher skill levels is reduced. Not meaning to change the subject, but given the recent study showing that Americans who are wholly dependent on gov't benefits are now receiving $32,700 per year worth of 'equivalent cash value', there may even be a DIS-incentive if obtaining a higher skill level and a somewhat higher paying job results in loss of benefit eligibility.
Thus as long as the USA remains exposed to the global economy, 'symptoms' of global economic competition like Wal-Mart will continue to be in the forefront. As long as unskilled US workers receive legislated pay increases which keep up with global commodity prices, their standard of living is unchanged. But for the skilled workers who are NOT receiving pay increases to offset the increased prices of gasoline, food and other goods linked to global commodities, their standard of living is destined to decline. Having very low priced goods available via Wal-Mart is one of the few things that will slow that decline.
Again, 'blaming' Wal-Mart is an all to convenient way of indirectly 'blaming' the USA for being fully exposed to the global economy without having to acknowledge those who were actually responsible. The real 'blame' for the negative effects of the USA facing ( and losing out to ) global competition, both in terms of comparative costs of production and comparative costs of labor, lies elsewhere !
eagle2
02-18-2012, 08:27 PM
It's not inconceivable in the least !
It is inconceivable. Your statement is based entirely on ideology, not what is actually happening in the real world.
Also note that the most rapid historical declines in US dollar purchasing power occurred circa 1933 ( i.e. 4 years into a severe economic downturn ... kinda like ??? right now ??? ), and also circa major changes in the US dollar's 'global role' ( a la Bretton Woods, or today's efforts at 'replacement' of the US dollar as the world's 'reserve currency' by China et al ).
I don't know what information your chart is based on, but in 1933 we were having deflation, not inflation. In 1933, the CPI fell 5 percent.
http://inflationdata.com/inflation/inflation_rate/historicalinflation.aspx
That's how the real world works. When unemployment is high and demand is low, prices fall or stay stable.
Please note that I'm not even talking about hyper-inflation ... of which there are many examples of a country's currency being devalued by a factor of 100 : 1+ . I'm only talking about a 4 : 1 or 5 : 1 devaluation. Arguably, where global commodity prices are concerned, the FED's QE programs have already precipitated a 2 : 1 devaluation of the US dollar's purchasing power over the course of the last 4 years. The closer the 'end product' is to the 'commodity' itself, i.e. $4 gasoline, $2 loaf of bread, $4 copper tubing, the faster the US dollar's loss of purchasing power translates into higher prices. Prices of 'end products' that are farther removed, i.e. oil based petrochemicals, grain fed beef, autos and appliances with copper coils and wiring, may lag the price increases of the 'commodities' themselves, but they won't lag forever.
But the bigger point is this. With high 'structural' unemployment, as the US dollar loses purchasing power, workers who still have jobs have absolutely no 'leverage' to force pay increases to offset the rising costs of food, energy and everything else linked to global commodities. Granted there are a handful of exceptions. In terms of this thread about Wal-Mart, one huge exception is 'minimum wage' workers - where the gov't essentially legislates a pay increase for unskilled workers ... a pay increase which is totally 'disconnected' from the global value of their unskilled labor as well as 'disconnected' from the actual added value their unskilled labor creates for their 'employer'.
And as has been alluded to by other posters, if legislated pay increases for unskilled workers aren't mirrored in similarly rising pay rates of higher skilled workers ( which they won't be due to global competitiveness concerns plus persistent high unemployment ), the 'incentive' for unskilled workers to invest in obtaining higher skill levels is reduced. Not meaning to change the subject, but given the recent study showing that Americans who are wholly dependent on gov't benefits are now receiving $32,700 per year worth of 'equivalent cash value', there may even be a DIS-incentive if obtaining a higher skill level and a somewhat higher paying job results in loss of benefit eligibility.
Thus as long as the USA remains exposed to the global economy, 'symptoms' of global economic competition like Wal-Mart will continue to be in the forefront. As long as unskilled US workers receive legislated pay increases which keep up with global commodity prices, their standard of living is unchanged. But for the skilled workers who are NOT receiving pay increases to offset the increased prices of gasoline, food and other goods linked to global commodities, their standard of living is destined to decline. Having very low priced goods available via Wal-Mart is one of the few things that will slow that decline.
You're just making stuff up again. There's no basis for anything you're saying. Unemployment is gradually falling, and over the long term will be much lower when baby boomers start retiring in large numbers.
Again, 'blaming' Wal-Mart is an all to convenient way of indirectly 'blaming' the USA for being fully exposed to the global economy without having to acknowledge those who were actually responsible. The real 'blame' for the negative effects of the USA facing ( and losing out to ) global competition, both in terms of comparative costs of production and comparative costs of labor, lies elsewhere !
Walmart has contributed to the economic decline of America, with their low wages for workers and with their downward pressure on prices from suppliers, which resulted in many manufacturers moving production overseas. Contrary to your ideological beliefs, there isn't an unlimited supply of labor and most people do not like working in miserable conditions for very low pay. There is labor unrest in China and wages have been rapidly rising. As wages increase, manufacturing in America will become more competitive.
Melonie
02-19-2012, 08:51 AM
That's how the real world works. When unemployment is high and demand is low, prices fall or stay stable.
That's how the real world WORKED ... in the 1930's ... when gold backed US dollars couldn't simply be printed up ad infinitum, when the US economy had a comparatively small component of international imports / exports, when being officially unemployed actually meant having little or no money to spend, when the US gov't was an international 'lender' not a 'borrower' etc.
Like some military leaders, some economists continue to fight the LAST battle ... not realizing that fundamental changes have taken place in the meantime.
Unemployment is gradually falling
Now who's letting ideology over-rule factual information ?
(snip)On Friday, Gallup’s mid-month unemployment reading, which covers the preceding 30 days, jumped from 8.3% in mid-January, the low point since the financial crisis, to 9.0%. An astounding increase. And its Job Creation Index confirmed that trend, dropping from +16 in January to +13 in February.
Worse, 10% of the employees in mid-February were part timers in search of full-time jobs, though down a tad from January's of 10.1%, the all-time worst level in Gallup's history! Underemployment—a combination of the unemployed and part-timers who are looking for a full-time job—jumped to 19% from the mid-January reading of 18.1%. While Gallup’s unemployment reading has improved steadily over the course of 2011, the underemployment reading has simply gotten worse.
Gallup's mid-month reading has been a good predictor of the non-farm payrolls report that the BLS releases two weeks later on the first Friday of the following month. For example, Gallup’s mid-January reading improved to 8.3%, in line with what the BLS would report two weeks later (causing the above hullabaloo). Unlike the BLS, Gallup, does not seasonally adjust its unemployment reading, so some uptick during this time of the year is normal. But that kind of jump is far beyond normal.
Of course, the BLS might tweak its formula to further decrease its utterly confounding workforce participation rate to the point where the resulting unemployment rate will actually, and once again, surprise on the upside, despite the hue and cry that may cause.
And there was another indicator: the Philly Fed employment index collapsed from 11.6 in January to 1.1 in February—a warning shot for Jack Ablin of Harris Private Bank whose concerns on this were published by Politico's Morning Money on Friday. The index reflects hiring plans by employers, and they have pulled in their horns. They're now adequately staffed, though they might add a few people here and there, while they’re waiting for demand to show signs of life. That wait may tax their patience, however: gasoline prices are at an all-time high for this time of the year, and other debacles are tearing into the toughest creature out there that no one has been able to subdue yet. But even that tough creature may have reached its limit.
Over the years, the Philly Fed employment index has shown a strong correlation with the BLS jobs report, and Ablin estimated that based on it, only 50,000 new jobs were created, a far cry from the 243,000 in January—fictual or not. This and the nasty mid-month unemployment number from Gallup revive an odd idea: has the ECRI’s much ridiculed recession call been right all along?
Unless the BLS can figure out how to statistically adjust its next set of data and estimates to relegate any negative elements to blissful oblivion, there will be disappointment. And it will slam into lofty expectations—which may cause the stock market to, well, spike because, in these crazy times of ours, QE3 with all its wondrous, illusory, and ineffectual magic will suddenly reappear on the table. (snip)
from
rickdugan
02-19-2012, 09:26 AM
Walmart has contributed to the economic decline of America, with their low wages for workers and with their downward pressure on prices from suppliers, which resulted in many manufacturers moving production overseas. Contrary to your ideological beliefs, there isn't an unlimited supply of labor and most people do not like working in miserable conditions for very low pay. There is labor unrest in China and wages have been rapidly rising. As wages increase, manufacturing in America will become more competitive.
Contributed? Potentially, but Walmart is far from the root of the problem. Companies had been moving manufacturing facilities overseas for decades, long before Walmart became so big, and would likely have continued regardless. However, it is probably fair to say that Walmart's pricing pressure has accelerated the process for some companies. The same holds true, though, for Home Depot and Walmart's many competitors.
But, as I have contended before, Walmart and these other companies didn't create the problem. Manufacturing is simply more global now and U.S. companies have been adapting to that reality. Remember that most U.S. companies don't just sell in the U.S., but also sell products in other countries. Simply put, if their manufacturing costs are higher than those of global competitors, then they will not sell their goods.
IMHO you are blaming the tail for wagging the dog, rather than the other way around. Walmart did not create global wage disparities, nor did Walmart make the U.S. so non-competitive in other respects, including tax treatment. Walmart also does not dictate market demand for goods and you can rest assured that if they did not sell their goods for the prices that they do then someone else would. Finally, Walmart does not set the market for employee wages and, while on a nationwide scale they are a very large employer, each store sits by itself in an area with lots of other retail stores, as well as other employers, and must compete for the same labor pool.
And I don't agree that wage increases in China will make any meaningful impact on this issue as there are plenty of other countries besides China where manufacturing can be done much more cheaply than here in the U.S. If China's wages become such that it becomes difficult for manufacturing facilities in China to compete on a global scale, then you can bet that they will find a "new" China in which to assemble their goods.
Melonie
02-19-2012, 03:46 PM
^^^ Indeed, the 'red herring' of rising Chinese wage rates has gotten a lot of media mileage. But in reality, you're still comparing a US $ 2.00-$2.50 an hour elevated Chinese pay rate ( with zero mandatory benefits / benefit costs to employer ), versus a $7.50-$8.00 an hour US minimum wage ( not counting an extra $2 an hour in mandatory unemployment / disability / other benefit costs to the US employer ). There is simply no way that US employers are getting 3-4-5 times the productivity / added value out of unskilled US workers that China is getting out of semi-skilled workers to offset the difference in labor cost !
And as you pointed out in very general terms, labor isn't the only cost of doing business. New regulations are shutting down US coal fired power plants and raising US electricity prices, while China is firing up a new 'unscrubbed' coal fired power plant every week to supply dirt cheap electricity to Chinese manufacturers. New US employee safety / environmental compliance regulations are raising compliance costs for US manufacturers and decreasing US production efficiency ... for example, by the banning of effective but supposedly 'toxic' chemicals ... while Chinese manufacturers are still able to expose workers to those supposedly 'toxic' chemicals which allows for much more efficient production operations.
And indeed US business income taxes is a whole 'nuther area which favors offshore production and offshore sales.
As many have now posted, Wal-Mart is an outgrowth of 'globalism', not a cause. If you object to 'globalism', take it up with those actually responsible ... starting with Bill Clinton.
eagle2
02-19-2012, 08:58 PM
Contributed? Potentially, but Walmart is far from the root of the problem. Companies had been moving manufacturing facilities overseas for decades, long before Walmart became so big, and would likely have continued regardless. However, it is probably fair to say that Walmart's pricing pressure has accelerated the process for some companies. The same holds true, though, for Home Depot and Walmart's many competitors.
But, as I have contended before, Walmart and these other companies didn't create the problem. Manufacturing is simply more global now and U.S. companies have been adapting to that reality. Remember that most U.S. companies don't just sell in the U.S., but also sell products in other countries. Simply put, if their manufacturing costs are higher than those of global competitors, then they will not sell their goods.
IMHO you are blaming the tail for wagging the dog, rather than the other way around. Walmart did not create global wage disparities, nor did Walmart make the U.S. so non-competitive in other respects, including tax treatment. Walmart also does not dictate market demand for goods and you can rest assured that if they did not sell their goods for the prices that they do then someone else would. Finally, Walmart does not set the market for employee wages and, while on a nationwide scale they are a very large employer, each store sits by itself in an area with lots of other retail stores, as well as other employers, and must compete for the same labor pool.
And I don't agree that wage increases in China will make any meaningful impact on this issue as there are plenty of other countries besides China where manufacturing can be done much more cheaply than here in the U.S. If China's wages become such that it becomes difficult for manufacturing facilities in China to compete on a global scale, then you can bet that they will find a "new" China in which to assemble their goods.
I agree that Walmart isn't fully responsible for the downward pressure on wages, but no retailer has gone as far as Walmart in trying to keep their prices down, which is why they were able to grow so rapidly. Over the short term, Americans benefited from the low prices, but over the long term it has also hurt the US, as wages have been driven down. Because of Walmart's size, they have a great deal of pricing power with their suppliers.
There is no country that has a labor force that can replace China's, as a major low-cost manufacturer. India is the only country that is comparable in population, but their infrastructure is way behind China's. As China's supply of labor goes down, there aren't any alternatives that have the labor capacity. China now has more people leaving the work force than entering, because of their one-child policy. This will start putting even more upward pressure on wages there. In addition, as wages in China increase, demand for goods and services in China will increase, which will create a much greater demand for manufactured products. I read that China will surpass the United States as the world's largest importer, sometime in the next 10 years.
eagle2
02-19-2012, 09:07 PM
That's how the real world WORKED ... in the 1930's ... when gold backed US dollars couldn't simply be printed up ad infinitum, when the US economy had a comparatively small component of international imports / exports, when being officially unemployed actually meant having little or no money to spend, when the US gov't was an international 'lender' not a 'borrower' etc.
According to your chart, the US went off the gold standard in 1933.
You claimed the dollar lost value in the 1930's. Your claim is wrong. The dollar actually gained value as a result of deflation in 1933.
There is nothing that would suggest we will soon be seeing a $30 minimum wage and small cars going for $50,000. You just pulled those numbers out of thin air to go along with your extreme gloom and doom outlook.
Now who's letting ideology over-rule factual information ?
(snip)On Friday, Gallup’s mid-month unemployment reading, which covers the preceding 30 days, jumped from 8.3% in mid-January, the low point since the financial crisis, to 9.0%. An astounding increase. And its Job Creation Index confirmed that trend, dropping from +16 in January to +13 in February.
It's true there are fluctuations in the unemployment rate, but over the long term it's been going down. January 2012's unemployment rate is lower than January 2011's.
eagle2
02-19-2012, 09:18 PM
^^^ Indeed, the 'red herring' of rising Chinese wage rates has gotten a lot of media mileage. But in reality, you're still comparing a US $ 2.00-$2.50 an hour elevated Chinese pay rate ( with zero mandatory benefits / benefit costs to employer ), versus a $7.50-$8.00 an hour US minimum wage ( not counting an extra $2 an hour in mandatory unemployment / disability / other benefit costs to the US employer ). There is simply no way that US employers are getting 3-4-5 times the productivity / added value out of unskilled US workers that China is getting out of semi-skilled workers to offset the difference in labor cost !
And as you pointed out in very general terms, labor isn't the only cost of doing business. New regulations are shutting down US coal fired power plants and raising US electricity prices, while China is firing up a new 'unscrubbed' coal fired power plant every week to supply dirt cheap electricity to Chinese manufacturers. New US employee safety / environmental compliance regulations are raising compliance costs for US manufacturers and decreasing US production efficiency ... for example, by the banning of effective but supposedly 'toxic' chemicals ... while Chinese manufacturers are still able to expose workers to those supposedly 'toxic' chemicals which allows for much more efficient production operations.
And indeed US business income taxes is a whole 'nuther area which favors offshore production and offshore sales.
As many have now posted, Wal-Mart is an outgrowth of 'globalism', not a cause. If you object to 'globalism', take it up with those actually responsible ... starting with Bill Clinton.
You're making stuff up again without having the slightest idea of how true it is. China is building cleaner coal-powered plants than the US is. China is also poised to surpass the US as the world’s largest market for wind power equipment.
http://www.nytimes.com/2009/05/11/world/asia/11coal.html
rickdugan
02-20-2012, 10:07 AM
I agree that Walmart isn't fully responsible for the downward pressure on wages, but no retailer has gone as far as Walmart in trying to keep their prices down, which is why they were able to grow so rapidly. Over the short term, Americans benefited from the low prices, but over the long term it has also hurt the US, as wages have been driven down. Because of Walmart's size, they have a great deal of pricing power with their suppliers.
I hear what you are saying, but if not Walmart then it would eventually have been someone else. Markets abhor a vacuum and, if goods could be obtained at lower cost and sold at lower prices, then somebody would have filled the void eventually. If not Walmart, then Target, or another large retailer, or even one that hadn't been formed yet. Walmart just happened to get there first, but IMHO somebody would have eventually.
There is no country that has a labor force that can replace China's, as a major low-cost manufacturer. India is the only country that is comparable in population, but their infrastructure is way behind China's. As China's supply of labor goes down, there aren't any alternatives that have the labor capacity. China now has more people leaving the work force than entering, because of their one-child policy. This will start putting even more upward pressure on wages there. In addition, as wages in China increase, demand for goods and services in China will increase, which will create a much greater demand for manufactured products. I read that China will surpass the United States as the world's largest importer, sometime in the next 10 years.
It doesn't have to be any one country, though I'm not saying that it could not be. And once upon a time China did not have all of that infrastructure either. India, Laos, Cambodia and Indonesia all have the potential to take on manufacturing facilities with low costs of labor, and I am sure that certain countries in Central and South America would love to compete for the honor as well. Heck, in certain cases it may make sense to move manufacturing operations to Mexico if labor costs in China rise too much. Roads, water distribution, sewage disposal and electrical output can (and you can be sure will) be expanded if there is enough money at stake.
Melonie
02-20-2012, 10:36 AM
You're making stuff up again without having the slightest idea of how true it is. China is building cleaner coal-powered plants than the US is. China is also poised to surpass the US as the world’s largest market for wind power equipment.
Again you're focusing on the 'bark' ... while ignoring both the 'forest' and the 'trees'.
For starters, the US isn't actually building any new coal fired power plants ... due to environmental protest red tape plus potential unlimited liability under new EPA 'interstate' smokestach emissions regulations.
China is indeed building a handful of 'showpiece' coal fired generating stations with reduced emissions, but these are a tiny minority of the total Chinese coal fired power generation initiative. In point of fact ... from
(snip)"There is a (dirty) coal power plant coming online every four to five days in China that could power a city the size of San Diego. Energy is wasted on an epic scale. One hundred cities with populations over 1 million faced extreme water shortages last year. China’s survival has always been built on the notion of a vastly powerful, infallible center. Thus, China has poor foundations on which to build the subtle network of institutions and accountability necessary to manage the complexities of a modern economy and society. The lack of independent scrutiny and accountability lies behind the massive waste in the Chinese government and destruction of the environment. Air pollution kills 400,000 people prematurely every year.(snip)
also from
(snip)"China's biggest coal company and officials in the Guangxi Zhuang Autonomous Region signed a deal for the 8-gigawatt thermal plant on Monday, according to Xinhua and the local government's website.
The plant would be built in the southern port city of Beihai to help ease power shortages caused by drought, which has strained power supplies.
China relies on coal for nearly 70 percent of its energy needs, which have soared in recent years as the country's economy grew at a blistering pace.
Power outages and rationing have been imposed in 17 provinces this year and shortages could worsen if coal supplies are not increased or if the country's north sees particularly harsh winter weather.
Shenhua's plans come days after local governments were ordered to reduce emissions of "major pollutants" by as much as 10 percent by 2015, amid growing public anxiety over bad air.
China is the world's biggest greenhouse gas emitter with many of its cities cloaked in a polluted haze.
Shenhua and the Guangxi government will ensure the new plant's eight power generators get a steady supply of coal from company mines in Indonesia and Australia by building four 100,000-tonne deepwater loading docks, Xinhua said.
Beihai city will also build a coal storage facility capable of handling 30 million tonnes a year in the nearby port of Tieshan."(snip)
and the bottom line re 'imported' coal ... from
(snip)Victoria’s brown coal reserves look set to be opened up to export on a mass scale — prompting claims the state is putting commercial opportunity ahead of its responsibility to curb greenhouse gas emissions.
Confidential cabinet documents obtained by The Age show the Brumby Government is considering offering billions of tonnes of Latrobe Valley coal for competitive tender next year.
The tender process would be preceded by a green light for a $1.5billion scheme by the company Exergen to mine, dry and export 12 million tonnes of brown coal a year to be burned in Indian power stations. [ and now Chinese power stations as well - sic ]
The cabinet documents acknowledge that community concerns could be raised by the export of brown coal, a ‘‘dirty’’ fuel that that emits significantly more greenhouse gases than alternative electricity sources such as gas and black coal.(snip)
Thus China's commitment to 'clean coal' is actually a promise of a 10% improvement over the next 4 years. But the question needs to be asked 10% improvement over WHAT ! If they're burning imported 'brown coal' their emissions are 10 times higher per kilowatt-hour than current US coal fired power plants burning low sulfur black coal. And those US coal fired power plants are in the process of being de-facto forced to shut down as a result of new EPA regulations on the 'interstate' effects of smokestack emissions. Ironically, these new EPA regulations will impact electricity prices in a major way for those parts of the US that are attempting to compete in global manufacturing i.e. Ohio / Indiana / Illinois / Michigan, Texas etc. This in turn will only increase the pricing advantage for Wal-Mart et al offering low cost Chinese manufactured goods for sale.
As to China's commitment to windpower, it still represents a tiny percentage of total Chinese power generation, and also presents a much smaller percent of GDP than, for example, Spain's ( disastrous ) investment in wind power. It really would be helpful to stop accepting the official 'public consumption' news releases of the Chinese ( and for that matter US ) gov't at face value, and instead to 'look under the hood' at the true facts.
eagle2
02-21-2012, 11:10 PM
I hear what you are saying, but if not Walmart then it would eventually have been someone else. Markets abhor a vacuum and, if goods could be obtained at lower cost and sold at lower prices, then somebody would have filled the void eventually. If not Walmart, then Target, or another large retailer, or even one that hadn't been formed yet. Walmart just happened to get there first, but IMHO somebody would have eventually.
It's really impossible to say whether or not another retailer would have taken Walmart's place, if Walmart never existed. There were large retail chains that existed for many decades before Walmart, and none of them went as far as Walmart in trying to keep prices down, on such a large scale. Perhaps someone else would have taken Walmart's place, or perhaps large retail chains would have continued running their business the way they had been doing for all the years before Walmart existed.
It doesn't have to be any one country, though I'm not saying that it could not be. And once upon a time China did not have all of that infrastructure either. India, Laos, Cambodia and Indonesia all have the potential to take on manufacturing facilities with low costs of labor, and I am sure that certain countries in Central and South America would love to compete for the honor as well. Heck, in certain cases it may make sense to move manufacturing operations to Mexico if labor costs in China rise too much. Roads, water distribution, sewage disposal and electrical output can (and you can be sure will) be expanded if there is enough money at stake.
India's infrastructure is decades behind China, and India is still moving ahead much more slowly.
http://www.business-in-asia.com/asia/infrastructure_india.html
Blackouts occur frequently. Even on the good roads in India, traffic moves at 15 - 20 mph because of how crowded the roads are, and the type of vehicles on the roads. There are water shortages projected for the future. India's government is very inefficient and corrupt.
There are no other countries in Asia that have anywhere near enough people to replace China's work force. In addition, as wages increase in China, and the Chinese become wealthier, there would a much bigger demand for manufactured goods. In Mexico and other Latin American countries, there has been a major decline in the birthrate. In the 1960's, the average Mexican mother had close to seven children. The average now is just over two.
http://www.economist.com/node/15959332
Eventually there will be labor shortages in Mexico. In the United States, millions of baby boomers will be leaving the work force over the next 10 - 20 years. Over the years, as demand for manufactured goods increases, and available labor decreases, wages will increase significantly.
mikef
02-22-2012, 06:49 AM
Actually the best chance for American workers to see increased wages and employment is.......
A) A continued decline is the value of the dollar.
B) A rising of living standards in cheap labor counties.
C) High energy prices.
These are long term balance issues...... The immediate future is not so good for the American worker.
Eric Stoner
02-22-2012, 07:09 AM
Actually the best chance for American workers to see increased wages and employment is.......
A) A continued decline is the value of the dollar.
B) A rising of living standards in cheap labor counties.
C) High energy prices.
These are long term balance issues...... The immediate future is not so good for the American worker.
Are you serious ? While "B" is certainly correct, a weak dollar and high energy prices are recipes for both short term pain and long term disaster. Unless you work for Exxon-Mobil.
mikef
02-22-2012, 07:46 AM
I was just addressing American workers chances for increased wages and employment opportunities..... Not quatlty of life issues..... Higher energy prices will force jobs back to this country to take advantage of the closer location to the ultimate consumer...... Warren Buffett has substantial railroad holdings..... It a good bet on higher energy prices...... As to a weaker dollar...... As other countries raise their prices because of the weaker dollar, American goods get more competitive.
Again I'm not trying to say these are good things, or bad things..... Just things I think will happen.
Eric Stoner
02-22-2012, 08:32 AM
I was just addressing American workers chances for increased wages and employment opportunities..... Not quatlty of life issues..... Higher energy prices will force jobs back to this country to take advantage of the closer location to the ultimate consumer...... Warren Buffett has substantial railroad holdings..... It a good bet on higher energy prices...... As to a weaker dollar...... As other countries raise their prices because of the weaker dollar, American goods get more competitive.
Again I'm not trying to say these are good things, or bad things..... Just things I think will happen.
Funny thing - Many analysts say that Buffet's railroad holdings caused him to get Obama to continue delay of the Keystone pipeline as the railroads he owns carry the very oil that would otherwise go through the pipeline. China keeps its currency low and its people have to pay a premium for imports. Is that what we want ?
mikef
02-22-2012, 09:11 AM
Well the Yuan has appreciated slightly less than 10% in a little over 18 months..... It's a slow game for sure.
Listen, America cannot compete on wages paid in these countries..... We need a little of this a little of that..... Maybe a lot of this and a lot of that.
rickdugan
03-04-2012, 12:40 PM
It's really impossible to say whether or not another retailer would have taken Walmart's place, if Walmart never existed. There were large retail chains that existed for many decades before Walmart, and none of them went as far as Walmart in trying to keep prices down, on such a large scale. Perhaps someone else would have taken Walmart's place, or perhaps large retail chains would have continued running their business the way they had been doing for all the years before Walmart existed..
We may simply have to agree to disagree on this. IMHO it was simply a matter of WHEN another retailer would have filled the breach.
Walmart got there first, in large part, because it was the first to make the most of new technology by developing advanced inventory control systems and automated distribution processes, which allowed them to purchase in larger bulk than other retailers and to efficiently supply stores with those products. The fact that nobody beat Walmart to the punch was as much a function of the technology limitations of earlier eras as anything else. As technology evolved, so did Walmart's processes.
http://mohanchandran.files.wordpress.com/2008/01/wal-mart.pdf
I firmly believe that someone else would have found a way to do it better than the others if Walmart had not been the first to do so. As I said before, the market abhors a vacuum and if certain parties were not currently trying to demonize Walmart for providing what so many people want, then they would just be demonizing some other company for doing the same thing.
India's infrastructure is decades behind China, and India is still moving ahead much more slowly.
http://www.business-in-asia.com/asia/infrastructure_india.html
Blackouts occur frequently. Even on the good roads in India, traffic moves at 15 - 20 mph because of how crowded the roads are, and the type of vehicles on the roads. There are water shortages projected for the future. India's government is very inefficient and corrupt.
There are no other countries in Asia that have anywhere near enough people to replace China's work force. In addition, as wages increase in China, and the Chinese become wealthier, there would a much bigger demand for manufactured goods. In Mexico and other Latin American countries, there has been a major decline in the birthrate. In the 1960's, the average Mexican mother had close to seven children. The average now is just over two.
http://www.economist.com/node/15959332
Eventually there will be labor shortages in Mexico. In the United States, millions of baby boomers will be leaving the work force over the next 10 - 20 years. Over the years, as demand for manufactured goods increases, and available labor decreases, wages will increase significantly.
You were kinda' all over the place with this and you really didn't address my core points, which were that (1) infrastructure development can be hastened if enough money is at stake (in fact, China is a prime example of this); and (2) there are several countries that would love to compete for manufacturing facilities and that have high rates of unemployment.
When there is enough money at stake, anything is possible and there is an enormous number of countries out there wtih large blocks of eligible workers, even if no single one of them is as populous as China. If China becomes too expensive for some manufacturers, they WILL find another place to call home.
Heck, there was a time that many would have scoffed at the notion of China becoming such a manufacturing hub and they would have done so using many of the same one-off arguments that you now present relating to other countries. Well, we all know how that turned out. ;)
jimboe7373
03-04-2012, 02:28 PM
We may simply have to agree to disagree on this. IMHO it was simply a matter of WHEN another retailer would have filled the breach.It didn't have to be that way, Walmart was able to create their own market buy successfully convincing large amounts of Americans that low-cost was the ONLY thing to be concerned with. IMHO this mentality is exactly what has severely hurt the US on economic, social and quality of life fronts. We have bought into a system where short-term profit and low-prices are the ONLY things to be sought after. Sustainability, quality, morality and many other desirable components have been discarded to feed the greed of the corporations and the cheapness of the US consumer. Just like our fast food; McDonalds, Taco-Bell etc. and our entertainment; Jersey Shore, Kardashian's etc., the American people have been marketed and have gobbled up the lowest common denominator. It is not sustainable on either an economic or moral basis.
When there is enough money at stake, anything is possible and there is an enormous number of countries out there wtih large blocks of eligible workers, even if no single one of them is as populous as China. If China becomes too expensive for some manufacturers, they WILL find another place to call home. I disagree with you on this point. The amount of money at stake is really inconsequential, the factors that will determine that much more are ones like; corruption, long-term thinking and strength of the central government. China is able to excel as it does because the central government is strong and is able to control most decisions and actions by others in government and commerce and they look for long-term results. The norm in most developing countries is to have a very small group of people in nominal control who will grab whatever cash they can by whatever means possible as quickly as they can. Many times there isn't a strong enough central government and making international deals becomes impossible because some regional politician won't honor what the central government agreed too. Corruption plays a huge part too, I live in a Latin American country, 5 years ago we were supposed to have had 4 oil refineries built (which would have cut our gas prices in half), after 2 years of delays all the projects were cancelled. It recently came out that the reason for the cancellation was that different parts of the government were demanding a total of $100 million in bribes to pass the various license, zoning and permits requirements necessary for the projects to proceed. This has happened dozens of times down here and we are one of the most progressive and rapidly developing countries in the world. So yes, you are right that it is POSSIBLE, but is it very unlikely when the majority of the countries have people making the decisions who put their short-term interest in front of the best interest of the country.
lifetravelergirl
03-04-2012, 02:42 PM
Walmart and it's ilk are like maggots feeding off the corpse of America, but what's going to happen when the corpse is consumed? American based corporations receive a tax cut for sending work overseas that would otherwise employ American workers, people who are instead working at the company store (Walmart). The division between rich and poor is growing every year, the poor becoming poorer, the rich becoming richer. I had to listen to some guy bragging about how he steals homes from people who have lost their jobs and then rents them out at a profit. The only thing that matters lowering costs to raise profits and taking advantage of the less fortunate. Good times though... I heard a long time ago, the end will come not with a bang but with a whimper.
Positive thoughts to jump start your day ^_^ ! Go Corporate greed! Yay!
jimboe7373
03-05-2012, 08:10 AM
^^^^Agree with your post and love your tagline.
rickdugan
03-05-2012, 08:55 AM
It didn't have to be that way, Walmart was able to create their own market buy successfully convincing large amounts of Americans that low-cost was the ONLY thing to be concerned with. IMHO this mentality is exactly what has severely hurt the US on economic, social and quality of life fronts. We have bought into a system where short-term profit and low-prices are the ONLY things to be sought after. Sustainability, quality, morality and many other desirable components have been discarded to feed the greed of the corporations and the cheapness of the US consumer. Just like our fast food; McDonalds, Taco-Bell etc. and our entertainment; Jersey Shore, Kardashian's etc., the American people have been marketed and have gobbled up the lowest common denominator. It is not sustainable on either an economic or moral basis.
Nice speech. ;) But it is also highly debatable. Consumers dictate wants and needs to suppliers, not the other way around. If they did not want what Walmart was selling, then Walmart would not exist. The same holds true of fast food joint and reality TV shows, among many other things. Marketing only makes consumers aware that these things exist, it cannot make consumers like or want things that they otherwise would not purchase.
I lay the blame on our moral decay in a lot of places, but certainly not on the sellers of goods and services. We are raising a generation of children with no moral compass, personal integrity or strength of character, but I lay the blame upon the parents rather than the stores that sell $15 toasters or junkie $2 burgers.
Eric Stoner
03-05-2012, 11:06 AM
Nice speech. ;) But it is also highly debatable. Consumers dictate wants and needs to suppliers, not the other way around. If they did not want what Walmart was selling, then Walmart would not exist. The same holds true of fast food joint and reality TV shows, among many other things. Marketing only makes consumers aware that these things exist, it cannot make consumers like or want things that they otherwise would not purchase.
I lay the blame on our moral decay in a lot of places, but certainly not on the sellers of goods and services. We are raising a generation of children with no moral compass, personal integrity or strength of character, but I lay the blame upon the parents rather than the stores that sell $15 toasters or junkie $2 burgers.
Actually, I think you are both right. Our lack of long-term thinking and planning coupled with an overemphasis on instant gratification is undoubtedly part of our problem.
Likewise we cannot ignore one of the few things Galbraith got right - invented or created demand. Neither consumers nor suppliers operate in a vacuum.
jimboe7373
03-05-2012, 01:23 PM
Nice speech. ;) But it is also highly debatable. Consumers dictate wants and needs to suppliers, not the other way around. If they did not want what Walmart was selling, then Walmart would not exist. I respectfully disagree, Madison Ave and the like have spent many years and hundreds of millions of dollars on finding ways to influence people's behavior. Many years ago DeBeers took a gem that was relatively common and without much value and by a combination of savvy and manipulative marketing created the "diamond equals love" mentality that has helped to sell $Billions of dollars worth of diamonds and influences the buying habits of hundreds of millions of people for over 100 years.
I agree with you 100% on the parenting part of the equation but also feel that too is part of the broader part of the marketing mentality. The parents have marketed and bought into the "instant-gratification" materialistic mentality that Eric mentions. A dumbed-down populace and what amounts to brainwashing by having the messages showed over and over during tv programs is a pretty potent combination in influencing behavior.
Kellydancer
03-05-2012, 01:35 PM
Nice speech. ;) But it is also highly debatable. Consumers dictate wants and needs to suppliers, not the other way around. If they did not want what Walmart was selling, then Walmart would not exist. The same holds true of fast food joint and reality TV shows, among many other things. Marketing only makes consumers aware that these things exist, it cannot make consumers like or want things that they otherwise would not purchase.
I lay the blame on our moral decay in a lot of places, but certainly not on the sellers of goods and services. We are raising a generation of children with no moral compass, personal integrity or strength of character, but I lay the blame upon the parents rather than the stores that sell $15 toasters or junkie $2 burgers.
I blame the moral decay on many things such as societal but also part of the problem is the materialistic world we live in. I think a lot of what we are seeing now with all side happen in the 1980's where it became a society of "I need that now". Things that used to be luxuries became the norm and many thing happened. For example there was the credit issues that we are still dealing with, and the problem where both parents often have to work fulltime and overtime to pay for things, sometimes their fault but often the fault of others.
Melonie
03-05-2012, 04:07 PM
trying to avoid the political and stick with the financial ...
If there is a 'moral' aspect to this it is financial 'moral hazard'. This basically boils down to lower income Americans being granted credit cards and mortgages - to then maxx out those credit cards and fall behind on mortgage payments - and to then either 'settle' or file for bankruptcy and thus avoid ever having to actually pay the full amount of these financial commitments.
Another manifestation of 'moral hazard' is the available amount of SNAP, unemployment, social security etc. ... which now boils down to X dollars being provided by the gov't to some 25 plus percent of American households as their primary means of support. With the US gov't being 'broke', they are not likely to increase the dollar amount of these payments. As such, the recipients have a strong motivation to find the lowest possible price for food, clothing, household items etc. ... which leads them straight to WalMart !!!