Wednesday, June 08, 2005

How Much Is A Good Deal Worth To You?

I like it when people refer to our wonderful democracy as an "experiment". It is a daring experiment. The Founding Fathers assembled created a nation that gave the common person an incredible power--choice. This was the experiment. In history, choice was largely left up to a select few; governments and churches decided what was best for the populace. But in America, the people would make the decisions for themselves. To me, American history is one great sociological experiment.

Our economy works on that principle. You have the freedom to create a product, and people have the freedom to buy it. You have the right to charge what you want, and people have the right to pay it or not.
Wal-Mart stands at the pinnacle of almost 250 years of American economics. Like anything else, it has evolved. And in our system of choice, this animal is the fittest of them all. By offering extremely low prices, and a wide variety of products, it has become the world's largest corporation. But it only got there by Americans exercising their freedom of choice and choosing it.

To me, Wal-Mart represents a giant disconnect in this country. Similar to the disconnect that exists between people and politics. Wal-Mart, like any animal, does what it needs to survive. Like any politician, it will say and do whatever it needs to. And yet, people seem more than willing to disregard the heavy price paid, to get what they want.

Wal-Mart searches the globe for the lowest price of labor. In China, workers are paid $100 a month. But then Wal-Mart can also sell jeans for $20. Would you pay more for jeans if they came from factory workers paid a reasonable wage and with a union? History has already given us that answer.

Wal-Mart has no union, and pays its employees $9 an hour. Would you buy groceries from a store with higher prices?

Smaller business cannot compete with Wal-Mart's prices. When a Wal-Mart moves into a region, many businesses must move or close, and many people are left unemployed. Sometimes those unemployed people go to work at Wal-Mart, for less than they made at their old business.

There's a disconnect in this country, and that is what makes me nervous. We are a very ambivalent people. Most of America is against the war in Iraq, most feel our troops are bogged down, and most feel that the war has done nothing to enhance homeland security. Thus, at the time of the election, most people thought the President was doing a poor job. Yet, we re-elected him. We continue to do many things that are not in our best interest, from denying our rights, to re-electing failed leaders, to shopping at stores that lower living conditions just so we can save a few dollars.

The article in the Los Angeles Times said, "Surveys by the Teamsters and the United Food and Commercial Workers — the two unions most threatened by Wal-Mart — show that many of their own members shop at the discounter."

Some say what is good for a business is good for everyone. Lower prices save workers money. Manufacturing jobs are jobs, regardless. The problem is that those jobs in China do not have unions. Plant owners can pay their workers $100 a month, and it's not illegal. Slave labor was free, but I suppose you have to pay workers something in the 21st century, don't you?

But I don't blame Wal-Mart. If, in some dramatic switch, they started employing only unionized workers, their prices would go up, and their business would decline. People would continue to shop the bottom line at some other store doing it cheaper.

I had Christian friends who mocked Bill Clinton for believing "it's the economy, stupid." They shunned such a selfish approach to life. But many of those same people look for the lowest prices possible, rewarding companies who cut every corner, and often do things illegally. Many of those same people own stock in companies busy destroy the environment.

Where does your money go? What do you really believe in? Would you shop at a more expensive store that paid its employees and manufacturers more? Many might say "yes", but history as shown we really believe something different. This week 100 million Americans will shop at Wal-Mart. That's about twice as many as will find their way into church. And we claim to be some kind of Christian country? American's freedom is a clear window into what they really believe. And what we really believe in is savings. Many people like to blame the corporations. But the blame lies with the consumer. Companies and politicians only survive based on the conditions we allow them to survive in. They mold themselves into what we want. Don't blame Wal-Mart because people want to save a few bucks.

Concentrate on socially responsible companies. Try the Domini 500 index for ideas.

If a company is on that list, it has been deemed socially responsible by Domini. Yes, Home Depot is on that list. No, Wal-Mart isn't.

1 comment:

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