Friday, January 14, 2005

Do shoppers really care what Walmart pays its employees?

Mad anthony offers some interesting thoughts on whether criticism of Walmart's labor polices has caused people to shop elsewhere. His post is based on a Bloomberg article in which a Wall Street analyst told Bloomberg that "consumers may also have turned to other retailers after reading criticism of Wal-Mart's labor issues."

Remember, Wall Street analysts told us how great a buy the NASDAQ was in 2000, so we should be careful about believing what they say.

I tend to agree with mad anthony on this one. Not only do I think that people don't care about the labor practices of companies they purchase from, I also think that most people don't pay attention to the news so don't even realize there's a controversy.

Most companies operate on the principle that they want to pay their employees the lowest amount of money that the market will bear. Walmart is far from unique. Mad anthony writes:

Does Target and Kohls pay all their employees $30 an hour with full benefits? I doubt it. So it seems unlikely that customers are going to pass up Walmart to shop at Target for moral reasons. I think the impact that Wal-Mart felt is a reaction against Wal-Mart's quality and shopping experience, not against their employee benefits.

I personally would never shop at Walmart, it's a pretty awful store and there aren't any in DC anyway.

54 comments:

Charles said...

I agree most companies want to pay the lowest possible wage that is practical for where the labor is located. Pretty much a given for a business. The majority of consumers don't care where the item was made, or how much the workers were paid - they care about finding what they want for the lowest price.

Yes, there are some consumers who won't buy an item due to where it was made, but not a lot of them. Or won't shop at a certain store, or (insert their rule here). That's fine, the diversity of the marketplace supports the ability to do that.

I don't have a problem with Wal-mart since it fills a need of convenience, price, service, hours of operation, etc. It is an American success story. If it deals with off shore companies that pay what looks like a starvation wage here - but is a huge wage there - why is that somehow "wrong?"

Why isn't that compared to certain charities and other fund raising organizations who treat their employees like dirt, yet finance the upper management with millions of dollars in pay, benefits, perks, and buyouts? That's just right here in the U.S. and is democrat and republican supporting businesses, environmental groups, labor unions, charities, foundations, and yes even governmental organizations.

Steve said...

Well, what's interesting is that Wal-Mart's CEO took out ads yesterday in one hundred newspapers to counteract the claims that he's taking advantage of his 1.2 million employees. TV ads are scheduled to follow next week, and radio ads shortly thereafter.

Wal-Mart does have some shoddy products - I bought a lavalamp from them that destroyed a coffee table and a $500 carpet and had to file a claim to get reimbursed. Still, seeing as how most people will believe anything they read or hear or see on TV, these ads are probably a good idea for them.

The difference between Wal-Mart, Target, and Kohls is that Target and Kohls aren't putting out ads. I would bet that some of the attention for this issue will shift to those other two stories in coming weeks.

Curtis said...

The reason I don't shop at Walmart has nothing to do with wages. It's that they refuse to carry anything that they consider 'vulgar' like Jon Stewart's book, or any CD's with explicit lyrics, yet they are totally content carrying guns and ammunition.

Mexigogue said...

I don't care how Walmart treats their employees. They work there of their own free will, who am I to protest if they choose to be abused? Just give me the everyday low prices! I leave the boycotting to the socialists and their wrongheaded collectivism.

R said...

I think a lot of people are misguided when it comes to what Wal-Mart actually offers. They run commercials about "Oh, I get everything here!" and that's simply not the case.

The discriminating shopper knows what products are good to get at Wally World and which they have to shop for elsewhere. I mean, I sure as fuck don't buy my clothes from Wal-Mart, but if I need groceries or a light bulb or a pen, etc., generic shit that I don't particularly care about the quality (to some extent), the prices are simply better at WM.

And Mexigogue is right. The employees work there of their own free will.

mikeca said...

There are some people that avoid shopping at stores because of their labor practices, but it is a small percentage. On the other hand, it only takes a small percentage of people changing their shopping habits to cause a small drop in Wal-Mart’s revenue.

The more important question for Wal-Mart is how happy are its employees with working there? Unhappy employees in retail, can lead to unpleasant experiences for customers, which is a much bigger threat to Wal-Mart.

Ricky said...

Interesting. If employees are mad, they take it out on shoppers, shoppers shop elsewhere, shop closes, employee has no job.

I think employees, who abuse customers are scum. It happens, but you should also realise that that is the reason people shop at Amazon. nobody there to humiliate you. It does mean that a lot of service jobs disappear. See, you want a computer, you can go to wal-mart, that means the employees got a job. If you don't like the service, you buy the computer at Amazon. Amazon orders it from China. It arrives at the US distribution hub, fed ex brings it to your house. It means less American workers handle it, less American jobs. This is what outsourcing does.

I think a lot of the economic downturn and dip in consumer spending has to do with the lousy behavior of shop employees. But then again, it's their job, not mine that's at stake.

The New Democrat

Old Blind Dog said...

The complaints are made up. How do I know? My son works for Wal-Mart. I asked him.

Lefties don't like Wal-Mart because they are successful. Mom & Pop stores don't like Wal-Mart because when Wal-Mart comes along they can't charge huge prices anymore and go out of business. It's called capitalism. It worked for Sam Walton and it can work for anyone.

Steph said...

>Lefties don't like Wal-Mart because they are successful.

Does the "lefty" disdain of success apply to successful "lefties" as well?

wil said...

I've got a lot of generally lefty friends and relatives and they definitely avoid Walmart. I suspect it's a movement you'll see gain steam in coming years, though probably not enought to have any effect.

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Does the "lefty" disdain of success apply to successful "lefties" as well?Amazingly enough, those are exactly the ones it applies to.

Jacqueline Mackie Paisley Passey said...

I assume people working at Walmart are working there because they do not have the ability or experience to work anywhere better. Therefore, Walmart is benefiting those employees by allowing them to gain experience and earn higher incomes than they otherwise would be able to.

The Ugly American said...

I personally will pass Walmart to shop somewhere else for the simple reason that most of the time, they only have 4 or 5 check out counters open and it takes for ever to get out of the place! Why do they have 40 check out counters?

But as far as how much they pay the people that work there, I think that's the people that work there business. People need jobs and some are willing to work for minimum wage or what ever it is they pay. I mean, be real, how much should a job at Walmart pay? It ain't like brain surgery or rocket science! No offense to anyone that works there.

Libertarian Girl said...

Ugly American, I never understood why stores allow long lines at cash registers. Some people will go elsewhere when they see a long line. Don't they realize they are losing business by allowing long lines?

Old Blind Dog said...

People need jobs and some are willing to work for minimum wage or what ever it is they pay.My son works at a Wal-Mart in the Houston area. Minimum wage is $5.15/hr. He has been working for them since last June and makes $9.00/hr. He says no one there makes minimum wage.

Jacqueline Mackie Paisley Passey said...

Long lines at checkouts are the result of a variety of factors:

1. Staffing levels are determined by *average* business levels for times and days of the week. So if you get a sudden abnormal surge of customers, there aren't enough people present to open up enough checkouts.

2. Low wage employees are flaky and skip work frequently, so even if you've scheduled adequate staffing, the people you've scheduled won't necessarily show up.

3. Scheduling is a complex task. The low level managers at retail stores who do this task often don't have enough brainpower to do a good job at it, and thus the schedule is frequently messed up.

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