quote:Originally posted by Jhai: Michael Pollan is a journalist, not a scientist, agriculturalist, nor even someone who has at least been practicing farming for most of his life.
Certainly. And anyone who changes their life based solely on his book (and I know some people who have) without doing any further research on the points he raises . . . well, I don't think it's very smart. Let's leave it at that.
I would tend to agree. I found the book to be very enjoyable and informative but I didn't buy into Pollan's interpretation of how things should be. However, I think it provides a good starting point for considering the medical and ethical implications of our eating habits.
Posts: 1327 | Registered: Aug 2007
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One of Walmart's (many) business practices that I don't like is that they pressure manufacturers to decrease the quality of their product so that Walmart can sell it cheaper.
For instance, the Levi jeans you get at Walmart are not of the same quality as the Levi jeans you get at other stores - Levi has produced a separate "Walmart line" of clothes to meet Walmart's pricing demands.
Snapper lawnmower told Walmart "thanks but no thanks" because of this and pulled their product from Walmart stores, standing by the quality of their name and not sacrificing their quality for Walmart's distribution. Walmart wanted to sell their mowers at a price below Snapper's cost to produce them - and when Snapper asked how exactly they thought this was possible, Walmart said to create a separate line of mowers for Walmart that are of lower quality and cheaper to produce. After that, Snapper walked (and good for them).
It is one of the reasons I don't shop there, because I know that the monetary "savings" often comes along with a matching decrease in quality. If I buy something for 20% less money, but I have to replace it 30% sooner than I would a more quality product... did I really save anything?
Vlassic is another example - where the drive for "low costs" nearly destroyed the supplier, forcing it to declare bankruptcy.
Here is another article, and here is another. There are really no end to these types of articles, and they're not difficult to find.
It's no big secret that Walmart sells certain products at a loss to drive out competitors who cannot match those cuts with profits in other areas, and that they strong-arm their suppliers (first becoming the primary or even sole distributor of product, then demanding price cuts that force the supplier to cut employees, benefits, and factories).
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I'm not sure why selling lower quality goods is a bad thing. Sometimes I want to buy lower quality goods, if they're cheaper.
If you don't want to, bully for you, but don't discount those of us who like to. Walmart was a godsend for me when I lived in rural Indiana. Loved it.
I also don't have much sympathy for the suppliers. It's a business, and they need to compete or close shop. I'm fine with them moving jobs overseas (I'll send up a cheer, even), and if they have to lay off some employees to cut costs, well, again, that's business.
I truly do not understand articles that complain about the business world being business-like. Or that companies are being forced to change to stay competitive. Is it really that much of a shocker?
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quote:Originally posted by Jhai: I'm not sure why selling lower quality goods is a bad thing. Sometimes I want to buy lower quality goods, if they're cheaper.
If you don't want to, bully for you, but don't discount those of us who like to. Walmart was a godsend for me when I lived in rural Indiana. Loved it.
I also don't have much sympathy for the suppliers. It's a business, and they need to compete or close shop. I'm fine with them moving jobs overseas (I'll send up a cheer, even), and if they have to lay off some employees to cut costs, well, again, that's business.
I truly do not understand articles that complain about the business world being business-like. Or that companies are being forced to change to stay competitive. Is it really that much of a shocker?
Well, it's for a short term gain. Do the extra dollars from the bottom line go to the company or the (new) workers or the CEO's pocket?
Are the extra dollars worth the blow to the American economy? The extra dollars come from the fact that the company is getting away with paying a worker overseas (who yes, does want a job) substandard wages. The extra dollars come from the fact that America has defined an acceptable minimum wage (which is quite low), and that companies have to pay for the health insurance that a lot of America doesn't even get and that we are arguing about so bitterly right now. The extra dollars come from the fact that American factories are subject to American laws about pollution and the environment. Basically, all those horrible working conditions and low wages for immigrants we read about in our history books got fixed because of unions and regulations on industry. They got fixed because they were happening in our backyard and we couldn't ignore them. Now all this stuff still happens, but we can't see it, because it's in China and we're not, so that's all okay. Prices are low.
Posts: 1757 | Registered: Oct 2004
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quote:Originally posted by Jhai: I'm not sure why selling lower quality goods is a bad thing. Sometimes I want to buy lower quality goods, if they're cheaper.
I think part of the issue is that we're not being adequately compensated for the change in quality and much of the process is quite non-transparent making it difficult for the consumer to gauge the change in reliability and/or possible risks.
When Wal-mart or any retailer sells products from overseas, they get hefty profits because the change in what they pay can drop much more drastically than the drop that the consumer will see at the cash register. You can verify this yourself by physically going to places like China and seeing how little stuff costs, but more numerically there was a good Atlantic article on just how little of the cost of a product filters down to the manufacturer these days.
What we're essentially doing is paying first-world prices for products from the third-world, but we're also relying upon third-world Q/A and safety regulations to control what kinds of products we're getting. This seems to me to be a very dangerous state of affairs.
Consumers and/or the government should really accept that overseas outsourcing is inevitable. Rather than wasting time fighting small irrelevant battles like getting tariffs on car tires and candles, or focusing on specific countries, we should both really advocate that companies that import overseas products use a greater portion of their savings to verify publicly (or contribute to third-party or government agencies that can) that the safety of their product is unchanged and up to "our" standards. I wouldn't even object to better oversight on domestic industry, just to make the whole thing fair across-the-board.
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quote:Originally posted by theamazeeaz: ... They got fixed because they were happening in our backyard and we couldn't ignore them. Now all this stuff still happens, but we can't see it, because it's in China and we're not, so that's all okay. Prices are low.
Well, some of it.
No, we don't enslave people anymore, but even in our backyard, some of our industries still use illegal immigrants heavily, such as in agricultural fields or housing construction. This is not necessarily a bad thing mind you, but still important to note.
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Wal-Mart pays the average for the retail sector and more employees get health insurance than the average in the retail sector.
Over 30% of Wal-Mart's customers are at or below the poverty line.
Wal-Mart prices in general are over 20% lower than at the competition.
The competition's prices are about 15% lower than they would be without Wal-Mart.
(All numbers from Dr. Robert Waples from Wake Forest University)
If Wal-Mart were a government anti-poverty program, it would be declared a screaming success. It has raised the standard of living for the poorest and a few levels up, which includes the people it employs, and it has enabled ALL Americans to enjoy low interest rates without the inflation that would normally accompany it.
I do not cry for its competition or the suppliers. Customers shouldn't have to pay higher prices over misplaced sentimentality. Become more efficient or get out of the game.
You know who doesn't shop there? High middle-class to wealthy. I'm not surprised that the same high middle class to wealthy are Wal-Mart's biggest detractors.
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I'm not telling you not to buy there, just saying I don't.
Blayne asked "What's wrong with Walmart?" - and I responded with the tip of a very, very large iceberg.
It's everyone's choice whether they want to feed the beast, or not.
I choose not to. I will not buy anything in their stores, choosing to "vote with my wallet" so to speak.
At this point, I would happily pay more money to a local shop for the same (and quite often better) product - or do without.
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quote:I would happily pay more money to a local shop for the same (and quite often better) product - or do without. --------------------------------------------------------------------------------
That's marvelous that you have the financial wherewithall to make that choice.
For most of Wal-Mart's customers, simply not buying new clothes, for instance, isn't an option. Not when the kid outgrew the other stuff.
For myself, I LOVE Wal-Mart's workout clothes. The last time I went there I got a pair of running pants and 3 sports bras for $20. Last time I went to Target I got A sports bra for $20. Sometimes, a whole lot of cheaper items are better.
I really think a lot of the condemnation of Wal-Mart is a class war. Declaring yourself to shop only at, say, Target and never at Wal-Mart is a declaration of comfortable economic status.
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quote:When Wal-mart or any retailer sells products from overseas, they get hefty profits because the change in what they pay can drop much more drastically than the drop that the consumer will see at the cash register. You can verify this yourself by physically going to places like China and seeing how little stuff costs, but more numerically there was a good Atlantic article on just how little of the cost of a product filters down to the manufacturer these days.
This isn't accurate. Wal-Mart's profits are generally around 3% -- that's the most they could lower their prices across the board and still be in business. It is much more expensive to sell things in the US (labor, real estate, et cetera) than it is to sell things in China. Sure, Wal-Mart buys things more cheaply from China (of course, so do most retailers, and this is a good thing; cheaper goods here making people better off, more decent-paying jobs in China making people better off), but it does not follow that because you can see such things available for very cheap in China Wal-Mart could offer them for a lot less here and pocket the difference.
Indeed, that this is not what is happening can be checked empirically very quickly. Their profit margin is just 3%, and there isn't some hidden excess going into executives' pockets. Their executives are paid low wages compared to those at other companies.
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quote:Originally posted by fugu13: ... Their executives are paid low wages compared to those at other companies.
This seems unlikely. I'm looking for the Atlantic article on manufacturing, but I do know this.
quote:Today, however, average public company CEO compensation is 400 times that of the average employee. And thousands of senior managers in addition to CEOs are drinking at the same frothy trough, especially, as we have all just seen, senior managers in the financial services industry. (By contrast, the ratio of CEO pay to that of the average employee has remained around 22 in Britain, 20 in Canada and 11 in Japan.)
quote:In 2004, the average United States Wal-Mart employee made $9.68 an hour. Wal-mart subcontracted employees in China and Bangladesh made $.17 an hour. H. Lee Scott Jr., Wal-Mart CEO in 2004, made $8,434.49 per hour (IPS). Wal-Mart has a long history of problems with employee wage and labor relations, working conditions, lack of health insurance, labor union opposition, and overseas labor concerns. Even considering these large legal, political and moral issues, CEO compensation has remained 871 times higher than the average Wal-mart employee (IPS).
871 times for Walmart versus 400 times for an average company is a pretty hefty difference even in the US, let alone a more reasonable 20 or 11 as in Canada or Japan.
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quote:I would happily pay more money to a local shop for the same (and quite often better) product - or do without. --------------------------------------------------------------------------------
That's marvelous that you have the financial wherewithall to make that choice.
For most of Wal-Mart's customers, simply not buying new clothes, for instance, isn't an option. Not when the kid outgrew the other stuff.
For myself, I LOVE Wal-Mart's workout clothes. The last time I went there I got a pair of running pants and 3 sports bras for $20. Last time I went to Target I got A sports bra for $20. Sometimes, a whole lot of cheaper items are better.
I really think a lot of the condemnation of Wal-Mart is a class war. Declaring yourself to shop only at, say, Target and never at Wal-Mart is a declaration of comfortable economic status.
Then don't buy new clothes for your kids. Buy new what you have to and get the rest from other sources. That's what thrift stores and friends with kids bigger than yours are for.
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Man, I had a whole post written out and somehow my computer lost it.
In brief, calling it a class war is oversimplifying. Though an argument could be made that those living hand-to-mouth are less likely to question (or care about) the quality or source of what they are buying, or care so much about sustainability or further-reaching reprucussions of their choices.
But there are always choices.
The links above are a small glimpse into why some people don't shop at Walmart, and they are not economically based.
Everyone's free to make their own choice, and I choose to shop elsewhere.
I'm not knocking those who feel they are financially pressured into shopping at Walmart - I'm knocking Walmart's business practices. It's similar to knocking OPEC, rather than the average commuter.
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quote:Originally posted by katharina: I do not cry for its competition or the suppliers. Customers shouldn't have to pay higher prices over misplaced sentimentality. Become more efficient or get out of the game.
That would be a fair statement if Wal-Mart was not artificially -- and, arguably, illegally -- distorting the functioning of the free market you're alluding to here.
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quote:Then don't buy new clothes for your kids. Buy new what you have to and get the rest from other sources. That's what thrift stores and friends with kids bigger than yours are for.
Or...buy them from Wal-Mart, where the lower quality doesn't matter because the kids will outgrow them before they wear them out.
Because, you know, poor people should never have new things. It's better for them to LOOK like they are poor for easier identification. Wearing out of style clothes that don't quite fit and not being able to get something pretty and new is the perfect way to shame those without extra cash.
There is clearly a place for low-quality but still new and stylish children's clothing. I can't believe that you want to decide for someone else that they had better LOOK poor unless they want to shell out serious money for clothes that will be worn for less than a year.
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quote:I really think a lot of the condemnation of Wal-Mart is a class war.
It sure seems that way to me.
I'm not sure I understand that statement. Are you saying that people who have a problem with Walmart have this problem because they feel that it helps out poor people?
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quote:Originally posted by FlyingCow: Out of curiosity, kat, did you read through the links above?
I did. The arguments in most of them are either incorrect, bad economics, things I don't really care about because I don't think they're morally wrong (i.e. suppliers being "bullied" by WalMart), or things I do care about and think are morally great (i.e. jobs being shipped overseas).
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Squick, I think the argument is "people with money can afford to care about things that people without money find trivial hairsplitting"... and also sort of a "let them eat cake" impression, that those that can barely afford poor quality things should pay for better things.
It's similar to the "poor people are overweight because McDonalds is cheap" argument.
I don't see it that way.
I think class is a factor in the discussion because Walmart most directly benefits those with less money, giving them a vested interest in protecting it. As those with more money don't benefit *as much*, they have more freedom to shop elsewhere (and thus less of a vested interest).
Therefore, Walmart has little fear of backlash from those in lower class segments because their vested interest dissuades them from questioning Walmart's practices.
So, while those in lower income brackets may claim that those in higher brackets are "attacking their way of life" - it's just not true. Those with more perceived freedom to shop elsewhere simply have less vested interest in the continued success of Walmart, and look at the company's actions without fear of "biting the hand that feeds them".
Posts: 3960 | Registered: Jul 2001
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quote:Originally posted by fugu13: ... Their executives are paid low wages compared to those at other companies.
This seems unlikely. I'm looking for the Atlantic article on manufacturing, but I do know this.
Wrong comparison to what fugu was saying, I believe. Compared to other executives running equally large corporations, WalMart executives are not paid that much more.
Comparing one company's executive vs. average employee salary is a really silly thing to do, since industries differ so much. If I'm the CEO of a cutting-edge biotech firm of course the gap between what I'm paid and what my average employees - i.e. research scientists - are paid is going to be less than if I'm the CEO of a retail firm. Seriously, dude. That's going to be true whatever country you're in. That's why reputable studies comparing CEO pay across countries control for industry effects, since the industry spread across countries is not identical.
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Jhai, I'm actually curious about your comment that shipping jobs overseas is "morally great".
Part of what I do is manage projects to outsource job functions overseas, and I work with many vendors that have both on- and off-shore associates. Personally, I don't have a problem so much with the concept of sourcing work overseas, but the words "morally great" stuck out for me.
If every manufacturing, clerical, call center, technical support, etc job in the US was sourced overseas, leaving only face-to-face jobs such as doctors, store clerks, landscapers, plumbers, etc. in the US... would that be your idea of a morally ideal environment?
I think I'm just curious about degree. I understand the need for sourcing at times (and even more the need for automation), but I don't know if I would agree with shutting down every manufacturing plant in the country.
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quote:I'm not sure I understand that statement. Are you saying that people who have a problem with Walmart have this problem because they feel that it helps out poor people?
I actually think Kat has a (partially) good point here. A lot of problems in the world stem, not from the upper class deliberately "fighting" against the lower class, but merely from acting in self interest in ways that happen to hurt poor people without regard to the consequences, often with some kind of "justification."
I'm not sure whether I think WalMart does worse things than other giant corporations do, either way I think there are certain practices that many larger corporations partake in that are worth criticizing. But it's worth considering how the things we advocate would impact all aspects of society.
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Jhai, I'm also curious about your not having any problem with the largest economic mover in the country bullying smaller businesses. Following in that vein, would you want current anti-trust legislation to be repealed?
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quote:But it's worth considering how the things we advocate would impact all aspects of society.
Which cuts both ways. Forcing "low low prices" at all costs has impact on other aspects of society, too.
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quote:Originally posted by Jhai: Compared to other executives running equally large corporations, WalMart executives are not paid that much more.
*shrug* I thought that would help adjust for purchasing power, because if you didn't I would expect the CEO in the US to be paid even more absurd amounts in absolute dollars when compared to other countries.
I think executive compensation in the US is just bizarre when you look at the results, and I don't think the industry spread between the US, Japan, and Canada is enough to account for it. We're different, but not more than an order of magnitude different.
In any case, I don't know why we're focusing on Walmart in my first statement because the first and only time I mention Walmart is "Wal-mart or any retailer sells products from overseas." I reserve my ire not just for Walmart, but all retailers in the US, so pointing out that other retailers in the US are just as bad ... not really relevant to me.
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Mucus, I think the Walmart focus came when I mentioned them parenthetically on page 1 of this thread, and then Blayne asked what was wrong with Walmart in particular.
Then again, the thread drift from capitalism to corporatism would naturally lead to a discussion about the country's single largest corporation, so maybe it was inevitable.
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I know that the thread as a whole had drifted to focus on Walmart, but my initial response was about the "low quality" issue. I don't really consider that to be a specifically Walmart issue, so I responded in general, but I can see how it can be confusing. Ack.
Posts: 7593 | Registered: Sep 2006
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quote:Originally posted by FlyingCow: Jhai, I'm actually curious about your comment that shipping jobs overseas is "morally great".
Part of what I do is manage projects to outsource job functions overseas, and I work with many vendors that have both on- and off-shore associates. Personally, I don't have a problem so much with the concept of sourcing work overseas, but the words "morally great" stuck out for me.
If every manufacturing, clerical, call center, technical support, etc job in the US was sourced overseas, leaving only face-to-face jobs such as doctors, store clerks, landscapers, plumbers, etc. in the US... would that be your idea of a morally ideal environment?
I think I'm just curious about degree. I understand the need for sourcing at times (and even more the need for automation), but I don't know if I would agree with shutting down every manufacturing plant in the country.
Basic argument: Poor people in developing countries need jobs far more than any individual in the US does. A manufacturing job in a developing country will add far more utility on the margin to individuals there than the loss of a manufacturing job will to individuals here. Generally speaking, as long as that remains true, I'll support jobs going overseas. I don't see why I should care more about the happiness of a random American stranger than I do about the happiness of a random stranger elsewhere in the world.
Slightly more complicating details, which nonetheless do not change the main point: the US's competitive advantages (and positioning for future industries), the marginal costs of pollution here vs. in developing countries, industry build-up as a development tool, fringe benefits that a manufacturing plant brings to communities here vs. overseas, increased economic freedoms overseas leading to other freedoms, I can expand on any of those if you wish.
Posts: 2409 | Registered: Sep 2003
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quote:I really think a lot of the condemnation of Wal-Mart is a class war.
It sure seems that way to me.
I'm not sure I understand that statement. Are you saying that people who have a problem with Walmart have this problem because they feel that it helps out poor people?
Here's what I'm saying. Comparing WalMart practices with the rest of the industry and the criticism of WalMart with the criticism of the rest of the industry, it appears that WalMart gets far more criticism than it deserves, relatively speaking. It appears that there is an emotional (or some other non-rational) component in a lot of the criticism against WalMart. I think that a good part of that is a negative emotional reaction to WalMart's association with the lower classes and rural America.
My personal problem with WalMart is that so much of their stuff is junk. More and more I'm moving to paying more for quality merchandise. But that's a personal preference, not a moral judgment.
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Interestingly, people have studied that. For instance, executive compensation is very strongly correlated with firm size. There are more very large firms in the US, so there are more executives with very high compensation.
This makes sense. If the impact of an executive is some percentage of firm activity, then it makes sense to pay a lot more to get the best executive one can afford, even if they are only a little better than the next-best executive. A 1% increase in executive quality can mean billions of dollars a year in revenue, making it a no-brainer to pay hundreds of millions in pursuit of that. That companies are seeking that (and are fairly successful at doing so) is also borne out in studies.
But anyways, Wal-Mart employs 1.8 million people. For the top executive to forego pay entirely would give each of them something like an extra ten or twenty dollars a year (the CEO's total compensation in 2007 was about $23 million -- quite low for a CEO of such a major corporation).
Alternatively, the CEO could forego his pay to reduce the prices of each thing sold at Wal-Mart by about what, a hundredth of a cent?
As I said, the empirical evidence is clear: Wal-Mart is not extracting large amounts of money from its customers by selling things at much above their total costs. They could not lower prices to anywhere near what they are in China (or much more than a few percent, in fact) and still exist. Believing that is ignoring the facts. Indeed, it would be somewhat of a perverse belief; if it were so possible, surely someone would do it -- indeed, you should do it, and become a billionaire.
Posts: 15770 | Registered: Dec 2001
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quote:Originally posted by katharina: You haven't convinced me that they do.
The facts are extant. Wal-Mart does more than simply dictate price terms to its suppliers; it dictates how its suppliers compete with one another. This is plainly market-distorting.
quote:Until recently, every retailer would draw up its own merchandising plan, detailing which brands to promote, how much shelf space to grant each, which products to place at eye level. These days, Wal-Mart and a growing number of other retailers ask a single supplier to serve as its “Category Captain” and to manage the shelving and marketing decisions for an entire family of products, say, dental care. Wal-Mart then requires all other producers of this class of products to cooperate with the new “Captain.” One obvious result is that a producer like Colgate-Palmolive will end up working intensely with firms it formerly competed with, such as Crest manufacturer P&G, to find the mix of products that will allow Wal-Mart to earn the most it can from its shelf space. If Wal-Mart discovers that a supplier promotes its own product at the expense of Wal-Mart's revenue, the retailer may name a new captain in its stead.(1)
(1) Such blatantly enforced collusion has not gone entirely unnoticed in Washington. Toward the end of its time in office, even the merger-happy Clinton Administration allowed the Federal Trade Commission to launch an investigation of these practices, and an FTC report in early 2001 identified four ways that Category Management may violate even the remarkably loose antitrust guidelines of the last generation. All four of these violations cut right to the core of the free-market system. As the FTC put it, a category captain might “(1) learn confidential information about rivals' plans; (2) hinder the expansion of rivals, (3) promote collusion among retailers; or (4) facilitate collusion among manufacturers.” In Wal-Mart's world, all four violations are present to at least some extent.
Wal-Mart is not the only offender here, but it is the biggest.
quote:Originally posted by katharina: Because, you know, poor people should never have new things.
Who has said that in this thread, other than you?
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quote:Originally posted by FlyingCow: Jhai, I'm also curious about your not having any problem with the largest economic mover in the country bullying smaller businesses. Following in that vein, would you want current anti-trust legislation to be repealed?
I don't think that what WalMart does is properly considered bullying (those the quotes when I used the term that had been used in the articles you linked to). Frankly, I think it's silly to use such emotive terms when discussing economics.
Generally, I think the idea of anti-trust legislation is a good one. However, I am not a lawyer, nor have I studied the economics of anti-trust legislation (outside of the WTO, anyways) in any great detail, so I don't think I can give an educated opinion on specific law in practice today.
My understanding is that economists today generally think that the US' anti-trust legislation is roughly on target - and from what I know of it, I would agree.
I do think that anti-trust laws are less important today than they were in the past due to the increased transparency of our economy, and the incredibly decreased transaction costs. Given my knowledge today (which, granted, is relatively scant), I would not repel any US anti-trust legislation.
I believe that most monopolies today - or industries where you have one extremely dominant player - are that way because of either the natural structuring of the industry or because one player has just been really, really good at what they do. I also think that most monopoly-esque businesses today (like, say, Microsoft & WalMart) add far more value to consumers than whatever hurts they may cause by monopolistic efforts. And I have no moral sympathy for any company as a whole - individuals at a company, yes, but companies as a whole need to be willing to change as the market does or die.
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You are talking about how suppliers get products on the shelf?
I think Wal-Mart is an innovator. Sure, they do things differently, but that's fine. They should be lauded for it. If suppliers don't like their (legal) terms, they don't have to supply Wal-Mart stores.
The issue you are speaking of does not support your stance.
Even your own quote doesn't say anything definitive:
quote:identified four ways that Category Management may violate even the remarkably loose antitrust guidelines of the last generation. All four of these violations cut right to the core of the free-market system. As the FTC put it, a category captain might “(1) learn confidential information about rivals' plans; (2) hinder the expansion of rivals, (3) promote collusion among retailers; or (4) facilitate collusion among manufacturers.”
And...the Clinton administration? Do you have anything that doesn't come from the 1990s?
quote:Originally posted by katharina: Because, you know, poor people should never have new things.
Who has said that in this thread, other than you? [/QB]
Theamazeeaz seems to have said that if you can't afford to pay more than WalMart prices, you should shop at thrift stores.
quote:Then don't buy new clothes for your kids. Buy new what you have to and get the rest from other sources. That's what thrift stores and friends with kids bigger than yours are for.
posted
Jhai, very interesting. Do you feel that as a taxpayer and citizen in the United States that you have more vested interest in the success of US Citizens than you do in citizens of countries in which you do not pay taxes (or receive benefits from those tax dollars) or have a vote?
For a microcosmic example, the schools in northern NJ are very good, in large part because of the tax dollars collected in the state from the many, many white collar workers who live here. If those jobs were to be dispersed throughout the developing world, the quality of education, policing, infrastructure, etc would necessarily go down as fewer tax dollars were available to fund them.
Therefore, the continued employment of someone local to me has more impact on my life/family than the continued employment of someone who lives in Bangalore. So, the global benefits of sourcing all of our labor to other countries is tempered considerably by the local impact of such a move.
mph, I think there are other companies that have drawn the same fire. Microsoft is probably relieved that Walmart assumed the "evil empire" mantle from them. Enron is a pretty good example of a big company taking a lot of criticism for exploiting the marketplace, too.
Yet, far fewer people point to Google as a "big bad" company, or Amazon, or Home Depot. I'd imagine it has a lot to do with the quality of product produced - which is why you're moving away from Walmart, yourself.
Walmart's size alone makes its moves more impactful. Its size allows it to do things that most other companies can't (for instance selling a product at a loss to corner the market and drive out competition). And if the supplier doesn't want to lower its prices for fear of bankruptcy, it's no matter to Walmart - the supplier can't live without them because they're the biggest retailer in the business, and if they grind the supplier to dust there's always another around the corner.
Posts: 3960 | Registered: Jul 2001
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quote:Originally posted by katharina: You are talking about how suppliers get products on the shelf?
There are a number of ways in which Wal-Mart exercises control over its suppliers. I've only excerpted one of the many examples given in the link I provided earlier.
quote:Originally posted by katharina: I think Wal-Mart is an innovator. Sure, they do things differently, but that's fine. They should be lauded for it. If suppliers don't like their (legal) terms, they don't have to supply Wal-Mart stores.
I don't grant your unsupported assertion that the terms are legal. In fact, there are reasonable grounds to conclude that they are not legal.
Wal-Mart is such a large customer that its demands place some of its suppliers in lose-lose positions: stop supplying Wal-Mart and go bankrupt now, or conform to Wal-Mart's demands, and go bankrupt later.
quote:Originally posted by katharina: The issue you are speaking of does not support your stance.
They do.
You've repeatedly alluded to the ability of suppliers to "take it or leave it," which only exists in less distorted markets where Wal-Mart is not a major player.
*
One example does not a class war make.
Posts: 10886 | Registered: Feb 2000
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Did you read the same quote? It doesn't say what you think it says.
I don't grant your assertion that what "may" be happening is definitely what is happening, at all. Clearly this is an area that hasn't been settled, but acting as if it HAD been settled and then extending that to a general, biased, unbalanced of condemnation of Wal-Mart across the board is unwarranted.
And, you asked for an example. You got an example. I get that you don't want to accept it, but my part is done.
quote:Yet, far fewer people point to Google as a "big bad" company, or Amazon, or Home Depot. I'd imagine it has a lot to do with the quality of product produced - which is why you're moving away from Walmart, yourself.
See, and I imagine it's because Wal-Mart's customers are poor, and condemning Wal-Mart serves the happy purpose of distancing the speaker from the people who don't have a choice other than to shop there. In other words, serious snobbery.
I see Wal-Mart getting a disporportionate share of crap for standard procedures as a condemnation of the speakers, not of the target.
Posts: 26077 | Registered: Mar 2000
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quote:Originally posted by fugu13: Interestingly, people have studied that. For instance, executive compensation is very strongly correlated with firm size. There are more very large firms in the US, so there are more executives with very high compensation.
Dubious.
For example, if you fix bank size
quote:You wouldn't know it by his pay stubs, but Jiang Jianqing heads the world's largest bank.
Jiang, chairman of Industrial and Commercial Bank of China, made just $234,700 in 2008. That's less than 2 percent of the $19.6 million awarded to Jamie Dimon, chief executive of the world's fourth-largest bank, JPMorgan Chase & Co.
The contrast illustrates the massive differences in pay among the CEOs of the world's top banks. The compensation of the CEOs of the largest U.S. banks towers above what's paid to banking chiefs in other parts of the world, according to a Reuters analysis of pay at the 18 biggest banks by market value.
quote:HSBC Holdings, the world's third-largest bank by market capitalization, paid CEO Michael Geoghegan $2.8 million in 2008 -- much more than his Chinese counterparts but far less than JPMorgan paid Dimon.
Alternatively, if you fix auto manufacturer size, something like the top 30 executives at Toyota made the same salary as the single CEO at GM when both companies have about the same market share now.
Executive compensation should be much more correlated to culture than to firm size.
quote:... it makes sense to pay a lot more to get the best executive one can afford, even if they are only a little better than the next-best executive.
Assuming that paying a lot gets you a "better" executive rather than just an executive thats better at getting more compensation. I think the performance of those aforementioned American banks and GM is pretty self-explanatory.
Edit to add: Or this
quote:Too often, executive compensation in the U.S. is ridiculously out of line with performance. That won’t change, moreover, because the deck is stacked against investors when it comes to the CEO’s pay. The upshot is that a mediocre-or-worse CEO – aided by his handpicked VP of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet and Bingo – all too often receives gobs of money from an ill-designed compensation arrangement
quote:Originally posted by katharina: Did you read the same quote? It doesn't say what you think it says.
I don't grant your assertion that what "may" be happening is definitely what is happening, at all. Clearly this is an area that hasn't been settled, but acting as if it HAD been settled and then extending that to a general, biased, unbalanced of condemnation of Wal-Mart across the board is unwarranted.
No, you've misread. I asserted two things:
1) Wal-Mart's actions with respect to its suppliers distort some markets;
2) There's a reasonable argument to be made that this is illegal.
You're saying that because (2) is not unquestionably, undeniably true [added: that is, because the argument is only reasonable, not proven in court], (1) is also not true. That's incorrect.
quote:Originally posted by katharina: And, you asked for an example. You got an example. I get that you don't want to accept it, but my part is done.
Very well; I'm now asking for evidence that class warfare is the motive of one side of this discussion -- an assertion you've made repeatedly, both implicitly and explicitly.
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quote:If suppliers don't like their (legal) terms, they don't have to supply Wal-Mart stores.
I think this is the essential issue. If a supplier doesn't like a Mom and Pop store's terms, they can leave and do business elsewhere.
Walmart has gotten to the point that there is virtually no elsewhere for certain market demographics. If you want to reach market at all, you'll do what Walmart wants... even if it means hurting your own company, employees, and shareholders.
Walmart is unique in this - it can force companies to change more than any other retailer, simply by dint of its size and share of the marketplace.
Vlasic is a good example, as linked above. They were forced to make decisions that led to bankruptcy because they couldn't lose Walmart's business (which also likely would have led to bankruptcy).
No other retailer could have done that - as Vlasic could have walked away from any other retailer. The power differential between Walmart and the rest of the industry is so great that their actions carry that much more weight.
Posts: 3960 | Registered: Jul 2001
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quote:See, and I imagine it's because Wal-Mart's customers are poor
Did you miss the part where I said the vitriol toward Walmart was inherited from Microsoft? Are you going to tell me people hated Microsoft because its customers are poor?
And, btw, Google is free... so economic status isn't exactly a factor, there. Their customers are anyone who gets on a computer, ever. And before you jump in and say that poor people don't have computers, *Walmart sells computers*.
It's not the customers, it's the company. Much like one can condemn the actions of OPEC without condemning car drivers everywhere.
Honestly, I don't have a problem with people shopping at Walmart (unless they are shopping on my behalf). I understand the reliance many people have on Walmart that has grown in the last two decades or so - which is even more pronounced now that many of the options that lower income families turned to in the 70's and 80's have now been run out of business.
It is possible to love a smoker and hate Phillip Morris - just because a company draws fire, doesn't mean its customers are the true targets.
Posts: 3960 | Registered: Jul 2001
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posted
I don't think that people are so much condemning people who have no choice but to shop at Walmart as being concerned that Walmart is their only choice and suggesting that those of us who are able to, make decisions that alleviate that.
*Except for twinky. He just hates poor people. Why, twinky,why do you hate poor people?
Posts: 11187 | Registered: Sep 2005
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The Chinese firm is not allowed to pay the CEO more; this is not necessarily preferable, just authoritarian. I would also bet that the CEO at the Chinese bank extracts considerably more political power in compensation, and I don't think we'd view that as preferable.
GM is not a good example at all. If they hadn't been subject to extreme amounts of political protection for years now, they would have gone out of business.
Posts: 15770 | Registered: Dec 2001
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quote:Originally posted by FlyingCow: Jhai, very interesting. Do you feel that as a taxpayer and citizen in the United States that you have more vested interest in the success of US Citizens than you do in citizens of countries in which you do not pay taxes (or receive benefits from those tax dollars) or have a vote?
For a microcosmic example, the schools in northern NJ are very good, in large part because of the tax dollars collected in the state from the many, many white collar workers who live here. If those jobs were to be dispersed throughout the developing world, the quality of education, policing, infrastructure, etc would necessarily go down as fewer tax dollars were available to fund them.
Therefore, the continued employment of someone local to me has more impact on my life/family than the continued employment of someone who lives in Bangalore. So, the global benefits of sourcing all of our labor to other countries is tempered considerably by the local impact of such a move.
Of course I have a vested interest in seeing the communities I live in do well. That self-interest, however, doesn't override my moral belief that it's better that people here lose jobs than that people abroad starve. (Not necessarily an either/or, of course, but if it were, I'd go with an American losing his job.) Self-interest should not overrule ethics, and I believe an impartial observer would agree that it's better overall that jobs go overseas.
I'm a citizen of the US, but my husband's not. He's a citizen of India. One thing I've realized as part of an international couple is that community - geographically/nationally-speaking - doesn't matter that much. We both care about our local community out of self-interest. So I'll gladly pay my taxes if I think that the taxes will go towards things that will help my living standards (and pay 'em grudgingly otherwise). But that's it. If the community we're currently living in isn't meeting our needs, then we'll move elsewhere. Another state, another country - whatever fits our needs.
We do give quite a bit of money to charity. But we direct our charity money to where we think it will do the most good - which is never the United States or our local community. Compared to developing countries, people mostly have their shit together here. $1,000 towards health care in Africa or much of Asia means 10 or 20 fewer dead children - that's better than any return you can get for your charity dollars here in the US.
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