Asymmetrical Information

For some reason I can't get the Slate article to load, so it may have discussed the point I'm making. In any event, while it may be true that economically many Wal-Mart employees are "natural" Democracts, culturally many if not most of them (excluding the nonwhites) are natural Republicans. If you're a Christian, as many of the employees surely are, you're going to find it very difficult to vote for the pro-choice, pro-gun control, and anti-homeschooling Democrats even if they do have your economic interests in mind. Some things really are more important than money.

It annoys me to no end, how people casually assume that if you're poor, you MUST want high taxes on the rich (or which mostly hit the rich), or labor regulations, or all those kinds of things. It's on the level of saying that blacks who oppose affirmative action must be self-hating, or women who oppose unequal treatment in the draft (thus requiring that women could serve) are mentally ill.

Poor people flee from countries more intent on screwing the rich, to the USA, all the time. Are they self-hating? Is it that much of a leap that e.g. capital gains taxes, though nominally paid by mostly by the rich, have long-term detrimental affects on everyone?

Peter, what does being Christian have to do with being pro-gun-proliferation?

And Jane, come on. Democrats* aren't trying to put Wal-Mart out business. For better or worse, they want things like higher wages, less breaking labor laws, and equal treatment of women.

*Surely some nut job is, our version of Westboro Baptists. But nobody that matters.

"If you're a Christian, as many of the employees surely are, you're going to find it very difficult to vote for the pro-choice, pro-gun control, and anti-homeschooling Democrats even if they do have your economic interests in mind. Some things really are more important than money."

Be careful...an Alabama Democrat may be more conservative than a Rhode Island Republican. It is certainly many WalMary employees may have perfectly palatable Democrats running in their districts (though, as Wal Mary may be trying to point out, it is not for certain that every politician running is a a district says nice things about Wal Mart.

It could be interesting though, as Wal Mart employess would be a non-trivial special interest group, and if Wal Mart could figure it out, Wal Mary customers would be a massive special interest group.

Peter, what does being Christian have to do with being pro-gun-proliferation?

Nothing directly, though I sort of imagine that Christians tend to be opposed to gun control. "Pro-gay marriage" (or "not sufficiently anti-gay marriage") might have been a better choice of term.

Be careful...an Alabama Democrat may be more conservative than a Rhode Island Republican.

True. What's important, however, is that an Alabama Democrat is unlikely to be more conservative than an Alabama Republican.

All this hatred focused at Wal-mart from the left is based primarily on one of two things: mom and dad losing their over priced shop (and their artificially high, unskilled, livelihood) and the elitist desire to maintain the small, lovely, charming, historic, business dristrict in the center of town. That is basically the root for all the anger.

I grew up in Massachusetts. I knew of many older, affluent, Boston suburbs and their "business districts." Wellsley has one. Newton has one. Brookline has one. Needham has one. Waltham has one. Norwood has one. Westwood has one. Dedham has one. Lexington, Arlington, Cambridge, Milton, Quincy, they ALL had multi-generational family wealth that had ties to the local community and it's "business dsitrict."

Oh yeah, and they all voted Democrat because they have always voted Democrat.

Burlington, Braintree, and Framingham were the outsiders. They gave in and had mega sized malls built. But still, mall prices were pretty expensive and the local mom and pop shops could fight an even battle with a mall because of the high overhead required to open a shop in a mall.

Wal-Mart changes everything. Wal-Mart changes history. Wal-Mart can end the wealthy lifestyle of the unskilled, local mom and pop shops.

Wal-Mart comes into town and the center of town dies. Nobody patronizes the little toy store, the little dress sotre, the little shoe store, the little ice cream shop, the little sandwich shop, the little sporting goods store, the little eye care store, the nail salon, the hair salon, etc. All of this can be done at Wal-Mart for a fraction of the price.

And all these family businesses are out of business. AND THEY VOTE.

The local community elders like having a thriving business district in the center of town. It's pretty. It's like something out of a Norman Rockwell painting. It's quant. What they most certainly do NOT LIKE is seeing a "For Lease" sign in the window of all these shops that were in business for 100+ years. AND THEY VOTE.

That is pretty much the reason why there is so much anger from the left. The fact that the poor (you know, the people the left are supposed to be speaking for) can now afford to live like the wealthy by being able to afford the finer things at Wal-mart that they could NOT afford in the town square, is irrelevant. To hell with the poor. The old money that voted Democratic line will now BE THE POOR and we can't have that.

Paul: there was a store in Worcester / Framingham (not sure if it's still there) called Spag's. They had really cheap prices, and they figured out some scheme where they kept trucks in the parking lot to avoid some sort of inventory tax. I don't remember the exact details, but they were a formidable competitor 20 years or so ago... They weren't as efficiency minded as Walmart, but they could do something regarding some obscure tax to lower their costs.

Wal-Mart comes into town and the center of town dies. Nobody patronizes the little toy store, the little dress sotre, the little shoe store, the little ice cream shop, the little sandwich shop, the little sporting goods store, the little eye care store, the nail salon, the hair salon, etc. All of this can be done at Wal-Mart for a fraction of the price.

Wal-Mart doesn't compete against the nail and hair salons.

Wal-Mart doesn't compete against the nail and hair salons.

The Super Wal-marts do, you bet your @ss they do. The Super Wal-Marts have a nail salon and a hair salon in them.

So basically the logic here is "artificially high, unskilled labor" must be destroyed? That's the solution offered by "educated", well indoctrinated people with more allegiance to abstract economic principles than flesh and blood human beings who need to eat. They support an artificially dominant bargaining position (Walmart's) over paying people more because it goes against "free market" principles, or some other BS mostly espoused by upper class hacks who have never done an honest day's work in their life.

Listen. Poor people don't want to work at Walmart. It's just that there are very few other jobs. Poor people don't want to shop at Walmart - the quality is lousy, and it is NOT always cheaper. There is just no other place to shop.

Instead of worrying about how cheap things are to buy, why can't we concentrate on creating higher paying jobs that give people and communities an actual choice? Why not have an upward spiral for once instead of the usual race to the botton? Oh, now I remember, that might come out of the shareholders' pockets - i.e. people who get money for doing no work...

Now, if Wal-Mart's workers all suffer from false consciousness and, a la Thomas Frank's Kansans, reliably vote against their own economic interests, then Wal-Mart's efforts to get them to the polls could help Republicans.

Or it could just be that Wal-Mart employees and Kansans don’t agree with Thomas Frank that higher taxes, a broken-down entitlement system, a government school system that serves the interests of the teacher’s unions more than it does parents and students, making health care less affordable with more mandates, and job-killing regulations and lawsuits are somehow in “their own economic interests.”

Thorley, I think you're forgetting that because Adolph cares about poorer workers, it logically follows that the policies he advocates must work in their favor. Really.

So basically the logic here is "artificially high, unskilled labor" must be destroyed?

No.

It is that the "artificially high, unskilled labor" MAY be destroyed, not MUST. If a Wal-mart goes into town, it WILL be destroyed.

Exactly what skills are required to open a shoe store? What do you need to know? If you give me $10,000, I can open a show store tomorrow. BFD. I'll just find 500 feet of cheapie retail space somewhere, buy a computer and get Excel to do the accounting, hit the internet, get some phone numbers for some shoe distributers and order some shoes, get a cash register, get a modem to call out to Visa and Mastercard for credit transactions, and hire some pimply-faced 15 year old at minimum wage to stand there and run the light pen over the bar code. Done. I'm in business. That wasn't so hard. Anyone can do that.

And because anyone can do that, there shouldn't be an enormous profit margin for that type of business. This is unskilled, brain dead work, and the market will only bear so much for the sale of these goods. Put a Wal-mart in the neighborhood (and they have the same phone numbers to distributers that I have) and there is no more market since they can under-price me. So it is time to shut down the shoe store and go back to school and learn some real skills to make my mortgage payment.

That's the solution offered by "educated", well indoctrinated people with more allegiance to abstract economic principles than flesh and blood human beings who need to eat.

History and family ties to the local neighborhood (and a family business that was passed down generation to generation) does not entitle you to a lifestyle such that you may "eat." You "eat" because you can do something that justifies your lifestyle. You have no right to claim "poor me" just because a Wal-Mart went in and now nobody comes through the door. I hear this nonsense argument all the time because that is where all this anger is coming from with regards to Wal-mart.

Listen. Poor people don't want to work at Walmart. It's just that there are very few other jobs.

Listen. Working at Wal-mart has nothing to do with being rich or poor. Working at Wal-Mart has everything to do with the fact that you can't do anything else. Go back to school.

Poor people don't want to shop at Walmart - the quality is lousy, and it is NOT always cheaper.

That makes no sense. If it wasn't cheaper then nobody would buy it and it would come off the shelves at Wal-Mart faster than you can imagine. Wal-Mart has so much power that it can dictate to distributers to sell their merchandise for a LOSS. And they are willing to do that just to get the branding out there in the market. And when this happens, the consumer (yes, even the poor consumer) wins.

Mom and pop can't do that from the center of town in their 100 year old business now can they?

Instead of worrying about how cheap things are to buy, why can't we concentrate on creating higher paying jobs that give people and communities an actual choice?

Who is this "we"? "We" need to concentrate on creating higher paying jobs? How do "we" do that? The market creates these jobs, "we" don't. And I'm so sorry but I like having lots of cheap things because that means that more people can afford to have them.

The only people that LOSE when a Wal-mart comes to town is the local 100 year old Mom and Pop shops. Their time is passed. It is time for them to go.

Instead of worrying about how cheap things are to buy, why can't we concentrate on creating higher paying jobs that give people and communities an actual choice?

First off, retail is not a great way to get rich. If you want higher standards of living then buy your commodities cheap and spend your energy doing some other form of skilled productive work.

However, if you want to compete against a store like Walmart, it can be done, even now. But you have to network with other stores. You have to manage your inventory so you're closer to the cutting edge of fashion and keep more of your assets as cash. You identify trends as they start in California. You need relationships with other shops across the country that you can trade with if certain items in your inventory don't move due to local trends. Running a successful retail shop nowadays is so much more than a computer running excel and a minimum wage worker. But a lot of small businesses don't even know if the business they're running is profitable.

Even if you maintain the small town veneer, most of those small retail outlets that want to compete with Walmart (and it can be done) need a backend that looks like a chain store. Most, of course, don't have this.

My father, btw, manages a network of consultants. They do a wide range of work, but their bread and butter is helping small retail shops go head to head against major chain stores and survive profitably.

However, if you want to compete against a store like Walmart, it can be done, even now. But you have to network with other stores. You have to manage your inventory so you're closer to the cutting edge of fashion and keep more of your assets as cash. You identify trends as they start in California.

People who are worried about keeping up with trends that start in California don't shop at Wal-Mart. People who like to have new cheap stuff, shop at Wal-Mart.

I have no doubt that you can get these mom and pop stores to compete with networking and keeping their assets in cash, but they aren't competing with Wal-Mart. That is a bad comparison. They are competing with "Abecrombe n Fitch", "Bebe", and "Ann Taylor."

Listen. Working at Wal-mart has nothing to do with being rich or poor. Working at Wal-Mart has everything to do with the fact that you can't do anything else. Go back to school.

Very cute "Paul" - you're obviously better at cheap shots than analysis. For what it's worth, this has nothing to do with me - I'll match my educational and professional credentials against anyone's here.

No doubt you would agree that the overwhelming majority of Wal-Mart shoppers haven’t the slightest clue about the economic principles we enlightened folk are debating. So what’s the problem with lower prices? Nothing, ceteris paribus. But you and I both know that one of the major tenants of free markets is having perfect information to make choices.

Is it your contention that the majority of Wal-Mart shoppers have enough information to make sound economic choices? Presumable you could only answer in the affirmative if you believe that “perfect information” consists of price and price alone, of knowing that an identical container of pancake syrup costs less at Wal-Mart than at other nearby competitors’ shops. But what of dumping and other practices aimed to destroy the life-blood of competition? And more importantly, do Wal-Mart shoppers really understand that Wal-Mart’s lower prices might cost them their jobs over the long-run? It seems to me that without this additional information, we can’t claim that the market is working as swiftly as Adam Smith dreamed of.

Amidst all the financial data and astonishing numbers some are nearly always missing --namely, the numbers of Wal-Mart employees who qualify for Medicaid or food stamps, average wages, and the like. Is this something to be proud of?

Believe it or not there was a time when a CEO would be embarrased to admit some of the numbers this company has. When taking good care (for real, not spin) was considered a badge of honor. Not any more.

Sweet gig your dad has. Managers do practically nothing. Consultants also do practicaly nothing. To "manage a network of consultants" must be fun.

Based on what Adolph Fischer posted, I imagine he supports banning all internet companies, tv shopping networks, catalogue ordering, Ebay, etc. As Paul said, the time of the mom&pop shops has passed. If you want to have your own private business you better be selling something people can't get from somewhere else easily.

Adolph Fischer,

Your arguments about how consumers may have imperfect knowledge allows one to criticize WalMart and to educate the public about the benefits of not shopping there, but, really, is that the limit of what you want? Or, rather, are you really advocating that the laws be changed to prevent WalMart from practicing business in the manner it now does?

For what it's worth, this has nothing to do with me - I'll match my educational and professional credentials against anyone's here.

Knock yourself out...

No doubt you would agree that the overwhelming majority of Wal-Mart shoppers haven’t the slightest clue about the economic principles we enlightened folk are debating.

I do doubt that since I am a Wal-Mart shopper. And I have a very good idea about the principles we are debating.

If you don't want to shop at Wal-Mart, that is your business. But don't profess to act like you know who shops there and who doesn't.

Is it your contention that the majority of Wal-Mart shoppers have enough information to make sound economic choices?

It is my contention that Wal-Mart is cheap. Wal-Mart forces distributers to sell to them at a price that Wal-Mart sets, far below what the distributer and manufactuer would ask for. And that savings is passed on to the consumer at Wal-Mart.

It is also my contention that Wal-Mart shoppers are patient people. They are willing to stand in real long lines and wait patiently to get to the cash register. They are willing to do this because the price is so low. Who could blame them?

Presumable you could only answer in the affirmative if you believe that “perfect information” consists of price and price alone, of knowing that an identical container of pancake syrup costs less at Wal-Mart than at other nearby competitors’ shops.

I don't know that at all, because Wal-Mart does not carry all pancake syrup. It carries "some" brands (the brands that are willing to list at Wal-Mart prices) but not all. If you want every choice in pancake syrup, go to the grocery store and take your pick. If you don't care what syrup goes on your pancakes (and I don't) then shop at Wal-mart and get the cheapest.

So far, your response has been constructive. Alas...

But what of dumping and other practices aimed to destroy the life-blood of competition? And more importantly, do Wal-Mart shoppers really understand that Wal-Mart’s lower prices might cost them their jobs over the long-run? It seems to me that without this additional information, we can’t claim that the market is working as swiftly as Adam Smith dreamed of.

Now you have gone off the deep end and waded into the murky waters of rhetoric. This paragraph of yours makes no sense, none what-so-ever.

Shopping at Wal-Mart does not cost anyone their jobs other than the people who own (or work for) the little, rinky-dink, mom and pop businesses. Those are the ones who lose their jobs. And it is the owners of those businesses who everything to lose if Wal-Mart comes to town, since the minimum wage kids they have working for them can just get a job at Wal-mart.

Wal-Mart is Adam Smith on steroids. That is what it is. Adam Smith would shop at Wal-Mart. Everyone who shops at Wal-Mart is richer the minute they leave the store. They paid the bare minimum to improve their lives and their standard of living. If you can get a plasma TV at Wal-Mart for one third the price someone else is willing to pay for a slightly better brand at an expensive electronics store, you are now living as good as someone who makes 3 times what you make. You are richer.

Amidst all the financial data and astonishing numbers some are nearly always missing --namely, the numbers of Wal-Mart employees who qualify for Medicaid or food stamps, average wages, and the like. Is this something to be proud of?

They are working. They have a job. It might not be much, but they are working and paying taxes. That is better than sitting at home and waiting for that welfare check now isn't it?

Maybe those on food stamps and Medicade are very proud of their job? Maybe they are very happy just to be working? Don't diminish what they are doing just because you and I aren't doing it.

'...get a cash register, get a modem to call out to Visa and Mastercard for credit transactions, and hire some pimply-faced 15 year old at minimum wage to stand there and run the light pen over the bar code. Done. I'm in business.'

Sorry, you can lead a 15 year old to a waver, but you can't make him think. It ain't that easy. You have to organize every little detail of his workday AND supervise him closely. Nor will you get him at minimum wage.

Adolph Fischer,

Did you even read the article that Winterspeak linked to in this blog? Pay close attention to the last sentence, that 40% of all employees at Wal-Mart quit each year. Why would they do that?

Because they found something that paid better most likely. They worked at Wal-mart while they waited until something better came along. That is the American way.

If Wal-Mart destroyed so many jobs, then why is it that so many people who work at Wal-mart find other jobs and leave?

"If Wal-Mart destroyed so many jobs, then why is it that so many people who work at Wal-mart find other jobs and leave?"

Good for them! Maybe there's still hope. Now if the rest only had better options...

For better or worse, they want things like higher wages, less breaking labor laws.

That's as Winterspeak said. Replacing low-wage, low-productivity jobs with machines and a smaller number of higher paying union jobs. That's what you would get, you know. Screwing the poor, of course, is SO much more attractive when it's done to the benefit of the middle class and the local small business owners.

It's not like Target or anyone else in retail pays any more. (Costco does somewhat, since they employ a LOT fewer people and have a less service-intensive philosophy.) Nobody want to attack the companies whose consumers average a higher income, though. No, they want to attack the company which saves the poor more money-- partially because it makes the mistake of opening in small towns (and recently, inner cities) instead of in wealthy suburbs only.

That makes no sense. If it wasn't cheaper then nobody would buy it and it would come off the shelves at Wal-Mart faster than you can imagine. Wal-Mart has so much power that it can dictate to distributers to sell their merchandise for a LOSS. And they are willing to do that just to get the branding out there in the market. And when this happens, the consumer (yes, even the poor consumer) wins.

Take a good look at what you just said. The bargaining power that you're vaunting isn't profit-seeking behavior -- it's rent-seeking behavior. And any sane economic model describes economic rent-seeking as the bane of any lassez-faire economic system. It's essentially asking retailers to turn over their entire profit margin in order to recoup a percentage of sunk costs. This is slash-and-burn capitalism at its worst, and benefits only one sector of the economy: Wal-Mart.

-- ACS

Amidst all the financial data and astonishing numbers some are nearly always missing --namely, the numbers of Wal-Mart employees who qualify for Medicaid or food stamps, average wages, and the like. Is this something to be proud of?

Considering that the percentage of Wal-Mart employees on public assistance (and most of whom were on it prior to working at Wal-Mart) is lower than the percentage of retail employees (which is the relevant comparison), than yes I would say it is something to be proud of.

It would probably be lower still if we had a more expansive system of health savings accounts that would allow Wal-Mart employees (and others) to cover the high deductible, low premium health insurance that they offer their employees.

Amidst all the financial data and astonishing numbers some are nearly always missing --namely, the numbers of Wal-Mart employees who qualify for Medicaid or food stamps, average wages, and the like. Is this something to be proud of?

I appologize for my langauge but this is the same sofistry that brought us Marxism.

Many of those people who are working at Wal-Mart where unemployed or on the dole. Have you noticed that unemployment is consistently lower than it was a generation ago? Have you noticed that the welfare rolls are lower than they were a generation ago?

Where did those people go? They went to work at Wal-Mart. Now they have something opposed to the nothing they had back in the good ole' days.

Paul - People who are worried about keeping up with trends that start in California don't shop at Wal-Mart. People who like to have new cheap stuff, shop at Wal-Mart

Stores that want to be profitable make efforts to minimize markdowns. One way to minimize markdowns is by being conscious of trends and keeping only the inventory that you need. It really is important, and large stores have planners who keep track of this (or they just do intelligence on some of the hipper small stores) There are people who would shop at walmart who will potentially also shop at a smaller local store, assuming that the local store can stay trendy and keep prices below the Abercrombie level.

wow - Managers do practically nothing. Consultants also do practicaly nothing. To "manage a network of consultants" must be fun.
Most of the store owners who've used Management -One were working over 60 hours a week. A lot didn't trust their employees enough to delegate to them.

To believe that my dad does nothing you should also believe that accountants do nothing, that inventory planning means nothing, that understanding the best way to finance a new expansion is a worthless activity, that conflict resolution is useless and a businesses management structure is irrelevant, that writing and tracking trends are puff jobs etc. He seems to enjoy it, absolutely. He doesn't work as hard as back when he was managing an R&D division for a paper mill, and he doesn't have to kiss up to anyone which is the best job perk. And he's dramatically increased the profits of the stores he's worked with. If that's easy, you've got a great career waiting for you. Good luck with that.

I have yet to figure out where this "Wal-Mart goods are low quality" meme comes from, except possibly from the stagnant marsh of the anti-Wal-Mart echo chambers. Maybe some of the items in the general-apparel and shoe departmeents qualify for that condemnation, but this has ALWAYS been true for department stores. Most everything else is the exact same stuff you can buy anywhere, but you have maybe 3-10 choices in a particular goods category at Wal-Mart, whereas a more specialized store (Bed Bath & Beyond, OfficeMax, Home Depot, King Soopers, etc.) would give you 10-25.

Also, how completely disconnected does someone have to be (A.F.), to give an implied brag about educational and professional credentials in one post, and then turn pedagogous in another on where the poor want to work and what they want to buy? Did that education and professional accomplishment include hours spent on a survey team in front of the neighborhood Wally World?

PTM: Jane is just using that same old tired wheeze about Christian Republicans are the only ones *really* worthy or the only ones you *really* can trust; everyone else is to be suspected. IF others support a position taken by the Good Christians (Reg US Pat Off), there must be an ulterior motive, you know!

Remember: to most Americans, there are Good Christians (Reg US Pat Off), and... (sniff) "THOSE people", or (finger-pointing) "them".

-signed: "them".

Friendly Grizzly, PTM;

Jane??

RGT

Winterspeak, can you please point me to a reliable source that proves that Liberals are out to shutter Wal-Mart?

Many on both sides of the political divide are keen on keeping in check the power of a company that dwarfs in size and influence any of the trusts of the gilded age. But nobody wants to close poor little Wal-Mart. Kindly refrain from making ridiculous, sensationalistic generalizations.

Remember: to most Americans, there are Good Christians (Reg US Pat Off), and... (sniff) "THOSE people", or (finger-pointing) "them".

You don't sound too friendly, grizzly. More like a bigot, actually.

No, just one who has had his loyalties questioned once to often, and who has lost one too many jobs for taking off on Yom Kippur (with PLENTY of notice).

"...mom and dad losing their over priced shop (and their artificially high, unskilled, livelihood)'

Trot outthat line in places where the mom and dad stores are being closed out and see how the crowd reacts.

I don't care how the crowd "reacts." And you shouldn't care either.

The reason why there is any reaction at all, is because these mom and pop shops see the writing on the wall and their owners are such active members of the local community. They sit on the zoning boards. They are the selectmen. They are the part-time police, fire, etc. They are teh town's "clique" so to speak. So they are very outspoken and they act as if they speak for everyone. They don't speak for everyone. They also act as if they are working on everyone's behalf, when in reality they are working only on their behalf.

Worrying about their reaction to my position regarding Wal-Mart is none of my concern. Tell them to shut down and go get real jobs.

It's too bad that Spags the store started dying when Spags, the owner, died. His kids weren't able to pick up where he left off and run the store the way it should be run.

Now it's owned by the Building 19 people.

Too be fair though, just the land alone that Spags covers must be worth a fortune, since it sits in the middle of Shrewsbury.