For years, we have seen the small business disappear from our areas and more of those "superstore"-type mega complexes sprout up all over the place. I go out of my way to avoid these places and to this day can proudly say that I have never bought anything at a Wal-Mart store. I dislike Wal-Mart and other such companies like McDonalds & Starbucks and so I am always looking for confirmation that I am doing the right thing by not shopping there.
I received this story in email form and would like to share it with you. Although, I tried to find a link for this story via the Toronto Star but was unable to do so... I know it's long but I found it really interesting. I hope that you will change your mind as well...
Have a good read!
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Values outsourced; What are the social costs of the Wal-Mart economy?
Everything is justified by 'slavish devotion' to the consumer
The Toronto Star
Sat 18 Oct 2003
At the beginning of the 20th century, the most transformational enterprise
in the world, Ford Motor Co., dramatically raised wages for its
assembly-line workers and reduced their work week. Henry Ford wanted his
employees to be able to afford a Model T, and have the leisure time to enjoy
it.
At the dawn of the 21st century, the transformational enterprise of our
times, Wal-Mart Stores Inc., pays most of its U.S. employees poverty-level
wages, skimps on worker and retiree benefits and is accused in almost 40
lawsuits of making staff work overtime without pay.
This is Ground Zero in the Wal-Mart economy, and most of us are complicit in
whatever role it has played in the elimination of 2.8 million jobs in the
U.S. economy since 2001, and 77,000 manufacturing jobs in Canada so far this
year.
A stunning 82 per cent of American households bought something at Wal-Mart
last year. And not long after its arrival here in the mid-1990s, Wal-Mart
had pushed T. Eaton Co. and Kmart Canada into an early grave, merely an
opening act for its current menacing regard for survivors Hudson's Bay Co.,
Loblaw Cos., Shoppers Drug Mart Ltd. and the like.
At Ground Zero, Wal-Mart has piggybacked on the trends in free trade,
weakened unions, diminished customer loyalty and just-in-time delivery
methods to become the world's biggest private enterprise, with $245 billion
(U.S.) in sales.
Wal-Mart alone now accounts for about 10 per cent of total U.S. imports from
low-wage China. ("Walk around Wal-Mart," says former General Motors Corp.
chief executive Jack Smith, "and it looks as if everything is made in
China.")
What it doesn't outsource directly, Wal-Mart obtains from suppliers who find
they too must outsource to low-wage jurisdictions in order to cut their
selling price to the bone.
The saying goes that the second-worst thing for a manufacturer to do is sign
a Wal-Mart contract, so stringent are its cost demands. The worst thing is
failing to do so, given the importance of Wal-Mart's shelf space.
This would explain why even the mighty Procter & Gamble Co., which looks to
Wal-Mart as the largest customer for many of its products, was compelled
this year to outsource production of its iconic Ivory soap to a lower-cost
manufacturer in Ontario.
In the wider Wal-Mart economy, blue-chip companies now benchmark themselves
against "the Beast of Bentonville."
And so the giant Electronic Data Systems Corp., founded by Ross Perot but no
longer run by that noisy patriot, now recruits $1.25-an-hour tech workers in
India and sheds their $10-an-hour counterparts in EDS's home state of Texas.
Wall Street brokerages including Morgan Stanley and J.P. Morgan Chase & Co.
are shifting from New York to India the ground-floor stock-research jobs
that traditionally lead to plum analyst assignments. Both India and China
are already well-known to recruiters from Intel Corp. and Microsoft Corp.
Levi Strauss & Co. has just announced the closing of its remaining four
North American plants, including three in Canada, and will shift all
production to Asia and Latin America.
Paul Martin's Canada Steamship Lines has long recruited mostly non-Canadian
crews for its freighters. Recently, Nike Inc. shut a Southern Ontario plant
that made hockey sticks for stars like Eric Lindros to shift some production
offshore.
And despite personal interventions from Governor George Pataki, Sen. Hillary
Clinton and a bevy of state and municipal officials, Carrier Corp. said this
month it will relocate production to Asia from Syracuse, N.Y., a city
synonymous with air conditioners ever since Willis Carrier was lured by
local tax breaks to open his first factory there. No inducement or threat
could now save Syracuse's 1,200 Carrier jobs, a company spokesperson said,
"unless they are going to pick up New York State and move it."
Two unlikely sources of social-justice concern, Business Week and the Wall
Street Journal, have recently fretted about the implications of
Walmartization of the global economy.
The former editorialized this month that Wal-Mart's "methods of squeezing
out its low prices - paying salaries below the poverty line, building
superstores that crush local mom-and-pop shops and pushing manufacturers to
the wall for savings - are generating a strong backlash."
But there is no significant backlash against the hollowing out of industrial
North America, where a university degree is no longer sufficient protection
against a redundancy notice.
Oh sure, Andy Grove, the corporate conscience and former CEO of Intel, has
taken up the cause, warning this month that something drastic must be done
to prevent the bulk of new information technology jobs from being shipped
overseas. (Goldman Sachs & Co. says an estimated 200,000 IT-related service
jobs have left the United States in the last three years.)
But Grove's remedies, including bigger university R&D budgets, tax cuts and
tort reform, would do nothing to curb domestic job loss, only strengthen the
balance sheet of domestic enterprises still in the hunt for expedient
cost-saving devices. In the meantime, recruiters for Intel and Microsoft are
now active on campuses at Stanford University, the University of Waterloo
and in Bangalore.
As for Wal-Mart, it makes no apologies for its role in the spiralling down
of employee wages and benefits. "Where we have the option to source
domestically we do," says Ken Eaton, global buying chief for Wal-Mart, which
has de-emphasized the popular "Made in America" campaign that founder Sam
Walton launched in the 1980s.
But, Eaton added in Business Week this month, "there are certain businesses,
particularly in the U.S., where you just can't buy domestically any more to
the scale and value we need."
There are no significant consumer boycotts aimed at this latter-day coal
mine.
Sam Walton's strategy of "stack 'em high, watch 'em fly" has been a boon for
consumers. As the largest peddler of everything from toasters, toys and
toothbrushes to TV sets, headache remedies and motor oil, Wal-Mart is justly
lauded for helping keep inflation in check. And the firm is believed to have
accounted for about one-eighth of all productivity growth in the U.S.
economy in the late 1990s.
But in service to its mantra of delivering the lowest-cost goods to
consumers, Wal-Mart has outsourced its social obligations. So have its
blue-chip emulators. That's the real bargain that Wal-Mart shoppers have
unwittingly bought into.
The Wal-Mart economy knows the price of everything and the value of nothing
- certainly not of a well cared-for workforce, or of a full-employment
economy, or of competitive marketplaces that have not yet succumbed to the
predations of a single omnipotent enterprise. And who's to blame for that?
"How about you, for one?" says Slate business columnist Daniel Gross. "At
Wal-Mart, the customer is king, everyone else be damned competitors,
employers and the domestic manufacturing base.
"Everything Wal-Mart does - particularly its low prices - is done in the
name of slavish devotion to consumer demand. And every day, millions of
Americans ratify Wal-Mart's strategy by shopping there. Stores don't kill
economies, consumers do."
Who then pays for the chronic unemployment and under-employment of the
Wal-Mart economy, the hollowing out of the manufacturing economy and the
dismantling of the old social contract among corporations, employees and
communities?
You again, probably, as the corporate outsourcing of social responsibility
spreads and deepens throughout the economy. At some point, the consumer
might be surprised to find himself called on to surrender a portion of his
windfall savings at Wal-Mart in the form of higher taxes to preserve some
semblance of a just society.
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