The Wal-Mart You Don’t Know

I’ve been meaning to post about this for a while now. My buddy Matt gave me a copy of this when I was out visiting him a few weeks ago and I couldn’t put it down until I had finished it. Its an article in this month’s Fast Company magazine called The Wal-Mart You Don’t Know.

Read it. Then read it again. That corner Wal-Mart is slowly destroying American manufacturing through its relentless price pressure.

I’ve never particularly cared for Wal-Mart. Sure, they have great prices, but I always felt like I needed a shower after shopping there. Eventually, I stopped going all together and haven’t missed it, the main reason being that a Target store is more convenient to me now (although Target may one day replicate Wal-Mart’s mistakes, but that’s a story for another day).

Wal-Mart pays their workers dirt-cheap wages, actively prevents them from organizing, cheapens American culture, drives business away from downtowns, and eats up acres with their big box stores. This is all in addition to the destruction of American manufacturing I mentioned earlier.

On the other hand, there is lots to admire about Wal-Mart. They have streamlined the retail experience. They are hugely efficient at what they do. They are not only the state’s largest employer, they are the country’s largest company, and the world’s largest company. All of this success has been earned by doing exactly what they should be doing: giving the customer what he wants.

I can’t blame them for that: it’s good business. What’s bad business is when your customer can’t afford to shop with you because his job was given to someone in China.

Wal-Mart used to tout “Buy American,” a noble effort I was happy to see. Somewhere along the line, they gave that up. Now every time you spend a buck there, its likely going indirectly to the People’s Liberation Army (aka. “China, Inc.”), rather than your neighbors.

I’ve always been a free-trade kind of guy, but there are more important things than that. Namely, jobs. People have to make a living.

As the article states:

Wal-Mart has also lulled shoppers into ignoring the difference between the price of something and the cost. Its unending focus on price underscores something that Americans are only starting to realize about globalization: Ever-cheaper prices have consequences. Says Steve Dobbins, president of thread maker Carolina Mills: “We want clean air, clear water, good living conditions, the best health care in the world–yet we aren’t willing to pay for anything manufactured under those restrictions.”

Our folly is catching up to us.