Wal Mart: When Employment Costs $$$

You probably don't have to be an idiot to write for the NYRev of Books. But it apparently helps. Read this:

With its deliberate understaffing, its obsession about time theft, its management spies, and its arbitrary punishments, Wal-Mart is a workplace where management's suspicion can affect the morale of even the best employees, creating a discrepancy between their objective record of high productivity and how they come to regard their performance on the job as a result of their day-to-day dealings with management. This discrepancy helps keep wages and benefits low at Wal-Mart.

One of the most telling of all the criticisms of Wal-Mart is to be found in a February 2004 report by the Democratic Staff of the House Education and Workforce Committee. In analyzing Wal-Mart's success in holding employee compensation at low levels, the report assesses the costs to US taxpayers of employees who are so badly paid that they qualify for government assistance even under the less than generous rules of the federal welfare system. For a two-hundred-employee Wal-Mart store, the government is spending $108,000 a year for children's health care; $125,000 a year in tax credits and deductions for low-income families; and $42,000 a year in housing assistance. The report estimates that a two-hundred-employee Wal-Mart store costs federal taxpayers $420,000 a year, or about $2,103 per Wal-Mart employee. That translates into a total annual welfare bill of $2.5 billion for Wal-Mart's 1.2 million US employees.

Wal-Mart is also a burden on state governments. According to a study by the Institute for Labor and Employment at the University of California, Berkeley, in 2003 California taxpayers subsidized $20.5 million worth of medical care for Wal-Mart employees. In Georgia ten thousand children of Wal-Mart employees were enrolled in the state's program for needy children in 2003, with one in four Wal-Mart employees having a child in the program.[9]

That is an excerpt from Simon Head's review of Wal-Mart: Template for 21st Century Capitalism? edited by Nelson Lichtenstein (Papers presented at a conference on Wal-Mart held at the University of California, Santa Barbara, April 12, 2004.) New Press, forthcoming in 2005.

ATSRTWT.

Here is what I said, before.

Now? I say this:

The criticism seems to be that WalMart pays less than the "market" price for workers. But...um...wages ARE a market price.

So, you can't depress wages below their market price. it makes no sense to say that, unless you are big enough to be a monopsony employer, and WalMart is hardly a monopsonist. Baseball was a monopsonist, under the reserve clause. But how could you monopsonize the market for unskilled retail employees?

Whatever wages are, that is the market price for labor. that is what a wage is.

Now, you *can* depress wages below a wishful thinking level of pay, which we call the poverty line. But literally thousands of people, from all over the world, try every day to enter the U.S. to get a piece of that "poverty". The fact is that our poverty level is set very VERY high by world standards. I'm not talking about small, homogeneous countries with tiny little educated populations like Sweden or Denmark. I mean big countries, China, India, Russia. Our wages are very high, even for poor people.

If you liberals want to pile on a lot more welfare payments, as a matter of political choice, then okay. But don't tell me that this is a "cost." We make a political choice to subsidize poor people, perhaps to ensure that there will be lots of poor people who might vote Democrat, since apparently no employed person can bring themselves to pull the D lever. (Sure, that doesn't count college profs. I meant "gainfully employed.")

The wage thing is self-correcting. We built a welfare system that pays people for not working. then we prop up wages. then we allow "illegal" immigration (nudge, wink) that drives wages down. Then we BLAME COMPANIES FOR PAYING THOSE MARKET WAGES. Why not blame the immigration policy, and the welfare system? Companies are just doing the rational thing. Why would they pay more than market wage? WHY WOULD ANYONE PAY MORE pay more than market price, for a car, for example?

The allegations about unpaid overtime are a bit much: enforce the law. But there is no logical connection between enforcing an existing law (overtime) and the point that people think they are making about WalMart, that market wages are somehow "too low," and that this is then an indictment either of the market, or WalMart. Sure, Marx thought there was a connection, too. But there is no logical connection. Only an emotional one, created by academics and life-arrangers who, having never themselves worked, think that working must be icky.