Wal-Mart Is The Poor And Minorities Friend

Latino Politics Blog reports that, Wal-Mart Named One Of The Best Companies For Latinas…yet decided to continue its boycott of the company anyways.

You can read the blog and fellow commenter’s reason for taking that stance but I post here the other side of the argument. I left this comment on the blog (a comment that has yet to be approved):

You forget to mention one of the many, and I would say most important, positives of Wal-Mart: providing cheap products to the very poor. Have you been into a Wal-Mart lately? If you have, you must have noticed that Wal-Mart, both in its work force and its customers, is very different than the other ‘politically correct’ food chains like Vons, Ralphs, and Albertsons. Wal-Mart tailors heavily to the poor and minority. The customers and the workers there are overwhelmingly brown and poor – an area of the market that the other grocery chains business strategy has neglected.

Of course not being poor gives you the luxury of raising your nose at Wal-Mart, but to the poor and neglected, Wal-Mart is a godsend. Which is why, for example, Wal-Mart stores often receive thousands of job applications for even a handful of job openings. And why their base, both in customers and workers, is overwhelmingly brown and poor.

Me personally, I’m sticking with the brown and poor and supporting Wal-Mart, a company that has benefited the poor and minority in the two areas they need it the most – with jobs and cheaper products.

11 Responses to “Wal-Mart Is The Poor And Minorities Friend”

  • Hello Hispanic Pundit,

    I approved your comment this morning (8/31/07).

    I think that the Latino community deserves better than Wal-Mart. In my original post, I acknowledge the fact that Wal-Mart provides cheap goods and jobs. I don’t think that supporting a company who is notorious for low wages without benefits and an overwhelming number of cheap products from China is a good way to stick with the “brown and poor.” Just because something is cheap and available doesn’t mean that we have to take it.


  • HispanicPundit…has it ever dawned on you that the reason Wal-Mart hires poor people of color is because they are not successful hiring anyone else? Poor people of color are easily manipulated, will tolerate more abuse than other employees, and will not complain when they are denied health benefits, and will not say a word when they are passed over for promotion. Is that an organization you want to support? An organization that exploits poor people of color, and assists them in remaining poor.
    So let me understand you clearly…because Wal-Mart sells cheaper products, you support them. Have you ever asked yourself why they sell cheaper products and still generate record profits for their shareholders? Do you know that Wal-Mart imports more products from China than any other entity in the world? Do you know that Wal-Mart’s Chinese vendors use prison and child labor to manufacture those products and that process not only lowers their wholesale costs, which expands Wal-Marts overall profit margin, but it also assists in destroying the U.S. manufacturing base that used to employ all those poor people of color. And that’s why poor people of color fill out thousands of job applications at Wal-Mart for 3-4 openings, because Wal-Mart has bankrupted their former employers who used to pay them higher wages and benefits. If that’s benefiting the poor people of color then you need to read more books and watch less Network television. Because your support of this organization is an extreme detriment to La Raza, and you’re too dumb to even see that.

  • Adriana,

    This is the comment I left on your blog (waiting for moderator approval):

    Thanks for approving my comment! I appreciate the opportunity for dialogue. With that, let me respond to your comments,

    Actually, Latinos are better served by local growers for produce, and many other discount stores have Wal-Mart like products for comparable prices.

    Well you may think so, but many disagree – enough of them atleast, to have Wal-Mart profitably operate in the area.

    Additionally, Wal-Mart tends to push out smaller retailers that may be owned by women, minorities, and other Americans trying to make a living.

    True but Wal-Mart also tends to bring in compatible smaller retailers that may also be owned by women, minorities and other Americans trying to make a living, see here. In addition, if wages and benefits are truly your concern you should hope that more small businesses are replaced by Wal-Mart as Wal-Mart gives higher average wages and benefits then small businesses do.

    If Wal-Mart continues to dominate the market, do you really think that their prices will always be lower?

    Yes. Because the only reason Wal-Mart continues to dominate the market is their pricing is significantly lower than others and consumers tend to value lower prices over other things. So if Wal-Mart starts to raise prices it gives others the opportunity to cut into Wal-Marts market share. It’s one of the many great things about competition, the consumer wins.

    I always found the criticisms of Wal-Mart inconsistent: ‘Wal-Mart is bad for the poor’ some argue, but then when you look deeper into it you realize that Wal-Mart gives more jobs and cheaper products to the poor than any other food chain. If thats treating the poor ‘bad’, I wish other food chains also treated the poor ‘bad’. Then others argue that ‘Wal-Mart pays low wages and little to no benefits’, but then turn around and criticize Wal-Mart for driving small businesses out – yet small businesses on average pay significantly lower wages and give less benefits than Wal-Mart does. Then there are criticisms that ‘Wal-Mart is bad for minorities’, until you realize that Wal-Mart hires more minorities and has more diversity in its workforce than all other food chains. Others criticize Wal-Mart for buying products made in China, implying that Wal-Mart is ‘exploiting’ (a term that is hardly ever defined, but I digress) their cheap labor, but then you realize that by Wal-Mart doing that very thing, “Wal-Mart might well be single-handedly responsible for bringing about 38,000 people out of poverty in China each month, about 460,000 per year. Even without considering the $263 billion in consumer savings that Wal-Mart provides for low-income Americans, or the millions lifted out of poverty by Wal-Mart in other developing nations, it is unlikely that there is any single organization on the planet that alleviates poverty so effectively for so many people. ” See more here.

    Then of course, when these criticisms run out you get more of the personal criticisms – things like, Wal-Mart is ‘chaotic and unorganized’, Wal-Mart employees give ‘poor service, attitudes, trash products, and customers children going wild. Who wants to be a part of that!’, without taking into account that many of these employees are the very poor and minority – the very people who lack jobs and benefit most by Wal-Mart’s job opportunity. Whenever I read comments like this I always wonder what these same people would think about poor areas in general? I could only imagine their elitist thoughts at seeing that many poor areas are also ‘chaotic and unorganized’, and have many ‘children going wild’. I expect criticisms like this from white limousine liberals like John Kerry and John Edwards – multi-millionaires whose only experience they have had with poor minorities is talking to their gardeners. But when a minority does it, it irritates me to the core.

    Why then do so many people really dislike Wal-Mart given their incoherent criticisms of it? If I had to guess, I would say the real criticism of Wal-Mart comes from the fact that it refuses to unionize its workers. It is the single biggest threat to unions in the food industry and because unions control so much of the political talk machine, their (incoherent) criticisms get repeated by the masses.

    But if this is the case I ask those who criticize Wal-Mart to look more closely at the facts. Unions, by artificially pushing up wages and requiring union dues put such a demanding premium on wages that the companies find it very difficult, impossible in many situations, to offer lower prices. This is why union run grocery chains like Vons, Ralphs and Albertson cater to the middle class. It is only through the middle class can these grocery chains sell products at a price where they can make a profit. In addition, by artificially raising wages unions force companies to hire employees who have higher productivity (a company would not hire an employee at a loss, if it is forced to pay higher wages, it has to find more productive employees to offset) – which is why these grocery chains have a significantly lower percentage of employees that are poor (and minority, through association).

    So you are left with two economic models: First, you have the union model that pays its employees higher wages and has better working conditions, but as a result gives you grocery chains that tailor to the middle class and primarily employee middle class workers. Second, you have the non-union model that pays its employees lower wages but as a result also employees less productive employees (the most neglected segment of society), operates in poor areas, and provides the poor and minority with two very essential necessities – jobs and cheaper groceries.

    Which one of the two economic models do you think is really better for the poor and minority? You know my choice.

  • Michaelr,

    Most of your concerns were addressed in my reply to Adriana. Please look it over and let me know if I have missed anything.

    There is one area in particular that I think needs further discussion. You write, “Poor people of color are easily manipulated, will tolerate more abuse than other employees, and will not complain when they are denied health benefits, and will not say a word when they are passed over for promotion.

    Assuming for the sake of argument that this is true, why do you think this is? Why do poor people, as opposed to say middle class whites, tolerate such ‘exploitation’?

    I await your reply.

  • Hispanic Pundit, out of your two economic models, I would have to pick number one. However, things aren’t as black and white as you portray them. You forget that the unions helped create the middle class in America. Check this article out:


    “According to the United Food and Commercial Workers union (UFCW), Wal-Mart could pay each employee a dollar more per hour if the company increased its prices by a half penny per dollar. For example, a $2 pair of socks would then cost $2.01. This minimal increase would add up to $1,800 annually for each employee.”

    I don’t think that poor minorities are content with earning less just so they can afford more “cheap” and often inferior goods.

    Also, in 2004, Wal-Mart’s CEO made $17,543,739 in total compensation, which was 871 times as high as the pay of a typical Wal-Mart worker. The executive pay is outrageous. Don’t you think that worker morale and employee attrition would improve if the compensation scales were not so terribly skewed to one end?

    My other criticisms of Wal-Mart in terms of the customer service and store aesthetics are valid as well. I would rather give my money to a company that is going to deliver good customer service and create a pleasant shopping experience. Many people, even the poor, pay a little more for better service. Why do you think businesses bother training their employees in relational sales techniques and in customer service skills? My experience with Wal-Mart did not leave me with the impression that they cared about customer service and the overall shopping experience. I don’t think that poor people should have to tolerate inferior service. They do it enough as it stands with the public education and health care system… why carry if over to their weekly shopping excursions?

    As far as this goes, perhaps we can just agree to disagree.

  • Hispanic Pundit,

    You forgot to mention that the main reason union jobs pay more money is because one must pay dues to be in a union. When I worked at a supermarket with a union workforce, I was paid 25 cents more per hour than the minimum wage, thanks to the UFCW Local 100. But $12 in union dues was withheld from my paycheck every week.

    You mind if I do a little math here? When I worked at this supermarket, I worked an average of 20 to 25 hours a week. Thanks to the union, I earned 0.25 more per hour. So in a 25-hour work week, I earned $6.25 more per week because of the seemingly benevolent union.

    But wait! Every week $12 was automatically removed from my paycheck for union dues. $6.25 (extra union wage increase) minus $12 (union dues for making such a wonderful wage increase possible) means I actually LOST $5.75 each 25-hour work week, and the fewer hours I worked each week, the more money I lost because my hourly wage increase of 25 cents was less than the $12 I had to pay for union dues. I couldn’t work more hours, because I was already enrolled in college as a full-time student.

    Imagine, all these idiots walking around saying “union jobs pay more, union jobs pay more, blah, blah, blah…” and the mathematical truth proves exactly the opposite, at least for those union workers earning the lowest wages. Seems to me if my old union cared so damn much for the working class they would’ve spared me the union dues.

    Thanks for discussing this issue, Hispanic Pundit. Orale!

  • Cono,

    I just re-read what I submitted and I see I got the first line wrong. That’s what I get for dropping a comment at 1:30 in the morning.

    What I meant to say was that for low-wage workers, a union job doesn’t really mean a higher wage, despite what the commie pinkos say.

    Sorry bro,

    No Soy El Unico

  • Adriana,

    Thanks for responding. A couple minor comments on your post since it simply reiterates the typical union talking points (hence further strengthening my theory on why Wal-Mart is hated so much, but I digress).

    First, unions throughout history have been a very small part of the workforce. Fluctuating between 5% and at most 50% or so, especially during wartime. So even if one grants that they do a service to the overall economy (something I strongly deny, but for arguments sake) one cannot credit them something as large as ‘creating the middle class’. They simply didn’t have that much influence.

    Furthermore, contrary to what the daily talk show host tells you, the credit for the middle class is more aptly credited with Henry Ford. Of course you won’t hear this from lefties, but its true – the eight hour work day and the 40 hour work week were brought in by Henry Ford, the same Henry Ford that absolutely despised unions. And he didn’t do so because of union pressure, he did so because of competition. He realized that he can attract better workers and get higher productivity.

    Here are informative links about Wal-Mart, how it treats its employees, and how it benefits the poor, see here also.

  • You are right, I shouldn’t exclusively credit the unions with creating the middle class. I think that they helped push employers in that direction to a certain extent. There were other factors such as an increase in the availability of higher education (partly due to the GI Bill, manufacturing boost during WWII, and more).

    How do you explain all of the law suits and other evidence suggesting that Wal-Mart does not treat its employees well? It doesn’t sound like Wal-Mart is taking a cue from the late Henry Ford. Today the average Wal-Mart associate earns less in a year than what is needed to support a family. How do you explain that with the record profits that the company has posted in recent years?

    On another note, why haven’t you updated your blog? With all of the issues going on involving Hispanics, I’m surprised that you are haven’t updated your site recently.

  • adriana,

    You are right, I shouldn’t exclusively credit the unions with creating the middle class.

    I would go even further and say that unions hampered the creation of the middle class. Remember, unions (generally) don’t create more productivity, all they do is shift pay around (see here and here) and in the process take a huge cut for themselves.

    Economist Milton Friedman explained it best when he described unions in his book, Capitalism and Freedom, this way:

    “If unions raise wage rates in a particular occupation or industry, they necessarily make the amount of employment available in that occupation or industry less than it otherwise would be — just as any higher price cuts down the amount purchased. The effect is an increased number of persons seeking other jobs, which forces down wages in other occupations. Since unions have generally been strongest among groups that would have been high-paid anyway, their effect has been to make high-paid workers higher paid at the expense of lower-paid workers. Unions have therefore not only harmed the public at large and workers as a whole by distorting the use of labor; they have also made the incomes of the working class more unequal by reducing the opportunities available to the most disadvantaged workers”.

    This is why unions have traditionally been at odds with immigration (remember Cesar Chavez? He was very similar to the minute men of today, precisely because immigration is at odds with unions) – they know that in order to keep control and make an impact they have to reduce the power of those outside of the union – which tend to be the less educated and poorer (read: browner and more disadvantaged!).

    Notice the similarities between todays unionized grocery chains whose workers tend to be more productive and less poor (read: whiter) verses the workers of the non-unionized wal-marts whose workers tend to be less productive and more poorer (read: browner) – this is no coincidence, as Friedman said unionization tends to “make high-paid workers higher paid at the expense of lower-paid workers”.

    Today the average Wal-Mart associate earns less in a year than what is needed to support a family.

    But yet Wal-Mart pays significantly more to its employees than small businesses do, and you are a strong supporter of small businesses, are you not? So which is it? Do you want employees to be paid more (and hence support Wal-Mart over small businesses) or do you want small businesses over big retail stores (and hence want employees to be paid less, on average?) because you can’t have both?

    Wal-Mart, like any other business, hires employees not to benefit the employee (that is what charity is for) but to benefit the company. To ask Wal-Mart to pay its employees more than what those employees produce in productivity is to ask a company to go against its very purpose (make a profit). Companies will not do this.

    That is not to say that Wal-Mart is doing these employees a disservice, on the contrary, Wal-Mart is giving these employees something that many of the union grocery chains are not – employment (in addition to cheaper groceries). You may quibble about the pay, the benefits, and the treatment, but I would argue that that is better than what union run grocery stores give them – nothing.

    If you look at employment as an act of charity (which you certainly do, with statements like, “Wal-Mart associate earns less in a year than what is needed to support a family”) than your criticism of Wal-Mart is equivalent to criticizing a company for sending a small amount of money to a certain charity (employment) while ignoring the companies that sent nothing.

    Adriana, don’t take this the wrong way, I sincerely say it with the utmost respect – if you have a chance, I strongly recommend you read, Economics In One Lesson by Henry Hazlitt. It is one of the better explained economic textbooks out there. More importantly, you can find it free online, see here (I would especially recommend 2,7,8,14,15,19,20,21 and 22) . You may disagree with alot of what it says (you probably will) but atleast you will understand some of the (very strong, IMHO) economic arguments against much of how you see the world (and be miles ahead of your leftie counterparts).

    On another note, why haven’t you updated your blog? With all of the issues going on involving Hispanics, I’m surprised that you are haven’t updated your site recently.

    Well for one, I have been on vacation the last two weeks. I was in Vegas from Saturday through Tuesday and then went to Santa Fe, New Mexico on Thursday and returned a few hours ago. Second, most of what has been on the news lately involves immigration, especially day to day immigration issues, two things I rarely blog about. Not because they are not important to me – they certainly are – but mainly because you can find that information on any other latino related blog.

    Here I focus primarily on my comparative advantage. 😉

    Btw, you get my email?

  • If the CEO did the same job as now, but worked for $1.00 per annum, how much effect would this have on store prices? How much effect would this have on store wages?

    Finally, how much effect would this have on your argument?

    You might as well argue that Shaq O’ or Michael Jordan (or Michael Jackson, for that matter) make too much money.

Leave a Reply