Thursday, May 05, 2005

Is Wal-Mart my brother's keeper?

Yes, another Long Post. But worth it!

The New York Times yesterday looked whether Wal-Mart has an obligation to pay its employees higher wages, as social critics contend.

I think this is an important issue – it goes to the heart of our compassionate society, and where we draw the line between economics and caring for our fellow people.

In the end, I have to side with Wal-Mart on this one (darn). Being successful does not force you to become more compassionate. And paying more than the marketplace says you must, out of the goodness of your heart, is a sure formula for becoming much less successful.

The theme of the Times piece is interesting. It looks at the contention that Wal-Mart has an obligation to uplift the American worker, just as General Motors did after the Second World War.

I can’t imagine a leakier argument. Yes, the U.S. auto industry has been an employer of choice. But if you don’t think that’s the key contributor to the Big Three’s sliding market share, you’re still driving an Edsel.

Autoworkers in the 1970s and '80s helped themselves to fabulous wages and benefits – at the cost of jobs for their children and children’s children. Those paycheques were unsustainable! The automakers are now restructuring their factories and processes to remove all possible wage costs. They are cutting and contracting out jobs as fast as they can – while there is still a domestic auto industry to save.

Anyway, take a look at the Times story (free registration may be required). If you’re human, you’ll be moved by the dilemma facing workers who earn so little they can’t shop at their own store. In the end, is it enough to say, “That’s their problem. They should have become lawyers and brain surgeons”?

But don’t stop there. Be sure to take a look at “Wal-Mart Bows to Unions, Copies GM Success Formula,” by right-wing blogger Scott Ott at

It’s a hilarious response to the NYT story. It includes these gems:

“In the short-term, analysts said that investors can expect to see their $48/share Wal-Mart stock "level out" around $3 and then begin its upward climb as the store reestablishes its brand identity as the place where Americans shop to provide higher-wage jobs for less fortunate Americans.”

"The unions have helped us to understand that we've been looking at the retailing business backward for 50 years," Wal-Mart’s CEO said.

The rest of the fun is at

(If you’re really trying to avoid getting any work done, do check out the comments that people are appending to this story. It’s a fabulous debate. There were 95 comments as of 3:30 pm, and they just started this morning!)

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