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Rob's note: Bennington voters' recent decision to allow Wal-Mart to enlarge the size of its downtown mega-store has prompted more collective head-scratching from Vermonters, including Ripton writer Bill McKibben.
Here, we offer Bill's VTC Issue #1 essay on Wal-Mart for your blogging pleasure.
Wal-Mart: What's a Bargain Worth? (VTC Issue #1)
By Bill McKibben
Let us begin by treating Wal-Mart with utter respect, by giving credit where it is due. In the course of a few decades it has become the mightiest retailer the world has ever seen. In 2002 it sold $224 billion worth of goods. It is bigger than Target, Sears, J.C. Penney, Safeway, and Kroger combined. It sells more toys, more furniture, more jewelry, more dog food, more flowers, more film, more aspirin than anyone in the world. Were it a country, Wal-Mart's economy would be the seventeenth or eighteenth largest in the world—larger than Saudi Arabia's.
And it opens a new store every forty-two hours. It is very eager to open a slew of them in Vermont, currently one of the least Wal-Marted states in the Union. From St. Albans to Bennington, Wal-Mart has its unblinking eye firmly fixed on our state.
The story of its growth is simple. It has achieved its position through one cardinal virtue: Lowest Prices Always. And it has done that in turn by becoming almost unbelievably efficient. It is the acme, the epitome, the zenith of efficiency, unlike anything humans have previously witnessed. If it is successful, there is no question that it will bring Vermonters lower prices. There is no question that it will save us some money at the cash register. How much? The only estimate I've seen comes from a UVM economist and Wal-Mart enthusiast named Art Woolf who calculated that it might be as much as $36 million annually. I think that's a gross overestimate, but let's take it as gospel truth. That works out to $58.14 apiece.
So the question becomes: is it worth it? What are the costs of going ahead and trying to grab that $58.14?
I'm going to describe what I see as the costs across several different categories. Some will seem far away, others are much more obviously close to home. All reflect Wal-Mart's enormous efficiency and scale—a scale that so dwarfs the small size of our state that it becomes a central, overwhelming fact. Any of the Big Box stores are out of scale with Vermont; a K-Mart or Costco would be no better. But it's Wal-Mart that has announced its plans, so it can serve as a useful reference point.
Let's begin by talking about jobs. For a while, in its early years, Wal-Mart prided itself on being a Buy American store. That is a boast it no longer makes, because now it is just the opposite. Ten percent of all American trade with China goes through Wal-Mart, for instance. Indeed, the Princeton economist Paul Krugman explained recently how crucial it has become in driving the transformation of the American economy. “One of the things that limits or slows the growth of imports is the cost of stabling connections and networks,” he wrote. “Wal-Mart, though, is so big and centralized that it can all at once hook Chinese and other suppliers into its digital system, so Wham, you have a large switch to overseas sourcing in a period much quicker than under the old rules of retailing.”
To imagine what that means to any Vermonter working in a manufacturing industry, consider the example of, say, socks. Their production was centered in the American south in recent years, but now those jobs have all but disappeared. Carolina Mills, for instance, shrunk from seventeen factories to seven in the last three years. Why? Because, in the words of one company executive, the company couldn't compete with low-wage Chinese workers even “if we paid our workers nothing at all.” The items we still make are vulnerable as well. Tombstones from China are now undercutting the Barre product, even though that means shipping chunks of rock halfway around the globe.
Now, in effect you could say Wal-Mart was unpatriotic. But is it doing this because it hates America? No, not at all. Rather, because patriotism would be inefficient. It would raise prices. The logic of Wal-Mart's operation doesn't allow it. And if logic doesn't allow it to care about American factories, it certainly doesn't allow it to care about Vermont factories.
And it doesn't allow Wal-Mart to care about the workers in its overseas factories either, of course. When a team of reporters from the Los Angeles Times went to a garment factory in rural Honduras, they found workers like Isabelle Reyes, who has worked at the plant for eleven years, ten hours a day. Each year the quote of sleeves that she has to sew keeps increasing, because Wal-Mart puts pressure on the factory to reduce their prices. At the moment she must deliver 1,200 garments a day—a shirt sleeve every fifteen seconds. At thirty-seven she can no longer lift a cooking pot or hold her infant daughter because of the inflammation in her hands. She makes $35 a week. And by Wal-Mart standards that may make her overpaid. The owner of the factory where she works—and Wal-Mart is its biggest customer—says Wal-Mart shaves the price it is willing to pay by a few cents each year.
In Bangladesh, factory owners say Wal-Mart has demanded they cut prices by as much as half in recent years. I've been to Bangladesh, seen those factories, seen the lives of the people who work in them. But even that kind of degradation is not efficient enough. More and more frequently, Wal-Mart is moving its business out of places like Bangladesh and Honduras, moving it mostly to China—and even there it plays one region off against another. What does it like about China? Not just the low wages, though those are attractive—one recent report described a factory where workers were taking home $14 a week, and living eight to a room in a dormitory. But they also like the “politically stable” climate of China. Meaning no unions. Meaning an authoritarian government. Wal-Mart theoretically sends inspectors around to look at factories, making sure they don't violate minimum standards. But often, say employees, factory owners are tipped off before they arrive, allowing them to fabricate timesheets or clean up work areas.
Does this happen because Wal-Mart executives are racists? Not in the least. It happens because that is what efficiency looks like carried to its logical extreme. If you paid people a living wage, a wage large enough to allow them their own room to live in, or if you slowed down the assembly line enough so that a woman's hands weren't crabbed and arthritic at thirty-five, then some of that $58.14 would vanish. Some of the argument for Wal-Mart would disappear.
But what about the jobs that Wal-Mart creates? Certainly that must be a benefit—after all, Wal-Mart now pays National Public Radio an undisclosed sum for the right to boast each day about the quality jobs it provides to local communities.
What do we know about the “quality” of those jobs? Well, Business Week magazine reported earlier this year that Wal-Mart “sales clerks earn, on average, less than the federal poverty level.” Less than the poverty level.
A grand jury in Oregon found Wal-Mart managers coercing hundreds of employees to work overtime without pay. Why? According to a Los Angeles Times study, it was because the managers were scared; if their labor costs got “too high,” they were singled out during the company's weekly in-house satellite broadcasts. The company settled similar suits in Colorado and New Mexico for undisclosed amounts, and more than forty other such cases are now awaiting trial. Federal agents have raided sixty-one stores across the country to seize evidence that subcontractors were cheating janitors who were illegal immigrants out of overtime pay. Meanwhile, the largest class-action suit in history for sex bias is now pending against the company. If you want to know what life is like as a Wal-Mart employee, may I recommend Barbara Ehrenreich's book Nickel and Dimed?
Less than half the workers at Wal-Mart are covered by its medical plan. If you want to know what that means, look at the rolls for, say, the state of Georgia's program for uninsured children. According to the Atlanta Journal Constitution, per capita, the kids of Wal-Mart employees “dominate” the plan. In essence, the cost of their health care has been shifted from the company to the state. Or, another way to say it might be this—it's been shifted from the citizen consumer to the citizen taxpayer. Even for those who do manage to pay the insurance premiums out of their poverty-level wages, the plan doesn't cover vaccinations for kids, or flu shots, or eye exams. In a survey of people using Las Vegas emergency rooms for routine medical care, patients who were employed but uninsured were asked where they worked. “Wal-Mart came up more than any other,” said the chairman of the Clark County Health Access Consortium.
All of this is troubling enough. But if it was confined to its own small Wal-Mart universe, you could do something about it. The deeper problem is what happens to all the other workers in town when Wal-Mart comes in. As their employers attempt to compete with the Lowest Prices Always, they too have to cut benefits and wages. Wal-Mart becomes the new standard. Consider what happens to, say, supermarket workers now that Wal-Mart has become the largest grocery chain in the country. Supermarkets pay, on average, $10 an hour more than what Wal-Mart pays—it's not perhaps the greatest job on Earth, but it's a solid one. When Wal-Mart started coming big into California, though, chains like Safeway and Kroger demanded cutbacks. Workers went on strike—and in the end, they lost. The logic was simply too overwhelming.
Does all this happen because Wal-Mart hates workers? I don't think so. It happens because it's the inevitable result of basing everything you do on the lowest possible price. Some of that $58.14 comes from shifting the cost of health care to the taxpayers, and some of it comes from paying poverty wages. If you didn't do those things, that $58.14 wouldn't be there. And Wal-Mart is stuck with its own logic. If it raises prices to pay better wages, customers trained by its philosophy will defect to the imitators it has spawned. So its low salaries will not disappear—in fact, Wal-Mart recently closed one Quebec store the moment its employees voted to unionize in search of higher benefits.
All of this, of course, assumes that you still have a job once Wal-Mart moves in. A series of academic studies in recent years has shown that, indeed, the average new Wal-Mart store employed 140 people—but that it simultaneously unemployed 230 people. How is this possible? It's simple. Look at what Wal-Mart does to all the other businesses where you trade at the moment, and the men and women who own and staff them.
The best case study might be provided by Iowa, which from 1983 to 1993 suffered the kind of total invasion that Wal-Mart has planned for Vermont. In that one decade, Iowa lost 553 grocery stores, 298 hardware stores, 293 building-supply stores, 161 variety stores, 158 women's apparel stores, 153 shoe stores, 116 drug stores, and 111 men's and boy's apparel stores.
It would be easy to imagine that Wal-Mart hated those merchants, hated those villages whose business districts it depopulated. After all, employees in its early days were sometimes told to chant one of the company's slogans:
Stack it deep
Sell it cheap
Stack it high
See it fly
Hear those downtown merchants cry.
In fact, though, Wal-Mart bears no real grudge against the towns and small cities it devastates. That devastation is merely the logical outcome of this process of efficiency. It is not as efficient to have 230 workers receiving decent wages and health care in twenty storefronts downtown to do the work and move the merchandise of 140 poverty-wage workers in one big box outside of town.
It should be noted, by the way, that the Wal-Marts that devastated Iowa were merely giant. They were not the Super Wal-Marts the company now favors, which cover an even vaster array of retail categories. And it should be noted that direct competitors are not the only ones who suffer. Wal-Mart doesn't need the services of local accountants, or lawyers, or graphic designers—all those things come from company HQ back in Arkansas. Wal-Mart doesn't even advertise very much—why would it need to once it's driven out the competition?
One way I imagine this is to hear in my mind the ads on WDEV in between innings of the Red Sox games. Lenny's Shoe and Apparel, Lacillade Lumber, Lantmann's IGA, and so on. I can imagine them gone, because that's what happens everywhere else. And as they go, even the bonanzas in tax revenues that local officials dream of dry up and disappear. Even in towns that hosted Wal-Marts, total retail sales dropped an average of 4 percent. And, of course, the towns next door were devastated—sales fell 15 percent on average. Property values often fall as Wal-Marts move in, and with them tax receipts. Most profoundly, the money that pours into that line of cash registers at the front of the Wal-Mart doesn't stick around town. What isn't paid out in poverty-level wages simply disappears at the end of each working day, sucked back to Arkansas as if by a giant vacuum. If you shop at a local store, the profits recirculate about 2.3 times in the community.
So you do the math. Figure out about that $58.14.
It may seem odd that I've barely mentioned the environmental effect of all these big-box stores, since that's often the first charge leveled against them. Partly that's because the effect is so obvious—if you can't see what it means to hollow out your downtown and build acre upon acre of parking lot in the surrounding farmland, then I'm unlikely to persuade you.
But partly it's because those environmental effects are, in a different way, subtle, so subtle as to defy the kind of analysis I've been making here. The biggest environmental issue, and perhaps the biggest spiritual issue, that we face is the unflagging epic of consumption in which we are now engaged. Wal-Mart is the icon of that overconsumption. Think of the gallon jar of pickles that has often been one of the chain's storefront specials. Twelve pounds of Vlasic pickles for $2.97—it's a kind of statement of excess. No family actually can eat that many pickles, the company executives conceded. Most people got through about a quarter of the jar before the pickles grew moldy and were thrown out. But the pickle jar was, and is, a symbol.
A symbol of driving farmers out of business—you can't grow cucumbers at that price and survive, not even by pouring pesticides on your field, underpaying your help, and cutting every corner. (Indeed, Vlasic, pressured for ever more concessions, didn't survive either.) But a symbol, too, of a culture of excess that simply cannot continue if the ecological fabric of the world is going to hold.
The biggest reason I've not been talking about the environment explicitly is that I've actually been talking about the environment all along. Community—the solidity of human communities—is at the heart of what environmental hope we have. The idea that we might learn to take more of our pleasure and satisfaction from each other and less from our stuff. Everything that Wal-Mart does undermines community, because a community cannot survive endless and total efficiency. A community cannot exist if all everybody does is maximize their own pleasure and profit at all times. A community demands a tolerance of old and young, of healthy and sick, of different ideas and different abilities. It demands a concern for stability, a concern for the lives of others. Others near us, whose suffering we will see if Wal-Mart moves in and destroys the businesses that pay them a living wage, and others far away, whose suffering is invisible to us. That suffering is the inevitable result of a kind of out-of-control efficiency, of a mill that grinds finer with each passing quarter.
Are there alternatives? Sure. Cities and towns can do much to keep Wal-Mart at bay. St. Albans passed a zoning change that would limit new businesses to 50,000 square feet. Unfortunately they waited until Wal-Mart had already filed its application for a 150,000-square-foot store. Other Vermont towns should be more vigilant.
Middlebury voters voiced their support for a similar 50,000-square-foot cap at this year's town meeting. And legislation now circulating in Montpelier would make such a limit statewide—an important step, since it would end the Wal-Mart practice of playing one community off against another. In fact, it's not too much to say that local land-use control is meaningless without such statewide guidelines. If South Burlington's planning board, say, can build huge big-box stores, what use is it for Shelburne to even try and exert control over its own landscape? Wal-Mart's influence goes beyond the borders of towns and even counties. Its effects will be statewide, and chief among those effects will be a steady diminution of the state's independence. Picture a fully Wal-Marted state, in fact, as less an independent state than a colony of Arkansas, or possibly China.
I live in Addison County, where we used to have a small discount department store, Ames. When Ames was driven out of business trying to compete in its other markets with Wal-Mart, we were faced with a problem: no place to buy socks or underwear without going to Burlington or Rutland. But the invisible hand of the market began to work reasonably well. The shoe store in downtown Middlebury, Green Mountain Shoe and Apparel, now sells Fruit of the Loom, and it sells tube socks and Levis and cargo shorts. Are they quite as cheap as they are at Wal-Mart? No, not quite. That's the $58.14 penalty. But they are cheap enough, and they help to anchor a downtown, and they provide a decent livelihood for the people who run the store, who advertise in the local paper, and when I asked if I could hang a poster in the window announcing sports night at the college, they were happy to oblige.
And there are more interesting things we could try yet. I was in Wyoming this summer—not liberal Vermont, but conservative Wyoming, in a county that voted 4:1 for President Bush. But the people of that county decided that when a Wal-Mart moved in twenty miles away, they were not simply going to shutter their downtown and give up. The found a thousand citizens who kicked in $500 apiece to start their own community dry goods store. It looks like the kind of clothing store that any of us who grew up in small towns remembers. Racks of jeans and shirts hanging from metal rods—nothing fancy. But it's doing well, and so are the surrounding stores and cafés and bakeries. Similar community ventures are going into other towns in Wyoming and Nevada and Montana.
There is so much we could do here. We have the beginnings of a real local foods movement in Vermont, as farmer's markets help reinvigorate small agriculture. We have amazing experiments in community forestry; we're even talking seriously about growing some of our own fuel in the form of biodiesel. None of these things, though, are purely efficient. It's cheaper to fly in apples from New Zealand. (Compared to a Champlain Valley Macoun, they taste like crap, but it's cheaper). It's cheaper to clearcut distant forests and bring the lumber here. It's cheaper to burn coal and fill the air with carbon dioxide. But in the end that “efficiency” undermines not only the environment—it undermines us. Look, we all want dairy farmers to be paid enough for their milk to have a decent life. Why doesn't the same principle apply to everything else we buy? And if paying that price—that $58.14, if that's what it is—meant that we bought a little bit less each year, that would not be so tragic.
Vermont is in the almost unique position of still having downtowns worth saving, of still having some real community, some working democracy. But all of it is small enough that it can be easily overwhelmed by something as huge as Wal-Mart (or, for that matter, K-Mart, or any other Mega-sized outfit). Here's what two University of Pennsylvania professors found in a study published last year: “The presence of Wal-Mart unequivocally raised family poverty rates in U.S. counties during the 1990s relative to places that had no such stores. This was true not only as a consequence of existing stores in a county in 1987, but it was also an independent outcome of the location of new stores between 1987 and 1998 . . . Wal-Mart transfers income from the working poor and from taxpayers though welfare-programs directed at the poor to stockholders and the heirs of the Wal-Mart fortune.” It doesn't get much more direct than that.
Wal-Mart has done us a great favor. It has forced us to ask, with far more urgency than usual, whether the scale of this place, with its neighborliness, its landscape, its way of life, is worth preserving. Whether it's worth $58.14. Wal-Mart wagers nothing can stand in the way of their efficiency. I think we can.