The Social Justice Crowd–Again.

Kevin Williamson, writing for the National Review, has perfectly captured the sentiments I have expressed on the Bereans blog on several occasions, when he wrote that the “anti-Walmart” protesters  are in reality just calling for the poorer among us to be stiffed.  Williamson contrasted the elite culture, whim he labeled the “Rolex crowd,” with the common people, whom he called the “Timex crowd.”  Rolex watches are made by upscale manufacturers and sold to the elites by upscale retailers as really nothing more than status symbols (He rightly points out that a simple digital watch is more accurate than an expensive mechanical one).  Timex watches on the other hand are sold by lowly Walmart to lowly consumers.

The Rolexers are forever (it seems) harping on how working for Walmart is demeaning and low-paying (from the way they talk, subsistence wages—which I know is false).  As Williamson points out however, Walmart’s profit margin is around 3-3.5%.  But Walmart is able to sell its goods at a low price to those with low incomes, and to do so while paying decent, though not CEO-level, wages.  As a result lower-income consumers can purchase reliable products they need without breaking the bank of the household budget or going without altogether.  What could possibly be bad about that?

Well, say the Rolex crowd, it’s “evil” and exploitative capitalism.  Notice they still use the term exploitative, some 160 years after Marx used it, as if the word itself has some magical significance.  Just repeat it often enough and magically people believe something really bad is going on.  I digress.  The Rolex crowd of course has plenty of income, from where, we can easily see: many are actors, artists, union officials (not rank and file notice), government officials or public intellectuals of all sorts.  They don’t shop at Walmart, and they don’t want the rest of us to do so either.  As I said, they believe (perhaps) Walmart exploits its own employees, exploits the people from whom it purchases its stock, exploits (indirectly) people in other countries who make cheap goods, and does so to make evil profit (which, remember is all of 3-3.5%).  As Williamson himself puts it, “Social justice warriors are too enlightened to let their poor neighbors pay lower prices.”  So they demand that Walmart pay a minimum wage of something like $15-$20 per hour, buy only from certain sellers, and also, as a further atonement for their many sins, to become a social justice leader too by contributing money to the favorite social justice organization or movement or in some other way.

What happens then to the Timex crowd?  If the Rolex crowd gets their way, we then either must pay higher prices for the “better” things in life or do without.  And we would have higher unemployment because Walmart couldn’t afford those new higher wages for every employee, what with its very thin profit margin.  That’s an interesting twist isn’t it.  The elite who always know what the rest of us need or don’t need have then succeeded in making the rest of us worse off.  But then we can always look to them for advice on what the government ought to do to help us.  I am sure they have plenty and are more than willing to give it.

So let’s continue to patronize Walmart—despite its imperfections—because it is actually helping real people.  As for the Rolex and $1,300 sneaker crowd, they will continue to do what they do and say what they say.  Let’s ignore them and hope that most everyone else will too—for the sake of the poor at least.

6 thoughts on “The Social Justice Crowd–Again.”

  1. Dr. Clauson — Wal-Mart has been criticized for conduct beyond low wages for full-time (managers discouraged from processing overtime, off-the-clock non-compensated work, disallowing unionizing, etc). That doesn’t account for its routine EPA fines, overseas outsourcing, troubling conditions for manufacturing employees, political influence, and questionable expansion tactics. Generally, I think those critical of Wal-Mart would argue that the total good accomplished by the business doesn’t account for the total harm caused by the business.

    For instance, what do you make of the argument that Wal-Mart structures employee contracts to ensure that as many as possible are subsidized through state and federal benefits? It’s estimated that 2.66 billion goes to full-time Wal-Mart employees alone. What kind of policy should be adopted when considering how/why the government subsidizes full-time employees that still meet general “poverty’ standards?

    Would be interested in your thoughts!

    1. Jonathan,

      I’d like to mention another aspect of the “Wal-mart question” that is rarely discussed.

      While the discussion usually centers around Wal-mart’s business practices, we rarely discuss the effect that Wal-mart’s business strategy has had on the general cost of goods purchased by the (generally lower income) public. What Wal-mart’s business model has accomplished is to offer a wide range of consumable goods at a lower cost than could be found without Wal-mart’s business model. You have significant savings being realized by literally tens of millions of people on a daily basis. The increase in the standard of living to Wal-mart patrons is absolutely huge. But it’s a benefit that’s very diffuse and spread out over millions of people. The negative side of Wal-mart’s business model is focused on the relatively few number of employees and is much easier to identify. If it were possible to compare the overall standard of living increase that Wal-mart brings to the equation and compare that to a more generous compensation package I’m sure the overall benefit would dwarf the amount that Wal-mart employees might earn if they were working elsewhere.

      1. Professor Wheeler —

        Great point! I think your analysis might pan out if the scope is limited to benefits within the United States; I would be curious to see how the analysis would look if it were possible to quantify the good and harm globally. Obviously, there’d need to be a great deal of work put into defining those terms, quantify less obvious goods and harms related to society and environmental affect, etc.

        There are also, of course, many ways to keep costs low. Wal-Mart has chosen a mixture of outsourcing, low employee wages, and mediocre products. That strategy has freed the company to pay rewarding wages to their executive team, resulting is a remarkable gap between that executive team and the standard Wal-Mart FT employee (even in relation to other major businesses). Mike Duke, Wal-Mart’s CEO, is paid 1000 times the average FT worker, a rate that exceeds comparable competitors (Target, Disney, McDonalds) and dwarfs other major industry actors (Amazon, Microsof, and Google).

        See the graph below:
        http://www.payscale.com/content/data-packages/ceos/ps-ceo-infographic-625a.png

        Given that disparity, and the way that Wal-Mart has chosen to invest it’s sales (while retaining a 3.5% overall profit margin), couldn’t Wal-Mart produce the same “low-cost” social/economic good you’re describing AND redistribute reasonable salaries to its full-time employees? They don’t seem to be mutually exclusive. Certainly, the decision would affect that executive team’s salaries, it would also probably produce positive consequences in other areas: less turnover employee turnover, less government subsidization, improved public image…and perhaps an overall greater, quantifiable good?

        Another option? Simply increase prices to allow for livable wages. There’s been a reasonable amount of attention given to this option, and some have suggested that total cost increase would amount to exactly 1.4%, or pennies on the dollar for most products at the store.

        Otherwise, do you have any thoughts on the idea of Wal-Mart intentionally subsidizing it’s employee’s through government welfare?

  2. I feel like if the Rolex group got their way and had Walmart severely regulated in terms of wages and inventory, Walmart would either cease to exist or become part of the Rolex group. Both of these would, as you said, contribute to unemployment. Over the long term, however, another business would take Walmart’s place and the cycle would continue.

  3. I didn’t get a chance to say this at Wednesday’s discussion and I really only solidfied the thought until now. I was thinking why I believe it is better to shop locally from mom and pop stores and I realized there is nothing inherently better about buying from people you know because in WalMart as well, all members of the transaction are being benefitted and in WalMart the purchase affects the global economy and the local economy.
    Over Thanksgiving, I went shopping at Sam’s Club for Thanksgiving and then for a tailgating before a Bills game. We had to feed 30 some and 40 some respectively for each event so we bought in bulk. My family at home is just four of us so I haven’t “needed” to go to a Sam’s Club in years. Niagara Falls, NY is not nearly as great a town as the world wonder for which it was named so possibly that and the Sam’s customers affected my experience. However, I was disgusted to see how much product lined the aisles of the store. Literally, the warehouse of stuff is at least three stories high. Most of it is only available to customers by forklift. I see now that what I hate about WalMart is the consumerism. Its business model has made it so accessible and cheap that people go there weekly and no other store. WalMart has everything for everyone, not name brand but the same stuff for less money which is what consumers search for. The mad rush in the early morning hours of Black Friday, no- the evening hours of Thanksgiving Thursday- have injured, killed, and been cause for arrest in America because people have convinced themselves products for cheap are needs. CEOs have only continued exponentially to take advantage of this flaw in human nature and the American personality. The Timex crowd is prone to this because they don’t have the priority in their household to buy more quality stuff and, though they may not think it when entering their sanctuary that is WalMart, they would rather support a national dependence on a store because it best suits there lifestyle (to which they have adapted their depedence on WalMart). So whether you are a Rolex or Timex person, your shopping preferences should reflect the values you want to see in society. For me, I prefer the model of friendly customer service within the neighborhood with people who know your name and can provide high quality goods. It is worth the cost because money is just numbers in banks’ computers after all but that is another rant for another time.

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