Is Wal-Mart Good for the American Working Class?

Class War as a Solution
E-mail debates of newsworthy topics.
June 27 2006 2:50 PM

Is Wal-Mart Good for the American Working Class?


Hi, Jason:

I'm a little baffled by your Best Buy/Stereo Exchange example. If Stereo Exchange took over from Best Buy, there'd be a lot more better-paying jobs in the retail electronics business. Why wouldn't the former Best Buy workers take a lot of these new and better jobs? They're not all as clueless as you seem to think.


Oh well, let me start by answering your questions and then move on to a grand philosophical point.

You ask, in so many words, why pick on Wal-Mart when there are so many equally Scrooge-like employers around? Why not go after, say, the bodega on the corner? Well, the question answers itself. By gobbling up thousands of acres of farmland and suburban sprawl to feed its relentless appetite for growth, recruiting (and spitting out) thousands of workers a day, and achieving near-monopoly status in some parts of the country, Wal-Mart has made itself into an unmissable target for anyone concerned about poverty and mounting inequality. The bodega may be bad—not to mention any number of retail chains other than Wal-Mart—but you might as well start with the biggest piggy of all, which is the largest single private employer in America.

You want to know what Wal-Mart workers "ought" to be paid. The technical answer is the same as for any other workers: enough so that they can actually live (indoors) on their wages. This is what we call a "living wage" and can be calculated on the basis of local rents and other costs. As you know, there's a whole "living-wage movement" afoot in the land, fighting to establish, as a moral principle, that anyone who works (full-time, year-round) should be paid enough to live on.

Could Wal-Mart afford to pay more without raising its prices to a level unaffordable to most of its current clientele? Here's what Jared Bernstein, L. Josh Blivens, and Arindrajit Dube conclude, in their June 15 paper "Wrestling With Wal-Mart: Tradeoffs Between Profits, Prices, and Wages":

… sizeable compensation increases could be fully paid for out of Wal-Mart's profits without affecting prices if the company either accepted the same profit margins it obtained in the recent past, or accepted the lower profit margins that some of its competitors do.

I'd just add that Wal-Mart CEO H. Lee Scott earns somewhere about $17 million a year (though I've seen estimates in recent years well above $60 million) and that, in the Forbes annual list of the 10 richest Americans, four or five usually have the surname Walton, meaning they are the heirs of Sam and his brother. You can't talk about inequality and leave out the other side of the equation: the billions accumulated by exploitative corporations and their owners.

But enough detail. I want to take on the more philosophical issue that seems to divide us. You're arguing, essentially, that whatever misery Wal-Mart workers endure is compensated for by the low prices Wal-Mart consumers enjoy. The same could be said of other workers who provide services to working-class people, like those in the fast-food and child-care industries: Their atrocious wages help keep prices low for impecunious parents and burger-eaters. In other words, the working class can only advance on the backs of (some of) its own members. Sacrifice one group to keep the others afloat, so that the class struggle is replaced by a kind of Darwinism internal to the working class.

I—and, more importantly, the unions and the living-wage movement generally—take an entirely different approach, one embodied in the venerable notion of solidarity, or the idea that we're all in this together. Solidarity is a fine and uplifting sentiment, but it also contains an economic calculation: The low-wage Wal-Mart (or Target or bodega) worker is someone else's spouse or grown child making a contribution to the household income.

Furthermore, blue-collar and pink-collar people in the same geographical region occupy the same labor market: Low wages for some depress wages for others. This is why you get Teamsters showing up at a janitors' strike and clerical workers supporting the food-services staff at any number of universities. And of course this is why you'll find working people of a variety of occupations joining local "site fights" against Wal-Mart's expansion into their towns.

Yeah, I'm talking "class war" as a solution to poverty and rising inequality. But remember, the working class didn't start this war and—mainly due to the weakness of the unions and the pusillanimity of the Democrats—has been fairly supine in the face of repeated attacks. I say it's time to fight back. What's your solution?



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