Why Wal-Mart is Good for America (and Maybe Your Portfolio)
< Continued from page 1
If a man or woman chooses to become a cashier and expects to maintain that position his or her entire life, he or she is delusional for thinking they are going to be able to afford a new car every few years or a plasma television. What's more, their resentment is unjust and unfair to those who have put themselves through school to work their way up the management chain. To blame the corporation for their conscious decision to cease improving themselves effectively castrates them of all responsibility and humanity.
It turns them into victims, instead of empowering them. If Rose Blumkin, founder of Nebraska Furniture Mart, (now a subsidiary of Berkshire Hathaway) can come to the United States penniless and die with a hundred-million-dollar fortune without the ability to read and write, it is anathema to the American spirit to decry the lack of opportunity.
On the other hand, it must be recognized that very few of us have the blessing of occupying the top quintile of wealth.
For a single mother working full time to support her children, however, you are talking about hundreds, if not thousands, of dollars each year in additional expense that will cut directly into her discretionary income. When Wal-Mart can offer her glue at $0.20 per bottle, or notebooks at $0.10 each for back to school, there is something good going on for society. If a factory in Mexico can produce it for cheaper, I would argue the company has a moral obligation to its customers - which typically are the poorest demographic in the United States - to buy from it. Consciously choosing to buy the more expensive American notebook and put it on the shelves is, in effect, supporting someone else's inefficiency and forcing that mother to have less disposable income for her family.
Somehow, people seem to forget that the so-called Beast of Bentonville originated as a small five-and-dime store with huge disadvantages relative to its competitors. I also find it puzzling how most commentators seem to forget that since its initial public offering, the company's stock is up 100,000 percent (plus you've received huge cash dividends along the way!). The original associates, whose retirement account was invested in the stock, have done extraordinarily well. Many others who had the good sense to invest on their own are now also rich beyond their expectations. How can someone blame the Walton family for exploitation when it was they who risked their entire family's livelihood and dedicated every waking hour for decades to build a company from nothing?
If a man or woman chooses to become a cashier and expects to maintain that position his or her entire life, he or she is delusional for thinking they are going to be able to afford a new car every few years or a plasma television. What's more, their resentment is unjust and unfair to those who have put themselves through school to work their way up the management chain. To blame the corporation for their conscious decision to cease improving themselves effectively castrates them of all responsibility and humanity.
It turns them into victims, instead of empowering them. If Rose Blumkin, founder of Nebraska Furniture Mart, (now a subsidiary of Berkshire Hathaway) can come to the United States penniless and die with a hundred-million-dollar fortune without the ability to read and write, it is anathema to the American spirit to decry the lack of opportunity.
Outsourcing and Globalization
Regarding the so-called high cost of low prices: In essence, asking for the company to support wage increases by slightly increasing prices is asking the other 298.4 million Americans to subsidize the 1.6 million that are employed by Wal-Mart. For me, that's fine. I've been extraordinarily blessed, had the privilege of attending a private university, have a job I am passionate about, invest virtually all of my excess capital, live well, and love what I do. If the question comes down to increasing my checkout price by two percent to improve someone else's standard of living, I'm happy to oblige as I believe we are all in this together.On the other hand, it must be recognized that very few of us have the blessing of occupying the top quintile of wealth.
For a single mother working full time to support her children, however, you are talking about hundreds, if not thousands, of dollars each year in additional expense that will cut directly into her discretionary income. When Wal-Mart can offer her glue at $0.20 per bottle, or notebooks at $0.10 each for back to school, there is something good going on for society. If a factory in Mexico can produce it for cheaper, I would argue the company has a moral obligation to its customers - which typically are the poorest demographic in the United States - to buy from it. Consciously choosing to buy the more expensive American notebook and put it on the shelves is, in effect, supporting someone else's inefficiency and forcing that mother to have less disposable income for her family.
Competitors and Wal-Mart
This brings us to a vital, often misunderstood point: Wal-Mart has never - not once - put another company out of business. We, the consumers, bear total and complete responsibility. I grew up in a small farm town in the Midwest. On the town square, there were small shops and other retail boutiques that offered everything from antiques to coffee. If one of these stores were to offer crest toothpaste at $4.90, a price that guaranteed they made their necessary margin for maintaining the business, yet I could go to the edge of town to get Crest for $1.39 at the local Wal-Mart, my decision to choose the store that is going to leave more money in my pocket is what made the small business close its doors. Wal-Mart offered a product at a price that allowed it to generate a decent profit margin, and did it so that my cost was lower than I could get it anywhere else. They made me an offer and I, along with hundreds of millions of people each week throughout the world, chose to take them up on it. No one has a constitutional right to remain in business; if the small retailer were supporting its customers and focusing on what was best for them, they would be able to effectively compete.Somehow, people seem to forget that the so-called Beast of Bentonville originated as a small five-and-dime store with huge disadvantages relative to its competitors. I also find it puzzling how most commentators seem to forget that since its initial public offering, the company's stock is up 100,000 percent (plus you've received huge cash dividends along the way!). The original associates, whose retirement account was invested in the stock, have done extraordinarily well. Many others who had the good sense to invest on their own are now also rich beyond their expectations. How can someone blame the Walton family for exploitation when it was they who risked their entire family's livelihood and dedicated every waking hour for decades to build a company from nothing?
