What's wrong with Walmart?

Last week Leno showed the premiere of a new animation by JibJab. They made some amazingly even-handed animations during last year's election. There was nothing even-handed about this. It was an attack on Walmart (under the name of "Big Boxmart".

It opens in a sweatshop in China making products ("crap") for Walmart. It then jumps to an American with a beer-belly going shopping, maxing out his credit cards on crap (they used that word a lot) that he didn't need. The next day his job was moved to China and he was stuck working at Walmart until death. Apparently it would have been ok for him to buy crap if it had been American made crap.

JibJab may have been a light-hearted cheap-shot but PBS's Frontline looked at the issue in detail (it was actually a repeat episode). After showing talking heads arguing facts over off-shoring, they closed with a segment on RCA, the last American TV manufacturer. The head of RCA said that he could compete with anyone on an even basis but Chinese TVs were being dumped in the US market and (horrors!) Walmart sided against him.

Lots of things were not said in this segment. The issue of dumping was passed over pretty quickly. Were TVs being dumped? Was there proof? How big an effect did this have on the market? These questions were not answered.

Something else that was unadressed is the whole question of why we were down to one US TV manufacturer? This takes a long view. When I first started paying attention to TV prices (around 1970) you could get a 13" black and white TV for around $100. A similar TV now costs $30. $100 will get you a 19" color TV (at Walmart). For $120, you can get a 13" TV with a built-in DVD player.

Figure in 35 years of inflation and today's TVs cost less than the profit margin on a 1970s TV. No one cares about who made the TV. You know it will work and have a good picture so buyers look for the most features in their price-range. TVs have become commodities.

For as long as I can remember, American manufacturers have had problems competing in commodities. Profits are razor thin and things like fluctuations in exchange rates can make all the difference.

That's why Americans don't make TVs any longer and why Walmart is full of Chinese goods. We go to Walmart for commodities. Frontline should have asked why Chinese companies can sell to Walmart cheaper than American companies.

But Walmart is not unique in this. I don't think that any of their competitors are any different, so why the fuss.

The Chinese angle is a recent twist to the anti-Walmart campaign. Other complaints are that their pay is too low and that they drive mom-and-pop businesses out of business.

I am always confused about these complaints. The mom-and-pop hardware store largely vanished decades ago, driven out by K-Mart, Sear Hardware, and other Walmart competitors. What's more, mom and pop may make a decent living from their hardware store but they usually pay minimum to their few employees. Walmart's average is nearly $10/hour plus benefits.

Why didn't anyone protest K-Mart back when they were the #1 retailer?

Granted Walmart is bigger and better than any of their competition. They are big enough to make unreasonable demands on suppliers and they are one of the top retailers of groceries, DVDs, music, magazines, and toys. To many on the left, big business is always bad. Big business equals big oppressors.

Again, that doesn't explain the lack of an anti-K-Mart or anti-Target campaign. So what is it?

I'm guessing that it is religion. The Walton family wears their religion on their sleeves. They refuse to carry soft-core skin magazines such as Maxim and they have forced alternate, cleaned-up versions of some CDs.

The left is secular and tends to be scared of anyone with a hint of Christianity.

I could be wrong about this. I've never seen anyone admit it in public, but I don't think so. As I have pointed out, no one ever complains about Walmart's competitors.