In the July 12 Washington Post, Princeton University Professor Rebekah Peeples Massengill wrote an article titled “Five Myths About Wal-Mart.” Here’s part of her explanation for Wal-Mart myth No. 3, that “Wal-Mart is [supposedly] great for low-income Americans“:
Prioritizing consumption (what we pay for goods) over production (what workers earn for making goods) means that even low-income families whose economic futures have been jeopardized by the outsourcing of manufacturing jobs can see Wal-Mart as a savior, not a villain. Yet the retail giant’s genius lies in camouflaging its exploitation in terms that frame its relentless cost-cutting as a kind of benevolence. For example, the company in 2006 declared itself “a lifeline” for millions of Americans facing harsh and uncertain economic times, adding that “perhaps more than any single company in America, Walmart is providing the opportunity for a better life for poor and working families.” Still, even if Wal-Mart’s low prices help low-income Americans make ends meet at the cash register, the low wages offered by Wal-Mart do little to help low-income families shoulder the burden of other rising costs, such as health care and housing.
Professor Massengill seems to concede that Wal-Mart’s “everyday low prices” are pretty great for the millions of low-income (and middle-income) Americans who save millions of dollars by shopping at Wal-Marts, so it’s really not a myth after all is it, that Wal-Mart is great for low-income Americans?
But then to salvage the argument that Wal-Mart is maybe not great for all low-income Americans, the professor paints a pretty bleak picture of Wal-Mart’s “low wages” to suggest that Wal-Mart’s significant benefits to the thousands of low-income consumers who shop at a Wal-Mart store are somehow more than offset by the exploitative “low wages” paid to about 300 employees at each store? That seems like a pretty weak argument, and it’s not convincing at all that Wal-Mart is “not great for low-income Americans,” but it’s recycling the persistent myth that “jobs at Wal-Mart are a dead-end cycle that keeps people in poverty.”
Here are some comments about working at Wal-Mart:
1. According to Wal-Mart, its wages are “at or above the retail industry average. In addition to competitive pay, our benefits include a 401K plan with a company match, education assistance, merchandise discounts, and health care. Health care plans are available to eligible hourly associates starting at $17 per pay period. All employees — full and part time — receive quarterly bonus opportunities based on store performance. Last year, these bonuses earned by hourly associates totaled more than $770 million.” Sounds like a pretty good deal for millions of low-income Americans who work for Wal-Mart.
2. When Wal-Mart opens a new store, it’s not uncommon for the retailer to receive 10,000 to 25,000 applications for 300-400 openings, which is a ratio of 25 or more applications per job opening, and an acceptance rate of 1.5% to 4%. If Wal-Mart was such a horrible place to work, why are so many low-income Americans so apparently desperate to work there?
Consider that at Princeton University, where Professor Massengill teaches, the elite Ivy League institution gets “only” about 13 applications for every available freshman opening, and its admit rate is 7.9%. Think about it — Wal-Marts get about twice as many applications per job opening as Princeton gets per opening in its freshman class, and is therefore in a position to be more selective when selecting employees than Princeton when it selects its first-year class! So given their alternatives, thousands of low-skilled, low-income workers must find the job and career opportunities at Wal-Mart extremely attractive since they apply in such large numbers whenever a new Wal-Mart store opens.
3. Why do so many low-income (and middle-income) Americans really, really want to work at Wal-Mart in entry-level jobs? In addition to the generous above-market compensation at Wal-Mart (as demonstrated by the fact that it gets 25 applications per opening), low-income Americans want to work there for the lucrative career opportunities for advancement at the giant retailer. Wal-Mart boasts that “75% of its store management started as entry-level hourly associates, and they earn between $50,000 and $170,000 a year — similar to what firefighters, accountants, and even doctors make.” And similar to what an assistant professor earns at Princeton University — $94,000 — and many Wal-Mart managers make even much more than that.
4. As an example of the career opportunities at Wal-Mart, consider the case of 50-year old Patricia Curran, until recently Wal-Mart’s executive vice president of people, and listed by Fortune Magazine in 2006 as one of the 50 most powerful women in the US. She was also listed by the Wall Street Journal as one of the “The Top 50 Women to Watch 2006.”
At age 20, Ms. Curran started her career at Wal-Mart as an hourly associate in the pet department, and was subsequently promoted to department manager, assistant manager, co-manager, store manager, regional personnel manager, district manager, operations coordinator, regional vice president, divisional merchandise manager, senior vice president of Wal-Mart store operations, executive vice president of Wal-Mart store operations, and was most recently promoted to executive vice-president of people in 2007. Although going from hourly associate to the senior management ranks of Wal-Mart is certainly not typical, it nonetheless illustrates the significant career advancement opportunities available at the world’s largest retailer, and helps explain why more people apply per job opening at Wal-Mart than students apply per opening at Princeton.
Bottom Line: Any neutral observer who looks at the significant economic benefits generated by Wal-Mart in terms of everyday low retail prices for groceries, prescription drugs, clothing, and household items that generate billions of dollars in cost savings for low-income Americans, along with millions of job opportunities in cities across America for low-income Americans with above-market compensation and significant advancement opportunities, could only come to one conclusion: Wal-Mart is truly great for low-income Americans.
Inspired by this Vancouver Sun article and to provide some counterbalance to Professor Massengill’s vilification of Wal-Mart, I hereby nominate Wal-Mart for the 2013 Nobel Peace Prize for its significant contributions to society, for improving the US and world economies, for directly creating more than two million jobs worldwide at its retail outlets and helping to support many thousands of jobs indirectly for all of the thousands of suppliers to Wal-Mart, and for its contributions to improving the lives of millions of lower-income consumers by offering “Everyday Low Prices.”