Friday, April 27, 2007
Walmart: a different model of corporate greed
Walmart epitomizes the American corporation: it's big--and it's greedy.
Well, sort of. One thing we can say for sure is that it's big--so big that now 97% of Americans shop their at least one a year, and it is now by far the biggest private employer in America. But is Walmart greedy? This, it seems, is a more complicated question. Walmart, as everyone knows, only pays its employees about 10 dollars an hour, but, according to Charles Fishman, author if The Wal-Mart Effect, it only makes about $6,400 per year on each of its employees--that is, if Walmart gave all its employees a $6,400 raise, it would not make any money. Compare this to a company like Microsoft, and the notion that Walmart is greedy--by corporate standards, anyway--no longer really explains the Walmart phenomenon. Microsoft makes (wait for it) $200,000 off each of its employees, 30 times what Walmart makes.
So, any way you slice it, Microsoft is worse at sharing its profits than Walmart. What's amazing about Walmart is that, just as it sells things in bulk, it makes profit in bulk; for everyone $3,000 of stuff it sells, it makes less than $100 profit. Where, then, has all the money gone? Who is it that's really being greedy here?
Of course, it has gone back to the consumer. Our low prices account almost completely for the low wages. Literally everything is passed onto the consumer. So, we have a very different model of greed than one we see in the standard evil corporation. If Walmart can be blamed for anything (which it certainly can) it is getting us all (even those of us who never go to Walmart, but go to other stores that have had to slash prices to keep up) to expect low prices.
Or maybe the employees are just being greedy. Don't you know how far your 10$ an hour can go in a Walmart?