Wal-Mart: The High Cost of Low Price (Review)

(5/10)

If you don’t know the film is made by Robert Greenwald, the same guy that made, Outfoxed: Rupert Murdoch’s War on Journalism (about Fox Network news) and Unprecedented: the 2000 Presidential Election. In this film, he directs his ire toward Wal-Mart.

Mitchell said that I would hate this movie. Well, I didn’t hate it, but he probably knows the type of criticism I’m going to direct at this film. The film would probaly get a lower score from me, except it triggered thoughts about capitalism, the way wages are determined, liberalism, hypocrisy and other issues, so I give it some points for that.

So what didn’t I liked about the film? Basically, I didn’t think he made a very clear and compelling reason we should all hate Wal-Mart.

Greenwald starts his film with interviews of the family of a small hardware store and their employees. These are political conservatives that say they’re all for capitalism, on one hand, but speak out against Wal-Mart coming into their town. It’s a sad situation for the family that will be losing it’s long-time business and for the employees who will lose their jobs, but to me their interviews just sound like sour grapes. One man claims that Wal-Mart has an unfair advantage, that they are a monopoly. If Greenwald could have shown how Wal-Mart has an unfair advantage. That would have been a stronger case. Instead, he seems to be using these interviews for two reasons: 1.) these are conservatives who are speaking out against Wal-Mart; 2.) he wants to appeal to the audience’s sympathy and emotions. After I heard those interviews I just thought that Wal-Mart was doing what any competitive business would do in a market economy. If people are mad at Wal-Mart, they’re mad at the fact that they’re too good at capitalism.

As for other criticisms, let me just make one generalization. I wished that Greenwald would provide a context for some of his information. For example, compare Wal-Mart’s practices with other corporations. Without this sort of comparison, the viewer has a hard time drawing any conclusions from the information provided by the filmmaker.

Here’s a related example. Greenwald interviews several employees (I would say less than ten) that complain about Wal-Mart and its practices. Is this represenative of how many Wal-Mart employees feel? Is there a reason–besides the fact that Wal-Mart is a terrible company–for this individuals to want to get back at Wal-Mart? How credible are these interviewees? Greenwald doesn’t give us this contextual information, and it’s crucial to letting the viewer know the credibility and streangth of these claims.

One of the questions that I thought about throughout the film was what makes Wal-Mart worse than othcr corporations? Wal-Mart may be worse in degree, but, qualitatively speaking, isn’t Wal-Mart very similar to a lot of other businesses out there? At the end of the film, I wasn’t clear what made Wal-Mart so much more terrible than other corporations.

In a way, the situation reminds of football fans who cheer the big hits, but then get all somber and sad when a player doesn’t get up. We want violence, but we don’t want people to get hurt. We want capitalism, but we castigate Wal-Mart for crushing its competitors, keeping wages down and creating poor labor conditions. There seems to be a hypocrisy or at least a failure to recognize the natural consequences of capitalism. Are we trying to have our cake and eat it, too?

This lead me to ask the question: Is balancing the desire for profits and humane treatment of workers and the environment possible? If so, what is the best way for this to be acheived? My two initial responses is that the people that run coporations have to value people and the environment. The other response is that a democratic government must help create that appropriate balance–via regulation and laws. The media–the fourth estate–also should help create that balance–which can’t happen when corporations control the media and when commercial factors dominate the media.

Anybody have any other ideas?

8 Responses to “Wal-Mart: The High Cost of Low Price (Review)”


  1. Mitchell

    The model everyone always cites for caring big-business is Ben & Jerry’s, but I don’t know how much of it is truth and how much is hype.

  2. Marc

    I haven’t seen the movie, but I’m familiar with the arguments that Reid makes above. Have you seen the Frontline (PBS) episode which focused on Wal-Mart? I believe this is the website.

    http://www.pbs.org/wgbh/pages/frontline/shows/walmart/

    This may be more balanced than the movie that started this thread, but is still negative in general toward Wal-Mart’s practices. I’ve got a pretty healthy respect for Frontline’s presentations and liked the recent one that discussed Hurrican Katrina. This Wal-Mart episode focused on price-cutting stategies and foreign manufacturing and pretty much ignored the labor issues domestically that Wal-Mart has been criticized for. Other companies aren’t mentioned, and Wal-Mart is a huge target, but the more I hear about their business practices, the more I dislike the company.

    Reid’s question – “Is balancing the desire for profits and humane treatment of workers and the environment possible? If so, what is the best way for this to be acheived?” – I think the answer is yes, and I want to briefly present two examples.

    Ben and Jerry’s is obviously a different company than Wal-Mart, but I think a good retail comparison is Costco – a northwest company that is well known for competitive pricing while providing a good work environment. They have actually been criticized by some business know-it-alls for treating their employees TOO WELL because of the costs associated with this, but they keep trucking along. A reprinted commentary from the Wall St Journal can be found here that makes the argument that successful businesses can treat the employees well.

    http://reclaimdemocracy.org/articles_2004/costco_employee_benefits_walmart.html

    Note that at the bottom of the reprint, a hyperlink are provided to a New York Times commentary which says pretty much the same thing.

    In a different arena, Reid and the Californian’s are probably familiar with a burger chain called In-n-Out Burgers. This organization has likewise received praise for different business practices, in particular treating their employees better than other fast-food restaurants and obtaining healthier/cleaner beef than their competitors. This was basically the only fast-food joint that received posivitve ink in Eric Schlosser’s “Fast Food Nation,” which is an absolutely horrifying look at the industry.

  3. Reid

    Marc,

    I really liked the article on Costco as it serves as a very good companion piece to the Wal-Mart movie. I hope Costco can continue treating its employees well and survive, but even in those articles you can sense the tremendous pressure on Jim Sinegal, CEO of Costco. I get the sense that the shareholders are just waiting for the company to slip in some way, so that they can get rid of him. I also sense that if someone other than Sinegal were running things, wages and health care benefits would probably be cut.

    I think we need to explore ways to encourage and support individuals like Jim Sinegal and make corporations like Costco more the rule as opposed to the exception. Which leads to a more important question: how likely is creating a company like Costco within the American capitalist system? What can we do to ensure that more corporations will treat workers well?

    Another question: I’m guessing that Costco would negatively impact small businesses and small-town community life in similar ways as a Wal-Mart would. Despite it’s good treatment of workers, would people still oppose the building of Costco’s in a community?

  4. Marc

    I think Costco probably has some effect on businesses around them, but considerably less than Wal-Mart because Costco has some disadvantages. Costco offers good prices by forcing their consumers to pay a membership fee, limit their selection, and buy greater quantities. You’ve all seen the industrial size mayonaisse jar right? They also offer pretty good deals on single items like TVs, tools, furniture, etc. But you can find comparable prices at stores that specialize in those areas. For instance, most furniture stores (IKEA), electronic stores (BEST BUY), home improvement stores (HOME DEPOT) all offer comparable prices to Costco on the specific item in question. So Costco’s good prices require paying for a membership and sacrificing selection greatly, but you generally get good stuff.

    Wal-Mart, on the other hand, offers a huge selection of thinigs at prices that meet or beat their competitors. You don’t have to buy the 8 gallon jar of mayo, you can buy a regular size jar. Super Wal-Marts have groceries as well. The beauty of this is that Wal-Mart can make tons of money by selling $1.99 tubes of toothpaste and so forth.

    So my impression is that most communities are more willing to accept Costco, which has to be very selective in where they open stores because of their built in disadvantages. They are less willing to accept Wal-Marts.

  5. Mitchell

    Costco is a great example of an Anti-Wal-Mart. I listened to an excellent story on HPR about Costco and was very impressed. It has a model that obviously works — the company is healthy and strong — but stock speculators hate it because it doesn’t increase its profits, instead paying its employees enough to keep them. My friend Desi is in her eighth year at Costco and she makes seven thousand bucks more per year then me.

    I do not know if Costco stores have negative impacts on other retailers, but I would suggest that the area in Salt Lake surrounding the first Oahu Costco store flourished until Costco moved to Iwilei.

    I almost never shop there because it’s not cost-efficient. People who live alone and don’t buy a lot of toys simply do better at local markets, supplemented by the occasional tag-along trip to Costco when a friend is obliging.

  6. Reid

    Does anyone know if Wal-Mart has had a negative impact on the small businesses around it? If I had to guess, I would say it hasn’t because they’re built in places that don’t have a lot of small businesses to begin with. Furthermore, they’re not wrecking any mainstreet, small-town vibe because those have already be wrecked or elminated for the most part.

    Are anti-Wal-Mart activists OK with Costco?

  7. Mitchell

    Are you kidding? Keeaumoku Street (“Koreamoku Street,” as one of my students calls it) is NOTHING but small businesses. The week the store opened just over a year ago, I walked down Keeaumoku and asked several of the store managers in those little stores if they thought Wal-Mart was going to be good for them or bad for them. The responses were all the same: We really can’t tell; let’s wait and see.

    I was planning to go back this past October (a year later) and ask the follow-up questions, but October was ridiculous for me, and November was worse, so it’ll have to wait until Christmas break.

  8. Reid

    Well, I was thinking of the Wal-Mart in Kunia, and also Sam’s Club and Costco locations.

    I wouldn’t call Keeaumoku a “small town mainstreet” either.

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