Thursday, May 25, 2006

Hypocritical Ploy From the Anti-Wal-Mart Crowd

Check out first this ad, which claims to be an “agreement . . . proposed in good faith by Wal-Mart Watch – A Campaign of Five Stones and the Center for Community and Corporate Ethics.”

It first appeared in the New York Times.

It basically “proposes” that Wal-Mart do all the things that liberal activists want it to do — provide higher wages and full health care coverage for all its workers, impose environmental and labor standards on all its suppliers all over the world, use local suppliers, and so on.

The sincerity of the ad is quesionable on its face, since Wal-Mart could not possibily afford to do all that the activists want.

While the activists like to quote the huge-sounding profits of the giant retailer, the reality is that their margins are paper thin. From a paper produced by one of John Kerry’s economic advisors:
Overall, it is no easier for Wal-Mart to change compensation than many other companies. This year Wal-Mart will earn about $6,000 per employee. This is virtually identical to the average for the retail sector and somewhat below the national average of $9,000 in profits per employee in the corporate sector. Some companies make substantially more, like Microsoft ($143,000 per employee) or General Motors ($12,000 per employee). Overall, it is not much easier for Wal-Mart to change compensation than, say, a small business making $24,000 a year and employing four people.

If Microsoft paid each of its employees an additional $5,000 or expanded its health benefits, its profits would be largely unchanged. If Wal-Mart took the same step — and did not pass the cost on to consumers – it would be virtually wiped out.

In the last fiscal year, Wal-Mart had revenues of $288 billion and costs (including taxes and other charges) of $277 billion — a razor-thin profit margin of 3.7 percent of revenues. Even a very small increase in its costs, without a corresponding increase in revenues, would wipe Wal-Mart’s profits out entirely.
So how seriously should one take an ad that asks the giant retailer to do think they could not possibly afford to do?

But here is the kicker. A link to the ad appears on the front page of the Wal-Mart Watch web site (no surprise here).

But right next to the link is an ad for Battle-Mart, a site that promises readers “you’ll find the resources to draw a line in the sand and defend your community.” Further:
Whether you want to stop a Wal-Mart from being built in your community, prevent an existing Wal-Mart from expanding, or hold a Wal-Mart accountable for its actions in your hometown, Battle-Mart is here for you.

This year grassroots powered citizen groups will successfully thwart Wal-Mart’s advance. Those victories are all of ours — and we can learn from them to take the fight to many more fronts.
So while Wal-Mart Watch is claiming to offer “an agreement of shared principles offered in good faith to the executives and board members of Wal-Mart” it is promoting the “line in the sand” attitude of activists who want to stop the giant retailer at all costs.


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