I'm certainly not a fan of Wal-Mart's recent attempts at encouraging revenue-hungry local governments into Eminent Domain abuses...

But this guy certainly makes some interesting points about the "bright side" of Wal-Mart's coin.

Mike

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Forget the World Bank, Try Wal-Mart

By Michael Strong, 22 Aug 2006




Between 1990 and 2002 more than 174 million people escaped poverty in China, about 1.2 million per month. With an estimated $23 billion in Chinese exports in 2005 (out of a total of $713 billion in manufacturing exports), Wal-Mart might well be single-handedly responsible for bringing about 38,000 people out of poverty in China each month, about 460,000 per year.

There are estimates that 70 percent of Wal-Mart's products are made in China. One writer vividly suggests that "One way to think of Wal-Mart is as a vast pipeline that gives non-U.S. companies direct access to the American market." Even without considering the $263 billion in consumer savings that Wal-Mart provides for low-income Americans, or the millions lifted out of poverty by Wal-Mart in other developing nations, it is unlikely that there is any single organization on the planet that alleviates poverty so effectively for so many people. Moreover, insofar as China's rapid manufacturing growth has been associated with a decline in its status as a global arms dealer, Wal-Mart has also done more than its share in contributing to global peace.

How can this be, given the vast and growing literature documenting Wal-Mart's faults? We have seen workers in the factories of Wal-Mart's suppliers complain on tape about being forced to work long hours under terrible conditions. Certainly no one should be forced at any workplace. And yet even articles documenting Wal-Mart's faults often mention other facts that ought to be considered before coming to too quick a judgment concerning the overall impact of the corporation. In a Washington Post story titled "Chinese Workers Pay for Wal-Mart's Low Prices," documenting abuses of workers at Wal-Mart suppliers in China, the authors point out that:

"China is the most populous country, with 1.3 billion people, most still poor enough to willingly move hundreds of miles from home for jobs that would be shunned by anyone with better prospects."

If we care about alleviating global poverty we need to take this fact seriously. Without Wal-Mart, about half a million of these people each year would be stuck in rural poverty that is, for most of them, far worse than sweatshop labor.

D. Gale Johnson, an economist who studied regional inequality within China, described the enormous disparity between urban and rural workers as "the great injustice." Urban workers earn about 2.5 times as much as rural workers. Even after counting the higher cost of living in urban areas, urban workers make about twice as much. Not surprisingly, massive numbers of people are moving to the city to work in factories. In 1990, 71 percent of China's labor force was in agriculture, whereas by 2000 that percentage had dropped to 63 percent: this great migration represents roughly 100 million people leaving rural areas to earn, on average, twice as much as they had on the farm.

Other than economic growth, there is no way to double the salaries of a 100 million people (and growing). After the 2004 Asian Tsunami, more than one-third of Americans gave more than $400 million in charitable aid, an extraordinary outburst of giving by any standard. And yet there are more than 630 million rural Chinese remaining, many of whom are living on less than a dollar per day. While each would welcome a charitable dollar if we could get it to them, that charitable dollar, representing one good day's worth of income, would not do them nearly as much good as would a job in the city paying twice as much day in, day out. Charity cannot take place on an adequate scale to solve global poverty.

Despite Jeff Sachs' enthusiasm for foreign aid, Bill Easterly makes a compelling case that government-to-government aid damages economies as often as it helps them. Does anyone think the World Bank raises more people out of poverty than does Wal-Mart?

What about social entrepreneurship? Ashoka, the highly regarded social entrepreneurship organization certified as among the "Best in America" charities, highlights among its hundreds of projects a worker's cooperative in Brazil that is growing rapidly:

Each member contracts individually with Coopa-Roca, but the collective meets weekly. Membership in the cooperative grew from eight members in 1982 to 16 in 2000, and has surged to 70 steady members today.

Is it heroic to raise one person up out of poverty each month, but merely a statistic to raise a million up?

Grameen Bank, the granddaddy of the social entrepreneurship movement, has now served 5 million borrowers. Over a period of twenty-five years, their five million served is thus of the same order of magnitude as the five million or so brought out of poverty by Wal-Mart in the last fifteen years. Micro-finance has become a hit with global development experts because it is the only poverty alleviation initiative, other than economic growth, that appears to be scalable.

That said; there is a thatched-ceiling to poverty alleviation through micro-finance. It may well be the case that the vast majority of Grameen Bank micro-entrepreneurs experience considerably greater pride and happiness in their work than do the factory workers hired by Wal-Mart suppliers. But most of these micro-entrepreneurs, who borrow less than $100 each and then repay the loan, do not experience as large an increase in standard of living as do those rural Chinese who move to urban areas and thereby earn an extra $1 or so per day, $365 or so dollars per year. Poor, rural micro-entrepreneurs selling eggs to other poor rural peasants simply do not have access to the vast pipeline of wealth from the developed world.

Moreover, most of the sweatshops workers in Japan in the 1950s and 60s, as well as the most of the sweatshop workers in Taiwan and South Korea in the 1970s and 80s, are now middle class retirees in developed nations. Likewise most of the "underpaid" Chinese workers of today will retire in a state of comfort and luxury unimaginable to them in their rural youth, as average Chinese wages will gradually rise just as they have risen in every other nation that has experienced long-term economic growth. At present rates of economic growth, China will reach a U.S. standard of living in 2031.

Paul Krugman, one of the most aggressively left-liberal economists writing today, understands how economic growth helps the poor:

"These improvements ... [are] the indirect and unintended result of the actions of soulless multinationals and rapacious local entrepreneurs, whose only concern was to take advantage of the profit opportunities offered by cheap labor. It is not an edifying spectacle; but no matter how base the motives of those involved, the result has been to move hundreds of millions of people from abject poverty to something still awful but nonetheless significantly better."

The Nobel laureate economist Robert Lucas once said "Once you start thinking about economic growth, it is hard to think about anything else." Non-economists, especially those associated with the environmental movement, regard this as evidence that economics is a form of brain damage, a cancer on our earth. But rural Chinese peasants surviving on less than a dollar per day do not regard economic growth, or Wal-Mart factory jobs, as a cancer. When a Mongolian student at a U.S. workshop on globalization heard U.S. college students denounce sweatshops, he shouted: "Please give us your sweatshops!

An unreflective passion for social justice may be one of the biggest obstacles to creating peace and prosperity in the 21st century. While there are most certainly factory owners in China whom we would rightly regard as criminal in their treatment of their workers, it is very important not to confuse these incidents with the phenomenon of globalization. It is a good thing that Wal-Mart is encouraging more humane standards in its supplier's factories. And yet it is also important to remember that Wal-Mart's "vast pipeline that gives non-U.S. companies direct access to the American market" is a vast pipeline of prosperity for the hundreds of millions of rural Chinese whose lives are more difficult than we can imagine.

Act locally, think globally: Shop Wal-Mart.

Michael Strong is CEO and co-founder (with John Mackey) of FLOW.

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1979 300 SD
350,000 miles
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1982 300D-gone---sold to a buddy
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1985 300TD
270,000 miles
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1994 E320
not my favorite, but the wife wanted it

www.myspace.com/mikemover
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Very true.

Our view on things is often skewed in this country. I remember seeing an interview with a Chiness girl of about 17 years old. She was very excited (picture American girl getting a car excited) about getting a factory job making a product for a company like Walmart. If I remember correctly it paid couple hundred bucks a month. She was estatic because the money would help her family so greatly, and she was so happy that they might be able to get a TV now.

There are many people around the world that would literaly kill for a $100 a month job.

__________________
1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

I still dont shop there, and dont buy Chineese goods, if American ones are avalible

~Nate

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95 Honda Shadow ACE 1100.
1999 Plymouth Neon Expresso. 2.4 swap, 10.5 to 1 comp, big cams. Autocross time attack vehicle!
2012 Escape, 'hunter" (5 sp 4cyl)

Yep.

The whole "sweatshop" thing is greatly exaggerated and dramatized by the media.

If I had two options:

1. Live in the middle of nowhere in China, making $1 or two a day farming rice for 14 hours a day.

--OR--

2. Live in or near an urban area in China and make $100 a month working in a "sweatshop" 14 hours a day.

.... I'd most CERTAINLY choose the latter, and I doubt that I would complain very much.

Mike

__________________
_____
1979 300 SD
350,000 miles
_____
1982 300D-gone---sold to a buddy
_____
1985 300TD
270,000 miles
_____
1994 E320
not my favorite, but the wife wanted it

www.myspace.com/mikemover
www.myspace.com/openskystudio
www.myspace.com/speedxband
www.myspace.com/openskyseparators
www.myspace.com/doubledrivemusic

Well its a different life style, different culture, different country. Money isn't as important for living as it is here. Those peasents don't need money to feed themselves ect.

Although working a rice field must suck, its all leaning over, wet muddy work.


Only the media can make blanket sweat shop statements. The real world is much more complexe.


From our American perspective what they make won't even lease a BMW. But from there perspective its a great job.

Everything is relative.

Besides the average Chiness family isn't that different from the average American. They want a nice house, maybe a car, and there kids to go to a good school and become educated. How dare we begrudge them the same shot at this dream that we have enjoyed for quite awhile now.

__________________
1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

You think this behavior is limited to women who work at WalMart?

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1982 300SD " Wotan" ..On the road as of Jan 8, 2007 with Historic Tags

So what? Is all the wealth in the world worth anything when your family can dissappear overnight and the govt. can scare your neighbors into silence? That article is written like a person whose only view of China is from the penthouse of hotels reserved only for westerners. Do you know it's more expensive to live in Beijing and Shanghai than it is in San Francisco?

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You don't need a weatherman to know which way the wind blows - Robert A. Zimmerman

Around here Walmart Employees have much better pay than Meijer (similar unionized store) and aspire to work at Walmart.

Meijer keeps employees just below 40 hours so they don't have to pay benefits and keeps most wages at minimum, and add union dues on top of that.

I wish I could care more about the plight of the Chinese, but I don't. Its really nice of Walmart to pull so many folks out of poverty on the other side of the world, while creating more here. Does anyone remember their 'Buy American' slogan?

__________________
1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma

So many slogans go to the side as time goes on:

Show me your Lark pack Cigarettes not cool anymore

Two all beef patties, special sauce, lettuce, cheese, pickles, onion, on a sesame seed bun. Mickey Dees dosen't use 100% beef anymore

What credit car is everywhere you want to be.? Who remembers Bank America Card

Baseball, Hotdogs and Chevrolet Yup, GM is all 100% made is USA

Hurry on down to Hardees where the burgers are charcoal broiled.
No more charcoal

Funny how times change

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BENZ THERE DONE THAThttp://www.peachparts.com/shopforum/...c/progress.gif
15 VW Passat TDI
00 E420
98 E300 DT
97 E420 Donor Car - NEED PARTS? PM ME!
97 S500
97 E300D
86 Holden Jackaroo Turbo D
86 300SDL
(o\|/o)

If you want to see another good thing that Wal*Mart does tune into the Wal*Mart First Tee Open at Pebble Beach next weekend.

Most of those kids are selected to play in that tournament based on their golf efficiency, essay writing ability, and interview skills. Those selected this way (50 of the 78 this year) have their way completely paid for by Wal*Mart. They stay in private housing. Which, on the monterey peninsula, is pretty outrgageously nice. They get to hobnob with the champions tour players at three functions. They get to play at least two rounds on Pebble Beach and two on Del Monte. Oh, and it's a Pro-Am so they might get to play with some big name people.

I caddied for a kid who got to do this for the last two years. He played with Craig Stadler both times. The first year he won the tournament. Last year his Pro-Am partners were Ronnie Lott and Harris Barton.

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Pxland

2001 Honda Accord

1995 Jeep Cherokee

1973 MB 280SEL 4.5

How does it work when you have two countries with great differences in average wealth per citizen? The wealthy country buys lots of low quality, cheap merchandise from the poor country, which brings prosperity to the poor country, but the citizens of the poor country can't afford goods from the rich country, so the rich country loses jobs because no one is buying their goods.

In the case of the Chinese, it also includes a Communist/Capitalist/Totalitarian government that really calls all the shots, throw in lots of local corruption and then really make the situation a loser for the US by holding the Chinese currency artificially low. We are getting screwed coming and going here. The worst part of it all is that the Chinese are no different than the Soviets when it comes to oppresion but we would have nothing to do with the Soviets.

I try not to buy Chinese goods but sometimes it is inevitable. Heck, even the Mexicans are losing jobs to the Chinese.

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Doug

1987 300TD x 3
2005 E320CDI

Too bad they got rid of the FEC. Our dollar would be worth so much more. You could buy stuff cheaper with USD than with RMB because of FEC.

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You don't need a weatherman to know which way the wind blows - Robert A. Zimmerman

Wal Mart is partly responsible for the rise of China as an economical super power, because of the hunger to feed this new economical tiger natural resources are going up in price, so at the end we will pay for those low prices at Wal Mart. And only imagine what we and our allies have to spent on defense to keep this roaring tiger in control.

Some predict that the Chinese economy will surpass the American in 20 years from now. It's ironic that communist China beats capitalist USA with it's own stick.

__________________
1979 Black on Black, 300CD (sold), 1990 Black 300SE, Silver 1989 Volvo 780, 1988 300CE (vanished by the hands of a girlfriend), 1992 300CE (Rescue).

No offense to you but...

So what?

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Pxland

2001 Honda Accord

1995 Jeep Cherokee

1973 MB 280SEL 4.5