Walmart’s entire business model.
July 2nd, 2009Dave Johnson would be just about the best blogger I’ve ever read this side of Josh Marshall. [And it's no coincidence that I've been reading both of them since before I knew what a blog even was.] His normal haunt is Seeing the Forest, but here at the Huffington Post he puts almost everything wrong with the economy today into a very tight nutshell:
Imagine a company in South Carolina that makes 20,000 pairs of shoes a week and distributes them to stores. Now, imagine that the company closes its South Carolina plant, opens a plant in a low-wage country, ships all the machines and raw materials there, ships back 20,000 pairs of shoes each week and distributes them to the same stores. Is that “trade?” Are the raw materials sent out of the country an “export?” Are the shoes brought back into the country an “import?”
The only thing that has been “traded” in this scenario is American jobs traded for huge executive bonuses. The workers in the low-wage country are not paid enough to buy any remaining American-made products. And, as the economic collapses as a result of shenanigans like this, American workers are no longer able to buy shoes so the executives won’t be getting bonuses next year.
I submit that nothing in this example is “traded” except that our standard of living has been traded away. And this exchange brings little benefit to the workers in the low-wage country. This is exploitative trade, not free trade, and we need to protect our workers, the workers in other countries and the world’s economy by demanding that our trade partners provide living wages and benefits.
[Emphasis in original]
Q. So why do we pick on Walmart?
A. Because these days that’s their entire business model.




