Friday, November 23, 2012

What You Need to Know About Wal-Mart Hater Robert Reich

Robert Reich is tweeting up a storm, calling for shoppers to not shop at Wal-Mart.

At his blog he writes at a post titled, Why You Shouldn't Shop at Wal-Mart:
Today, America’s largest employer is Walmart, whose average employee earns $8.81 an hour. A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits...

Walmart earned $16 billion last year (it just reported a 9 percent increase in earnings in the third quarter of 2012, to $3.6 billion), much of which went to Walmart’s shareholders — including the family of its founder, Sam Walton. The wealth of the Walton family now exceeds the wealth of the bottom 40 percent of American families combined, according to an analysis by the Economic Policy Institute.

Is this about to change? Despite decades of failed unionization attempts, Walmart workers are planning to strike or conduct some other form of protest outside at least 1,000 locations across the United States this Friday – so-called “Black Friday,” the biggest shopping day in America when the Christmas holiday buying season begins.

At the very least, the action gives Walmart employees a chance to air their grievances in public – not only lousy wages (as low at $8 an hour) but also unsafe and unsanitary working conditions, excessive hours, and sexual harassment. The result is bad publicity for the company exactly when it wants the public to think of it as Santa Claus. And the threatened strike, the first in 50 years, is gaining steam.
It appears that Reich's influence is microscopic, if there is any at all. Wal-Mart employees are showing up for work and shoppers are filling Wal-Stores.

In other words, free exchange goes on. No one is forcing anyone to work at Wal-Mart. Thus, those working there must be doing so because it is the best option they have. If Reich wants to offer them more to work for him, then he should shut-up and start writing checks.

The fact of the matter is that Reich is a major league interventionist. He hates free exchange. He is a central planner and favors wealth redistribution.

In an interview at NYT, he stated "I don't believe in redistribution of wealth for the sake of redistributing wealth. But I am concerned about how we can afford to pay for what we as a nation need to do...[Taxes should pay] for what we need in order to be safe and productive."

He was recently called out for bitching about market pricing in the airline industry, when he charges a market rate of $40,000 to deliver a speech.


  1. Lots of coverage of the protests against Walmart on the local news which I found annoying but I had to laugh when the "reporter" told us that the protesters were picking up at one Walmart store and moving on to another store in the city (Milwaukee). She didn't tell us how many were there but how many could there be if they had to more from store to store?

  2. He contradicts himself faster than most...

    "A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits..."

    then he goes on to say

    "not only lousy wages (as low at $8 an hour) but also unsafe and unsanitary working conditions, excessive hours, and sexual harassment."

    Which is it Reich, less than 28 hours a week or excessive hours?

    Could it possibly be those working less than 28 hours want a part time job? Maybe its a second job, maybe they are on SS and Medicare and they just want a little extra income.

  3. Reich who bills himself as a "political economist" (sounds redundant to me) has of course never actually operated a business, or even worked a day in his life in the private sector. Rather Reich has spent most of life in very elitist colleges of the 1% like Harvard, Yale, and Oxford as a student and later as a academic. Outside of this he was basically a government bureaucrat, including Clinton's Labor Secretary.

  4. If your only alternative is starvation, you might well be forced to work for Walmart.

    The state of the economy is the reason for so few employment choices and Walmart is one of the reasons few alternatives exist.

    Free exchange, meanwhile, is the reason Walmart kids lounge on yachts, while their employees suffer and die young.

  5. I dislike Walmart because like other corporate creatures of the State, it enjoys privileges and immunities at the expense of the rest of us:

    I agree that the mainstream Walmart hatefest is based in antipathy to free exchange. That doesn't mean that Walmart is a paragon of a model market. The exact opposite is true. Walmart wouldn't exist but for the State.

    1. Thanks for pointing that out. Wally World uses its size and clout to steal property via eminent domain, broker tax deals that leave others at a disadvantage and

  6. I haven't shopped at Walmart since 2000.

    My reasons are different than they were originally.

    Walmart is very aggressive about externalizing costs on to tax-payers. They don't offer health insurance, but do offer classes on how to get tax payer funded healthcare. The "Walmart bailout" is massive and ongoing.

    The labor "market" in China is hardly free considering that rabble-rousers get sent to labor camps or wind up having their organs sold to the highest bidder. Walmart is happy to help the Communist Party maintain this arrangement.

    The way Walmart uses government (both in the US and abroad) so adeptly, the way they have become so entangled with it, reminds me of a defense contractor, they might as well be part of the government, like Goldman Sachs.

    I don't fault poor people who shop at Walmart. But I'm wealthy enough to not do business with Chinese Communist slavers.

    I prefer to spend my money as locally as possible. As a small business owner myself, I'd rather keep as much money in my potential customers' pockets as possible.

    1. Well said. Google hates my iPad so my post above was incomplete. Thanks for filling in the blanks!

  7. Walmart is a predator, why is this not recognized? They have destroyed the business section of many a small town in the past, although that never comes up nowadays, forgiveness through forgetting.

    Robert Reich is certainly allowed to hate Walmart, it's a free country. Big Business is totally gutting this economy. Yes, I know, that's sacrilege, to say that, but it's true. Big Government isn't our only problem, it's the evil twins of Big Government and Big business, who happily stroke each other while the country spins downward into jobs you can't live on. Anyone that thinks you can live on $8-10 an hour, should try it. Good luck with that.

    Or maybe the working poor should just become alcoholics and drink themselves to death, eliminating the problem of all the useless eaters, but wait, they can't afford the booze...

    Happy Holidays.

    1. You're 100% right. The mega corps control the government and use that power to control us.

      Since they control the media they can always paint the story as "free market capitalrapists" vs "angelic regulators" so that the majority don't ask questions and just believe the lies.

    2. Firstly big business would not exist with big government. Everytime a corporation grows too large it introduces massive inefficiencies due to an inability to handle an enterprise that large. At that point they get the government to use force against competitors in the form of regulations to stay in business.

      Secondly you can absolutely live off of $8-$10 / hour. I have done it. It sucks, but can be done. Also that is an intro rate for a cashier. If that is the best you can do professionally then it is hardly the fault of Wal Mart that you are struggling.

    3. The $8-10 hour figure is due to the high number of entry level and part time workers employed by the company. People need to realize that a large part of the Walmart workforce turns over and it is not particularly committed to working at Walmart long term. When you get past this segment, to those who stick with Walmart for at least a few years things improve dramatically in terms of pay and benefits, and there is an excellent career track for those who want to spend their lives work for the company. I speak from experience when I say that for people who want to make a long term career in retail Walmart is better than 90-95% of retail employers out there.

    4. I worked part time for $8.00 an hour recently also, just to maintain my health insurance which has been about $450/month. I was working 35 hours a week for HEB, a food chain in Texas. After taxes I cleared maybe $850 a month. There is no way I could have lived on that after insurance, and yes, at my age, I need insurance, I'm 60.

      The fallacy is that anyone can live on $8-10 an hour. It doesn't just suck, it's impossible, unless your very young and can go without insurance. Many of the unemployed are not young, or have health problems (yes, it happens).

      Now I'm on SS Disability,and fortunately, because I used to work for an oil company, my SS check is pretty good, and I have two small pensions. So I can live reasonably. Otherwise, I would be eating cat food.


      And no, these older people may not be what WalMart is looking for to 'Promote'. Many of us won't live long enough.

      Don't forget Walmarts's participation in 'DEAD PEASANT INSURANCE' also. They're not alone in doing this, but this is also predatory.

  8. "A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits..."
    "excessive hours"

    Oops. Mr. Reich just set of the "dumbass" indicator.

  9. Those "Mom and Pop" stores Walmart supposedly replaced didn't pay any more wages or offered health coverage either. Are you kidding me? Actually, when a Walmart sets up shop in an area, they employ local contracted labor to build the store and end up hiring more people than any smaller buiness that might of left due to the competition of LOWER PRICES. Only in brain washed America do people complain about a business offering them a better deal. My advice to all the Walmart bashers; put your money where your mouth is and shop at a low volume store where you're guaranteed to pay more.

    1. You miss the point. All of those relatively numerous Moms and Pops are the people that lost their shops, and their livelyhoods. This is well documented, though not spoken of for years. Yes, the employees of the Moms and Pops didn't thrive, but whole downtown areas became shuttered shops. Small grocers, locksmiths, hardware stores, and others disappeared.

      It's hard to understand how people can't see how the concentration of wealth caused by multi-nationals is a bad thing. Unless you work for one I guess. 'It's good to be King'.

      Given the the rich-poor gap is also well documented and widening, I suppose you'll defend that also. Or come up with some reason why having a world of a just few big fish, and then 'the masses' is just fine and dandy.

    2. Just think about something first. Economics are about human action. People making purposeful decisions about applying scarce means to wanted ends. With this in mind, how did Walmart get to be the number one retailer? Did they force anyone to spend their scarce resources at their stores? By pleasing their fellowman Walmart became successful. Just like any athlete, entertainer, farmer or businessman. Nobody gets rich by ripping off the public, legally. The gap between the rich and poor is due to government intervention into this process. It's government carving out niches for their special interests that cause monopolies. It's intervention into the market that concentrates wealth away from the middle class to those closest to government. I include the central banks here. I'm attempting to be concise and brief and appeal to your intellect for understanding. I'm not going to assume you work for anybody as you have done me, as I don't know you.

    3. Robert, Wal Mart uses government power when it suits them, and they use it often. That's not a free market.

      If they had to pay normal prices for land (instead of using eminent domain) and not use Chinese slave labor for their products their prices would be higher. They usually end up with lucrative tax breaks from the city/county/ state to open a new store, disadvantaging small operators.

      How can anyone call that fair or free market is beyond me.

    4. Mr. McKeown is right. People never acknowledge that Walmart started out building stores in rural America, places that Sears and Penneys didn't deem populated enough to justify a physical presence.

      A lot of my relatives are farmers, and they were thrilled when Walmart would announce a store. The stuff they bought from the Mom & Pop retailers was usually dated and over priced.

      And from a vendor perspective, Walmart is the easiest big box store to get a product into. Most retail buyers are self-important, snobby gate-keepers, while WalMart will talk to anybody that has a product they want to sell in Walmart. No slotting fees, no kickbacks to the buyers...just good ol' honest business.

    5. Robert-

      I just saw that your are a Mises grad. You should know better than anyone that a "crony capitalist" entity is worse than an outright "public/nationalized" company. At least the latter is openly socialist, whereas the former is just a commie in free market clothing. Is Bechtel, or GM, or GE, or Blackrock, or Goldman Sachs a "good, free market" company just because they aren't owned by the government? Sorry, but Wal Mart is no different. Lew Rockwell should be ashamed

    6. Angela-

      If a company opened a branch in your small town and sold everything at half the price, but the government subsidized it by increasing taxes on everyone else, it would be okay?

      As long as Wal Mart uses slave labor, tax breaks unavailable to the average business, eminent domain laws to steal property and other government provided advantages your argument is not only invalid but immoral.

      You remind me of the people who think that subsidies to farmers are wonderful (a relic of the FDR years) but fail to see that +90% of those subsidies go to multi billion dollar corporations.

      Until so-called "libertarians" learn that the vast majority of these alleged "free market" companies (like GM, or Bank of Amerika, or Monsanto, or Disney, or GE) are using the government to increase their "market share" and disrupt the true free market, liberty will never flourish.

  10. I like how he complains one third of the workers work less than 28 hours a week and then claims the workers work excessive hours. RR speak with forked tongue.

    1. RR just doesn't know how to debate. Keeping a lot of part timers is just a way to avoid paying benefits.

      Why is this country headed for instability? Because people defend Big Business for all possible squeezing of the employee class in wages and benefits, while on the other hand, Government is too busy fighting pointless multi-trillion dollar wars that benefit certain select classes of Big Business, to continue to honour things like SS, Medicare and Unemployment insurance.

      It's a truly genocidal squeeze, that will ultimately be the undoing of both our political system, and the social stability that investors in the U.S. have taken for granted for decades. In the financial carnage that will surely follow the demise of the 'civility' in our 'civilization', the Billionaires might survive, but many of the Millionaires possible won't.

  11. Wal-Mart is the Exchange Benefits Transfer(EBT) card goliath. They back giant food stamp and other benefit programs as they massively benefit. And not only is the taxpayer paying for this, but the billions flowing toward food purchases(and who knows what else) likely increases food prices. So the hapless schlump that eschews EBT Cards and other benefits is getting doubly hit, on taxes and higher prices(beyond Bernanke's printing press). Wal-Mart is among the top 10 Crony Capitalists - Big Time!

    1. Google "zero hedge" and "46 million foodstamp man march" and see how Wal Mart uses crony powers.

      We are so used to seeing the soup lines from the 1930s to illustrate the "Great Depression" but a closer look reveals that the EBT cards are just a modern version of soup lines, and it's getting worse.

      The Misean "Crack Up Boom" will wake many of us up, and being prepared is the only way to survive.

  12. Not to defend Reich, but to be fair, re: his apparent contradiction, what I think he meant to say is that a third of Walmart's workers work less than 28 hours per week, while of the remaining two thirds, many of those work excessive hours. Meaning, Walmart decides that if they're paying benefits to the full-timers, they'll work them like donkeys.
    I avoid shopping at Walmart, not because they're any more evil than other retailers, but because I think they're crappy stores that sell junk and hire the worst employees they can dredge up. Dealing with a Walmart employee will make you want to reach for a flamethrower. Notwithstanding, I think Robert Reich is a turd with hands.

  13. I just hate walmart because it takes me forever to find anything! I choose to shop elsewhere.

  14. I worked at a wal- mart the summer before college. They paid $7/hr in Louisiana when minimum wage was $5.25/hr. I was a cashier. Never noticed any unsafe or unsanitary working conditions. I cant imagine a situation in a wal-mart that would qualify as either. This is not the manufacturing or mining industry. It's retail sales. Your biggest threat is someone robbing you, to which wal-mart just said "give up the money or the stuff in that event."

    Wal-mart made their way by taking a third of the margins and turning over their inventories at 3 times the pace. They built an incredible inventory management system to keep inventory turning over. And if you're a supplier and have ever dealt with wal-mart, you know how much they squeeze suppliers and partners for better prices.

    Just as a side note to the insanity. Check out the market capitalizations of wal-mart vs amazon. Wal-mart makes $16bn a year according to reich above with a $230bn market cap. Amazon earns $900m with a $100bn market cap. I know amazon is growing, but something is off.

  15. We have a friend who's husband was asked to work many hours a week in a freezer, and was not provided with adequate clothing. This is because he had other duties in the store, and the judgement was made that he wasn't in the freezer 'that much'. He complained, but was not listened to. He put up with it because yes, he's older, with few employment options.

    He ended up with frostbite on all of his toes.

    Walmart did pay for the medical care, but it was gross negligence.

    1. Seriously, it's amazing that he survived into old age. He wasn't provided with adequate clothing? Seriously?

    2. I don't think she got your sarcasm...

  16. Yes, and he's 48, not old age, just old to be looked at by another employer...