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June 09, 2006

Richard D. North asks, anti-corporate films may be misguided, but do they do much harm to anyone? Wal-Mart: The High Cost of Low Price - Robert Greenwald

Posted by Richard D. North

Wal-Mart: The High Cost of Low Price
Directed by Robert Greenwald
certificate PG, 2005

These are tales from Gotham City. Nice Republican shop-keepers from small-town USA parade their "For Sale" signs and their abandoned Main Streets, as deserted as boom-and-bust ghost towns. It would be a hard-hearted person who sat there reminding himself that there's no market for buggy-whips now either. But there were enough echoes of the kind of talk familiar from the UK's New Economics Foundation and Sustain to provide a degree of inoculation.

The most worrying bits are interviews with ex-employees of Wal-Mart discussing how they were bullied by management to keep unions out of the stores, to keep people working for free hours, or to turn a blind eye to mistreatment of workers amongst the firm's sub-contractors abroad. It was as though Wal-Mart's victims were from Toon Town (remember Who Framed Roger Rabbit?, 1988), or some other place where decency didn't reach. Maybe, one wondered, things are sufficiently different in the US for UK complacency to be a poor line?

Luckily, the film piled on the agony by listing the many lawsuits which - at least domestically - are challenging the firm's practices. In other words: the majority of the worst of the practices were likely to be illegal, and to end up being put right in court. Good, that was another thing one didn't have to worry about.

I'm afraid I also put aside the Third World concerns. China is the major supplier of Wal-Mart, and doubtless bit by bit it and other Western films will be part of how that country cranks itself not only out of poverty but also toward Western pay and conditions. One suspects that the market will improve things there rather quicker than Western protest does. Whether Wal-Mart ought to be in the vanguard of Western protest or progressiveness there or anywhere else is seriously moot.

Countering the impression that Wal-Mart was all-powerful, the film described myriad successful battles by "local communities" against the arrival of a megastore. I suspect that American planning law is even more on the side of "communities" than ours is. And I use the inverted commas because it is entirely possible that the putative employees and customers of the stores that don't get built would rather have wished the projects had gone ahead, but weren't politically organised to be heard.

Wal-Mart seem to have had a fairly simple commercial formula: employ at low wages large numbers of poor people to sell huge amounts of produce at the lowest possible price to a vastly larger number of poor people, and quite a lot of not-very-poor people as well. Within that, they have more full-time employees ("associates") than most of their large competitors. They have an industry-average record of employing people at wage rates which are low enough to qualify them for state medical aid. They do rather better than average at moving people into privately-funded medical insurance (after a period of two years' employment). All in all then, Wal-Mart seem unexceptional except by being vast.

Vast, but not unchallenged. Their situation may not be quite analogous to Tesco's, but the existence of many competitors demonstrates that Wal-Mart is doing something people like.

What's more, it is fairly easy to defend it against the charge - made in the film - that Wal-Mart forces down wages in such a way as to create the poverty it feeds off. How else is the left-of-centre to make a case that the firm's influence is baleful? But actually, it is the country's political decisions which create the world within which Wal-Mart operates. Wal-Mart's low wages and prices attract huge numbers of employees and customers. Raising its wages would merely invite a lower-cost operator to stick to the minimum wage and steal Wal-Mart's customers. Or, if no competitor was around, raising its wages would rob its existing customers of their cheap deals. In short, Wal-Mart could go upmarket, but would that be socially-beneficial?

Isn't it this kind of difficulty which makes the case that governments have to be the people to set minimum wages? And then, of course, they have to work out how to provide access to welfare services to the very poor. Even Robert Reich, a left-of-centre figure, seems to accept that having low-paid workers on Medicaid is a policy decision by government rather than a piece of commercial exploitation.

This sort of logic wouldn't stop the left and kindly liberals fretting about Wal-Mart, or even loathing it, but it does suggest that they ought to direct their ire not so much at the firm as at politicians and their voters.

For what are probably quite complicated reasons, Wal-Mart is addressing many "Corporate Social Responsibility" issues as part of what may be a drift upmarket. It may have reckoned that the middle class customer is too valuable to lose for the lack of a bit of rhetoric and minor expenditure. Its directors may have had epiphanies. It may merely have discovered that corporate meanness is curiously unproductive. This film, of course, looked at none of that. This isn't a piece which bothers with argument.

It's as subtle and fair as The Corporation (2003), previously reviewed here. It doesn't invite Wal-Mart to comment (at any rate, Wal-Mart doesn't). It is a tale of woe, and fits in with a widespread anti-Wal-Mart campaign. I'm glad in a way. If this had been produced by the BBC, it would have much the same shape, but there would be just enough countervailing material for a semblance of "fairness" to have been demonstrated. Better, in a way, this unabashed propagandising. I can't believe it does much harm to anyone. Wal-Mart's website response to this sort of argument is pretty robust. There is enough commentary around which puts a more nuanced point of view.

Richard D. North is the author of Rich is Beautiful: A Very Personal Defence of Mass Affluence.

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