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Thursday, November 22, 2012

Happy Thanksgiving

I may have more to say about the holiday, and about holidays in general, later today. For now, you should know this: If you shop at a "big box" retailer on Thanksgiving, my dog Bella will hate you.

Robert Reich says you shouldn't shop on Friday either -- not at Wal-Mart, not this year.
A half century ago America’s largest private-sector employer was General Motors, whose full-time workers earned an average hourly wage of around $50, in today’s dollars, including health and pension benefits.

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.

There are many reasons for the difference – including globalization and technological changes that have shrunk employment in American manufacturing while enlarging it in sectors involving personal services, such as retail.

But one reason, closely related to this seismic shift, is the decline of labor unions in the United States. In the 1950s, over a third of private-sector workers belonged to a union. Today fewer than 7 percent do. As a result, the typical American worker no longer has the bargaining clout to get a sizeable share of corporate profits.
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.
Consumer spending is 70 percent of economic activity, but consumers are also workers. And as income and wealth continue to concentrate at the top, and the median wage continues to drop – it’s now 8 percent lower than it was in 2000 – a growing portion of the American workforce lacks the purchasing power to get the economy back to speed. Without a vibrant and growing middle class, Walmart itself won’t have the customers it needs.

Most new jobs in America are in personal services like retail, with low pay and bad hours. According to the Bureau of Labor and Statistics, the average full-time retail worker earns between $18,000 and $21,000 per year.

But if retail workers got a raise, would consumers have to pay higher prices to make up for it? A new study by the think tank Demos reports that raising the salary of all full-time workers at large retailers to $25,000 per year would lift more than 700,000 people out of poverty, at a cost of only a 1 percent price increase for customers.

And, in the end, retailers would benefit. According to the study, the cost of the wage increases to major retailers would be $20.8 billion — about one percent of the sector’s $2.17 trillion in total annual sales. But the study also estimates the increased purchasing power of lower-wage workers as a result of the pay raises would generate $4 billion to $5 billion in additional retail sales.
This is a point I've been making all along. Every capitalist wants his employees to be paid little while other employees earn high wages, because well-paid employees have more to spend. But economies don't work that way. If a company like Wal-Mart (the correct spelling) demands low-priced labor, wages go down all across the country -- all across the world. Pressure grows to create ever-cheaper merchandise using slave or near-slave labor.

The entire economy enters a downward spiral.

Libertarian economists believe that tax cuts for the rich pay for themselves, due to increased economic activity. That's a myth. But it is a truism that increased wages pay for themselves by making the entire economy more robust. Any honest look at the years 1940-1980 will prove that point.

If a Wal-Mart employee earns a living wage, he'll spend ever dime of it. Even if he chooses to spend it on booze and cigarettes, that's great news for the people who make booze and cigarettes. More money circulates. Everyone gets richer.
We won't be shopping at all until sometime next week, when the fridge and larder are empty....staying well away from "the madding crowd".

Happy Thanksgiving to you and yours and to Bella, Joseph!
"Thousands of small stores, restaurants, spas — and even dry cleaners — across the U.S. will offer their own discounts and promotions to draw holiday shoppers on what's known as Small Business Saturday."

Do your shopping of Saturday at your local stores.
Wal-Mart is a leader in the kind of corporate thinking that wants to see American workers reduced to the level of peons. Henry Ford proved this is fallacious about 80 or 90 years ago when he began paying his workers the unheard of sum of $5 a day. Since the going rate at the time for industrial labor was only $2.50/$3.00 a day, people rioted at Ford factory gates to apply for a job. Many of Ford's well-paid workers bought new Fords, and Henry's net profits increased. He may have been an asshole and an anti-semite, but Ford wasn't stupid about money. Why can't our overpaid and overrated corporate managers be as wise now as Henry was 90 years ago?
Also, hope everyone has a pleasant holiday and don't forget Joseph's advice to stay out of big box stores for a couple of days, if not forever.
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