The Price of Low Prices

I don’t shop at Wal-Mart. Yes, I know, you don’t either. Well, maybe you do, once or twice a year, possibly more, depending on what’s on sale. They do, after all, have low prices. Very low prices. But as I said, I don’t shop at Wal-Mart. Haven’t even been in a Wal-Mart parking lot for years, let alone inside any of their stores.
So what makes me so unpatriotic as to not shop at the world’s largest retailer? A retailer with roots right here in America, the good ‘ol US of A. The ubiquitous and powerful Wal-Mart. It’s precisely my patriotism and love for the ever fading American Worker that keeps me away. Because Wal-Mart is probably the reason why so many of those workers-- our friends, family and neighbors-- are unemployed, uninsured and living in desperation.
To garner a contract with Wal-Mart has been likened to playing in the Super Bowl. A manufacturer can literally overnight go from a struggling, unknown concern to a nationally if not internationally known brand. Living the American dream; go from rags to riches, by going from selling to a few retailers to selling to the biggest retailer with countless stores and millions of customers. But as with so many things, there’s always a price to be paid.
Let’s say you manufacture and wholesale the famous Widgets. In the USA. You sell these Widgets for $5.00 each and make a decent profit, enough to support your family, send your kids to college and save for retirement. Plus, you keep your plant running and your 150 American workers gainfully employed. You and they also contribute your share of taxes to all levels of government. But Wal-Mart won’t pay you $5 per Widget. They will only pay you $4.75. But on the bright side, you go from manufacturing thousands of Widgets to tens of thousands in order to satisfy Wal-Mart customers. All is well in your world. You’ve hit the big time. Congratulations!
Now, after a year of record profits, it’s time for you to renew your Wal-Mart contract. Now the fun begins. Wal-Mart now offers to pay you $4.25 per Widget. Take it or leave it. You can still make a decent profit and so you agree. Then the third year contract comes around and they will only pay $3.50. This, you’ve got to think about. You’re in quite the dilemma. What to do, what to do?
You do what most other American companies have done and will continue to do. Outsource. Which, of course, is just a fancy term for manufacturing your product in countries such as Mexico, India, Pakistan or China. You’re left with little if any choice. It only makes economic sense for you. There is one problem—your American workers. Yikes. Double yikes. Some of those workers have been with you from the beginning. When you paid them using your credit cards. You’ve been to their homes, birthday parties, Bar Mitzvahs, weddings and funerals. But, you’re in the super bowl of retailers and there’s no turning back. You close your American shop and open one in another country. And you layoff your plant workers. Left to fend for themselves.
That scenario has been repeated countless times. Wal-Mart has the might and the big bucks to whittle down prices which is why we, or rather you, shop there. Even if it’s only once or twice a year (yeah, right). We are egocentric when it comes to most things and especially when it comes to saving our money. We may shake our head and tsk, tsk our tongues when our neighbor or friend or Uncle gets the pink slip because the plant where they work is closing and moving to Mexico. But then we get into our cars and drive to Wal-Mart because they have the lowest prices.
Well, like I said, I don’t shop at Wal-Mart.