Reflections on Walmart

I used to hate Walmart.  When I was in middle school and high school, Walmart was where I had to accompany my mom  to buy sponges, shoe deodorant, towels and other etc items.  I always dreaded going.  The lines were long, people pushed and the sales clerks didn’t smile or say thank you.  I only went because the Walmart stop came at the tail end of the shopping mall run, and I couldn’t teleport from Wet Seal to the house.

All the scandals surrounding Walmart broke when I was in college.  At the time Walmart was decried as the money mongering giant that crushes small businesses, exploits workers (especially of the female variety) through overwork and underpayment, and busts any attempts at unionization.  All of these charges have truth and in the last few years Walmart has paid dearly for its abuses, with several multi-million payouts to employees.  But what’s interesting in all of this is that today Walmart is still doing well.  Unlike many businesses in our current economic clime, it isn’t tanking anytime soon.  Walmart Inc. must be doing something right.  And since moving to the US-Mexican border, I’ve gotten an inkling.

Walmart on the border is nothing short of a phenomenon.  Tens (hundreds?) of thousands of Mexicans, permanent border residents with visas (more on border visas soon), cross daily just to visit the store.  They come by foot, in personal vehicles and in shuttles, converted old school buses that continually go back and forth between the border and the nearest Supercenter.

Inside our Walmart 3 miles north of Mexico, you forget which side of the border you’re on.   Spanish is the lingua franca of the all-Mexican shoppers and sales clerks, and merchandise includes an assortment of chili peppers, tortillas and salsas.  Guacamoles are 3 for a dollar.  Mexicans bring the kids, the significant others and the grandparents and leave with carts brimming with groceries, sodas, kitchen devices, clothes and electronics.  On a good day you wait 15 minutes to pay because the lines are so long and people so chatty.

That Mexicans cross to the US to shop might be surprising.  After all, isn’t Mexico supposed to be cheaper?  Don’t we go to Mexico to buy cheap crap?  Well, yes, Americans do go to Mexico to buy cheaper souvenirs and knick knacks.  But, that’s where the cheapness stops.  In our illogical and unfair world, it seems that the poorer the area, the more expensive the merchandise.  This holds true on the border.  On the Mexican side, a maquila worker makes 100 pesos a day and spends half of it buying lunch for one.   Forget buying wholesome groceries for a family – it would absorb his whole income.  Enter Walmart.  Cheap and quality, especially compared to supermarkets al otro lado.  Even with the dramatic fall of the peso (from 10 to the dollar half a year ago, to now 13.5 to the dollar), it’s still cheaper.  People wouldn’t be crossing in droves otherwise.

Living here, I have come to see the value of Walmart for border residents.  Although there’s little extreme poverty here, people are poor (even on the US side, 30% of residents live below the poverty line) and stretched for cash.  Walmart helps them feed their families well, and (I hope) may help to lower sky high obesity rates by offering affordable produce.  I am only a temporary border resident, but for me too, Walmart has been a saving grace.  Living on a nonprofit salary just above food stamps makes me appreciate Walmart prices, a lot.

Here too, Walmart has a sparkling reputation as an employer.  A friend of a friend’s whole family proudly works in Walmart.  A  coworker from a nearby border city talks about Walmart jobs as being the most coveted, respected and well paid in the area.

My hunch is that the border is not the only place where Walmart is helping.  There are so many poor areas in the US that are and could be served by low prices.  Of course, Walmart is far from perfect.  And there still swirl the questions of whether a world with megalopolies and multinationals is one we want to live in.  For now though, I can’t help but think that Walmart is more good than evil.

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7 Comments

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7 responses to “Reflections on Walmart

  1. Manuel Ambriz

    I’ve loved and admired Wal-Mart since it came to Mexico and I had the luck to experience the radical changes its presence brought to the retail industry in my hometown: San Luis Potosí.

    Before Wal-Mart, there were several autoservicio (supercenter, supermarket, etc.) brands in town but they hardly competed and they were all good examples of worker’s exploitation: when I was in 4th grade (1990), there was a blackout in the whole city and I remember my teacher (a convinced PRIista) telling how these stores forced their employees to sleep in the stores and take turns to protect the goods. I argued that if they were forced to stay at least they would get paid overtime…my teacher smiled sardonically. Oh what a naive boy I was.

    Wal-Mart brings efficiency to where it is needed the most: you should not be forced to spend a significant portion of your money on good quality food.

    By lowering prices Wal-Mart frees up income families can use for other purposes. Wal-Mart has realized this and changed its slogan to: “Save money. Live better.”

    Is Wal-Mart the best place to work? No. Can Wal-Mart do some things better? Yes.

    But hating it just because it is Wal-Mart is just, for the lack of a better word, stupid. Just like loving El Che because it is El Che and not taking the time to research about him…he’s cool enough with that beret and those flashy phrases.

    I recommend you to check this paper. Basically, the conclusion is that Wal-Mart has no or positive impact in obesity rates. (http://www.uncg.edu/bae/econ/seminars/2008/Courtemanche.pdf)

    Disclosure: I do NOT work, invest or supply Wal-Mart or any of its affiliates. I’m just a curious person.

  2. gringarusamexicana

    Thanks for the paper, Manuel. Super interesting! Turns out Walmart does have modest effects on reducing weight. The analysis suggests that Walmart’s low prices free up people’s incomes for healthy, more expensive food. Unfortunately lower prices also mean that shoppers have more money – and spend it – on cigarettes and alcohol. To curb over consumption, the authors propose taxes on cigarettes and alcohol, which doesn’t sound like a bad idea, though I do like my Pacifico cheap.

  3. Utpal

    Asya! So glad you’re blogging. I look forward to reading more of your insights. (Is there any way to permit RSS subscriptions to your blog?)

    The knock I’ve heard on Wal-Mart in some places is that it drives all of the mom-and-pops out of business and then jacks up the prices. Is it already a monopoly where you are, or are there still competitors?

    Keep up the interesting posts!

  4. gringarusamexicana

    Utpal, you rock! You inspired me to spend the last few hours figuring out the HTML for RSS feed 🙂

    I think you’re partially right about the knock. Walmart drives out businesses because it actually has consistently lower prices than the mom and pops. I’m all for small businesses so long as they can provide affordable goods.

    Where I am, there are quite a few mom and pop businesses, but more specialty stores and not in direct competition with the likes of Walmart and other big discount stores.

  5. hmm i have no idea but that’s all good share information

  6. Jill

    The one and only reason that Walmart continues to do well in this struggling economy is because they have the lowest prices. Ask yourself why and how they are able to have the lowest prices, then ask yourself if your conscience still allows you to shop there.

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