Sunday, July 12, 2015

Defending Walmart Against the Black Soul of Altruism

Walmart is raising wages this year. As the New Jersey Star-Ledger editorialized back in February, Walmart's wage hike is good business more than altruism.

True enough.

But this Leftist publication, not surprisingly, doesn’t see Walmart’s self-interested action as a virtue. Instead, the Star-Ledger saw it as a chance to smear a great company:

The idea of working at Walmart always evokes Dickens' depiction of life in the Chancery: "It's being ground to bits in a slow mill; it's being roasted at a slow fire; it's being stung to death by single bees; it's being drowned by drops; it's going mad by grains."

And the fact that it pays a sub-poverty wage is no great prize, either.

So it comes as welcome news that Walmart will give 40 percent of its American workforce - that's 500,000 hourly employees in all - a wage increase to a minimum of $9 per hour, and then another bump to $10 next year.

This cannot be dismissed casually. It is an extraordinary development when the country's largest employer - a black-souled scourge of the labor market, which has built an empire on the backs of exploited workers - can demonstrate more sense than the U.S. Congress, which habitually lies about the potential evils of a national $10 minimum wage.

Apparently, the Star-Ledger can’t (or won’t) see the stark moral and economic difference between a voluntary wage increase and a government mandated wage floor.

Indeed, any increase is not something to sniff at: Working families could use even a $1-per-hour boost, because the extra $2,000 per year makes a real difference for someone making $19,000.

But it's been so long coming, it's hard not to be cynical about Walmart's ulterior motives, or keep a straight face when it's CEO depicts this as an example of corporate munificence.

The truth is that Walmart is responding to the realities of a more vigorous economy, and it will likely inform all retailer payrolls in coming months.

Responding to market conditions and the law of supply and demand is an “ulterior motive?” Walmart’s wage announcement states, “Ultimately, we believe this package of changes will benefit associates, customers and the business.” But apparently, the Star-Ledger believes Walmart's employees should only get a raise when they don’t earn it. That, of course, is what altruism—the glorification of the unearned—demands. Someone must always be sacrificing. There must always be a loser in the transaction. In this case, if Walmart is motivated by its own profit, which it sees as tied to customer and employee satisfaction—the win-win-win inherent in successful business—its new policy is corrupted by an “ulterior motive.” But what the Star-Ledger’s view of Walmart exposes is the black soul of altruism.  

The Star-Ledger also condemned Walmart because many of its employees qualify for food stamps, for taking advantage of undefined “tax breaks,” and myriad other alleged evils.

I left these comments in support of Walmart:

Walmart “built an empire on the backs of exploited workers?” Wrong. Like all successful companies, Wal-Mart built its business on satisfied customers. Wal-Mart’s revolutionary business model, employing modern technology, lowered the cost of consumer goods across the retailing industry, stretching the budgets and raising the standards of living of millions of consumers; a particular benefit to those at the lower end of the income scale. Satisfied customers is the source of Wal-Mart’s “revenues of, gasp, nearly a half-trillion” dollars, as well as making it the largest employer in America and creating hundreds of thousands of the kind of entry-level jobs that for many is a first step up on the economic ladder (see below). It takes virtue, not “a black-souled scourge,” to build that kind of success.

Walmart cashes in on food stamp money “coming out of your wallet?” Don’t blame Walmart. SNAP is a government program. The government, not Walmart, is the one forcibly seizing money from taxpayers’ wallets. Why shouldn’t Walmart accept food stamps from people who voluntarily patronize its stores? It is one of the taxpayers being ripped off. And what “tax breaks” are we talking about? Wal-Mart is the 5th largest corporate taxpayer in America.

Walmart raised wages out of “ulterior motives,” not “munificence?” True, but not in the negative way implied here. Self-interest is not an “ulterior” or base motive. It is the essence of pursuing a better life. In truth, a job is not a munificent undertaking—in the hand-out sense—for employer or employee. It is based on mutual self-interest—an eminently virtuous moral transaction. Consider the degrading view of workers implicit in the S-L’s morally inverted premise: Workers are lazy incompetents who can’t earn higher wages through merit, so they must depend on “munificence”—charity—or government minimum wage coercion. Are they really too stupid to know when they are being taken advantage of? But as one Wal-Mart employee noted in 2013 in his response to another SLEB smear of Wal-Mart, the company and its employees get a bum rap:

While The Star-Ledger may think our employment choice is “dismal,” we know better. Walmart promoted 165,000 people last year to positions with more responsibility and higher pay; about three-quarters of our store management teams started as hourly associates. They earn between $50,000 and $250,000 a year.

I should know. I started as a cashier in Oklahoma and, 14 years and nine promotions later, I’m a market manager in northern New Jersey, overseeing store operations in Woodbridge, Linden, Union, Kearny, Bayonne and Watchung.

I think The Star-Ledger owes an apology to the thousands of hardworking men and women at our stores in New Jersey.

Ditto for this editorial. All of Walmart’s workers took their jobs voluntarily at mutually agreed-upon wages. This is not “exploitation.” It is called trade. If trade is exploitation, then it works both ways; the worker can just as easily be said to have exploited Wal-Mart for taking advantage of the job opportunity created by the company. In truth, no job constitutes exploitation. Workers take jobs—even miserable ones—because they’re better off than without that job. A job is a life improvement. A company hires workers to advance its own productive mission. Win-win.

The question critics never ask is: If employment conditions are so bad, why do workers take the jobs? Because, in the context of any specific time, workers consider themselves, by their own voluntary judgement, better off than the alternative. This was true even in Dickens’s time, when working conditions, by today’s standards, really were miserable. If this were not true, why would anyone take the jobs? Yes, wage gains have been slow in this recovery (though everyone is much better off than 40 years ago). And yes, wages will play catch-up as the economy (finally) strengthens. And yes, Walmart is self-interestedly responding to a much stronger labor market (which coincidentally [?] took off after Congress ended unemployment compensation extensions in 2013). As more and better job opportunities open up, competition for good workers will heat up, and jobholders/seekers will move on if companies don’t take steps to hold and attract them. This is a virtuous process precisely because everyone is pursuing his own self-interest, rather than altruistic—self-sacrificial—ends. We should never forget that altruism, in the form of government’s “affordable housing” interventions, was the primary cause of the financial crises and Great Recession.

Related Reading:

Capitalism and the Moral High Ground—Craig Biddle, for The Objective Standard

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