Thursday, July 27, 2006

Defeating Wal-Mart by committing consumer suicide

"We beat Wal-Mart" cried a bunch of damned fools, after Chicago's city council passed a law requiring large retailers to pay a minimum wage of $9.25 per hour. What they really should be saying is, "We won by screwing ourselves over!"

There's little hope that these morons, both the councilmen and supporters, will ever pull their heads out of their own asses. They should sign up as extras for the next time a Star Trek feature needs Pakleds: the intellectually challenged humanoids who believe themselves "strong" and "smart," and who thought they had a chance against the Enterprise-D. The anti-Wal-Mart crowd would do better to emulate the Ferengi, who were initially portrayed as comical and ridiculous, but who turned out to be a peaceful, prosperous civilization that fought no wars and never had any inquisitions.

Ignorant Federation critics believed that the Ferengi "exploited" people, but in fact, Quark never once forced (in the true sense of the word) his employees to work at his bar. What you "deserve" in pay is only what your employer believes you are worth, and besides, if it's not enough, why do you work there? Rom, Leeta and the others were always free to work elsewhere, or start up their own bar on DS9's Promenade (like Martus did in "Rivals"). It demonstrates that, barring physical coercion, no one is ever forced to work for anyone at any wage -- even the English who, in exchange for passage to the colonies, agreed to be indentured servants for several years.

The plain fact is that Chicago's city council, with union labor's blessing, just made it that much harder for everyone, especially the poor, to get the most for their money. Wal-Mart was going to build 20 more stores in Chicago, but who really thinks it still wants to develop a single square foot within the city limits? It'll build those stores out in the suburbs, like it did in Evergreen Park, requiring city residents, both customers and employees, to travel further. Nice job, City Council!
"People have bills, rent to pay, and $6 an hour is not going to work for them," says Kanisha Adams, a nursing student.
It sounds like Kanisha needs to learn that some people do not produce as much economic value as others, so they will need to work more. Let's also ignore the fact that only two percent of the American labor force earns minimum wage, and they're typically young people who are starting out -- in other words, contrary to what unions and other leftists claim, hardly the struggling breadwinners of a family.
In this part of the city, unemployment is in the double-digits. More than 9,000 people applied for the 450 jobs that Wal-Mart will offer when the Chicago store opens next month.
And just what do the minimum wage advocates think will happen when employers must pay more? No big retailers will move in now: no Target, no Home Depot, and that means no additional jobs. If they thought it was hard to find jobs now, they ain't seen nothin' yet. And they did it to themselves.

At least there are a couple of people with common sense:
But many fear higher wage costs could drive retailers and jobs out of the city, and that could have particular consequences for the city's minority workers.

"African-American, inner city people are in trouble — desperate trouble," says the Rev. Leon Finney, a community organizer. "We need to do everything we can to encourage business, not anything to discourage business."

Chicago mayor Richard Daley had also spoken out against the measure saying, "This is basically going to hurt the minority community, to be very frank."
Daley is only partially right. The minimum wage requirement is basically going to hurt everyone.
Supporters of the living wage law call that a scare tactic.

"Where are they going to build those stores?" asks Toni Foulkes, a neighborhood activist.

The suburbs, Foulkes says, are already saturated. "Are they going to build a Target next to a Target next to a Target?"
Foulkes could be correct, but she doesn't understand the true ramifications of what she's saying. If Wal-Mart doesn't build as many stores in the suburbs as it would have in the city, then Foulkes and her ilk have destroyed many thousands of potential jobs.

In the Danbury-Bethel area of northwest Connecticut, there's a new Target being built up the road from Wal-Mart. Target has calculated that it can still make a profit, even with its biggest rival a mere half-mile away, otherwise it wouldn't be investing all that money. Before either even thought to have a presence, there were many other stores that still compete, otherwise they wouldn't be there. And what's wrong with any of them competing, when it forces them to be their most efficient and thereby benefit the consumer?

What amazed me, when I visited some friends in Utah over the Fourth of July, was how many Wal-Marts have popped up since my last visit four years ago. Mushrooms. Charlie told me, I recall, that there are five from Ogden to Layton, and I also saw several in the Salt Lake valley. Are Wal-Mart's planning executives so stupid that the company is wasting untold millions to compete with itself, when stores are within a few miles of each other? Or are they crazy like a fox, knowing that the stores will bring in more customers and make the initial investment more than worth it?


Anonymous Shamus said...

Let us not forget that raising minimum wage hurts the next tier of employees the most. The typical company is pyramid-shaped, with thousands of people at the bottom, hundreds of people above them, scores of people above them, and finally a dozen or so people on top of the whole thing. When the company has to pay those thousands of workers a lot more money, the most obvious place to get it from are the hundreds of managers. You can't get it from the scores, because there are too few of them, and you can't get it from the dozen because they are the ones making the decision.

So what ends up happening (I witnessed this myself in the late 80's / early 90's with the minimum wage hikes) is that your managers start at lower pay, and get fewer raises.

So now the teenagers have more money for videogames and iTunes downloads, and Dad has less money for putting food on the table. This is to say nothing of the fact that they hire fewer people overall, so jobs are lost and everyone ends up working harder.

Thursday, July 27, 2006 3:22:00 PM  

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