Wal-Mart's Rise in Price and Power
Should Wal-Mart pay employees more if, as a result, its prices must rise and its customers have to pay more? Why or why not?
From both the perspective of the consumer and Wal-Mart, it would not be in their best interest to pay Wal-Mart employees higher wages. Raising the salary would mean that consumers have to pay more for the same goods they are used to purchasing at the same store; Wal-Mart would, in turn, lose their customer base as the price of their product continues to rise. On both ends, neither Wal-Mart nor the consumers have anything to benefit from giving the workers a more reasonable pay. Just as Robert Reich emphasizes, Wal-Mart is merely another capitalist player “following the current rules of the game,” a game in which corporations and companies buy everything globally to keep prices at the lowest possible (Reich, 13). Therefore, it is up to us as consumers to make the change—change what we consume, change the way that we consume, change our lifestyle altogether.
The logic is simple: guaranteeing the lowest prices and greatest benefits to their customers while maximizing returns to their investors. And Wal-Mart's business strategy is no different from other companies in this game of corporate warfare. By keeping wages low and worker benefits minimal, the company is able to not only attract consumers seeking good deals but also put a price pressure on their many suppliers that count of Wal-Mart for large sales. In the end, their sales win out others in the competition as huge amounts of consumers flock to Wal-Mart for the cheapest goods possible. Their model is more about mass sales than mass production, and that's where they're succeeding. Simply put, it is not so much that Wal-Mart needs to pay their employees more but that the consumers that find their wages unfair need to do something about it. It isn't enough that a few people in the neighborhood boycott Wal-Mart products and refuse to shop there ever; it will take towns, cities, states, and probably the entire nation to change structurally.
To consume entirely socially responsible goods takes a lot of dedication, and that is something consumer America has not yet achieved. The consumer in each of us faces the constant dilemma in our “split brains” of the socially responsible versus unsocially responsible hemispheres (Lecture, 2/17/10). Do we buy cheap to stretch the dollar or do we buy socially responsible goods knowing workers were safe in the process and received decent pay? It requires great sacrifice from every individual for it to make a real impact, but I believe that would be more effective than pushing for Wal-Mart to higher employee wages and benefits. If Wal-Mart were to take action and improve workers' conditions and pay, there's no knowing that another company won't come in and do exactly what they did—low wages, little benefits. Chances are there are a lot of other companies out there doing just that. The fact of the matter is that that is exactly what every company will do in order to come out on top. As Reich puts it, it is all part of the game that everyone is trying to win. Thus, while condemning Wal-Mart will provide short-term relief to employees struggling with low pay and few or no benefits it will do little to resolve the issue of fair wages in the long run.