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People argue about whether that accusation is true .. but it certainly leaves enough of a taste right now to make one suspicious that they might be opposing "the public interest" in some things.
"Wal-Mart was assumed to be an opportunistic, possibly predatory, profit-seeker."
One need not "assume," one need only be cautious, after hearing various accusations of "bad practices" in the media.
What, exactly, is your basis for believing that Halliburton's work for DoD is somehow the product of corruption and rent-seeking? By throwing this canard into your post, might you not be accepting without question the very bias and prejudice you are pointing to at NPR?
I can certainly differentiate between ill-concieved arguments against globalization or even big-box retailing, and the more specific problems with what I call "gaming the system."
A quick search yields this story:
http://www.washingtonpost.com/wp-dyn/content/article/2005/06/22/AR2005062202136.html
Which mentions that WallMart has 600,000 employees without health benefits.
As I understand it, they achieve that by "over hiring" and then keeping that many people (half a million?) below the hour-per-week thresholds that require insurace.
In the public interest?
Corporate social responsibility may be a joke or worse, when it amounts to just giving to management's favorite charities. But Wal-mart's manuverings, even if they are targeted to appeal to the conscience of people who can afford Whole Foods, could open up a virtuous Pandora's box.
(One might think that, at least, if one were optimistic to the point of delusion.)
It uses whatever arguments advance its cause.
It knows that business corrupts government, but that on average, the knowledge Class is more influential in government than in industry.
Hence, better a corrupt but malleable government, than a corrupt, but market-constrained industry.
A Marxist would say that they are furthering their class interests.
Or as a Russian professor told me, He may have been poorer under communism, but at least he was part of the elite, and there were no crude businessmen around to amass wealth greater than his.
They believe in the State, because they are gambling that they will have more say in the State
And judging by PBS, can you blame them?
Let’s look at Fox News’s report on the Department of Labor’s “perfectly legal” (as Will says) acquiescence:
“The provisions [of the settlement with Wal-mart] were principally written by Wal-Mart's lawyers, the report said, and were never challenged by the wage and hour division. Nor was the Labor Department's professional legal staff consulted or asked to participate in the negotiations, "despite extensive involvement of Wal-Mart's attorneys."
…
In some areas, the changes made by Wal-Mart's attorneys were significant. One version of the agreement, for example, had limited the advance-notice provision to child labor investigations only. Wal-Mart's lawyers "changed the wording of the scope to `any' wage and hour division audit or investigation," the [federal inspector general’s] report said.
…
Foot Locker and Sears stores have both received advance notice of investigations... but only under limited conditions and with strict, self-auditing procedures established in conjunction with the provisions.
The Wal-Mart agreement, however, "was significantly different from other agreements" and "had the most far-reaching restrictions" on the division's authority to conduct investigations, the report said.
"There is no conceivable way the wage and hour division or the Department of Labor as a whole can enforce the law in every workplace," said Seth Harris, a professor at the New York Law School and a top Labor Department official in the Clinton administration. But he said the Labor Department should have good reason to trust the companies to whom it gives such wide latitude.”
I guess that Fox News has finally joined the liberal media! At least they point out that their source, the guy saying that Labor needs to be able to trust Wal-mart before they give them special breaks that other companies don’t get, did work for Clinton.
Now, let’s see what liberal Fox News said about the Wilkenson/Roberts view that giving Labor more funding would just make them seek more rent with Wal-mart:
“Given the Labor Department's daunting task - it has about 1,500 investigators to enforce labor laws at approximately 7 million U.S. workplaces - agreements that are geared toward encouraging compliance among employers rather than punishing them for violations can sometimes make strategic sense.”
Hmmm. “Perfectly legal,” Will said. ???
Wal-Mart does not have a per-hour week threshhold to achieve eligibility for health benefits. It has an aggregate hours worked threshhold. When you've worked 1,000 hours -- which works out to about six months for full-time employees and usually about two years for part-time employees -- you are fully eligible benefits.
In this respect, it offers much more than most big retailers do. And nearly half of those offered the benefits turn them down. I discuss some of the reasons why here:
http://lehmann.typepad.com/in_lehmanns_terms/2005/10/adverse_selecti.html
Wall Mart doesn’t ultimately care whether the cost of labor it faces is 2000 in health care or 2000 in wages. So if you made wall mart pay for health care the cost of labor would go up. Either they would offer less wages or hire less people.
There is really very little dispute over this. That is what is ment by “there is no such thing as a free luch”. There is no such thing as free health care.
Now if the government decides it want to take my taxes and give it as “free” health care to certain type of workers that is not Wall Marsts fault, it’s the fault of government. Or maybe you like the policy, in which case it is no ones fault.
But understand this. The core of the problem is that those workers are not very productive. Wallmart cannot magically make 20% of the population worth much more. There is not one once on indication Wall Mart is paying below market wage, so we know that the total compensation (inkl health care) responds to the productivity of the workers. If you make them pay for health care and keep the wages Wall Mart will hire less people.
“Well, why not take a little of the massive profit Marx told us so much about and give those poor workers health care”
There are two answers. Firstly profits are very small compared to wages. In the US economy 75% of earnings go towards wages, whereas after tax profits are 10% of Gross National Income. There is not that much you can take, and if you tax it further investments go down further.
On a moral sence why is Wall Mart responsible to handle public welfare? If Liberals are such Good people why don’t they give the poor workers some of their money? Well I know the answer. They are not good people at all, they are just idiots who want to give away other peoples money. And by ignoring simple facts they impose
As Will tries to explain, Wall Mart, because of profit by the way, has done more for American workers than all socialists and so called “liberals” combined. Cheaper goods for all and low skilled jobs for many.
Having said that, I am very disappointed at Wilkinson for the “answer” he gave Kent. If you want the other side to use well reasoned arguments, why are you using an Michel Moore level “argument” against Halliburton?
And “are you kidding” is no response. Is the underlying logic we all “know” evil men in suits run everything in a big conspiracy, who needs factual basis for accusations?
I will make it simple. Can you give me evidence the stock price of Halliburton went up the day Bush got elected?
Maybe that's because I'm in California where there are more health rules than some other states?
By the way, if you read the WaPo article more carefully, you'll the 600,000 figure you quoted is the number of employees who don't have COMPANY insurance. That's a very different thing from having 600,000 uninsured employees, as the bulk of those 600,000 draw their coverage from sources other than Wal-Mart. To be sure, Wal-Mart does have a significant uninsured contingent, but as in society at large, this contingent is heavily weighted toward younger, healthier employees who OPT not to pay premiums -- generally because they don't see health care as a priority and they'd rather pocket the cash.
It got caught in the spam filter (because it has three links?). I hope it pops out soon ;-)
The Hawaii law is a special case, in that it was passed before ERISA and is considered grandfathered. But in Vermont, for instance, the law can only be applied in the small group market -- those with less than 100 employees. Thanks to the ballot initiative, California's law never had a chance to implemented. If it were, though, the provisions that sought to dictate rules to the large group plans almost certainly would have been struck down as incompatible with ERISA. There were a number of suits prepared by the Chamber of Commerce to do exactly that if the ballot question failed.
It's to try to get around these sorts of state level laws that groups like the realtors and independent contractors have been lobbying for association health plans, which would put them on the same footing as the large group ERISA plans.
But, anyway, I think the part of the issue that is widely misunderstood by the general public -- certainly by the media -- is that health benefits are not something offered IN ADDITION to salary, but rather, they are offered IN LIEU of salary. Because health benefits aren't taxed as income, the same level expenditure on labor can purchase more employee compensation by way of benefits than by way of wages. All else being equal, an employer has a strong incentive to offer health coverage instead of pay increases.
And until very recently, this worked out quite well for employers, as the 1990s were marked by flat or declining health premiums as managed care grew in popularity. The switch in emphasis has really only come over the past four or five years, when wage inflation has been flat or declining, while health inflation has skyrocketed.
I'm remembering now that I read a "my life at wal-mart" essay recently, by some manager that climbed through the ranks. I might have to find that again.
http://www.npr.org/templates/story/story.php?storyId=4989287
Of course this does not show that NPR does not have a liberal bias or, for that matter, a liberal bias that is disadvantagous to the left.
I thought about this while on my hike, and just decided that I can't trust Wal-Mart at this point. It might be a "where there's smoke there's fire thing" but I worry that they might be cheaters.
If anyone of you have read The Winner's Curse, you know that we are "economic" creatures, but that experiments often uncover "anomalies" of economic life that revolve around issues of fairness, and cheating. Game theory offers insight into why these rules might be advantageous over the long term.
Books like "The Blank Slate" and "Cheating Monkeys and Citizen Bees" extend this idea a bit in terms of both brain mechanism and evolutionary advantage. There is some interesting work in this area, especially in studies that show we might share ideas of "economic exchange" and "fairness" with other creatures.
Many of the posts above take this as a right/left split issue. That might be true, but I don't think the extremes really illuminate the issue.
I guess the classically liberal stance would be that it is all about "fairness" and insuring such. On the other hand, the classically conservative stance would be that it is all about "economic exchange."
Sorry guys (extremists) human nature includes both.
Being a conservative-leaning-moderate I'll say that our nature is mostly about advantageous exchange, but that we carry very definite ideas of fairness within ourselves (certainly within the society, if not every individual).
Companies which sail too close to the rocks, and become identified as "unfair" or "cheaters" suffer. That's just human society.
Behaviour economics is not a against "conservative" economics. Hayek was a behavioural economist, so was Adam Smith. Issues such as fairness are part of market exchange.
I don't agree that Wall Mart is cheating, Wall Mart never promissed it's workers something it is not delivering.
On the other hand people, in a political discussion, are attacking wallmart because they emotionally it is "unfair". This is a great example of political faliure, that harmfull populist ideas effeckt politics.
Hayek has very good theories why from an evolutionary perspective we humans cannnot understand the market, and consider it "unfair". For one thing mostpeople simply don't have modules to handle corporations, and just analyse them morally as if they were people "can't Wall-Mart give away a little money, he has so much".
Empires like Wal-Mart, like Microsoft, like ExxonMobil -- they usually don't have to break the rules. Instead, they rewrite the rules to better suit them.
But maybe we can look at it with a little comparative taxonomy ... why is Wal-Mart "bad" and Target "good?"
If a Nike or a Home Depot successfully manages its social position ... should we blame the people for not liking Wal-Mart, or Wal-Mart for so ineffectively interacting with the people?
There are probably human/tribal things going on here, in our interactions with corporate players, that we are too immersed in to even see.
But government has no genuinely necessary functions!
In any case, I find your argument that there is a popular conception of the government as universally benevolent and that is what is creating a hotbed for crony capitalism unconvincing. First of all, the American people is plenty cynical about gubmint. The problem is that it is a kind of passive, apathetic cynicism that numbs us to outrage like the no-bid contracts in Iraq. Of course, I'm just speculating here (as are you), but I think it is equally likely that there would be more concern over Halliburton if we had higher expectations of government and what it can achieve.