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February 16, 2004, 12:40 P.M.

I feel like I’m a pawn, and I hate it.

In one of its latest attempts to have its way with the marketplace, Wal Mart has recently decided that it doesn’t like what MasterCard charges it for debit transactions when the consumer chooses the credit option. Many of us choose credit instead of debit when using these cards because the bank doesn’t charge the consumer a fee for the transaction, as it would if we choose the debit option. Dianne found out about Wal Mart’s latest snit the hard way when she attempted to use our card for a purchase this past weekend. The register declined her request to use the card’s credit option, and instead regurgitated a form directing her to Wal Mart’s website for further information. There we read a message that told us, that

“[t]his decision was made as a result of the higher processing fees associated with the MasterCard signature debit card. These processing fees are ultimately passed on to you, the customer, in the form of higher merchandise prices. Therefore, Wal-Mart has chosen to eliminate the MasterCard brand of signature debit rather than accepting the higher costs associated with acceptance of this card type.”
We were invited to simply choose the debit option, pay the transaction fee, and assist Wal Mart in its little war with MasterCard. In its zeal to keep its prices low for me, the customer, Wal Mart apparently feels just fine about shifting a transaction fee it doesn’t like back to me, the customer. Frankly, I’d rather stick needles in my eye than do anything that would make life more convenient for Wal Mart.

This whole MasterCard thing is just an expensive annoyance for me, but Wal Mart approaches screwing its customers, screwing its competitors, screwing its suppliers, and screwing its workers with equal glee. My MasterCard example shows how Wal Mart eliminates a choice in how I pay for my merchandise. So not only can Wal Mart, through purchasing and marketing, tell us what we should buy, and for how much, it is also now dictating how we can pay.

I listened to a great discussion on the Diane Rehm Show on NPR not too long ago regarding Wal Mart and what I like to call the Wal Mart Syndrome. Just 8 or 9 years ago, Wal Mart professed to be a great “American” company. Today, Wal Mart imports billions of dollars of low-priced goods from China. What the company doesn’t like to mention is the billions of dollars more worth of goods manufactured in China it buys from other companies: Huffy bicycles, for example. Wal Mart doesn’t count these purchases when it reports the details of its international sales. Wal Mart is also known for telling its suppliers that if they can’t provide a product at a favorable price, it will have a knock off product made in China, cheaper. 10% of all Chinese exports are sold through Wal Mart stores; and these goods account for perhaps 20% of Wal Mart’s total sales. Wal Mart expects this number to rise in the future.

This company is successful not only because of its use of cheap international labor. There are some very innovative marketing and distribution techniques that also give the company an edge, but manufacturing, or purchasing goods manufactured, in countries without child labor laws, fair labor standards, environmental constraints or intellectual property constraints affords a huge competitive edge. Add to this the allegations of sex discrimination and unfair labor practices here in the U.S. and you have a company that clearly has become the world’s largest retailer through the development of effective management and marketing systems, but also without regard to the cost to people working to manufacture and supply goods to its stores, or by this latest example, to its customers.

Three million manufacturing jobs have left this country in the last three years and those jobs are not coming back. The “outsourcing” of manufacturing to countries where labor standards and relaxed or non-existent, where no environmental standards exist and where the work force is exploited purely for profit and greed, undercuts, circumvents and endangers protections for workers and the environment in this country.

Chinese workers who supply goods for Wal Mart’s shelves are being exploited for longer work days, more hostile work environments and a complete disregard for worker safety. A sign in a factory in Shenzhen, China reminds workers that “If you don’t work hard today, tomorrow you’ll have to try hard to look for a job.” Because of this type of threat, workers who toil to bring low cost goods to Wal Mart’s shelves do so in unhealthy and unsafe workplaces for miserable pay. If Wal Mart were a country, it would be a major international human rights violator. A great article in the Washington Post on February 8 by Peter Goodman and Philip Pan details some of the pressures on Asian suppliers of Wal Mart’s goods.

Despite all of this, Wal Mart customers keep coming. We shop at Wal Mart because we think it is cheaper, without regard to why, or the effects on our economy and work force. In this sense, Wal Mart customers support the very behavior that is taking away their jobs. The shifting work force is simply another example of the results of corporate greed that I have mentioned in an earlier article regarding IBM moving jobs overseas. But as long as Wal Mart continues to sell the cheapest Tickle-Me-Elmo, U.S. manufacturing and local retail businesses will continue to close and give way to mega-corporations and the jobs previously provided in small local business will continue to melt down all the way to China: the Wal Mart syndrome.

Wal Mart’s greed is all about exploitation and opportunism. Along the path to cheaper prices, a lot of little people get hurt. Whether they are the businesses who can’t compete, the manufacturers who are put out of business, the workers who suffer because of price demands or the shoppers who lose choices because they affect the bottom line, we are all pawns of this Leviathan, unless we choose not to be.

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Copyright 2004 Edward Philpot

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