Sunday, November 28, 2010

Wal-Mart is good for the Black Community

Everyone likes to pick on a winner, but when you add it up, Wal-Mart is good for the Black Community. Not great, but pretty good. Wal-Mart is a plus for the economic health of the Black Community because of it's low prices and job creation.

Disclaimer: I do shop at Wal-Mart for commodities like detergent, meat, and basic clothing.

1) The lower prices on basic goods really do help consumers. Wal-Mart prices really are about 20-33% cheap on the same item at a local suburban supermarket and up to 50%-75% cheaper than supermarkets in low-income areas.

2) The quality is also better. Wal-Mart requires maximum dating, rotates stock and does not sell expired product. Products are delivered frequently since they do not want to keep inventory.

3) The selection is better. Wal-Mart typically offers two brand names and one store brand for all major product categories. Many competitor carry one national brand and one store brand.

4) Wal-Mart employs large numbers of low-income people and minorities who could not find employment elsewhere. Wal-Mart gives jobs to many people that could not work else where due to geography, discrimination and skill issues. Wal-Mart offers a chance to get on the first rung of the employment ladder. Many Mom-and-Pop business in poor neighborhoods would never hire the people that work in Wal-Mart. Now they can work where they shop.

5) Destination Economics. A Wal-Mart has a significant leakage effect. Wal-Mart always brings in a string of related businesses that capitalize on the traffic. Fast-food places, banks, cleaners, and gas-stations. Usually other big box retailers like Lowes, Home Depot, Staples, 99 cents store and Pet store join the neighborhood.

6) Finally, there are also subtle ways in which Wal Mart is good. As a large public, corporation Wal-Mart worries about it's public image. Wal-Mart can be pressured. When the news media has found Wal-Mart misdeeds, Wal-Mart has corrected them.

Wal-Mart also has some negative attributes / strikes against it.

1) Low wages. Walmart typically pays the minimum legally required where it operates. It gives employees few or minimum holidays. It also forces employees to work maximum part-time hours to keep benefits down. Wal-Mart also offers low-quality benefit plans.

2) Hard work. Wal-Mart has many incentives (both postive and negative) to keep employees working hard. Cashiers are measured on scans per hour, stock clerks on stock levels, receiving clearks on accuracy and put-aways. All the store data are instantly available to the store manager and their management team as well as regional and division managers.

3) Leading the outsourcing of manufacturing from the US. Wal-Mart is a leader in non-US manufacturing of clothes, toys, sports equipment, jewelry and fashions. Just about anything with a significant amount of labor has been "sourced" by Wal-Mart from China.

4) Drive local businesses out of business. Yes, Wal-Mart does drive local shopkeepers out of business. Retailers who are in the same business and cannot offer anything better (faster service, unique items, cheaper products) usually are put our of business by Wal-Mart. However some businesses survive.

5) Wal-Mart contributes to a unhealthy life style of shopping as an activity, over spending and over consumption. Wal-Mart encourages over consummerism and impluse buying. Wal-Mart stores are destinations for a "full-day" of activity: Shopping. Cheaper items lead to buying more products that contribute to poor health and an sedentary lifestyle. Do we really need a five pound bag of chips ?? or two pounds of cookies ??

When you weigh up the pluses and minusus of Wal-Mart, the low-prices and jobs tip the balance in favor of Wal-Mart being a postive economic influence on the Black Community.

Let the bush tax cuts expire. Extend unemployment benefits

It is time to let the Bush era tax cuts expire. Simple as that. No middle class tax cut, no tax cut for anyone. Going in, it would have been nice to see a middle class tax cut for those families making $100,000 or less. But the "starve-the-government" republicans are against any revenue raising possibility. The existing tax cuts are so skewed to the rich that they are not good for anyone but the rich. They also increase income inequality in the US.

Continuing the cuts would waste money on people who do not need the money. The rich would invest the money further lower interest rates and not spend it. More investment is not need in a 0% interest rate climate. Or worse, if they do spend it, it would be on imported, luxury goods. What is currently needed: investment opportunities from increased consumption and demand in the short run.

Meanwhile, the same money could be used to support additional unemployment benefits. Or educational grants. Job training.

The best position is to veto any extension of the tax cut bill. A good compromise is to offset the tax cuts by closing some tax loopholes on corporate off shore revenues, farm subsidies and the military.

Friday, November 12, 2010

Hanging out with the about to be unemployed

Hey, I am on the floor of a building where everyone is losing their jobs next Tuesday. Well, almost everyone. It is pretty sad state. People are close to tears. One lady was telling the woman who is replacing her that she did not know how to do her job and to "stop calling IM" all the time. Another came in, read some e-mail and left with a box. Everyone else comes in around 10am and leaves around noon. The last day is next Tuesday, November 15th, 2010. A lot of people are already gone, having exchanged phone numbers, e-mails, gifts and recipes last week.

"Leadership - Until you spreads you wings, you have no idea how far you will fly" (with a picture of an Eagle with wings spread). The department had those corny "Motivators" posters by Successories all over the walls. In the good times, they were ignored as another harmless idea from the boss. Now the posters mock the losers as they head out the door.

The company had a medium sized manufacturing plant in New Jersey but things haven't been good for years. Then they got bought by another company. The plant was running about 20% capacity. People would leave and not be replaced or replaced by temps. The last few days are a lot of heartache for the people working here. Almost everyone has more than 10 years experience. It is, sorry WAS, a big corporation accounting and finance operation, so you know the staff was 80% female. Only the bosses and the IT staff are men.
"Belief - The future belongs to those who believe in the beauty of their dreams" Lighthouse with a light in the dark on a hill. Say what, Can't figure this one out.

I stumbled across a cube, while looking for the printer. The cube has all the name plates that have been taken down as people left. Lisa, Pilar, Rose Marie, Ken, Patricia and Deborah. A pretty mixed group judging from the last names: some Spanish, Indian, Italian, Black and Polish. They were lucky to work here.

It is a little creepy to see order breakdown. I can almost hear the conversations: ”I never liked you. I saw you and Mike at the Christmas party. You can’t dress worth a damn. You need help and soap. I’ll miss you.”

Now it is Friday afternoon and the place is deserted; close to spooky. The cubes are stacked with boxes and junk. The filing boxes are in the hall way waiting for the mover to come get them. Some are going to storage because they cannot be legally destroyed. Others are going to the recycle bin. Just massive amounts of waste paper.

Excel - "All glory comes from daring to begin". (Waterfall). Who writes this stuff? It is just bad sloganeering that won't help anyone get a job.

I am sure they all got good severance packages. Company's usually give 1-2 weeks of pay per year of service as long as the employee's agree not to sue. But a lot of them were making good money for a pretty easy job. They worked 8 hours days, 1 hour for lunch, flexible hours, worked from home, vacation days and unlimited sick days. On the other hand almost none of them will find the same type of job and pay. Most were around 50, which is too early to retire but at least they got the kids out of the house (knock wood). Now what?

The security guard walks by, once in the morning, once at noon and one in the evenings. Looks in the conference room, decides I am safe. Some young kid. I guess they are looking for obvious trouble. Like some one going postal. I have never seen security in an office building unless there is trouble.

"Attitude - "Blah, Blah, Blah, it is all in your attitude, blah, blah, blah" (Ski-jumper going off a cliff)

Well almost time to go. I guess the posters didn't help much. But they had a nice little run so things can't be too bad. Some of the people had 25 years of experience and made it to retirement. It just looks bad right now.

Writing from the front lines of the recession...

Tuesday, November 9, 2010

October jobs report is slightly positive

The Bureau of Labor Statistics released the October unemployment report on November 5th, 2010. The report said the United States unemployment rate stayed at 9.6%. Non farm payroll increase by a total of 151,000 jobs.

The unemployment rate for all groups stood at 9.6%. For Blacks it was 15.7%, Hispanics had a rate of 12.6% and the White rate was 8.8%. The average unemployment duration increased from 33.3 weeks to 33.9 weeks. The number of people who were jobless for 27 weeks or more was 6.2 million. The number people working part time involuntarily was 9.2 million. This group would work full time if they could.

The October jobs report shows almost no change in all major categories. The small positive note was the increase in non farm payrolls of 151,000 jobs. Private service jobs increased by 154,000. Retail was up by 28K, Business Services increase 46K, 35,000 of which were temp help. Health was up 34K and education was up 19K. Government drop 8K (local government -7,000).

In other notable categories construction added on 5,000 jobs, Manufacturing dropped 7K jobs, and computer systems design added 7,500.

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