Another day older and deeper in debt.
Saint Peter, don't you call me, 'cause I can't go;
I owe my soul to the company store.
Reuters: August 14, 2007 -- Wal-Mart Stores Inc. reported a lower-than-expected quarterly profit and cut its full-year earnings forecast on Tuesday, saying its customers remain under economic pressure..."It is no secret that many customers are running out of money toward the end of the month," Scott said on a recorded conference call. (Full)
What? The great American working class, running out of money? How can that be?
Well to begin with they aren't the “American”working class any more. They've become the WalMart working class. Yes, WalMart is a nation. To be precise it's the world's 4th largest economy. Over the last decade or so WalMart has had more impact on the lives of America's working classes – from the working poor to skilled blue collar workers – than Uncle Sam.
The WalMart nation is comprised of roughly 127 million former American workers.
The deal, according to free-trade, free-market conservatives, went like this:
- Allow WalMart (and other super-discount stores) to devastate local, small businesses because,
- Such large retailers bring economies of scale, lower prices and create more new jobs than the jobs lost in the once locally owned retail sector.
- Allow these WalMart-types to import unlimited goods from cheap labor countries like China, even though doing so destroys high-paying US manufacturing jobs, because...
- US workers must adjust to compete in the new global economy and, even though their once high-paying manufacturing jobs will be replaced with lower-paying service sector jobs – like those $10/hr. Jobs at WalMart -- they won't feel the pain because.
- US workers will be able to buy the imported stuff for so much less at WalMart.
No. It was never right and and now we can prove it. WalMart cut the golden goose open figuring it could grab all the gold for itself. Now all they – and we -- have to show for it is goose on life support.
For a while anyway, many displaced American workers bought into WalMart's fairytale economic analysis. In the beginning they flocked to their local WalMarts to scarf up VCRs and TV's and chic furniture, clothing and shoes – all at prices a fraction of what their local mercantile once charged.
Then they shopped WalMart because their local mercantile had been driven out of business. But never mind. Even though they were now earning half what they used to, easy credit and home refi's were keeping them in the black, and those WalMart prices were so low! How could they resist?
Then music slowed. Credit got tighter. Suddenly working folk had to start living within their new low-wage reality. From that point on they shopped at WalMart because they couldn't afford to shop anywhere else.
For a brief moment in time WalMart had created a retailer's paradise -- albeit a fool's paradise. Low wage-slave workers, 127 million of them every week, marching slack-jawed across giant parkinglots into WalMarts from coast to coast. Each little peasant family clutching that week's meager earnings with which they purchased all their basic needs -- made by even lower-paid Chinese peasants -- from WalMart. (No extra charge for lead content.)
Now we see the beginning of the end of that too. The once vibrant American working class – the goose that laid generations of golden eggs for America and Americans – is now under hospice care – one foot in the grave and the other on a banana peel. And, in what will go down in economic history as a classic comeuppance, WalMart is itself about to get the same marco-economic reality check it handed out to local competitors and American workers.
Andd what about all those American workers WalMart screwed blue and tattooed too? What are they feeling now? Not good. And they have their own way of saying, "up yours" to the folks who helped engineer this meltdown.