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August 28, 2006

Always Low Wages, Always?

Jonah Goldberg accuses me of ducking and weaving away from his criticisms -- which would be true, only I, uh, didn't see his criticisms, and so wasn't responding to them. Amazingly, I don't actually read the Corner on Saturdays, and was responding to those, like Glenn Reynolds, who answered me during the week.

But since I now do see that Jonah answered, it gives me time to be confused. In what must be the most revealing few sentences he's ever written, Jonah promised, "I'll make Ezra a deal. I will forthrightly deal with the progressive case against Wal-Mart, if he explains in simple and straightforward language which issues he considers to be less important than Wal-Mart."

Read that again. Jonah will bring an ounce of intellectual honesty to the table if I accept his demands. He's literally holding good faith debate hostage, and in doing, admitting that his LA Times column was nothing but a smear job, one in which he didn't deal with the opposing arguments forthrightly. I applaud the honesty, but can't accept the terms. I don't negotiate with hacks. If Jonah wants to deal with opposing arguments seriously, he shouldn't need anyone to bribe him into position.

But since I actually do think this is an important issue, I'm willing to deal with queries about my position forthrightly (no conditions!). As I said earlier today: I believe that Wal-Mart is setting the norms for the service economy, which contains most of the job sectors slated for rapid growth in coming decades. Moreover, I believe their size and purchasing power are destroying the corporate welfare state: Wal-Mart's competitors need to cut labor costs to compete, and their producers need to cut labor costs (and often outsource) to meet Wal-Mart's price points. These are the norms of the service economy -- a mindless pursuit of lower prices, a worrying lack of countervailing powers, and little to no employee power -- and they are causal factors behind the erosion of the corporate welfare state, the shift of risk onto individuals, and the decline of unions. In the way that bridling GM and Ford was critical to creating the middle class in the 20th century, taming Wal-Mart is central to sustaining it in the 21st -- and if we can't do that, health care, child poverty, and all those other issues Jonah fears I'm neglecting are going to get a whole lot worse.

One more thing: Goldberg writes that:

Part of his indictment is that I didn't fully lay out the no doubt epic-length Progressive case against Wal-Mart, in a 700+ word column. One of the the things I love about Ezra's broadsides against me is how Tom Daschle-like they are. He's always so saddened, "disappointed" and offended.

Actually -- I'm never offended by Goldberg, but I'm often saddened and disappointed. I think, as writers, we have certain responsibilities to turn out a product that is, on some level or another, constructive for the larger debate. That responsibility is mitigated somewhat on blogs, where the cost of extra space is nil, and thus our broadsides can merrily coexist with our more informative pieces, neither distracting from nor squeezing out the other.

But on a major op-ed page, the burden is much more acute. I've written a handful of LA Times op-eds myself (obviously fewer than Jonah), and always taken them seriously. I don't pitch or write partisan broadsides, and never offer up anything (and this goes form my magazine writing as well) that doesn't seek to put new ideas, information, or concepts on the table. The aim is always to push the discussion forward, never to muddy up the waters or merely inflame the partisans -- there are too few op-eds in a day, and for too many, it's their main source of political commentary. So when I saw Jonah use his weekly column to write such a hackish piece on Wal-Mart, it was depressing. He'd taken the chance to address a major issue and, rather than explaining the contours or advancing the conversation, chortled at Democrats. It is a shame for him, or anyone, to waste the opportunity that such valuable newspaper real estate offers. So I'm not disappointed by Jonah -- he can sink as low as he wants -- I'm disappointed by the blown opportunity. But hey -- that's just how I view my profession. Jonah, clearly, sees himself engaged in a different pursuit, and that's certainly his right.

August 28, 2006 in Wal-Mart | Permalink


You keep saying, "the shift of risk onto individuals," but that is not the truth. The HSA shifts a large amount of health insurance premium away from the insurance industry and into the bank accounts of individual workers. So you might say HSAs shift the flow of money from insurance companies to the FDIC insured bank accounts of workers so they may build wealth and finacial freedom.

Democrats think citizens can't handle any wealth but Republicans know better.

WalMart should not choose the health insurance on their employees' children because they don't care about their employees.

Democrats are defeated and divided on health care reform. Now is the time to strike because all the liberals are shell shocked and dazed. They need some kind of leader but Dems have no one in sight. I feel kind of sorry for all of you liberals. You should demand some Democrat somewhere come up with some kind of solution that is better than what you have now. Anything would be better than your 65 year old ideas of employer-based health insurance or Socialism. Come on, ezra is asking for some ideas so please help him.

Posted by: Ron Greiner | Aug 28, 2006 3:33:07 PM

While I think it is undoubtably true that Wall-Mart is is setting norms for retailing, which is a service sector component, I don't think that making the jump from setting norms for retailing is the same as setting norms for the entire service sector.

Especially I don't know that it is setting norms for those areas of the service sector that are growing and projected to grow. I don't claim to know the numbers, but I would be surprised if their are vastly more retailing jobs now than their were 10 or 20 years ago, and I would be surprised if the reletive number of retail jobs if projected to grow greatly.

We are always told that Wal-Marts force the closure of all the Mom & Pop stores which would seem to support the idea that retail jobs are not increasing at a vast rate.

From my understanding, a lot of the growth in the service sector is areas that are not related all that much to wallmart of how it does business. For example, design type fields ranging from web design work to interior design are growing a lot. Wal-Mart may effect these jobs, but probably in a positive way by reducing costs, rather than any negative way.

Posted by: Dave Justus | Aug 28, 2006 3:34:33 PM

Ezra, there are no "service economies". There is no comparative advantage in double-entry bookeeping and database management. Anybody can do it. People working at MacDonalds so they buy Big Macs that pay their own salaries does not a sustainable economy make.

England thought it was a service economy. When the empire fell they discovered nobody really needed their services anymore.

We are the administrative hub of a military empire, protecting the various extractive economies and trade routes. Our comparative advantage shows up in how our gov't spends our taxes. China is building dams and high speed trains and power plants. America is building Star Wars and fighter bombers.

And providing bread and circuses.

Posted by: bob mcmanus | Aug 28, 2006 4:09:48 PM

You should let the baby have his bottle, Ez. Imagine how outraged he'd get if you ranked mitigating Wal-Mart's pernicious effects on the global economy ahead of the "war on terror."

Indeed, I'm not sure what's funnier: That Jonah actually believes global priorities should be ranked and seeded, like teams in March Madness, or trying to take him at his word on such an absurd offer and coming up with an "Issue Tournament," in which Global AIDS Prevention might face off against Combatting Wal-Mart in the Final Four, while, in the night game, Global Warming goes up against the exploding Slum Population.

Posted by: Brian Cook | Aug 28, 2006 4:17:24 PM

Ezra, I urge you not to waste any more of your time taking Jonah Goldberg seriously. Just keep writing the informed, thoughtful, and incisive stuff you produce so reliably, and ignore the Peanut Gallery.

Posted by: RonThompson | Aug 28, 2006 4:36:37 PM

Democrats think citizens can't handle any wealth but Republicans know better.

You mean Republicans know citizens can't handle any wealth?

Which is why conservatives make it a policy to transfer wealth from the people to themselves. (See DeVos, Dick) See, them people are just wrong, and they're not qualified for such an awesome responsibility.

Let conservatives help them out with that. They'll feel better for it.

Posted by: Dr. Squid | Aug 28, 2006 4:58:03 PM

I think, as writers, we have certain responsibilities to turn out a product that is, on some level or another, constructive for the larger debate.

That's why your writing is always worth reading (even when--ever so rarely--I disagree with it). Conversely, Goldberg doesn't see this as his responsibility, and thus his writing is rarely worth reading.

Posted by: Tom Hilton | Aug 28, 2006 5:37:52 PM

As far as I can remember I have never joined in with the "ban the trolls" or "write about [X] less/more/harder" complaints, whether on this blog or others, but it really seems appropriate here. Jonah Goldberg is a moron. For the "deal" you pointed out and half a dozen more reasons in those two posts, he wouldn't know a sound, valid argument if a detailed definition of one from a college textbook was tattooed on his ass.
I remember one time how he was so upset about my column on Al Gore because his family lived back home in California. They might read it in the LA Times and not understand how wrong it was! (I can't find the link, but I know it's out there).
Mr. Goldberg, do you expect us to take you seriously on politics when you get stymied by that little "search" link on Ezra's site?
I do wonder what Ezra means. Is the war on terror more important than Wal-Mart? Than Iraq?
I know he has a tendency to ramble, but Ezra gets there eventually, Mr. Goldberg. Like, the sentence after the opening line you so loved.
Me: Who said the issue was that Ezra doesn't write about healthcare enough?
TAKE 1: Who said you said the issue was... zzz. Nooo, Ezra got criticized for not explicitly prioritizing some things higher than Wal-Mart, so he used a thing we call "sarcasm" to show that he does, in fact, think other things are also important.
TAKE 2: Not everything's about you, Mr. Goldberg. Sorry to disappoint.

Ezra, you've commented before that you follow Goldberg because he has some good op-eds sometimes. Do you have any links handy? Because I'm sorry, but I'm just not seeing it.

I think Sadly, No! is right. The best way to handle people like Goldberg is derisive laughter.

Posted by: Cyrus | Aug 28, 2006 5:48:48 PM

bob mcmanus's comment is the scariest thing I have read all day.

Posted by: Tony v | Aug 28, 2006 6:44:52 PM

I think you should agree to his terms. I don't think Goldberg can actually make a substantive argument, and I'd like a chance to be proven wrong.

And OT: does else anybody stop reading a post when they see "HSA?" God knows I do.

Posted by: mwg | Aug 28, 2006 7:27:55 PM

Ezra, I would have to agree with Ron Thomson. There is no shame in having an honest discussion about Wal-Mart.

It seems to me you are on the fense about wal-mart, not because you think it's a terrible employer (which I have a feeling deep down inside you know this to be true) but because you get so fiercely attacked everytime you criticize wal-mart in th slightest.

I'm going to put a post up about it at Bushtheidiot.com, but let's run down a few things.

1. Wal-Mart makes an active decision to target mom and pop shops that treat their employees well, selling every item they offer at a lower price, not to compete, but to simply shut the store down.

2. Wal-Mart pays the lowest wages, yet it is the most successful retailer

3. Wal-Mart skirts benefits laws by forcing their employees to clock just under 40 hours a week so that they can provide absolutely NO benefits to employees

4. Wal-Mart shows training videos to new hires depicting unions as very negative groups that will do nothing but hurt them

5. Wal-Mart fires any employee that wants to unionize

6. Wal-Mart simply closes stores if the employees do manage to unionize

7. Wal-Mart, the biggest retailer in the world, censors its products. (can't by a Maxim mag or Michael Moore movie).

8. Most people who work at Wal-Mart cannot even afford to shop at Wal-Mart

Now these idiots defending Wal-Mart can say what they want but the bottom line is Wal-Mart became successful by making a purposeful decision to fuck over anyone they possibly could.

If indeed Wal-Mart is an example of the future as you seem to suggest, what kind of a future is that?

Posted by: Tony | Aug 28, 2006 7:28:53 PM

According to their website it seems michael moore films are now available, but maxim is still not.

Posted by: Tony | Aug 28, 2006 7:31:24 PM

Goldberg is intellectually and morally dishonest, to say the most (or least?) about his mental capacities. The people who give him a megaphone obviously don't care about honest analysis and policymaking directed at improvement in sociey. I can't blame Jonah because the LA Times editorial staff sucks. The NRO is his home, a place specifically created for intellectually dishonest and morally deficient freaks. Even mothers who are bad examples can raise decent kids, or the kids can learn to be decent on thier own. Neither happened in Goldberg the Inferior's case.

McManus comes real close to the truth. America, the country that has one comparative advantage now compared to other developed countries: our workers (at all practically all levels and occupations) are willing to keep improving productivity without any reward at all and without any prospect of a lasting job. Empire has its price, and we will pay for it, over and over, until the visigoths level DC like they did Rome.

This really hasn't been a good decade to live in the US, or even a good quarter century since mentally imcompentant Reagan.

Can we just start over with Kennedy and replay the rest of this movie?

Posted by: JimPortlandOR | Aug 28, 2006 7:33:43 PM

good on you, ezra. my hat is off to you. but bob mcmanus is right: "... there are no "service economies"... People working at MacDonalds so they buy Big Macs that pay their own salaries does not a sustainable economy make."

Posted by: a-train | Aug 28, 2006 7:34:27 PM

I don't say this often, but Bob's completely right.

Posted by: Christmas | Aug 28, 2006 7:47:55 PM

Putting the meta-commentary on what constitutes hackishness aside, I'd like to address the following (bracketed numbers added by me):

[1] I believe that Wal-Mart is setting the norms for the service economy, which contains most of the job sectors slated for rapid growth in coming decades. [2] Moreover, I believe their size and purchasing power are destroying the corporate welfare system: Wal-Mart's competitors need to cut labor costs to compete, and their producers need to cut labor costs (and often outsource) to meet Wal-Mart's price points.

Propositions #1 and #2 are very different propositions. I agree with #1 but not #2.

To be a bit more specific, #1 is a proposition about Wal-Mart's relationship to its own US-based employees and how the terms of that relationship have been shaped by federal labor and employment law, especially (I think) with reference to union organizing. I agree with that. The fact that no part of any Wal-Mart anywhere in the US is organized tells me that something is wrong. Even if Wal-Mart employees actually aren't well served by unionizing, out of X thousand stores with Y departments each, there has to be some bargaining unit who holds a contrary view, even if they are mistaken.

#2 is a proposition about what would happen either if (a) Wal-Mart were some other kind of company in terms of its corporate practices (e.g., "Nice-Mart") or (b) if the structure of the market in which Wal-Mart competes were substantially different (e.g., if DOJ broke Wal-Mart up into Wal-Mart-1, Wal-Mart-2, Wal-Mart-3).

As to #2(a), it's hard for me to imagine how such a company would operate. Suppose Nice-Mart's board of directors adopted as a statement of corporate policy that it wouldn't seek lower prices from manufacturers with a US employee base in industries that are dominated by imported goods. Now suppose a Nice-Mart shareholder sues the directors for breaching their fiduciary duties to the shareholders by adopting a policy which by definition ensures the company will forego potential profits. How could the directors defend their position? I don't think they could.

As to #2(b), I can't imagine the "baby" Wal-Marts would be less tenacious in dealing with vendors than the existing Wal-Mart. More to the point, Wal-Mart as it exists really doesn't have monopoly buying power in any market, because its various segments compete with other big box retailers. (E.g., electronics competes with Best Buy, tools with Home Depot, clothes with Old Navy, etc.) So I don't see how breaking up Wal-Mart would change things much other than to shift the balance of competition within those various markets.

A further point on the difference between propositions #1 and #2:

I don't think anyone can reasonably disagree that if Wal-Mart is not being subjected to fair labor practice regulations (proposition #1), that's not good for working people who work there (and there are probably spillover effects on local labor markets).

To the extent that Wal-Mart puts price pressure on its suppliers to keep its sales prices low (proposition #2), I think it is at the very least a hard question whether lower- and middle-class people don't realize a net benefit from that. You can buy a DVD player in Wal-Mart for forty bucks. You can buy a week's groceries for (say) a hundred bucks. Being able to buy consumer goods at low prices is very, very good for lower- and middle-class people.

Posted by: alkali | Aug 28, 2006 7:50:18 PM

Somewhat tangentially, did you see the news about SB840, the California Health Insurance Reliability Act passed both the house and senate? If Arnold doesn't veto it, California will have single payer insurance. That would certainly be good news for WalMart employees as well as the working poor throughout the state.

Arnold, of course, will veto it.

Posted by: J Bean | Aug 28, 2006 8:42:12 PM

alkali: Costco attempts to be NiceMart. They provide their staff with decent wages and benefits while selling low priced goods to the working poor -- or at least everyone who can afford the yearly membership. They get beaten up by Wall St. for making huge profits instead of mega-huge profits, but otherwise they seem to be okay. Also they donate blue.

I vote with the don't waste your time on Jonah group. I can't read his drivel.

Posted by: J Bean | Aug 28, 2006 8:48:28 PM

Being able to buy consumer goods at low prices is very, very good for lower- and middle-class people.

Not having to rely upon discount retail is better.

Posted by: ahem | Aug 28, 2006 9:08:41 PM

You know, I just started hanging out in your comments, and I have to ask -- is Greiner another blogger, or just your local conservative talking points troll, or satire? Because, seriously ... "socialism"? Does anyone under 60 actually still use that word?

Posted by: jonrog1 | Aug 28, 2006 9:44:01 PM

I don't think Goucher College demands much of their students, and even if it does, chubby Jonah could always count on mom to pull some strings for him if life got difficult. Don't waste your time on mama's boys.

Posted by: sglover | Aug 28, 2006 9:47:45 PM

Posted by: alkali | Aug 28, 2006 4:50:18 PM Being able to buy consumer goods at low prices is very, very good for lower- and middle-class people.

This depends very much on how much of the cost has been actually saved, and how much of the cost has simply been shifted. For the cost shifting, the benefit to that consumer is matched by an equal or great damage somewhere else.

Given that, it is very important to understand that a substantial amount of the benefits that Wal-Mart gains from its size are not economies of scale, but simply oligopsonist ("few buyers") market power.

Perhaps the most serious problem with Wal-Mart is that it helps entrench the auto-uber-alles transport system at a time that it is rapidly approaching its use-by date. Once gas prices rise high enough, even a normal shopping mall will permit retrofitting to provide public transport priority access to the door with car parking relegated to the fringe ... but free-standing big box requires the car, and all the hidden subsidies that the auto-uber-alles system rests upon.

Posted by: BruceMcF | Aug 28, 2006 10:32:55 PM

is Greiner another blogger, or just your local conservative talking points troll, or satire?

I believe #2 is about right-- Ezra's particularly wonkish on health care, and Greiner's apparently been assigned to him on that basis, specializing in HSA drivel that he/it/they apparently hope will divert the more libertarian-leaning readers.

Posted by: latts | Aug 28, 2006 10:37:44 PM

You know, I just started hanging out in your comments, and I have to ask -- is Greiner another blogger, or just your local conservative talking points troll, or satire?

At first glance the second option seems more likely. But after his sheer mindless repetition, a fourth option - paid flack - seems the only possibility. But considering just how bad he is at persuasion, how ridiculous and annoying and anti-ideological his shilling for HSAs becomes, the third option seems to be a dark horse candidate. (Google him some time, and see what you find. Be sure to follow the links for an anonymous and unsupported surprise!) Ron, if you are #1 or #4, take note: you're doing a bad job.

Because, seriously ... "socialism"? Does anyone under 60 actually still use that word?

Sadly, yes.

Posted by: Cyrus | Aug 29, 2006 12:01:07 AM

1) Bob McM is not right, though he is not completely wrong.

The burden of proof is on the affirmative, Bob. Break out your data and we can begin to talk. Fair warning, until you explain how dams, high-speed trains and power plants congrue with a per-capita Chinese GDP under ten grand, I may be unconvinced.

Don't get me wrong, I am highly critical of the US economy. However, it isn't because we produce nothing -- it's because we save and manufacture too little compared to what we consume, not because we woke up today as Burkina Faso.

2) Costco and Target are competitors of a different sort.

The former is of the higher-quality, fewer-SKU model (cf, Sam's Club). They do it better. They are not going away, though I am not sure they can continue to offer real careers to their emplyees. The latter is of the better-styled, less-crap quality, moderate-SKU model. They will have their battles, but having seen them when they "work" (in a word: Minnesota), I doubt they go away either.

3) Wal-Mart is not invincible.

Case in point: Germany. What defeats them is simple: make them pay for all their extarnalities rather than letting them offload as many as possible. While I admire WMT's distribution expertise, Target's is famously good, too. The difference is that WMT depends on larding as many costs as possible onto anyone else: notably, suppliers, second customers themselves via crap merch, and last society via various costs like healthcare.

4) Ron is evil.

He isn't a troll, he sells HSAs (as well as placing advertising that demonizes socialized medicine on Rush Limbaugh, neatly threading two camels through a single needle's eye). Inexplicably, he thinks the way to fame, fortune and more fortune is to be found trolling Ezra's comment threads.

I engaged him, though I admit with a hint of venom, until he told me, in so many words, "we kicked your ass in World War II." He is worse than just plain evil, that this country has in spades: he's annoying. Ignore him and maybe he'll go away.

Posted by: wcw | Aug 29, 2006 1:54:03 AM

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