How Are We Still Having This Conversation?

 

Speaking of children working in inhumane conditions, how much did he pay the 5-year-old who created that sign?

 

Sometimes, avoiding the first-person voice on this blog is impractical. But we try, and will continue to. Here’s a recent conversation with a Lexus-driving business owner who lives in one of the ritziest gated communities in town, if not the ritziest:

Him: You shop at Walmart? (harrumph)

Yes, he harrumphed. An onomatopoeic expression that sums up his indignation with our choice of grocery purveyor far more effectively than any words could. Our relationship will never be the same.

It doesn’t matter what the low-cost provider is. Could be WinCo, Food4Less, or whichever discounter in your town sells in bulk and doesn’t waste money on décor. But Walmart gets most of the notoriety, and will serve as our example. It’s notorious because it isn’t unionized, and was founded in a part of the country that some people equate with a punchline. Boiled down to their essence, the reasons most commonly given for not buying groceries at Walmart (and passing judgment on those who do) are:

  1. The people who shop there are comically unfashionable, which should make it obvious to you that the food itself is awful.
  2. The company exploits workers, somehow.
  3. It runs mom-and-pop stores out of business.

 

Grocery shopping is not a social statement, or at least it shouldn’t be. It’s simply something you do to avoid starvation.

Given that Walmart has the most employees of any corporation in the United States, and doesn’t keep any of them shackled, is there any chance that maybe the employees don’t feel they’re being exploited?

You could argue that they’re too dumb to know it, as many a wag does. At that point it becomes less about the principals and more about the observer.

Day-to-day buying and selling of goods and services in a relatively free economy like the United States’ is a series of voluntary exchanges. Ideally, the cheapest provider not only ought to win (in a logical sense), but should win (in a moral sense). You take possession of whatever it is you wanted regardless of whom you buy from, but when patronizing the lowest bidder you end up with more money in your pocket. You’d think this is so obvious that it doesn’t warrant mentioning, but it does. Again and again and again. In the same respect, when selling something – and what most of us sell is ourselves, on a regular schedule 5 days a week – we’re looking for the opposite and will only do business with the highest bidder.

When buying anything, and we used groceries because they’re as much of a necessity as anything, you’re welcome to pay a premium for proximity, for perceived quality, or even for guilt. But the sensible thing to do is to buy as cheaply as possible. When operating as a seller (see above), you’re again welcome to offer a discount. But you’d need a compelling reason to. Two jobs with the same requirements, equidistant from your home, but you’d choose the one that pays less? Maybe if your ex-spouse sits by the door at the better-paying one, but it’s hard to think of many other reasons why you’d refuse an opportunity to make more money with no incremental effort.

Back to the buying side. Clearly, the Cheerios and celery at Safeway are of much higher quality than those sold by the Bentonville Bruiser. And the canard about running family businesses out of operation doesn’t stand up to any kind of scrutiny. How Kroger, SuperValu, and the Delhaize Group stores (Food Lion, et al.), each multibillion-dollar concerns, managed to avoid that same accusation is a mystery. The “mom-and-pop” grocery store is, to almost all of us, laughably inapplicable and obsolete. Family-owned food merchants are as much a part of 2012’s landscape as dry goods stores and blacksmiths are.

There are trillions of ways to waste money, and future generations will find further ways that we could never conceive of. But with respect to gambling, smoking, drinking, taking out permanent life insurance, and incurring credit card debt, it’d seem that paying extra just for the sake of paying extra would be an easy one to omit. For many, it isn’t.

Speaking out of self-interest, we can make an argument that that’s good: when other people are willingly spending more than they need to, it makes it easier for the rest of us to make offers on assets. After all, there are now fewer viable bidders in the marketplace. On the other hand, a society full of financial dimwits is a weak one. There are two major reasons why China went from economic wasteland to powerhouse in barely a generation. One is a government policy of economic liberalization, the other is a cultural propensity to bargain and save. (Cf. Mark Steyn, “Culture trumps economics.” When you’ve got both on your side, seismic shifts occur.) Westerners who do dumb things with their money indirectly hurt all of us, their cumulative effects making our society that much weaker.

Maybe the economic truths that we hold to be self-evident, aren’t. Buying an item at Store X when Store Y sells it more cheaply means putting your own financial interest in a position of relative unimportance. Caring about the plight of the non-unionized Walmart employee is a job for…the non-unionized Walmart employee. Respect that, and we won’t tell you to eat your vegetables and straighten your tie.

This article is featured in:

**The Totally Money Blog Carnival #62-Easter Edition**

I’ll Shop At Trader Joe’s When I’m Dead

Everyday low prices

 

It’s hard to imagine that trying to save money while stocking your pantry can be taken as a social statement. But for some people, politics infuses everything.

Walmart is America’s biggest retailer, a weekly staple for tens of millions of consumers. But for several thousand others with a flair for being dramatic and uninformed, Walmart’s wide air-conditioned aisles are just a coal mine with too much fluorescent lighting. Add the inevitable truth that a low-price retailer will attract working-class customers (among plenty of upper-class customers), and for many, Walmart thus becomes Exhibit A in the Everything That’s Wrong With Unbridled Profit display.

Don’t fool yourself into thinking that you’re doing your microscopic part for the Gross Domestic Product by patronizing your local Korean mom-and-pop grocery instead and paying its comically high markups.

For the most part, corporatization is the ultimate result of Adam Smith’s division of labor. Not to go Economics 101 on you, but the gist of the dead Scotsman’s argument is that the best way for an economy to thrive is that everyone do what they’re best at. In the early days of motor vehicles, there were dozens of manufacturers – some with factories not much bigger than a 4-car garage. The manufacturers who figured out how to best cut costs without impacting quality were the ones that survived and flourished. That hired the most people. And whose descendants signed suicidal union contracts that eventually rendered said manufacturers limp, but that’s another story.

Objections to Walmart range from the preposterous to the starkly so. For instance:

a) “They pay slave wages.”

Working at Walmart is voluntary.

a1) “Yes, but they should still pay more.”

Again, voluntary. The biggest economic myth of our lifetimes is that a third party (the union boss, the Department of Labor sycophant, mommy) is entitled to have an opinion on an agreement between two principals – in this case, the employee and the employer. Walmart can offer its employees 4¢/hour if it wants. No applicant has to (or will) accept it.

Besides, you think Walmart’s smaller and less-successful competitors are showering their employees with gold doubloons and rides on the company jet?

Starting cashier wage ($)
Walmart9.66
Albertson’s9.28
Safeway8.89
A&P8.25
Kroger7.70
Piggly Wiggly7.30
Food Lion7.12

Numbers courtesy of PayScale.

b) “Disgusting people shop there.”

Yes, and only neurosurgeons who run ultramarathons shop at other grocery stores. Here’s an upscale lady waiting in line in the pharmacy at Smith’s.

Yes, that’s toilet paper hanging out of her butt. No, it’s unclear that it’s clean. Yes, hopefully it is. No, this doesn’t count as taking pictures of unsuspecting women for salacious reasons. She was the retail equivalent of a green flash – a fleeting phenomenon that a camera had to be quick to catch.

c) The consensus favorite, “They prey on people who don’t know any better.” Including yours truly, apparently.

Shop wherever you want: the very point of capitalism is that you have choices. $400 Cole Haans and $5 shower flip-flops serve the same purpose, as do a new Infiniti QX and a 1985 Hyundai Pony. The richer you are, the more options you have and the greater justification and rationalization there is for spending more.

We get disdainful looks from friends when the topic of willingly shopping at Walmart comes up. We respond that while we’re not poor, we’re not so rich that we can afford to have a grocery-buying philosophy that transcends price, selection, 24-hour convenience and freshness. Not coincidentally, paying a karmic premium is something that few truly rich people do. What, the generic 10-ounce can of cooking spray at Safeway lubricates a skillet that much better than the equivalent Walmart one? Or is it just the intangible feeling of knowing that the extra 19¢ you pay for the former will help provide an Ivy League education for the Safeway employees’ kids, when divided among 197,000 of them?

If you’ve been conditioned to consider Walmart as emblematic of everything evil, a logically sound 800-word screed isn’t going to change your mind. Meanwhile, “Everyday low prices” sounds like a pretty convincing and airtight business strategy to a rational person.

Walmart shopping is a powerful barometer of what some amateur sociologists* have dubbed The Rwanda Test. Here’s how it works: you take a Rwandan, present him with a first-world moral quandary, state your position, then see if he wants to punch you in the face. Complaining that a parolee beat your daughter to death is legitimate. Complaining that the millions of dollars you make playing dress-up leave you unfulfilled is not. The next time you take a stance against America’s largest seller of breakfast cereal (of which there were 220 varieties at my neighborhood store yesterday), think about who’s listening. Then think about the billions of people on the planet for whom refrigerated milk to pour on the cereal is an untold luxury, let alone refrigerated milk that someone went to the trouble of removing the fat from (without increasing the miniscule price of the milk, no less.)

*alright, one friend, who was possibly medicated at the time

**This post is featured in the Carnival of Wealth #8**

McDonald’s: Luxury Dining

Meet this week’s three guests of honor: At their maxima, these suet inhalers weighed 1035 pounds, 980 pounds, and 850 pounds respectively.

Kenneth Brumley (fl. 2009)

Renee Williams (1977-2007)

Billy Robbins (d. 2010, to estimate it conservatively)

That’s a total of 2,865 pounds. The New York Knicks’ entire roster is listed at 2,585 pounds, notwithstanding that pro athletes notoriously overstate their sizes.

So what does controlling your appetite have to do with Controlling Your Cash? Tons.

Mr. Brumley, the late Mrs. Williams, and Mr. Robbins (or as his overbearing mama calls him, “my titty baby”) have one thing in common. (Aside from unwashed genitalia, dizzying sloth, and toenails that appear to have been grafted on from some reptilian genus.) Each at least partly blames the preponderance and ubiquity of fast food for somehow contributing to their size.

None of the three appears to have (or in Ms. Williams’ case, to have had) much money. Which enables them to use the same excuse that millions of slightly-less-disgusting corpulent people use while stuffing their faces and doing their darnedest to drag our nation’s average lifespan down – some variation on “fast food is cheap, it’s all I can afford, curse Wendy’s and Burger King for making their unhealthy food taste so good and cost so little.”

To quote a British tabloid,

Only deliveries of fast food from (Mr. Brumley’s) partner Serena break the monotony of the day. Because of this weakness for junk food, Kenneth is among 2 million Americans who are over (560 pounds).

Mr. Brumley certainly has plenty of weaknesses: his life appears to consist of nothing but. The implication seems to be that if Serena were spending a little more money to make runs to The Cheesecake Factory or Joe’s Crab Shack, Mr. Brumley’s weight might be – oh, somewhere down in the neighborhood of three digits.

As of this writing, a fresh whole chicken at a local Food4Less goes for 67¢/lb. If it takes 5 ounces of chicken to make a decent entrée, that’s 21¢. Pasta costs maybe $1.19/lb. Half a pound constitutes a pretty generous serving, which would be 60¢. Throw 4 ounces of reduced-fat sauce on there, out of a $3, 2-lb. bottle, that’s another 38¢. Remember water? Depending on where you live, it can be either heavenly out of the tap (Juneau) or straight-up brackish (Detroit). If your water tastes like the latter, get a Brita filter and the price of your water will go up about .0005¢ a glass amortized over the life of the filter.

So dinner costs $1.09, maybe $1.09005 if you filter the water.

Here’s another:

At the neighborhood Wal-Mart, a gallon of non-fat milk routinely costs $2. The store’s equivalent of Cheerios (the healthiest cereal available that isn’t sold exclusively in vegan co-ops peopled by patrons who talk about their chakras and think that all Mahmoud Ahmedinejad needs to calm him down is some yoga) runs about $3 a box.
The price of frozen concentrated orange juice is flexible, but usually costs something like $1.50 for a 12-ounce can.
Eggs are about $1/dozen. Bagels, $3/dozen.
Louis Rich/Oscar Meyer turkey bacon, which tastes better than and has one-quarter the fat of pork bacon (and doesn’t involve slaughtering animals that are as intelligent and affectionate as dogs) costs ~$2.50 for 14 slices.

On a per-use basis at home, pepper, salt, spices and cooking spray are too cheap to meter.

So for a fairly indulgent breakfast consisting of

  • 1 pint of milk (25¢)
  • a bowl of Wal-Mart off-brand cheerios (30¢)
  • a blueberry bagel (50¢)
  • 1 pint of orange juice ($1)
  • a 6-egg-white omelet (50¢)
  • 4 slices of bacon (71¢)

…you’d pay $3.26.

A quick examination at the local McDonald’s shows that you’d get barely a 24-ounce orange juice for that price. If you wanted the protein available in 6 egg whites – say from 6 Eggs McMuffin – you’d pay 12 times what you’d pay to make a homemade egg-white omelet. To stay as healthy as possible, you’d also have to eat your way around the yolks and pretend the eggs weren’t fried in grease and slathered with butter, either.

Hell, you can even break up the home-cookin’ as 2 meals; a $1.05 carb-laden one before the gym, and a $2.21 one full of protein and fiber after: as long as you’re the kind of person who doesn’t sit in bed all day growing chins and testing the limits of Newton’s gravitational constant.

We’re not here to bash McDonald’s for gauging customers: far from it, especially since gauging doesn’t exist (if you don’t like the prices, don’t buy the product.) Furthermore, if you’re driving through a town like Tonopah, Nevada, and don’t have a multi-element hot plate and a fridge in your glove box, a smoke-free McDonald’s owned by a franchisee who has to practice quality control to keep his franchise is probably going to be the finest available restaurant within several leagues.

The point of this post is to disabuse fatties of the notion that their caloric intake is directly correlated to their financial situation. If anything, there’s an inverse correlation: beyond a certain baseline, the more you have to economize on your meals, the healthier you should eat.