Profit, Values, and the Glorification of Walmart

You may have seen the viral post floating around social media sites that glorifies Walmart, praising its business success. In part, the post points out:

Americans spend $36,000,000 at Wal-Mart every hour of every day. This works out to $20,928 profit every minute!...Wal-Mart now sells more food than any other store in the world, has approx 3,900 stores in the USA, of which 1,906 are Super Centers...90% of all Americans live within fifteen miles of a Wal-Mart.

The post contrasts Walmart with other "broke" government-run agencies and programs, and says that if Walmart executives were running the country, we'd be much better off.

The first thing I'm curious about is how these folks imagine a Walmart-like government would achieve the massive increase in revenue that would be necessary. But here's the thing: Walmart-type people ARE running the country. They're called corporate lobbyists. Profit is their only motive and their only value, and they put gobs of cash in your representatives pockets every year so that they will vote for their interests. Campaign contributions hang in the balance for any politician who would dare not give them what they want (it's essentially a system of bribery). And here we sit in America with one of the largest income disparities in modern times. Yes, Walmart is one of the largest and fastest growing companies in the world, employing more Americans than any other corporation. But missing from this post and many others like it are the Ethics 101 questions concerning the human cost of these ends.

Here are some other Walmart stats for you:

• A majority of Walmart's employees live below the federal poverty line--including the full-time employees--while having one of the largest CEO to store employee pay disparities in the country. 
• The employee turnover rate is 70%, and a UC Berkley study found that employees who have been there 2 years or more make up to 32% less than their counterparts in other retail jobs.
• Despite a campaign back in the 80s to encourage American manufacturing and purchasing, Walmart now obtains more than 60% of its goods from overseas.
• According to a study by economist Emek Basker, when a Walmart opens in a typical United States county, three other retailers close within two years and four close within five years. Another study at Penn State found that communities with a Walmart have a higher poverty rate, all other factors being equal.
• Duke professor Gary Gereffi found that Walmart puts constant pressure on its suppliers to lower cost however possible, leading many to turn to international sweatshops where there are little or no employee protections, and wages are as low as $0.20/hour.
• Walmart offers some of the poorest healthcare benefits in the industry (to the 48% of its workforce that receives healthcare at all), and recently instituted a program that forces employees needing certain types of surgery to choose between one of six hospitals in the entire country.
• Claims of withheld overtime pay are rampant with some becoming lawsuits (that Walmart employees don't have the money to fight in court).

Walmart's great for America? I think it's fair to say that such a claim is on shaky ground when scholarly studies published in peer reviewed journals have proven the opposite. 

Let me play along for a second and assume that the American government should adopt the practices of a successful for profit business (which it shouldn't). If we're going to emulate a business, let's emulate Costco (a direct competitor to Walmart's "Sam's Club"). Adding together base pay, bonuses, and stock options, Costco CEO Craig Jelinek took home 77% less than Walmart CEO Mike Duke, and yet he paid his employees approximately twice as much (looking at the average pay for corresponding positions). Only 4% of Costco's workforce is part-time, compared to 25% at Walmart. During the recession of 2008-2009, then CEO Jim Sinegal increased the pay of his hourly workers. He is quoted as saying, "This economy is bad. We should be figuring out how to give them more, not less." Since going public in 1985, Costco has endured relentless pressure from Wall Street to cut pay and benefits, but has never done so. Costco employees' self-reported job satisfaction is one of the highest in the industry, and 88% of them have company sponsored health insurance (in contrast to Walmart's 48%). The company is known for treating it's employees well, and CEO Jelinek says this is intentional: "We know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty." Retail industry expert Doug Stephens makes an observation that rings true: "A lot of people working at Walmart go home and live below the poverty line. You expect that person to come in and develop a rapport with customers who may be spending more than that person is making in a week? You expect them to be civil and happy about that?”

Both Walmart and Costco make their business philosophies clear, and they have both been effective at achieving their stated goal. However, Walmart's priority is on the ends, and Costco's on the means. From its beginning, Walmart set out to make products available at the cheapest price possible. It has done that. In contrast, Costco has focused on investing in its "human capital." It's a strategy that business gurus have written about for a long time, but the ravenous profit hounds don't have the time for it. In his best-seller 7 Habits of Highly Effective People, Stephen Covey likens the need to invest in people to the lesson of Aesop's fable, "The Goose That Laid the Golden Egg," in which a farmer, in greedy haste, kills the goose to get to his eggs faster, only to realize that he destroyed the one thing that could produce the eggs. Covey refers to it as the P/PC balance; balancing production with production capability, a balance that is particularly crucial with your human assets. Covey writes, "There are organizations that talk a lot about the customer and then completely neglect the people that deal with the customer: the employees...Always treat your employees exactly as you want them to treat your best customers."

All of this must be especially critiqued by Christians, those who claim to follow Christ and believe in the God who cannot be served alongside money (Matt 6:24). There's something amiss when Costco and Stephen Covey have more to say about the value of people over profits than Christians do. In the past few years, there has been a troubling wave of elected officials who successfully got people railing against "government spending" with no discussion of what the spending is for. We were pulled into an abstract debate about budgets and deficits that was morally void and paid no attention to the needs of citizens and what constitutes a good investment in the common good (which the Constitution explicitly identifies as one of the purposes of government). The result has been a government that crunches numbers while crushing people, adopting the business model of Walmart. In the midst of jumping on the bandwagon, many Christians have neglected the Bible's high value on economic justice and its concern for how the powerful treat the vulnerable. Proverbs 31:8-9 is one of the most clear and powerful: "Speak up for those who cannot speak for themselves, for the rights of all who are destitute. Speak up and judge fairly; defend the rights of the poor and needy." Jeremiah 22:13-14 carries a harsh warning to those who build their wealth on the backs of the poor, as Walmart does worse than anyone: "Woe to him who builds his palace by unrighteousness, his upper rooms by injustice, making his own people work for nothing, not paying them for their labor. He says, 'I will build myself a great palace with spacious upper rooms.'" In fact, you would be hard pressed to find a verse the Bible that talks about the wealthy or the powerful without an accompanying warning concerning how that wealth and power is used.

In a strictly for-profit mindset, employees are annoying hindrances on the way to a fat earnings sheet. Hiring employees, especially full-time ones, is a course of last resort for businesses and is done only when consumer demand requires it. This exposes the inimical effect of giving tax breaks to "job creators" who hire part-time and low paying whenever they can. This is the pervasive reality of the business world, but Christians are called to live out and support a totally different ethic. You cannot be a Christian and value profit above the well-being of people. It's that simple. Even Costco, who treats its employees like gold compared to other retail stores, does it because it's "more profitable in the long term." As Christians, we begin with the belief that every person is created in the image of God (Gen 1:27), deserving of equal worth, and the command to love our neighbor as ourselves (Matt 22:39). I have not figured out a way to have genuine care and concern for others while complacently watching them live in poverty despite having a full-time job.

*****

Sources:

Bloomberg Businessweek

Center for Labor Research and Education, University of California, Berkley

PBS Frontline

"Store Wars," Independent Television Service

"Walmart and County-Wide Poverty," Social Science Quarterly 87

"Walmart and Job Quality: What Do We Know and Should We Care?"

The Untitled Rant, Part 1: Who Are the Poor?

"If man you be in heart, not adamant, forbear that wicked cant until you have discovered what the surplus is, and where it is. Will you decide what men shall live, what men shall die? It may be, that in the sight of heaven, you are more worthless and less fit to live than millions like this poor man's child."   - The Ghost of Christmas Present in Charles Dickens' "A Christmas Carol"

The other day, an acquaintance from college posted a YouTube video from the show Judge Judy in which a litigant reveals ways that he has been taking advantage of government services and tax payer money.  The video was titled: "Here's who we support with taxes."  The comments started from other like-minded individuals who would like nothing more than to rid society of such human beings.

On October 10, 2010, John Stossel (who once touted that he "built his career on unpaid interns") talked on Fox News about "the makers versus the takers." On August 15, Ann Coulter said that welfare is creating "generations of utterly irresponsible animals." On August 18, Nebraska Attorney General Jon Bruning compared the poor to raccoons.  On June 22, Neal Boortz called the poor "parasites."  On July 6, he said there is an all-out war between the productive class and the moocher class.

These only scratch the surface of the kind of talk you hear out there; all examples that seem to confirm suspicions of mine about widespread disdain for the poor, a dualistic view of society, and misguided ideas about what tax dollars do. The implicit assumption is clear:  whenever government services help people, they are helping lazy people who don't deserve it and they're using your money to do it. One person actually told a friend of mine who ministers with impoverished communities that the best way to take care of those communities is to bomb them out of existence.

Enough is enough. I'm tired of the vicious hate and watching the powerful bully the powerless. It wouldn't bother me if it were just a few isolated commentators. This kind of language is everywhere.

First of all, let's be clear:  laziness is a universal problem.  You find laziness among people of any socio-economic level, so you can't say that laziness = poverty.  Before going any further, we've got to pull this discussion of the poor out of the muck.

First, let's economically define poor.  There's much more to it than money, and even then there's a lot of debate surrounding it, but for my purposes here, when I say "poor" I mean individuals or families whose income is less than 125% of the 2011 HHS Poverty Threshold.  So, for example: the poverty threshold (or "line") for a family of 4 is an annual income of $22,350 (aspe.hhs.gov), and I'm defining a family of 4 as "poor" if they make 125% of that: $27,937 or less. This is very conservative, because it is widely known that the federal poverty guidelines are off by a factor of 2. A family of 4 realistically needs to make twice the amount of the threshold (200%) to keep up with today's cost of living.

So, here we go.  Who are "the poor?"

26% of them have a job.  How is it possible to have a job and still be poor? For one, the federal minimum wage is obscenely low and is nowhere close to covering the cost of living. Another reason is that the system ends up penalizing people for working. I was told a story of two different people who were each drawing $8000/year in disability, and after they finally found a job at which they could work, they ended up at a financial disadvantage. Is that their fault?

40% of the poor are single women and/or single moms.  For many of the moms, getting a job would mean having to shell the money right back out in child care costs. 25% are children. 16% are senior citizens (65+).

All in all, roughly 67% of "the poor" either do work, can't work (children), or shouldn't work (elderly).  What about the others?  Some who only work part-time do so because of physical limitations. Among the poorest of the poor and the homeless, there are physical, emotional, and psychological challenges that contribute greatly to their situation and virtually no employer will touch them.

As David K. Shipler points out in his book, The Working Poor: Invisible in America, those who work but can't make ends meet are among the most forgotten and most vulnerable people in society. According to the U.S. Department of Labor, in 2008, 8.9 million adults were "working poor" (those who have a job but whose income is insufficient), which was up 1.4 million just from the previous year.  Some have more than one job. 4.5 million family units were living below the poverty level despite having at least one member of the family in the labor force (www.bls.gov).

People just don't seem to understand these realities, especially politicians. On February 25, 2010, during the televised bipartisan summit on the health care bill, Senator John Barrasso (R-WY), a former orthopedic surgeon, was explaining why he thought it would be prudent for people to purchase only catastrophic health insurance and have health savings accounts on the side. President Obama asked him, "Would you feel the same way if you were making $40,000 a year?" Barrasso had a blank stare on his face, and a few minutes later would reiterate his point about the people who could take advantage of a catastrophic health insurance plan, completely ignoring the point about those in lower income brackets.  They either don't get it, or they wish everyone who makes less than 6-digit incomes would just go away and stop bothering them.  They really operate off of this idea that if the government is helping you, you're a moocher. Tell that to military kids getting their college education while in the service or senior citizens on Medicare.

More fair-minded people will say that they just want to improve the system and stop scammers.  Great; that's a good goal, and I agree that the system needs to be reformed.  That's different from cutting all the lifelines and not caring what happens. We also must challenge this idea about rampant drug use among welfare recipients. Data from Substance Abuse and Mental Health Services shows that illegal drug use in households receiving government assistance is only 2 or 3 percentage points higher than self-sufficient households, and alcohol abuse is actually lower.  The state of Florida is starting to find out for themselves that mandatory drug testing laws only cost the state money and families their dignity (2% of all new applicants test positive). You say you don't want your tax dollars to be spent activities to which you object? I don't either. But how often have we worried about that when it comes to our government's activities overseas, and especially in the Middle East?

Are there people who are scamming the system? Yes. Do all of them realize they're scamming the system? I've met people who don't. Are some people irresponsible? Yes. We've all been in the houses of the paycheck-to-paycheck families who have huge, flat-screen TVs and expensive smartphones—which, by the way, can be easily obtained by signing up for one of these pyramid schemes that prey on the desperate and uneducated, or by having an absent, drug-selling father who thinks he's done his part by getting the kids a TV.  But let's assume for the sake of argument that the person's gadgets were purchased with money they don't have. Are you assuming that just because your parents taught you money management and how to be responsible that they have the same knowledge? It was eye-opening to me the day a neighbor and mother of 3 came over with all her receipts and bills, asking us to help her learn how to manage her finances. She literally had no idea. No one has taught her. On top of that, I learned in talking to her that she genuinely believes that good parents get their children lots of stuff. When they come home with all the toys, to me, they're being irresponsible. In their minds, they're being loving parents. Are you prepared to help teach them?

We have to understand the difference between an excuse and an explanation, and I'm giving the latter. I once had a conversation with a very poor and struggling single mother. I was visiting her in her home, which one church member described as "a dump." Any and all of the appliances in the house had been donated to her. I asked her, "What are your dreams and hopes for the future?" She said, "I don't know, we're just living." Things like that used to frustrate me, and I would think to myself, "If the poor are going to have that attitude and not plan for the future, then they deserve to be poor."  But then I heard the executive director of a local homeless shelter give a speech, and I'll never forget one thing he said:  "If I don't know what I'm eating today, I can't plan for tomorrow."  In other words, we humans cannot see beyond our unmet needs, and in asking that question, I was asking the single mother to think beyond her unmet needs. Are you prepared to help them? We all want people to be independent. The problem is the myth of equal opportunity. It's just not true that everyone has an equal opportunity to succeed if they just try hard enough (see Compassion International's "Poverty Wheel").

As my friend and minister to the poor Wendy McCaig writes in her book, hopelessness abounds in impoverished communities, but transformation can happen when we personally connect with the poor, learn their stories, and offer them a chance to serve others and feel like a person of worth again. In a recent email conversation, Wendy said:

"Most folks do not want to live off the government. Some simply know no other way or are too disabled, under-educated or face too many barriers to move into competitive employment...The answer is creating jobs that give my friends a chance to be productive citizens. AmeriCorps grants allow us to create jobs for people no one else would hire. The jobs we create are jobs that are designed to change the take, take, take culture of our community and turn it into a giving culture. They are very part-time positions but...they do it because they get so much out of giving to others."

Something changes when you come face to face. Jean Vanier once asked, "Is the person standing in front of you precious to God or not?" I'm having trouble finding the parts of the Bible that call the poor moochers, raccoons, or parasites. The Bible has such scathing words for the rich, but not the poor. It does say that when we feed, clothe, and visit, we are doing it to Christ Himself. It does warn many times against oppressing and mistreating the disadvantaged. It does have Jesus standing before an audience announcing that the reign of His kingdom will be characterized by the good news to the poor, and freedom for prisoners and the oppressed. Need I individually mention each of the hundreds of passages that talk about poverty and injustice? The glorification of the rich and the demonization of the poor that we are seeing today and that I've seen many Christians buy into is in direct contradiction of the biblical witness.

I encourage you to read Wendy's book to see how this kind of personal ministry and valuing the other as a person with dreams has transformed people and communities.  However, there are still large-scale, systemic things that need to be done that churches, non-profits, and individuals can't sustain. I fear that the current climate is putting lawmakers and policies in place that are only going to make things worse. I explore this in Part 2.

Many thanks to Wendy McCaig for editing and improving this post.

Extravagance and Dead Egyptians

In July, our church hosted an Egypt-themed Vacation Bible School that sought to give children a realistic, life-like experience of the story of Joseph (the biblical character who was sold into slavery, imprisoned unjustly, but became a prominent leader among the Egyptians). In preparing to bring Egypt to life, we were setting up a pyramid or two, and I was reminded of their purpose. Those who have visited Egypt can attest to how impressive the pyramids are, but they served a very useless purpose. They were shrines for dead pharaohs. Experts still disagree on the details, but it seems that they served to protect the mummified bodies of these former Egyptian leaders for the afterlife.

As you may have heard it said, "You can't take it with you." We can all probably think of someone in our lives who we think has spent time and money on things that aren't going to benefit anyone after he or she is gone. But wait a minute - am I not guilty of such things myself? Extravagance always happens to be more than we have, doesn't it? Compared to the majority of the earth's population, I'm extravagant.

Have you ever tried to practically answer the question, "How much is too much?" It's practically...impossible. It's all so relative to where you live, what your needs are (e.g., health), and what you do with it. I'm reading a book written by a former seminary classmate who founded an urban ministry to the homeless. In one particularly inspiring part of the book, she describes how she came to the decision to sell her 5-bedroom house and move to something much more modest. She did this for two reasons: 1) to be able to invest more money in her non-profit ministry, and 2) she felt too guilty and convicted about the disparity between her living situation and that of her poor or homeless friends. I am very inspired by her story. If you're willing to give up your standard of living for strangers in need, you're a saint in my book. But it gets you thinking: there's really no clear stopping point, is there? After I downgrade to a cheaper house, why don't I then get rid of my air conditioning? Why don't I then sell my cars? Why don't I just keep going until I'm also living in a cardboard box? Relative to one's station in life, there comes a point where our voluntary poverty would render us no longer helpful to others in need. Temporary solidarity with the poor is a great thing...it makes me realize what I have. Permanent solidarity would just make me yet another person in need. Where is that point for you? What would it look like for you to provide enough for your family and give the rest away? Are you there? Why is it so hard?

The Jesus we find in the gospels had a very special word for and ministry to the "poor" (broadly defined). In fact, the Old Testament prophets, and Jesus after them, seem so compassionate towards the poor and so hostile towards the rich that modern theologians began using the term "preferential option for the poor" (first articulated by Gustavo Gutierrez) to describe what we find in these traditions. Most decent theology schools at least introduce students to this view. But one thing it tends to do, especially while you're in the vacuum of seminary, is make you glorify the poor. As we reflect on Jesus in Matthew 25:31-46 saying that "whatever you have done for the least of these, you have done for me," we start to expect to find God, and godly behavior, in the poor. But as Wendy McCaig finds out and describes in her book, this is not always the case. Those who live in what we call generational or perpetual poverty are sometimes very selfish, greedy, ungrateful, and unmotivated. Perhaps such traits are responsible for their current plight, but often, those in poverty find themselves living day to day, meal to meal, and it's nearly impossible to find motivation and vision in such circumstances. As so many affluent people don't realize, it's a steep downward spiral.

If you're like me, you might live life thinking that you're not in danger of becoming homeless, but in reality, you are. My family is one major accident, illness, or job loss away from having to depend on others. And therein lies the reason for being generous in any way we can with what we have. What if it were me? One day, it could be me. Jesus said to the rich young man, "If you want to be perfect, go, sell your possessions and give to the poor..." (Matthew 19:21). But for those of us who perceive perfection to be a little too far off, we have the simple biblical injunction to "do nothing out of selfish ambition or vain conceit, but in humility consider others better than yourselves" (Philippians 2:3).

At the very least, let's start by making sure we're not building huge pyramids for a dead Egyptian.