Why Are Walmart Prices So Cheap?

[boedicca]

It's a sad commentary when running a successful business that provides good value to millions of consumers is considered a cancer.

most people are against slavery

Most people realize that going shopping is not a form of slavery, unless one turns oneself into an indentured servant via unsustainable debt levels.

 

[iamwhatiseem]

I have thought about boycotting Walmart before, but then I remembered with the economy the way it is now, I don't want hurt anymore American workers.They have us right where they want.
How can I boycott a 70 year old who was screwed over on their retirement and can't find a job anywhere else?

the 70 year old should have better planned his/her life as they had teh oppurtunity to do. the children performing slave labor for wal mart have no choice

See here is where we would disagree.
Walmart is as successful as they are because American consumers don't care about where a product came from - as long as it is cheap.
WE are the ones encouraging slave/child labor.

 

[blu]

It's a sad commentary when running a successful business that provides good value to millions of consumers is considered a cancer.

most people are against slavery

Most people realize that going shopping is not a form of slavery, unless one turns oneself into an indentured servant via unsustainable debt levels.

another retarded commment from you... the slavery comes in the form of children producing chinas products so they can sell them cheaply

 

[Bfgrn]

According to a 2004 report released by U.S. Representative George Miller, one 200-employee Wal-Mart store may cost federal taxpayers $420,000 per year because of the need for federal aid (such as housing assistance, tax credits, and health insurance assistance) for Wal-Mart's low-wage employees. Moreover, many corporations fill their labor needs offshore in order to exploit unorganized workers in low-cost and politically friendly countries. Over 40 million people now work in export-processing or "free trade" zones. These areas, often exempt from national legislation, allow manufacturers to demand long hours, pay lower wages, and ignore health and safety regulations.

Corporations have achieved considerable freedom to act in ways that harm the host on which they depend. They have done so primarily by means of regulatory capture, the redesign of societal laws by vested interests for their preferential benefit. This is not new; corporations have always sought to influence lawmakers. Transnational corporations' current levels of power, money, and freedom are unprecedented, however, and regulatory capture has become widespread. The results can be seen in the scores of laws and court rulings that now protect corporations' right to profit, right to pollute, right to patent intellectual property-at the expense of citizens, farmers, workers, consumers, communities, and indigenous peoples. As U.S. President Rutherford B. Hayes once remarked, "This is a government of the people, by the people, and for the people no longer. It is a government of corporations, by corporations, and for corporations." That was in 1884; it's truer now than ever.

When Good Corporations Go Bad

 

[iamwhatiseem]

It's a sad commentary when running a successful business that provides good value to millions of consumers is considered a cancer.

most people are against slavery

Most people realize that going shopping is not a form of slavery, unless one turns oneself into an indentured servant via unsustainable debt levels.

OMG.
I know you are smarter than this.
There is absolutely nothing Americans can do as individuals that forms the world more than buying products.
Your consumer choices causes 1,000 times more actions than the effect of a lifetime of voting.
Maybe you are being obtuse, I don't know...what you just wrote sounds like something rdean or huffy would write.

 

[boedicca]

China is a developing country with rapidly changing working conditions. Considering the countless millions that have died in famine after famine over millenia, present day trade with the west is a net positive for the average person in China, including children. This is not a defense of slavery; but it is up to the Chinese to reform their own country.

Economic reality itself is going to be an impetus for reform.

In the US, when I mention that I was going to China, I was liable to hear a flood of complaints. China manipulates its currency to make its goods artificially cheap. Americans are being forced to compete with cheap Chinese labor who live on practically nothing. There are no labor and environmental standards.

That last isn't quite true, but it's certainly different from the United States, and it's hard to argue with the former two arguments: China does manipulate its exchange rate to subsidize exports to the US; and its labor is very cheap.

Both of those factors, however, are changing. The endless acquisition of US currency is unsustainable. The sterilization transactions required to keep their foreign exchange operations from turning into inflation have left the banking system positively gorged with low-interest government bonds; and now that the sterilization has eased, the inflation is showing up anyway. The current official figures are 4.25%, and a bank economist we spoke to yesterday expects something over 5% in the near future.

The wages, too, are starting to rise. Anecdotally, we're hearing reports of labor costs jumping 15-30% in major urban areas like Beijing and Shanghai. Importing low-wage workers from distant farms and using the labor cost advantage to dramatically undercut competitors is a strategy that has limits. To see why, look at the map I posted the other day when I wrote about high speed rail:

...

China's cities cluster very tightly around good coastal ports, and the Yangtze (that horizontal line in the middle). I'd argue Shanghai and Beijing are near, as the traffic is close to Manhattan levels; if you can't move people or goods, you can't grow much bigger. As those other major cities start hitting the limits to their growth, the cost of living will rise sharply in these cities, and even unskilled labor willing to work for poverty wages will cost enough to make large classes of goods, like textiles, mostly unprofitable....

Is China's Competitive Edge Already Eroding? - Megan McArdle - Business - The Atlantic

 

[blu]

China is a developing country with rapidly changing working conditions. Considering the countless millions that have died in famine after famine over millenia, present day trade with the west is a net positive for the average person in China, including children. This is not a defense of slavery; but it is up to the Chinese to reform their own country.

Economic reality itself is going to be an impetus for reform.

In the US, when I mention that I was going to China, I was liable to hear a flood of complaints. China manipulates its currency to make its goods artificially cheap. Americans are being forced to compete with cheap Chinese labor who live on practically nothing. There are no labor and environmental standards.

That last isn't quite true, but it's certainly different from the United States, and it's hard to argue with the former two arguments: China does manipulate its exchange rate to subsidize exports to the US; and its labor is very cheap.

Both of those factors, however, are changing. The endless acquisition of US currency is unsustainable. The sterilization transactions required to keep their foreign exchange operations from turning into inflation have left the banking system positively gorged with low-interest government bonds; and now that the sterilization has eased, the inflation is showing up anyway. The current official figures are 4.25%, and a bank economist we spoke to yesterday expects something over 5% in the near future.

The wages, too, are starting to rise. Anecdotally, we're hearing reports of labor costs jumping 15-30% in major urban areas like Beijing and Shanghai. Importing low-wage workers from distant farms and using the labor cost advantage to dramatically undercut competitors is a strategy that has limits. To see why, look at the map I posted the other day when I wrote about high speed rail:

...

China's cities cluster very tightly around good coastal ports, and the Yangtze (that horizontal line in the middle). I'd argue Shanghai and Beijing are near, as the traffic is close to Manhattan levels; if you can't move people or goods, you can't grow much bigger. As those other major cities start hitting the limits to their growth, the cost of living will rise sharply in these cities, and even unskilled labor willing to work for poverty wages will cost enough to make large classes of goods, like textiles, mostly unprofitable....

Is China's Competitive Edge Already Eroding? - Megan McArdle - Business - The Atlantic

so you are justfiyign the slave labor until the market works it out?

 

[boedicca]

If you actually bothered to read what I posted, you'd understand that I'm not.

But all you apparently know how to do is play the Slavery Card.

 

[iamwhatiseem]

so you are justfiyign the slave labor until the market works it out?

No, what he is saying is, is that China is losing their manufacturing advantage because as Chinese are realizing that their labor is making the government extraordinarily rich - so they are wanting a bigger piece of the action than they get.
So the next desperate/desolate population(s) are already starting to erode their ability to sell lower than anyone else.

 

[blu]

so you are justfiyign the slave labor until the market works it out?

No, what he is saying is, is that China is losing their manufacturing advantage because as Chinese are realizing that their labor is making the government extraordinarily rich - so they are wanting a bigger piece of the action than they get.
So the next desperate/desolate population(s) are already starting to erode their ability to sell lower than anyone else.

and this isn't the market fixing slavery how?

 

[boedicca]

Demographics and market forces are going to make slavery in China a thing of the past.

Their birth rate has fallen to the point where the population is aging and shrinking. As human capital becomes scarcer, it becomes more valuable. China's competitive advantage will transform from very cheap labor to one of skilled, value-added workers.

If they don't make this transition, the social upheaval will tear them apart. They are also at risk due to the imbalance of males to females, but that is a topic for another thread.

 

[code1211]

Of course they did.
The effect of Walmart is felt even in industries that have nothing to do with them. In fact, WalMart affects industries that do not sell to them, more than those that do.
How Walmart deals with large vendors is extraordinary. So far beyond how any other business has ever done in the history of markets.
Walmart conducts business with vendors in this way:

1) Here is the price we want to sell your item for.
2) Here is what we will pay for it.
3) We understand that this is 20% below what you can sell it for and make a profit, but we want YOUR product on our shelves.
To make this happen, WalMart will...
a) provide all of the transportation costs, we will pick your product up at your factory, and we will distribute it all over the nation.
What you need to do...
a) You are buying your raw materials from Company X. We located a manufacturer in Indonesia that can provide these materials for 15% less. You will need to buy those materials from them in order to meet our price.
b) Unfortunately your assembly plant in Georgia costs $2.00 per unit to assemble. In order for us to be able to sell your product for the above price, that has to be no more than $1.20 per unit. We would like for you to be able to find a way to do that in Georgia, if not we have taken the liberty of discussing your product with Company Y in Guan Mexico. They have agreed to assemble your product for $1.15.
c) We will assume that $.05 savings, we will sell the item for $.03 less and will keep the other $.02.

Any questions?

Yes. Will you please provide the link to the source of this or the name of the doctor that prescribes your meds?

Resorting to insults is the first (and usually the last) method of debate when someone has nothing else to stand on.
This is how WalMart conducts business everyday with all major vendors.
Since it is obvious you don't know this, then your "knowledge" on the subject is found wanting.

Still waiting for the link.

 

[Quantum Windbag]

Whahooo!
Man this is great! $200 for a 32" HD LCD TV...how do they do it?

Well that is easy..first they had to close all the plants in the U.S. where greedy American workers use to work(picture on the left of old American Plant)...but screw them right?

Then they opened massive plants in Mexico (Sony in Baja Mexico photo below) and India.

But hey...Walmart keeps them prices down for the rest of us!

They keep prices low by doing a better job than anyone else.

WalMart delivers more local produce, at a lower price, than anyone else. Not only that, there produce tastes better than Whole Foods, or any of the other favorites of liberals. This means that WalMart does more to support the small farms, and the little guy, than you do by blaming them for tax policies they have nothing to do with.

The Great Grocery Smackdown - Magazine - The Atlantic

 

[Quantum Windbag]

Let's see now... Do I want to pay $200.00 for a tv that was made in Mexico or do I want to pay over $400.00 for a tv that was made in America, by union workers, who all demand to have high wages, terrific benefits, and all the perks that they can pass on to the American consumer? I'll buy the $200.00 tv every time. **** the unions and the people who ***** about not buying "American". Union labor caused this problem - not Wal-Mart or the American consumer. If the union labor folks were not so greedy, there would still be plenty of jobs available in the U.S.. Don't whine to me about a problem that the unions created.

What?
Unions only exist in a minority of businesses anymore.
WalMart doesn't sell cars or do plumbing/electrical/contracting work or provide freight services.

They do sell cars, and provide contracting work, through Sam's. I don't think they provide freight service though.

 

[uscitizen]

Whahooo!
Man this is great! $200 for a 32" HD LCD TV...how do they do it?

Well that is easy..first they had to close all the plants in the U.S. where greedy American workers use to work(picture on the left of old American Plant)...but screw them right?

Then they opened massive plants in Mexico (Sony in Baja Mexico photo below) and India.

But hey...Walmart keeps them prices down for the rest of us!

Hmm well how did Wally World sell cheaper back before offshoring was a major problem?
I recall when they emphasized Made in America sold there.

Could it be that they just did what the other retailers were doing but better?
And are still doing the same thing?

 

[Jon]

According to a 2004 report released by U.S. Representative George Miller, one 200-employee Wal-Mart store may cost federal taxpayers $420,000 per year because of the need for federal aid (such as housing assistance, tax credits, and health insurance assistance) for Wal-Mart's low-wage employees.

Sounds to me like that's the fault of the U.S government, not Wal-Mart. Don't want to cost taxpayers moneys for handouts? Don't give the handouts. Easy enough.

 

[Bfgrn]

According to a 2004 report released by U.S. Representative George Miller, one 200-employee Wal-Mart store may cost federal taxpayers $420,000 per year because of the need for federal aid (such as housing assistance, tax credits, and health insurance assistance) for Wal-Mart's low-wage employees.

Sounds to me like that's the fault of the U.S government, not Wal-Mart. Don't want to cost taxpayers moneys for handouts? Don't give the handouts. Easy enough.

Maybe if we just blindfold citizens, place them on the edge of a pit, then shoot them in the back of the head it would save you some money.

I suggest you spend it all, because it will do you no good in hell...

 

[Samson]

Maybe if we just blindfold citizens, place them on the edge of a pit, then shoot them in the back of the head it would save you some money.

I suggest you spend it all, because it will do you no good in hell...

Bravo! Our first volunteer!

I'm a little suspicious of your offer, BigFern: A shot to your head would no doubt be a purely superficial wound at best.

 

[boedicca]

As far as I am concerned, all of the interesting people are going to end up in hell. I plan to open up a tavern on the landing between the 2nd and 3rd levels.

 

[Samson]

Whahooo!
Man this is great! $200 for a 32" HD LCD TV...how do they do it?

Only the Liberal Elite should be able to afford 32" HD LCD TV's.

Your "Whahooo" exclaimation clearly demonstrates that you did not attend an Ivy League school, and that you live well outside MA's 10th Congressional District.

Therefore you, sir, should be made to feel ASHAMED of yourself!!!