On burning porcupines, Wal-Mart economics

Posted: Monday, September 24, 2007

My thanks to Jamal Kennedy and his letter of Sept. 17. It opened my eyes. I never thought I was a "neo-hippy." I thought I was a registered Republican who thought of another Clinton presidency in the same category of enjoyment as giving birth to a burning porcupine. But since I'm opposed to Wal-Mart, I'm really a "neo-hippy." How novel.

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Yes, Wal-Mart is here. However, part of a free society is not only choosing your preferred store (while it's still around), but exercising your freedom of speech to persuade others on which businesses to avoid or frequent.

Kennedy's store comparisons show he hasn't done his homework. He comments on where Costco gets its jewelry, but has he closely read the labels on the items in "Wally World?" Many of the same nations Costco products come from, whose conditions Kennedy condemns, host the factories where Wal-Mart's items are made.

Look at Wal-Mart's dealings with those suppliers. For example: a Honduran company makes shirts for Wal-Mart. They sell, say, 1,000 containers of shirts for $1,000,000. If that company wants to sell to Wal-Mart the next year, they need to drop the price 5 percent for the same amount of shirts. This company still has to pay manufacturing overhead, suppliers, and the workers. Where can the company cut costs? The easiest is personnel, feeding the "conditions that violate international labor standards and basic human rights."

And let's not forget what Wal-Mart does to tax bases. In 1995, Cathedral City, California gave Wal-Mart a tax subsidy worth $1.8 million to build two stores. In 2004, after the city collected its first check for $800,000 from the stores' sales taxes (charged to its customers, not out of Wal-Mart's pocket), the stores were closed down and a new one opened in a neighboring town.

Google "Wal-Mart taxes closed" for a plethora of information.

Kennedy calls himself a "broke 21-year-old college student." With many manufacturing jobs going overseas, where will he support himself after college? As he said, Wal-Mart doesn't have the benefits or pay Costco does. Hopefully, the latter is hiring when he needs employment to pay off his college loans.

Robert Kindred


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