The unbearable pain of everyday low prices

What do we learn from "The Wal-Mart Effect"?

Published January 23, 2006 6:06PM (EST)

On my way to work this morning I finished "The Wal-Mart Effect," the book by Charles Fishman that Salon is excerpting today and that I unreservedly recommend to anyone who wants to get up to speed on just how influential (and corrosive) Wal-Mart's impact is on the global economy.

The epilogue to "The Wal-Mart Effect" is a terribly sad collection of quotes from women laid off at a sprinkler factory after manufacturing moved to China. Their words resonated with a Joseph Nocera column in the New York Times on Sunday about the closing of his brother-in-law's costume jewelry company, also a victim of Chinese competition.

In both cases, at the end of a chain that includes politicians cutting free trade agreements, corporate CEOs taking advantage of cheap overseas labor, Wal-Mart executives placing their own suppliers under incessant pressure to lower their prices, one reaches the fundamental force fueling the brutal globalization dynamic -- American shoppers opting for the lowest price available. The intimate connection between Americans expressing their free will at Wal-Mart (or Target or Home Depot, etc.) and the ripping up and shredding of American jobs cannot be emphasized enough.

Unless that last link is broken, the vicious cycle continues. But how to break it? Tariff walls that jack up the prices on goods made abroad is one clear option, but it's an approach that is likely to cause as many economic problems as it solves. Another choice is the endless task of educating the American consumer to the true cost of Wal-Mart, the cost that demonstrates itself in the declining quality of manufactured goods, in the labor conditions that Wal-Mart price pressure mandates in the developing world, in the strains placed on social services in the U.S. by Wal-Mart's bottom-line focus on wages and benefits.

More information won't necessarily lead to a more perfect world, of course -- when one doesn't have a whole lot of dollars in one's pocket, the lowest price makes a compelling argument. But it's an essential part of any comprehensive solution, a place where government and the media both bear a clear civic responsibility. So in tribute to "The Wal-Mart Effect," I am declaring this week at How the World Works to be Information Week. This week will be all about the sexy domains of labeling laws, corporate disclosure and global transparency. As free speech hard-liners are wont to maintain: Good ideas are supposed to drive out bad. But what can we do to help those good ideas along?

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Globalization How The World Works Wal-mart