One Nation Under Wal-Mart

If Wal-Mart were a nation, it would be one of the world's top 20 economies. There are now nearly 5,000 stores worldwide, over 3,500 in the U.S. A new Wal-Mart SuperCenter opens every 38 hours; with yearly sales of $288 billion, Wal-Mart employs one of every 115 workers in America. Wal-Mart has an enormous influence on all facets of business -- manufacturing, trade, communications, transportation, design, you name it. But as journalist John Dicker describes in his first book, The United States of Wal-Mart (Jeremy P. Tarcher), the backlash -- from citizens, workers, unions and governments -- has begun.

TERRY MCNALLY: You supplied the statistic -- if it were a country, Wal-Mart would rank as the 20th largest economy. Any idea what countries rank below it?

JOHN DICKER: It's bigger than Ireland, Sweden and Israel.

Fifty years ago Americans knew the phrase, "What's good for General Motors is good for the USA." Today GM's credit rating is in trouble, it's been offering its employee discount to everyone in hopes of generating sales, and Wal-Mart rules. What does this shift mean for all of us?

I think it means that corporations don't take the same sort of responsibility anymore. They can get away with a lot less. The idea that you pay your workers a living wage for a job that's also a career -- that seems to be on the decline. It obviously also signifies the switch from a manufacturing economy to a service economy. Rights that were fought for and won in union campaigns in the '20s and '30s in manufacturing have yet to be won in the service sector, retail in particular.

Wal-Mart claims it benefits millions by supplying more jobs than any other company and lower prices worldwide. What's wrong with this picture?

Well, on one level it's correct. I'm very critical of Wal-Mart's PR in this book, but one thing Wal-Mart's CEO gets right is that he continually reminds people that the heart and soul of Wal-Mart's customers live paycheck to paycheck. To serve them, Wal-Mart provides cheaper check cashing services and cheaper money wiring services. They really cater to that clientele, and that creates a very complex political dynamic.

How do you explain to a poor person that a $28 DVD player sucks? I wouldn't want to go to a checkout line and engage in that conversation. One of the things that we saw with Southern California's grocery strike: Wal-Mart is putting the pinch on. They're forcing their competitors down to their level of wages and benefits.

Retail has never been a source of incredible jobs. You've never been able to get rich working in a store as a clerk, but there used to be more of a middle ground. What you see in retail now is a certain bifurcation. On the high end, you have Whole Foods or Wild Oats, the kind of frou-frou markets where I have a piece of squash on layaway. On the lower end you have Wal-Mart.

You also have Aldi, a very interesting German hard discounter. They'll have about 800 items for sale, but you go in and there's only three people in the store working. If you want a shopping cart, you put in a dollar deposit. It's pretty ingenious. You get your dollar back when you return the shopping cart. It saves on labor, right? You don't have anyone doing parking lot reconnaissance, herding stray carts around. If you want a plastic bag, you pay for it, I think it's between 10 cents and a quarter. In exchange for these labor-saving techniques, you get significantly lower prices.

A&P did something like this recently on the East Coast. They shut down their deli and their bakery, and now you have to pay for your plastic bags, but prices went down 20 percent. Hard discounters, places like Costco or Wal-Mart, used to be novelties. Now really low prices are becoming entitlements. But they're not free. Super-low prices have social costs. This is a conversation that I think the country is slowly beginning to engage in.