January 27, 2006
Retail giant Wal-Mart has created its share of enemies for its competitive practices, low wage and benefits packages, and for putting mom-and-pop stores out of business. Some localities have successfully kept the company from building stores in their communities and, earlier this month, Maryland passed a law forcing Wal-Mart to devote 8 percent of payroll spending to employee health benefits.
Despite all this, the store received 25,000 applications for 325 openings for a new Chicago area store. Critics charge that this will encourage a race to the bottom, as the store fills many of these vacancies with part-time employees and offers lower wages and benefits than the competitors that will inevitably fold against Wal-Mart’s enormous buying power.
Meanwhile, Chad Donath, the corporation’s Chicago area manager argues, “That incredible number of applications shows the community thinks Wal-Mart is a great place to work.”
Well, not exactly. What it shows, though, is that 25,000 people would prefer to work in those jobs than the jobs they have — or don’t have — at the moment.
That’s the fundamental fact of economics that the critics seem not to get. Sure, for those with college educations or substantial technical skills in high demand in the marketplace, work as a stocker or cashier in the retail industry would be undesirable. It’s hard, stressful work. But there would appear to be 25,000 people out there who consider those jobs a step up from where they are now.
Arguably, Wal-Mart is actually overpaying for these jobs — likely because of minimum wage laws and other governmental regulations. If 79 qualified people are applying for every job, then the conditions of work are surely more desirable than they need to be. One imagines that Wal-Mart could, if it had the flexibility, cut the salaries and/or benefits offered and still attract, say, two applicants per opening.
This isn’t just an educated professional talking about situations that “those people” find themselves in. I have a doctorate in political science and have found myself in precisely the same situation as those Wal-Mart applicants when on the academic job market. Indeed, there were often many more than 79 highly qualified applicants — Ph.D.s with publications and teaching experience — for each college teaching position that I applied for.
Because the academic market is so tight, universities have adopted virtually the same attitude toward aspiring professors as Wal-Mart does to prospective stockers. They demand heavy teaching loads, substantial committee work, a rigorous pace of professional publication — and offer rather paltry salaries. And that’s for people who have, on average, twenty-two or more years of schooling.
Not only is there intense competition for jobs — a nationwide search and the willingness to move, usually at one’s own expense, to whatever school will hire you is a must — but schools increasingly hire part-timers (called “adjuncts” in the business) who work for peanuts and no benefits rather than full-time professors.
Now, obviously, those who succeed at getting tenure-track teaching jobs make more money and have better benefits than those who land jobs as retail store cashiers. But, then, the latter don’t give up a decade of earnings while pursuing degrees in higher education.
Still, some of the same conditions apply. TCS Contributing Editor Arnold Kling points out the irony that self-professed advocates of the poor are standing in the way of their progress:
“In the liberal morality tale, Wal-Mart is a villain, and its workers are victims. However, Wal-Mart workers themselves feel lucky to be able to work there. What low-skilled workers need are more Wal-Marts. More Wal-Marts would increase employment for low-skilled workers, and ultimately this could drive up wages for such workers.”
Further, as economist Thomas Sowell explains, people who take low paying jobs gain valuable skills that they can translate into higher paying jobs. “Notions of menial jobs and dead-end jobs may be just shallow misconceptions among the intelligentsia but they are a deadly counterproductive message to the poor. Refusing to get on the bottom rung of the ladder usually means losing your chance to move up the ladder.”
While liberal activists and the Maryland legislature seem not to understand this, the good news is that most people do. Among them are 25,000 folks in Evergreen Park, Illinois.