Tag Archives: middle class

Scenes from a Walmart

 

walmartAbout two years ago, the majority of the old Brookdale Mall were demolished. Brookdale was opened in 1962 and by the time it closed in 2010, it’s best days were behind it. In its place came a WalMart Supercenter.

I will admit WalMart isn’t my favorite place to go. But since there’s one close to me, I do go there every so often to find something that might be at a lower price than say at Target.

WalMart seems to be the villian du jour for people. Especially in the churches that I am a part of, it seems to be the norm for people to denounce the Arkansas-based retailer for a multitude of social sins. There was a time when I would agree with those pastors and other folks. But reality has a way of confusing things.

Whenever I walk through a WalMart, at least here in Minnesota, I am astounded at how diverse it is. I can see the Hispanic family looking for clothes for their kids, the Somali mother shopping for the week, the Hmong man getting paint and the African American man ringing up his purchases at one of the self-checkouts. I see people from different economic classes all coming to this one place to do shopping.

Maybe WalMart is more than it’s alleged sins.

WalMart has started a new ad campaign that is aimed at showing what they call “the Real WalMart.” The commercial, which is below has actual customers talking about the chain.

I am reminded of a blog post I wrote back in 2006 about WalMart:

I’m a centrist Republican, they are dyed-in-the-wool New Deal Democrats. I drive a late model Volkswagen made in Mexico, they are retired autoworkers who are proud United Auto Workers members. Where these contrasts get a bit strange is where we shop for discount goods: I tend tend to shop at Target; they shop at Walmart.

Walmart. This behemouth of a retailer is considered basically evil by many people. I’ve decided not to shop there because of some of their labor practices. My parents are quite aware of this, and yet shop there anyway. In fact, when the visited me here in Minnesota recently from my native Michigan, they got gas at the local Sam’s Club because they are members and it’s cheaper than regular gas.

I don’t understand why my parents shop at a place that seems antithetical to their beliefs, but they do and maybe I don’t have to understand.

What’s interesting to me is that many of the people who object to Walmart tend to be more middle-class. People like myself like to go to Target which tends to market itself as an upscale discounter. Walmart appeals to the working class folk like my parents who don’t care about design, they just want something at a good price.

All of this has led to me to wonder if a lot of the protest against Walmart has more to do with class than it has to do with things like health care or wages. I mean, Target probably pays the same wages that Walmart does in markets where they both compete. Walmart is even getting into the organics business,joining the trend among retailers to offer healthier and sustainable foodstuffs…

The fact is, a lot of my friends who dis Walmart are people like myself: we shop at more upscale places like Ikea and Trader Joe’s. These places are precieved as being more upper middle class; Walmart is more working class; and despite all the talk of caring for the less off, I would bet that a lot of those who profess Walmart as Satan and shop at these more upscale places wouldn’t want to be caught dead with those from lower socio-economic backgrounds.

Seven years later and I still have the same viewpoint.

Listen,  I don’t think WalMart is a saint that should be uncritically praised.  But I wonder what would happen if WalMart never existed.  How would some of the immigrants and low-income folks who shop at WalMart be able to find foodstuffs at a low price?

I still think those who hate on WalMart might want to go just once and observe the folk who shop there.  These folk at the hoi palloi they profess to care for.  Like I said, WalMart isn’t innocent, but I tend to think that the case against the retailer is far more complicated than some would like to believe.

How’s the Middle Class Doing?

Professor James Hanley has a great post from a few weeks back comparing the middle class circa 1950s vs. the middle class of today.  It has touched off a quite a debate at the League of Ordinary Gentlemen after Jason Kusnicki picked up on it a few days ago. Here’s part of what Hanley said in that January 5 post:

it seems to me that part of the problem is that as the country becomes wealthier, it doesn’t seem to become easier to live a middle class life. And it seems to me that this is because the material standard of living that defines the middle class today is higher than that which defined the middle class in past generations. For example, in the 1950s, a middle class lifestyle meant a window air conditioner and some fans to move the air around; today it means central air conditioning. Back then a single car family was middle class; today most middle class families are two car families. A single television set was sufficient to be middle class back then; today–even though televisions are much cheaper–most middle class families have multiple televisions, many pay extra for a television that’s much larger than what their (grand)parents had, and most pay extra–sometimes a lot extra–for cable or satellite (i.e., once upon a time three free channels was middle class; now 100 pay channels is middle class). They didn’t pay for microwaves and computers (and internet access) in the 1950s, while we do now. We also eat out a lot more today than they did back then. One of the biggest changes is the size of American homes. In the 1950s, the average home size was just under 1,000 square feet; today it’s over 2,300 square feet. As importantly, a house back then most often had a single bathroom; now homes regularly have 2 1/2 baths or more.

All this extra material wealth is a good sign, from a strictly economic point of view,* because this means our middle class can afford more than our grandparents’ middle class. Our middle class has a higher standard of living, is better off, than our grandparents middle class. But as commenter E.C. Gach’s question, “Will we (human race) ever have competed enough in the rat races to have a future where our children can have their needs met while only working part time at the “low end” job?”

Like I said, it’s created a lot of debate. As of today, there are 353 comments. This is what E.D. Kain, once a heterodox conservative and now newly-minted progressive, had this to say:

Jason,

I’m well aware that leisure items and material goods are in many ways more fun and more advanced than in the past. But this says absolutely nothing about retirement security or healthcare – two far, far more important issues. Furthermore, it doesn’t speak to the preferred changes libertarians and many conservatives would like to make which would, on sum, make retirement security even less reliable. And frankly, if left to just libertarian and conservative ideas on healthcare – without the pressure liberals place on the issue – I don’t think you’d ever see anything like healthcare security for the poor and working classes. Just look at the efforts to cut people off the Medicaid rolls across the country.

Furthermore, while this does a fine job at explaining how things have improved in society (and I don’t think most people are arguing that we should return to the 1950’s or the 1800’s – the idea of progress is well-rooted in the collective psyche) it says nothing at all about how things should have improved. Would we trade our high-tech middle-class existence for the low-tech middle-class existence of the 1950’s – maybe some die-hard nostalgiaits would, but most people would not, even if they believed that there was a crisis in the middle class. Asking to pick the present over the past and then using that as an example of how things must have improved is pretty paper-thin as far as arguments go. Nor does it say why things have gotten materially better. Perhaps some of these much-loathed government programs are to blame; and perhaps, too, the liberalization of markets and the lowering of tax rates have helped as well. Perhaps it is a very mixed bag with no simple explanation, just as the gains made across the board don’t tell the whole story either. But I suspect that the usefulness of libertarian economics has reached its peak. Civil liberty issues are the next frontier for libertarians who want to improve the lives of Americans – not attempts to privatize public libraries or fight for more tax cuts.

Anyways, this argument also says nothing about how things will be in the future if we maintain the current course. I don’t trust that the nation as a whole will be very good with its 401k investments, or that the investment bankers who just thrashed the economy will be very wise stewards of our money. Pointing out that the middle class can afford more leisure and better toys than it used to, and that we live in more material comfort, ignores the chaos in the system, the rapidly shifting industries, the rough and tumble ride that middle class workers face, and how very important things like health insurance are for people who have none, or who lose it when they lose their jobs.

The argument that is going on about the middle class could be summed up in another comment:

Being middle class isn’t just the ability to buy stuff… it’s security: knowing that if you get sick you’ll get health care, when you retire you will be comfortable; etc.

One of the main defenses of the globalization of labor is that this decreases the cost of consumer goods. Well, we have that now.
Maybe it’s time to focus on the other side of the equation… finding ways to drive up the costs of labor so that the middle class can have both cheap TVs and a decent retirement.

The debate boils down to what the middle class can do: are they able to buy certain consumer items or are they able to afford retirement and health care.

Since, I tend to lean to the right, I tend to resonate with Hanley’s argument.  But I don’t know if some the anxieties that the middle class feels is just due to higher living standards.

What do you all think?

Look Who’s Not Spending

Tyler Craft notes there is one group that doesn’t spend its tax cuts- the middle class:

Conventional wisdom (something I do generally adhere to) goes like this… if a person makes $20K a year and you give them $100, they will spend all $100 to fulfill basic needs. If you give the same $100 to a person making $80K per year, they will likely save some percent of it. The percent of income saved increases as income increases. This is a very logical argument that is generally accurate.

What happens when a twist is thrown into the premise of the argument? What if a third group is introduced in the middle? The third group, by the original logic, would simply save more than the $20K group but less than the $80K group. However, what if the original two groups have less leveraged balance sheets than this new group? This is the case with the current recession.

Middle class homeowners are leveraged to a breaking point. The rich continue to be rich, and the poor continue to fall just outside of the regular economy. As figures 8 and 9 in the aforementioned research show, stimulus dollars led to increased total spending at a rate of about $.77 per $1.00 by the high group in the study (incomes > about $75K) and at a rate of about $1.28 per $1.00 by the low group (incomes below $32K). The baseline group only increased spending by about 58%. Figure 9 goes on to illustrate the effect of mortgage responsibilities on stimulus spending (this continues in the narrative of figure 8).

Does this mean the middle class should not receive tax cuts because the rich and poor are more effective groups to target? Of course not. In addition to providing some stimulus (the middle class is still spending nearly $.60 per $1.00) from the middle class, tax breaks for this group allow them to deleverage their personal balance sheets so they will emerge from the recession in better financial health than when the recession began.