Ayn Rand Institute factotum tries to convince us Wal-Mart pays its employees enough

Right-wing factotum Doug Altner, an analyst with the Ayn Rand Institute, poses a provocative question in a Forbes article: If Wal-Mart is such a crappy place to work, why do 1.4 million Americans work there and many more want to?

It’s the type of question that extreme free-marketers love to ask, because it assumes that we really have a free market in which every market participant has equal rights and equal clout.

Altner forgets that the poor and the uneducated have very few options.  That 10,000 people apply for 300 openings when a new Wal-Mart opens says less about the attractiveness of the company and more about the lack of jobs, especially for young people who don’t have diplomas from one of the top 300 or so colleges. In many rural areas, Wal-Mart’s entrance into the marketplace destroyed many local and regional retailers who paid their employees more in wages and benefits. Wal-Mart does pay marginally more money than burger-flipping, but that does not mean that it pays a decent wage.

Altner gives three reasons why he thinks people clamor to work for Wal-Mart:

1.     The work is not physically straining.

What Altner writes is that “Many entry-level Walmart jobs consist of comparatively safe and non-strenuous work such as stocking shelves, working cash registers, and changing price labels.” Altner goes on to mention that these jobs pay more than other entry-level jobs that require few skills. What he doesn’t say is that other non-strenuous jobs pay much more money. I can’t remember the last time I worked up a sweat writing an article or meeting with a client. I do remember that an attorney and a company president with whom I recently met both looked absolutely exhausted—they had just come from a racquetball game at 10:00 a.m. on a week day! Sarcasm aside, the fact that work is not physically exhausting shouldn’t justify paying less than a living wage.

2.     Wal-Mart provides entry to myriad career opportunities.

Altner points out that Wal-Mart tends to promote from within and that three-quarters of its store managers started as hourly workers (Altner uses the Wal-Mart euphemism and calls them “associates.”). I’m not sure how Altner earned a PhD in industrial engineering, because he certainly forgot to do the math. Counting 1.3 million employees and about 5,000 Wal-Marts and Sam’s Clubs across the 50 states, a new hire at Wal-Mart has less than three-tenths of one percent chance of becoming a store manager.  But the 1.3 million number is the wrong one to use, since 70% of all Wal-Mart employees quit within a year, a stunning indicator of employee dissatisfaction which Altner neglects to mention.  If we consider the competition for 75% of store manager jobs to be everyone hired in a 12-month period, then the statistical probability of becoming a store manager is significantly less than two-tenths of a percent. But the real odds of getting a job are assuredly even less than this number, since the company does not turn over all store manager jobs within a year. Maybe the competition for store manager jobs includes everyone hired by Wal-Mart in a six-year period (less than 6/100ths of a percent) or even a 10 year period (less than 4/100ths of a percent).  I’m guessing that if you consider everyone who draws a salary playing for all the major and minor leagues of baseball, basketball, soccer, hockey, race car driving, golf, tennis and every other professional sport, the chance of becoming a professional athlete is probably as great as starting as a Wal-Mart entry level employee and becoming a store manager. In other words, the opportunity is there, but it’s far-off and very unlikely.

The article does not miss a beat in defending Wal-Mart. For example, the one example of a hourly worker who made it to the top is a woman named by Fortune Magazine as one of the 50 most powerful women of 2006. I’m sure that offers consolation and hope to the many Wal-Mart female employees who are suing the company for wage discrimination and a hostile work environment. He doesn’t say it, but Altner selects this woman as his example to fight the negative publicity Wal-Mart continues to get for its treatment of women.

3.     Others are waiting for the Wal-Mart jobs.

Altner declares that Wal-Mart can get away with paying low wages, so why should it pay higher wages. He complains that critics think Wal-Mart should pay more, “regardless of whether he has the skills or experience to justify such a wage, regardless of whether he is a model employee or a slouch, regardless of how many other individuals are willing and able to do his job for less, regardless of whether raising wages will be good for the company’s bottom line. In effect, their premise is that $12+ per hour wages shouldn’t have to be earned or justified; they should be dispensed like handouts.” He forgets that it is Wal-Mart that is getting a handout because so many of its employees rely on government assistance programs to supplement their low wages.

Altner is really making a case for no minimum wage and, in fact, no government regulation.  He can’t really believe that Wal-Mart offers a great deal if 70% of employees quit within a year, unless he postulates that all 70% are “slouches.” The fact that others are waiting in line to take the jobs is no excuse for paying less. Many attorneys are clamoring for high-priced jobs at corporate law firms. I get dozens of resumes a month from people clamoring for a job at a public relations agency. These are high-paying jobs that stay high-paying despite the fact that lots of people want them.

For decades, Wal-Mart has taken advantage of the economic climate. It thrives by exploiting the fact that the minimum wage has lost its buying power through inflation and is much lower than it should be; the fact that the current laws allow corporations to play games with part-time work to limit benefits; the fact that there are far fewer jobs than there are people seeking them.  In this sense, they are bottom feeders who take advantage of the poor and uneducated.

The heart of Ayn Rand’s philosophy is selfishness. In its discussion of Ayn Rand’s philosophy, the Ayn Rand Institute website writes, “Man—every man—is an end in himself, not the means to the ends of others. He must exist for his own sake, neither sacrificing himself to others nor sacrificing others to himself. The pursuit of his own rational self-interest and of his own happiness is the highest moral purpose of his life.”

I disagree entirely. All of our sustenance and pleasure—our necessities like food and shelter and our joys like music and sports—come through our interactions with society.  We owe society—for roads and bridges, our electrical grids, our safety, our markets, our cultural norms and standards, our base of knowledge and all our goods and services. No one can live outside society or without other people. As a society, we owe everyone, and in this I mean everyone in the world, food, shelter, education, health care and a chance to better themselves.

As individuals, we manifest what we owe society by following its rules and regulations. For the good of the whole, we impede people’s rights to adulterate food or use inaccurate weights and measures. And we also impede people’s right to take advantage of the downtrodden. That’s what the minimum wage is all about.

If Wal-Mart (and many other employers)  did not operate always and only on the principles of pure selfishness, there would be no need to unionize or to raise the minimum wage. But they don’t, so society and its members have every right to foster unionization and to set a minimum wage.

We are living in a particularly harsh time now, mainly because for too long we have let those like Doug Altner and other Randers set the tone of the political debate. We hear too much about the rights and prerogatives of corporations and rich folk and too little about the family of humans and how interconnected we all are.


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