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t0dd Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 06:07 AM
Original message
The Walmartization of Retailing
Edited on Sat Jan-02-10 06:41 AM by t0dd


The story isn't part of the official Wal-Mart creation epic, but it tells us almost all we need to know about the company's approach to the interests of its employees and the laws of the nation. Around the time that the young Sam Walton opened his first stores, John Kennedy redeemed a presidential campaign promise by persuading Congress to extend the minimum wage to retail workers, who had until then not been covered by the law. Congress granted an exclusion, however, to small businesses with annual sales beneath $1 million -- a figure that in 1965 it lowered to $250,000.

Walton was furious. The mechanization of agriculture had finally reached the backwaters of the Ozark Plateau, where he was opening one store after another. The men and women who had formerly worked on small farms suddenly found themselves redundant, and he could scoop them up for a song, as little as 50 cents an hour. Now the goddamn federal government was telling him he had to pay his workers the $1.15 hourly minimum. Walton's response was to divide up his stores into individual companies whose revenues didn't exceed the $250,000 threshold. Eventually, though, a federal court ruled that this was simply a scheme to avoid paying the minimum wage, and he was ordered to pay his workers the accumulated sums he owed them, plus a double-time penalty thrown in for good measure.

Wal-Mart cut the checks, but Walton also summoned the employees at a major cluster of his stores to a meeting. "I'll fire anyone who cashes the check," he told them.

Besides its Dickensian shock value, this story -- told by Nelson Lichtenstein in his new book about Wal-Mart -- points to a phenomenon of wider significance. The company that was willing to break the law to avoid paying the minimum wage is now the largest private-sector employer in the nation and the world, with 1.4 million employees in the United States and 2 million overall, more than 6,000 stores, and revenues that exceed those of Target, Home Depot, Sears, Kmart, Safeway, and Kroger -- combined. By virtue of its size and its mastery of logistics, Wal-Mart is able to demand low prices from its thousands of suppliers and thus inflict low wages on their employees. Its low prices have also forced reductions in wages and benefits at the unionized supermarkets with which it threatens to compete.

As the unionized General Motors was big enough to set the pattern for the employment of nonprofessional Americans in the three decades following World War II, Wal-Mart is now so big it is setting the pattern today. Each created a distinct national buying public for its goods that was far larger than its immediate work force: in GM's case, workers who could afford to buy new cars; in Wal-Mart's, workers who could afford to shop nowhere except Wal-Mart. With Wal-Mart's rise, the same traditional values that underpinned Sam Walton's cheating and threatening of his workers -- contempt for Yankee laws and regulations, and a preference for the authoritarian, low-wage labor system of the South -- have become more the norm than the exception in America's economic life.

For the past year, Americans have focused, and understandably so, on the ways in which Wall Street has misshaped the American economy, how finance has grown large over the past 20 years as manufacturing has shrunk. But the rise of finance is just half the story; it takes the rise of retail to complete the tale. Both Wall Street and Wal-Mart played a central role in the deindustrialization of the United States: 40,000 U.S factories were closed between 2001, when China was admitted to the World Trade Organization, and 2007, during which years Wal-Mart's Chinese imports tripled in value from $9 billion to $27 billion.

The rise of Wal-Mart, and the national economy it has shaped in its image, is a story that Lichtenstein, a professor of history at the University of California, Santa Barbara, is eminently suited to tell. He's also the author of The Most Dangerous Man in Detroit , a biography of United Auto Workers President Walter Reuther that is one of the definitive accounts of the rise of the unionized, high-wage, mid-20th-century economy that Wal-Mart has done so much to destroy. The Retail Revolution now tells the story of how Walton, strongly abetted by Ronald Reagan, pulled down the world that Reuther, strongly abetted by Franklin Roosevelt, created. It is not the definitive scholarly history that Lichtenstein's Reuther biography is, but it is surely the best account we have of Wal-Mart's metamorphosis from a backwater chain to the nation's dominant corporation, and it contains more direct reporting than is normally found in the works of historians. The story of Walton's minimum-wage evasion came from Lichtenstein's interviews with former Wal-Mart executives.

...

With its stock price stagnant for nearly a decade due in part to its failure to expand to blue-state America, and with Democrats now in control in Washington, Wal-Mart is currently undergoing a great cosmetic makeover. It has announced it will develop a green profile for all the products it sells and has even proclaimed its support for an employer mandate in any emerging health-reform package. What it is not willing to relinquish is its die-hard opposition to unions and labor-law reform, its existential commitment to the Southern model of labor relations. Wal-Mart cannot thrive in a nation where prosperity is broadly shared, and it will do all it can to keep that from happening.

...

http://reclaimdemocracy.org/walmart/2009/creation_myth_...
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Sherman A1 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 06:20 AM
Response to Original message
1. Good piece. Thanks for posting this....
Much appreciated! Something that everyone should read.
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Pithlet Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 06:59 PM
Response to Reply #1
27. Interesting read. It pretty much shows the apples didn't fall far from the tree.
Wal Mart is the pits and has been from the beginning.
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blm Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-06-10 10:05 AM
Response to Reply #27
50. WalMart was Jackson Stephens and GHWBush's first big step to force global fascism on Americans too
dumbed down to realize what was happening. Some are STILL so dumbed down they STILL don't recognize they are supporting fascism because it's being sold to them as 'religion' and patriotism' for the last 3 decades.
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lazarus Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 06:40 AM
Response to Original message
2. they're opposed to health care reform
because they're starting to put in health clinics at their superstores.
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madrchsod Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 09:40 AM
Response to Original message
3. when walmart runs out of cheap goods.....
they`ll meet the same fate as this company. A&P once had the largest market share too.

http://en.wikipedia.org/wiki/The_Great_Atlantic_&_Pacif...
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proud2BlibKansan Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 09:50 AM
Response to Reply #3
8. I had no idea A&P was still in business
We haven't had any of their stores here in years.
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blue_onyx Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 12:24 PM
Response to Reply #8
15. According to wiki...
there's still 460 A&P stores. They closed their Farmer Jack stores in my area (Detroit) in 2007. That was the same summer we got our first Walmart Supercenter.
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TheFarseer Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 09:57 AM
Response to Reply #3
9. why would they run out of cheap goods? n/t
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tabbycat31 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-06-10 10:47 AM
Response to Reply #3
51. they're still around
the cleanest grocery stores near my hometown.
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Vinnie From Indy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 09:42 AM
Response to Original message
4. Great piece!
I have always been awestruck by the amount of people that regularly shop at Wal-mart and have nary a clue that, for most of them, they are committing slow motion suicide with each dollar they spend at that evil place. They seem incapable of drawing a line between the closing of a factory in their town to Wal-Mart being the reason it closed. Indiana has been devestated by factory closings and a good many of those closings are due primarily to Wal-Mart's business model and almost dictatorial control over it's suppliers.

In short, Wal-Mart IS a very evil company that preys on Americans.
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DollyM Donating Member (837 posts) Send PM | Profile | Ignore Sun Jan-03-10 12:03 AM
Response to Reply #4
34. wal marts are carrying less and less of needed supplies . . .
You can't buy a spool of thread anymore at wal mart (they did away with their fabric department)or a pair of little girls dress shoes. The plus side is, we have had two small fabric stores open up in the area since wm did away with their fabric department. Now if we could just have some small shoe stores open and the other things that wm is no longer carrying. The trend for wal mart is going smaller when they have been going bigger (Super Centers) for a decade or more. They finally figured out that they couldnt substain all the products they were carrying as consumers just waited for clearance sales. Unfortunately, WM is our only choice in a general merchandise store in our small area. We would love a Target or Kmart but they drove those out years ago. We also lost our Pennys store and Goodys store which had decent clothing. Wal Mart clothing sucks in both quality and style. We lost the last of our locally owned clothing stores in the area more than a year ago so if you want anything decent, you have to order it online or go way out of town to shop.
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bighart Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-04-10 09:47 AM
Response to Reply #34
45. Target and K Mart follow the same business model as Wal-Mart
so shopping at either of them is really no different.
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Danger Mouse Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 09:43 AM
Response to Original message
5. I refuse to shop there.
Ever.
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undeterred Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 10:01 AM
Response to Reply #5
10. Then be thankful you can afford to shop elsewhere.
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XanaDUer Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 10:15 AM
Response to Reply #10
12. Yes, exactly
I refuse to shop there, and I don't have to, thank God. At this point in my life, I can afford not to, and I am eternally grateful for that. In the future, I may have to shop there. I do not begrudge those who have to shop there, whether for the low prices, or that fact that the WM drove out all other establishments within 50 miles.

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undeterred Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 10:21 AM
Response to Reply #12
13. I've been unemployed for 7 months and I shop there.
I never used to and I hope I don't have to again. But the prices on a lot of things are much lower and I need every penny.
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XanaDUer Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 12:04 PM
Response to Reply #13
14. When I was out of work, and then had a no-benefits, PT job
I shopped there, too.

Hang in there.

:hug:
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jeff47 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 11:33 PM
Response to Reply #13
33. Make sure you really check those prices
The last 2 places I've lived, Wal-Mart was more expensive on most groceries than the local supermarkets.
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Sherman A1 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-03-10 02:28 AM
Response to Reply #33
37. Precisely
There often isn't a deal to be had at Wal mart, just the image that you are saving money.
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proudohioan Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-03-10 04:42 AM
Response to Reply #33
40. This is true.
As far as groceries are concerned, if you are lucky enough to have an Aldi in your area, I strongly urge you to try them out! Most, but not all of Aldi's private label stuff is just as good (in some cases better)than national brands. It's just a matter of trial and error and personal taste, really. You will also get in and out of Aldi's a hell of a lot quicker than you will a Wal-mart!

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Danger Mouse Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 05:26 PM
Response to Reply #10
21. I don't really have much money...
Edited on Sat Jan-02-10 05:29 PM by Danger Mouse
and to be honest, I'd rather go to a goodwill or salvation army if i needed clothes really cheap.
But I realize that Walmart has driven out a lot of local businesses, limiting peoples' options. They sell, food, too, don't they? I know target does.
They're rat bastards that way.
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undeterred Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 06:13 PM
Response to Reply #21
23. Well, you can't get everything you need
at thrift stores. The Walmart I go to is not a supermarket, although they have a couple aisles of frozen foods. And there are some rural area where there is nowhere else to work or shop.
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Pithlet Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 06:45 PM
Response to Reply #10
24. I don't believe I saw in the post you responded to
A condemnation of anyone who shops there.
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undeterred Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 06:48 PM
Response to Reply #24
25. No, I didn't see one either.
What's your point?
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Pithlet Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 06:50 PM
Response to Reply #25
26. It appeared that you did. I'm sorry if I misread you. n/t
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Luminous Animal Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-06-10 11:01 AM
Response to Reply #10
52. Thrift stores, freecycle, craigslist, re-use.
And yes, I realize that for some people, alternatives are limited.
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proud2BlibKansan Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 09:46 AM
Response to Original message
6. A good friend's mother was one of Sam's most trusted employees
He left her literally millions when he died. And he may have been a selfish and greedy man, but he is surely spinning in his grave over how his stores have changed since he died. They sucked when he was alive but they are far worse now.
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Union Yes Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 09:48 AM
Response to Original message
7. Be wise, Unionize! knr nt
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dana_b Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 12:59 PM
Response to Reply #7
18. +1
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XanaDUer Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 10:05 AM
Response to Original message
11. Gotta give him credit - he was smart
a slimy piece of shit, but a smart one.

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pundaint Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-03-10 04:20 AM
Response to Reply #11
39. Thats the trouble with slimy, it sometimes gets credit for smart. If one has too
much compassion for one's fellow man to abuse them for ones extra hundreds of millions, is he really less smart? Until we require more than money or fame in exchange for our respect, we will continue to have broken human beings leading us in the wrong direction.
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XanaDUer Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-03-10 08:09 AM
Response to Reply #39
41. This is why we need unions and regulations
some folks are too "smart" by half.
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madmom Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-04-10 09:05 AM
Response to Reply #41
43. Having a union is not the ONLY answer, it has to be a GOOD union, I
worked at meijer, kroger and at walmart. meijer and kroger was unionized walmart wasn't. I was paid better and was treated better at walmart. Sorry but that is the truth, meijer union was union in name only they took our money and run. I would not advise anyone to work there, oh and their management sucks too! kroger union was wimpy and didn't "want to make waves". I made almost twice as much per hour at walmart and did the same job. If I had to make a choice I would go back to walmart before the other two. Flame away is you must, but you will not change my mind, I've been there, done that.
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JCMach1 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 12:36 PM
Response to Original message
16. Come to Dubai and I will show the 'REAL' price of the Chinese goods Walmart is selling
You guessed it, Americans are getting screwed over on prices by Walmart.
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dajoki Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 12:47 PM
Response to Original message
17. K&R
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Vidar Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 02:01 PM
Response to Original message
19. K&R.
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IRemember Donating Member (118 posts) Send PM | Profile | Ignore Sat Jan-02-10 03:27 PM
Response to Original message
20. K&R
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Dont_Bogart_the_Pretzel Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 05:48 PM
Response to Original message
22. K&R
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Electric Monk Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 07:53 PM
Response to Original message
28. k&r
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Cowpunk Donating Member (572 posts) Send PM | Profile | Ignore Sat Jan-02-10 09:23 PM
Response to Original message
29. Is their new Golden Arsehole logo part of the makeover?
Seems fitting enough to me.
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HBravo Donating Member (239 posts) Send PM | Profile | Ignore Sat Jan-02-10 10:22 PM
Response to Original message
30. I have a love/hate relationship with Wallyworld
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PassingFair Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 10:28 PM
Response to Reply #30
31. Really? I have a Hate/Hate relationship with them.
In fact, I've stopped seeing them.
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nevergiveup Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-02-10 10:46 PM
Response to Original message
32. Not to mention the tens if not hundreds of thousands
of small Ma & Pa retailers who have vanished as a result of Walmart's conquering of America. As the son of a small hardware store family in rural America I witnessed on a first hand basis what Walmart did to small town America. This is not to say that small town America could have survived the modern retail revolution but Sam Walton certainly accelerated their demise.
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DollyM Donating Member (837 posts) Send PM | Profile | Ignore Sun Jan-03-10 12:06 AM
Response to Reply #32
35. some small retail stores are coming back due to changes at WM
After wm dropped their fabric department, we had two fabric stores open in the area. Their prices are higher than wal mart but I think we have seen the damage that all those "low prices" ultimately did to our economy.
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madmom Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-04-10 09:11 AM
Response to Reply #32
44. What about Lowe's and Home Depot? Did they not help in the demise of the hometown hardware store?
I don't think walmart is to blame on that one. :shrug:
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nevergiveup Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-04-10 09:26 PM
Response to Reply #44
46. There are still no Lowes or Home Depot stores
in the county I came from. Walmart came into our county 20 years ago. I am talking rural America.
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madmom Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-05-10 07:52 AM
Response to Reply #46
48. I also live in rural America, I see Lowe's and Home Depot everywhere I go. Just
because they are not in your immediate vicinity doesn't mean they are not the cause of the demise. People really need to wake up. It's fine to blame walmart for all the ills of this country, but then one day everyone will wake up and see that there are others just as big, just as nasty and we'll say oops, we didn't know. They ALL do it, walmart is just more visible because they got a head start.
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nevergiveup Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-06-10 09:05 AM
Response to Reply #48
49. I don't disagree with you premise
I was just stating my personal experience in the rural area where I was raised whereby Walmart was and remains the only culprit. All the big box stores are collectively responsible for the demise of Ma & Pa family run businesses but Walmart was the George Washington and Granddaddy of them all.
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burning rain Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-03-10 12:15 AM
Response to Original message
36. "A nation where prosperity is broadly shared"...
that is an America we have to build, not America as it is.

Fine stuff. k & r
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Joe the Liberal Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-03-10 03:06 AM
Response to Original message
38. Low prices until you get to the cash register and pay the high sales tax. n/t
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Commie Pinko Dirtbag Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-04-10 08:44 AM
Response to Original message
42. "I'll fire anyone who cashes the check." He actually GOT AWAY with that?
I got dizzy reading that.

Gotta buy that book.

Amazon link: http://www.amazon.com/Retail-Revolution-Wal-Mart-Create...
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BeatleBoot Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-04-10 09:35 PM
Response to Original message
47. Wal*Mart Thrives on the People's Demise

They are profiting off of the race to the bottom.


They will eventually eat themselves when no one is left to eat.









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