The high price of cheap lube
Wednesday, October 22nd, 2008Paul at Stronger Unions has a good round-up post on this week’s news from Canada, that Wal-Mart have (again) closed a branch after it unionised. The company claimed that if they had to give the 5 staff working at a Quebec Tire and Lube store a pay raise, they’d need to increase prices by 30%, so it was cheaper to close the whole store. Poor things, those 5 raises could very nearly have been the straw that broke the back of their $378 billion turnover camel.
First things first – It’s simply not the case that Wal-Mart can’t afford to pay better, it’s that they’re *choosing* not to pay better. Wal-Mart work by squashing down earnings (though not those of the $31.6million salaried CEO H Lee Scott), and by using their immense purchasing power to bully suppliers on cost. All of this undercuts local competitors, who were doing fine paying the higher wages before Wal-Mart moved into their area. Tires were being changed and lube being whatever-it-is-you-do-with-lube’d (is it something like motor oil, or are American cars inherently kinkier than ours?) for slightly higher costs quite happily before Wal-Mart, and they hopefully may again now that Wal-Mart have pulled out. (more…)
