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The Wal-Mart Tip Jar

Posted By Russ Roberts On November 30, 2005 @ 2:27 pm In Social Responsibility,Wal-Mart | Comments Disabled

I’ve been writing recently (here [1] and here) [2] about how we don’t want Wal-Mart and Exxon and other corporations to share the burden during a catastrophe by holding prices below the market price or by paying employees more than the market wage.  As appealing as it is for businesses to act with kindness by altering prices and wages, it is actually destructive to ask buisinesses to be loving.  It is better for businesses to do what they do best (use information, creativity and capital to create wealth) and leave families and charities to do what they do best.  Asking businesses to be loving makes no more sense than charging my brother rent when he comes to visit for Thanksgiving.

But what can we do to help the underpaid Wal-Mart worker?  So many people are telling us how underpaid and overworked they are.  How strange that those who would help the Wal-Mart worker do so by NOT shopping there!  How strange it is that those who would help the Wal-Mart worker want fewer Wal-Marts built, reducing the demand for such workers temporarily or for even longer!  Is there a better way?

My idea is to create an organization that would go around the country putting special tip-jars by the cash registers at the check-out stations of every Wal-Mart.  In front of these jars would be a sign, saying something like this:

Hello!  We are the employees of Wal-Mart.  We earn less than the national average and only about half of us have health insurance.  Can you do your part to help us make ends meet?  Especially if you make more than we do, please consider a generous donation.  Thank you!  And thank you for shopping at Wal-Mart!

Would you give?  Many would, just as they give now to charities at the cash register that collect money for the poor and hungry.  Why not give something to the poor wretch standing right there before you, kindly ringing up your order?

Do you see the beauty of the tip jar?  Instead of asking the stockholders of Wal-Mart to give something back of those profits they could be sharing more lovingly, ask the customers!  After all, it is we the customers who foolishly think we’re getting a bargain and not realizing all the hardship such selfishness creates.  The tip jar allows the customers to give something back.  Surely, with such low prices, we can afford to give something back.

It’ll probably never happen.  But just thinking about the tip jar gets at the heart of the flaw behind all those who villify Wal-Mart for exploiting its workers.

The people who work at Wal-Mart show up for work of their own free will.

I know it’s hard to believe.   But Wal-Mart employees work there voluntarily.  About a million every day.  A million every day!  Incredible.  And when Wal-Mart opens a new store, people throng the doors for the opportunity to work there.

Why?  Why would people line up to be exploited?  Two answers come to mind.  The first is these pitiful fools don’t know any better.  They actually think it’s a good idea to work at a large, profitable corporation that exploits them paying them low wages with meager benefits.  The second possibility is that for most or all of the people who work at Wal-Mart, working there is actually a good deal.  Working there is as good or better than their next best alternative.  There may actually be a few who actually believe that it’s a good idea to work at a  profitable corporation because it raises the odds that your job will still be there tomorrow.

How would these workers feel about the tip jar?  Would they be grateful for the helping hand?  Or is it possible that they might find it a tad insulting, a tad condescending, a tad patronizing?  How many of those million Wal-Mart employees are actually proud to work there?

A reporter once told me how sorry she felt for Wal-Mart workers because they were treated like slaves.  Yes, I agreed, the hardest part of the job is lugging the ball and chain out to the car at the end of the day.

But it turns out that they actually choose to work there.  There is no ball and chain.  How can this be?

When Sam Walton was alive, whenever I shopped at Wal-Mart, I’d ask the cashier if she liked her job.  Invariably, she would say yes and I would marvel at Walton’s ability to create enthusiasm through such a large organization.

Now where I live, the Wal-Mart is far away.  (Thank you Montgomery County politicians for making it so hard for me [3] to exploit those poor workers at Super Wal-Mart!)  So I don’t get there often.  The next time you’re in a Wal-Mart, ask the cashier if she likes her job.  And whether she says yes or no, give her a ten or twenty-dollar bill as your way of giving something back, your way of saying you’re sorry for shopping where the prices are low as a result of her sweat and sweatshop wages, your way of brightening her day until the tip jar shows up.  How do you think she would respond?

For economics students:  If the tip jar actually did happen and people gave generously, would Wal-Mart employees be better off?

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[3] so hard for me: http://cafehayek.com/2004/11/smart_growth_as.html

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