Wednesday, 12 February 2014

Mike Rowe Touches the "Third Rail" of Retailing: Walmart

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Mike Rowe, the popular host of Dirty Jobs on the Discovery Channel and frequent voice behind ads for Ford, Caterpillar, Motorola, and Lee’s Jeans, learned how thin his popularity is among some of his fans when he touched the "third rail" of retailing: Walmart.

In his voiceover of Walmart’s ad appearing during the Olympics, Rowe announces the retail giant’s plans to buy $250 billion worth of American merchandise over the next 10 years to put up for sale in its stores. What could be wrong with that?

Last Sunday Rowe spent most of his day responding to those who found lots of things wrong with that:

Kevin: Walmart is the last [company] I would ever think you would do anything for! Why?

Rowe: That’s easy. Walmart has committed to purchase 250 billion dollars of American made products over the next decade. In essence, that’s a purchase order made out to the USA for a quarter of a trillion dollars. That means dozens of American factories are going to reopen all over the country. Millions of dollars will pour straight into local economies, and hundreds of thousands of new manufacturing positions will need to be filled.... Isn’t this the kind of initiative we can all get behind?

Walmart, the largest retailer on the planet, with more than two million employees working in over 11,000 stores generating gross revenues approaching half a trillion dollars annually, got there by finding out what customers wanted to buy and then offering it to them at competitive prices. There is only one possible way Walmart can make such a promise: that American manufacturers will offer the best deals to Walmart’s customers. Rowe spent his Sunday afternoon articulating that simple fact to his naysayers:

Romeapple: It’s hypocrisy. Walmart’s products are all made in China. Walmart contributes to those empty [American] factories. What’s so “powerful” about an ad that makes absolutely no sense?

Rowe: That’s not entirely accurate, Romeapple. There’s a lot of merchandise currently in Walmart that’s manufactured right here in the USA.... But let’s assume ... that Walmart did get every single item from China. Wouldn’t you like to see that change? Watch the ad again. Walmart is promising to buy 250 billion dollars of American made stuff and put it on their shelves. Whatever else you might think of the company, can you really root against an initiative like that?

Let me ask it another way. Do you really think America has any hope of reinvigorating our manufacturing base without support from the biggest retailer in the world?

Rowe is behind the curve here, but makes the valid point that Walmart swings a large hammer. According to a report from the Institute for Supply Management released in January, American factory purchasing managers said new orders for goods were the highest since April 2010. Walmart is likely turning a simple fact of life — jobs are coming back to America — into a press release.

But some of Rowe’s former fans aren’t buying it:

Pat: I am uneasy about trusting Walmart to do the right things to better serve this country and its people.

Rowe: They have to make good on it, because if they’re blowing smoke, their detractors will eat them alive. I believe this thing is going to happen.... Walmart is going to buy a quarter trillion dollars of American made goods in the next ten years and put those goods on their shelves. The only question is whether or not Americans will support that effort.

If they do, we just might be looking at a stimulus that actually stimulates something.

Rowe’s contrast of Walmart’s action with the federal government's talk is spot on. The government doesn’t have one single dime to spend on "stimulus" that it hasn’t forcibly taken from someone else. Walmart doesn’t have a dime that it didn’t earn by offering a customer, via the free market in an unforced transaction, a better deal.

But Walmart is greedy, rapacious, self-serving, evil, etc., etc. Rowe’s response to that canard could have come right out of Henry Hazlitt’s Economics in One Lesson:

Rose: I want "made in America" too but make you’re sure on the side of the WORKER not the corporate greed side ok Mike? Love ya.

Rowe: Love ya back, Rose, but no thanks. You offer up a false and dangerous choice. The world is bigger than “Workers vs. Bosses,” and so is this campaign. Remember, Walmart thrives because a majority of Americans like to shop there. Like Apple, Discovery, Ford, and Facebook, Walmart does not exist for the purpose of employing people. No successful company does. Walmart’s first order of business is to serve their customer. Ultimately, the customer calls the shots. Not management. Not labor. Jobs are just a happy consequence of that success.

Former fan Sean accused Rowe of selling out to the evil empire:

Sean: I thought you were good person. But I just saw your AD that WAL-MART paid for. You’re a corporate suck, Rowe.

Rowe: Well hi there, Sean. From “good person” to corporate suck in 60 seconds! That’s gotta be a record! Let me explain something. Better sit down, as the truth may shock you. Ready? I make my living on commercial television. Not television. COMMERCIAL television.

That means I appear in television shows with commercials, paid for by corporations. I also produce television shows with commercials, paid for by corporations. I sometimes narrate television shows with commercials, paid for by corporations. And occasionally, I appear in the television commercials themselves, also paid for by corporations.

No matter what your job is Sean, if you work in commercial television, the money all flows from the same place. And no — it’s not the advertisers or the corporations that pay the bills. It’s you, Sean. The viewer. Just like the customer in a Walmart, the viewer on the sofa programs the airwaves by deciding what to watch and what to buy. In other words, you’re the boss.

Then Rowe stepped out of his role as kindly father explaining how the world works to his young naïve son, and scolded Sean (with tongue in cheek) for being part of the problem with Walmart and with any company successfully providing goods and services to its customers:

Rowe: Don’t get me wrong — I would never imply that your decision to watch a Corporate Spectacle like the International Olympic Games on a Global Network owned by one of the largest Conglomerates on Planet Earth makes you a “corporate suck.”

But I might wonder — given the purity of your own position — why you ever liked me in the first place?

Rowe then touches a sensitive issue: Part of the reason the employment rate is so low is not because employers aren’t hiring. They’re trying to hire but they can’t find qualified people who are willing to work. Here’s Rowe on that:

I know that the labor participation rate is at historic lows. I know that millions are out of work. But I also know that I’ve seen Help Wanted signs in all 50 states. Even at the height of the recession, the employers I met on Dirty Jobs were all hiring. They still are. And they all told me the same thing — the biggest challenge of running a business was finding people who were willing to learn a new skill and work hard.

As his Sunday wore on, Rowe became less forgiving in his responses, especially to those who weren’t buying his argument. He heard back from Sean:

Sean: [You] should have never done this ad due to the fact it came from Walmart. I like the message, but Walmart is one of the reasons a lot of manufacturing was lost in the United States....

Rowe: Step back for a minute. Look at what’s happening here. Walmart has just promised to do something you claim to want them to do. How do you react? Do you encourage them? Do you support them?

No. You hold fast to the party line. You lash out. Our country is falling apart around us, and you criticize me. For what? For doing a voiceover on a commercial that celebrates the dignity of hard work? I realize you’d prefer it if Costco was pushing this campaign forward, but guess what — they’re not.

Rowe is assuming here that Sean knows that Costco has supported Democrats more than 96 percent of the time, while the hated Walmart has supported Republicans 67 percent of the time. But Rowe wasn’t finished with Sean:

Rowe: Seriously Sean, do you and all the other detractors really want to see this campaign fail because it’s coming from a retailer whose policies you don’t approve of? Do us all a favor — try to get over it. Try to get over your disappointment with me. Try to get over your disappointment with Walmart. Try to get past your issues with the messenger, and take another look at the message:

A quarter trillion dollar commitment to American made products. 250,000 new jobs.

Really — what’s not to like?

Thanks for the lesson in how the real world works, Mike Rowe. Thanks for touching the third rail and creating the opportunity to promote the message of the free market that the mainstream media loves to ignore and that so many get wrong.

Photo of Walmart sign: AP Images

 

A graduate of Cornell University and a former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently at www.LightFromTheRight.com, primarily on economics and politics. He can be reached at

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