[Marxism] WSJ: Hispanics' Hard Times Hit Wal-Mart

Walter Lippmann walterlx at earthlink.net
Wed Aug 29 11:51:25 MDT 2007

The U.S. political establishment, aka the ruling class, has mixed 
feelings and sends mixed messages about immigration. Big business
makes lots of money from immigrant workers which are now becoming
incorporated culturally into the life of the United States, as is 
obvious from the success of Ugly Betty, whose dad is an undocumented
immigrant with the problems which are attendant to his situation.

The rulers of the U.S. are caught between a rock and a hard place
on immigration today. That's one of the reasons why Elvira Arellano
has struck a chord with so many people. She speaks for them out of
an experience shared by many millions of other immigrant workers.

Ricardo Alarcon explained the links between the struggles of the
immigrant workers and those of the U.S. workers exceptionally well 
last year in his essay on Karl Marx and the work of the 21st Century.

Immigrants play a growing role in the organized labor movement now.
Today, the immigrants are the heart and soul of the labor movement:

Cuba looks at Elvira Arellano's struggle:

Walter Lippmann
Los Angeles, California

August 29, 2007
Hispanics' Hard Times Hit Wal-Mart
Results of U.S. Housing Slump Are Felt
On Both Sides of Border With Mexico
August 29, 2007; Page A8

DALLAS -- Martín Zamorano, a cement worker and Wal-Mart shopper,
frequently used money transfers to send $50 to $100 at a time to his
82-year-old mother in the tiny town of Chinanpas in central Mexico.

• Ripple Effect: Wal-Mart's Mexico arm has seen slower sales growth
as customers spend less.
• On the Wire: Growth in remittances, an important source of income
in Mexico, has slowed as U.S. demand and U.S. housing have softened.
• New Challenge: Wal-Mart, with overall slower sales growth, could
see additional pressure in both nations.

Now, with local home construction down precipitously from a year ago,
he can no longer afford to send even a modest amount. Instead, Mr.
Zamorano has been sending cans of peas and corn, packaged soups, and
other foods to his mother through a relative who visits Chinanpas

"Work has dried up," said Mr. Zamorano, 44 years old, as he perused
the grocery section of a Wal-Mart near the heavily Hispanic Oak Cliff
section of Dallas. "It's been very rainy, and there haven't been a
lot of projects."

Mr. Zamorano's plight presents a challenge to Wal-Mart Stores Inc. on
both sides of the U.S.-Mexican border. The world's biggest retailer
by sales has increasingly relied on purchases by Hispanic shoppers
both in the U.S. and in Mexico to fuel its sales growth. In
particular, Wal-Mart has sought to draw Mexican and Mexican-American
customers in the U.S. who send money to relatives in Mexico using the
retailer's growing wire-transfer business. The relatives then have
the opportunity to stock up while at their local Wal-Mart-operated

But economic jitters -- in particular, the softening U.S. housing
market -- have led to spending cutbacks among many in that group.
Estimating the impact on a group as large and varied as Hispanics is
difficult. But economists at Deutsche Bank estimate about 500,000
illegal Hispanic workers in construction have lost their jobs last
year without showing up in government figures. The industry is
heavily Hispanic, legal or illegal: The group makes up 25%, or 2.9
million, of the 11.8 million workers in the U.S. construction
industry, according to the Pew Hispanic Center, with about
three-quarters of them foreign-born.

"There's less work," says Jesús Manuel Vázquez, a sheetrock installer
in Dallas who sends money to his mother-in-law in the state of
Chihuahua in northern Mexico every 15 days but recently has cut back.

Economists cite the housing market, among other factors, for a drop
in those money transfers. The Mexican central bank estimates that
money transfers into the country have risen 0.6% so far this year,
compared with a robust 15% increase last year and 21% the year prior.
Money transfers from the U.S. are estimated by economic-analysis firm
Global Insight Inc. to account for 5% of Mexico's consumer spending.

The company cited the slowdown in remittances when its Wal-Mart de
Mexico SAB unit, often a generator of double-digit percentage gains
in sales, posted a more sedate gain of 8.6% in its second quarter
ended June 30. The Mexican unit, known as WalMex, noted that it is
attracting more shopping visits than a year earlier at its 930
stores, but shoppers are spending less each time and buying
necessities rather than discretionary items.

"The Mexican economy is experiencing slowing growth and softening
consumer demand," Wal-Mart Treasurer Charles Holley said on a
recorded message detailing the retailer's global results for its
second quarter ended July 31.

Wal-Mart -- which operates under the Bodega Aurrera and Suburbia
names, among others, in addition to its flagship Wal-Mart brand --
has become the largest retailer by sales by offering a low-cost
alternative to relatively inefficient Mexican retailers. WalMex
racked up $18.3 billion in sales last year, accounting for nearly a
quarter of the retailer's international sales and ranking it as
Wal-Mart's second-largest international division behind its Asda unit
in the United Kingdom.

The retailer has responded to the slowdown by cutting its spending on
advertising and marketing, eliminating jobs at its headquarters and
slashing prices on a new round of products on Aug. 16.

The money-transfer slowdown is but one of several factors hampering
the Mexican economy. Most importantly, U.S. demand for goods
manufactured in Mexico -- cars, auto parts and consumer electronics,
among others -- has eased. "Definitely, the slowdown in the U.S.
economy in the first quarter triggered a slowdown in Mexican growth,"
said Rafael Amiel, a managing director in Philadelphia for Global

In the U.S., the hit to many Hispanic shoppers adds to a host of
other factors, like higher gasoline prices and Wal-Mart's own failed
foray into trendy apparel and home decor, that have limited
Wal-Mart's sales at established U.S. stores to a paltry 1.9% gain in
its fiscal second quarter. (Related article on page B9.) In its home
market, Wal-Mart has wooed Mexican immigrants and Mexican-Americans
with a combination of low prices on clothes and groceries and a
growing array of services such as low-cost money transfers, check
cashing and prepaid Visa cards aimed at people without bank accounts.

An estimated 9% of Wal-Mart's U.S. shoppers were Hispanic in 2005, up
from 6% in 1997, according to ACNielsen. The company declined to
comment on the potential impact on its results.

Other retailers catering to Hispanic shoppers report lulls. Adir
International LLC's La Curacao, a closely held chain of eight
Hispanic department stores in the Los Angeles area, reports that its
sales gains have fallen two to three percentage points from their
year-earlier levels. Similarly, the chain's sales of money transfers
have slowed. "We're still posting good numbers vis-a-vis last year,
but we are starting to see the beginning of a slowdown in consumer
confidence," said Mauricio Fux, senior vice president of business

Minyard Food Stores Inc., a closely held operator of 26 Carnival
Hispanic grocery stores in the Dallas-Fort Worth area, registered a
slight pullback in sales gains earlier this year. Chief Executive
Officer Mike Byers attributes the slackening to an unusually wet
spring in Texas that cut into construction hours and limited the pay
received by many Carnival shoppers.

Osiris Rubio, a 21-year-old construction worker in Dallas, has
reduced to $1,000 from $1,500 the amount he and his brother send to
family in Paracho in central Mexico every 15 days. The market for
construction work in the area "is very slow," Mr. Rubio said,
standing next to his nearly empty shopping cart in a Dallas Wal-Mart.
"I still work five days a week, but there's no overtime. So I get
less money."

Mr. Rubio's relatives in Mexico have pared their spending and dipped
into their savings to make ends meet. His mother uses the money he
sends home to buy groceries and pay school tuition for his two
brothers still in Mexico. "We don't spend on any luxuries," he said.

More information about the Marxism mailing list