The Unwinding: An Inner History of the New America (16 page)

The blight was spreading, gathering speed, and it followed Tammy after she moved.
What had crept through the east side over a decade or two took just a few years on
the south side. Tammy’s neighborhood got really bad—a gang called the Dale Boys, because
they lived on Avondale and Auburndale, took over. In 1997 she moved with the kids
to a house right next door to Brian’s mom, but she couldn’t sell the house they had
left—it turned out to have a lot of things wrong—and she ended up cutting a deal with
the bank, giving the house back in exchange for having the mortgage written off.

She considered getting out of Youngstown. Crime was terrible just about everywhere,
and there was no opportunity beyond the job she had. Most of the people who had something
going on were leaving or had left. The whole city was on a downward slide. But within
a couple of years she would have her ten years in at Packard, which meant full pay
and benefits, including her pension when she retired. She was thankful to have a good
job, and Youngstown was affordable. Over time, she started a side business on her
closed-in porch, helping people plan weddings, designing invitations and printing
them on her laser printer, then she got into Valentine’s Day baskets, graduation cards,
even funeral programs. She called her business “A Perfect Cup of T.” One night she
and her younger daughter sat in front of a movie and hand-tied 350 bows and glued
350 pearls onto the bows for bridal bookmarks. And she sold Avon at the factory—you
could make a lot of money in a plant full of women. She wasn’t going anywhere.

It was harder to get to Packard from the south side than the east, and Tammy was constantly
juggling babysitters and after-school programs and work schedules. She used her vacation
days to see her older daughter’s performances and her son’s football games. On weekends
she kept her kids entertained without spending much money, going for country drives
to pick strawberries and apples. She made them go to church on Sunday and Bible study
after school. If she couldn’t get to the parent-teacher conference, she talked to
the teacher in the morning before class, and once cell phones came along, the teachers
always had her number so they could reach her at the factory. She didn’t work overtime
until the kids were older. They would congregate with their friends at her house because
she wanted to know who their friends were and what they were doing. The girls were
not allowed to wear makeup until they were sixteen, and when her son was thirteen
and came back from a visit to his father’s with his ear pierced, Tammy made him take
it out because she had told him no piercing until high school, and by then he no longer
wanted it. Even as high school seniors they were never out later than midnight, or
1:00 a.m. on special occasions. She didn’t abuse them, she bent sometimes, but they
needed discipline and Tammy didn’t play. It was crazy out there. And her daughters
did not get pregnant, her son stayed out of the gangs, they all graduated from high
school and went on to college. God blessed her with three good kids.

Once, someone she knew expressed amazement that she raised three children in Youngstown
and they were all doing okay. Tammy got what the person was saying, but she had only
done what she was supposed to do. “I had no choice, because my kids were going to
have it better than I did. They were going to have it better than my brothers. I did
what I needed to do, and that is what my great-grandmother did.”

MR. SAM: SAM WALTON

Sam was born in 1918 in Kingfisher, Oklahoma, right in the middle of the country.
He grew up in a pretty hardscrabble time. After the Depression hit, his father, Thomas
Walton, got a job repossessing farms around Missouri on behalf of Metropolitan Life
Insurance Co. Sam sometimes traveled with his dad and saw how he tried to leave a
little dignity to the farmers who had defaulted on their loans and were about to lose
their land. No question, that was where Sam got his cautious attitude toward money.
He was just plain cheap. It was the way he was brought up. Even after he became the
richest man in America—and he hated it when
Forbes
put that spotlight on him in 1985, the attention caused his family a lot of extra
trouble—he’d still stop to pick up a nickel off the ground. He never liked showy lifestyles.
Honesty, neighborliness, hard work, and thrift—those were the bedrock values. Everyone
put on their trousers one leg at a time.

“Money never has meant that much to me,” he wrote near the end of his life. “If we
had enough groceries, and a nice place to live, plenty of room to keep and feed my
bird dogs, a place to hunt, a place to play tennis, and the means to get the kids
good educations—that’s rich. No question about it.”

His father was never much of a success, but his mother had ambitions for their two
boys, and the couple quarreled all the time. Maybe that was why Sam always needed
to stay busy. He was a joiner and a competitor—Eagle Scout, quarterback and student
body president at Hickman High in Columbia, Beta Theta Pi at the University of Missouri.
He learned to speak to people coming down the sidewalk before they spoke to him. He
was small and wiry with a face like a good-natured bird of prey, and he always wanted
to win.

Sam found out pretty young that he could sell things. He worked his way through high
school and college delivering newspapers, and he won a contest selling subscriptions
door-to-door. After college he went to work at a J. C. Penney store in Des Moines
for seventy-five dollars a week. That was his first job in retail, and it lasted long
enough for Sam to learn that if employees were called “associates,” they gained a
sense of pride in the company. Then came the war. He spent three years in the army,
stateside because of a heart irregularity. When he got out, he was determined to get
back into retail, this time for himself.

Sam wanted to buy a Federated department store franchise in St. Louis, but his new
wife, a wealthy Oklahoma lawyer’s daughter named Helen, refused to live in a town
with more than ten thousand people. So they ended up in Newport, Arkansas, population
five thousand, where Sam bought a Ben Franklin variety store with help from his father-in-law.
There was another store right across the street, and he would wander over and spend
hours studying how the competition did things. That turned into a lifelong habit.
It was in Newport that Sam got to thinking in ways that became the foundation of his
success.

He was buying ladies’ satin panties from the Ben Franklin supplier at $2.50 for a
dozen, and selling them at three pairs for a dollar. But when he found a manufacturer’s
agent in New York who would sell him a dozen for two dollars, he put them out at four
pairs for a dollar and had a great promotion. His profit per panty dropped by a third,
but he sold three times as many. Buy low, sell cheap, high volume, fast turn. That
became Sam’s whole philosophy, and in five years he tripled his sales, making his
the number one Ben Franklin in the six-state region.

People were cheap. They’d never pass up a rock-bottom price. It was true in the little
all-white towns around Arkansas and Oklahoma and Missouri after the war. It was true
everywhere all the time.

It was true in Bentonville, Arkansas, where Sam and Helen moved with their four kids
in 1950 after a clever landlord took away the store in Newport. Sam opened Walton’s
5&10 on the main square in Bentonville, population three thousand, and it did so well
that over the next decade he and his brother Bud opened another fifteen stores. They
were in the tiny backwaters that Kmart and Sears didn’t bother with—Siloam Springs,
Arkansas, and Coffeyville, Kansas, and St. Robert, Missouri. People were cheap, but
there was higher volume in those places than the smart money in Chicago and New York
knew. Sam spotted the locations in his two-seater Air Coupe, flying low over a town,
scouting the roads and building patterns, then finding the right piece of empty land.

In the grip of his retail fever dream, he left his family on vacations to go check
out stores in the area where they were staying. He scoured the competition and hired
away their best men with offers of an investment stake in his franchises. He thought
up stunts to bring in business and mislead his competitors into thinking he was a
cornball. He squeezed every penny out of his suppliers. He never stopped working.
He had to keep growing and growing. Nothing could get in his way.

On July 2, 1962, Sam opened his first independent discount store, in Rogers, Arkansas.
Huge discounters, selling everything from name brand clothes to auto parts, were the
wave of the future. He would ride it or be swept away. He was so cheap that he kept
the sign to as few letters as possible: the new store was called “Wal-Mart.” It promised
“everyday low prices.”

By 1969 he had 32 stores in four states. The next year, Sam took the company public.
The Walton family owned 69 percent of the shares, and Sam was worth around $15 million.
Entrepreneurship, free enterprise, risk—the only ways to improve other people’s quality
of life.

Throughout the 1970s, Wal-Mart doubled its sales every two years. By 1973 there were
55 stores in five states. By 1976 there were 125 stores, with sales of $340 million.
Wal-Mart was spreading outward through the forgotten towns of middle America in a
great circle whose center was Bentonville, laying waste to local hardware stores and
pharmacies, saturating the regions it conquered so that no one else could compete,
each new Wal-Mart built cookie-cutter fashion within a day’s drive of company headquarters,
where the distribution center was located. The stores were as big as airplane hangars,
no windows, with giant parking lots paved over fields and trees, situated away from
the center of town to attract sprawl. Sophisticated computers kept minute-by-minute
track of every item of stock that was ordered, shipped, and sold.

By 1980 there were 276 stores, and sales passed $1 billion. Throughout the eighties
Wal-Mart grew explosively, to all corners of the country and then overseas. Sam even
built stores in big cities like Dallas and Houston, where there was more stealing
and it was harder to come up with people of the right moral character who were willing
to work there. Hillary Clinton became the first woman to join Wal-Mart’s board. Her
husband—the governor—and other politicians came to Bentonville to pay homage. In the
middle of the decade, Sam officially became the richest man in America, worth $2.8
billion. He was as cheap as ever—he still got a five-dollar haircut in downtown Bentonville
and didn’t leave a tip. He and his company gave almost nothing to charity. But every
year each Wal-Mart store would hand out a thousand-dollar college scholarship to a
local high school senior, and somehow that bought better publicity than generous corporate
philanthropy.

Sam still flew around in a twin-engine plane and visited hundreds of stores a year.
He would lead the crowd of assembled associates in a boisterous chant (the idea had
come to him on a trip to South Korea in the seventies):

“Give me a W!”

“W!”

“Give me an A!”

“Give me an L!”

“Give me a squiggly!” (Everyone including Sam performed a little twist.)

“Give me an M!”

“Give me an A!”

“Give me an R!”

“Give me a T!”

“What’s that spell?”

“WAL-MART!”

“Who’s number one?”

“The customer!”

Sam always showed up with his first name on a plastic tag, just like all his store
clerks. He made a point of collecting suggestions, listening to complaints, and promising
to act on them, and hourly workers felt more attended to by this friendly man than
they ever did by their managers. The associates were given moral instruction and needed
permission from the district manager to date one another. They would hold up their
hands and repeat a pledge: “From this day forward, I solemnly promise and declare
that every customer that comes within ten feet of me, I will smile, look them in the
eye, and greet them, so help me Sam.”

The boss became Mr. Sam, the object of a folksy personality cult. Annual meetings
drew thousands of people to Arkansas and were staged as pep rallies, lit with evangelical
fervor. From his spartan office in Bentonville, the chairman wrote a monthly letter
that went out to his tens of thousands of employees, thanking and exhorting them.
After he was diagnosed with leukemia in 1982, he assured them, “I’ll be coming around—maybe
more infrequently—but I’ll be trying and wanting to see you. You know how much I love
to visit with you all on how you’re doing.”

When a town in Louisiana tried to keep Wal-Mart out, fearing that it would leave the
main street deserted, the story stayed local. When reports surfaced that Wal-Mart
workers were so badly paid, in part-time jobs without benefits, that they often depended
on public assistance, Mr. Sam would talk about the hourly associate who retired with
two hundred thousand dollars in her stock ownership plan, and he would claim that
he was raising standards of living by lowering the cost of living. When clerks and
truck drivers tried to join unions and Wal-Mart ruthlessly crushed them, firing anyone
foolish enough to speak out, Mr. Sam would come around afterward and apologize to
any associates who felt ill-treated, vowing to do better, and some of them said that
if only Mr. Sam knew what was going on, things wouldn’t be so bad. When the departure
of factory jobs for overseas turned into a flood, Mr. Sam launched a Buy American
campaign, winning praise from politicians and newspapers around the country, and Wal-Mart
stores put up
MADE IN THE U.S.A.
signs over racks of clothing imported from Bangladesh, and consumers didn’t stop
to consider that Wal-Mart was driving American manufacturers overseas or out of business
by demanding killingly low prices.

The face like a good-natured bird of prey under a blue-and-white Wal-Mart baseball
cap smiled more as it aged. As long as Mr. Sam was alive, Wal-Mart was a great American
story out of Bentonville.