"Wal-Mart's Critics Are Short-Sighted"

Newspaper editorialists all over the country are expressing their opinions on the anti-Wal-Mart movement. Op-ed pieces have appeared in the Wall Street Journal, the New York Times, the Washington Post, the Seattle Times, and in countless smaller local papers. The message is the same: leave Wal-Mart alone.

Jay Ambrose had the following column published in the Kitsap Sun(free registration required), a small paper on the west side of Washington state, this past Monday:

Wal-Mart, go away, or at least become something vastly different, say lefties and an occasional commentator on the right. But the American people voted on the issue on the day after Thanksgiving, and guess what? Once more they came out heavily for the discount retailer.

The vote was not the sort where you go to the polls and cast ballots, but where you go to the store and spend your dollars. When the Christmas shopping season officially began, Americans did not show up in numbers pleasing to most retail outlets. They did descend in something closer to hoped-for hordes on discount operations, and especially on Wal-Mart, which saw a nice spurt in sales from 2004.

It was no accident, but a consequence of aggressive, smart marketing and, most of all, of the factor that sets Wal-Mart apart from so many of its competitors, very low, affordable prices. To some critics, these low prices have too high a cost — that's the theme of an anti-Wal-Mart movie making the rounds. The prices, say the critics, are a consequence of such factors as low wages and imports from abroad and of driving some small businesses out of town.

Yes, OK, and let's add something: The prices are a boon to the poor.

A boon to the poor? Absolutely. Among those making the claim, I discovered in scanning newspaper commentaries on the subject, is Jason Furman, a top economic adviser for Democrats, a visiting scholar at New York University and very much a liberal.

He notes in a Web discussion that the "price differences" between Wal-Mart and other outlets "are staggering."

"Wal-Mart prices are, on average, 8 to 40 percent lower than what people would pay elsewhere," he writes, referring to a study showing that the annual savings for consumers could be as much as $2,300 per household. "There are few public policies that I've advocated that would make a difference as big as that," he said.

Low-income Americans don't have to have the fact beaten into them. Along with those making more money, they flock to Wal-Mart to stretch their dollars. The Wal-Mart critics harp on the low wages of Wal-Mart employees even though the firm's successful business model might face disintegration if the firm were made to pay low-skill positions much above their market value. Besides keeping prices low, this model has enabled the chain to create 1.3 million jobs, more than created by any other single U.S. employer. Many of those employees might be jobless if not for a relatively non-interventionist economic system that allows Wal-Mart to thrive.

This vital truth is not keeping some state legislatures from seeking out ways to force higher pay. The legislators, none of whom have probably ever served their constituents a fraction as well as Wal-Mart, should look over their shoulders at how Europe's welfare-state forays have led to unemployment rates twice as high as in this country. The insistence of some pundits that Wal-Mart embrace unions forgets a history voluminously affirming that unions are far from an unmitigated good. It forgets tough federal law makes it impossible for companies to prevent unions if enough employees genuinely want them.

One critic — denying that it's essentially look-down-their-noses elitist types who frown on, oh dear, that very common place, Wal-Mart — says those who fight new stores are folks who hate what the auto traffic will mean, that sort of thing. I guess so, but local governments tend to heed majority sentiment, whatever this critic thinks. The leftists who complain about Wal-Mart selling many products from abroad just refuse to get it that free trade is a great benefactor to people of all lands, including ours, even if the extent of globalization is currently disorienting.

A conservative critic — Stephen Bainbridge, a professor of law at UCLA — is more on track when he worries about the ugliness of Wal-Mart buildings and about small businesses folding as Wal-Mart stores prosper. His solution is that local governments should respect their zoning plans and do nothing to subsidize Wal-Mart.

He is right, of course.

I don't adore Wal-Mart, but I do shop there sometimes and find that it pays. In the final analysis, it seems to me, it is deeply American: a business reaching out democratically to people of every income status, and the product of an entrepreneurial vitality that many societies routinely smother. Its critics, with important exceptions, have a withering socialist glare in their eyes, despite all we have learned about the life-diminishing misconceptions of socialism.