Politics from the Palouse to Puget Sound

Tuesday, August 29, 2006

Rebutting The Butthead

I was going to avoid giving local fanatical Costco advocate TV Reed's monotonous screed any extra coverage, but since Scotty already brought it up...

Reed has now used the word "elitist" three times in his last two letters to the editor. You can judge who is "elitist" from a quote from Dr. Kenneth Stone, the oft-cited (by PARD) author of the study of the effects of Wal-Mart on small towns in Iowa, concerning Wal-Mart opponents:
“All these malcontents, as I call them, I’m beginning to think of them as elitist. I don’t think they speak for the average person. The local people say, ‘We want them.’”
TV Rerun cannot be considered a "competent journalists or researchers for government, business or academia", as the figure he gives of 9000 adults over 25 in Pullman is dead wrong. There are some 3,200 children under the age of 18 in Pullman, making that only 5,800 adults over the age of 25.

Why is that important? In a letter to the editor about Costco, Don Pelton (my fellow fanatical Wal-Mart advocate) stated:
The annual median income of Costco shoppers is about $70,000. Thus the market for Costco is primarily limited to the most affluent one-fifth of shoppers. In contrast, the median income of Wal-Mart shoppers is about $38,000 and the median income level in the Pullman-Moscow area is less than $40,000. If we eliminate all students and their families, the most affluent 20 percent of the population including babies will total perhaps 3,000 persons. If each of these shops once a week at Costco, daily customer counts would be about 430. At Wal-Mart in Moscow, about 2,500 persons plus children shop on an average day. Costco would not be a viable business.
So even if we double the 3,000 to 6,000 as Reed would have us do, that's still only a daily customer count of 860, still nowhere close to making it viable. Heck, I would welcome Costco with a big sloppy kiss, but it ain't gonna happen any time soon.

Has Costco "proven definitively is that Wal-Mart's elitist model of low wages, meager, expensive benefits, and vicious anti-union activity is not necessary to big-box success?" Uhhh, no. Costco's business model is night-and-day different from Wal-Mart, yet both are successful in their own way, though Costco is a MUCH smaller company. Reed's anti-capitalistic mind has a hard time grasping that concept apparently. Here is what U of I economist Steve Peterson had to say about Costco and Wal-Mart:
Costco—a different market model: Costco’s 2005 total sales were only 16.4% of Wal-Mart. Costco employs 120,500 employees (world-wide) versus 1.8 million for Wal-Mart (7% of Wal-Mart’s total). Costco has a different customer base than Wal-Mart, serving higher end products to wealthier families. The average household income of Wal-Mart customers is $35,000 versus $85,000 for Costco. Forty-two percent of Costco customers earn over $100,000.

Government imposed wages would likely bankrupt Wal-Mart: Suppose that Wal-Mart decided to raise its average wage to the equivalent of Costco $21,029 to $33,280 (i.e. raise its wage from $10.11 an hour to $16) for its 1.3 million U.S. employees, an increase per employee of $12,251. This would wipe out Wal-Mart’s entire 2005 $11.2 billion net income and create a ($4.73 billion) net loss, in effect bankrupting Wal-Mart.
If Reed would dig for the facts beneath the claims of organized labor, the Democratic Party, Wake Up Wal-Mart, Wal-Mart Watch, and Al Norman, and not take them at face value, he might realize that Wal-Mart is not the source of all evil in the modern world and that the substance trickling down the back of his neck is not the Walton's fortune.

No, let's face it, the only people "misleading and denigrating our considerable attractiveness as a community" is Reed and the handful of elitist anti-Wal-Mart malcontents in PARD.

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1 comment:

April E. Coggins said...

I am surprised on two parts with TV Reeds letter,

1. Who cares. The arguments are over. No more hearings, no more newspaper coverage, no one cares. We are waiting for the inevitable.

2. He would choose to open up more easily proven dissinformation. He is trying one last attempt to take our eyes off the ball. Costco and Target have not shown one inkling of interest in Pullman. TV Reed is shallow thinking and has comtempt for Pullman when he tries to distract us from our good to suit his own agenda. He is dishonest, manipulative and is attempting to apply his own scorched earth Pullman policy for the advancement of his career.