Politics from the Palouse to Puget Sound

Tuesday, September 12, 2006

"It's not Wal-Mart, stupid; how about important issues?"

An op/ed column that appeared in today's Indianapolis Star:

We might hope that candidates for Congress this year would present us with ideas to solve the major problems we face in this country. On the economic side, we could really use some creative thinking on, among other subjects, taxes, Medicare, and Social Security.

So what is emerging as one of the big issues for the Democrats?


The giant of retailing is the focus of a protest movement that has been endorsed by many leading Democrats, including our own Sen. Evan Bayh. The New York Times has suggested that the anti-Wal-Mart campaign "could prove powerful" in this year's elections.

Well, I doubt it, but more so, I hope not. I doubt it because it seems like bad politics. About 150 million Americans shop at Wal-Mart, and most say they think Wal-Mart is a good place to shop.

I hope not for two reasons: First, the campaign against Wal-Mart is based almost entirely on misconceptions; and second, the discussion about the company is largely populist blather that's drowning out a debate over the real economic issues we face.

There are several charges against Wal-Mart, although Democrats and labor union leaders have mainly focused on the plight of Wal-Mart workers -- 1.3 million in the U.S. Employees make about $10 an hour on average and many don't have medical and other benefits. But in fact, contrary to the claims of its opponents, Wal-Mart's wages and benefits are not out of line with the rest of the so-called "big box" retail industry. Indeed, a study by one of Sen. John Kerry's former advisers concluded that Wal-Mart's health benefits are comparable to those throughout the industry.

There is, however, we are told, an industry exception: Costco. Costco pays higher wages and offers benefits (after six months) and is highly profitable. If Costco can do it, why can't Wal-Mart?

Well, Wal-Mart could pay more if it changed its expectations of its employees and fired 60 percent of them. Costco has one-tenth as many workers as Wal-Mart has but has one-quarter the sales. The bottom line? You can't pay someone more unless you increase the demands of the job.

Of course, Wal-Mart could simply bow to the pressure and announce wage hikes to equal the rate Costco workers receive. Instead of firing people, the company could simply raise prices to cover the additional costs. I have heard some suggestions that Wal-Mart's prices are "too low" (whatever that means) in any case.

Of course this would hurt the people who shop at Wal-Mart who are mainly from low- and middle-income households. Two independent researchers have estimated that Wal-Mart saves consumers $200 billion per year and that by putting pressure on competitors, it has helped reduce the average family's food bill by one-fourth. One might expect that these income groups would be among those that Democratic candidates would like to attract. Raising their costs would hardly make sense as a way to go about it.

One other charge is leveled at Wal-Mart: Even if shoppers benefit, the company comes into a community, drives out the smaller competition and that overall hurts the local economy. But this, too, doesn't stand up to scrutiny. Another study of 25 communities where Wal-Mart recently opened stores found that employment in those communities had risen overall; in fact, by more than in neighboring communities that lacked the big-box giant.

All of this is not to say that Wal-Mart is run by saints or mainly for the public interest. The company undoubtedly does displace community businesses and surely some of its workers don't feel they get a fair deal. But unless the company is clearly breaking the law, which no one alleges, I don't see what the Democrats think they can accomplish.

Indeed, a larger question raised by the Democrats' anti-Wal-Mart campaign is this: What can (or should) politicians do to a company they don't like? Clearly, in the case of Wal-Mart, the answer is nothing. Should Congress make Wal-Mart pay higher wages (even though its pay is already well above the minimum)? Should legislators require Wal-Mart, and Wal-Mart alone, to offer more benefits?

With so much to be done in this country, so many real problems to address, the Democratic Wal-Mart bashers are doing a real disservice not to the company but to America's voters who deserve a debate on more pressing issues.
And that applies locally as well as nationally. The city has many more pressing issues to address than PARD's frivilous, idelogically-driven attempts to stop Wal-Mart.

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