Politics from the Palouse to Puget Sound

Monday, February 05, 2007

"'Wal-Mart Is Saving America,' Authors Say"

From the Cybercast News Service:
Despite frequent and vocal complaints from critics of the world's largest retail chain, Wal-Mart "has arguably done more to help ordinary Americans, especially the poor and disadvantaged, than any other institution in our society," according to the authors of a new book being released nationally on Monday.

"Wal-Mart does far more for America's working class than any labor union, bloated federal bureaucracy or pandering politician," Richard Vedder, co-author of "The Wal-Mart Revolution" and a visiting scholar at the conservative American Enterprise Institute, told Cybercast News Service in a telephone interview.

Because of this and other factors, "Wal-Mart is saving America," added Vedder, who also serves as a distinguished professor of economics at Ohio University.

"I know that sounds like an exaggeration," he said, but "the economic transformation in U.S. retailing, which is personified by Wal-Mart, has been good for both America and its economy."

While admitting he was "an agnostic" regarding the retail giant when he began more than a year of research and writing for the book, the author argued that "Wal-Mart's basic business strategies have had a profoundly positive impact on America's productivity, wages, consumer prices and other key economic variables."

Vedder stressed that neither he nor co-author Wendell Cox, a public-private partnerships expert, received any kind of assistance from the retail chain, even when they contacted the company seeking information for their book.

Nevertheless, their research of financial and academic studies led Vedder and Cox to a number of conclusions, they said:
  • Wal-Mart workers are paid fairly - given their level of skills and experience, and compared to other retail firms, Wal-Mart employees do well;

  • The chain's health-care coverage, retirement benefits and other benefits are similar to those of other retail firms, and very few Wal-Mart workers go without health insurance;

  • Big boxes mean big business, as communities with new Wal-Mart outlets typically enjoy increased employment and incomes after the store opens;

  • Wal-Mart benefits the poor, in particular, in the form of lower prices and new job opportunities; and

  • Attempts to keep Wal-Mart out of communities through zoning restrictions, mandatory health insurance or special high minimum wages hurt citizens, especially those with lower incomes
  • Vedder acknowledged that Wal-Mart and other big-box discount retailers such as Target or Home Depot have been vilified as selfish retailers that mistreat their workers, outsource American jobs, uproot communities and harm the poor.

    "Nothing could be further from the truth," he said.

    "The criticism of Wal-Mart follows a rich American tradition of attacking new retail innovations," the author noted. "More than a century ago, some people were concerned that the mail-order catalogs of Sears, Roebuck & Co. and Montgomery Ward were destroying local retailing.

    "In the 1930s, angry small grocery stores attacked the new chains like A&P that brought lower prices and greater choice to communities," Vedder said. "Congress even passed laws to try to prevent stores from offering low prices to consumers, although those laws were found legally flawed or ineffective."

    He added that "the anti-A&P campaign in the 1930s and the anti-Wal-Mart campaign 70 years later are remarkably similar" since in both cases, "costly service providers have lost out to more efficient companies that provide 'consumer welfare' to their customers through low prices, greater choice selection and relatively good service."

    'Not an either-or proposition'

    Chris Kofinis, communications director for WakeUpWalMart.com, took a different view of the conclusions drawn by the authors of "The Wal-Mart Revolution."

    "I challenge Vedder and Cox to walk a day in the shoes of a Wal-Mart worker who struggles without affordable health care and gets paid a poverty-level wage," Kofinis told Cybercast News Service.

    "I want them to walk a day in the shoes of a manufacturing worker who had his job shipped overseas to China so they can wax poetically about Wal-Mart's positive effects," he added.

    "But the truth is that Wal-Mart's negative effects far outweigh any benefits people get from its 'everyday low prices,' and that's the tragedy here," Kofinis said.

    "This is not an either-or proposition. It never has been, never will be and never needs to be," he said. "Wal-Mart can provide low prices and be a responsible employer, but they don't want to. That's the unfortunate part of all this.

    "As long as companies like Wal-Mart continue down this path of corporate irresponsibility, they are going to be the focus of a growing political and social movement against them," Kofinis noted. "It's really that simple."

    Despite his praise for Wal-Mart, Vedder readily agreed that the company "is far from perfect," as proven last month, when the retail giant agreed to pay almost 87,000 employees over $33 million in back wages.

    So, given the complaints from union-backed groups like WakeUpWalMart.com about the company, what should be done about Wal-Mart? "Nothing," Vedder said. "Putting the government in the position - for which it is ill-equipped - of picking winners and losers in a market economy would be a disastrous policy."

    Besides, he added, Wal-Mart's influence may have peaked, since the company is starting to lose market share to Internet retailers such as Amazon.com and eBay.

    "Change is progress," asserted Vedder.
    Let me translate what Kfinis, the union mouthpeice said in plain language: "I haven't read the book, I'm not familiar with the research or the conclusions, but if it says anything good about Wal-Mart at all, it's a lie." "Haven't walke din the shoes of a Wal-Mart worker" What rubbish. Has Kofinis? He has a cushy six figure salary. Are we supposed to disregard anything he says about Wal-Mart because of that? Paul can correct me here since I'm practicing philosophy without a license, but that seems to be a perfect example of the argumentum ad personam or ad hominem logical fallacy. "Why the Vedder's arguments are all wrong because he's never worked at Wal-Mart." Who cares about the actual facts? Ad hominem is the left's favorite logical fallacy, in addition to argumentum ad misericordiam (e. g. the poor "manufacturing worker who had his job shipped overseas to China".)

    I will be getting a copy of the book within a couple of weeks to read and judge for myself. My initial impression is how closely it tracks with the conclusions made in a paper by Jason Furman, the former Economic Policy Director of the Kerry-Edwards 2004 campaign. Furman is certainly no conservative hack or Wal-Mart apologist.

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    1 comment:

    Paul E. Zimmerman said...

    Kofinis: "As long as companies like Wal-Mart continue down this path of corporate irresponsibility, they are going to be the focus of a growing political and social movement against them," Kofinis noted. "It's really that simple."

    Translation: "If these guys don't do what we want and pay us protection money, we're going to trash their shops and bust their kneecaps."

    I can't believe how blatant some of these people are, unless it's the case that they don't realize the implications of these things they say. If they would not be comfortable in the presence of history's brutal dictators, that would be a sign that they do not know themselves.

    Tom: "Paul can correct me here since I'm practicing philosophy without a license..."

    None is necessary - philosophy belongs to everyone, as everyone has a philosophy (consciously or otherwise, with the former being effective and the latter not, the essence behind the admonition, "know thyself").

    As for Kofinis' statements being an argument against Vedder and not Vedder's arguments, his response certainly has elements of that, and I think it falls under the category of "appeal to pity", too, another logical fallacy.

    Rather than producing data to counter Vedder's position, Kofinis only has emotionally charged denials to offer that do not address the findings - Vedder has offered data that can be verified or denied, while Kofinis is only offering a hypothetical story that is at the same time a subjective, individual experience, which he claims is representative of all actually existing lower tier Walmart employees. The difference is huge, and significant.