Sunday, June 05, 2005

The Conservative Case Against Wal-Mart

from ProfessorBainbridge.com:

Hugh Hewitt praises a tough-minded speech by Wal-Mart's CEO and inveighs against Wal-Mart's critics:

Resistance to WalMart opening new stores always amazes me. Really. Good jobs at good wages, many of them entry-level jobs with training and advancement possibilities. Excellent advantages for consumers, benefits for employees, and neighborhood redevelopment.

But the media loves to hate the giant retailer, and local small businesses always put up a predictable cry. When WalMart is blocked, you never hear about the folks who didn't get jobs or the insurance plans that don't get enrollees. The small stores are happy, but the next time an objection is raised, I'd love to see a report on the wages and benefits paid to employees of such mom and pop operations. There will be some exceptions, but the average worker who is not an owner would be better off at the WalMart.

I respect Hugh a lot, but on this one I think there's a plausible counter-argument to be made; indeed, that one can make a plausible conservative case against Wal-Mart.

First, the data show that entry of a Wal-Mart store into a community has only a very small positive impact on county-level employment. According to a study by Missouri economist Emek Basker, "in the first year after entry, retail employment in the county increases by approximately 100 jobs; this figure declines by half over the next five years as small and medium-sized retail establishments close. Wholesale employment declines by approximately 20 jobs over five years." (3) Note that the "typical Wal-Mart store employs 150-350 workers. These results suggest that employment increases by less than the full amount of Wal-Mart’s hiring, even before allowing other firms time to fully adjust to Wal-Mart’s entry." (14)

Second, the data also show that Wal-Mart's entry into a community has a downward impact on overall retail prices of certain core consumer commodities. (Link) (more)

And this from The Neighborhood Retail Alliance, a group fighting the Wal-Marting of NYC.

2 comments:

chrisbilal said...

In Maryland, I worked on a bill that would require that large co's, particularly WalMart would pay more of their payroll taxes towards healthcare because they dump the cost of us taxpayers. It gained momentum, got a nice passing margin after hours of lobbying, protests, media blitzes etc. Only for the governor to veto the bill as the leg session closed. Worse, he vetoed the bill with the Vice President of Walmart.

If that wasn't the biggest slap n the face to the people I don't know what else was. It showed that he chose the corporation over the people. The excuse is that their is a new Walmart that is possibly coming to MD that would provide more jobs.

Who gives a shit when we are going to be paying for their healthcare instead of walmart.

"Walmart Always Low Prices No Health Care"

handdrummer said...

Amen. I've watched as over the last 10 years a vibrant, creative downtown has been destroyed by not 1 but 2 Wal-Marts and a Sam's. It's heartbreaking.

I liken Wal-Mart (and the other big boxes) to the British East India Company. They move in, take over the local economy and transfer out economic decision making to a distant location.

So sad to see. Keep up the good fight.