Democrats vs. Wal-Mart
George Will has an informative and amusing column today about the Democrats’ war on Wal-Mart.
He includes some interesting statistics:
The median household income of Wal-Mart shoppers is under $40,000. Wal-Mart, the most prodigious job-creator in the history of the private sector in this galaxy, has almost as many employees (1.3 million) as the U.S. military has uniformed personnel. A McKinsey company study concluded that Wal-Mart accounted for 13 percent of the nation’s productivity gains in the second half of the 1990s, which probably made Wal-Mart about as important as the Federal Reserve in holding down inflation. By lowering consumer prices, Wal-Mart costs about 50 retail jobs among competitors for every 100 jobs Wal-Mart creates. Wal-Mart and its effects save shoppers more than $200 billion a year, dwarfing such government programs as food stamps ($28.6 billion) and the earned-income tax credit ($34.6 billion).
So, why would Democrats be against a company whose customers are largely from and whose benefits mostly addount to its supposed base of ordinary working class Americans? Well, labor unions, for one thing. But it’s more than just that:
Liberals think their campaign against Wal-Mart is a way of introducing the subject of class into America’s political argument, and they are more correct than they understand. Their campaign is liberalism as condescension. It is a philosophic repugnance toward markets, because consumer sovereignty results in the masses making messes. Liberals, aghast, see the choices Americans make with their dollars and their ballots and announce — yes, announce — that Americans are sorely in need of more supervision by . . . liberals.
Before they went on their bender of indignation about Wal-Mart (customers per week: 127 million), liberals had drummed McDonald’s (customers per week: 175 million) out of civilized society because it is making us fat, or something. So, what next? Which preferences of ordinary Americans will liberals, in their role as national scolds, next disapprove? Baseball, hot dogs, apple pie and Chevrolet?
No. The current issue of the American Prospect, an impeccably progressive magazine, carries a full-page advertisement denouncing something responsible for “lies, deception, immorality, corruption, and widespread labor, human rights and environmental abuses” and for having brought “great hardship and despair to people and communities throughout the world.”
What is this focus of evil in the modern world? North Korea? The Bush administration? Fox News Channel? No, it is Coca-Cola (number of servings to Americans of the company’s products each week: 2.5 billion).
When liberals’ presidential nominees consistently fail to carry Kansas, liberals do not rush to read a book titled “What’s the Matter With Liberals’ Nominees?” No, the book they turned into a bestseller is titled “What’s the Matter With Kansas?” Notice a pattern here?
Indeed.
The irony is that it is the Democrats’ intellectual and economic elites, in conjunction with the CEOs of Big Labor, who are taking the party down this path–one that is against both the electoral interests of the party and the interests of its constituency. Meanwhile, Republicans–the Party of the RichTM–is on the other side. Odd, that.
When I visit Walmart I see people of all income levels shopping, based on clothing worn and vehicles driven. These people understand the price of meat, eggs, clothing, ,Cd’s etc. I assume that the democrats who are driving this issue- never shop for basics. There are a lot of old timers who are working there, and they are earning some extra income and keeping engaged- what a blessing. It is a wonderful, fun store to shop at with family- something for everyone.
Wm:
I tend not to shop Wal-Mart much these days because the ones near me as really crappy. When I lived in Alabama, where they have nice SuperCenters, I shopped there all the time. My parents still do.
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james,
I share your fondness for the Walmart Supercenters. When I lived in Alabama and Florida, there were two new, very nice supercenters that I loved to shop at.
The closest Walmart to me is in Kingstowne, and not only is it not a supercenter, it is always overcrowded and rather dirty. The Target is nice, though.
The Wal-Mart in my town is a Supercenter, and cleanliness is not a problem. However, its location is in the heaviest traffic area in town and the roads are not up to the load; the state is now upgrading but that means construction delays.
I also have learned to dislike parking in huge parking lots and walking into huge stores unless I’m relatively sure what I’m after represents a broad enough variety that no other kind of store will have it all — even the standard suburban supermarket doesn’t appeal to me much for this reason, let alone a Super Wal-Mart. It does seem that their onetime chronic cashier shortage has been overcome, though Christmas shopping season may argue otherwise.
We’ve actually taken to going to Target more than Wal-Mart simply because it’s more convenient to most of our out-errands. My wife does shop at the WM in the next town because she passes it every day on her way home from work.
Oh c’mon now. This article is such tedious, disingenuous horsecrap. Why is there such glee expressed at such dishonest argumentation? Is it just that it appears to score some points, even though it is obvious nonsense?
Everyone who follows the issue knows perfectly well that the attacks on WalMart are not because they offer low prices. It is because they offer low wages, minimal benefits, and, as the largest retailer in the world, are defining the standard for employee relations that other competitors will need to match. Unlike say, a Henry Ford, who understood the value of his workers becoming members of the middle class, WalMart focuses relentlessly on the “labor as just another expense” bottom line.
We all are capitalists here in America, and the main politico-economic divisions are between those who are purer capitalists (let the market do its thing, the people be damned), vs. those who recognize the problems that capitalism fails to solve, or even creates, and wish to solve them. Its been the argument for a very long time now. And we all know the dangers of not finding the right balance. Too much “problem solving” could lead to stifiling the creative forces of free enterprise. Too little problem solving leads to an inhuman world where workers are paid as little as possible, and discarded when used up, as if they were products or machines instead of human beings.
Nothing new here. We oscillate around the ideal balance. WalMart is a strident force toward one extreme. Democrats are not advocating that they stop trying to offer good deals. They are however advocating that WalMart treat their workers better.
But they is plenty of room for compromise here. To take just one issue: I think it would be great if we had a national health insurance. That would relieve WalMart, and other companies, of their responsibilites toward their worker’s health, and thus make them more competitive. But so long as we dont have that, so long as we look to businesses to be providers of health insurance, then WalMart should do their part.
The issue is that wal-mart pays it’s employees a low wage that doesn’t keep them off public assistance. The local community winds up (through taxes) subsidizing wal-mart.
The local community suffers, wal-mart benefits and the everyone else gets low prices. These prices are false. Instead of creating a middle class wal-mart creates a poverty class. The company saves money so it can expand like a virus and do it again in another previously viable or marginal community.
What we should be asking is for corporate responsibility to the local communities which goes beyond maximum profit. It’s really long term planning and grooming a sustainable middle class and not a vacuuming of the dollars out of an area.
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Gore Vidal anticipated this new conservative tack in a book yet to be published.
The idea is this: all liberal efforts to better the lot of the poor is masked condescension. There is no such thing as fellow feeling. No simple decency.
I am glad I don’t see the world like George Will sees it. It must be an ugly place. Social Darwinism writ small, written smug.
This is a load of disengenuous horsecrap. As Arnold Kling says, I don’t want to promote misery for anybody, but I also happen to think that the government redistributes poverty and reduces income.
Or as Stefan Sharkansky put it,
So your mischaracterization is rather naive and simplistic.
I thought you said you were a capitalist (to a lesser degree) then you turn around and spout this proto-Marxist bilge. So which is it, are you a soon-to-be-Marxist or a Wannabe-Capitalist?
Stick to biology, your economic analysis here stinks. Here is the clue for you, with nationalized health care, the burden of health care does not disappear. If the burden is borne via taxes on consumers they’ll have less income, quite possibly less income than they have now, hence less consumption of all goods, and that means a leftward shift in the demand function. This could then induce firms to reduce labor and/or shut down. So your conclusion is clearly speculative horsecrap.
The only reason that employers are the providers of health care is due to the tax exempt status of health care benefits. Remove that and you’ll likely see fewer people getting health care from their employer. Of course, there is also the problem that many things are covered under health insurance which shouldn’t be such as pregnancy/child birth.
Stew,
Sounds to me like the solution is to eliminate the subsidies that Wal-Mart is taking advantage of. Eliminate them, prices will rise, the communities will no longer be subsidizing Wal-Mart, Wal-Mart will down size due to higher labor costs…oh, wait I bet you wont like that.
The problem is that there is no such thing as a free lunch. If Wal-Mart can sustain its current employment levels via a subsidy, then getting them to either voluntarily or involuntarily give up that subsidy (this includes eliminating the subsidy) will likely result in a decrease in Wal-Mart’s employment. Investors will look elsewhere to put their money (note I’m not saying that Wal-Mart will cease to exist, but if you change the price of one of the inputs the firm will change its mix of inputs…basic freaking theory of the firm from a first year microeconomic course).
I love the liberal responses to this. It is obvious Steve you just don’t understand how evil Walmart is. So since you didn’t understand the first time, they will just shout it a little louder and sneer so you will know your betters are talking to you. Funny, it doesn’t work in elections either.
I am not an economist, but this analysis seems to miss a few points.
If we have national healthcare funded through taxes, wouldn’t the consumer lose money through their taxes but gain some because they pay reduced insurance premiums than under the current system?
There is also the possibility of reduced overhead with a nationalized system (less admin costs is the standard argument) – and yes, I know that OTB does not believe this part.
No, you are assuming the conclusion you want, when in fact the conclusion is actually an empirical question. We might get lower premiums, or even have no premiums (depending on how the program works) or we might have higher premiums. Further, there is no way to measure the impact of cost-containment measures which do things like increase wait times.
It isn’t that I don’t believe, it is just that I find it amazingly naive to think that the U.S. government…the government of the $600 hammer, $12,000 toilet seat, etc. is capable of reducing bureaucratic overhead. Further, it is an empirical question, not something we can prove like a math theorem.
Steve:
Your point is that Wal-Mart should just underpay it’s employees to artificially keep the prices low through what is basically tax subsidies or use of community resources just because they are an employer. In those golden conservative 50s… local businesses contributed to the well being of the community since the employees where most likely their neighbors. What you are stating is that it is OK for wal-mart to do what they do since although the community picks up the rest of living support tab, wal-mart is reducing that burden by giving them at least some form of job, but what we forget is that wal-mart also artificially undercuts local businesses and causes increased local burdens. Under these rules the structure of society will eventually fail and all wal-mart does is move on to a new location. No real investment in the community. I am not a socialist, but there is a point when the lack of a need for a community standing allows anti-community behavior. They can just move on after they damage a community beyond repair since there is no vested interest to stay. You know who picks up the pieces….oops no one. Capitalism without a social conscience cannot promote general well being and sustainable healthy growth.
No, that is your strawman view of my position.
Oh please, spare me the rose-tinted glasses moment.
I never said such a thing was “OK”. What I merely did was point out that Wal-Mart was using government programs to its own benefit. The solution then is to cut off Wal-Mart’s access to those programs. I guessed that you probably wouldn’t like doing that either, and that you want to cajole Wal-Mart into raising wages on their own, which will likely result in less jobs at Wal-Mart, which is pretty much what we’d get by cutting off Wal-Mart’s access to these public assitance programs. I merely described what was likely, in my view, to happen. Nowhere did I say it was a good thing or a bad thing.
What is this, the Wal-Mart version of the Malthusian nightmare, the immiseration of the proletariat by Wal-Mart or some such? Please, spare the apocalyptic rhetoric, it undermines your position.
I’d like for you to compile a list of communities where this has happened.
True, but inasmuch as impugning motivation in order to avoid actual arguments is the bread and butter of most columnists, it’s to be expected. I find it hard to get worked up about a pundit acting like a pundit.
The empirical question has been endlessly studied, and other things being equal national healthcare saves lots and lots of money. The commenter wasn’t begging the question but assuming a minimum standard of being well-informed on behalf of his/her interlocutors.
Steve,
I don’t think you are an idiot, but I do think you could do a much better job making a case for your point of view if you werent to come off as being so obssessed with working in all those insults. Insults are sharp, and to support them, you end up in overdrawn positions.
I sense that you have a good heart, and want to do well. But you also seem to have a fascination with a fundamentalist, pure version of capitalism. Resolving the tension between your heart and your ideology seems to be a real problem for you.
Libertarian capitalism does not work so well. That is an empirical fact. I think an argument can be made, for instance, that the terrible bloody history of the 20th century was driven, at least in part, by a desparate need to find some alternative to libertarian capitalism, since everyone understood how bad it was. Socialism, Communism, Fascism, Syndicalism, so many isms, all found favor with tens of millions of otherwise decent people because they all held out the promise of a more humane system. Which, at that time, was not a very high bar to cross. We are so fortunate in this country to have found the best solution of all – to maintain a core engine of capitalism, but to tame it with regulation, and to have mechanisms in place to address the problems it fails to solve, and the ones it creates.
Your comments about health care (when I was talking about national health insurance) are not very coherent. You present no evidence that a nationalized insurance pool would lead to lower disposable income. Anyway it just seemed that your whole point here was to riff on the fact that I am a biologist and not an economist. Maybe you focus more on presenting coherent arguments.
“I find it amazingly naive to think that the U.S. government…the government of the $600 hammer, $12,000 toilet seat, etc. is capable of reducing bureaucratic overhead. ”
You should do a little empirical research into what the administrative costs incurred by the Social Security and Medicare systems are, compared to private insurance bureacracies. Instead of just parroting the standard assumptions of your ideology.
Steve:
I don’t remember asking you to grade my paper.
You obviously have your veiws and I have mine. It’s nice to see that people still believe that after we have decimated the middle class in this country (by all statistical measures) that unregulated capitalism works. Last I looked T. Roosevelt didn’t think it worked and he was a real conservative. His regulations actually helped to spur innovation and foster growth. Unregulated corporations will eventually lead to corruption and undue influence on government. It has to be properly balanced for the relationship to work properly. History has proven this time and time again and it really is the middle road. It’s called checks and balances. It prevents abuses.
It’s interesting to see Social Security and Medicare cited as efficient systems given that both are rapidly approaching bankruptcy.
Does anyone here know how much Wal-Mart pays starting employees?
I started working as a lower class worker, now I’m middle class and I don’t feel decimated. For me capitalism works, otherwise how did I get my house, my car, my three TVs, my two computers, etc? Is there some classification of middle class that I’m nor aware of?
BTW there is no unregulated capitalism in America. There are thousands of local, state, and federal laws regulating business in America and that is regulated capitalism by any definition.
Ray:
Actually your perspective is good and I am glad for your success, but now go to the economic and demographic statistics which (include all other people) and see what are the facts.
The middle class owns a much smaller percentage of the wealth of this country than 5 years ago – and much much smaller percentage than 20 years ago. The real income of the middle class has fallen by all measures in general terms. In fact real income is stagnant for a large percentage of the middle class. Personal debt has increased tremendously and the actual debt burden of the middle class is huge. Personal savings has dropped to the lowest level ever and is actually trending into negative growth.
I am lucky to be in the middle class also and have worked hard to achieve this, but generally speaking my father made less then me in normalized dollars and had a great deal more in the way of accumulated assets and growth opportunity.
Why is it that Americans today hear about a great economy (corporate growth is up) but the general population purchasing power is flat if not negative.
It is historically proven that it is not healthy for any economy or society to have a very very rich upper class with an anemic middle class. The imbalance is bad for everyone. It is indicative of other imbalances that eventually wear away at the fabric that makes it possible for you and I to achieve better lives.