WAL-MART ECONOMY

Daniel Gross argues that it is unfair to blame Wal-Mart for the economy that bears its name.

Suppose Sam Walton had spent his life as a farmer, and Wal-Mart never existed. Would baggers at Winn-Dixie and shelf-stockers at Costco be making a living wage and have great benefits? Would Kmart have avoided bankruptcy? Would small grocery stores in small-town downtowns be thriving? The answer to all three questions is likely no. More likely is that other companies would have married discounting–which existed before Wal-Mart–to free trade, weakening unions, and better technology.

There’s no question that workers without skills find it difficult to get paid as well as they once did, that employers are more reluctant to supply comprehensive health benefits, and that Chinese imports are pummeling American manufacturers. Wal-Mart thrives in part by contributing to or piggybacking on each of these trends, but they were all well underway before Wal-Mart took the United States by storm. Who should we blame for the other 90 percent of Chinese imports?

How about you, for one? After all, Wal-Mart is a mere pass-through for its customers–one that takes a slim margin for the trouble. At Wal-Mart, the customer is king, everyone else be damned: competitors, employees, and the domestic manufacturing base. Everything Wal-Mart does–particularly its low prices–is done in the name of slavish devotion to consumer demand. And every day, millions of Americans ratify Wal-Mart’s strategy by shopping there. Stores don’t kill economies, consumers do.

Yup.

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FILED UNDER: Economics and Business,
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. JohnC says:

    Ah yes, another tragedy of the commons. 🙂

  2. Rascal says:

    Shame on us.