Wal-Mart is progressive


Take a look at all the benefits
Now this is interesting. Even more so since it is in the Washington Post.

Wal-Mart's critics allege that the retailer is bad for poor Americans. This claim is backward: As Jason Furman of New York University puts it, Wal-Mart is "a progressive success story." Furman advised John "Benedict Arnold" Kerry in the 2004 campaign and has never received any payment from Wal-Mart; he is no corporate apologist. But he points out that Wal-Mart's discounting on food alone boosts the welfare of American shoppers by at least $50 billion a year. The savings are possibly five times that much if you count all of Wal-Mart's products.

These gains are especially important to poor and moderate-income families. The average Wal-Mart customer earns $35,000 a year, compared with $50,000 at Target and $74,000 at Costco. Moreover, Wal-Mart's "every day low prices" make the biggest difference to the poor, since they spend a higher proportion of income on food and other basics. As a force for poverty relief, Wal-Mart's $200 billion-plus assistance to consumers may rival many federal programs. Those programs are better targeted at the needy, but they are dramatically smaller. Food stamps were worth $33 billion in 2005, and the earned-income tax credit was worth $40 billion.

Set against these savings for consumers, Wal-Mart's alleged suppression of wages appears trivial. Arindrajit Dube of the University of California at Berkeley, a leading Wal-Mart critic, has calculated that the firm has caused a $4.7 billion annual loss of wages for workers in the retail sector. This number is disputed: Wal-Mart's pay and benefits can be made to look good or bad depending on which other firms you compare them to. When Wal-Mart opened a store in Glendale, Ariz., last year, it received 8,000 applications for 525 jobs, suggesting that not everyone believes the pay and benefits are unattractive.

Free market. Lower prices. More jobs. And a bigger impact on the poor than on the middle class or rich. If it were a government program it instead of the free market, it would be celebrated.

So exactly what does happen when you throw government in the mix?

I'm glad you asked. This article provides an answer. Very dramatically in fact.

KARE 11 compared prices at two Wal-Mart stores that are ten miles apart. One is in Hudson, Wisconsin. The other is in Woodbury, Minnesota.

Here's what we found:

A Trivial Pursuit game selling for $19 in the Woodbury flier, cost $27 in the Hudson.

A portable DVD player selling for $68 in Woodbury, cost $83 in Hudson.

A TV selling for $98 in Woodbury, cost $129 in Hudson.

A $398 personal computer in Woodbury was almost $100 cheaper than its Hudson twin.

And a laptop that cost $398 in Woodbury, cost $632 in Hudson. That's a difference of $234 for the exact same computer.

"That's unreal, isn't it?" says Judy Darwin of Hudson. "May as well go across the border."

"How can they do that? It's the same store," says Amy Weiser of Madison, Wisconsin.

The answer dates all the way back to 1939, when Wisconsin lawmakers passed the Unfair Sales Act. That state law says it's illegal for retailers to sell items below cost. It's supposed to ensure a competitive marketplace.

"Kind-of irritates me," one Wisconsin customer said.

Wal-Mart officials would not go on camera, but they told KARE 11 they're simply complying with state law.

"State regulations prevent us from practicing certain pricing policies in Wisconsin," says Gail Lavielle, Wal-Mart spokeswoman.

Gee, do you think Wisconsin is losing tax revenue?

Hat tip to The Agitator for that last article.

— NeoWayland

Posted: Tue - November 29, 2005 at 04:51 AM  Tag


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