Saturday, December 10, 2005

Wal-mart and political economics

Here's what you've heard about Wal-mart:

Wal-Mart alone is responsible for driving down American wages by 2.2 percent

Here's what you haven't:

Wal-Mart does not merely save consumers money. It's also responsible for pushing down consumer prices in America by 3.1 percent...

Since Wal-Mart has driven down prices more than wages, real disposable income -- the purchasing power of what's in the average person's wallet -- is up .9 percent.

So why exactly do so many Americans oppose Wal-mart? Here's some speculation:

...the vanguard of the Wal-Mart haters is composed of unions that have for decades kept retail wages and prices artificially high, especially in the supermarket business. Those unions have had next to no success organizing Wal-Mart employees and see Wal-Mart's push into groceries as a direct threat to their market position. And on that one score, they may be right.

But seen in that light, it becomes clear that much of the criticism is simply a form of special-interest lobbying in socially conscious drag. And why an outside observer should favor the interests of unionized supermarket employees over those of Wal-Mart shoppers and employees is far from clear (unless you're a politician who gets union contributions).


At 1/27/2006 3:12 PM, Anonymous jeff biebighauser said...

Or, or a socialist. Or a Christian.

At 2/25/2006 4:59 PM, Anonymous Anonymous said...

In one of the business classes I took, we were discussing how Wal-Mart and Home Depot are good at driving small business owners out of business because they can afford to keep costs down and employ larger numbers of people.


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