Monday, November 28, 2005

Wal-Mart--Better Welfare Agency than the Government?

That is the argument made in Sebastion Malloby's Op-Ed today in the Washington Post, which debunks a number of Wal-Mart Myths.

For example, Wal-Mart's low prices mean that Wal-Mart's customers, who make an average of $35,000 per year and spend more on food and other essentials than most Americans, can afford food and other essentials. Malloby estimates that Wal-Mart's lower prices mean a

$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.
Not bad.

The Myth the Wal-Mart suppresses wages is also debunked:

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.

When you get more than 15 people applying for each and every Wal-Mart job--you can't say that they people are fools. In an era when unemployment is among the lowest it has ever been, Wal-Mart is a job creating machine--something the government cannot claim.

I make no bones about it, I love Wal-Mart. I was a former employee and I know they have their faults, but Malloby makes some powerful points. They are not perfect and to be honest, I usually don't shop there anymore, but I don't need to. For millions of Americans, they need Wal-Mart and they should have Wal-Mart, free from silly government restrictions--at least free from government restrictions that are not applied to all business.

Read it.

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