United Liberty
In Defense of Walmart
Sat, 11/24/2012 - 4:14pm | posted by Matt Naugle
I can not express just how uninterested I am in Black Friday shopping. Long lines and the potential for violence is not worth a cheap TV. Nor do I feel like a corporation with balance sheets the size of many countries needs much defending, especially as they lobby for regulatory favors or for internet taxes.
However, Walmart, for all of its faults, probably does more for America’s less fortunate than any social program. Their food is 20%-40% cheaper than most grocery stores and offer supplies of cheap goods to communties which need them. And as we begin President Obama’s 2nd term, its clear unions are gunning for profitable companies and will force them into funding their political activities, while consumers suffer.
Peter Suderman, senior editor for Reason.com, on Saturday used Twitter to lay out his observations on the big box giant. His points are reasonable and brilliant:
Really enjoyed talking Walmart and Black Friday on @upwithchris [MSNBC’s Chris Hayes] this morning. I’m going to add a few stray observations on twitter.
1. Walmart’s customer base is heavily concentrated in the bottom income quintile, which spends heavily on food.
2.The bottom income quintile spends about 25 percent of income on food compared to just 3.5 percent for the top quintile.
3. So the benefits of Walmart’s substantially lower prices to the lowest earning cohort are huge, especially on food.
4. Obama adviser Jason Furman has estimated the welfare boost of Walmart’s low food prices alone is about $50b a year.
5. Walmart’s wages are about average for retail. Not amazing. But not the worst either.
6. Paying Walmart’s workers more would mean the money has to come from somewhere. But where?
7. Erase the Walmart CEO’s entire salary, and you can raise average hourly wages by just a penny or so.
8. Erase the entire Walton family fortune and you get an average $1/hour boost to Walmart workers.
9. Raise prices to pay for increased wages and you cut into the store’s huge low-price benefits for the poor. It’s regressive.
10. But what about Costco? They pay more, right? Yes, but it’s a different, smaller market.
11. Walmart’s average customer earns roughly $35k. Costco’s average customer earns about $75k.
12. Costco only has about half as many employees as Walmart. What would happen if Walmart adopted a Costco model and shrank to Costco size?
13. Not at all clear that the remaining half of Walmart workers would be better off. Many would almost certainly be worse off. Unemployed.
14. Obama econ adviser Jason Furman did a lot of the work on Walmart’s progressive benefits. His case: slate.me/R3bkc2
15. Finally, as someone who’s actually been a regular, small-town Walmart shopper, I’d like to argue for its community benefits.
16. Yes, some small stores close when Walmart opens. But in small towns, Walmart can become real community hubs – more so, because of size.
17. As for Walmart workers getting health benefits thru Medicaid, that’s due in part to a policy liberals argued for: wapo.st/axXXNE
The arguments against Walmart are anti-poor and are about union power. MSNBC and other liberal media outlets, working as paid PR efforts for AFL-CIO, pushed the news of striking “walk outs” well through the holiday weekend, even as the protests failed, as a way to publicly shame Walmart.
This will be a long, drawn-out war. Sadly, many Americans don’t think as clearly as Mr. Suderman.
I agree with the overall points of this post, but would like to mention one thing.
Peter Suderman’s wording makes it sound like lower-income shoppers spend more money on food than higher-income shoppers. It is possible that the lower-earners are spending a higher percentage because they don’t have more money for luxuries while the higher-earners spend a lower percentage because they have extra cash for non-necessities.
He may not have meant it to come off that way. Sometimes that’s what happens when you have a 140-character limit.
I can`t believe comparing high income wage earners and lower wage earners spending habbits on food…Lets face it people that make a good dollar are going to spend——their hard earned money- on their capability to buy what they want and how much they want on goods and services…..Thats like saying Ahhhhh the person who makes minimum wage doesn`t have the things that someone making 200,000 dollars has…because the lower wage earner is spending more(% wise)of their money for the same things…Well lets get real here..LOW wage earners are NEVER going to have the same as a wage earner that makes way more…If they all ate exactly the same meals daily..the low wage earner is going to spend a higher % of their income on food….Does this mean…Give them more money so they will spend less(as a % of income)on food….The problem here is that people that have no-very little-little-some-education will never get a high paying job—especially in our dwindling job market and overpopulation….
Ya know, one can only do a facepalm so many times but one begins to get a headache. What a load of unmitigated weapons grade crap.
I agree with you 110% Michael… good point!
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