Skip to comments.The Price Is Right [Harvard business professor praises Wal-mart] (NYT Op-Ed)
Posted on 08/03/2005 12:54:00 PM PDT by summer
.... But to chalk up Wal-Mart's success simply to the exploitation of its work force, as many of the company's most ferocious critics do, is simply wrong, for two reasons.
First, Wal-Mart hasn't just sliced up the economic pie in a way that favors one group over another. Rather, it has made the total pie bigger....
Second, most of the value created by the company is actually pocketed by its customers in the form of lower prices. According to one recent academic study, when Wal-Mart enters a market, prices decrease by 8 percent in rural areas and 5 percent in urban areas.... And because Wal-Mart's presence forces the store's competitors to charge lower prices as well, this $16 billion figure understates the company's real impact by at least half.
These kinds of savings to customers far exceed the costs that Wal-Mart supposedly imposes on society...
... Is such pro-consumerism a good thing?
The answer depends on who these consumers are, and Wal-Mart's customers tend to be the Americans who need the most help. Our research shows that Wal-Mart operates two-and-a-half times as much selling space per inhabitant in the poorest third of states as in the richest third. And within that poorest third of states, 80 percent of Wal-Mart's square footage is in the 25 percent of ZIP codes with the greatest number of poor households. Without the much-maligned Wal-Mart, the rural poor, in particular, would pay several percentage points more for the food and other merchandise that after housing is their largest household expense.
So in thinking about Wal-Mart, let's keep in mind who's reaping the benefits of those "everyday low prices" - and, by extension, where the real conflict lies.
(Excerpt) Read more at nytimes.com ...
Very interesting post. Thanks. By the way, I bet this article has given Paul "slice and dice facts" Krugman the fantods.
I love Wal-Mart!
Thought you would enjoy this Wal-mart thread. :)
My pleasure. I thought it quite an interesting article, especially from a Harvard business professor.
There are many ways to look at the impact Wal-Mart has on a community and lower prices is just one of them. Often the easiest to measure. To measure the more insidious effects involves looking the "hidden" charges the community pays. And that is more difficult.
They are a big target because they are so successful without the need of a union. Also being conservative and business savy makes for liberal envy.
I buy cat litter and potato chips from Walmart because they're cheap. Then I go home, and me and the dog sit on the cat litter bag eating potato chips, while watching the cat dig a hole in the garden and doing his business.
It works for me.
Where I live, if you don't like Wal Mart, there's always Target, Fred Meyer, various department stores, and several mom and pop stores. Wal Mart hasn't driven anyone out of business around here. I don't shop there because I think their products are crap and their stores are an overcrowded mess.
I did...immensely. Thank you.
Are they hidden inside the black helicopters that are reading your brain waves?
The store near me is an overcrowded mess but the groceries are so cheap I can overlook that fact. The employees are nice too. I think they do so much business they cannot keep up.
No they are not, thanks for asking. They are in depressed wages and subsidies. Wal-Mart also pays so little that many of its workers rely on state healthcare subsidies, food stamps, housing vouchers and other public aid. They have pressured manufactures to go overseas to "keep the price low". That costs jobs. There are more but that's just a start.
In general I don't like shopping, but the local Walmart I now use is clena, bright, convenient, the staff is polite and helpful and the prices are good.
I don't know what kind of "hidden" charges to the community you are talking about - I know that in my area they are about the best paying private employer other than the poultry plants...and the difference isn't very much.
I heard an interview on NPR today by some human rights guy detailing the alledgedly deplorable conditions and wages and abuses etc.. that Pakistani workers endure to bring Americans cheap prices at Wal-Mart. Likewise Central America and wherever they employ sweatshop conditions. Like six year old girls working 14 hour days for seven cents an hour seven days a week. (one example) He went on for quite a while. If this stuff is true, I'd write letters to Wal-Mart asking them to fix some of these things.
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