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The Price Is Right [Harvard business professor praises Wal-mart] (NYT Op-Ed)
The NYT ^ | Aug 3, 2005 | PANKAJ GHEMAWAT and KEN A. MARK

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 ...


TOPICS: Editorial; US: Arkansas; US: Massachusetts; US: New York
KEYWORDS: business; cary; harvard; nyt; praise; walmart
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To: BipolarBob
I did misstate your point, for which I'm sorry.

My point is simply that I have not seen Walmart ruin my own community which was predicted by the hysterical naysayers. In fact, the only business that has been hurt at all is a poorly run national chain store. And many of the employees at that store have gotten jobs at Walmart because they are treated (and paid) better.

The mom and pop stores, and the other big box stores did not offer any higher wages, did not offer benefits and the community had to pay for the "hidden costs" with those businesses as well.

I guess my greater point, on which we may agree is that all businesses offer the community something and cost the community something. In our case the benefits have outweighed the costs.

41 posted on 08/03/2005 2:35:32 PM PDT by pollyannaish
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To: BipolarBob

Are you too naive to understand the simple fact that ALL retailing falls in that simplistic statement?
Please explain the cost of these employees to the state if they did not have these jobs? Please explain the impact of the loss to the tax revenues Walmart and others generate. Obviously you haven't thought through your conclusion.


42 posted on 08/03/2005 2:37:04 PM PDT by bfree (PC is BS)
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To: summer

Incoming...I just bought two freezer Munchkins for the kid's lunchboxes at Wal-Mart. Looked all over the local grocery store and they had nothing. Strange since they had lunchboxes.


43 posted on 08/03/2005 2:38:12 PM PDT by TXBubba ( Democrats: If they don't abort you then they will tax you to death.)
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To: summer

Oh, and one other thing. The HEB stores in our area give Wal-Mart a run for their money. We have read some interesting articles about how our HEB grocery stores can beat Wal-Mart at grocery prices and Wal-Mart actually loses money on it's grocery line in our area. Just wanted folks to know that there really is still competition out there.


44 posted on 08/03/2005 2:41:42 PM PDT by TXBubba ( Democrats: If they don't abort you then they will tax you to death.)
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To: TXBubba

What are "HEB" stores?


45 posted on 08/03/2005 2:44:03 PM PDT by summer
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To: babaloo
The store near me is an overcrowded mess but the groceries are so cheap I can overlook that fact. The employees are nice too.

Walmart does so much business they can't keep up.

It's one of the reasons I shop there for food. Everything is fresh and new. I've bought "expired" stuff at Publix by accident - and that means the stuff was on the shelves for years. At Walmart, as soon as they get groceries on the shelves, someone's taking it down and putting it in their basket.

Old canned food is safe, but it starts breaking down - buy an old can of fruit from your local "we charge to the hilt" store then a can from Walmart. Both are safe, but the fruit in the old can will be mushier. Same with tomatoes and forzen foods.

Overcrowded is a fact, but it's worth it to get the better quality.

46 posted on 08/03/2005 2:44:36 PM PDT by GOPJ (A person who will lie for you, will lie against you.)
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To: bfree; BipolarBob; pollyannaish

Where union elections have been held at Wal-Mart, unions have been rejected repeatedly. That indicates worker satisfaction with things the way they are. I am a 31 year union member (retired)

Wal-Mart employees like all other employees have a legal right to organize. They don't - that's their choice.

My wife works in a management position at Wal-Mart and travels extensively in the central and west central U.S. Everywhere she goes she finds Wal-Mart wages and benefits compare favorably with all other stores of its type.

Management employees are encouraged to discourage unions by all legal means. As a long time union member I have no problem with that policy.

By the way, she didn't start out in management. 5 years ago she started as a deli clerk,


47 posted on 08/03/2005 2:45:41 PM PDT by Graybeard58 (Remember and pray for Sgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
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To: scheuber
If this stuff is true, I'd write letters to Wal-Mart asking them to fix some of these things.

Yeah. That is how I feel, but I never really know if this stuff is true. If it is true, how is this allowed? I mean, isn't Wal-mart an American company and subject to some laws about children labor, etc? Or does everything go out the window in these foreign countries? I really don't have a grip on it, but I agree with you.
48 posted on 08/03/2005 2:46:05 PM PDT by summer
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To: pollyannaish
I guess my greater point, on which we may agree is that all businesses offer the community something and cost the community something. In our case the benefits have outweighed the costs.

Good point.
49 posted on 08/03/2005 2:47:26 PM PDT by summer
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To: TXBubba
I don't know where you are in Texas but I just spent a little time in Gatesville and did some comparisons.

HEB there doesn't come close to Wal-Mart for low prices.

50 posted on 08/03/2005 2:47:45 PM PDT by Graybeard58 (Remember and pray for Sgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
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To: summer

I meant: child labor


51 posted on 08/03/2005 2:48:02 PM PDT by summer
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To: BipolarBob
They are in depressed wages and subsidies

Mabey they really were inflated wages until Wal Mart came in and brought them to a more reasonable level.

What exactly are you talking about with depressed subsidies? Is Wal Mart forcing the government to pay less to single moms?

52 posted on 08/03/2005 2:48:13 PM PDT by antienvironmentalist
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To: summer
Also true -- it's the Unions, democrats, and rip-off stores that hate Walmart:

...Wal-Mart isn't really about a Marxist conflict between capital and labor. Instead, it is a conflict pitting consumers and efficiency-oriented intermediaries like Wal-Mart against a combination of labor unions, traditional retailers and community groups. Particularly in retailing,

53 posted on 08/03/2005 2:49:39 PM PDT by GOPJ (A person who will lie for you, will lie against you.)
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To: TXBubba

Also, Wal-Mart will price match anything that HEB sells that Wal-Mart also sells if HEB price is lower.

Will HEB do the same?


54 posted on 08/03/2005 2:49:45 PM PDT by Graybeard58 (Remember and pray for Sgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
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To: Graybeard58

What is "HEB?"


55 posted on 08/03/2005 2:50:54 PM PDT by summer
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To: Graybeard58
Exactly. I continue to wonder why people hate Walmart so much. I've been in one's that I hated, and I've been in one's that I love. Not for everything, but for some things.

My assumption is that they are just an easy target because they are so successful. Beyond that, I'm kind of at a loss.

56 posted on 08/03/2005 2:53:06 PM PDT by pollyannaish
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To: Graybeard58

What is you obsession with unions? This was a story about the cost/benefit of Wal-mart. It sounds like you made a good union wage and are now trying to make the most of your retirement by hoo-raying a depressed wage/benefit for others. It is not money that is the root of all evil, it is the love of money. The union was good enough for you for 31 years but NOW it is crap?


57 posted on 08/03/2005 2:53:48 PM PDT by BipolarBob (Yes I backed over the vampire, but I swear I didn't see it in my rearview mirror.)
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To: Graybeard58; summer
Well, if Wal-Mart is having to lower its prices to match HEB then why would HEB do the same? We are in the Austin area and HEB beats them on groceries.

Summer, HEB stands for the H.(Howard?)E. Butts grocery chain. Yes, we now know why it goes by intials and not the full name! LOL. I think the family also started Safeway at one time but am not quite sure of all the facts there. I believe HEB is headquartered in San Antonio.

58 posted on 08/03/2005 2:55:03 PM PDT by TXBubba ( Democrats: If they don't abort you then they will tax you to death.)
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To: summer

I never heard of it either until I went to Gatesville, Texas a while back. It is a grocery store. I think they have quite a few stores in Texas. Maybe other places too.

My wife was helping open a new Wal-Mart Super Center there and we went to HEB and did some comparisons.

HEB lost.


59 posted on 08/03/2005 2:55:56 PM PDT by Graybeard58 (Remember and pray for Sgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
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To: Graybeard58

Well, that certainly explains your rabid defense of Wal-Mart. I like Wal-Mart but they aren't god.


60 posted on 08/03/2005 2:57:34 PM PDT by TXBubba ( Democrats: If they don't abort you then they will tax you to death.)
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