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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: antienvironmentalist
"What exactly are you talking about with depressed subsidies?

Read for context. The conjuction "and" separated the two. One was depressed and the other was not. Companies come into an area and ask for cities to pay (through tax breaks) for this entrance. This is a subsidy.

61 posted on 08/03/2005 2:57:48 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: BipolarBob

You don't read too well, do you? I said that unions are leftists, not graybeard. Maybe if you had done better in school, you wouldn't be whining like you do.


62 posted on 08/03/2005 2:59:08 PM PDT by bfree (PC is BS)
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To: TXBubba
HEB never had anything to do with Safeway as far as I know. HEB was actually started in town outside of San Antonio. Not real sure but maybe Kerrville or Fredricksburg. They do give Wal-Mart a lot of competition as far as groceries go. Much better selection and as cheap if not cheaper most of the time.
63 posted on 08/03/2005 3:00:29 PM PDT by nomorelurker (wetraginhell)
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To: summer
The author seems to be suggesting that Walmart is good for America because it helps to redistribute wealth from the rich to the poor by providing low prices to the people who shop there, who tend to be from the lower levels of the economic heirarchy. I agree with the author except to the extent he favors the redistribution of wealth.

How does the redistribution of wealth occur? In my state, for example, real estate taxes are the primary source of revenue for local government. Most of the real estate taxes are paid by the wealthier members of society because they tend to own the more expensive residential and commercial properties in the communities where Walmart and the other big box stores are located. Even many supporters of Walmart will admit that big box stores impose some financial burdens upon the community related to road construction and maintenance, fire and police protection, etc., the cost of which fall disproportionately upon the upper middle class and wealthy who shoulder the real property tax burden. That burden is even greater in those communities where the Big Box Stores have successfully lobbbied the local political whores for tax abatements as an incentive to build or remain in the community, leaving the other taxpayers to pay what the Big Box Store would have paid if not for the tax abatement. And while the Big Box stores do generate sales tax revenues, most of the revenues do not go to the localities to offset the cost of hosting a Big Box Store, but rather, to the state to spend on state stuff.

The redistribution of wealth occurs because the upper middle class and the wealthy as a whole generally don't shop at Walmart and therefore, they don't benefit from the "super low prices," yet they are the class that pays -- through higher real property taxes -- the cost of hosting the Big Box Store in the community. The less wealthy, who do shop at Walmart, benefit from the low prices, but share little of the real property tax burden.

64 posted on 08/03/2005 3:00:41 PM PDT by Labyrinthos
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To: BipolarBob

What is it with your obsession with defending unions?

I was a member for 31 years and I am not downing unions. My statement is that unions are legal and employees have a legal right to organize.

The fact is that when given a chance to vote for unions, Wal-Mart employees reject it time after time and Wal-Mart isn't breaking any laws by using legal means to discourage them.

I see Wal-Mart from the perspective of a long time union member and my wife is a member of Wal-Mart management. I think I am in a unique position to observe what is going on.

The dims hate Wal-Mart because they are a highly successful free enterprise business and they have achieved that success without being union.


65 posted on 08/03/2005 3:02:51 PM PDT by Graybeard58 (Remember and pray for Sgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
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To: Labyrinthos
The less wealthy, who do shop at Walmart, benefit from the low prices, but share little of the real property tax burden.

That is probably because they CAN"T afford property. Good grief.

66 posted on 08/03/2005 3:04:13 PM PDT by bfree (PC is BS)
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To: summer

All I know is I find it mighty strange that no one EVER complained back then or complains now about Sears crummy employee practices, etc. Very strange. I also find Sears clothing line(nasty) is less attractive, never really on the mark with fashion trends and charges higher than Walmart. Go figure.


67 posted on 08/03/2005 3:04:32 PM PDT by SunnySide (Ephes2:8 ByGraceYou'veBeenSavedThruFaithAGiftOfGodSoNoOneCanBoast)
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To: TXBubba

I am not saying that item by item that Wal-Mart is lower on every single thing. Overall they are lower priced though and if HEB is running a "loss leader" Wal-Mart will match their price on that or any item that you might find lower at HEB.

My question is will HEB match any lower price on any item that both stores carry if Wal-Marts price is lower?


68 posted on 08/03/2005 3:06:07 PM PDT by Graybeard58 (Remember and pray for Sgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
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To: Labyrinthos

Finally!! Someone who gets it. Thank you Labyrinthos. There are costs and benefits to the Walmart chain. And the local politicians can make them pay a fair price or let Wal-mart stick it in their pocket. I say they should pay their fair share in the community.


69 posted on 08/03/2005 3:07:30 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: Clemenza

"their stores are an overcrowded mess."


LOL, uh maybe cause that's indictative of the area you live in? WalMart there can't get any good help to manage that particular store?


70 posted on 08/03/2005 3:07:41 PM PDT by SunnySide (Ephes2:8 ByGraceYou'veBeenSavedThruFaithAGiftOfGodSoNoOneCanBoast)
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To: TXBubba
Well, that certainly explains your rabid defense of Wal-Mart. I like Wal-Mart but they aren't god.

My defence is "rabid"? You need a dictionary.

Nor did I say that "Wal-Mart is God"

By disclosing my wife's connection to Wal-Mart I was simply being honest about my motives. Certainly I have a monetary interest in Wal-Marts well being. If I tried to pretend otherwise that would be dishonest.

As I have stated in other posts, also in the interest of honesty. I am a 31 year union member (retired)

Here's one more fact - I am 60 years old and have never voted for a liberal in my life.

71 posted on 08/03/2005 3:11:44 PM PDT by Graybeard58 (Remember and pray for Sgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
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To: scheuber

"Like six year old girls working 14 hour days for seven cents an hour seven days a week."

Yeah darn those little girls! Why won't their countries leaders send them back to the child brothels so foreign male pedophiles can have more of a selection. Sarcasm off.


Signed,

reasonably unpleasant

(thanks flaglady47...heh heh)


72 posted on 08/03/2005 3:12:50 PM PDT by SunnySide (Ephes2:8 ByGraceYou'veBeenSavedThruFaithAGiftOfGodSoNoOneCanBoast)
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To: BipolarBob

You certainly are simplistic. Hate success don't you? Still waiting for your response to my questions in post #42.


73 posted on 08/03/2005 3:12:59 PM PDT by bfree (PC is BS)
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To: BipolarBob

"That says multitudes about the manufacuring base in your area."

No Mr. Bipolar, it's been the manufacturing base across America for some time now. Were you born yesterday?


74 posted on 08/03/2005 3:14:48 PM PDT by SunnySide (Ephes2:8 ByGraceYou'veBeenSavedThruFaithAGiftOfGodSoNoOneCanBoast)
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To: SunnySide

Too many good paying jobs at Boeing, Microsoft, or Amazon I guess.


75 posted on 08/03/2005 3:16:59 PM PDT by Clemenza (Life Ain't Fair, GET OVER IT!)
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To: Graybeard58
You might add to your list that you tend to over-react to disagreements.

And no, I've never heard of HEB lowering a price to match Wal-Mart. At least they don't advertise it if they do.

Regardless of your meaning of "rabid" I found that you made a blanket statement about HEB based on ONE opening in one city. I simply stated that we had read articles in our area that Wal-Mart was losing money in it's grocery line in our area due to the competition with HEB.

Whatever this discussion has to do with your voting habits is lost on me.

76 posted on 08/03/2005 3:18:57 PM PDT by TXBubba ( Democrats: If they don't abort you then they will tax you to death.)
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To: bfree

"The only real fact is that unions are dying and their last real hope is to unionize the retail industry and Walmart is the target,"

That's so true. They're so desperate they're targeting small privately owned business who employee less than forty to fifty people! Tragic


77 posted on 08/03/2005 3:19:07 PM PDT by SunnySide (Ephes2:8 ByGraceYou'veBeenSavedThruFaithAGiftOfGodSoNoOneCanBoast)
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To: bfree
" Freedom of choice is a great thing,"

Your own words. I choose to ignore you.

78 posted on 08/03/2005 3:20:04 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: SunnySide
WalMart there can't get any good help to manage that particular store?

You hit the nail on the head. If a store is a "mess" its a management problem. It's also a management problem if employees are rude or disrespectful, or if there aren't enough cashiers. I suggest to anybody who has a complaint with a particular store that they call the District Manager. You will find his/her name and phone number in the customer service department. I can tell you. he/she will take your complaint quite seriously. Give the D.M. names and details as much as possible.

79 posted on 08/03/2005 3:22:44 PM PDT by Graybeard58 (Remember and pray for Sgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
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To: pollyannaish

"...but are using more automation."

Well, we simply can't have that. Robots stealing high paying American jobs. Those that bash walmart for it's low prices are against automation too.


80 posted on 08/03/2005 3:25:19 PM PDT by DugwayDuke (Stupidity can be a self-correcting problem.)
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