Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Wal-Mart economy keeps lid on US inflation: study
Associated Press ^ | November 5, 2005

Posted on 11/05/2005 11:51:05 AM PST by RWR8189

The "rock-bottom" pricing strategy used by retail giant Wal-Mart has filtered into the US economy and kept a lid on inflation, according to a study commissioned by the company and released.

The study by the economic research firm Global Insight concluded that the discounting along with other measures led to cumulative savings for consumers of 263 billion dollars between 1985 and 2004, or 895 dollars per person.

The researchers concluded that Wal-Mart had a positive impact on US employment, generating 210,000 jobs by 2004, or 0.15 percent more that would have existed without Wal-Mart.

The report also found that Wal-Mart's low pay for employees led to a 2.2 percent drop in overall wages across the economy but maintained that this was offset by falling consumer prices.

"Consumers earned less in nominal dollars, but their income bought them more in the economy with Wal-Mart because of real disposable income gains," the study concluded.

The study drew criticism from Wal-Mart's chief detractors, who argue that the company benefits from a variety of public subsidies while depressing wages.

Tracy Sefl, spokeswoman for Wal-Mart Watch, a leading critic of the company, said her group's research, based on data from congressional reports, concludes that Wal-Mart benefits from at least 1.5 billion dollars in public subsidies each year.

Additionally, Sefl noted other reports showing retail workers lost 4.7 billion dollars as a result of depressed wages and that nearly half of the children of Wal-Mart employees qualify for the government's Medicaid health program for the needy.

"Wal-Mart is only telling part of the story, which is not the same as telling the whole story," Sefl said.

Global Insight concluded that over the 1985-2004 period, Wal-Mart led to to 9.1 percent decline in food prices, a 4.2 percent decline in prices of other goods and a 3.1 percent decline in overall consumer prices.

The research firm found Wal-Mart led to a 0.75 percent improvement in the overall efficiency of the economy, based on capital intensity and lower import prices.


TOPICS: Business/Economy; Extended News; Government; News/Current Events
KEYWORDS: deflation; economy; retail; walmart
It has long been said that China's greatest export to the world is deflation, Wal-Mart seems to be proving this correct.
1 posted on 11/05/2005 11:51:06 AM PST by RWR8189
[ Post Reply | Private Reply | View Replies]

To: RWR8189
"0.15 percent more that would have existed without Wal-Mart. "??
-Man I wish I had their insight on ALTERNATE DIMENTIONAL PROBOBILITY.
2 posted on 11/05/2005 11:57:27 AM PST by clbiel (Hey Islam! Satan's on the line- says he's not giving back your religion without a fight.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: RWR8189
retail workers lost 4.7 billion dollars as a result of depressed wages and that nearly half of the children of Wal-Mart employees qualify for the government's Medicaid health program for the needy.

"Always low prices."

3 posted on 11/05/2005 12:02:27 PM PST by teenyelliott (Soylent green should be made outta liberals...)
[ Post Reply | Private Reply | To 1 | View Replies]

To: A. Pole; ninenot; neutrino; oceanview; snowsislander

retail workers lost 4.7 billion dollars as a result of depressed wages and that nearly half of the children of Wal-Mart employees qualify for the government's Medicaid health program for the needy.


4 posted on 11/05/2005 12:19:46 PM PST by jb6 (The Atheist/Pagan mind, a quandary wrapped in egoism and served with a side order of self importance)
[ Post Reply | Private Reply | To 3 | View Replies]

To: RWR8189; bfree; Diana in Wisconsin; Mrs.Nooseman; Graybeard58
We hit paydirt today :)

Tracy Sefl, spokeswoman for Wal-Mart Watch, a leading critic of the company, said her group's research, based on data from congressional reports, concludes that Wal-Mart benefits from at least 1.5 billion dollars in public subsidies each year.

I take anything this union front group say about WalMart with a grain of salt.

5 posted on 11/05/2005 12:24:54 PM PST by Gabz
[ Post Reply | Private Reply | To 1 | View Replies]

To: RWR8189
The "rock-bottom" pricing strategy used by retail giant Wal-Mart has filtered into the US economy and kept a lid on inflation, according to a study commissioned by the company and released.

Even the harshest critics haven't asserted that Wal-Mart controls monetary policy. And inflation is solely a monetary phenominon.

Either the AP vastly misunderstood the study's results or else the consultant who wrote the study has a credibility rating of zero.

6 posted on 11/05/2005 12:38:15 PM PST by SolidSupplySide
[ Post Reply | Private Reply | To 1 | View Replies]

To: RWR8189
Sure...when a new Wal-Mart has opened, all their new hires left better paying jobs (with better benefits) just to work at Wal-Mart. /s
7 posted on 11/05/2005 12:51:02 PM PST by elli1
[ Post Reply | Private Reply | To 1 | View Replies]

To: Gabz

I am a 30+ year retired union member and have no built in prejudices against unions but the tactics I have seen used by union organizers are repugnant to me and should be to every decent American whether they are union members or not.

About 5 years ago I received an unsigned flyer in my mail, in it was a request of all members retired and active to go to Wal-Mart, fill a shopping cart with mostly pershible goods and then walk out of the store. It wasn't union sanctioned but where did they get the mailing list?

In the interest of fairness I will tell you that my wife works for Wal-Mart. She started as a deli clerk 6 years ago at a little more than minimum wage. She had a high school diploma. Taking advantage of advancement opportunities and continuing her education at the local jr college she has advanced through the ranks and now makes an almost obscene amount of money (I said ALMOST obscene.) She is 52 years old.

Nobody has to stay in these entry level jobs at Wal-Mart, they are free to advance or seek employment elsewhere.

I was just told by a poster on a different thread that Wal-Mart sells junk. Wonder why it's "junk" when you buy a Sony big screen at Wal-Mart but if you pay $100 more for the same TV at a different store it's quality merchandice.

Wal-Mart is the most successful company on earth. Some people just can't stand that.


8 posted on 11/05/2005 12:51:30 PM PST by Graybeard58 (Remember and pray for Sgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
[ Post Reply | Private Reply | To 5 | View Replies]

To: RWR8189; All

From yesterday, on C-SPAN now.


9 posted on 11/05/2005 12:53:03 PM PST by leadpenny
[ Post Reply | Private Reply | To 1 | View Replies]

To: RWR8189
Tracy Sefl, spokeswoman for Wal-Mart Watch, a leading critic of the company, said her group's research, based on data from congressional reports, concludes that Wal-Mart benefits from at least 1.5 billion dollars in public subsidies each year.

Additionally, Sefl noted other reports showing retail workers lost 4.7 billion dollars as a result of depressed wages and that nearly half of the children of Wal-Mart employees qualify for the government's Medicaid health program for the needy.

So is it Wal-Mart or its employees that are getting public subsidies?
10 posted on 11/05/2005 12:54:09 PM PST by operation clinton cleanup
[ Post Reply | Private Reply | To 1 | View Replies]

To: RWR8189
BWA HA HA HA HA HA HA! Wal-Mart is helping the American economy?!!?? I bet that REALLY frosts the unions!! BWA HA HA HA HA HA HA HA HA!
11 posted on 11/05/2005 12:55:37 PM PST by Recovering_Democrat (I am SO glad to no longer be associated with the party of Dependence on Government!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Graybeard58

I am not particularly anti-union, but like you, I do find some of their tactics very repugnant.

Shortly before school started there were several threads here about the NEA targeting walMart and telling members not to shop there. The Washinton State chapter went so far as to inform their members that receipts from WalMart would not be reimbursed. Interestingly, the day we were in WM to do back-to-school shopping we ran into more than a half dozen tachers and staff from my daughter's elementary school :)

I applaud your wife for what she has accomplished working at WM, and I applaud you for the grief you receive on these threads for admitting that.

In the spring we were pricing window air conditioners in the 10,000 btu range. The GE 12,000 btu one we bought was over $100 less in WM than a 10,000 btu one else where. Why should I not save that money? To appease the WalMart bashers or the unions trying toundermine the company? I don't think so.


12 posted on 11/05/2005 1:09:55 PM PST by Gabz
[ Post Reply | Private Reply | To 8 | View Replies]

To: SolidSupplySide

Inflation is an economic phenomenon which monetary attempts to control.

Discounters like Wal-Mart keep prices low and hamper inflation.


13 posted on 11/05/2005 1:13:38 PM PST by RWR8189 (George Allen 2008)
[ Post Reply | Private Reply | To 6 | View Replies]

To: RWR8189
While I like wal-mart, this study is wrong.

Its based on a keynesian economic belief.

It assumes that labor drives inflation.

This is wrong, inflation is a monetary issue.

I.E. to much money chasing to few goods.

It is not economic but monetary as an issue.

Wal-Mart has no impace or influence on inflation, one way or the other.

Money supply is the main factor in inflation not a retail shop.

14 posted on 11/05/2005 1:18:07 PM PST by Sonny M ("oderint dum metuant")
[ Post Reply | Private Reply | To 1 | View Replies]

To: Gabz; All
"...concludes that Wal-Mart benefits from at least 1.5 billion dollars in public subsidies each year."

Wal-Mart is the ONLY national company that benefits from public subsidies on the planet? *SNICKER* Wow! (Off the top of my head, I can think of shipping companies, airlines, the Post Office and the biggest subsidy pig of them all, AMTRAK!) Now, be honest, all you Wally-Bashers; how often do you need expendable consumer goods such as toilet paper or deodorant, or need to mail a letter versus needing to ship a crop overseas, or use AMTRAK to visit Grandma? Where would you rather see the government spending your tax dollars? Giving Wal-Mart a break, or bailing out the airlines yet again? The less money the government throws at companies providing for "the common good" the more money comes out of YOUR pocket for the basic necessities of life.

Quitcherbitchin. We, the Taxpayer, are going to pay either way, so I'll take my subidies in cheaper toilet paper and pet food over AMTRAK, thanks! Economics 101.

"Subsidy: financial assistance granted by a government or philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare. Subsidies were used in England in the later Middle Ages, when Parliament granted funds to the king to augment or replace customs and other taxes collected by royal prerogative; such early subsidies later became the means by which the power of taxation was taken from the king and lodged in Parliament. At first a nationwide levy, it became (in the reign of Charles II) a land tax levied annually without the intervention of a parliamentary vote. In France the king was able to retain his control and acquire financial powers that made him independent of any subsidy granted by the States-General. The term subsidy has had widely varied usage in the 20th cent. Subsidies may be granted to keep prices low, to maintain incomes, or to preserve employment. They are most important as grants to private corporations for performing some public service, such as to shipping companies and airlines for carrying the mail or to railroads for maintaining passenger service. These are often required where a necessary public service, particularly one that might otherwise not be profitable, is granted funds to remain in operation. In the United States, the National Railroad Passenger Corporation (Amtrak) receives federal subsidies for its intercity railway network. American cities have frequently subsidized transit companies to induce them to provide metropolitan transportation facilities for the public. Other commonly subsidized enterprises include agriculture (see agricultural subsidies), business expansion, and housing and regional development. In the United States, 5 million households received housing assistance in 1998. Medical and educational institutions are among the largest recipients of subsidies (see foundation); in 1997, for instance, federal spending in the United States paid 46% of national medical costs. Subsidies have also been granted by one country to another country to aid it in pursuing a war effort, to gain its goodwill, or to help stabilize its economy. Very similar to a subsidy is a bounty, except that it usually takes the form of a per-unit premium or reward for a service already performed.

http://www.answers.com/topic/subsidy

15 posted on 11/05/2005 1:47:04 PM PST by Diana in Wisconsin (Save The Earth. It's The Only Planet With Chocolate.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: RWR8189
You do not have an accurate understanding of economics.

I do not dispute that Wal-Mart is an extremely efficient company. Furthermore, I don't dispute that Wal-Mart's efficiency holds down prices less than they otherwise would be.

But that has nothing to do with inflation. Inflation is the debasement of the monetary unit (the dollar). Only the Federal Reserve (through poor monetary policy) can debase the dollar.

16 posted on 11/05/2005 2:01:19 PM PST by SolidSupplySide
[ Post Reply | Private Reply | To 13 | View Replies]

To: Diana in Wisconsin

RUH ROH, REORGE.........now you've gone and done it - burst their widdle bubbles .......LOL!!!

As we say on the tobacco threads about the anti-smokers - don't confuse them with facts, their minds are already made up :)


17 posted on 11/05/2005 2:02:23 PM PST by Gabz
[ Post Reply | Private Reply | To 15 | View Replies]

To: Sonny M
Money supply is the main factor in inflation not a retail shop.

What he said.

(For the record, I agree with everything else in your post, Sonny, but this was the primary point.)

18 posted on 11/05/2005 2:05:05 PM PST by SolidSupplySide
[ Post Reply | Private Reply | To 14 | View Replies]

To: Gabz

"...don't confuse them with facts, their minds are already made up."

I know. It's fruitless, but I'm just in one of those moods today. Think I'll go next door to SL and poke Jeff with a stick for a while now, LOL!


19 posted on 11/05/2005 2:05:16 PM PST by Diana in Wisconsin (Save The Earth. It's The Only Planet With Chocolate.)
[ Post Reply | Private Reply | To 17 | View Replies]

To: SolidSupplySide
Money supply is the main factor in inflation

Actually, money demand is an equal factor in inflation. But the market determines money demand. Money supply is what we (through the Federal Reserve) have control over. Therefore, I don't see much harm in focusing your attention on money supply.

20 posted on 11/05/2005 2:08:19 PM PST by SolidSupplySide
[ Post Reply | Private Reply | To 18 | View Replies]

To: Diana in Wisconsin

ROFL!!!!!!!!!!


21 posted on 11/05/2005 2:17:04 PM PST by Gabz
[ Post Reply | Private Reply | To 19 | View Replies]

To: Graybeard58

I used to sell to Walmart in Bentonville and it was amazing to see how their corporate offices were like a small business' warehouse. Small rooms, drab and without hubris. Compare that to the Kmart offices which were like a palace.

The buyers were more interested in how our products were positioned and the quantity in certain areas where our product was in demand by customers. They did not take an advertising program on a national scale just because it added to their bottom line (unlike many other retailers who take the money and run, even if the product wouldn't work in a certain area).

Although as such a massive company they are bound to have problems, especially with the left who hate success, I am impressed by their business sense and dedication to grow by meeting the needs of their customers. I think criticism is good to keep them honest, but the extent of the hatred for Walmart can be as logical as blaming Bush for Paris burning.


22 posted on 11/05/2005 2:50:17 PM PST by soloNYer
[ Post Reply | Private Reply | To 8 | View Replies]

To: Recovering_Democrat

LO:. Wait til Walmart starts selling made in China automobiles.


23 posted on 11/05/2005 3:04:17 PM PST by hubbubhubbub
[ Post Reply | Private Reply | To 11 | View Replies]

To: Sonny M
I.E. to much money chasing to few goods. ... Wal-Mart has no impace or influence on inflation, one way or the other. Money supply is the main factor in inflation not a retail shop. Well, didn't you say "too much money chasing to few goods"? That's exactly right. This means there are TWO variables: 1. Money supply 2. supply of goods While the Fed is in part responsible for the money supply in America, the supply of goods comes from China thru Wal*Mart. Therefore Wal*Mart does indeed have a huge influence on inflation in America.
24 posted on 11/05/2005 6:01:11 PM PST by blueberry12
[ Post Reply | Private Reply | To 14 | View Replies]

To: SolidSupplySide
But that has nothing to do with inflation. Inflation is the debasement of the monetary unit (the dollar). Only the Federal Reserve (through poor monetary policy) can debase the dollar.

Read my previous post.

25 posted on 11/05/2005 6:08:54 PM PST by blueberry12
[ Post Reply | Private Reply | To 16 | View Replies]

To: blueberry12
....the supply of goods comes from China thru Wal*Mart.

PULEEEEEEEEZE........WalMart doesn't sell anything different than any other retailer, thus the same can be said for any other retailer.

26 posted on 11/05/2005 6:12:39 PM PST by Gabz
[ Post Reply | Private Reply | To 24 | View Replies]

To: soloNYer
I think criticism is good to keep them honest, but the extent of the hatred for Walmart can be as logical as blaming Bush for Paris burning.

All of your points are excellent, but this did give me a chuckle...the left is blaming Bush for the hurricanes, so why not for Paris burning?

27 posted on 11/05/2005 6:14:04 PM PST by Gabz
[ Post Reply | Private Reply | To 22 | View Replies]

To: Gabz
....the supply of goods comes from China thru Wal*Mart. PULEEEEEEEEZE........WalMart doesn't sell anything different than any other retailer, thus the same can be said for any other retailer.

WALMART does sell stuff that everybody else sells. But there are two important things that you ignore:

1. WAL*MART SELLS MORE STUFF THAN OTHER RETAILERS!

2. WAL*MART SELLS FOR LESS.

PLEASE! WAL*MART is not just another company that sells stuff.

28 posted on 11/05/2005 6:46:57 PM PST by blueberry12
[ Post Reply | Private Reply | To 26 | View Replies]

To: blueberry12

You are missing the point here..............it is the manufacturers that moved overseas - not WalMart or any other retailer.........and the manufacturers were doing so long before WM ever came on the scene.

My entire point on all of these WM bashing threads is not that WM is so great - but rather WHY have the US manufacturers moved their operations out of the US?

No one wishes to look at the real culprits, they just want to beat up on one guy.


29 posted on 11/05/2005 7:05:44 PM PST by Gabz
[ Post Reply | Private Reply | To 28 | View Replies]

To: blueberry12

These folks know exactly what you mean. Their intent is largely to obscure the clarity of argumentation and hide within the cloud of confusion they create. The root of their argumentation is the notion of "everyone does it" combined with the notion that "the only reason businesses exist is profit". Everything else to them is moot. Just as with businesses that hired child laborors or used slaves. Just as with trucking companies that ran their drivers without breaks till they were falling asleep at the wheel -endangering themselves and others, etc. Profiteers often forsake all but the money they seek and "we the people" end up having to reign them in and place restrictions upon them in order to uphold moral principles of right and justice. The fogging of the argument is their hope that "we the people" will not so constrain them this time as has been the case in the past. They don't want to be held to answer. In all likelyhood though, they will be.


30 posted on 11/05/2005 7:08:48 PM PST by Havoc (President George and King George.. coincidence?)
[ Post Reply | Private Reply | To 28 | View Replies]

To: Havoc

...on the other hand, as I have seen on these threads, a lot of people really, really like Wal-Mart. If there was not support for the "big box" retailers, folks wouldn't let them build in their communities.


31 posted on 11/05/2005 7:12:53 PM PST by durasell
[ Post Reply | Private Reply | To 30 | View Replies]

To: durasell

That's true; but, not entirely accurate. There are some communities wherein walmart is the only business functionally selling some things. There are others where walmart may be open 24 hours and is the only place to buy things after a certain time of night. There is also the condition now imposed as a result of walmart - that people make so little that walmart is the only thing they can afford.

Trying to put this into a simplistic one line rebuke is not so easy to do. I don't shop at Walmart. But I know many do. And I know they cannot afford to shop elsewhere because of wages. Amazingly, before Walmart came here, people could afford better and did. Now they do not. At the same time, since walmart has come in, a lot of high dollar jobs have left due to similar competition - offshored and outsourced, and now the majority of jobs around here are low paying. Ant it continues to get worse.


32 posted on 11/05/2005 7:24:29 PM PST by Havoc (President George and King George.. coincidence?)
[ Post Reply | Private Reply | To 31 | View Replies]

To: Havoc

Here in NYC they've blocked Wal-Mart at every turn, though Home Depot, Target and K-Mart seem to flourish.

That a Wal-Mart in a small community essentialy kills off the downtown as well as shopping malls is beyond debate. I've seen vacant stopping mall stores with plywood over the windows with my own eyes.

On the other hand, Wal-Mart is what people seem to want. Some of the pro-Wal-Mart people on these threads are quite passionate about the store and are prepared to defend them with facts, figures and last ounce of strength.

My only response to that is: well, okay. you get what you want. this is America and people more or less can create the type of community they want. It wouldn't be my choice, but it's still a free country.


33 posted on 11/05/2005 7:31:58 PM PST by durasell
[ Post Reply | Private Reply | To 32 | View Replies]

To: durasell

People want Candy; but, one cannot live off of candy. People want bread and circuses. Both are not normally feasable unless in moderation. Walmart is the antithesis of moderation as concerns the depressing of wages, price and profits. Companies may make a great deal of money because of Walmart, but they also lose over what they could make were it not for Walmart. Walmart is the compromise position of doing or doing without. Walmart has used its weight to so depress the market, that the competition it creates is both damaging and at once constructive to it's own end. When you run everyone else off, you are now the only thing anyone can afford. I have a cheap house in my hometown - cheaper than rent for an apartment would be. And I can barely afford to live in it. I don't know how renters afford anything - especially young kids just entering the market.

Anyway, off to work.


34 posted on 11/05/2005 7:39:55 PM PST by Havoc (President George and King George.. coincidence?)
[ Post Reply | Private Reply | To 33 | View Replies]

To: Havoc

take care


35 posted on 11/05/2005 7:41:36 PM PST by durasell
[ Post Reply | Private Reply | To 34 | View Replies]

To: blueberry12
My comments.

That's exactly right. This means there are TWO variables: 1. Money supply 2. supply of goods

I'll agree as long as you agree that "supply of goods" is roughly equivalent "money demand".

While the Fed is in part responsible for the money supply in America, the supply of goods comes from China thru Wal*Mart. Therefore Wal*Mart does indeed have a huge influence on inflation in America.

The Fed is almost wholly responsible for money supply in America. It could devalue the dollar by a factor of 10 overnight if it wanted to. It could create a policy of deflation if it wanted to. Yes, banking theory suggests that banks can create money, but that is immaterial to the power of the Fed. Trade with China is irrelevant to US monetary policy.

Advocates of Classical economics (like me, see screenname) believe the role of the Fed is to keep the value of the dollar stable. That should be the sole goal of monetary policy. Keynesians (and their cousins, the Monetarists) believe that the Fed should have some sort of target inflation. They agree with the Classicists that monetary policy is the driving factor in the value of the dollar. They simply think they can trick market forces into believing something that is not true with their inflation. Classicists do not believe you can trick the market. Classicists believe all inflation is bad.

I feel I'm getting into a discussion of Keynesianism vs. Classicism. If that is your desire, I will continue.

36 posted on 11/06/2005 8:26:16 AM PST by SolidSupplySide
[ Post Reply | Private Reply | To 24 | View Replies]

To: blueberry12
WALMART does sell stuff that everybody else sells. But there are two important things that you ignore:

The big difference that is ignored is that Wal-Mart resists labor unions. That makes Wal-Mart a political lightening rod.

37 posted on 11/06/2005 8:27:51 AM PST by SolidSupplySide
[ Post Reply | Private Reply | To 28 | View Replies]

To: bjcintennessee

ping


38 posted on 11/06/2005 8:36:32 AM PST by ImaTexan
[ Post Reply | Private Reply | To 12 | View Replies]

To: Graybeard58

Amen.

Wal-Mart pays better than Mom & Pop, and Mom & Pop sell the exact same things at a higher price. So, what's the argument here?

It's also worth noting that a lot of the "junk" are -American- junk. Take their budget furniture for example. All particle board... most all American. The Chinese furniture I have is solid wood.


39 posted on 11/06/2005 8:41:14 AM PST by Seamoth
[ Post Reply | Private Reply | To 8 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson