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.
"Always low prices."
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.
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.
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.
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.
From yesterday, on C-SPAN now.
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.
Inflation is an economic phenomenon which monetary attempts to control.
Discounters like Wal-Mart keep prices low and hamper inflation.
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.
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
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.
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 :)
What he said.
(For the record, I agree with everything else in your post, Sonny, but this was the primary point.)
"...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!
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.
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