Sebastian Mallaby writes in the Washington Post:
Wal-Mart’s critics allege that the retailer is bad for poor Americans. This claim is backward: As Jason Furman of New York University puts it, Wal-Mart is “a progressive success story.” Furman advised John “Benedict Arnold” Kerry in the 2004 campaign and has never received any payment from Wal-Mart; he is no corporate apologist. But he points out that Wal-Mart’s discounting on food alone boosts the welfare of American shoppers by at least $50 billion a year. The savings are possibly five times that much if you count all of Wal-Mart’s products.
These gains are especially important to poor and moderate-income families. The average Wal-Mart customer earns $35,000 a year, compared with $50,000 at Target and $74,000 at Costco. Moreover, Wal-Mart’s “every day low prices” make the biggest difference to the poor, since they spend a higher proportion of income on food and other basics. As a force for poverty relief, Wal-Mart’s $200 billion-plus assistance to consumers may rival many federal programs. Those programs are better targeted at the needy, but they are dramatically smaller. Food stamps were worth $33 billion in 2005, and the earned-income tax credit was worth $40 billion.
The entire article is well worth the read, Sebastian continues on to debunk many of the current charges against Wal-Mart. In the end, he shows that Wal-Mart is not only good for the United States, but especially good for the poor.
Economics professor Russell Roberts has a post on whether Wal-Mart should treat its workers better and another one on wages.
Radley Balko, policy analyst with the Cato Institute, has more and Market Power has more.
Update: Daniel Drezner has more.
I am still boycotting Wal-Mart!
Actually, if you truly care about the poor, the economically sound thing to do is shop more at Wal-Mart, not less.
I demand an audit of your bank account. There must be some kind of kickback coming to you from the Walmart HQ for all of the advertising, I mean, “reporting” you do about them.
Any objective economic analysis loses any credibility when the writer refers to someone as “Benedict Arnold”.
As far as the median income numbers. They can be skewed by where the stores are located. As we all know, major metropolitan markets like NY, SF etc. have major higher median income levels than rural areas. However in real dollars they are much lower due to much higher cst of living.
I can tell you in the NY Metro area, there are Targets and Costco’s in all neighborhoods. There are very few Wal-Marts. So, the $75K shoopers of Target in NY are barely getting by while if you were making $75K in rural Ark., you’d be living like a king.
Michael,
Either way you slice it, cheaper prices primarily helps the poor.
Big Gringo,
No kickback here, just trying to keep things in their proper perspective.
Cheaper prices help the poor assuming that they are not making up for the cost differential in some other way — i.e. fewer jobs, lower paying jobs, reduced environmental standards, less health care coverage etc. I haven’t personally seen data indicating Wal-Mart causes any of these things, but you cannot simply assume them away by categorically proclaiming that lower prices help the poor.
Hey Abo,
Glad to see you in my neck of the woods. I agree with what you say, btw.
Either way you slice it, cheaper prices primarily helps the poor.
Agreed. It helps the everyone. Nowadays, it seems like the Middle class can barely pay for necessisites.
“Glad to see you in my neck of the woods.”
I’m taking the fight to you! just playin. So, beers? late decemberish?
I’m down, cuando quieras mi amigo. Can we talk shit about liberals though? LoL. I kid, I kid…
Walmart scares me. A couple of years back I was taking an advertising class where I learned that Walmart has the biggest people database in the world. They can track down what you eat, what you wear, what you read, what toilet paper you use. . .and so on. . . just by accessing your credit card number/atm card.
Something that is very scary to me, because where I use to work I learned that big brother does exist and I also heard that’s how they found NEO. :p~
Wow, very scary indeed!!! I didn’t know a company could do that, damn.
It may not be the best way to introduce myself, but a suggestion, if I may: If you don’t like Wal-Mart, don’t shop at Wal-Mart. There is always K-Mart/Sears, Target, Costco.
Exactly, but if only life were that simple. There are many that not only don’t like Wal-Mart, but even want to take away the consumers choice of deciding for themselves, whether to shop at Wal-Mart or not.