That’s the title of a recent editorial in the Los Angeles Times. Here is the article in full:
Democrats’ Shameful Wal-Mart Demonization
Presidential hopefuls only hurt themselves when pandering to unions by bashing the country’s largest employer.WITH ONE EYE ON 2008 and one on their labor union base, Democratic luminaries are canvassing Iowa and other states this summer to campaign against the nation’s incumbent … retailer. They obviously see Wal-Mart as this season’s Enron, the one corporation that represents all that is wrong with America.
Too bad the party can’t simply draft Costco or Target to run for president. Instead, Democratic presidential aspirants — including Sen. Joseph R. Biden Jr. of Delaware, Sen. Evan Bayh of Indiana, former Sen. John Edwards of North Carolina and Gov. Bill Richardson of New Mexico — feel compelled to bash one company, the largest employer in the U.S., to score points with labor organizers. The candidates are so intent on gaining tactical advantage in the primary season that they risk alienating possible supporters in the general election.
Most Americans do not want their politicians ganging up on one company. Wal-Mart may be a behemoth that employs 1.3 million people in this country and earned $11 billion in profit last year, but it still looks like bullying when politicians single out one business to scapegoat for larger societal ills. And when they start passing laws aimed at their scapegoat — as the Maryland Legislature did when it passed legislation forcing Wal-Mart to spend a certain amount on employee healthcare — the judiciary rightly balks. A federal judge struck down the regulation, holding that it violates laws requiring equal treatment of employers.
But there is no stopping the campaign rhetoric. At an anti-Wal-Mart rally last week in Iowa, Biden noted that the retailer pays people $10 an hour, and then asked: “How can you live a middle-class life on that?” It’s clearly the company’s fault, at least from a skewed senatorial perspective, that all Americans cannot live a comfortable middle-class life. How dare it pay prevailing retail wages? Bayh, who appeared at another rally, was quoted as saying that Wal-Mart is “emblematic of the anxiety around the country.” That may be true. But if it’s the emblem he’s worried about, he should stay in Washington and work to make healthcare more affordable for working families.
The gusto with which even moderate Democrats are bashing Wal-Mart is bound to backfire. Not only does it take the party back to the pre-Clinton era, when Democrats were perceived as reflexively anti-business, it manages to make Democrats seem like out-of-touch elitists to the millions of Americans who work and shop at Wal-Mart.
One reason the Democrats may have a tin ear on this subject is demographic. Certainly most of the party’s urban liberal activists are far removed from the Wal-Mart phenomenon. The retailer has thrived mainly in small towns and exurbs, which is one reason a Zogby poll found that three-quarters of weekly Wal-Mart shoppers voted for President Bush in 2004, and why 8 out of 10 people who have never shopped at Wal-Mart voted for John Kerry. Denouncing the retailer may make sense if the goal is to woo primary activists, but it’s a disastrous way to reach out to the general electorate. Or to govern, for that matter.
The article can be found here.
Update: Daniel Drezner has more and Sebastian Mallaby of the Washington Post has more.
Update: Robert Samuelson has more.
Update: Other economists weigh in.
Here is what is shameful-
- The median hourly wage for American workers has declined 2% since 2003 after factoring in inflation while productivity (the amount that an average worker produces in an hour has increased in that period has risen in that period.
- Wages and salaries now make up the lowest share of US GDP since the government began recording this data in 1947 while corporate profits have frown to their highest share since the 1960’s.
You don’t think that the fact that nation’s largest employer pays wages at artificially low rates has something to do with this problem.
Its not just Joe Biden that warns about threats of too many workers living below middle class levels. Just last week Ben Bernanke the conservative Fed Chief appointed by Pres Bush warned that “recent economic changes threaten the livelihood of some workers and the profits of some firms” and that “policy makers must ensure that the benefits of global economic integration are sufficiently wildly shared.”
In many towns Wal-Mart is a virtual monopoly, they move into a small town, squash all of the local competitors at which point they are the only real employer in town, they can pay whatever low rate they want becuase there is not competitor in the local labor market, its work at Wal-Mart at minimum wage or starve. This is what a lot of “free-market” proponents do not understand, it is not a free market when a monopoly exists.
The only way that Wal-Mart could ever become as monopolistic as you claim here* is for Wal-Mart to offer significantly lower prices than the alternative stores - thereby increasing purchasing power. Also, the only way that Wal-Mart could pay employees so little is by opening up a store in an employee nourished neighborhood, thereby bringing more employment to the area. There are two sides to the Wal-Mart story, and it seems that if you add them all up, even at the worse case scenario, Wal-Mart is more a positive than a negative.
*The real world scenario is not quit as bleak, Wal-Mart, for one, pays significantly higher wages than many small businesses it supposedly runs out, and compliments many other businesses, all in all pushing up standard of living and jobs)