Analyzing three myths of the Wal-Mart Haters
By Beth Cody, Writers’ Group member
Iowa City Press-Citizen
Wednesday, June 9, 2008

Wal-Mart again plans to expand its aging Iowa City store into a 21st- century Super Wal-Mart. This is great news for those who live near Highway 1, since the entire southwest side of town lacks a grocery store.

But the Wal-Mart Haters are gearing up again to prevent you from shopping where you want to. And they will trot out many reasons why Wal-Mart is “bad” for Iowa City – reasons simply not founded on truth.

Reason #1: The supposedly low wages and heinous treatment of employees. Actually, Wal-Mart’s wages are competitive with other retail wages. How could they be otherwise? Workers have choices: Target, Kmart and Menard’s keep wages competitive. And Wal-Mart offers health and retirement benefits, unlike most small retailers. Are the thousands of applicants for each new Wal-Mart simply too stupid to know how bad those jobs are?

Reason #2: Wal-Mart doesn’t “Buy American”. This is the cruelest reason employed by the Haters, who want to keep developing countries poor by forcing retailers to buy from the world’s wealthiest producers. Wal-Mart (Target and Kmart too) is helping alleviate world poverty by buying their products, at the same time providing more-affordable items for America’s poor.

Reason #3: Wal-Mart puts local “Mom & Pop” stores out of business. This is only partly true, but actually a positive thing – “creative destruction”. New inventions and business models destroy some businesses, but better businesses rise in their place. The invention of the automobile destroyed the buggy manufacturers, but we’re all better off as a result.

Wal-Mart’s business model uses technology to stamp out wasteful costs, so it can offer goods for less than small businesses do – and still pay employees more.

This has made us all wealthier, because we spend less on toilet paper, leaving more money for other things. New restaurants, specialty retailers and service businesses can replace old, inefficient downtown retailers (like Iowa City’s downtown bounced back after the Coral Ridge Mall “destroyed” it ten years ago).

A study (“Has Wal-Mart Buried Mom and Pop?”) confirms that the number of small businesses has not decreased since the 1980s, and although they are different businesses (more restaurants and services), they are in no way inferior. Average inflation-adjusted income of sole proprietors has grown exponentially since 1970.

Lest I be accused of evil “interests,” my only relationship with Wal-Mart is occasional shopping trips. Oh, and I own and operate a small, specialty-retail store that competes directly with Wal-Mart.

So why am I still in business, when Wal-Mart offers my products at much lower prices? Because I offer better selection, quality, ambience and service. Not everyone is willing or able to pay more for these things, but enough people are that my store can exist. My competitors make my store better by keeping me on my toes, which makes everyone better off.

If you want to know who has “interests” in attacking Wal-Mart, look no further than the big service employees unions who fund Wal-Mart Watch, Wake Up Wal-Mart and our local rabble-rouser, Iowa City Stop Wal-Mart. The real reason behind all the activism is to force Wal-Mart employees to unionize and pay about $300 million dollars a year in compulsory dues to the decaying unions.

And they’re willing to hurt America’s poor to advance their self-interest.

The average working family saves $2,000 a year because of Wal-Mart and other low-cost retailers. The biggest beneficiaries are families with incomes less than $10,000 – a Wal-Mart makes a 30% difference in what they can buy.

Wal-Mart has probably done more economic good for Americans in the last quarter-century than any other organization (including government).

For all the absurd assertions that Americans are worse off than ever, food, clothing and household goods cost far less in terms of hours worked than they did in 1970, and a staggering 25% of the price decreases are attributable to Wal-Mart alone.

On the other hand, health care, education, housing and transportation are now unaffordable – thanks to government policies. (But Wal-Mart provides hope for health care, with walk-in clinics and $4 prescriptions.)

Wal-Mart made itself into a great American success story – not by exploiting anyone, but by providing what people need at affordable prices. I like to believe that the Haters will not triumph over the poor this time.