The Wal-Mart Problem

[Beestie]

Originally Posted by Undertoad

That phrase used to be common and meaningful to the minimum wage argument...

I can't get too specific about California's economy but common sense tells me a couple things.

Wages in CA are artificially high. Artificial because the grocery store unions have leveraged them up. Higher wages increase prices which, in turn, raises the poverty line. Additionally, California's generous state-provided entitlement programs (education and other benefits for non-citizens who don't pay into the tax system) serve to increase the tax burden disproportionately. A higher tax burden also has the effect of raising the poverty line because those who shoulder the burden must raise prices to cover the increase.

Now, Wal-Mart sees the "gap" between labor costs and price level and enters the market with lower prices and lower labor costs and makes a zillion dollars BECAUSE their lower prices enable shoppers to basically lower their own poverty line by increasing their buying power. A point conspicuously absent from the cited study.

I just think its disingenuous to single out Wal-Mart for paying below-average wages when all they are guilty of is offering a wage and benefit package that is better than 44,000 Californians had before Wal-Mart entered the CA market. And to turn a blind eye to farm co-ops who "employ" thousands of non-citizens and pay no labor tax and pocket the wage differential.

And without necessarily assuming it, I think its a safe bet to say that Wal-Mart's contribution to the GDP of California far outweighs the phantom cost the study attributes to Wal-Mart. The study was not an economic study and only looked at one element in the equation.

Therefore, while interesting, the study is basically conclusionless.