WalMart

In the WaPo, Sebastian Mallaby chides Democrats for criticizing WalMart:

For a party that needs the votes of Wal-Mart's customers, this is a questionable strategy. But there is more than politics at stake. According to a paper for the National Bureau of Economic Research by Jerry Hausman and Ephraim Leibtag, neither of whom received funding from Wal-Mart, big-box stores led by Wal-Mart reduce families' food bills by one-fourth. Because Wal-Mart's price-cutting also has a big impact on the non-food stuff it peddles, it saves U.S. consumers upward of $200 billion a year, making it a larger booster of family welfare than the federal government's $33 billion food-stamp program.

Mallaby ignores the most important point: By ruthlessly driving down wages WalMart creates an environment in which many people can't afford to shop anywhere but WalMart.

No analysis of the "WalMart Effect" can be taken seriously unless this issue is addressed.

NOTE: The paper to which Mallaby links requires payment to read so I can't comment on it nor can I determine if Mallaby is accurately characterizing it.



I said Mallaby.


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