Sebastian Malaby has an interesting op-ed in The Washington Post on how the anti-Wal-Mart movement is taking over the Democratic Party. He argues that this kind of “dumb economic populism” is ultimately going to hurt the Democratic Party with the low-income to middle-class voters that they need to win.
I tend to agree — despite the fact that I can’t stand Wal-Mart, the silliness of the Democratic anti-Wal-Mart campaign shows just how far the left the Democrats have gone. The issue of Wal-Mart has been described as one of the top issues in the country — a statement that’s rife with a sense of misplaced priorities.
Wal-Mart as a political football riles up only two groups of people: rich white liberals and union members. Both of those groups are already firmly in the Democratic camp. It has no resonance with the rest of the American electorate. In fact, Malaby is right that the Democrats’ attempts at cheap economic populism could hurt them with voters who depend upon Wal-Mart to meet their daily needs. As Malaby notes:
or 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.
How can centrist Democrats respond to that? By beating up Wal-Mart and forcing it to focus on public relations rather than opening new stores, Democrats are harming the poor Americans they claim to speak for.
Granted, I’m not a fan of Wal-Mart, and I suspect very few people are proud Wal-Mart shoppers, but they do ensure that their suppliers are as efficient as possible — which keeps overhead low even if we don’t shop there. No other big box retailer provides the kind of benefits that activists demand Wal-Mart provide. The selective outrage over Wal-Mart seems quite suspicious.
In the end, Wal-Mart as a political issue will appeal only to a narrow segment of the electorate, one which the Democrats should already have sown up. Trying to exploit economic populism in a time of unprecedented global interconnectedness, when millions of Americans owe their jobs to world trade, is simply poor politics. The Clinton Administration was far more “progressive” than the so-called progressives in liberalizing world trade, helping to usher in a time of unprecedented prosperity in America. Unfortunately, the increasingly radicalized Democratic Party of today have jettisoned their own best ideas in favor cheap populist rhetoric.
UPDATE: Another Rovian Conspiracy notes an article showing that low-income and minority consumers have an incredibly positive view of Wal-Mart. That isn’t all that surprising to me — and it again shows why the Democratic attempts at playing the economic populism card are so politically foolish. Attacking Wal-Mart will alienate the low-income voters that the Democrats need to win elections. Then again, the Democrats seem to be more about Air America than Middle America these days.
UPDATE: A leftyblog called the “alternative hippopotamus” gives the anti-Wal-Mart perspective:
As you know, the left half of the blogosphere recently appointed me spokesperson. So, I’ll explain why there is much ado about Walmart. It has nothing to do with people being treated fairly, or workers being forced to go to ER’s instead of receiving health benefits. It has nothing to do with Walmart forcing out the family businesses. It has nothing to do with a time when “Made in the USA” didn’t mean a sweat shop in the Marianas islands.
No, we just don’t like people from Arkansas. That’s why.
Let’s examine these implicit charges.
First of all, what constitutes workers being “treated fairly”? That’s a rather nebulous charge. Retail is hard work. It’s not all that fun. Wal-Mart, for all its real and imagined sins, gives people who wouldn’t otherwise have any job a chance at gainful employment. I don’t have the figures, but I would imagine that Wal-Mart hires more minorities as a percentage of their workforce than anyone else. It is a lot easier for someone to find a better job when they’ve had something before.
I would be quite curious to see how long the typical Wal-Mart employee goes before finding better work. Contrary to the usual stories about the “working poor” most people don’t stay in those entry-level jobs forever.
Again, what other retailer gives health benefits to its retail employees? Why is Wal-Mart being singled out for special opprobrium? There’s a reason why no one gives health benefits to hourly retail employees: because they can’t afford to do so. As a question of public policy is it better to have people with no job and no health insurance or a job that gives them skills and experience that can get them to a point where they can have health benefits? The workers who would get laid off by Wal-Mart are going to still be going to the ER for illnesses — and they’re also likely to be on food stamps as well.
Wal-Mart employees thousands of underprivileged and minority workers. It gives them valuable job experience, it gives them a decent wage, and it gives them the dignity of employment. Being a stocker at Wal-Mart is not designed to be a lifetime position. However, it’s an important start.
No retail store can provide health insurance for all of its workers and still turn a profit. Millions of disadvantaged and minority people depend on Wal-Mart, not only for their own low prices, but for the efficiencies that Wal-Mart creates for other retailers. The reason why Wal-Mart works is that they realized that millions of people weren’t being served by existing retail outlets and were overcharging people due to inefficient supply chain management. Over the last two decades or so they’ve changed all that and have produced a retail environment that is much more efficient and gives low-income consumers more choices than ever before.
The small businesses that Wal-Mart “forced out” were businesses that weren’t as efficient, and simply couldn’t compete in an open marketplace. In terms of social good, Wal-Mart’s probably better in the long run. None of those Mom and Pop stores were going to offer health benefits either. None of those Mom and Pop stores can employ as many people as Wal-Mart does. None of them can charge the type of prices that Wal-Mart does, meaning that if they were the only options the effective budgets of millions of low-income people would be much less than they are.
As much as I like small businesses, and make it a point to shop locally when I can, if it weren’t Wal-Mart, it would have been Target, or Costco, or someone else. Economics is all about reaching efficiencies, and not all small businesses can survive. Furthermore, there’s no credible economic evidence that suggests that Wal-Mart has had a negative economic effect — quite the opposite in fact. Even small businesses benefit from a supply chain that’s more efficient than it was 20 years prior.
And I don’t even like Wal-Mart. I can’t stand shopping there. However, the arguments against Wal-Mart could easily be applied to any other retailer and are grounded in a profound economic ignorance. No one holds a gun to anyone’s head and demands that they shop at or work at Wal-Mart. People do of their own free volition and if they stopped Wal-Mart would go away in fairly short order. Wal-Mart is thriving not because they’re more evil, but because they’re more efficient and provide goods of decent quality at a price people can afford.
The people who make the most fuss about Wal-Mart tend to be rich white liberals. I suspect that the reason why the anti-Wal-Mart crowd hate Wal-Mart so much is because it refuses to acquiesce to the demands of the unions and the fact that they’re extremely successful at what they do. The fact is that no matter what the intent of these rich white kids filled with a sense of noblesse oblige wrapped in the veneer of “social justice” may be, the end result is that they want to take the ladder to success for millions of disadvantaged and minority workers and saw the bottom rungs off.