WSJ defends WMT; Tierney nominates WMT for a Nobel
[and John Tierney’s column from yesterday is too good to pass up]
Wall Street Journal - October 18, 2006
The Wal-Mart Posse
October 18, 2006; Page A20
Wal-Mart may be expanding in the People’s Republic of China, but here
in capitalist America the low-price retailer has become the
Democratic Party’s favorite pinata. The media like to portray this as
a populist uprising against heartless big business. But what they
don’t bother to disclose is that this entire get-Wal-Mart campaign is
a political operation led and funded by organized labor.
We’ve done a little digging into the two most prominent anti-Wal-Mart
groups, and they might as well operate out of AFL-CIO headquarters.
An outfit called Wal-Mart Watch was created by the Service Employees
International Union (SEIU), probably the most powerful union in
America after the National Education Association. Wal-Mart Watch is
backed by Five Stones, a 501(c)3 organization that received
$2,775,000 in 2005 from the SEIU, or 56% of its $5 million budget.
According to financial records, SEIU also gave Five Stones $1 million
in 2004 to launch the anti-Wal-Mart group, and SEIU president Andy
Stern is the Wal-Mart Watch chairman.
A second group, Wake Up Wal-Mart, is more or less a subsidiary of the
United Food and Commercial Workers Union (UFCW). Wake Up Wal-Mart
refuses to divulge its funding sources, but here is what we do know:
The group was founded by the UFCW, is housed at UFCW headquarters,
and its campaign director’s $135,000 salary is paid by the UFCW.
Wake Up Wal-Mart also has close ties to the Democratic Party. Its
union-funded campaign director is Paul Blank, who was political
director of Howard Dean’s failed Presidential campaign. The group
sponsored a 19 state, 35-day bus tour across the U.S. earlier this
year, staging anti-Wal-Mart rallies. Nearly every major Democratic
Presidential hopeful has joined in the Wal-Mart-bashing, including
Senators Joe Biden and Evan Bayh, New Mexico Governor Bill
Richardson, and trial lawyer-turned-man-of the-people John Edwards.
They all seem to believe they have to take this line to pass union
muster for 2008.
Even Hillary Rodham Clinton has joined in the political fun. Never
mind that she served six years on the Wal-Mart board during her time
in Beltway exile as an Arkansas lawyer and, according to the Arkansas
Democrat-Gazette, was paid $18,000 per year plus $1,500 for every
meeting near the end of her tenure. Most recently, Mrs. Clinton
returned a $5,000 campaign contribution from Wal-Mart to protest its
allegedly inadequate health care benefits. Maybe someone should ask
her if she’s returned her director’s pay, with interest.
Most of the local protests against Wal-Mart are organized through the
left-wing activist group ACORN, an acronym for the Association of
Community Organizations for Reform Now. ACORN is the group that put
the squeeze on the Chicago City Council to pass an ordinance this
summer to require Wal-Mart, Target and other big-box stores to pay a
minimum $10 an hour wage and $3 an hour in benefits by 2010.
(Democratic Mayor Richard Daley vetoed the bill.) ACORN also pretends
it is a locally organized and funded voice of the downtrodden masses.
But guess where ACORN gets much of its money? Last year the SEIU
chipped in $2,125,229 and the UFCW $165,692.
Then there are the anti-Wal-Mart “think tanks,” if that’s the right
word for these political shops — notably, the Economic Policy
Institute (EPI) and the University of California at Berkeley Labor
Center. The job of these two outfits is to publish papers backing the
economic claims of Wal-Mart critics. The UC Berkeley group recently
asserted that Wal-Mart “reduces total take-home pay for retail workers.”
The UC Berkeley Labor Center has received at least $43,550 from SEIU.
The Economic Policy Institute received $100,000 from the SEIU and
$40,000 from the UFCW in 2005 and has published several anti-Wal-Mart
studies, particularly on the benefits of the Chicago ordinance. By
the way, Andy Stern also sits on the EPI board. He’s a busy guy.
Now, we’re not predisposed to be pro- or anti-Wal-Mart. We’ve
criticized Wal-Mart lobbying on policy grounds — for example, when
the company supported a minimum wage increase to court some nice
publicity while also knowing this would harm any lower-priced
competitors. However, it is simply fallacious to argue that Wal-Mart
has harmed low-income families.
More than one study has shown that the real “Wal-Mart effect” has
been to increase the purchasing power of working families by lowering
prices for groceries, prescription drugs, electronic equipment and
many other products that have become modern household necessities.
One study, by the economic consulting firm Global Insight, calculates
that Wal-Mart saves American households an average of $2,300 a year
through lower prices, or a $263 billion reduction in the cost of
living. That compares with $33 billion savings for low-income
families from the federal food stamp program.
Alas, what’s good for working families isn’t always good news for
unions and their bosses. They hate Wal-Mart because its blue-coated
workforce is strictly non-union — a policy that dates back to the
day founder Sam Walton opened his first store. Today the company
employs 1.3 million American workers, and its recent push into
groceries has made life miserable for Safeway and other grocery
chains organized by the service workers or the UFCW.
Wal-Mart pays an average of $10 an hour, which is more than many of
its unionized competitors offer. And typically when a new Wal-Mart
store opens in a poor area, it receives thousands of job applications
for a few hundred openings. So Wal-Mart’s retail jobs of $7 to $12 an
hour, which the unions deride as “poverty wages,” are actually in
high demand.
But as we say, this campaign isn’t about “working families,” or any
of the other rhapsody-for-the-common-man union slogans. If Wal-Mart
were suddenly unionized, Big Labor’s membership would double
overnight and union leaders would collect an estimated $300 million
in additional dues each year to sway more politicians. Short of that,
their goal is to keep Wal-Mart out of cities so their union shops
have less competition. That’s what the war against Wal-Mart is truly
about.
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New York Times - October 17, 2006
Shopping for a Nobel By JOHN TIERNEY
I don’t want to begrudge the Nobel Peace Prize won last week by the
Grameen Bank and its founder, Muhammad Yunus. They deserve it. The
Grameen Bank has done more than the World Bank to help the poor, and
Yunus has done more than Jimmy Carter or Bono or any philanthropist.
But has he done more good than someone who never got the prize: Sam
Walton? Has any organization in the world lifted more people out of
poverty than Wal-Mart?
The Grameen Bank is both an inspiration and a lesson in limits.
Compared with other development programs, it’s remarkable for its
large scale. Since it was started three decades ago in Bangladesh, it
has expanded to more than 2,000 branches. Its micro-loans, typically
less than $150, have helped millions of villagers start small
businesses, like peddling incense or handicrafts at the local market,
or selling milk and eggs.
The economist William Easterly, who was afraid Bono was going to get
this year’s Nobel, calls the bank’s prize “a victory for the one-step-
at-a-time homegrown bottom-up approach” to development. That approach
is a welcome contrast to the grandiose foreign-aid schemes that do
more harm than good, as Easterly documents in his book, “The White
Man’s Burden.”
But there’s a limit to how much money villagers can make selling eggs
to one another — a thatched ceiling, as Michael Strong calls it.
Strong, the head of Flow, a nonprofit group promoting
entrepreneurship abroad, is a fan of the Grameen Bank, but he figures
that villagers can lift themselves out of poverty much faster by
getting a job in a factory.
The best way for third world villagers to tap “the vast pipeline of
wealth from the developed world,” he argued in a recent TCSDaily.com
article, is to sell their products to the world’s largest retailer,
Wal-Mart. Strong challenged anyone to name an organization that is
doing more to alleviate third world poverty than Wal-Mart.
So far he’s gotten a lot of angry responses from Wal-Mart’s critics,
but nobody has come up with a convincing nomination for a more
effective antipoverty organization. And certainly none that saves
money for Americans at the same time it’s helping foreigners.
Making toys or shoes for Wal-Mart in a Chinese or Latin American
factory may sound like hell to American college students — and some
factories should treat their workers much better, as Strong readily
concedes. But there are good reasons that villagers will move
hundreds of miles for a job.
Most “sweatshop” jobs — even ones paying just $2 per day — provide
enough to lift a worker above the poverty level, and often far above
it, according to a study of 10 Asian and Latin American countries by
Benjamin Powell and David Skarbek. In Honduras, the economists note,
the average apparel worker makes $13 a day, while nearly half the
population makes less than $2 a day.
In America, the economic debate on Wal-Mart mostly concerns its
effect on American workers. The best evidence is that, while Wal-
Mart’s competition might (or might not) depress the wages of some
workers, on balance Americans come out well ahead because they save
so much money by shopping there.
Some critics, particularly ones allied with American labor unions,
argue that the consumer savings don’t justify the social dislocations
caused by Wal-Mart’s relentless cost-cutting. They’d rather see Wal-
Mart and other retailers paying higher wages to their employees, and
selling more products made by Americans instead of foreigners.
But this argument makes moral sense only if your overriding concern
is saving the jobs and protecting the salaries of American workers
who are already far better off than most of the planet’s population.
If you’re committed to Bono’s vision of “making poverty history,”
shouldn’t you take a less parochial view? Shouldn’t you be more
worried about villagers overseas subsisting on a dollar a day?
Some of them prefer to keep farming or to run small local businesses,
and they’re lucky to get loans from the Grameen Bank and its many
emulators. But other villagers would prefer to make more money by
working in a factory. If you want to help them, remember the new
social justice slogan proposed by Strong: “Act locally, think
globally: Shop Wal-Mart.”