Monday, December 12, 2005

Attention Wal-Mart shoppers

Krugman continues to dog the big baddie:Big Box Balderdash - New York Times. Taking on Wal-Mart's latest claim:
But instead of resting its case on these honest or at least defensible answers to criticism, Wal-Mart has decided to insult our intelligence by claiming to be, of all things, an engine of job creation. Judging from its press release in response to the religious values campaign, the assertion that Wal-Mart "creates 100,000 jobs a year" is now the core of the company's public relations strategy.

It's true, of course, that the company is getting bigger every year. But adding 100,000 people to Wal-Mart's work force doesn't mean adding 100,000 jobs to the economy. On the contrary, there's every reason to believe that as Wal-Mart expands, it destroys at least as many jobs as it creates, and drives down workers' wages in the process.

Think about what happens when Wal-Mart opens a store in a previously untouched city or county. The new store takes sales away from stores that are already in the area; these stores lay off workers or even go out of business. Because Wal-Mart's big-box stores employ fewer workers per dollar of sales than the smaller stores they replace, overall retail employment surely goes down, not up, when Wal-Mart comes to town. And if the jobs lost come from employers who pay more generously than Wal-Mart does, overall wages will fall when Wal-Mart moves in.
Krugman cites a UCal study that has found that retail employment and average wages drop when Wal-Mart sets up in a new county. His conclusion, Wal-Mart should think about paying higher wages.

Let's all keep this in mind as we consider our next venture out to Wal-Mart for those discounted prices, especially at this time of year...