It Isn't Just About Having Low Prices

Wednesday, August 30, 2006

It Isn't Just About Having Low Prices

In a column headlined "Wal-Mart as Red Herring," Robert Samuelson refers to the growing criticism of the retail giant's workplace policies and sarcastically wonders why no one has proposed nationalizing the company. In today's Washington Post, Samuelson writes:

... if Wal-Mart's health insurance is inadequate, Congress could command more coverage. (I asked Wal-Mart for coverage figures, which it declined to provide. All a spokesperson said is that more than half of its 1.3 million U.S. employees are full-time, enjoying higher coverage rates, and that 75 percent of all workers have some coverage through the company, the government or spouses' plans.)
Read that last phrase carefully. The 75% figure sounds good, but we have no idea how many of those workers are forced onto state government CHIPs programs because they can't afford to pay the out-of-pocket premiums that Wal-Mart charges. Many of the Wal-Mart employees who secure coverage through a spouse probably do so because their spouses' health plans offer better coverage at lower costs.

When it comes to op-ed columnists, it's hard to find someone in the mainstream press who is more friendly to corporate America than Samuelson. For this reason, it's rather telling that Wal-Mart refused to provide a detailed breakdown of its health care coverage to a writer whom they had to know would treat it with kid gloves.

Samuelson argues that Wal-Mart's low prices have significantly lowered the Consumer Price Index (CPI), but he quotes a study that Wal-Mart itself funded -- to his credit, he acknowledges as much.

I'm sure that a lot of Americans are saving money when they shop at Wal-Mart. Viewed only in this context, that's nice.

Yet the same could be said of Asian-based clothing producers that hire children, pay sweatshop wages and require bathroom passes for their workers to leave the factory line. Their business "plan" also ends up saving the consumer money. It might even reduce our CPI. But is this a system we want to encourage or tolerate?

Gone are the days when businesses can ask to be judged solely on the effect they have on the consumer. The wages they pay, the conditions of their workplaces, and the pollution they emit are appropriate issues for public scrutiny.

Finally, I thought this was Samuelson's weakest argument:

On any list of major national concerns, the "Wal-Mart problem" would not rank in the first 50. Why, then, are some leading Democratic politicians spending so much time talking about it?
Neither would Darfur. Should elected officials not talk about it? (Hopefully, they'll do more than just talk about it.)

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