Saturday, May 28, 2011


In 2006, journalist Robert Samuelson noted that Democratic politicians had adopted a new corporate bete noire, Walmart. Sam Walton’s retail giant was displacing Exxon Mobil and Microsoft as the villain du jour for business-loathing do-gooders.

As a thought experiment, Samuelson suggested that critics should simply nationalize the company and double wages that then averaged about 50% above the national minimum wage.
Walmart, of course, would no longer exist as a profit-making, tax-paying enterprise. Instead, it would become another money-losing conduit through which political patronage would be dispensed and tax dollars redistributed.

Politicians would “find unending opportunities for grandstanding and meddling. Does Wal-Mart import too much from China? Order it to cut back… Are its stores ugly? Appoint architectural advisers.”

Govmart, in other words, would deliver countless payoffs to favored constituencies and few, if any, low prices and products to consumers in general. Samuelson might also have noted that this new monstrosity would be a retail version of California’s government—providing sweetheart deals for its public employees and to unions with political clout.

As currently organized, Walmart not only offers low prices, it also exerts price pressure on other businesses. One consulting firm calculated that the company’s influence lowered consumer prices by a total of 3.1 percent between 1985 and 2004. Today Walmart, with 1.4 million employees in the U.S., is the nation’s largest private job-provider.

Critics contend that the company’s success is actually government-subsidized because a significant percentage of Walmart employees receive public benefits like foodstamps. A more reasonable economic analysis would ask how many more Americans would be unemployed or more dependent on welfare were it not for the jobs Walmart creates and for the money saved by consumers who can then purchase additional items.

On June 7, voters in Menifee will have an opportunity to say “yes” or “no” to Walmart and several other businesses that hope to occupy a shopping center at the northwest corner of I-215 and Scott Rd.

The most compelling arguments against expansion (and Measure C) are the lack of adequate roadways in the area and the absence of a clear plan for generating the revenue that’s needed for construction.

Supporters of Measure C argue that infrastructure funds largely depend on the additional tax revenues that new businesses (especially Walmart) can generate.

This municipal decision should, I think, be based primarily on these issues: infrastructure, jobs, tax revenues, and the desirability (or not) of new businesses in Menifee. The decision should not be based on the corporate hatred fostered by politicians and their union allies who see Walmart’s employee pool as a potential boon to themselves and their very political coffers.

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