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December 02, 2005


This retelling of a radio show Jonah Goldberg heard hints at a fairly illuminating point:

They had an anti-Wal-Mart guy on who was bemoaning Wal-Mart's real and "stealth" subsidies. The complaints about the real subsidies deserve at most one and a half cheers, since most of the subsidies as I understand it are from localities who are desperate to attract Wal-Mart in order to launch inner-city revitalization projects. I don't like most "public-private partnerships" and I'm sure there are some real stinkers out there in terms of Wal-Mart friendly pork. But it's not the corporate welfare this guy was describing.

But his schtick about "hidden" subsidies was just outrageous. Basically he and his group add-up all of the benefits they think Wal-Mart should provide, from health-care to daycare, and then they claim Wal-Mart's getting a free ride on these costs because "the government" is covering them. In other words, because Wal-Mart isn't sending its employees' kids to private school, they're getting a subsidy because the government is paying for their education.

Well, it's not that liberals think Wal-Mart should provide those thing, but that someone should. Technically, Goldberg's right: Wal-Mart, generally speaking, does not pay below the minimum wage, and so is doing their employees no legal harm. They don't, for that matter, have any legal obligation to offer health care. But liberals, myself included, tend to believe such things as a living wage, health coverage, adequate food, and so forth to be rights, and so when an institution that could be expected to provide such things does not, it's a grievous wrong.

Here we get into the whole corporate responsibility thing. The problem is, corporations are seldom responsible, but there was a time when unions forced them to be persuadable. GM, hallowed be their name, was a good example. But those corporations, and those unions, died (though not, as some of the trolls would have you believe, because of each other), and nothing has arisen to restore the employee's clout in the workplace relationship. Wal-Mart, while doing nothing legally wrong, is doing nothing morally right. That's predictable. The question is, can we want force amoral institutions to act as if they were actually concerned with worker, rather than shareholder, welfare, or would it be easier and more effective to place the onus for worker well-being on the government?

Wal-Mart could do better. Making them do better will be very hard. Probably as hard or harder than extracting certain far-reaching concessions from the government. And making Wal-Mart do better will not change target, or whoever dominate the next major industry. So the question really is one of strategy. If you believe, as I do, that a weakened Wal-Mart could be turned into a political ally, and that winning the political fight will prove a more sustainable and attainable way to achieve our ends, how do you fight the first battle against Wal-Mart and then smoothly transition into winning the different, albeit connected, war for an expansive welfare state?

December 2, 2005 | Permalink


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This was what I was trying to get at in your last Wal-Mart post when I asked about the desirability of progressive support for unions.

If you consider a 'living wage, health coverage, adequate food, and so forth to be rights' it seems to me that the logical course would be either to have the government provide those things directly through taxation and redistribution or to have the government force all employers to provide those things. Either way, you don't need unions, and you probably don't want unions, since if unions were the norm in the workplace most people would have these things but a minority would be deprived of their 'rights' and it would be difficult to get those 'rights' extended to them.

Of course I question the economic wisdom of this policy, and the merits of positive rights in general.

Posted by: Dave Justus | Dec 2, 2005 2:24:56 PM

Nope, you need unions for a variety of crucially important other things, not to mention as a check on unsound business practices. But you shouldn't need employers for health care.

Posted by: Ezra | Dec 2, 2005 3:09:38 PM

I say set the corporations free, and in turn free u,/as from them, and by set free i mean we can get our healthcare and other benefits from a different source. Folks like Newman and the other union people who hang onto the past are only dooming themselves to failure, asking corporations to provide things beyond what they sell or service is a thing of the past, it's time for us to have a national collective heathcare policy and a national pension policy, and a few other things mentioned in a great book called the "Radical Center".

Posted by: jbou | Dec 2, 2005 3:49:32 PM

Well, if the government gives to the working poor some significative benefits and WalMart offers jobs to that working poor, then the government is allowing WalMart to pay a lower wage, in effect subsidizing low wage jobs. That may be good and worthwhile, but it IS a subsidy, right?

Posted by: Carlos | Dec 2, 2005 4:08:13 PM

That sounds complicated Ezra...of course you delve more into politics than I by a long shot. But I think jbou is on the right track....simplicity. And simplicity is probably more efficient, which is important if you want to make headway with selling government programs.

Posted by: Steve Mudge | Dec 2, 2005 4:46:45 PM

Unsurprisingly, the Pantload is comparing apples and oranges. While there are criticisms to be made of the public education system, I don't believe many people make employment decisions based upon the private schooling plan. On the other hand, Wal-Mart certainly makes location and wage decisions based upon the knowledge that government will pick up the slack. Is DP really suggesting that childrens' education should be organised like healthcare? Bring on the EMOs?

Posted by: ahem | Dec 2, 2005 10:36:11 PM

Does it make sense to hit low paying enterprises as unfair. The state sets a base (minimum wage). Competitive business operates from that point. An unfairly low minimum means poverty is built in. Whose fault ? I think public responsibility is a fair assessment.

Posted by: opit | Dec 2, 2005 10:57:41 PM

Actually, I don't think Wal*Mart or any other company should have to do more than stick to a 40 hour or less work week, pay their employees a decent living wage, keep their employees safe from harm while on the job, and give a decent amount of time off for holidays and vacations. That's it - in a perfect system, that's all any company would have to do.

The problem is that we expect corporations - entities created so that their creators could legally avoid certain personal entanglements with their business transacations - to fulfill a role that society as a whole should be taking care of. We as a society SHOULD be providing health care for ourselves - not expecting some corporation to do it for us. That's an undue burden on our corporations that is killing competition and pushing out innovation. The sooner we get rid of this expectation, the better off we'll be.

Posted by: NonyNony | Dec 3, 2005 5:43:24 PM

This is all sort of a red-herring, since WalMart's dream is to eliminate most of the low-wage jobs in their stores. How will they do this? Eventually, by embedding active tags in every product. Vendors (meaning manufacturers reps) will come in and stock the shelves, organize things, and probably clean up. Customers will come in, load their carts with products, and then push their carts under scanners, which will instantaneously read all the tags in the cart. The customer will pay with a credit or debit card, help themselves to bags, and be out. WalMart will have a few guards, masquerading as old people. Electronic tags are too expensive to do this now, but they won't always be. When that happens, WalMart will cut its number of employees by at least half, and all this discussion about what an abusive employer it is will go by the by.

Of course, if you want to accelerate that day, simply impose a lot of mandates on WalMart. That will make it feasible to shift to this model at relatively higher tag prices.

Posted by: TigerHawk | Dec 4, 2005 3:45:12 AM

The point that is not mentioned in most analysis of Walmart's behavior is that they consistently use illegal methods to prevent workers from organizing.
In addition, as was mentioned above, they break labor laws for existing employees as well. That's why they are now a party to the largest class action discrimination suit in history.

Another factor which usually doesn't get discussed is their techniques of pressuring local governments into giving them tax breaks when they open a store in the area. In addition they demand road and other infrastructure improvements which are paid by the taxpayers, but benefit only them.

It is their bad corporate behavior that is the issue. It is unfair to their competitors as well. Making them behave would take the pressure off their competitors to cut corners as well.

If you are into Walmart discussions you might want to visit this blog devoted to such issues:

Posted by: Robert Feinman | Dec 4, 2005 4:08:54 PM

About the only thing that would accelerate WalMart's program to essentially eliminate its retail workforce would be the unionization of its employees.

The ugly truth here is that WalMart does not hire people who have a lot of alternatives. It hires people who don't have them. You might say that this is the result of WalMart -- it puts the small Mom n' Pop shops out of business -- but it also puts tons of money into the hands of consumers by cutting the prices they pay for almost everything. That money goes some place, mostly into more consumption. Some of the savings are certainly being spent at WalMart, but they are also being spent on things that people did not used to spend money on -- premium coffee, foreign cheese, tastier beer, IPods, video games, massages with hot stones and more restaurant meals. The poorer people are probably investing their savings in simply more and better food, or an apartment in a better neighborhood.

Point is, there are a huge number of diffuse beneficiaries from WalMart, even if some small businesses have been destroyed. The people who work at WalMart have few options whether or not WalMart exists.

I absolutely agree that local governments are foolish to subsidize WalMart. In my opinion, all states would greatly benefit from legislation that prohibits municipalities, which are really just state agencies, from negotiating with any business to favor their retention or location in that locality. It is hard, though, to demonize this particular version of subsidy over others that simply favor more popular industries. We have no business subsidizing manufacturing businesses either, yet those concessions draw considerably less ire from the left.

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