The Washington Examiner has published a chart that clearly lays out the difference between Obamacare versus private sector health care. Using Walmart as an example (despite the employer’s much-disparaged employee benefits), Elliot Smilowitz at the Examiner shows that the private sector is able to offer comparable health care at much less expense than Obamacare. (more…)
In light of the ongoing discussion over fast-food wages, I recently wrote that prices are not play things, urging that we reach beyond the type of minimum mindedness that orients our imaginations around artificial tweaking at the bottom instead of authentic value creation toward the top. Prices don’t equip us the whole story, but they do tell us something valuable about the needs of others and how we might maximize our service to society.
But though I have a hearty appreciation for the role that low-wage employers like McDonald’s play — due in large part to my 5-year stint working for The Ronald — I’m also grateful that other companies like Costco are able to provide higher wages to many low-skilled workers.
When we observe such differences — one prosperous company paying $7 per hour while another pays $12 — it can be easy to get worked up, pointing our fingers at greedy executives, idols of efficiency, unwise allocation of company funds, etc. Yet while any assortment of these drivers may indeed contribute to how wages are set, and though executives bear heavy moral responsibility on such matters, it’s helpful to remember that (1) we’re greatly limited in understanding the books of the companies we critique, and (2) executives aren’t the only ones influencing prices.
Over at Bloomberg, Megan McCardle does a marvelous deep-dive on this very sort of thing, starting with a comparison of Costco and Walmart wherein she ponders why the former offers higher wages than the latter.
A mere recital of the economic policies of governments all over the world is calculated to cause any serious student of economics to throw up his hands in despair. What possible point can there be, he is likely to ask, in discussing refinements and advancements in economic theory, when popular thought and the actual policies of governments…have not yet caught up with Adam Smith? – Henry Hazlitt, Economics in One Lesson.
These words continue to echo in the District of Columbia as legislators and activists once again choose to listen to their well-intended intuition over the lessons of basic economics.
On Wednesday, D.C. Council approved the Large Retailer Accountability Act (LRAA), a bill which requires “big-box” retailers to pay their employees a minimum wage of no less than $12.50 an hour. The bill is backed by labor activists and some religious leaders who claim that employees who are paid the city’s minimum wage of $8.25 (a dollar higher than the federal minimum wage) are not being paid a ‘living wage.’ Should the LRAA be signed by Mayor Vincent C. Gray (D) and pass a congressional review period, all D.C. retailers that work in a space of 75,000 square feet or more and exceed $1 billion in corporate sales will be forced to pay their employees this higher minimum wage.
Wal-Mart has warned the city that the company will abandon plans for three planned stores in the district should the bill be passed into law. Such a statement is being taken as an ultimatum by labor activists. Among the most outspoken is Rev. Graylan Hagler, a senior pastor of the Plymouth Congregational United Church of Christ and a leader of Respect DC – a local activist group that fights for what they call living wages. In response to Wal-Mart’s proposal, Hagler stated, “If you allow a bully to bully you, it’s never going to end. There will be something else. There will always be another agenda. We’ve got some work to do.” (more…)
Every year Black Friday marks the official beginning of two modern American traditions: Christmas shopping and criticizing Walmart.
Critics on both the left and the right have found a common enemy in Walmart. Those on the left hate the company because it isn’t unionized while conservatives complain because it undercuts mom-and-pop retailers. Some researchers even claim that people are prone to gain weight after a Walmart Supercenter opens nearby.
I suspect if the researchers were to conduct a follow-up study they’d also find that there is about a 99 percent chance you will not be starving to death if you live near a Walmart store. But we live in a strange period in history when the idea of affordable food is considered a lamentable condition.
Walmart’s very business model—maintain a large and innovative supply chain that keeps prices low—offends the sensibility of those who think that prices should be raised in order to pay employees a higher wage. The idea that the higher cost should be passed on to consumers is typically made by those who would never actually shop at Walmart. A prime example is The American Prospect‘s Harold Meyerson:
Walmart replaced General Motors as America’s largest private-sector employer. Instead of paying its workers enough to buy new cars, Walmart paid its workers so little they had to shop at discount stores like Walmart.
The reason why Walmart employees—and others on the lower end of the income scale—shop at the stores is because they are, by necessity, price conscience shopper. Meyerson and other elites that spend only about 3.5 percent of their income on food at home can afford to shop at Whole Foods. But households in the bottom quintile, which spend 26 percent of their income on food, are eager to keep food prices as low as possible. (During this holiday season Walmart employees receive an additional 10 percent off most food items.) If Walmart didn’t exist they the company’s employees wouldn’t have higher paying jobs; they’d just be paying more for food and consumer goods.
Growing up in a family that lived below the poverty line, I can appreciate the value of inexpensive food. That is one of the primary reasons I appreciate the company—and the reason I think other conservatives should appreciate it too. There is admittedly a lot to dislike about the company, but as former low-income rural resident I think there are a number of reasons why conservatives should be more supportive of Walmart (and similar poverty-alleviating corporations).