Now Don attacks Ms. Featherstone's lack of economic logic:
One of Featherstone�s claims that I didn�t deal with there is her allegation that Wal-Mart free-rides on government welfare payments. Her argument (which, I recall, is not unique to her) is that welfare payments enable Wal-Mart to pay lower wages. The allegation, in other words, is that taxpayer-funded welfare increases the supply of workers....Don continues at length... read it all. IMHO he's thinking WAY too hard about Ms. Featherstone's essay. Why? She's not using a logical argument.
IMHO, Ms. Featherstone believes that Wal-Mart's low prices put competitors out of business. Essentially, WM eliminates the high wage competition... and then uses welfare subsidies to hire the desperate employees at lower wages. It's competitors don't do this because, unlike WM, they're moral. As Don notes, evidence is lacking for this theory.
But assume WM does put the competition out of business. How does Wal-Mart manage to hire people when it initially moves into an area, since it must compete with higher-paying better-benfit businesses? Unless one is willing to admit that WM pay is equal to competitors, or that the quality--dependability, experience, language competence, demeanor, etc.--of WM employees is inferior, this is a rather big problem for the WM-eat-dog theory. Asking people to go on the dole mightily disadvantages WM in the labor market--giving competitors a distinct worker quality advantage--,but this seems to be of no consequence to Ms. Featherstone.
I've been reading this anti-WM rhetoric for months. To me, Ms. Featherstone's piece was so... stale.
Posted by Kevin on December, 31 2004 at 10:53 AM
