November 4, 2005

Big Media on the Economic Conference

Annie D'Innocenzio writes for the AP:

The all-day session, the latest effort by Wal-Mart to repair its reputation, included rosy findings from a Wal-Mart-commissioned report and mixed results from studies done by other economists. It was attended by about 100 people in the media and academia.

The seminar may have raised more questions than answers on Wal-Mart's impact on jobs, earnings and individual communities, but in the end the company appeared to make progress toward its goal of appearing more open to change.

Bloomberg has an interesting take on corporate sponsorship:
Several conference participants said while the corporate sponsorship was unusual, they welcomed the chance to share their findings. ``Any time a conference is not purely academic, one worries that the conference sponsor may try to influence the discussion,'' Basker said in an e-mail. ``I am hoping that the exchange of ideas will be free and open, and the more academics participate, the better the chance of that.''

Hicks said in an e-mail that he was reassured by Global Insight's reputation for ``unbiased high quality work.''

The sponsorship did dissuade one academic, whose paper on Wal-Mart's effects on local businesses was submitted and will be presented by a co-author.

In an e-mail, a retired Iowa State University economics professor, said he was boycotting the event, calling it ``rather self-serving for Wal-Mart.''

Emily Kaiser at Reuters has the data takeaway:
Wal-Mart Stores Inc. lowers consumer costs and adds jobs but has also led to a decline in wages and an increase in the number of people relying on government aid for health care, studies released on Friday show.

At a conference sponsored by Wal-Mart to examine its impact on the U.S. economy, researchers found that the world's biggest retailer accounted for some 210,000 net jobs last year while driving nominal wages down 2.2 percent.

The world's biggest retailer also lowered consumer prices by 3.1 percent, and real disposable income was 0.9 percent higher than it would have been in a world without Wal-Mart, researchers at Global Insight concluded.

The LA Times Abigail Goldman gets in a few good words:
When the scholars delivered, some of their findings didn't exactly cut in the company's favor. At the conference Friday in Washington, billed as "An In-Depth Look at Wal-Mart and Society," the retailer will be stuck with them anyway.

"To us it's worth the risk to have a real healthy discussion," said Robert McAdam, vice president of corporate affairs for the Bentonville, Ark., retailer. "We start out with a bias because we think we have a positive economic impact. If the results come back and they show that we don't have a positive economic impact, that will be a disappointment, but at least it's an honest look."

Wal-Mart critics say the company's willingness to hear dissent at the conference will be meaningful only if its executives decide to make changes.

Jennifer Waters of Marketwatch touches on what this conference wasn't:
Elizabeth Cohn, a Takoma Park, Md.-based consultant and professor at the conference, criticized the Global Insight study because it didn't include the indirect impact Wal-Mart has on people, suppliers, and other companies.

"The Wal-Mart business model is very good for consumers, but what does it do for workers and other companies?" she asked. "This study has a limited usefulness."

For example, she said, displaced workers may eventually find work at Wal-Mart, but the study doesn't take into account the disruption to their lives and their income.

Bob McAdam, vice president of corporate affairs for Wal-Mart, said the conference wasn't about the human effect.

"This wasn't a sociological conference," he said. "It was an economic conference and to that extent, the economic issues were what mattered.

"But I don't think the human factor was ignored," McAdam added. "When you talk about how much savings consumers get on an average day, that's a significant impact, not just for the people who shop at Wal-Mart, but those who shop at some of our competitors too.

Posted by Kevin on November, 4 2005 at 09:31 PM