November 5, 2005

Big Media (Part II)

The day-after brings more big-media reporting, much of it very diverse in subject matter an conclusions. As expected, the press accounts go straight to many of the pro and con findings, but fail to note just how tentative the results are.

Stephen Greenhouse of the NYTimes announces a mixed report card:

With critics hammering Wal-Mart day after day, the company sponsored an unusual conference on Friday about its impact on America's economy, and it got some good - and a few not so good - grades.
Amy Joyce of the WaPo talks about two things that I, personally, did not experience:
The event was a strange hybrid of academics and public relations at which attendees toted around registration information in plastic Wal-Mart shopping bags. A room full of people asking questions was reminded -- after a journalist asked about a statistic in a paper -- that reporters were not allowed to take part in the Q&A.

[KB: The reporter was Steven Greenhouse of the Times; he asked David Neumark to try to reconcile competing datapoints, and since the question was very good, nobody in the audience really cared that he's not an academic.]

Outside, Wal-Mart critics greeted attendees. About a dozen demonstrators with the United Food and Commercial Workers union and its Wake Up Wal-Mart organization gathered outside the J.W. Marriott to protest the conference, some arrayed behind a large Wake Up Wal-Mart banner. A few others handed out fliers headlined "Research Confirms: Wal-Mart Needs to Change" that touted some of the more critical findings of the academic papers.

Security guards checked attendees' identification before allowing them to the registration table.

Strange hyrbid, yes. But I did not even see the UFCW folks, because I entered using the Pennsylvania Avenue entrance, while the union folk were on the other side of the building. I hadn't even known that they protested until I was talking to some people after the conference. Also, I was NOT asked to ID myself when I registered, and very, very few people toted around plastic bags, although they were offered when you picked up the symposium materials.

Reporters were asking for opinions from economics Ph.D's. For the most part, I had to hold my lips sealed. But others could talk more. Alison Vekshin wanted responses to Global Insight's paper:

One academic at the conference expressed doubts about the study's methodology.

"I think it's a nice, good effort, but some of the analysis is not valid to what they studied," said Vishal Singh, assistant professor of marketing at the Graduate School of Industrial Administration at Carnegie Mellon University in Pennsylvania.

"They ignored the competition," he said. "But competition has to come into play, in the late 80s and 90s certainly, looking at what Kmart is doing or what Target is doing when making the location decisions."

Holling said the retailer created 210,000 jobs last year.

"When Wal-Mart moves into a county there is higher overall retail employment, but, yes, there is disruption in the retail sector," he said. "Wal-Mart does displace other employment."

Disposable income is 0.9 percent higher than it would be if Wal-Mart did not exist, according to the report.

The researchers also concluded that Wal-Mart has contributed to lower prices.

Thankfully, Wal-Mart did not even try to form a final, coherent message from the studies. I should add that Wal-Mart insisted that it will be a more transparent company, and is very interested in its own economic impact. To that end, it will make data available to economists who want to perform economic impact analysis...

Here's an earlier installment of Big Media Reports.


UPDATE: Maria Halkias of the Dallas Morning News was kind enough to quote me. :

Kevin Brancato, management scientist for Rand Corp., said the conference was billed as an event that would point to an overall trend. Nine independent studies were also presented at the daylong session.

"No one disagrees that Wal-Mart has lowered prices," he said. "But what impact on the economy in total does Wal-Mart have? I don't think the conference answered that."

Still, he said, the work presented by Global Insight was sincere and honest.

"The work Wal-Mart has done in the past was propaganda. This is a big first step."

That most certainly is representative of what I said, though the exact words aren't mine, which is perfectly fine, since I was talking off-the-cuff. Also, I think there is a consensus on some issues, but certainly not the hot-button ones of wages and benefits. The propaganda I was referring to were many -- not all -- local economic impact assessments...

I think that the question I want answered is, "If we let a Wal-Mart into Queens, what's the probability that wages in competing stores will decrease?" We're nowhere near that type of resolution, and I doubt we'll ever get there...

I should note that ALP is NOT affiliated with RAND, and that I have performed no RAND work involving Wal-Mart. My use of the RAND label was unwise...

Posted by Kevin on November, 5 2005 at 06:28 AM