It's a small world. Jack Schultz of Boomtown USA wrote this post and later sat down at my table for lunch:
But, it is in the area of productivity that Wal-Mart really shines. The two keys here are information technology and supply chain management. In the area of supply chain management, one of the factors that I have argued for the past five years is that part of their advantage is the location of their Distribution Centers (DCs) in rural markets. I’m convinced that the lower costs and more productive labor in these markets is a huge benefit to the company.Wal-Mart Watch profiles David Neumark, who sat down next to me at the same lunch:
Today we’ve chosen Dr. David Neumark, an economist with the Public Policy Institute of California who co-authored a paper for Wal-Mart’s self-funded academic conference today in Washington, DC. Neumark dared to challenge the company on its own dime, and presented a paper that contradicts today’s other rosy presentations. His study examined Wal-Mart’s effect on employment and earnings, and concluded that “Residents of a local labor market do indeed earn less following the opening of Wal-Mart stores.” From Neumark’s paper:
The Fark tagline is amusing: "Behold! Mighty Wal-Mart hath suppressed U.S. inflation". And in the comments, a serious discussion has ensued embedded in a flame-war. The first casualty: Tracy Sefl of Wal-Mart Watch, who is being quoted and satirized pretty unfairly,, although ""Wal-Mart is only telling part of the story, which is not the same as telling the whole story" lends itself mightily to such insignificant attacks.
More Later...
Posted by Kevin on November, 5 2005 at 06:32 AM
Bob wrote:I completely forgot about this conference. It would have been great to attend, but school is keeping me completely buried.
Reading the snippets, I think there are a couple of things I would have mentioned. One, it seems that neighboring county employment wasn't taken into account. Studies I've read is that Wal-Mart has a negative impact on surrounding counties. Second, the types of jobs that Wal-Mart creates in other sectors of the economy may account for the lower payroll. That is, restaurants benefit when WM opens a store and this would lead to a lower payroll per worker. I wonder if this was taken into account. On the other hand, and we are two handed economists around here, furniture stores also benefit which I would think have higher payrolls although maybe not enough to offset the restaurant worker increase.
It looks like one of the studies did point out that prices did decrease more than the drop in payroll per worker which means that standards of living did increase which should help the WM cause.
I didn't read very much of the papers, I'm too swamped right now, so Kevin will let me know if I'm off base? Other than that, I would agree that it was very narrowly focused. I found the anecdote about the reporter funny. How rare is that guy?
-- November 6, 2005 11:15 PM ∞
