Last Friday, Wal Mart Inc in an attempt to fend off crtics of its policies took the desperate step of having a summit about itself and, most dangerously, asking economists what they thought.
Here’s the summary:
The company has even asked the consulting firm of Global Insight Inc. to commission academic studies of its economic impact, several of which were presented last week at an open forum in Washington. They showed that in areas where its stores are located, Wal-Mart has lowered wages, cut food costs and increased Medicaid spending but lowered spending on other kinds of public assistance.
No company enjoys this kind of scrutiny and attention. But with its same-store sales rising only 3 percent, its stock price languishing and even once-loyal customers beginning to turn away because of all the bad publicity, Wal-Mart probably has no choice but to deal with it.
Another economist unquoted here (of course – it’s the Washington Post after all) presented statistics that Wal Mart also saves the average family over $2,000 per year if that helps round out the picture.
No mention of the economic effect Sam Walton had in turning relatively low wage workers into millionaires through the profit sharing plan in effect while he was alive.
My questions are this… by saying Wal Mart is responsible for rising Medicaid expenditures are we saying that people leave jobs with health insurance to work at Wal Mart for close to minimum wage with no insurance? That’s unbelievable. How many people do you know who went from a job with insurance to a job without insurance because they loved Wal Mart? It’s hard to believe how this “fact” was discovered and if there’s any real connection to Wal Mart.
It’s good to recall that the position of economist is the only profession in which one never has to make a correct prediction and still remain employed.
But for those who feared Wal Mart might take over the world as we know it, perhaps the danger is averted.
Wal Mart has swallowed the poison pill of sticking its corporate finger in the air to see which way the wind is blowing.
Sam Walton would have just addressed the situation honestly in a series of TV commercials and people would have believed him.