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Wal-Mart Prevails Again
In Wal-Mart We Trust
National Post Published: Friday, March 28, 2008 Full article Colby Cosh National Post Excerpts: Shortly before Hurricane Katrina made landfall on the U.S. Gulf Coast on the morning of Aug. 29, 2005, the chief executive officer of Wal-Mart, Lee Scott, gathered his subordinates and ordered a memorandum sent to every single regional and store manager in the imperiled area. His words were not especially exalted, but they ought to be mounted and framed on the wall of every chain retailer -- and remembered as American business's answer to the pre-battle oratory of George S. Patton or Henry V. "A lot of you are going to have to make decisions above your level," was Scott's message to his people. "Make the best decision that you can with the information that's available to you at the time, and above all, do the right thing." This extraordinary delegation of authority -- essentially promising unlimited support for the decision-making of employees who were earning, in many cases, less than $100,000 a year -- saved countless lives in the ensuing chaos. The results are recounted in a new paper on the disaster written by Steven Horwitz, an Austrian-school economist at St. Lawrence University in New York. While the Federal Emergency Management Agency fumbled about, doing almost as much to prevent essential supplies from reaching Louisiana and Mississippi as it could to facilitate it, Wal-Mart managers performed feats of heroism. In Kenner, La., an employee crashed a forklift through a warehouse door to get water for a nursing home. A Marrero, La., store served as a barracks for cops whose homes had been submerged. In Waveland, Miss., an assistant manager who could not reach her superiors had a bulldozer driven through the store to retrieve disaster necessities for community use, and broke into a locked pharmacy closet to obtain medicine for the local hospital. ### Due to the good sense of Mayor Richard Daley, Wal-Mart, and residents and employees of Chicago have won. Unions and the Democratic party have lost another strong arm battle, just as they did in Maryland. The Mayor, a Democrat and strong union backer, used the veto power for the first time in his long career, declaring in his veto message, that the wage law would "drive jobs and businesses from our city, penalizing neighborhoods that need additional economic activity the most." The Bill would require "big box" retailers like WalMart and Office Depot to pay a minimum wage of $10 an hour plus $3 in benefits to all employees by 2010. WalMart and Target threatened to halt expansion in Chicago if the law was enacted. Chicago loses $300 million a year, in sales tax revenues, when its residents shop in the suburbs, where the two giant retailers had threatened to relocate if the measure became law. Democrats continue to vilify and work against WalMart even though one study shows that from 1985 to 2004, the consumer price index over that time was lowered by by 3.1% due to the expansion of Wal-Mart. The study showed further that consumers saved $263 billion in 2004, equal to $2329 per household. Even though the study was financed by WalMart, If one were to question the numbers, as exaggerated, the numbers would still be in the billions in total price savings and in the hundreds per household. Washington Post Columnist Robert Samuelson, points out the following: “A collateral benefit is less understood. By restraining inflation, intense competition of the sort that WalMart provides eases pressure on the Federal Reserve to do the job with higher interest rates. Note the paradox: at one level, intense competition destroys jobs, as some companies can't compete, but the larger effect is to increase total job creation by fostering favorable economic conditions. No company should be above public scrutiny. But much of the political criticism of WalMart is shallow and, if followed, undesirable. WalMart doesn't pay high wages and benefits mainly because it's in an industry (retailing) where those are rare. In 2005, average hourly wages were $10.85 for food stores, $10.63 for clothing stores and $10.84 for department stores. As General Motors and Ford are now discovering, companies that pay above-market labor costs ultimately shrink and destroy jobs. The efforts of some local governments -- notably the Maryland Legislature and Chicago City Council -- to mandate higher labor costs on WalMart are shortsighted. There may even be political pitfalls to this crusade. By Wal-Mart's estimate, 85 percent of Americans shop during the year at the chain; in opinion polls it generally receives high ratings. People are voting with their pocketbooks. On any list of major national concerns, the "WalMart problem'' would not rank in the first 50. Why, then, are some leading Democratic politicians spending so much time talking about it? People who ask that question may conclude that WalMart, though a tempting target as a symbol, is mostly a diversion from weightier issues where what politicians do really matters.” WalMart Has Hired 240,000 Workers Since 2001, held down costs To Consumers, Passed Savings To Consumers, and is still villified By Democrats
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