George Leef devotes his latest Forbes column to the politics surrounding Wal-Mart.
Wal-Mart receives a constant barrage of rhetorical artillery fire from the left/progressive/statist camp (just “left” from now on) mainly because it chooses to contract for labor at market rates rather than paying more than it needs to. Rick Ungar’s recent column not only attacks Wal-Mart, but contends that those of us who favor laissez-faire are in some kind of philosophical bind when we defend Wal-Mart.
Ungar writes, “After all, they (referring to “conservatives” but I take him to mean classical liberals, libertarians and others who advocate free markets and the rule of law) would tell you, if people are willing to work for wages that keep them ensconced in poverty, why should Walmart not take advantage of this and do the job management was, apparently intended by The Almighty to do – pass the profits of inadequate wages along to the company’s shareholders?”
Those rather vehement words certainly throw down the gauntlet.
The truth of the matter is that Wal-Mart is no different than other retailers, businesses in general, or even non-profit organizations. It enters into contracts with people to do the work needed in its operations – cashiers, shelf-stockers, customer assistants, and so on. Wal-Mart must offer sufficient compensation to workers so they will accept its offers, rather than going to work for others who also want their services. Wal-Mart employees earn somewhat more than do similar employees at other retailers and somewhat less than at others.
Why the denunciation of Wal-Mart? It’s because of that “somewhat less.”
The argument that Mr. Ungar and other critics make is that Wal-Mart could afford to increase worker pay substantially, up to the levels of the firm that is held up as a model for corporate altruism: Costco. The higher compensation for workers employed there supposedly indicts Wal-Mart as a villain right out of Dickens.
I don’t think that a sound argument can be made for that indictment, which would apply not only to Wal-Mart, but to every other company that offers “inadequate” wages to people who need more.
George’s friend Richard Vedder has written an entire book on the demonization of Wal-Mart.