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Demonizing Wal-Mart

Op-Ed

What is the retailer doing that's so wrong? A more deserving target might actually be small companies.

December 22, 2011|Michael Kinsley
(April L. Brown / AP Photo )

In cultural commentary about the American economy, one company at a time always seems to be the goat. Everything it does is interpreted as evil. In the 1950s it was General Motors. GM's CEO, Charles "Engine Charlie" Wilson, became a national figure of ridicule for telling a congressional committee, "What's good for General Motors is good for America." Except that he actually said, "For years I thought that what was good for the country was good for General Motors and vice versa" — which is quite a different proposition.

In the 1990s the goat was Microsoft.* That famous antitrust case looks a bit silly in retrospect, don't you think? Turns out it wasn't Microsoft that was about to take over the world: It was Google.

Who is the goat today? Clearly it's Wal-Mart, with perhaps an honorable mention for Amazon. But Amazon has ardent fans as well as ardent enemies. Does anybody really love Wal-Mart? Well, I'm a pretty big fan. It's fun to roam the aisles and see what people are buying. Nineteen-inch flat-screen TVs for $98! That's pretty great, but I don't need one.

A couple of weeks ago, my colleague at Bloomberg Jeff Goldberg launched a ferocious attack on Sam Walton's daughter, Alice (net worth: $21 billion), for building a billion-dollar art museum in Bentonville, Ark., where Wal-Mart has its headquarters, and stocking it with American art. He calls it a "moral tragedy." Why? Because Alice Walton's money is tainted by its source: Wal-Mart.

What is Wal-Mart doing that is so wrong? Critics like Jeff say that Wal-Mart employees are underpaid and that many don't get healthcare coverage. They see the museum as a symbol of the growing gap between the haves and the have-nots. As for what Walton can do about any of this, Goldberg suggests she could fund day-care centers or mobile dental clinics for employees. This smacks of Lady Bountiful delivering turkeys to the serfs at Christmastime.

Wal-Mart is a profitable business. It shouldn't get subsidized by charity, nor should its employees have to depend on charity. I also suspect that most of Wal-Mart's employees in the area are happy to have the new museum in town and don't see it as a symbol of income inequality.

The growing income gap is a big problem, but how is Wal-Mart contributing to it? Presumably Wal-Mart pays what it has to in order to attract workers, and doesn't pay a lot more if it can be avoided. Presumably, Wal-Mart scours the globe looking for bargains, and if China is the cheapest producer, China gets the business. That's capitalism, and if we don't like the results, we can use the tools of government, primarily the tax code, to improve them.

True, Wal-Mart has a reputation for being especially ruthless in its dealings with employees and suppliers. Jeff talked to one employee who said she was paid so little that she had to live in her car. Did he talk to no one who said she or he liked working for Wal-Mart?

As for benefits, no company is obliged to offer healthcare. Critics often note that Wal-Mart doesn't offer health insurance to employees who work less than 24 hours a week. You could turn that around and say that Wal-Mart does offer coverage to employees who work at least 24 hours a week. My experience is that you start getting benefits at about half-time. That would be 20 hours a week. So is 24 hours so unreasonable? It's also true that Wal-Mart is raising the premiums for many employees who do get health insurance. But most companies in America are probably increasing the employee contribution in the coming year. It's nothing unique to Wal-Mart.

There are those whose objections to Wal-Mart are more aesthetic than economic: the barn-like quality of the stores, the impact of a Wal-Mart on old downtowns, even the whole culture of consumption that some people find distasteful. They're welcome to those views as long as they acknowledge that higher prices at non-Wal-Mart stores are bad for consumers — especially poor consumers.

Wal-Mart's employees seem as cheerful as those at Target or Costco. But perhaps the company has hypnotized them — or possibly me — in some sort of Stepford wives scenario.

Big companies make fat targets, but a more deserving target might be small companies. Instead, we have the ever-inflating myth of small business. Small businesses come and go, creating and eliminating jobs along the way. Yes, they are an important part of the economy, and often they come with inspiring tales of hard-working immigrants and so on. But they're in it to make a profit, just like Wal-Mart. And I doubt that many offer healthcare to people working less than 24 hours a week. A successful small-business person is more likely to be in the notorious 1% than is an employee (or even a stockholder) of a big corporation. They don't need to be coddled with special tax breaks.

Alice Walton could have put her museum in New York, where this sort of thing belongs. Most of us don't get to Bentonville as often as we'd like. Or she could have decided not to build it at all, for fear that journalists would start comparing her to Marie Antoinette. Would that have been better?

*P.S. Just so you know, I once worked for Microsoft, and my wife is a member of Amazon's board of directors.

Michael Kinsley, a former editorial page editor of The Times, is a Bloomberg View columnist.

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