Wednesday, October 22, 2014

Wal-Mart, That Economic Wrecking Ball

By Ilana Mercer

To ameliorate the effects of the Obamacare wrecking ball, Wal-Mart Stores, Inc., is venturing into the business of providing primary health care. For $40, the price of a copay (mine are way more), "you can walk into a Wal-Mart clinic and see a doctor." It's "just $4 for Walmart U.S. employees and family members."

Sandra Fluke: You can have a pregnancy test at Wal-Mart for ... $3.00.

Via MarketWatch:

On Friday, a Walmart Care Clinic opened in Dalton, Ga., six months after Walmart U.S., the retailer’s biggest unit, entered the business of providing primary health care. It now operates a dozen clinics in rural Texas, South Carolina and Georgia and has increased its target for openings this year to 17. A ... cholesterol test [will cost] $8. A typical retail clinic offers acute care only. But a Walmart Care Clinic also treats chronic conditions such as diabetes. (Walmart U.S. also leases space in its stores to 94 clinics owned by others that set their own pricing.)
“It was very important to us that we establish a retail price in the health-care industry because price leadership matters to us,” said Jennifer LaPerre, a Walmart U.S. senior director responsible for health and wellness, in an interview.

Let the anti-Wal Mart jousting begin.

Typically, critics of Wal Mart—for example, Marian Kester Coombs, writing for The American Conservative—will do nothing to trace the mysterious mechanism by which Wal-Mart is said to impoverish. By offering “the lowest possible prices all the time, not just during sales”? What precisely is the economic process that accounts for Wal-Mart’s ability to “expel jobs and technology from our own country”? Competition? Offering a product people choose to buy?

“Protecting the home market,” which is what TAC writer advocates, is to the detriment of consumers. It forces them to subsidize less efficient local industries, making them the poorer for it. To keep inefficient industries in the lap of luxury, hundreds of others are doomed to shrink or go under.

The writer aforementioned also froths at the mouth over “the teenage girl in Bangladesh … forced to sew pocket flaps onto 120 pairs of pants per hour for 13 cents per hour.” It sounds dreadful. However, the economic reality is this: Wal-Mart is either offering higher, the same or lower wages than the wages workers were earning before its arrival in Bangladesh. The company would find it hard to attract workers if it was paying less, or the same as other companies. Ergo, Wal-Mart is a benefactor that pays the kind of wage unavailable prior to its arrival. More material, if the entrepreneur were forced to pay workers in excess of their productivity, he would eventually have to disinvest. What will the Bangladeshi teenage girl do when that happens?

Ilana Mercer is author of Into the Cannibal's Pot: Lessons for America from Post-Apartheid South Africa©2014 By ILANA MERCER


  1. Great article. Sadly Walmart has an uphill battle when it comes to delivering low prices. My own community, a suburb of San Diego recently campaigned against a new Walmart and after listening to the noisy ones Walmart decided to take its low prices elsewhere. The mentally impaired are a noisy group. To add insult to injury the community "leaders" have embraced a developer who will give us more condos and an office park. That's what we need, more high density living in the suburbs! Sooooo, crony business is hard to beat.

  2. As if WMT isn't heavily subsidized. They actually give new employees signup forms for EBT and other gov bennies upon hire so they can pay less. Also, a significant portion of its revenues consists of federal, state, and local welfare payments. In this crazy world, WMT should pay a proportional % of dividends to taxpayers.

    1. But the dividends would be taxed and the cycle would continue. The only way to stop it is through commerce without coercion. No taxes, no subsidies, no acceptance of force in human relations which means the elimination of government. But getting people to travel down this road to peace and prosperity is extremely difficult. There simply are not enough people who are mostly rational most of the time.

    2. Agreed although I am reconsidering minarchism, especially after a commenter on another site said anarchy would lead to criminal corporations running amuck harvesting human organs and the need for setting bear traps for human invaders. Just kidding, I think. Anyway, my point was that WMT is not some 21st Century Rearden Metal, it is, to a large degree, a creature of the government's largesse in the current system of oligarchical collectivism. Some people think that IS capitalism. BTW, when the EBT system goes down and riots ensue, where are the YouTube videos filmed? You guessed it, Wally World.

    3. If the government didn't subsidize workers with low wages, that wouldn't mean that Walmart would start offering higher wages. They are doing their employees a service by helping them find financial assistance when needed. They offer the best opportunity those employees can get, otherwise, those employees would work somewhere else. Seems you've fallen into the same trap as the "living wage" folks. Wages are a function of supply/demand and limited by productivity. What the employee needs for whatever reason is not a factor.

    4. So, there is no relationship whatsoever between gov bennies and Wal-Mart's low wages and, maybe even more importantly, its revenues? WMT is doing its employees a "service" by pushing their snouts into the trough of the public dole? Somehow I'm advocating a "living wage"? I feel like I've entered the twilight zone...

  3. From a 1997 UNICEF study including Bangladesh child labor:
    "A study sponsored by international organizations took the unusual step of tracing some of these children to see what happened to them after their dismissal. Some were found working in more hazardous situations, in unsafe workshops where they were paid less, or in prostitution."

    (Page 24 of PDF)

  4. Replies
    1. While I do enjoy your command of Ebonics, I didn't see a rebuttal. Care to elaborate?

  5. I have no problem with people shopping at Walmart. That's just something I don't do. If I ever get to the point that I have to shop at Walmart, I'm packing it in.

    I'm glad to see that Walmart will be treating diabetes, since if you do most of your food shopping at Walmart you most likely have it anyway.

  6. Everyone just needs to get it though their thick skulls: JOBS EXIST FOR THE CONSUMER, NOT THE EMPLOYEE. The commies always get this one backwards.