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David Sirota

David Sirota

Posted: November 20, 2005 02:23 PM

How Wal-Mart's Low Price Idolatry Distracts Us From the Real Problem


My new book being released in April 2006 is called Hostile Takeover: How Big Money Uses Lies, Myths & Half-Truths to Control Our Country – And What We Can Do About It. In writing it, one of the most fascinating experiences was researching the underlying myths and half-truths that corporate shills use to venerate Wal-Mart. The most often-heard of these is the B.S. line that Wal-Mart's low prices offset the damage it does to society in lowering wages, destroying small business, hurting the environment, and forcing taxpayers to foot the bill for the health benefits it refuses to pay.

But Robert Greenwald really has it right: there is a very high cost of those low prices. Let's just take a look at American's wages. As I noted a few weeks ago over in a trade policy debate with Clintonite Gene Sperling, if low prices were really a bigger benefit than the costs of a Wal-Mart economy, then wages would be outstripping inflation. After all, the only way lower prices really are a benefit is if people's paychecks are rising faster than those prices. But as the Center for American Progress pointed out in 2004, wages are, in fact, not keeping up with inflation. And that trend has continued into 2005. In other words, the supposed gains from "low" prices are outstripped by the losses the Wal-Mart economy is bringing to workers' wages.

To get a real-world idea of what that really means, look at this interesting 2003 report that found a single parent with two children employed full-time at a local Wal-Mart "does not earn enough money to supply the family's basic needs by shopping at that same Wal-Mart." Put another way, the low prices Wal-Mart is able to provide on goods are not enough to offset the low wages workers are now making from Wal-Mart itself.

So before you listen to any more economic lies from Wal-Mart's PR department or from corporate apologists like Tom Friedman, remember: most underlying assumptions that Corporate America peddles are really fabricated out of thin air. Wal-Mart's "low price" idolatry is only the best example of this, and the more we swallow the lies hook line and sinker, the more we aid and abet the decimation of America's middle class.