Via Wal-Mart Watch comes word of a study by Economic Policy
Institute that claims to debunk an earlier study that suggested that
Wal-Mart didn’t do as much harm as critics claim.
The key points from the EPI study:
- A study by the consulting firm Global Insight, which concludes that
Wal-Mart’s expansion has saved U.S. consumers $263 billion, is deeply
flawed. The statistical analysis generating this widely quoted figure
fails the most rudimentary sensitivity checks used in good economic
analysis, rendering its conclusions unreliable.- A robust set of research findings shows that Wal-Mart’s entry into local
labor markets reduces the pay of workers in competing stores. This effect is
largest in the South, where Wal-Mart expansion has been greatest.- Wal-Mart could raise wages and benefits significantly without raising
prices, yet still earn a healthy profit. For example, while still
maintaining a profit margin almost 50% greater than Costco, a key
competitor, Wal-Mart could have raised the wages and benefits of each of its
non-supervisory employees in 2005 by more than $2,000 without raising prices
a penny.
Battle of the competing experts, it seems.