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Wednesday, August 03, 2005

In Defense of Walmart

A note worthy article on Walmart from the New York Times. It appears the NY Times has opted to "inform" its readers with worthwhile information instead of spending its writer's effort and ink on Bush Bashing and furthering the Liberal Agenda. Their recent investigation of Medicaid fraud in New York State and now this rather enlightening piece on Walmart serves the public in ways that matter.

An excerpt from the article "The Price is Right":

First, Wal-Mart hasn't just sliced up the economic pie in a way that favors one group over another. Rather, it has made the total pie bigger. Consider, for example, the conclusions of the McKinsey Global Institute's study of United States labor productivity growth from 1995 to 2000. Robert Solow, a Nobel laureate in economics and an adviser on the study, noted that the most important factor in the growth of productivity was Wal-Mart. And because the study measured productivity per man hour rather than per payroll dollar, low hourly wages cannot explain the increase.
Second, most of the value created by the company is actually pocketed by its customers in the
form of lower prices. According to one recent academic study, when Wal-Mart enters a market, prices decrease by 8 percent in rural areas and 5 percent in urban areas. With two-thirds of Wal-Mart stores in rural areas, this means that Wal-Mart saves its consumers something like $16 billion a year. And because Wal-Mart's presence forces the store's competitors to charge lower prices as well, this $16 billion figure understates the company's real impact by at least half.

Click on the headline "In Defense of Walmart" to read the entire article. Very informative!


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