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Reason Senior Editor Addresses Chief Anti-Walmart Talking Points


"Raise prices to pay for increased wages and you cut into the store’s huge low-price benefits for the poor."

It’s no secret that many on the left (and even some on the right) really, truly dislike Walmart and its business practices. Indeed, just yesterday the union-backed OUR Walmart tried to disrupt the big box retailer’s Black Friday sales by staging a nationwide protest. Luckily for Walmart, the protest did little damage and the much-touted employee walkout never materialized.

But let's talk about the long-standing and persistent hatred against the company. Let’s face it, ever since Walmart became an economic powerhouse, they’ve been attacked, maligned, smeared, and, in some cases, blocked by certain communities from even opening stores.

We all know the arguments against the retailer: Walmart puts mom-and-pop stores out of work; Walmart doesn’t pay its employees enough; Walmart doesn’t offer the healthcare benefits its employees deserve; Walmart operates on "greed."

But there has to be another side to this argument. Is there anything to be said that might explain the retailer's massive and continued success? Perhaps.

Peter Suderman, senior editor for Reason.com, on Saturday used Twitter to lay out his observations on the big box giant. Luckily for us, a tweet from The Heritage Foundation’s excellent Lachlan Markay notified us as to what was happening on Suderman’s timeline and we were able to follow along.

Below are Suderman’s thoughts on Walmart, its employee pay, and what would happen if unions get their way [author's note: We've put Suderman's tweets into list format because it’s much easier to read that way]:

Really enjoyed talking Walmart and Black Friday on @upwithchris [MSNBC’s Chris Hayes] this morning. I'm going to add a few stray observations on twitter.

1. Walmart’s customer base is heavily concentrated in the bottom income quintile, which spends heavily on food.

2.The bottom income quintile spends about 25 percent of income on food compared to just 3.5 percent for the top quintile.

3. So the benefits of Walmart’s substantially lower prices to the lowest earning cohort are huge, especially on food.

4. Obama adviser Jason Furman has estimated the welfare boost of Walmart’s low food prices alone is about $50b a year.

5. Walmart’s wages are about average for retail. Not amazing. But not the worst either.

6. Paying Walmart’s workers more would mean the money has to come from somewhere. But where?

7. Erase the Walmart CEO's entire salary, and you can raise average hourly wages by just a penny or so.

8. Erase the entire Walton family fortune and you get an average $1/hour boost to Walmart workers.

9. Raise prices to pay for increased wages and you cut into the store’s huge low-price benefits for the poor. It’s regressive.

10. But what about Costco? They pay more, right? Yes, but it’s a different, smaller market.

11. Walmart’s average customer earns roughly $35k. Costco’s average customer earns about $75k.

12. Costco only has about half as many employees as Walmart. What would happen if Walmart adopted a Costco model and shrank to Costco size?

13. Not at all clear that the remaining half of Walmart workers would be better off. Many would almost certainly be worse off. Unemployed.

14. Obama econ adviser Jason Furman did a lot of the work on Walmart's progressive benefits. His case: slate.me/R3bkc2

15. Finally, as someone who's actually been a regular, small-town Walmart shopper, I'd like to argue for its community benefits.

16. Yes, some small stores close when Walmart opens. But in small towns, Walmart can become real community hubs - more so, because of size.

17. As for Walmart workers getting health benefits thru Medicaid, that's due in part to a policy liberals argued for: wapo.st/axXXNE

We’re not sure which is more impressive: The all-encompassing nature of Suderman's observations or the fact that he was able to do it in 140-character bursts.

Follow Becket Adams (@BecketAdams) on Twitter

Front page photo courtesy Getty Images. This story's headline has been updated.

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