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Carol Platt Liebau - Columnist

Carol Platt Liebau is a senior member of the editorial board. She is an attorney, political analyst and commentator based in San Marino, CA, and has appeared on the Fox News Channel, MSNBC, CNN, Orange County News Channel, Cox Cable and a variety of radio programs throughout the United States. A graduate of Princeton University and Harvard Law School, Carol Platt Liebau also served as the first female managing editor of the Harvard Law Review.


Hitting the “Wal”
Why Do Liberals Love to Hate Wal-Mart?
[Carol Platt Liebau] 10/27/03   

In his immortal 1964 speech “A Time for Choosing,” President Reagan once perfectly encapsulated liberal dogma in two short sentences: “It’s not that our liberal friends are ignorant. It’s just that they know so much that isn’t so.” At the time, lest we forget, many considered socialist or even communist forms of government superior to America’s robust capitalism.

Even today, fourteen years after the Berlin Wall fell and the Soviet Union imploded (thank largely to President Reagan’s efforts), some Americans remain hostile to the concept of vigorous free enterprise. And these people have an enemy – Wal-Mart. For many liberals, Wal-Mart has become the archetype of the big, soulless, greedy American corporation – or at least these are the grounds upon which they most often base their critique of the company. Less discussed, but equally significant, is the fact that Wal-Mart’s corporate culture espouses a traditionalism that many liberals despise. Indeed, Wal-Mart refuses to stock music or computer games with mature ratings, carries only sanitized copies of CDs, has removed or hidden magazines with sexually provocative covers, and does not sell Preven, a “morning-after” pill that many consider an abortifacient.

So it was hardly surprising that the Oakland City Council chose last week to ban Wal-Mart super centers, passing an ordinance that bars discount retail stores with full-service supermarkets that exceed 100,000 square feet, or about 2.5 acres. This decision is perfectly consistent with liberal elite disdain for the company. The council trotted out the old reliable complaints about Wal-Mart – which include claims that the huge super centers are eyesores, that that drive “mom and pop” enterprises out of business, and that its employees are underpaid. According to Oakland City Council member Jane Brunner, if super centers are allowed into Oakland, the city will “lose” grocery stores and there will be no grocery stores in areas that “need” them.

Doubtless the city officials are congratulating themselves for having struck a blow against the capitalist (and cultural!) threat that Wal-Mart presents. But was their decision really good for the people they claim to serve? After all, according to the 2000 census, the per capita income for the city of Oakland is $21,936. Fully 19.4% of the population and 16.2% of families are below the poverty line. These would seem to be people who might well be willing to overlook the theoretical economic, cultural and aesthetic oncerns that exercise so many elite liberals, in exchange for the practical opportunity to purchase an extensive selection of goods at discounted prices.

And Wal-Mart does understand the art of discounting – it caters to customers who, like so many in Oakland, desperately need the savings it provides. A full 25% of Wal-Mart’s customers have neither a basic checking nor a savings account; they are living paycheck to paycheck and food represents their second-largest expenditure (behind only their housing costs). Saving even $15 with each grocery shopping excursion may not seem significant to city council members who sup comfortably at the government trough, but for many of their constituents, such a sum is meaningful. And Wal-Mart estimates that if its Superstores are able to penetrate the California market, customers will save 25% on their food costs.

Although the city council may well experience a delicious frisson of self-righteousness by striking a blow for mom-and-pop businesses or even unionized grocery stores, there’s no doubt that these businesses have both higher prices and more limited selections than does Wal-Mart. If the residents of Oakland believe that these other businesses are nonetheless worthy of support, they will patronize them regardless of whether a Wal-Mart is available. But the choice about where to shop should belong to the people of Oakland – there is something repulsively arrogant about a city council decreeing that its poor should pay higher prices in order to subsidize the merchants that the council apparently favors.

Indeed, the council’s efforts to protect the city’s existing grocery stores are at odds with Councilwoman Brunner’s assertion that Wal-Mart will eliminate grocery stores in areas that “need” them. If Wal-Mart either cannot or will not provide the products or services that residents require, then the underserved population will continue to support Wal-Mart’s competitors, and the stated concerns about merchants being driven out of business are unfounded.

As for the argument that Wal-Mart’s workers are “underpaid,” the question remains: By whose standards? In any labor market, the employer is a consumer of labor; the employee is the producer. If Wal-Mart pays wages far below the market rate, the company will have difficulty finding employees. The salaries Wal-Mart provides are dictated by the labor market’s demand and the available supply of this labor. In a city like Oakland – where unemployment runs at 9.7%, compared to the statewide average of 6.1% (as of September 2003) – there is likely to be plenty of interest in employment with Wal-Mart.

But those seeking work will be deprived of the opportunity to find it because of a city council determined to promote its own cultural and economic agenda without regard to its constituents’ well-being. To the politicians in Oakland, apparently “no wages” are better than “low wages,” and the unemployed should simply step up and pay the higher food prices that support artificially inflated salaries at other grocery stores. (The recent discovery of 245 illegal aliens working as cleaning crew subcontractors – representing only .02% of Wal-Mart’s 1.1 million person domestic work force – has no impact on this analysis, though it will doubtless be seized upon by the company’s adversaries.)

The city council must have realized that legislative chicanery was the only hope for dealing a setback to Wal-Mart. For like their views on the war in Iraq, taxes, and President Bush, the liberals’ animus against Wal-Mart places them far out of the mainstream. In fact, Americans named Wal-Mart – which ranks among the top five corporate foundations by giving in 1999 and 2000 – as the company they think of first in supporting local causes and issues. The company has likewise been recognized by Forbes magazine in 2002 as being one of the most philanthropic companies in America. And in 2003, Wal-Mart was named by FORTUNE magazine as the most admired company in the United States.

And so the Oakland City Council had better savor its victory – it may be temporary. Although the city council of Inglewood, California (a city with significant demographic similarities to Oakland) recently banned construction of a Wal-Mart, enough signatures have been collected to put the issue to a vote of the people. This may well be a precursor to a similar effort up north.In the end, it is highly likely that the citizens of both Inglewood and Oakland will be willing to tell their city council to stop requiring local shoppers to subsidize their own elitist policy preferences. Once again, regular Californians may well conclude that their own elected officials know far too much that just isn’t so.

Disclosure: Carol Platt Liebau’s husband, a professional money manager, owns Wal-Mart stock on behalf of his clients.

CRO columnist Carol Platt Liebau is a political analyst and commentator based in San Marino, CA.


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