My book report: The Wal-Mart Revolution: How Big Box Stores Benefit Consumers, Workers, and the Economy

Earlier this week I finished reading The Wal-Mart Revolution: How Big Box Stores Benefit Consumers, Workers, and the Economy, a book by Richard Vedder and Wendell Cox.

The book is well-written and well-researched, and should be, I say, should be required reading for such individuals as Alderman Joe Moore of Chicago and Barack Obama.

A lot in the book reinforces what I knew about the big-box king, but there were a few revelations for me.

Here are some Wal-Mart misconceptions that are knocked down in the book:

Wal-Mart contributes to urban sprawl: Wal-Marts are disproportionatel--compared to its competitors--located in non-metropolitan areas. Its stores are usually built outside of town centers so the store can capitalize on the one thing shoppers crave more than low-priced goods, and that is abundant and free parking. People drive to Wal-Mart because by their own choice--they want to shop there. It's common knowledge that small town and suburban downtowns have been struggling for decades. Ironically, the state most-associated with sprawl, California, didn't see its first Wal-Mart until 1990.

Wal-Mart pays low wages: With the notable exception of Costco, Wal-Mart's wages are in line with wages at other retailers. On a nationwide average, Wal-Mart's appear lower, but again, many of its stores are located outside of major metropolitan areas, where people on average get paid less. Jobs offered by retailers generally don't require major skills, and the market responds accordingly. And just as no one is forced to shop at Wal-Mart, no one is compelled to work there either.

Wal-Mart hurts the poor: Wrong. Because it offers not only jobs but also low priced goods, Wal-Mart helps the poor, putting extra dollars in their pocket the would've been spent elsewhere to buy the same products, at a higher price.

Wal-Mart underinsures or doesn't insure its employees: Way wrong. Many employees opt-out of Wal-Mart insurance plan because their spouse already has coverage. Yes, some Wal-Mart employees receive Medicaid, but so do employers at other retailers, Vedder and Cox write.

Wal-Mart drives smaller firms out of business: Well, that one is true, but so did A&P, Sears, Montgomery Ward, K-Mart, Safeway...should I keep going...and today's big-box chains such as Home Depot, Target, Lowe's, Best Buy and others are doing the same thing. Why is this happening? The short answer is that people prefer shopping there, the longer one is that chains have superior distribution systems, enjoy brand name recognition, choose better locations, and oh yeah, they offer lower prices.

A warning to Wal-Mart and the other kings of the hill today. A&P once was viewed as dominant and unstoppable as Wal-Mart is today. Once nationwide, A&P is now confined to the Northeast.

Wal-Mart destroys jobs: Well, if you worked at a variety store such as Woolworth's, and a Wal-Mart came to town, you probably lost your job. Of course, you could apply to work at that Wal-Mart. Also, because Wal-Mart, Target and the others put more cash in people's pockets--because they pay less for goods than they would elsewhere, that allows them to spend that money at say, a local restaurant, a nearby amusement park, or see a movie. Which means new jobs are created.

On a final point, the authors of the book write just as John D. Rockefeller was the business genius of the 19th century, Wal-Mart's Sam Walton, earned the title for the 20th century.

If you click on the top link, not only do you end up at the The Wal-Mart Revolution spot on Amazon, but you can read friend-of-the-blog John Ray's review of the book.

Thanks for the links!

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