Wal Mart: good or evil?

• Author: Tierney, John
• Position: OPINION

How did a store become such a hot topic of national debate? Well, War-Mart isn't just any store. Since Sam Walton opened his first shop in Rogers, Ark., in 1962, it has grown into the world's largest retailer and the largest private employer in the U.S., with 1.3 million workers. New York Times columnists John Tierney and Paul Krugman weigh in on Wal-Mart and its impact on America.

Once upon a time, social activists decried the plight of workers in company towns whose paychecks vanished each week because they were being gouged by the local stores. And urban politicians, angered by the high prices charged at many grocery stores in the inner city, offered subsidies in order to attract chain stores that would make food more affordable for the poor.

Then Wal-Mart came along, offering urbanites food at the same low prices charged in the suburbs. Now the activists and politicians have a new cause: Say No to Wal-Mart! Stop it before it discounts again!

This new crusade is especially puzzling in light of the current consensus among poverty experts. Many have praised the welfare reform of the 1990s and say the government should keep pushing people off the welfare rolls and into jobs.

From that perspective, Wal-Mart has been one of the most successful antipoverty programs in America. It provides entry-level jobs that unskilled workers badly want--there are often 5 to 10 applicants for each position at a new store.

JOBS FOR UNSKILLED WORKERS

Critics say Wal-Mart's pay, $9.68 per hour on average, is too low and depresses local retail wages when a new store opens. That effect is debatable, but even if wages do go down slightly, these workers still end up with more disposable income, according to Jason Furman, a professor at New York University and former economic adviser in the Clinton administration who studies Wal-Mart.

Furman notes that the possible decline in wages is minuscule compared with what the typical family saves by shopping at Wal Mart: nearly $800 per year on groceries alone, a savings that's especially valuable to the many low-income shoppers at Wal-Mart.

AN EASY TARGET

The average income of Wal-Mart shoppers is $35,000, compared with $50,000 for Target and $74,000 for Costco. Costco is touted as the virtuous alternative to Wal-Mart because it pays better wages, but it needs to do so because it requires higher-skilled workers to sell higher-end products to its more affluent customers.

Wal-Mart is often denounced for getting "corporate...