- The Washington Times - Friday, May 14, 2004

Some newcomers plan to move to Chicago, and the invasion sounds as if it will be a grim affair. “They’re a negative for the city,” said one fearful alderman. They’re guilty of “treating people wrong,” said an angry minister. They exploit a “slave mentality,” charged another clergyman.

You would think Genghis Khan was riding in our direction, with marauding hordes in tow.

In fact, the would-be migrants are from Wal-Mart, whose chief crime is to become one of the most successful companies in American history. All the giant retailer threatens to bring is a few hundred jobs and many inexpensive products. But critics want the City Council to block the project.

If Chicagoans loathe everything Wal-Mart represents, of course, they can easily defend themselves by declining to shop there. But the people in the neighborhoods where the stores are planned (one on the South Side and one on the West Side) bear an uncanny resemblance to other Americans in (a) their desire for a bargain and (b) their preference not to have to travel far to get it. The danger, from the critics’ standpoint, is not that Chicagoans will detest Wal-Mart but that they’ll like it.

That’s been the case for most people in most places. The company didn’t climb to the top of the Fortune 500 list, sell nearly $259 billion in goods last year and become the largest U.S. private employer by failing to cater to ordinary Americans.

The complaints heard in the Chicago dispute are familiar. Wal-Mart, we are told, pays poorly, resists unions, skimps on health insurance and puts small retailers out of business.

It’s true very few people get rich working for Wal-Mart, but the company says the average hourly wage for full-time workers in its Chicago-area stores is $10.77. It says the typical starting pay for an inexperienced worker at the new stores will be from $7 to $8 an hour (compared to the current minimum wage of $5.15). Some 60 percent of its employees get health coverage through Wal-Mart, with most of the rest getting it through spouses, parents or Medicare.

Does the company resist unions? Sure. But that doesn’t exactly make it unusual, since 92 percent of private-sector workers in the United States lack a union. Does it hurt small businesses? Only by offering consumers goods they want at lower prices than established retailers.

We once feared large corporations because they would use their market power to overcharge. Now we’re supposed to fear a large corporation because it undercharges? Plenty of companies have been criticized for staying out of inner-city areas. Wal-Mart is getting flak because it wants in.

Local unions worry the new stores will pressure wages downward. But if Wal-Mart paid less than the market rate, it wouldn’t be able to hire workers. They would go work for some other employer.

Keeping these stores out of Chicago, in any event, won’t prevent city-dwellers from supporting Wal-Mart — it will only force them to trek to the suburbs to do so. Dwight Gunn, pastor of the Heritage International Christian Church on the West Side, says 99 percent of his congregants shop at Wal-Mart, even though the nearest store is several miles away.

Any downward pay pressure already exists, thanks to the suburban stores. But the city suffers less from mediocre wages than from unemployment — which, for most people, pays $0.00 an hour. By establishing 600 new jobs in neighborhoods not teeming with employment opportunities, Wal-Mart is likely to boost the wage level, not lower it.

In addition, the stores would offer inexpensive products to people who need to stretch every dollar. American workers lack many of the protections offered by the strong unions found in Western Europe, and Wal-Mart’s wages reflect that. But the higher wages in those countries translate into higher prices and fewer jobs.

Despite our economic troubles, U.S. unemployment remains well below that in supposedly enlightened Germany, France and Canada. And, as the Organization for Economic Cooperation and Development reports, Americans have the highest average purchasing power among industrialized democracies, partly because “$100 buys more in the United States.”

How come? One reason is we have so many fiercely competitive discount retailers like Wal-Mart. Economist W. Michael Cox of the Federal Reserve Bank of Dallas has called Wal-Mart “the greatest thing that ever happened to low-income Americans.” Anyone who thinks it would be bad for low-income Chicagoans should let them vote on it, with their feet.

Steve Chapman is a nationally syndicated columnist.

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