# 499

February 2004

Wal-Mart: A Target because It's Successful

by Amy Ridenour

In America, the word "success" seems to be inscribed indelibly on the national consciousness - the consciousness, that is, of everyone except a typical federal bureaucrat.

It happened in the Clinton Administration in the late 1990s, midway through the high-tech boom that appeared to be forging a permanent prosperity. Some bright lights in the Justice Department's Anti-Trust Division decided that Microsoft was being anti-competitive by being, well, over-competitive. The resulting costly and time-consuming lawsuit arguably was the first pinprick to penetrate the high-tech bubble.

Now the Bush Administration's law enforcers seem to be repeating their predecessors' mistake. Federal immigration authorities recently swooped on 61 Wal-Mart stores to arrest 251 illegal immigrants working as night janitors for outside contractors hired by the retailing giant.

Wal-Mart stands accused of knowingly hiring subcontractors that used illegal workers to cut costs. It now also is being sued by nine employees of the subcontractors - illegal aliens all - for allegedly not following labor laws.

If some of Wal-Mart's subcontractors are guilty, and Wal-Mart genuinely knew and approved, one wonders why the company, which has over 1 million employees, didn't resort to this money-saving practice at all 2,864 of its U.S. stores. Slightly reduced pay for 251 employees at 61 stores would have been but a drop in the bucket for Wal-Mart.

One also wonders at the chutzpah of an illegal alien who can sue someone else for indirectly providing him with illegal employment he willingly took. If these illegals can sue Wal-Mart for hiring the firms that illegally hired them, should not Wal-Mart be able to sue them for taking the illegal work in the first place?

Wal-Mart, simply put, is a target because it is successful.

The company already is under fire by the United Commercial Food Workers union and its left-wing allies because Wal-Mart is opening super supermarkets around the country and Wal-Mart employees are rejecting unionization attempts by the UCFW.

So the union and its media allies are charging Wal-Mart with anti-social activities from allegedly selling goods produced in foreign sweatshops to driving unionized competitors out of business by paying lower wages.

Wal-Mart, however, buys overwhelmingly American and demands that its foreign suppliers subscribe to fair labor standards. Moreover, its wages and benefits, on average, are as good, and sometimes better, than are those of its unionized rivals.

Wal-Mart has long been the bogeyman of the left because it is big and successful.

When Wal-Mart locates on the fringe area of a small town, so the myth goes, its sucks the lifeblood from all the local merchants on Main Street, but the Interstate Highway System and ubiquitous parking meters, both put into place in the 1950s, probably are far more responsible for Main Street's demise.

The Interstate allowed shoppers to take advantage of economies of scale at big shopping centers long before Wal-Mart arrived. Coin-gobbling parking meters helped accelerate that trend. Economic data, in fact, show Wal-Mart has been a net plus in the areas where it locates.

Darwinian as it sounds, the capitalistic system is not cruel - just efficient. If your business happens to get run over by a better idea, the best response is simply to pick yourself up and find some way to profit from the change. Or, better yet, develop an even better idea yourself.

Americans will only maintain world leadership if enough of us to do just that. Whining about victimhood may be music to the ears of pandering politicians, but it is drowned out by the chaos of a fiercely competitive global marketplace.

The fact is that Sam Walton had a remarkably better retailing idea five decades ago in Bentonville, Arkansas, and that his successors have managed to refine and polish it along the way.

Wal-Mart's sales juggernaut helped dull the pain of the past recession. It provides everyday America with affordable goods. And the smiling faces of its often-elderly greeters are far better than the surly countenances one often encounters at the post office or many a unionized checkout counter.

Yet, Wal-Mart will only remain a success as long as it provides a product that a majority of consumers want. Eventually either it will adopt policies that betray its current formula for success or someone else will come along with an even better idea.

Until that happens, it is far better for America if shoppers are driven by their own desires and perceptions of good deals rather than by someone else's ideology of resentment.

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Amy Ridenour is the president of The National Center for Public Policy Research. Comments may be sent to [email protected].