News & Observer | newsobserver.com | Wal-Mart's anti-poverty prescription

Published: Oct 25, 2006 12:30 AM
Modified: Oct 25, 2006 03:10 AM

Wal-Mart's anti-poverty prescription

 

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If you want to feel good about helping the poor, donate to a charity. If you want to make a positive and instantaneous difference in the lives of the poor, make sure they have access to a Wal-Mart.

The store nearly every fashionable social-justice type loves to hate is fast becoming one of the biggest producers of social and economic benefits for the folks who need a helping hand.

The latest social good resulting from Wal-Mart's soulless pursuit of profit is the opportunity to pay just $4 for a 30-day supply of one of 314 generic drugs. And last week the company announced it's bringing its $4 drug program to the 128 stores it operates in North Carolina.

Here's how the program works: Show up with a prescription and four bucks. Then go home, take your pills and spend the money you saved on something else.

That's it. Way too simple for government work.

Of course, 314 generic drugs is a very small island in the pharmaceutical world. But only wishful thinkers among Wal-Mart's competitors believe it won't expand that list and eventually discount even brand-name drugs. And when that happens, a growing amount of research shows that the biggest beneficiaries will be those living paycheck-to-paycheck.

Economists at Global Insight have established that Wal-Mart saves the American consumer $264 billion a year, or about $2,329 per household. It only stands to reason that the lower one's income, the more significant the savings become. How progressive.

Yet, inexplicably, progressives continue to be the biggest Wal-Mart opponents. They shouldn't be. By opposing the retail chain they're limiting the economic opportunity of the poor.

Research is knocking down, one by one, the well-worn cocktail party arguments against Wal-Mart. Even the one that sticks the most -- that the Arkansas-based company pays below-average wages -- doesn't hold water.

According to Jason Furman, a former economic adviser in the Clinton administration and director of economic policy for the Kerry-Edwards campaign, Wal-Mart pays its employees better than other retail-sector employers, both in terms of hourly wages and benefits. Furman, who is a visiting scholar at New York University's Wagner Graduate School of Public Service, also says Wal-Mart earns about $6,000 per employee, below the national average of $9,000 in profit per worker, and chickenfeed to Microsoft's $143,000.

With domestic arguments against Wal-Mart crumbling, opponents can be counted on to accuse the retailer of using overseas suppliers that exploit cheap labor in sweatshops. That's inhumane, they contend.

But to Michael Strong, co-founder of FLOW, which describes itself as leaders and entrepreneurs working together for global peace and prosperity, one man's sweatshop is another man's ticket out of poverty.

In a provocative piece in TCS (Technology, Commerce and Society) Daily, Strong maintains that no other organization is responsible for lifting more people out of poverty worldwide than Wal-Mart. By his reckoning the company is single-handedly responsible for substantially improving the economic lives of about 460,000 Chinese workers each year.

That's a detail that escaped a stereotypical Washington Post story earlier this year, one that said poor Chinese workers were paying the real price for Wal-Mart's low prices.

Strong chided the reporter for failing to point out that working for a Wal-Mart supplier in a so-called supplier urban sweatshop is a huge economic step up for many rural Chinese workers. On average, they make 2.5 times more in these factories than they could in their former countryside hometowns.

Strong also made the case that the social justice elites are becoming one of the biggest obstacles to FLOW's goal of spreading prosperity around the world. He contends that relief delivered through economic growth is no less noble than help provided via government benefit or philanthropic largess.

This is where I part company with Strong. It's much nobler to give people the opportunity to work their way out of poverty. Self-reliance -- even when earned in a sweatshop -- offers more dignity than a handout disguised as charity. Even if that sweatshop supplies Wal-Mart.

Contributing columnist Rick Martinez can be reached at rickjmartinez2@verizon.net

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