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<DIV><FONT face=Arial size=2>there is also an interesting article in
Christianity Today about Wal mart. Last month I belive.</FONT></DIV>
<DIV><FONT face=Arial size=2>PK</FONT></DIV>
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A title=scooke@uidaho.edu href="mailto:scooke@uidaho.edu">Stephen Cooke</A>
</DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=vision2020@moscow.com
href="mailto:vision2020@moscow.com">Vision2020 Listserver List</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Tuesday, June 14, 2005 2:53
PM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> [Vision2020] WalMart... you all
got me going!</DIV>
<DIV><BR></DIV>
<DIV class=Section1>
<P class=MsoNormal><FONT face=Garamond color=blue size=3><SPAN
style="FONT-SIZE: 12pt; COLOR: blue; FONT-FAMILY: Garamond">Mean while back at
the WalMart war
..</SPAN></FONT></P>
<P class=MsoNormal><FONT face=Garamond color=blue size=3><SPAN
style="FONT-SIZE: 12pt; COLOR: blue; FONT-FAMILY: Garamond">Steve
Cooke</SPAN></FONT></P>
<P class=MsoNormal><FONT face=Garamond color=blue size=3><SPAN
style="FONT-SIZE: 12pt; COLOR: blue; FONT-FAMILY: Garamond"></SPAN></FONT> </P>
<P class=MsoNormal><FONT face=Garamond color=blue size=3><SPAN
style="FONT-SIZE: 12pt; COLOR: blue; FONT-FAMILY: Garamond"></SPAN></FONT> </P>
<DIV>
<DIV class=MsoNormal style="TEXT-ALIGN: center" align=center><FONT
face="Times New Roman" size=3><SPAN style="FONT-SIZE: 12pt">
<HR tabIndex=-1 align=center width="100%" SIZE=2>
</SPAN></FONT></DIV>
<P class=MsoNormal><B><FONT face=Tahoma size=2><SPAN
style="FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">From:</SPAN></FONT></B><FONT
face=Tahoma size=2><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Tahoma"> Stephan
J. Goetz [mailto:sgoetz@psu.edu] <BR><B><SPAN
style="FONT-WEIGHT: bold">Sent:</SPAN></B> Tuesday, June 14, 2005 12:11
PM<BR><B><SPAN style="FONT-WEIGHT: bold">To:</SPAN></B> <A
href="mailto:cenet@aaealist.org">cenet@aaealist.org</A><BR><B><SPAN
style="FONT-WEIGHT: bold">Subject:</SPAN></B> Re: [cenet] Re: WalMart... you
all got me going!</SPAN></FONT></P></DIV>
<P class=MsoNormal><FONT face="Times New Roman" size=3><SPAN
style="FONT-SIZE: 12pt"></SPAN></FONT> </P>
<P class=MsoNormal><FONT face="Times New Roman" size=3><SPAN
style="FONT-SIZE: 12pt">The PBS show is actually available (or was at one
time) on the PBS web-site.<BR><BR>I think there are a number of reasons why
Wal-Mart is being targeted in the media and elsewhere. In addition to
the direct employment impacts (possibly replacing full-time with part-time
jobs, although we do not know for sure) on the moms-and-pops, Wal-Mart also
displaces those service providers who supplied the moms-and-pops with legal
advice, accounting services, logistics, transportation, advertising,
wholesaling, etc. These functions are all handled out of Bentonville,
AR, with tremendous economies of scale. Some of the latter jobs may have
been better-paying and also have provided benefits. From our colleagues
in sociology we learn that owners of these firms tend to represent the
"leadership class," and when that is destroyed, so is the civic capacity
(social capital) to solve local problems that are of a public nature. Of
course, in some declining rural communities that capacity had disappeared long
before Wal-Mart came to town.<BR><BR>Wal-Mart's PR folks point out that the
chain gets 1,000s of applicants for 100 or 200 jobs in some communities.
No one is forcing these individuals to apply for and take the jobs. As
community economic developers, we might wonder about the opportunity costs of
these local workers, and whether we can deliver programs (such as
entrepreneurship training), that might raise the returns to their labor.
[George Gilder's 1981 (updated in1993) book <I><SPAN
style="FONT-STYLE: italic">Wealth and Poverty</SPAN></I> is an interesting
read in that regard]. Things will get really interesting once Wal-Mart
fully implements Radio Frequency Identification (RFID) tags; as I understand
it, a single cashier will be able to check out 10 customers simultaneously
once this system is fully implemented (you won't even have to place your goods
on a check-out conveyer).<BR><BR>My own work with Hema Swaminathan shows that
the presence of Wal-Mart is associated with higher family poverty rates, after
controlling for endogeneity--i.e., the WM location decision (the chain
actually avoids counties with higher poverty rates -- and with higher shares
of self-employed, all else equal). The paper is available at (comments
are welcome): <A href="http://cecd.aers.psu.edu/pubs/PovertyResearchWM.pdf"
eudora="autourl">http://cecd.aers.psu.edu/pubs/PovertyResearchWM.pdf</A>
The Readers' Digest version is here: <A
href="http://cecd.aers.psu.edu/pubs/WalMart%20Brief.Oct25.pdf"
eudora="autourl">http://cecd.aers.psu.edu/pubs/WalMart%20Brief.Oct25.pdf</A>
A back-of-the envelope calculation suggests that an additional 20,000 families
fell below the poverty line between 1989 and 1999, as a ceteris paribus
by-product of Wal-Mart. Note that the poverty line was adjusted for
inflation between 1989 and 1999, so this number should take into account the
fact that Wal-Mart reduced the CPI by 1 percentage point annually during the
decade. <BR><BR>If Wal-Mart creates externalities (e.g., shifting health care
costs and other welfare costs to taxpayers), then that could be one reason why
people are upset. Wal-Mart is also masterful at extracting direct
subsidies from communities (e.g., for infrastructure improvements) even
though, as a retailer, we may not think of it as part of the economic base in
the traditional sense. This can be debated; David D.--you can insert
your rebuttal here, but keep in mind that what happens locally may not be
comparable to what happens nationally. These subsidies are transferred
dollar for dollar to the corporation's bottom line, and WM extracts them by
promising 150-200 jobs for the community per store (see, however, the note
about RFID tags above). It is probably not surprising that Emek Basker's
(U Missouri) 2005 REStat paper indicates that WM has no effect on overall
employment in a county (her data are already a few years old).<BR><BR>As an
aside, WM has phenomenal amounts of information, because every single
transaction is recorded; one can only marvel at what a clever marketing
economist might be able to do with the billions of transactions
(price-quantity) data points that are collected every month by Wal-Mart.
Information is power, after all (and in this case we are not talking about
consumer power).<BR><BR>Some individuals may take issue with the fact that the
$20 billion or so of wealth held by each of the five Wal-Mart heirs translates
into more income on a single day (of leisure), even at a conservative rate of
return of 1%, than the average Wal-Mart worker would earn over a lifetime of
working at the chain, appropriately discounted. As WM spokespersons have
pointed out in other contexts, when you are at the top of any list, you are
likely to become a target. <BR><BR>In terms of the globalization debate,
it has been suggested that there may be a link between abandoned local
manufacturing plants and the "made in China" label of products sold at local
Wal-Mart stores. While Wal-Mart is not the only firm sourcing from
overseas, it is clearly viewed as a leader. The moms-and-pops (and their
wholesalers) that previously supplied Main Street with retail goods are not
likely to have developed the expertise and knowledge needed to develop China
into the main supplier--or at least not as rapidly (which might have given
local stores more time to adjust).<BR><BR>Despite all of the negative press,
it is not clear that anything should or could be done about Wal-Mart.
Our job as academics interested in regional and local economic development, it
seems to me, is to point out that the consumer savings produced by the chain
must be balanced against some of the other considerations listed above, and
that community leaders should think carefully about redirecting public
subsidies to the chain and away from public schools, for example, as they were
"encouraged" to do recently in a nearby county here in
Pennsylvania.<BR><BR>SJG <BR><BR>At 12:42 PM 6/14/2005, you
wrote:<BR><BR></SPAN></FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3><SPAN
style="FONT-SIZE: 12pt">Since the discussion is presently on WalMart, folks
might want to catch the Frontline show on PBS tonight. It is called "Is
Walmart good for America?" It is on Iowa Public TV (CDT) at 9 pm this evening
(Tuesday). As they say, check your local listings.<BR>Best
wishes,<BR>Jan<BR><BR>At 09:59 AM 6/14/2005, you
wrote:<BR><BR><BR><BR></SPAN></FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" size=3><SPAN
style="FONT-SIZE: 12pt">I've sometimes wondered about the apparent
inconsistency of economists. Most of us support free trade, and will
argue at the suggestion of a trade restriction that consumers, collectively,
benefit more from getting goods at lower prices through free trade than
workers, collectively, lose. Yet benefits from lower prices to consumers
seem to be forgotten when Wal Mart threatens to move in to a new
community.<BR><BR>Granted, some part of Wal Mart's price advantage is due to
monopsony, but even there, we have become so accepting of monopoly power in
our present-day economy that I suspect in substantial part they are merely
bargaining away monopoly profits of their suppliers.<BR><BR>Tom<BR><BR><BR>Tom
Hady<BR>thady@att.net<BR><BR>---------------------------<BR>To leave the list,
send a blank email (no subject required)
to:<BR>cenet-leave@aaealist.org<BR><BR>If you still have any problems or
questions, please email<BR>cenet-owner@aaealist.org, who will be happy to
help.</SPAN></FONT></P>
<P class=MsoNormal style="MARGIN-BOTTOM: 12pt"><FONT face="Times New Roman"
size=3><SPAN style="FONT-SIZE: 12pt"><BR>Jan L. Flora<BR>Professor and
Community Extension Specialist<BR>Dept. of Sociology<BR>317D East Hall<BR>Iowa
State University<BR>Ames, IA 50011-1070<BR>Phone: (515) 294-4295<BR>Fax: (515)
294-0592<BR>E-mail: floraj@iastate.edu
<BR><BR><BR><BR>---------------------------<BR>To leave the list, send a blank
email (no subject required) to:<BR>cenet-leave@aaealist.org<BR><BR>If you
still have any problems or questions, please
email<BR>cenet-owner@aaealist.org, who will be happy to
help.</SPAN></FONT></P>
<P></X-SIGSEP><FONT face="Times New Roman" size=3><X-SIGSEP><SPAN
style="FONT-SIZE: 12pt">Stephan J. Goetz, Ph.D.<BR>Director, The Northeast
Regional Center for Rural Development<BR>Professor of Agricultural and
Regional Economics<BR>7E Armsby Building<BR>The Pennsylvania State
University<BR>University Park, PA 16802-5602<BR><BR>Phone: 814/863-4656
Cell: 814/777-4656 FAX 814/863-0586 <BR>e-mail: sgoetz@psu.edu; <A
href="http://www.cas.nercrd.psu.edu/"
eudora="autourl">http://www.cas.nercrd.psu.edu</A>
<BR><BR>--------------------------- <BR>To leave the list, send a blank email
(no subject required) to: <BR>cenet-leave@aaealist.org <BR><BR>If you still
have any problems or questions, please email <BR>cenet-owner@aaealist.org, who
will be happy to help. </SPAN></FONT></P></DIV>
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