Wal-Mart Caught Again

Wal-Mart Savings Ads Assailed
Walmart’s ads showing people using their “savings” to spend elsewhere run into a slight problem – the facts.

Wal-Mart, the ads claim, saves the average family $2,500 a year. The implication seems clear: shop at Wal-Mart, save money, and you can afford to splurge.

But it turns out you save $2,500 even if you never step foot inside a Wal-Mart.

An outside firm, paid by Wal-Mart, found that the company’s emphasis on low prices led to a 3 percent decline in overall consumer prices. That translated into $287 billion in savings in 2006, or $2,500 a household, whether a family shops at Wal-Mart or a competitor, according to the study.

I question the study as well, since it implies that only Walmart would have been able to push prices down. If Walmart didn’t exist does this means that we wouldn’t have imports from China? Or that other retailers wouldn’t be competing with each other by pushing prices down?

Walmart isn’t a factor in either the auto or PC markets, yet these products have gotten “cheaper” (when adjusted for their improved quality and features) over the decades nevertheless. The other side of the coin seems to be true, however. Walmart has pushed wages down. This is easier to track because wages are determined in a local labor market, unlike goods which can be imported from anywhere.

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