Friday, November 04, 2005

BREITBART.COM - Wal-Mart economy keeps lid on US inflation: study

BREITBART.COM - Wal-Mart economy keeps lid on US inflation: study

The "rock-bottom" pricing strategy used by retail giant Wal-Mart has filtered into the US economy and kept a lid on inflation, according to a study commissioned by the company and released.

The study by the economic research firm Global Insight concluded that the discounting along with other measures led to cumulative savings for consumers of 263 billion dollars between 1985 and 2004, or 895 dollars per person.

The researchers concluded that Wal-Mart had a positive impact on US employment, generating 210,000 jobs by 2004, or 0.15 percent more that would have existed without Wal-Mart.

The report also found that Wal-Mart's low pay for employees led to a 2.2 percent drop in overall wages across the economy but maintained that this was offset by falling consumer prices.

"Consumers earned less in nominal dollars, but their income bought them more in the economy with Wal-Mart because of real disposable income gains," the study concluded.

The study drew criticism from Wal-Mart's chief detractors, who argue that the company benefits from a variety of public subsidies while depressing wages.

Tracy Sefl, spokeswoman for Wal-Mart Watch, a leading critic of the company, said her group's research, based on data from congressional reports, concludes that Wal-Mart benefits from at least 1.5 billion dollars in public subsidies each year.

Additionally, Sefl noted other reports showing retail workers lost 4.7 billion dollars as a result of depressed wages and that nearly half of the children of Wal-Mart employees qualify for the government's Medicaid health program for the needy.

"Wal-Mart is only telling part of the story, which is not the same as telling the whole story," Sefl said.

Global Insight concluded that over the 1985-2004 period, Wal-Mart led to to 9.1 percent decline in food prices, a 4.2 percent decline in prices of other goods and a 3.1 percent decline in overall consumer prices.

The research firm found Wal-Mart led to a 0.75 percent improvement in the overall efficiency of the economy, based on capital intensity and lower import prices.

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