NCPA - National Center for Policy Analysis


November 14, 2005

In his book, "The New New Left," Steven Malanga explores an emerging new political dynamic: the contest between those who benefit from an ever-expanding public sector and those who pay for this bigger government -- in other words, between tax consumers and taxpayers.

Unlike the original New Left, which evolved from a naive but genuine effort to create a better society, these new groups pursue an agenda based on their own narrow economic interests. Malanga says the war on Wal-Mart is a prime example of this:

  • For years, Wal-Mart encountered opposition from anti-sprawl activists or small town merchants worried about competition, but the new war on Wal-Mart is a coordinated effort in which unions, activist groups, environmentalist groups, private- and public-sector unions and even plaintiffs' attorneys work together in effective alliances.
  • Opponents argue there are hidden costs to business's increasing emphasis on low prices and high employee output; they seek government edicts to force Wal-Mart and discounters like it to raise wages and offer workers more benefits.

Malanga says these groups ignore the greater benefit that an efficient operator like Wal-Mart brings to shoppers and an entire economy by driving down prices and forcing other stores to perform better. In one study, the Los Angeles County Economic Development Corporation estimated:

  • Wal-Mart's entry into Los Angeles County would save consumers about $1.78 billion annually and southern California shoppers $3.76 billion annually, or nearly $600 per household.
  • Shoppers would redirect those savings into other uses that could create up to 36,000 new jobs, more than offsetting the estimated loss of 3,000 to 5,000 jobs resulting from a drop in the grocery industry wage pool.
  • The true difference between Wal-Mart wages and union wages is less than three dollars an hour; that difference can be offset by other benefits like quick advancement in the company and stock benefits.

Some observers are starting to realize that it is those who do not live in the communities who are doing most of the objecting. Regardless of the campaigns against it, Wal-Mart is still generating enormous support from consumers and workers, as well as in many of its newest markets, especially in lower-income urban areas where shoppers often have few choices among stores and prices are typically high.

Source: Steven Malanga, "The New New Left: How American Politics Works Today," Ivan R. Dee Publisher, 2005; and Gregory Freeman, "Wal-Mart Supercenters: What's in store for Southern California?" Los Angeles County Economic Development Corporation, January 2005.


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