After workers and labor unions protested Walmart, the world’s largest retailer, last Friday, The New York Times quoted a union organizer describing the effort as “open-source striking.” An alleged 1,000 protests took place across the country. But the real battle was happening on the ideological field between conservative and liberal pundits. Many claims were made to defend the company’s business practices. The least sound of these claims was made by the Reason Foundation’s Peter Suderman:
4. Obama adviser Jason Furman has estimated the welfare boost of Walmart’s low food prices alone is about $50b a year.
— Peter Suderman (@petersuderman) November 24, 2012
The numbers in this claim seem very inflated, seeing as the entire U.S. spending level in grocery stores was $407 billion for 2011, according to the USDA. Suderman’s claim would mean that Walmart saves the entire nation 12.2% on their food costs. Really? Should we ask Walmart to administer Medicaid too?
With a Google search I discovered that Sebastian Mallaby of the Washington Post wrote about about a similar claim made by Jason Furman in 2005. I thought I should investigate this claim more closely, since Furman is the Deputy Director of the National Economic Council and has been nominated to the Obama administration’s fiscal cliff negotiating team. Surely he wasn’t out cheerleading for a private company. According to the Post:
As Jason Furman of New York University puts it, Wal-Mart is “a progressive success story.” Furman advised John “Benedict Arnold” Kerry in the 2004 campaign and has never received any payment from Wal-Mart; he is no corporate apologist. But he points out that Wal-Mart’s discounting on food alone boosts the welfare of American shoppers by at least $50 billion a year. The savings are possibly five times that much if you count all of Wal-Mart’s products.