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Bright Idea: Attack Business

September 25, 2006

With all the trouble the Bush administration is in, both domestically and internationally, you'd think the Democrats could come up with something better as an election strategy than an anti-business crusade.

Sen. Joseph R. Biden, a likely Democrat presidential candidate in 2008, launched the following salvo against Wal-Mart, the nation's largest private employer: "My problem with Wal-Mart is that I don't see any indication that they care about the fate of middle-class people. They talk about paying them $10 an hour. That's true. How can you live a middle-class life on that?"

I won't argue that it wouldn't be nice if everyone, at a minimum, could enjoy a middle-class lifestyle, no matter what their job or training. But with Biden scoffing at $10 per hour, I'm not sure what he's proposing. If it's $20 an hour, that's $41,600 a year for a 40-hour week, no overtime. Two high school students could drop out and go to Wal-Mart and earn $83,200 a year. To keep kids in school, we'd have to chain them to their desks.

By way of comparison, $83,200 is $20,100 higher than the current U.S. median household income for those in their prime working years, ages 25 to 59.

On the customer side, Biden doesn't mention that Wal-Mart's millions of customers are saving billions of dollars per year. Between 1985 and 2004, reports Investor's Business Daily, Wal-Mart "slashed food-at-home prices by 9.1 percent, goods prices by 4.2 percent, and overall consumer prices by 3.1 percent."

Harvard Business School professor Pankaj Ghemawat estimates that U.S.consumers are currently saving $18 billion a year at Wal-Mart. "And because Wal-Mart forces its competitors to charge lower prices as well," explains Ghemawat, "this figure is a fraction of the company's real impact."

On wages, a Global Insight nationwide survey in 2004 found Wal-Mart paid 71 cents more per hour than the average wage in equivalent retail jobs.

Nonetheless, Sen. Hillary Clinton, a former member of Wal-Mart's board, has publicly returned a $5,000 campaign contribution from the company, protesting the firm's compensation package.

Biden and Clinton aren't alone. The New York Times recently ran a front-page story, "Eye on Election, Democrats Run as Wal-Mart Foe." Some Democrats are worried that the campaign could turn back prior efforts "to erase the image of the party as anti-business," reported The Times. "Still, what is striking about this campaign is the ideological breadth of the Democrats who have joined in, including some who in the past have warned the party against appearing hostile to business interests."

"Wal-Mart has become emblematic of the anxiety around the country and the middle-class squeeze," stated Sen. Evan Bayh, a former head of the moderate Democratic Leadership Council. "Democrats across the country are rallying around this issue."

Funny, but these leading Democrat politicians seem to have more problems with Wal-Mart's capitalistic operations than do the Chinese communists. Getting the required blessings from the top commies in central planning, Wal-Mart now has 60 stores in 30 Chinese cities and more than 30,000 Chinese employees.

On the other side of the issue, pro-Wal-Mart but still anti-business, is longtime civil rights activist Andrew Young. Asked by the Los Angeles Sentinel if he had concerns about Wal-Mart closing down mom-and-pop stores, Young replied: "Well, I think they should. They ran the mom-and-pop stores out of my neighborhood. But you see, those are the people who have been overcharging us, selling us stale bread and bad meat and wilted vegetables. And they sold out and moved to Florida. I think they've ripped off our communities enough. First it was the Jews, then it was the Koreans and now it's the Arabs. Very few black people own these stores."

I don't how many Koreans ended up in Palm Beach by selling bad lettuce to blacks, but what Mr. Young, a former Atlanta mayor and U.N. ambassador, fails to address is why so few black mom-and-pops stepped up to beat out the allegedly crooked or inept Koreans, Jews and Arabs by selling non-wilted produce to their own communities.

Given the real problems facing this country, it's not surprising that the Democrats' anti-business campaign isn't clicking with voters. Democrat pollster Thomas Riehle found in a recent nationwide survey that 62 percent of respondents said they "disapprove" of making Wal-Mart a campaign issue.

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