FL: Alan Grayson gives flawed lesson on Walmart economics

By Yaël Ossowski | Florida Watchdog

ST. PETERSBURG — Taking his victory lap on the heels of his return to the U.S. House after losing two years prior, U.S. Rep. Alan Grayson staged his first public spectacle against the retail giant Walmart over the Thanksgiving holiday.

Grayson, a Florida Democrat, made Thanksgiving Day and Black Friday appearances at stores in St. Cloud and Orlando, handing workers turkey sandwiches and encouraging them to learn about “their right to organize”. In some cases, he actually encouraged some people to quit on the spot in order to join union groups protesting the major retailer outside and across the country.

According to the group Making Change at Wal-Mart, a lead organizer for the protests, approximately 500 Walmart workers across the nation went on strike on Black Friday, afar cry from the nearly 1.4 million Walmart employees in the United States.

“One brave ‘associate,’ who had had enough of this mistreatment, walked out with us,” Grayson celebrated on his Facebook pageafter snapping a picture with the woman.

Grayson says Walmart employees are grossly underpaid at an average of $10 a hour, allowing the company to “exploit them mercilessly” and force them onto welfare.

On Current TV’s “The Young Turks” program, Grayson told host Cenk Uygurthat Walmart is “the largest recipient of public aid in the country,” claiming that the poor pay forces workers onto public assistance and Medicaid programs subsidized by the government.

He argues the company should raise worker pay by close to 30 percent, within the thin margin that would allow Walmart to “still be profitable.”

But economists are not convinced of Grayson’s Walmart economics lesson, which omits the greater positive impact the company has on the millions of consumers that purchase billions of products per year.

“We all want to make poor people richer,” said Art Carden, professor of economics at Samford University in Birmingham, Ala. “Redistribution will help, but only in the short run.”

As an economist, Carden said he is especially intrigued by the Walmart, having published several studies measuring the retail company’s largely positive effect on the economy as a whole, especially consumers and employees.

“Walmart doesn’t cause low wages. Low productivity causes low wages,” Carden told Florida Watchdog. “As Walmart is a very large employer of low-skill, low-productivity labor, it should come as no surprise that the welfare rolls are filled with Walmart employees.”

Carden said the low prices allow millions of Americans a better opportunity for finding affordable food that otherwise wouldn’t exist.

“Walmart participates in very competitive markets for labor and very competitive markets for capital,” said Carden. “If they paid more, they would not raise the standards of living of low-skill, low-productivity labor. We would get what I’ve seen called ‘job gentrification’ — higher productivity, higher-skill workers would be willing to accept work at Walmart in response to the higher wages.

“The net result is that the people the congressman is trying to help would actually be worse off because they would have to waste so much time and energy getting and keeping these jobs in the first place,” Carden said.

He told Florida Watchdog that attacking Walmart misses the point on expanding opportunities for the poor and working class.

“If Alan Grayson really wants to help low-wage, low-skill workers, he should be looking to get rid of taxes, regulations and other barriers that make Florida, specifically, and the U.S., more generally, a tougher place to do business,” he said.

As far as public aid is concerned, Grayson makes no mention of the nearly $59 million in subsidies Walmart has received across the state of Florida, thanks to tax breaks and various economic development incentives offered by the state and local governments.

A call to Grayson’s office was not returned.

Read more: Florida Watchdog

Yaël Ossowski is a journalist, writer, and consumer advocate. His writings and interviews have appeared in newspapers, magazines, and online outlets across the world in multiple languages. He is the founder and editor of Devolution Review and deputy director at the Consumer Choice Center. He was previously a national investigative reporter at Watchdog.org. He has a Master’s Degree in Philosophy, Politics, Economics (PPE) from the CEVRO Institute in Prague, and a Bachelor's in Political Science from Concordia University, Montreal. He currently splits his time between Vienna, Austria and Charlotte, North Carolina.
Website https://yael.ca
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