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August 17, 2006
Democrats Declare War On Wal-Mart

The Democrats have finally found a unifying theme for the mid-term elections, one that appears to unite all ends of the political spectrum in their party. Instead of fighting a war on terrorism, though, they have decided to fight a war against Wal-Mart. Claiming that attacking a retailer with the lowest prices somehow champions the poor, Democrats of all strips have enlisted in the latest cause:

Senator Joseph R. Biden Jr. of Delaware, a likely Democratic presidential candidate in 2008, delivered a 15-minute, blistering attack to warm applause from Democrats and union organizers here on Wednesday. But Mr. Biden’s main target was not Republicans in Washington, or even his prospective presidential rivals.

It was Wal-Mart, the nation’s largest private employer.

Yes, not Islamofascist terrorists, not oppressive dictatorships, not drug cartels nor organized crime -- Wal-Mart.

Among Democrats, Mr. Biden is not alone. Across Iowa this week and across much of the country this month, Democratic leaders have found a new rallying cry that many of them say could prove powerful in the midterm elections and into 2008: denouncing Wal-Mart for what they say are substandard wages and health care benefits.

Six Democratic presidential contenders have appeared at rallies like the one Mr. Biden headlined, along with some Democratic candidates for Congress in some of the toughest-fought races in the country.

“My problem with Wal-Mart is that I don’t see any indication that they care about the fate of middle-class people,” Mr. Biden said, standing on the sweltering rooftop of the State Historical Society building here. “They talk about paying them $10 an hour. That’s true. How can you live a middle-class life on that?”

This is Democratic economics at its most state-controlled, and its politics at the apex of class warfare. Biden and the rest of the Democrats volunteering for this war want Republicans to defend a $10 per hour wage, instead of talking sense about market wages and the effect on prices that interference will bring.

Let's address the wages first. In any area of the country, that wage is a large improvement over minimum wage, even over the minimum wage the Democrats proposed this year. That wage applies to the entry-level positions at Wal-Mart and seems about right for the skill sets and the experience needed for a new-hire in retail. In fact, I suspect that most other retailers do not offer a starting wage that high. And remember that this is a starting wage, not a cap on wages. Employees who work hard and gain experience get promotions into better-paying jobs. It's the same fallacy that Democrats trot out about minimum-wage workers not having a raise in seven years. If they haven't earned a raise in that amount of time, then that's hardly the government's fault.

Another argument the Democrats trot out attacks Wal-Mart for not offering a better benefits package. That again is a market decision. Some retailers offer better packages at lower wages, some do not, but Democrats for some reason have not marked them as an enemy of the state. The main thrust of this is that Wal-Mart displaces other retailers who paid better wages and benefits, but that's not the case. In most communities, Wal-Mart displaces locally-owned specialty retail stores, which traditionally pay lower compensation to employees.

Besides, the effect of the reforms that Democrats want to force on Wal-Mart would require the company to raise prices. The money for all of these higher wages and benefits have to come from somewhere, and just as with any other retail business, it will come from the customers. In Wal-Mart's case, the low prices allow working-class families to have access to goods that would otherwise take a bigger bite out of their income. The working poor that the Democrats want to protect will find that their income has less buying power, and as Wal-Mart becomes less competitive, their numbers will increase as Wal-Mart starts laying off workers and closing stores in less-profitable areas.

None of this is a secret; it's basic economics. The Democrats want to fool people into thinking that government edicts can somehow override market forces of supply and demand. They would do better by ending the public-school monopoly that delivers so many graduates with minimal job skills, forcing them into choices that limit themselves to Wal-Mart's entry-level positions. The truth is that the job market values skills such as literacy, competence, and education, and rewards hard work and experience, and that is what allows people to live middle-class lives. Joe Biden's outrage does nothing to solve the underlying problems for lower-wage workers, and the Democratic Party's war on Wal-Mart will make their lives worse, not better.

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Posted by Ed Morrissey at August 17, 2006 6:12 AM

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