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The Promiscuous Octopus on the Slate

Over at Slate, they're having a dialogue on the good/evil of Wal-Mart in the American economy. I've long been a defender of the promiscuous octopus -- just doing my part to stick it to the little guy on behalf of The Man.

Anyway, on the pro-Wal-Mart side is Jason Furman, who wrote a controversial paper on Wal-Mart as a progressive success story (PDF).

Here's a passage from his opening salvo, over at Slate:

Are you as surprised as I am by how quickly Wal-Mart's critics move past the issue of low prices? You will hear comments like, "Yes, Wal-Mart may have somewhat low prices, but let's talk about its impact on workers, the environment, trade with China, etc." But given just how important these low prices are to the hundreds of millions of Americans that shop there, I hope I can beg your indulgence to linger on them for a few moments.

A range of studies has found that Wal-Mart's prices are 8 percent to 39 percent below the prices of its competitors. The single most careful economic study, co-authored by the well-respected MIT economist Jerry Hausman, found that grocery sales by Wal-Mart and other big-box stores made consumers better off to the tune of 25 percent of food consumption. That doesn't mean much for those of us in the top fifth of the income distribution--we spend only about 3.5 percent of our income on food at home and, at least in my case, most of that shopping is done at high-priced supermarkets like Whole Foods. But that's a huge savings for households in the bottom quintile, which, on average, spend 26 percent of their income on food. In fact, it is equivalent to a 6.5 percent boost in household income--unless the family lives in New York City or one of the other places that have successfully kept Wal-Mart and its ilk away.

He's right, of course. A huge portion of the Wal-Mart debate happens among people who shop at Whole Foods. I've hardly ever been inside a Wal-Mart. I'm more of a Fresh Direct guy these days. But the people who get hurt when, say, the unions in New York City keep Wal-Mart out are the ones who would be saving a significant chunk of their budget if a supercenter could open in Queens or The Bronx and Staten Island.