New Economic Study Disproves Wal-Mart Claims

A study released today by the Economic Policy Institute (EPI) asserts that Wal-Mart, the world’s largest retailer, can offer better wages to its employees while keeping profit margins nearly 50 percent greater than key competitors. The report also disproves a 2005 Wal-Mart-commissioned study by Global Insight (GI), which claimed that American consumers have saved $263 billion because of expansion by Wal-Mart.

Economists Jared Bernstein and L. Josh Bivens assess the competing claims about Wal-Mart’s impact on prices and wages in The Wal-Mart Debate: A False Choice Between Prices and Wages. The most important revelation in the new report is the inaccuracy of the claim that Wal-Mart’s expansion saved consumers $263 billion. Wal-Mart commissioned a study by the consulting firm Global Insight (GI), which found that Wal-Mart had whopping positive impacts on the economy. The Wal-Mart Debate reviews research that reveals the two top-line findings of the GI report are incorrect and the GI research methodology throughout is fraught with problems.