All About the Wal-Mart Conference That’s All About Wal-Mart

For Immediate Release
Wednesday, November 02, 2005

Washington, D.C., November 2, 2005 - On November 4, 2005, Wal-Mart is hosting a conference all about itself.  Sponsored by Global Insight Inc., a Boston-based consulting firm, the event is titled "Economic Impact Research Conference: An In-Depth Look at Wal-Mart and Society" and will be held at the JW Marriott in Washington DC.  Because Wal-Mart has pledged to "always listen" to its critics and "to act on any legitimate issues", we're eager to learn exactly what will be revealed at this event.  Or will it be another hollow PR stunt?  Whatever the case, we won't know firsthand because Wal-Mart Watch has been denied entry to the event.  Attached is a background document about the conference.

Everything You Wanted to Know About Wal-Mart’s Upcoming Economic Conference,
Including The Things Wal-Mart Won’t Say

"Regardless of the findings - either positive or negative - we are encouraging the submission of papers that are rigorous in their scholarship, clear in their presentation and forthright in their conclusions."
--Glenn MacDonnell of Global Insight [Global Insight Press Release, 8/29/05]

 “While groups and individuals might continue to criticize us, our pledge to you is that we will always listen to our critics and act on any legitimate issues.”  [Wal-Mart poster exhibit in Wal-Mart Museum, Bentonville, Arkansas]

BACKGROUND: Wal-Mart Hired Global Insight to Study Impact on US Economy. In August 2005, Wal-Mart announced it would host a conference sponsored by Global Insight Inc.  The conference will be held on November 4, 2005 at the JW Marriott on 1331 Pennsylvania Ave NW, Washington, DC and is titled “Economic Impact Research Conference: An In-Depth Look at Wal-Mart and Society.” [Global Insight Press Release, 8/29/05; http://www.globalinsight.com/Highlight/HighlightDetail2093.htm]

WHO: Members of the Media and Individual Presenters Will Attend Conference.  After being notified of their selection, each author, along with members of the media, will be able to attend the conference in Washington, DC.  Wal-Mart has said it welcomes all levels of criticism; however, Wal-Mart Watch’s request to attend the event has been denied.  Questions related to the conference should be sent to Glenn MacDonnell at glenn.macdonnell@globalinsight.com or Nate Hurst of Wal-Mart at 479.273.4314. [http://www.globalinsight.com/Highlight/HighlightDetail2093.htm]

WHY: Conference Coincides with Wal-Mart “Charm Offensive” Aimed At Countering Critics. As the Boston Herald first reported, Wal-Mart conveniently scheduled its conference just days before the new documentary, “The High Cost of Low Price.” The film is critical of the retailer giant’s business practices. BusinessWeek reported that the conference is part of Wal-Mart’s “charm offensive” and “effort to reach     out to critics in an attempt to repair the damage persistent attacks have been wreaking on its reputation.” [BusinessWeek , 10/20/05; Boston Herald, 7/28/05]

WHAT: Twelve Studies To Be Addressed at Global Insight Conference. To date, Global Insight has selected 12 academic papers and rejected two for the November 4th conference. The conclusions of the papers have been mixed for the company.  According to BusinessWeek, “The conclusion: Even some of those that support Wal-Mart's view nonetheless raise uncomfortable questions about its business model. Other studies validate the notion that Wal-Mart undercuts wages and benefits.” [BusinessWeek, 10/26/05]

Wal-Mart Hears No Evil, Sees No Evil, Pays Firm to Do Exclusive Study

WHAT: Global Insight To Present Wal-Mart Funded Study with Exclusive Data. In addition to organizing the conference and collecting research, Wal-Mart paid Global Insight to conduct a yearlong study on the company. BusinessWeek reported that Wal-Mart provided researchers with “unprecedented amounts of data on its wages and workforce.” This study will be available November 4th at the Wal-Mart conference in Washington, DC.  [BusinessWeek, 10/20/05]

WHO: Global Insight Study to Be Overseen by Divergent Experts. Wal-Mart and Global Insight have recruited multiple experts to oversee the study. BusinessWeek said, “One, Marvin Kosters of the American Enterprise Institute, is a conservative, while another, Isabel Sawhill of the Brookings Institution, is a liberal.”  [BusinessWeek, 10/20/05]

• David Neumark Concludes that Wal-Mart Hurts Wages and Retail Employment. Neumark, a senior fellow at the Public Policy Institute of California, co-authored a paper which examined employment data as well as wages. Neumark, using data supplied by Wal-Mart, examined the opening of 3,066 stores in the United States and their impact on employment. He found that, although countywide retail employment did fall by 2% to 4%, overall county employment did rise. However, his study goes on to find that Wal-Mart undercuts wage levels. “The story we find is that Wal-Mart hurts wages, not so much in retail, but across the whole county," says Neumark.
• Wal-Mart Hurts the Southern United States. Decreased wage levels are a big problem in the south, where Wal-Mart has a significant influence on local economies. Neumark found “…evidence of adverse effects of Wal-Mart stores on retail employment, total employment, and total payrolls per person in the South, where Wal-Mart stores are most numerous on a total and per capita basis, and where they have been open the longest.”  [BusinessWeek, 10/26/05]
  Click to read the study http://www.businessweek.com/pdfs/2005/david_neumark.pdf
  
• Wal-Mart Increases State Medicaid Spending By $898 Per Person. Michael Hicks, an economist at the Air Force Institute of Technology at the Wright-Patterson Air Force Base in Ohio, submitted a study analyzing Wal-Mart employees and government health care programs. He concludes that Wal-Mart causes an increase in state Medicaid spending by as much as $898 per person. [BusinessWeek , 10/26/05]
  Click to read the study: http://www.businessweek.com/pdfs/2005/michael_hicks.pdf

• Emek Basker Finds Wal-Mart Decreases Prices and Increased Total Employment. Basker, a University of Missouri economics professor, submitted two studies for the conference. The first study examined how Wal-Mart lowered the price of certain items like shampoo, toothpaste and other consumer items by as much as 12% for 1982 to 2002. In his second study, Basker examined data related to Wal-Mart’s impact on countywide employment. The study revealed that Wal-Mart increased total employment in the county by 1% or 2% over the long term. This study will be available November 4th at the Wal-Mart conference in Washington, DC. [BusinessWeek, 10/26/05]

• Jerry Hausman’s Study Finds Wal-Mart Increases Efficiency, Has Low Prices and Causes Other Supermarkets to Lower Their Prices. Hausman, a professor of economics at M.I.T., concludes that "Wal-Mart is cutting wages, which is bad [for the economy], and is also more efficient, which is good. The question is: How much of each one?" Hausman also finds that Wal-Mart prices are very low and has even caused competitors to lower their prices. “…Wal-Mart's food prices are 27% lower than those of rivals on average and that its presence forces supermarkets to reduce their own prices by 5% more than they otherwise would have.”  [BusinessWeek, 10/26/05]
  Click to read the study: http://www.businessweek.com/pdfs/2005/jerry_hausman.pdf

IMPACT: Conference Considered “Big Risk” by Wal-Mart. With many of its critics based in Washington, DC and the possibility of negative academic papers being release to the public for debate, many believe Wal-Mart is taking a risk in allowing this conference to go forward. BusinessWeek concludes, “Wal-Mart's decision to put itself under the academic microscope is a brave one. The Global Insight study may end up eclipsing all the others, since it will have internal data Wal-Mart has long declined to release. But given the negative conclusions from the outside studies, the entire conference is looking more like a big risk for a major corporation to take.” [BusinessWeek, 10/26/05]