If You Really Want to Help the Poor, Shop at Walmart

(Bloomberg Opinion) --

Now and then, my wife and I shop at Walmart. We’re not trying to get in the middle of a brouhaha. We go for the bargains. But as recent research reminds us, maybe there’s another reason. Maybe we should support the mammoth retailer for helping the poor.

Seriously.

First things first. As retailers go, Walmart Inc. has proved remarkably divisive. The chain is disdained by elites. Its efforts to expand have long provoked political resistance from unions and their allies. Progressive towns that manage to keep the store out congratulate themselves. There’s still no Walmart in New York City. (Target’s fine.) On the other hand, sometimes the resistance loses. Back in 2013, true-blue Washington finally saw its first Walmart stores open, but only after the mayor vetoed a bill that would have required the company to pay its employees 50 percent above the minimum wage.

As with most things, how you feel about Walmart depends on what you value. Walmart really does lower consumer prices. The policy question that divides us is whether the savings are worth it, given the other social costs the chain is said to impose.  For example, the opening of a Walmart store measurably reduces local retail employment.  In other words, fewer local workers have retail jobs. And traditionally the company has paid low wages, which is how it charges low prices.  (More on that in a moment.)

Often the data cut both ways. For example, the consumer gain from those low prices is much greater than the cost of the job losses.  (The savings to the public are on the order of many billions of dollars a year. ) And a well-known study linking the rise of the Walmart Supercenter (which also sells groceries) to the rise of obesity concedes that consumer savings from the store’s lower prices substantially outweigh increased medical costs. And, speaking of health, we also know that living near a Walmart pharmacy significantly increases the likelihood that someone suffering from high blood pressure will take medication and decreases avoidable hospitalizations by a remarkable 6.2 percent.

Now comes a fresh entry in the what’s-good-about-Walmart sweepstakes: research suggesting that proximity to a Walmart Supercenter reduces food insecurity among children. This is no small thing. According to the U.S. Department of Agriculture, in 2016 more than 3 million households contained children who were “food insecure” — young people, says the USDA, who eat meals of relatively poor variety and desirability.

One answer is to improve government assistance. But another may be to bring in a Walmart Supercenter. That’s the conclusion of a new working paper by economists Charles J. Courtemanche, Art Carden, Murugi Ndirangu and Xilin Zhou, released this month by the National Bureau of Economic Research.

Using data from the December Current Population Study Food Security Supplement between 2001 and 2012, they calculated the distance from each household’s census tract to the nearest Walmart Supercenter and found that “closer proximity to the nearest Walmart Supercenter leads to sizeable and statistically significant improvements in all food security measures except the indicator for very low food security.” (That last indicator, for those who suffer most from hunger, showed no statistically significant change.)

We’ve known for some while that the opening of a Walmart Supercenter increases local spending on food. Makes sense that a lot of that increased spending would be among the most price-sensitive food buyers — that is, the poor. (It’s easy to forget that the poor have to shop.)

To be sure, there are anomalies in the data. Why don’t the advantages to food security of the Supercenters also hold for Walmart Neighborhood Markets? (Maybe a different clientele or not so many bargains, the authors speculate.) How do other varieties of discount supermarkets affect the problem? (A matter for future study, it seems.)

But the overall thrust of the new study is hard to argue with: Lower prices help the poor eat. Not only that: Low prices improve autonomy by giving the poor more opportunities to decide for themselves exactly what to eat.

No company is perfect, and a lot of what is said in criticism of Walmart is true. But those traditionally low wages are rising. (Please, though, no Henry Ford canards. ) And although the chain is struggling, it has sensibly understood that the future of retail is ecommerce and is rapidly moving in that direction, outbidding Amazon.com Inc. for India’s Flipkart. Meanwhile it’s been closing brick-and-mortar locations. (Does the big DC Comics in-store deal arrive too late?)

To be sure, Walmart’s Supercenters and other stores will be around for a long time to come. That’s a good thing. Closing a local Walmart can deprive a town of its sense of community. It can hurt housing prices. And now we know it can make it harder for poor kids to get enough to eat.

I’m not ready to nominate Sam Walton for the Nobel Prize. But on the evidence so far, I’m much more pro-Walmart than anti-. Certainly we plan to keep shopping there.

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