The Wal-Mart Myth

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

The gateway to Cudahy, Wis., just east of Milwaukee’s airport, is a vacated industrial plot with the ribs of a half-built, now-abandoned hockey arena rusting in back.

Wal-Mart wants to replace it with one of its supercenters, a store with a full supermarket. Not without a fight, according to residents who showed up at a meeting last month with frowny-face placards. Low prices, economic vitality, the benefits of free trade — no thank you, sir! So Cudahy, a classic industrial suburb named after the meatpacker who still makes the place smell of bacon, serves as a little museum of silly notions about economics.

“I am not a fan of Wal-Mart,” Mayor Ryan McCue said — it feels too downscale. He’s hoping that Cudahy can become an adorable little place on the commuter rail line that may someday run south from Milwaukee. Low-cost, 24-hour groceries apparently don’t fit that. There are seven Wal-Mart supercenters within 40 miles of Milwaukee. Every one is in a ZIP code where the median household income is markedly higher than Cudahy’s — 38% on average. Near them are other thriving retailers, including precious Main Street shops of the kind Cudahy wants. It seems convenient bargains might not repel time-pressed, affluent dual-income families inclined also to patronize boutiques but, instead, appeal to them. Who knew?

But to say this is to argue reason when feelings are the ordnance of the day. “We do not need another outlet for cheap Chinese crap,” one guy said at last month’s public gripe session, summing the zeitgeist: That too many of Wal-Mart’s bargains are imported.

Only no one can say how many. The union-funded Economic Policy Institute can’t say whether or not the chain has more Chinese goods than Target or Kmart. Their point man on the issue won’t venture a guess. He says his impression is that all discount retailers rely heavily on China.

That’s because China’s specialty is low-cost goods, say trade experts. Ikea sells some low-cost China-made goods, and practically every suburban Milwaukee mayor would surrender a kidney to snare that chain. My wife’s $79 iPod was made in China, which doesn’t make the Apple store an outlet for cheap Chinese crap. China has low prices for all kinds of retailers; its specialty just happens to align especially well with Wal-Mart.

Cudahy’s specialty, meanwhile, is higher-end industrial labor. At Ladish Corp., a half-mile-long forging plant, about 800 people make parts for jet engines. They grind titanium. They work to minute tolerances. Business is booming because Boeing and Airbus have been selling a lot of planes in Asia. Which is to say that Cudahy has a stake in world trade, and a nice one: Ladish’s pay is good and the profitsharing checks have been fat.

The feeling behind the crack about cheap Chinese crap is that we all ought to be buying American and would do so if we weren’t lured into imported sin by Wal-Mart. But Midwestern manufacturers say they have a devil of a time hiring anyone nowadays. Why that scarce, capable labor should quit making jet-engine parts and should instead make sneakers is a mystery.

Most sneakers at Wal-Mart — or Target, for that matter — are imported because they’re adequately made by semi-literate ex-peasants for a buck an hour overseas. If you want $15 sneakers, that’s how you’ll get them. You can buy American footwear: Allen-Edmonds’ superb shoes are made in suburban Milwaukee. Casual styles start at about $150 a pair — not what you’d wear to wash the car. Again, when you want high-end, Milwaukee’s got you covered.

Or consider shirts. I saw nice cotton button-downs for $8 at a store. They were made in Bangladesh. Suppose, instead, that they were made by the well-educated workers of Cudahy. What then would the Bangladeshis do — make jet engine parts? Dicey jets and overpriced shirts do not seem like the route to happiness.

Really, the Cudahy Wal-Mart argument is all about unionized groceries. Supercenters take Wal-Mart beyond the nonunion discount department store sector, where the chain’s wages and benefits are typical, and into competition with unionized supermarkets.

It’s tough for grocery unions to explain to customers why unionized help is worth higher prices. So instead, unions say Wal-Mart is déclassé and its Chinese imports are a dead loss. All they’ve got going for them is a feeling this must be so, which may be enough to win at next week’s Cudahy planning commission meeting.

Only consider: Those cheap Chinese imports will be made with power generated from coal mined with equipment made one suburb over, in South Milwaukee. Bucyrus International, one of the world’s top makers of mining equipment, is booming, thanks to China. Bucyrus just sold a giant dragline, the kind that can cost more than $100 million, to a Chinese mine. The customer insisted it be built in South Milwaukee for quality reasons.

Bucyrus is desperately trying to hire help, particularly welders. It set up a training course with a tech college for anyone who wants a start in the field. Such work pays $22 an hour. This is the result of China needing coal to generate power to make cheap stuff to sell to Wal-Mart. It shows how hard the case for free trade is when such facts make little dent against the sentiment that rusting ruins are better for a town than shelves full of imports.

Mr. McIlheran is a columnist for the Milwaukee Journal Sentinel.


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