Why Wal-Mart Should Be Pushing for Socialism

Wal-Mart is widely despised by left wingers for reasons both philosophical and aesthetic. The company, in turn—though sometimes pushing for "green" improvements and other traditionally liberal notions that will help the Wal-Mart bottom line—is a heavy Republican donor and notorious union-buster, and generally behaves in the corporatist, center-right way that one would expect of one of America's largest corporations.

This is not about whether or not we agree with Wal-Mart's political persuasion. It is about the fact that it doesn't make sense. If there is any company out there that should throw its financial and political clout behind socialism, it is Wal-Mart.

Why is Wal-Mart so big in the first place? What is the business model that pulled in $447 billion in annual revenue? It is populism—corporate populism. Wal-Mart's customers are everyone. And, in America, that means that Wal-Mart's customers are distinctly not wealthy. Wal-Mart got so big by driving prices down as far as they could possibly go, and becoming a one-stop shop for poorer Americans to save money on everything. Wal-Mart is not about the best quality, or the best selection; it is about selling cheap things to people for whom every dollar is precious.

This month, Wal-Mart executives fretted in an internal memo about slow sales, thanks to higher payroll taxes on their financially strapped customers, and a weak economy in general. In the WSJ today, Rich Karlgaard argues that the "political left" should not applaud Wal-Mart's hard times, because what they really signal are hard times for the retailer's customers—the middle and lower classes of America.

He's right. But the implications of this are not simply that liberals should cheer Wal-Mart on. The real implications are that Wal-Mart should be doing everything it can to stabilize and enrich the socioeconomic position of its customer base. The vast inequality that plagues America is not Wal-Mart's friend. The fact that the wealth gains of recent decades have flowed overwhelmingly to the very rich means that that money is not in the pockets of Wal-Mart shoppers. If Wal-Mart, the world's largest private employer, wants to put together a rational political platform for the long-term good of itself and its customers, that platform should resemble socialism much more than it would resemble anything coming out of the Republican party. Consider:

  • Wages—increasing the wages of the poorest workers is like funneling money directly into Wal-Mart's coffers, since poorer people are much more likely to actually spend their monetary gains on day to day items, rather than simply banking or investing them. The company showed admirable self-awareness on this issue in 2005, when its CEO advocated raising the minimum wage. It's being more tentative about the current minimum wage hike proposal, but it shouldn't be. As retailer of choice for low-wage America, Wal-Mart should constantly be pushing to raise wages at the bottom of the pay scale. (Even if this means raising the wages of its own employees, Wal-Mart can take heart in the fact that they are so poor that they'll spend much of that money at Wal-Mart.)
  • Health care—Wal-Mart has been widely criticized for costing taxpayers millions of dollars in public subsidies, which must be paid to cover the basic needs of low-paid Wal-Mart employees. Do not expect any company with Wal-Mart's business model to offer its employees universal health care coverage any time soon. The simple logic of a national "single payer" healthcare system are obvious; especially for a huge corporation like Wal-Mart, which could cross the issue of employee health care off its list of concerns in one fell swoop. Wal-Mart has more U.S. employees than any other company. It's not going to keep them healthy itself. It should be lobbying hard for the government to do so.
  • The tax system—Simply put, the more progressive our system of taxation is, the better it is for Wal-Mart; the more regressive the system is, the more money it takes out of the pockets of Wal-Mart customers, and out of the corporate bottom line. The current horrible month the company's having is attributable largely to the recent increase in the payroll tax, the most regressive tax there is. In our political system, we can redistribute wealth via taxation however we want. Since the Reagan era, our policies have been concentrating wealth in the hands of the already wealthy. With the right amount of political will, we can just as easily move some of that wealth back down the ladder, into the hands of those who actually need it most—and who will actually spend it, at Wal-Mart. Policies that reduce wealth and income inequality serve ultimately to bring more money into Wal-Mart. The company should be America's foremost advocate of progressive taxation.
High unemployment among the middle and lower class? It disproportionately hurts Wal-Mart. Skyrocketing food prices? It disproportionately hurts Wal-Mart. Government support for the lower classes—reducing economic inequality, providing health care, subsidizing food and other basic needs—all disproportionately help Wal-Mart. In the long run, a stable working class with real buying power is the very best thing that Wal-Mart could ever hope for.

It's called socialism, Wal-Mart. Embrace it. Help the poor. Help the majority. Help your customers. Help yourself.

[Image by Devin Rochford.]