retail news in context, analysis with attitude

The Economic Policy Institute is out with a new study suggesting that Walmart's imports from China "eliminated or displaced over 400,000 jobs in the United States between 2001 and 2013," according to a story in this morning's New York Times. These jobs, predominantly in the manufacturing sector, represent 13 percent of all the jobs lost to China during that period, the Institute says.

The study comes out even as Walmart is several years into an initiative originally designed to increase its sourcing of made-in-the-USA products by $50 billion over the next 10 years, though that number later was increased to $250 billion. This effort has been described by Walmart as a significant commitment, but dismissed by critics as being a cynical public relations ploy that borders on insignificant in the context of its total sales.

“Walmart is one of the major forces pulling imports into the United States,” Robert E. Scott, an economist at the institute and the study’s author, tells the Times. “And the jobs we’re losing are good-paying manufacturing jobs, which pay higher wages and provide better benefits.”

The Times reports that Walmart "disputed the conclusions of the study, which is an update of estimates that the institute released in 2007. For one, many of the numbers used in the study rely on guesswork, because retailers do not generally release a breakdown of their imports. Some economists also point out that studies like these do not properly account for the jobs that imports can create in industries like transportation, wholesale and retail."

Lorenzo Lopez, a Walmart spokesman, described the study as "an old report with flawed economic analysis that assumes that imports equal job losses and does not take into consideration that countless jobs are added through the global supply chain, distribution and logistics, among other areas of the business."
KC's View:
It has to be pointed out that the Economic Policy Institute is generally described as a progressive think tank that long has criticized many of Walmart's policies, so the fact that it would come out with this study hardly is surprising.

This being a "he said, she said" sort of scenario, it is hard to sit here are conclude what the real numbers are, though I do think that Walmart certainly is vulnerable on this issue ... though I tend to think more about the story from earlier this year, in which it was shown that Walmart was selling products as "made in the USA" that demonstrably were not.

Whatever the numbers are, it seems logical to say that when products are made elsewhere, those manufacturing jobs go elsewhere. But it also seems logical that a robust supply chain can create even more jobs in transportation, warehouses, in bricks-and-mortar retail stores and in e-commerce.

The pressure on Walmart is to get this right. And I think it has to do so in a way that changes the conversation and makes it less vulnerable to these criticisms.