Newt Gingrich, Cheerleading for Wal-Mart

by Tula Connell, Oct 6, 2006

Is it any surprise that former House Speaker Newt Gingrich (R), who resigned from lack of support within his own party in 1998 and sought drastic cuts in fundamental federal education and social programs, comes to the defense of Wal-Mart?

Surfacing Wednesday on American Public Media’s “Marketplace,” Gingrich made clear to host Scott Jagow he supports the Wal-Mart corporate-first model as a replacement for a federal government whose mission is to serve the people. 

Gingrich offers up the usual argument for Wal-Mart: It offers consumers low-cost goods. But at what price?

Four members of the Waltons, the family behind Wal-Mart, last month were ranked by Forbes as among the nation’s 10 wealthiest people in the nation, with a combined net worth of more than $72 billion. Less than two weeks after the Walton Four saw their mugs highlighted on the Forbes website, reports emerged that Wal-Mart plans to cap wages, use more part-time workers and schedule more workers on nights and weekends—all to save money for a company with gross annual sales of more than $250 billion and an annual profit of more than $10 billion.

Said Gingrich:

The fact is, Wal-Mart improves the quality of life for 180 million Americans each week at lower cost. Free choice and free markets help consumers and Wal-Mart proves it.

Unless you’re a consumer who also works at Wal-Mart. The average two-person family (one parent and one child) needed $27,948 to meet basic needs in 2005, well above what Wal-Mart reports that its average full-time associate earns. Wal-Mart claimed that its average associate earned $9.68 an hour in 2005. That would make the average associate’s annual wages $17,114, according to the Economic Policy Institute’s “Basic Family Budget Calculator.”

Back to Gingrich:

Government has been trying for years to help Americans afford prescription drugs. But Wal-Mart’s huge economies of scale enable it to offer a one month’s supply of generics for as little as $4.

Let’s follow the logic. Companies become more and more like Wal-Mart, replacing government’s consumer-driven mission with a profit-driven model. The top of the corporate heap, like the Waltons, rakes in the cash. (And let’s not forget Wal-Mart CEO Lee Scott, whose 2005 salary, bonuses and stock options totaled $27.2 million—871 times the hourly earnings of a full-time US Wal-Mart employee and 50,000 times the wage of a Chinese worker for a Wal-Mart supplier.)

So, the savings “passed on to consumers” are really taken out out of workers’ paychecks—and in their lack of  benefits. By Wal-Mart’s own admission, workers are forced to spend 8 percent of their salary, twice the national average, for health care. At some point, there won’t be enough people in the United States who can afford to buy enough products to support the American economy. Many are forced to use emergency rooms and other public services to meet their health care needs.

Here, Gingrich offers some insight—it’s the overseas markets Big Business is depending upon, both for labor and consumers:

Government gives away billions of dollars in foreign aid every year, not all of it reaching the people it was intended for because of corruption.

But Wal-Mart lifts about 38,000 Chinese out of poverty every month by buying the $23 billion in Chinese goods they make every year for export.

He forgets to note that Wal-Mart was responsible Wal-Mart was responsible for one-tenth of the U.S. trade deficit with China in 2005, according to Bloomberg—a trade deficit that’s now nearly $80 billion.  

Given that most workers might prefer to support political candidates who oppose such a corporate-first approach in favor of an America first, worker-first policy, it’s no surprise Gingrich also strongly backs Wal-Mart’s new voter registration progam among its more than 1 million workers. Although employees increasingly are pressed by their employers, in subtle and not-so-subtle ways, to vote along corporate lines, Gingrich is quick to say that “how employees decide to vote is completely up to them.”

In praising Wal-Mart’s recent drive to register Wal-Mart employees to vote, Gingrich revealed his hopes  these new voters would support his, and Walmart’s, corporate-first agenda rather than a workers agenda.

With Wal-Mart in charge, and no government services available, workers wouldn’t need to worry about need to go to emergency rooms. There wouldn’t be any.

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