Welcome Wal-Mart

Listen to many elected officials or union bosses, and you'd think Wal-Mart was a malicious criminal, exploiting workers and pillaging towns for the benefit of greedy shareholders. But if that's the case, how has Wal-Mart grown from a single shop in a small Arkansas town into a world-wide colossus with 4,000 stores, 1.3 million employees, $245 billion in annual sales and 100 million customers each week?

The company's success isn't built on exploiting. It's built on providing. Wal-Mart can't force anybody to work at its stores, nor can it force anybody to shop there. Through relentless cost-cutting and technological innovation, the company offers low cost goods to consumers, jobs for willing employees, and solid returns for shareholders.

Yet Chicago, despite its history as a scrappy, industrious center of commerce, seems to want nothing to do with the world's largest retailer. The City Council killed the prospect of a Supercenter in Chicago's South Side Chatham neighborhood by refusing to support Wal-Mart's request for a zoning change. Instead, nearby Evergreen Park got the store, collecting over $1 million in taxes each year.

All the revenue, traffic and new jobs — I suppose a majority of the City Council didn't think the economically impoverished South Side could use that sort of boost.

The real puppet masters behind the anti-Wal-Mart fervor are the big unions, who, in claiming to stand up for average working Americans, end up hurting exactly the constituency they purport to represent.

In a free country, consumers have the option to shop wherever they choose. And although Wal-Mart isn't as quaint as the corner hardware story, millions of people prefer Wal-Mart because they get significantly more value for their hard-earned dollar. The company's "low price guarantee" shouldn't be dismissed as a marketing catchphrase: estimates suggest the average Wal-Mart can save a family over $2,000 a year compared to shopping at higher priced alternatives.

That's not chump change for anybody, let alone the lower income families that flock to Wal-Mart for everything from clothes to books to groceries. The money saved by shopping at Wal-Mart can be put towards retirement, invested into a home, a new business or spent on other goods that will improve the quality of one's life.

The charge that Wal-Mart puts local "mom-and-pop" stores out of business is a validation of the company, not a demonizing of it. In a market economy, we vote with our pocketbooks. Most folks, especially low income patrons, prefer to stretch their dollars and get more for their money.

What's immoral is to claim small business has a "right" to be protected from bigger competition through government intervention. That's the real injustice.

Just as we have the right to choose where to shop, so do we have the right to pick where to work as well. Wal-Mart hires workers on a voluntary basis, and right now 1.3 million Americans have willingly chosen to work there. They could walk out and leave at anytime…but they don't.

When Wal-Mart announced plans to hire staff for its Evergreen Park store, some 25,000 people applied for a scant 350 jobs. If employees are so ruthlessly exploited by Wal-Mart, why would so many continue to work and seek employment there?

What the union blowhards don't want you to know is that, despite their PR tactics, Wal-Mart actually treats its employees quite well. Full-time workers receive benefits that include competitive wages, profit-sharing, 401(k) plans, paid vacations, life insurance, a discount card, medical coverage, disability insurance, scholarship bonuses and child-care discounts – just to name a few benefits.

The average hourly wage for full-time store hourly employees at Wal-Mart is $10.11. It certainly isn't akin to being on the board of directors for a Fortune 500 company, but for a relatively unskilled position, the gig isn't half as bad as the hysterics would have you believe. Yet the unions would rather someone not be employed at all rather than working at a job in which they believe the wage is "too low."

This is the real danger of unions: by forcing unreasonably high wages, they ultimately drain the businesses' potential for growth and bring the whole ship crashing down. Wages are not arbitrary, and when a union contract forces a company to pay an employee $40,000 for a job that another might accept for $30,000, the firm's overall level of productivity and competitiveness suffers accordingly. Ever notice how mass layoffs always seem to happen at industries that are heavily unionized?

In 2005, Wal-Mart created 125,000 U.S jobs, and is continuously adding thousands each month. How many jobs has the Chicago City Council created this year? How about the unions, whose outrageous demands have torpedoed airlines, automobiles — almost any industry in which they play a dominant role.

The truth is that all Wal-Mart does is provide low prices, serve communities with long hours, employ thousands of people and pay millions of taxes – over $61 million in the state of Illinois alone.

Those who benefit most are exactly the low-income folks the "benevolent" unions claim to defend. The fact that a majority of Chicago aldermen thwarted the company's attempt to open a store on the economically distraught South Side is disgrace, and a violation of the rights of both Wal-Mart and the citizens of Chicago. The city shouldn't be fighting Wal-Mart, but welcoming it with open arms.

A version of this article originally appeared in the Chicago Sun-Times.

Jonathan Hoenig is managing member at Capitalistpig Hedge Fund (http://www.capitalistpig.com).