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Bernie Sanders vs. Walmart

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John Minchillo


Other than Wall Street, there's no easier target for Bernie Sanders than Walmart and the family that's profited most from it.

At an event in Manchester Friday, the Vermont senator and Democratic presidential candidate noted that the nation's single richest family — the heirs of Walmart founder Sam Walton — has more wealth than the bottom 40 percent of the population. (Politifact has deemed this assertion to be true.) Sanders also said the wages Walmart offers are so meager that employees need to rely on taxpayer-funded social programs such as Medicaid and subsidized housing.

"A rigged economy," Sanders declared, "is when the middle class pays to subsidize the wealthiest family in this country."


The power of Sanders' presidential bid lies in the stark diagnosis he offers of America's economic condition. We're in trouble, he's saying, because of the staggering level of income and wealth inequality in the country. But even if you agree with him about the seriousness of the problem — I do — it doesn't follow that the heartless plutocrats he singles out are the only ones responsible for it.

Walmart, of course, has made a decision to distribute money in a certain way. If it wanted to do so, the company could presumably steer more of its revenue toward its workers and less toward the Walton family and other shareholders.

But shareholders' demands aren't the only reason Walmart behaves as it does. The company's business model involves relentless downward pressure on costs — by limiting wage growth and fighting worker unionization, yes, but also by cutting tough deals with suppliers, and developing hyper-efficient inventory and distribution systems. This model attracts customers because they like the "everyday low prices" that result.


Companies, in theory, can offer discount prices without putting the squeeze on employees. Indeed, the privately held grocery chain Market Basket has a reputation for being inexpensive while also paying well and treating workers decently. Yet consumers don't appear to reward such virtue in and of itself. They regularly seek out bargains from retailers that minimize labor costs by keeping wages low — or by cutting out human workers to the greatest extent possible.

The world's mightiest retail chain itself faces competition from online stores; it's telling that last year Amazon's market capitalization surpassed Walmart's. Walmart, if nothing else, operates brick-and-mortar retail spaces that employ actual humans. Amazon moves lots of goods around with robots; someday, it'll deliver them with drones. Not coincidentally, Amazon generates five times as much revenue per employee as Walmart does.

Which hints at a quandary Sanders isn't addressing: Yes, chains like Walmart could and should pay employees more, but what happens when Internet companies cut out human workers altogether?

Ironically, there are socially conscious consumers who would never set foot in a Walmart but order from Amazon all the time. For Sanders to get the America he wants, it's not just the Waltons who'll need to have a change of heart.

Dante Ramos can be reached at dante.ramos@globe.com. Follow him on Facebook: facebook.com/danteramos or on Twitter: @danteramos.