Experts debate: Does Walmart help or hurt America's economy?

Customers outside Walmart.
Walmart shoppers walk in the parking lot of the Midway Marketplace Walmart on Tuesday, Oct. 25, 2016, in St. Paul, Minn.
Sam Harper | MPR News

Walmart is the country's largest private-sector employer. Which has made it a target of both praise and criticism.

Does the big-box retailer push out small businesses and use cheap foreign labor? Or does it provide lots of American jobs and sell affordable goods to consumers?

Experts took on these questions in an Intelligence Squared debate using the motion: 'Long live Walmart.'

For the motion: John Tierney, Contributing Editor at the City Journal and Richard K. Vedder, an economist and author of "The Wal-Mart Revolution."

Against the motion: Amy Traub, Associate Director of Policy and Research at Demos and Nelson Lichtenstein, a professor at UC Santa Barbara and author of "The Retail Revolution."

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Opening statement: For the motion

In a New York Times column, John Tierney challenged readers to name an organization who has done more than Walmart to help the world's poor. "I still haven't heard a plausible candidate," he said.

By selling its products at low prices, Walmart saves a typical American family approximately $2,500 a year, Tierney said.

Walmart is also a pipeline for redistributing wealth to poorer countries, providing factory jobs for those living in poverty around the world.

"Now, since 1990 when Walmart became the largest retailer in America, the global rate of poverty has been cut by two-thirds," Tierney said.

The reason people don't like Walmart boils down to snobbery, its size making it a target for lawyers and its tendency to challenge special interests, he said.

Local stores don't like Walmart because they don't want to match prices, and unions are challenged by the competition it presents — Walmart employees make comparable wages to these workers but don't have to pay dues.

"So, don't believe all the propaganda you've heard against Walmart and don't assume that all its critics have pure motives," he said.

Opening statement: Against the motion

"Walmart's business model is pretty simple," said Amy Traub. "The company pays its workers poverty wages. It offers few benefits and it manipulates workers' hours and understaffs its stores."

That model is expanding the gap between the extremely wealthy and everyone else in America.

Walmart's workers bear the brunt of these low wages, but it also has an affect on tax payers, Traub said, because these workers don't make enough to support themselves they often have to rely on government programs like Medicaid and food stamps.

Other big retailers, like Costco, have proven that it is possible to pay your workers livable wages and still provide competitive prices, she added.

Economies thrive when people have money to spend on the basics. Walmart's business model will not be sustainable in the future, and isn't worthy of one, Traub said.

"If you agree that there's a better, more equitable way to operate a business in this country, you should vote no, against the proposition."

To listen to the debate, click the audio player above.

Previous Intelligence Squared debates

Is giving President Trump a chance open-minded or dangerous?

Statistics and experiences clash in debate on bias in policing

Are charter schools the answer to America's public education challenges?

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