The highly-intelligent-but-requiring-a-good-dose-of-Don-Boudreaux Ezra Klein writes:
My guess is that Wal-Mart’s size and might is having much more profound effects on our economy through the demands and strains it places on suppliers than through their lowish wages and benefits for direct employees (although those labor standards give them a competitive advantage over chains with higher standards, and so we race to the bottom…). So much as I want the latter to go up and unionization to rush across the land, I’m more worried that Wal-Mart’s size and status as the indispensable outlet for products, when coupled with their virtually maniacal (though fully understandable) demands for lower pricing, are pushing down wages and work conditions all throughout [sic] the land and, for that matter, the world. Suppliers simply can’t pay better and push the marginal cost to consumers — Wal-Mart will drop them faster than you can say "Always low prices."
If our economy had more pockets of sluggish monopoly power, those highly stable and visible firms might be more unionized. But unionization is not desirable per se. Keep in mind, a well-functioning antitrust law raises real wages rather than lowering them. Wal-Mart, by squeezing suppliers and lowering prices, does the same. Wal-Mart suppliers are still selling at "price above the appropriate measure of marginal cost," albeit by less than before. Asking for higher prices and higher monopoly profits — not as a spur to innovation, but in the hope that monopolizing suppliers will share those profits with their laborers — is a bad way to elevate the American standard of living.
I worry more when Wal-Mart acts to keep prices up.