Bernie Sanders

Mark Perry has a nice little point here. If we listen to some of the activists on the WalMart issue then we’re told that the jobs at the store are just terrible. The pay, the conditions are appalling, which leaves us with the mysterious question of why do so many people seem to want a job at WalMart:

There’s a lot of rhetoric, especially from the left, that is very dismissive of working at Walmart. Go the Wikipedia entry for “Criticism of Walmart” and you’ll find references to the following criticisms of being a Walmart employee: low wages, poor working conditions, being forced to work off the clock, being denied overtime pay, not being allowed to take breaks, violations of child labor laws, instances of minors working too late, during school hours, or for too many hours in a day, labor racketeering crimes, sexual discrimination, limiting or eliminating health care benefits, poorly-run and understaffed stores, etc. You get the idea – it must be a pretty terrible place to work, right? But then why do so many people actually want to work for the retail giant, based on the huge number of applications that Walmart receives every time it opens a new store?

Perry then goes on to point out that the new Washington D.C. stores received 23,000 applications for only 600 positions. That’s a multiple of the number of applications there are for each and every place at Harvard. So, if the jobs are so terrible then why is it that so many people want to have one of these terrible jobs?

The answer is of course that the WalMart jobs are better than the alternatives. Those alternatives could be not having a job at all, working in fast food, say, or at Target TGT -1.45% or wherever. The one thing we do know is that those WalMart jobs are better than one or all of those alternatives. This is revealed preferences in action: that people apply for the jobs means that they want them.

Given this it’s now obvious what should or could be done to make those jobs at WalMart better. Which is not to go shouting at that company at all. Rather, it is to encourage more people to set up more businesses offering other jobs. As those alternatives proliferate then those offering the best opportunities and working conditions will get the workers and those offering bad conditions and/or pay will find that they have to improve them in order to retain their workforce.

Now, as to what is the current constraint on people setting up in business? I’m sure we all have our own pet theories. Mine is that the bureaucratic nonsense that surrounds gaining all of the necessary permits and licenses discourages many would-be entrepreneurs from even starting. Reduce that regulatory burden and we’ll see more new businesses starting and thus, through the above process, conditions will get better for all workers. Note though that this is a pet theory (one that certainly has some truth to it, but probably not the entire truth) driven by a certain amount of personal experience.