Barbara Ehrenreich

Yes, she makes the same old mistake:

Based on size alone, it would be easy to confuse it with a nation: in 2002, its annual revenue was equal to or exceeded that of all but 22 nation-states.

Erm, no.

You are comparing the turnover of Walmart to the GDP of nations. Turnover and GDP are not the same thing at all.

Turnover, the revenue, is the sum of all transactions by the company. GDP however is the value added in an economy. As far as a company is concerned the equivalent to GDP is profits (some academics would argue that it should be profits plus wages paid).

So, Wal-Mart\’s turnover, revenue, might indeed be something like $400 billion (the 22nd largest economy seems to be Poland with $430 billion or so GDP).

But Wal-Mart\’s profits are more like $12 billion or so (very rough figure reached by 4x quarterly profit). Around and about Iceland (the country, not the store) say.

If we guess (very much a guess) that Wal-Mart has 1 million employees all on $30,000 a year, that\’s another $30 billion we can add to the profits to give the second possible measure of value added, wages plus profits.

Around and about Uruguay say. Which shouldn\’t really be all that much of a surprise. There\’s 3.5 million peeps in that country, take out the pensioners, the kiddies, the unemployed, stay at home mothers etc and you\’ve a workforce roughly comparable in size to the Wal-Mart one. Millionish people.

All these numbers are very rough indeed but they do show the obvious point. A million or so middle income peeps produce the same value added as another million or so middle income people.

Must do, for there\’s a million in each group and income is determined by value added.

6 thoughts on “Barbara Ehrenreich”

  1. Who cares if she compares GDP and Walmart’s turnover? That has very little to do with the point of the article – which you know very well. Or should know.

  2. “Who cares if she compares GDP and Walmart’s turnover? ”

    I do.

    The display of such ignorance in the first paragraph of an article is almost always correlated with the rest of the content also being bullocks

  3. Who cares if she compares GDP and Walmart’s turnover?

    Me too – Still a lot to learn about these things and if the national press are getting it wrong it’s nice to know and understand why.

  4. Perhaps this is just availability bias …

    There’s too many Wal-Marts nearby to sniff at, and not nearly enough … south of France.

    And the investment to enjoy the fruits of the latter is so much bigger, what with the dieting before you go, and the dieting after you get back.

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