China and Wal-Mart: The Champions of Equality

Workers worry about being on the losing side of trade and losing jobs. But inflation and higher prices can also quickly erode wealth. “National statistics ignore the fact that inflation affects people in different income groups unevenly because the rich and poor consume different baskets of goods,” writes Christian Broda for the Financial Times. In the US, where unemployment stands at about 5 percent, the poor tend to purchase more goods, and the rich tend to purchase more services. As a result, inflation has been less severe for the poor than for the rich, Broda suggests, and that is due to the influence of China and Wal-Mart. Widespread misunderstanding about the benefits of trade and low-cost superstores could result in misdirected policies that restrict trade rather than boost education or health care, in the end causing more problems than they solve. – YaleGlobal