The giant retailer's low prices often come with a high cost. Wal-Mart's relentless pressure can crush the companies it does business with and force them to send jobs overseas. Are we shopping our way straight to the unemployment line?
The Wal-Mart Effect | Charles Fishman
Wal-Mart’s ability to sell goods more cheaply means that it represents a profound threat to the viability of other nearby retail establishments. There is no doubt that some of these newly out-competed establishments will be forced out of business when a new Wal-Mart opens its doors for business, and that others will be forced to downsize as their customer base declines. Particularly hard-hit competing businesses tend to be stores selling apparel, shoes, hardware, building supplies, paint and glass, groceries, fabric and jewelry. Additionally, establishments providing certain kinds of services – for example, optical services and car repairs – are also vulnerable.
Wal-Mart has taught us that the lower price is the correct price and we've lost track of quality in many categories as part of the equation of price.
Understanding 'The Wal-Mart Effect' : NPR
We found that a Wal-Mart store reduced the average earnings per retail worker in urban and suburban counties (counties that are part of Metropolitan Statistical Areas) for sectors it affects most—general merchandising and grocery. Accounting for job losses or gains only strengthened the finding, as total take-home pay fell even more than average earnings with Wal-Mart entry. In rural counties, the story was more nuanced, as Wal-Mart affected wages for workers in grocery and general merchandise differently. But after accounting for any impact on job gains or losses, total take-home pay remained stable. Since most retail workers (85%) and a majority of Wal-Mart store are in counties that are part of Metropolitan Statistical Areas, the net effect on overall pay was negative. Our research shows that Wal-Mart reduced take-home pay of retail workers by $4.7 billion dollars annually.