Wal-Mart Data
Wal-Mart had notoriously refused to grant researchers access to its data for years, making fact-based arguments rather difficult. In 2005, it cracked open its vault of numbers, sponsoring a conference and papers based on Wal-Mart data. The results have recently been put up online.
So how are the results? Surprisingly even-handed, given the sponsorship. One study finds that Wal-Mart's presence reduces employment by 2-4%, and may reduce payrolls per worker by 3.5%. At the same time, other studies do find significant price declines (by as much as 25% for groceries, averaging out to around a 3.1% decline across all household expenses). Taken together, it suggests that Wal-Mart's benefits in price reduction roughly equal its costs in wage reduction.
Two questions. Should we believe it? And, if we do believe it, what next?
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Comments (5)
Demand the Truth
Here are some of my views on your subject of Wal Mart.
EasyRider's BlogWal Mart mirrors Standard Oilhttp://www.tpmcafe.com/node/26973
EasyRider's BlogWal Mart and Standard Oil versus Small Businesseshttp://www.tpmcafe.com/node/26367
February 23, 2006 3:06 PM | Reply | Permalink
I think if having Wal Mart in your community is an economic wash then the arguments against Wal Marts couldn't be clearer.
1. Large corporations, which have to be run based on policies rather than on interpersonal relationships, de-personalize. Wal Mart undermines communities by getting rid of the hardware store owner who gives you advice, the butcher who knows your name and the kind of meat you like, etc. etc. You're sacrificing your community so some corporation somewhere can make a profit. Communities are already unraveling as people spend more time in front of their electronic acquaintances. Why undermine them further?
2. There's an ownership argument here, too. A guy who owns a pharmacy in a town is more invested in that town than a guy who's the assistant pharmacist at the local Wal Mart. Decisions that may have an economic affect on the town won't be made at corporate headquarters with one eye on the town's welfare.
3. Wal Mart drains money out of communities. A local hardware store owner gets a dollar from a customer and re-spends that dollar in the local economy. Wal Mart gets a dollar from a customer and transfers the money to corporate headquarters in Texas or wherever Wal Mart is headquartered. Local businesses spend profits locally, giant corporations spend profits in some other economy. If they overcompensate their senior executives, that dollar that got spent at the local Wal Mart could get re-spent in Paris or St. Croix or a vacation to see the Great Wall.
Americans treat lower prices as if any inconvenience, any sacrifice to the community is worth it in order to get them. It's an odd behavior.
February 24, 2006 6:39 AM | Reply | Permalink
I can't disagree with your first two points. But the third is dubious. If intra- and international trade is fair, then, sure, money is drained from Austin to Boston, but it's also "drained" from Boston to Austin. If we took the "keep the money in one place" argument seriously, we'd prohibit banks from having more than one branch, or from lending far from where their depositors lived. That was what Americans did for centuries -- following that exact logic -- and, man, that sucked.
February 24, 2006 12:37 PM | Reply | Permalink
First I recommend a visit to the Writing on the Wal web site which is devoted to discussions like this.
Second here are some links to academic studies not tainted by being affiliated with a Walmart-sponsored "conference". The fact that Jon Lackow could say the results are "surprisingly even-handed" shows that Walmart has achieved its aim of obscuring how bad things really are. The links:
Loss for Local Economies (PDF)
Shopping for Subsidies (PDF)
Finally a recent new blog site started by an activist who went to work for Walmart to see how things are first hand. Clever writing too.
Working at Walmart
--- Policies not Politics
Daily Landscape
February 28, 2006 7:52 AM | Reply | Permalink
SherryB
Here in the rust belt, people are lining up for jobs at Walmart. I hate what they done to the local businesses, they are just closing their doors. They employ three shifts, work the people to death, but at least the people aren't on welfare. The number of jobs leaving this area is just devastating. Every day another one or two small factories close. Every day. Men come to the farms around here begging for work, any work. So I guess employment at Walmart beats standing in the line for free food at the local pantry. The elderly women that work there tell me they hate working there but need the secondary insurance. They have Medicare but can't afford to buy insurance, what they make goes to pay for the insurance. Yet I read that the economy is booming. Here in the rust belt we are still waiting to get trickled on.
March 12, 2006 7:45 AM | Reply | Permalink