Cam Lewis

Wal-Mart
9/27/08

Many people love to cry out and complain about Wal-Mart and all the evil things

it does to communities. The truth, however, is that there are both winners and losers every

time a Wal-Mart opens its doors. The job of a community is to weigh the pros and cons

and, based on their current situation, decide whether to cheer or complain when Wal-Mart

comes to town.

The first group that is most obviously affected by a Wal-Mart opening is the

consumers. This group has its feet in both camps though. On one hand, the consumers are

winners; Wal-Mart brings low prices and the convenience of shopping at one place for

everything on the shopping list. As Robert Guell puts it, some people “are attracted to

them (Wal-Mart) because they can do grocery shopping, have their pharmacy needs met,

and pick up a power tool and a new-release DVD all in one location” (Guell 466). This is

certainly a benefit for consumers who find their schedules crowded for time and need a

quick and easy solution to the time consuming task of shopping. The low prices make this

option even more enticing. According to some reports, Wal-Mart’s prices are somewhere

between 15% and 22% less expensive than the market price (Guell 467). And who can

argue with prices like that?

This brings in the second hand of the consumers. How does Wal-Mart keep its

prices so low? It is becoming increasingly apparent that as Wal-Mart products drop in

price they also drop in quality. Wal-Mart’s suppliers are forced to find cheaper ways to

produce goods as Wal-Mart lowers their prices. This happens because if Wal-Mart
charges less; they, in turn, need to buy for less. Wal-Mart is the largest buyer of many of

its suppliers and can therefore coerce them to sell for less. If a supplier won’t lower its

prices, Wal-Mart simply stops buying from them and this results in the supplier losing

huge amounts of revenue. Therefore, many suppliers lower their quality standards in

order to produce goods more cheaply so that they can sell them to Wal-Mart at lower

prices. So consumers in the short run benefit from lower prices, but in the long run suffer

from lower quality goods. When quality doesn’t suffer it is because the supplier

outsources its labor to foreign countries or lowers worker wages and benefits. This brings

up the next group, workers.

Do workers benefit from a Wal-Mart opening? As stated above, the workers of

Wal-Mart’s suppliers often suffer from losing their job altogether due to outsourcing or

else they suffer from pay and benefit cuts. The same type of thing can happen with Wal-

Mart employees too. In a New York Times article, Michael Barbaro points out that, “Wal-

Mart has been associated with low wages, skimpy health insurance and poor treatment of

workers…” (Barbaro). In order to balance out the low prices, Wal-Mart provides lower

wages and benefits. According to Robert Guell, “Wal-Mart’s pay is $5 to $10 less per

hour (including benefits) than the typically unionized grocery store it is challenging”

(Guell 468).

Granted, when a Wal-Mart opens it does bring new jobs to a community. Wal-

Mart’s competitive prices, however, can drive local businesses under and cause the loss

of previously available jobs. These jobs may or may not be made up for by Wal-Mart’s

employment. Another aspect of this, however, is that in a community with little or no

commerce in the first place, Wal-Mart could be just the thing to jumpstart the dead
economy. Wal-Mart can draw in other big-box retailers as well as fast food restaurants

(Guell 469). The only problem with this perspective is that the chances of Wal-Mart

moving into an economically decrepit area are miniscule. This is generally due to

corporate greed. After all, what money is there to be made in a poor slum where the

economy is stagnant?

Wal-Mart also causes a community social loss. Wal-Mart is generally a very

impersonal environment. The mom and pop stores that Wal-Mart generally runs out of

business are, in general, much friendlier and personal in their services. The loss of this

social aspect of shopping can be detrimental to the interconnectivity of a community and

can lead to a community that is no longer bonded together as it once was.

It would seem then that most people either only suffer from Wal-Mart opening or

suffer a little but gain a little as well. Perhaps the only group that only wins when a Wal-

Mart opens up is the corporate level employees and the higher ups such as the CEO and

CFO. Each new Wal-Mart means more revenue which in turn means more benefits and a

bigger paycheck. This is again tied into corporate greed. Despite the detrimental effect on

everyone else, these executives push for more and more Wal-Mart stores knowing that it

will make them richer and better off. In such a case greed is not helping but hurting

people.

So the ultimate question is, do we complain or cheer when Wal-Mart comes to

town? As we have seen, it largely depends on who you are. As a Wal-Mart corporate

executive you would absolutely cheer. As the owner of another business that would

benefit from a Wal-Mart’s attraction of people, such as fast-food or another retailer such
as Target, you too would cheer. As the people and government of a town in dire need of

an economic boost, cheering would indeed be the appropriate reaction.

The rest, however; the consumer, the employee of Wal-Mart and its suppliers, the

community in general, all these are the losers in this deal. Although all consumers may

not always notice or care about the quality of their products, the conscious consumer

would complain when Wal-Mart came to town. Also complaining would be local business

owners who would be unable to stand against Wal-Mart’s competitive prices.

In the end, it really depends on the current circumstances of a town when it comes

to whether allowing Wal-Mart is a good idea. For the town, Wal-Mart would only be

good in the absence of almost all other commerce. At this point Wal-Mart would help

jump-start the commerce. In any other situation, the evidence against Wal-Mart is

overwhelming, and in the greater number of circumstances, Wal-Mart would be bad for a

community and its population.

 Works Cited

Barabaro, Michael. “In Wal-Mart we Trust?” New York Times. 10 Mar. 2008. ProQuest.

ProQuest Direct. Olean High School Library, Olean, 22 Sep. 2008

<http://proquest.umi.com>.

Guell, Robert C. Issues in Economics Today. New York: McGraw-Hill/Irwin, 2008. 465-

468.