Wal-Mart Effects the Economy

Jim Lee Eng 101 Reames December 2, 2010 Wal-Mart Greatly Impacts the U. S. frugality Is Wal-Mart ruining the local anesthetic worryes in the States? Most professional business men back end deem that Wal-Mart affects the join States delivery in much different ways. Wal-Mart is an Ameri send packing public breadbasket that runs a chain of large, dismiss department line of descents. It is the worlds largest public skunk by revenue according to the 2008 megabucks Global 500. However this corporation has contraverisal issues ab come on how they do their gross sales and the capacious term affects they put in the preservation.Professionals leave behind check that Wal-Mart has hurt numerous residential atomic number 18a businesses as Wal-Mart open in argonas around them. There require been common statistics for when a Wal-Mart opens and the affect they grow. This paper focuses on the affect Wal-Mart has in rural argonas and the projects of professionals intake on t his emergence. Also this paper bequeath deliver how Wal-Mart pass on affect our feature. The tar overprotect audience for this paper is wad who ar interested in the learning of the affects of large corporations vs sm whole(prenominal) businesses.When analyzing the affects of Wal-Mart many another(prenominal) researchers testament halt with the fact that small businesses lose revenue when big corporation corrupt for low and sell also low to beat the opposition. jewel (1997) states that Studies in Iowa create shown that some small towns lose up to 47 part of their retail trade after 10 years of Wal-Mart retentions nearby (Pg. 2). That is a big statistic to take in as the community will suffer from a high loss of the m iodiney for the community.Also the small business champions keep the deliverance in flow and when small businesses start to fail, volume start losing jobs and mickle will move out of communities which hurts the communities. Stone (1997) comments that It is believed that this lessen in sales happened because Wal-Mart placed its own stores too boney together, make a predatory answer (Pg. 6). This statement is true because Wal-Mart uses the predatory effect to drive competitors out of business. The predatory effect is the practice of selling products and operate at a very low price intending to drive competitors out of business.That is how Wal-Mart has been dominant because of their ability to sell prices so low to attract consumers to overcompensate to shop at Wal-Mart. Wal-Mart lavatory do this because by attracting consumers to buy certain(prenominal) products at a disappoint price that former(a) products atomic number 18 increase in value and consumers will shop th untrimmedout the store. The key is to get consumers to come to your business and Wal-Mart has almost perfected that. Overall Stone would agree with the idea of Wal-Mart is ruining the local businesses around America as Wal-Mart has allowance back a fully national chain.Understanding this topic would be important because it can tell what we will see in the future of the economy. Many would agree with Stone bid Goetz and Swaminathan with the fact Wal-Mart has effects in local communities. Goetz and Swaminathan (2004) states that We mountain pass three possible explanations for this finding, including that Wal-Mart stores destroy civic capacity in the communities in which they locate by hotheaded out local entrepreneurs and community leading (Pg. 2). This statement connects with Stone as well as my point of view of this topic.Wal-Mart has downgrade the middle class economy with their style of retail sales and buying cheap products over seas. Goetz and Swaminathan (2004) quotes that Local leaders and academic researchers argon increasingly interested in the community-level effects of big box retailers and synthesis department stores (Pg. 3). This has potential to have a compulsory outcome because America will realize that Wal-Mar t has affected the join States so greatly that the administration needs to step in and control how Wal-Mart conducts business.Wal-Mart has received considerable and broadly sermon negative recent public media and Congressional attention, in addition to spawning a number of hostile web-sites as Goetz and Swaminathan (2004) reports (Pg. 3). It is levelheaded that people are realizing this and speaking out almost this effect on our economy. This will get this phenomenon brought up to the government level and will be talked about to high levels of authority. Goetz and Swaminathan are professionals that agree with my idea of local businesses being destroyed by Wal-Mart.Common views of professionals will agree that our economy is partly affected by the Wal-Mart effect. Neumark, Zhang, and Ciccarella (2005) will agree with Stone, Goetz, and Swaminathan by saying that We estimate the effects of Wal-Mart stores on county-level art and earnings, invoice for endogeneity of the location and timing of Wal-Mart openings that most same(p)ly biases the evidence against finding unfavorable effects of Wal-Mart stores (Pg. 1). This is an early(a) common aspect of all these professionals with the idea that in that location is a negative effect behind the openings of Wal-Mart.All of the effects found are common as they reduce local businesses around rising Wal-Marts. Neumark, Zhang, and Ciccarella (2005) quotes heretofore two of the most commonly-heard criticisms are that Wal-Mart eliminates more jobs than it creates for a community and that Wal-Marts wage levels pull down standards for all workersnot simply creating low-wage jobs, unless driving down requital (Pg. 1). Not only is the Wal-Mart effect destroying the local businesses, Wal-Mart does not jock create more jobs for the jobs it loses in the community.Also Wal-Mart does not pay its workers a good wage. That can greatly affect a community because the citizens within that community will not have property t o buy products, keeping the flow of the economy going. Neumark, Zhang, and Ciccarella (2005) also agrees on my idea of the topic of Wal-Mart by stating There is also an academic literature on the force of Wal-Mart stores, focusing on the effects of Wal-Mart openings on local employment, retail prices and sales, poorness rates, and the concentration of the retailing industry, as well as the impact on existing businesses (Pg. ). They are basically stating that Wal-Mart impacts many aspects of the economy because of how Wal-Mart conducts business. Also that the impacts are not in positive ways in which they should be when bran-new competition a fountains. The fact that Wal-Mart beats out its competitors really easy is a scary weapon that Wal-Mart can abuse. In which they have abuse their place to buy bulk supplies by demanding the prices of whom they buy from instead of negoicating. Neumark, Zhang, and Ciccarella can all agree that Wal-Mart is ruining the local businesses in Americ a.Furthermore into this topic, most professionals will all conform that Wal-Mart affects the economy in more negative ways consequently positive. Arindraji, William, and Barry (2007) states that estimates that exploit the spatial diffusion of Wal-Mart stores find that a single Wal-Mart store opening reduces the middling retail earnings in a county by 0. 5 0. 9 percent (Pg. 4). This is not good for any economy that when a new business is open that the average retail earning is get down instead of increased. This on the button means that when Wal-Mart opens it loses more of its competitor retailers then what Wal-Mart gains.Ten new Wal-Mart stores in a state are found to reduce the average hourly wage of retail workers by around 2 percent as purpose by Arindraji, William, and Barry (Pg. 4). Wal-Mart should be able to pay their workers reform if they are finacnically doing well as they are be number one in the Fortune 500 list. They are the number one ranked corporation and they do not pay their employers above the average. Wal-Mart has been making money other then the products and services they contribute. As Wal-Mart can see that they can pay their workers the minimum wage and get away with it, while making billions of dollars world wide.Arindraji, William, and Barry will confirm that Wal-Mart has been greatly impacting the economies in the where abouts they consult business. Wal-Mart has been overly competitive with the prices they put on the products and drive competition out of business. In the Lansing State Journal, Domsic reports that The recent closings of three locally owned trade place stores reflect a traditional grocery sector struggling to argue with big-box stores and the growing number of pharmacies, convenience stores and other shops that have added more sustenance to their lineups. The big box stores they are talking about are Wal-Mart, Meijers, and Kroger. Those stores have been competing with each other to cut prices really low, be ating out the other local businesses. Competition is good but what happens when at that place is no competition? Then those who have beat out the other competition will have a garentee chance to always survive in the economy and basically take all the consumers in the area. Domsic also comments bigger players have beefed up their food lines or cut prices as they vie for Lansing-area shoppers. The bigger players are the Wal-Mart, Meijer, and Kroger and they are competing fiercely for consumers. Even though competition is good, it is unstable when some of the competition disappears from the market. Although there are many cons of Wal-Mart, Wal-Mart has many gathers as they tolerate low costs of products they sell. Irwin (2007) reports that Wal-Marts food prices are estimated to be 8% to 27% unhorse than large supermarket chains for an identical market basket across different U. S. metro areas (Pg. 1). This is a benefit for the lower and middle class to try and render money in th ese rough times in the United States.That is why consumers are attracted to shop at Wal-Mart because you can save money and be able to buy other things. Irwin expresses this benefit as This has generated tremendous savings for Wal-Mart consumers by offering lower priced goods in the community, and generating competition among retailers (Pg. 1). Wal-Mart creates unbelievable savings for its consumers therefore keeps the competition animate for Wal-Marts competitors. Also that competition is very good for the economy in the United States. Those are some ways that Wal-Mart impacts the business industry in positive ways.Those are not secure the ways that Wal-Mart has benefited America. Wal-Mart has helped personal income and employment. Riper (2008) quotes The study shows that amid 1985 and 2003, personal income, overall employment and retail employment grew faster in counties with a Wal-Mart than in those without one. This means that the more Wal-Mart is built around the United Sta tes and other countries that it will benefit income of people and help raise employment in the area. That is a good because then people would have more money to help keep that economic flow in communities going.Also the rise in employment will improve the surrounding unemployment of the location Wal-Mart is around. nigh 90% of the U. S. population lives within 15 miles of a Wal-Mart store, and two-thirds of all retailers are located within five miles of one as Riper reports. That means a vast majority of America is surrounded by a Wal-Mart close by. This is good for Wal-Mart as they can be easily located and can be accessible to almost anyone. Wal-Mart is everywhere and that is a huge benefit Wal-Mart has over its competitors.Wal-Mart has brought up some good positive impacts as there are aproximatly 3,600 Wal-Marts in the United States. One of the impacts is the amount of jobs each Wal-Mart creates as Wal-Marts site cites Approximately 350 new positions will be needed at the store (a majority of those positions will be full time). An additional blow turn of events jobs will be created. That means there are 1. 26 million jobs in America that are in the Wal-Mart industry. Also that 360,000 construction jobs was created for the building of Wal-Mart.As long as Wal-Mart is doing well with profits, they will continue to hit the ceiling new Wal-Marts. This will mean more jobs in America. Another good impact Wal-Mart has is how they raise savings to consumers as the Wal-Mart site reports Studies have shown that Walmart stores save the average household $3,406. 00 a year. Customers can purchase over ccc generic pharmaceutical drugs for just $4. 00 or less. The amount you save at Wal-Mart builds up as you can see. That helps citizens save money if there income is sufficiently low or on certain budgets.Not only do Wal-Mart provide savings for its consumers and employment, Wal-Mart has been involved in the environment by stating that Wal-mart is leading a global s ustainability effort to reduce energy consumption done a variety of initiatives that will also be used at this store. The store will purchase a number of grocery and garden products locally to save energy costs and support the local economy. That helps Wal-Mart with its community extol to be involve and not just a average corporation that does not care about the itself.Also this tells that Wal-Mart cares about the environment and not just making profits. Overall, Wal-Mart is a benefit to the American economy. Wal-Mart has not been selfish at all in communities like Landover Hills. Wal-Mart has started up a program to help local businesses. Mui reports that Wal-Mart said it would offer free advertising to local stores and seminars on how to do business and even compete with Wal-Mart. This is something that is rarely done in the business world. A competitor helping another competitor out.This would help competition around the area and benefit the local stores into competing with W al-Mart. Many people think having Wal-Mart around is a benefit. Mui quotes Other store owners credit Wal-Mart for boosting their sales, through both its proximity and community outreach programs. Local businessmen are claiming that having a Wal-Mart around is a benefit. Somehow Wal-Mart has continue to benefit some people while some others do not believe so. Wal-Mart has brought up many views on how they affect the competition and how the employment is affect in some(prenominal) different ways.My opinion on Wal-Mart is that Wal-Mart is destroying the American middle class belatedly every year. Wal-Mart closes individual business owners and reduces competition in which an economy like America, competition keeps the economy in steady flow. Also that they are like a monopoly to me. Wal-Mart is not just a discount retail store. They provide all sorts of different services like eye examinations, haircuts, predacures, and they can provide and activate cell phones on the Wal-Mart plan. Wal-Mart is exploring all markets and providing them into their own stores.That is not a good impact because Wal-Mart already dominates in the retail store and driving other retail stores and local businesses out of work, so providing these services just keeps Wal-Mart in benefits from those services. I believe that the government needs to take a bigger stand on what Wal-Mart can do because Wal-Mart has been changing so rapidly and dominating any corporation out there, that the government should model how they buy supplies. Wal-Mart buys most of their products for their shelves from China for low prices.Thus, making a lot of job losses in America. How can an American corporation do this to America? Wal-Mart also does not have health benefits for its workers and Wal-Mart pays low wages for its workers. That does not help out the working class of the United States. Our economy is not doing so well right now as we are in debt from war. Wal-Mart should help stable the economy since the y done some ill-use to the United States in ways the Founder of Wal-Mart should have knowledge about and try to find new ways to conduct business.