Wal-Mart Effects the Economy

Jim Lee Eng 101 Reames December 2, 2010 Wal-Mart Greatly Impacts the U. S. Economy Is Wal-Mart downf both the local anaesthetic anesthetic avocationes in the States? Most professional business hands heap sum that Wal-Mart affects the united States economy in many opposite ways. Wal-Mart is an American public peck that runs a chain of large, discount incision introduces. It is the innovations largest public corporation by revenue according to the 2008 Fortune orbicular 500. However this corporation has contraverisal issues ab go forth how they do their sales and the long border affects they put in the economy.Professionals leave crack that Wal-Mart has hurt many conjunction businesses as Wal-Mart open in argonas just about them. There receive been mutual statistics for when a Wal-Mart opens and the affect they have. This paper focuses on the affect Wal-Mart has in hoidenish beas and the views of professionals intake on this topic. as well as this paper get ou t feature how Wal-Mart get out affect our feature. The target audience for this paper is people who argon interest in the learning of the affects of large corporations vs sm all in all businesses.When analyzing the affects of Wal-Mart many researchers will check oer with the fact that small businesses lose revenue when big(a) corporation defile for broken and sell also low to beat the contention. c been (1997) states that Studies in Iowa have shown that slightly small towns lose up to 47 percentage of their retail trade after 10 years of Wal-Mart stores nearby (Pg. 2). That is a big statistic to take in as the community will amaze from a high loss of the specie for the community.Also the small business helps aliveness the economy in flow and when small businesses galvanize to fail, people start losing line of descents and people will move out of communities which hurts the communities. Stone (1997) comments that It is believed that this decline in sales happened becaus e Wal-Mart placed its own stores too close together, causing a predatory effect (Pg. 6). This education is true because Wal-Mart uses the predatory effect to flummox competitors out of business. The predatory effect is the practice of selling products and services at a very low price intending to drive competitors out of business.That is how Wal-Mart has been sovereign because of their ability to sell prices so low to attract consumers to continue to computer memory at Wal-Mart. Wal-Mart can do this because by attracting consumers to bargain for certain products at a lower price that oppo range products are raised in value and consumers will shop throughout the store. The key is to get consumers to practice to your business and Wal-Mart has almost perfected that. Overall Stone would flout with the judgement of Wal-Mart is ruining the local businesses around America as Wal-Mart has become a fully national chain.Understanding this topic would be important because it can sig nalize what we will see in the future of the economy. Many would agree with Stone like Goetz and Swaminathan with the fact Wal-Mart has set up in local communities. Goetz and Swaminathan (2004) states that We offer ternion possible explanations for this finding, including that Wal-Mart stores destroy civic capacity in the communities in which they invest by driving out local entrepreneurs and community leaders (Pg. 2). This statement connects with Stone as well as my point of view of this topic.Wal-Mart has rank the nitty-gritty class economy with their style of retail sales and bargain foring cheap products over seas. Goetz and Swaminathan (2004) quotes that Local leaders and academic researchers are more and more interested in the community-level effects of big box retailers and discount department stores (Pg. 3). This has potential to have a positive outcome because America will realize that Wal-Mart has affected the United States so greatly that the administration nee dfully to step in and control how Wal-Mart conducts business.Wal-Mart has received considerable and mostly contradict recent public media and Congressional attention, in addition to spawning a military issue of hostile web-sites as Goetz and Swaminathan (2004) reports (Pg. 3). It is serious that people are realizing this and speaking out about 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 employment and earnings, accounting for endogeneity of the attitude and timing of Wal-Mart fountains that most likely biases the evidence against finding adverse effects of Wal-Mart stores (Pg. 1). This is a nonher harsh aspect of all these professionals with the idea that there is a negative effect behind the openings of Wal-Mart.All of the effects found are common as they reduce local businesses around immature Wal-Marts. Neumark, Zhang, and Ciccarella (2005) quotes Yet 2 of the most commonly-heard criticisms are that Wal-Mart eliminates more jobs than it creates for a community and that Wal-Marts lock levels pull down standards for all workers non simply creating low-wage jobs, but driving down wages (Pg. 1). Not only is the Wal-Mart effect destroying the local businesses, Wal-Mart does not help create more jobs for the jobs it loses in the community.Also Wal-Mart does not honorarium its workers a favorable wage. That can greatly affect a community because the citizens at bottom that community will not have money to buy products, charge the flow of the economy going. Neumark, Zhang, and Ciccarell a (2005) also agrees on my idea of the topic of Wal-Mart by stating There is also an academic literature on the pertain of Wal-Mart stores, steering on the effects of Wal-Mart openings on local employment, retail prices and sales, poverty rates, and the ingress of the retailing indus undertake, as well as the impact on existing businesses (Pg. ). They are essentially 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 new opposition arises. The fact that Wal-Mart beats out its competitors really easy is a shuddery weapon that Wal-Mart can abuse. In which they have abuse their power to buy bulk supplies by demanding the prices of whom they buy from sort of of negoicating. Neumark, Zhang, and Ciccarella can all agree that Wal-Mart is ruining the local businesses in America.Furthermore into this topic, most professionals will all set that Wal-Mart affect s the economy in more negative ways then positive. Arindraji, William, and Barry (2007) states that estimates that feat the spatial diffusion of Wal-Mart stores find that a single Wal-Mart store opening reduces the mean(a) 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 lowered instead of increased. This just 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 periodical 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 better if they are finacnically doing well as they are ranked 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 make money former(a) then the products and services they forget. As Wal-Mart can see that they can pay their workers the minimum wage and get away with it, firearm 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 agonistic with the prices they put on the products and drive rivalry out of business. In the capital of Michigan State Journal, Domsic reports that The recent closings of three locally owned grocery stores muse a traditional grocery sector struggling to compete with big-box stores and the outgrowth number of pharmacies, convenience stores and another(prenominal) shops that have added more food to their lineups. The big box stores they are talking about are Wal-Mart, Meijers, and Kroger. Those stores have been competing with separately other to cut prices really low, beating out the other local businesses. Competition is good but what happens when there is no competition? so 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 large 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 bad when some of the competition disappears from the market. Although there are many cons of Wal-Mart, Wal-Mart has many realises as they provide low costs of products they sell. Irwin (2007) reports that Wal-Marts food prices are estimated to be 8% to 27% lower 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 action money in these rough clock in the United States.That is why consumers are attracted to shop at Wal-Mart because yo u can save money and be able to buy other things. Irwin expresses this benefit as This has generated tremendous nest egg 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 alive 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 just the ways that Wal-Mart has benefited America. Wal-Mart has helped individualized income and employment. Riper (2008) quotes The study shows that between 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 States and other countries that it will benefit income of people and help raise employment in the are a. 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. Nearly 90% of the U. S. population lives within 15 miles of a Wal-Mart store, and two-thirds of all retailers are hardened within five miles of one as Riper reports. That means a considerable 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 100 social organisa tion jobs will be created. That means there are 1. 26 one million million jobs in America that are in the Wal-Mart industry. Also that 360,000 construction jobs was created for the twist of Wal-Mart.As long as Wal-Mart is doing well with profits, they will continue to expand new Wal-Marts. This will mean more jobs in America. Another good impact Wal-Mart has is how they provide 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 300 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 orbicular sustainability effort to reduce energy consumption through a renewing of init iatives 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 respect 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 Wal-Mart. Many people speak up having Wal-Mart around is a benefit. Mui quotes Other store owners credit Wal-Mart for boosting their sales, through both(prenominal) 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 several different ways.My opinion on Wal-Mart is that Wal-Mart is destroying the American middle class slowly 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 trigger off cell phones on the Wal-Mart plan. Wal-Mart is exploring all markets and providing them into their o wn 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 quick and dominating any corporation out there, that the government should regulate 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 they done some damage to the United States in ways the Founder of W al-Mart should have knowledge about and try to find new ways to conduct business.