We've been seeing Wal-Mart ads on TV lately that seem to be trying to convince people that having Walmart in their neighborhoods is
GOOD for the local community.
These ads feature Wal-Mart employees, usually local store management personnel, talking about how great it is for the other retail businesses in their town. They never actually site any examples, or explain what it IS that Walmart does to foster this supposed environment - they just assert that it is a fact and talk about how "proud" they are to be involved with Walmart's wonderful community spirit.
Of course, Wal-Mart is a notorious destroyer of local communities all over the country.
Studies show that for every two jobs created by a Wal-Mart store, the community loses three. Jobs that are retained by a community are merely shifted from local businesses to the giant retailer. In a 1994 report, the Congressional Research Service warned Congress that communities need to evaluate the significance of any job gains at big-box stores against any loss of jobs due to reduced business at competing retailers. The report also pointed out that these so-called new jobs "provide significantly lower wages then jobs in many industries, and are often only part-time positions, seasonal opportunities, or subject to extensive turnover." The Real Story
is that when Wal-Mart moves into the neighborhood, it devours local businesses and lowers community living standards.
Studies conducted by small towns on the impact of proposed Wal-Mart stores have shown that tax revenue reductions are more likely to occur after a Wal-Mart moves into an area.
A Maryland study showed that in the years following the arrival of Wal-Mart, "town tax receipts from personal property and ordinary business corporation taxes grew but at a declining rate." The study said that "the expected growth in income taxes may have been offset by low-wage jobs offered by the large retailer and by the loss of employment in competing businesses. . . ."
But there is more...
There was a very interesting Frontline documentary on Wal-Mart's effects on the US economy a while back called, "Is Walmart Good for America?"
The general consensus was NOT positive.
According to economist, Prof. NELSON LICHTENSTEIN at U.C. Santa Barbara:
In the 19th century, it was the Pennsylvania Railroad, which called itself the standard of the world. Early 20th century, it might have been U.S. Steel. General Motors, of course, in the mid-20th century. But clearly, Wal-Mart today is setting a sort of a- a new standard that other firms have to follow if they hope to compete. And more than just other firms, it's setting standards for the nation as a whole.
The power of Wal-Mart is such, it's reversed a 100-year history in which the manufacturer was powerful and the retailer was sort of the vassal. It's changed that. It turned that around entirely. Now the retailer, the mass global retailer, is at the center. That's the power. And the manufacturer becomes the serf, the vassal, the underling who has to do the bidding of the retailer. That's a new thing.
With other mass retail chains, like Target and K-Mart, Wal-Mart generated a revolution in how goods are produced, a shift from what's called "push production" to "pull production." The push system involved manufacturers deciding what they're going to produce and then trying to get retailers to buy it and sell it for them. The pull system involves retailers deciding what is being sold, collecting information on what is being sold, and then telling manufacturers what to produce and when to produce it based on what is actually being sold.
Walmart is such a large customer, they basically write their own ticket. In the film, JON LEHMAN, a former Wal-Mart store manager explained how the company's "pull" system pressures it's suppliers.
Well, it's very one-sided. There is no negotiation. There's not much negotiation at all. The manufacturer walks into the room. I've been in these little cubicles, I've seen it happen. The buyer says, "Look, we want you to sell it to us for 5 percent on a dollar - at cost - lower this year than you did last year."
They know every fact and figure that these manufacturers have. They know their books. They know their costs. They know their business practices- everything, you know? So what's a manufacturer left to do? They sit naked in front of Wal-Mart. You know, Wal-Mart calls the shots. "If you want to do business with us, if you want to stay in business, then you're going to do it our way." And it's all about driving down the cost of goods.
This new paradigm has been the major cause of ever increasing importation of cheap foreign merchandise into the US, which is to say the exportation of American manufacturing jobs to places like the Taiwan, Malaysia, and China.
