I'm really not out looking for this stuff about Wal-Mart; these things just seem to have come across my path as of late.
This story (originally from the Los Angeles Times) is particularly interesting: "Wal-Mart Seeks Unbiased Research -- and Gets It." Wal-Mart commissioned an academic conference to study its effects in communities across the United States. To their credit, they hired an outside firm to conduct the study in an effort to maintain objectivity.
While the results were certainly mixed, Wal-Mart can't be too happy with some of the findings. Here's the bulk of the relevant information from the Times article:
Some of their findings, which a few of the researchers released before the conference, tend to confirm what Wal-Mart critics have been saying for years.
At least two concluded that Wal-Mart stores' pay practices depressed wages beyond the retail sector. Another found that states on average spent $898 for each Wal-Mart worker in Medicaid expenses.
One study concluded that Wal-Mart's giant grocery and general merchandise Supercenters brought little net gain for local communities in property taxes, sales taxes and employment; instead, the stores merely siphoned sales from existing businesses in the area.
Not all the news was bad for Wal-Mart. Several of the studies noted that its stores led to lower prices throughout a region. Two suggested that Wal-Mart increased a county's total employment, with one pegging that long-term gain at 1% to 2%.
David Neumark, a senior fellow at the Public Policy Institute of California, found that "residents of a local labor market do indeed earn less following the opening of Wal-Mart stores."
Worse yet, he wrote, is Wal-Mart's influence in the South, where it has its greatest concentration of stores. There, Neumark and his coauthors found, Wal-Mart has decreased retail employment and total employment.
Michael Hicks of the Air Force Institute of Technology and Marshall University found that each employee of Wal-Mart caused "the average state to expend just under $900 a year in Medicaid benefits."
In a look at the Supercenters' effects on local businesses in Mississippi, Albert Myles and his coauthors found that a Supercenter's own community benefited from sharp retail sales increases -- as much as 59% -- though nearby towns suffered annual decreases. Any gains, the researchers found, came at the expense of local merchants.
"Many times the net increases are minimal as the new big-box stores merely capture sales from existing businesses in the area," they wrote.
Emek Basker of the University of Missouri, however, found that Wal-Mart stores decreased prices across a region and increased total employment. And in a study of Ohio, economist Hicks found that a Wal-Mart store increased commercial property tax revenue and raised employment.
A study of the San Francisco Bay Area also presents a mixed picture. UCLA researcher Randall Crane and his coauthors found that once Wal-Mart established itself as the region's leading grocer -- the company is already the national leader -- it would probably depress grocery store employees' wages by hundreds of millions of dollars. But, they found, the company also would save shoppers hundreds of millions of dollars by offering cheaper food.
So it seems that the gains Wal-Mart claims to bring to a community are slight, if they exist at all, and, in just as many cases as not, they have a detrimental effect on a community.
Of course, this raises a lot of questions. Is a low price always best? Does it justify shopping at a big box store where profits are sent outside of your community? Does it justify putting local businesses owned by your neighbors out of business? If this trend continues, will their be enough living wage jobs in the United States? Will we buy ourselves out of jobs and, if we do, will the prices at Wal-Mart be low enough for its own workers to afford shopping there? And, ultimately, does this kind of retail (which Wal-Mart leads, but is not the sole player) represent Christian economic principles? And this is only a short list off the top of my head ...
Here's the full Global Insights report, if you're interested.
