Should Wal-Mart harm the economy when it comes to town? Essay

Submitted By 33joanna
Words: 1104
Pages: 5

Jing Jin
November 25, 2013
Research Paper
091A/Professor Lee

Should Wal-Mart harm the economy when it comes to town? In resent years, Wal-Mart has become people’s “daily life”: We drive to Wal-Mart to buy a lot of furniture, eat food there and search the goods in Wal-Mart online. However, one man’s meat is another man’s poison. When Wal-Mart comes to town, it pushes other retailer stores closed. While the goal of Wal-Mart is to make people’s life better, does it really bring advantages to people’s life? “The negative impact is due to the use of the Wal-Mart business model. A new generic grocery does not equal economic harm, but a new Wal-Mart does”(Christopher Fowler, 2012), which means the business model of Wal-Mart will harm the industry and the economy. According to a research in 2005, 20% people will lose their jobs when Wal-Mart appears to their towns. The truth is, Wal-Mart will hurt the small town’s economy in three ways: kills jobs and downtowns; pays low wages to it’s employees and monopoly among the retail industry. The first thing that Wal-Mart harms the economy is that it kills jobs and downtowns. When Wal-Mart appears, it will meet people’s demand and people don’t have to drive to many retail stores to buy the goods. What’s more, people can get much cheaper price from the Wal-Mart, which will directly cause the retail stores lose their customers. Some customers hold the opinion that Wal-Mart brings a lot of conveniences to them and it’s not a big problem when they see other stores closed. For example, the food prices are 14% lower in markets where Wal-Mart competes, according to a UBS Warburg report. “Since 2005, Wal-Mart has become a global leader in corporate sustainability and has made genuine practical commitments for a more efficient, cleaner and healthier operation”(Jessica Wohl, 2013). That means people like to buy things in Wal-Mart not only because the price of the products, but also because the free shipping and professional operation. However, some researches show that the true economic impact a Wal-Mart stores has on a neighborhood when it moves in. In his article “A Wal-Mart Monopoly?” the writer says, “For every Wal-Mart supercenter that opens in the next five years, two other supermarkets will close. And this is done without creating new jobs” (Jeff Hwang, 2003). In other words, Wal-Mart will kill other retail stores when it comes to town and no new groceries will open because of it. People like to go to Wal-Mart because the low price, but if no other stores exit, what’s the meaning of “lower price”?
How much does Wal-Mart pay to it’s employees is the second aspect that we should pay attention to. When someone criticizes the low wage it pays, Wal-Mart has it’s own opinion: “More than half of our 1.3 million U.S. employees are on our health-care plans, which also include free hip and knee joint replacements” (Jessica Hohl, 2013). It seems that Wal-Mart gives a lot of benefits to it’s employees and the health insurance will pleased every workers in the future. But what if Wal-Mart pays very low price to the workers that under the poverty? Does every worker really have the right to enjoy the health insurance? In his article “What is really costs when Wal-Mart comes to town”, the writer says, “ when Wal-Mart comes to town, it is going to reallocate sales and its impact is going to be a function of the difference between what is currently being paid in wages at the existing stores and what Wal-Mart pays” (Dave Mielach, 2012). In other words, the sales will be changed when Wal-Mart opens and the most important thing is the different wages between Wal-Mart workers and other stores’ workers. After these years, we can see that communities will be much worse, with lower wages and less money in the communities after Wal-Mart appears. In fact, Wal-Mart employees earn 20% less than those at unionized supermarkets. And if people can’t get enough wages to support their…