Why do people like Walmart so good. Walmart is actually bad for the economy.?

Question

1. Virtually everything they sell is manufactured outside the United States.

2. 40 to 60 percent of employees are part time and only recieve benefits after a year with the company.

3. They start their pay scale out very low and keep most people at a below poverty subsistence rate.

4. The schedule of work varies so much it disrupts sleep cycles and is unhealthy.

Answer 1

Wal-Mart is enjoyed by consumers because they reap a substantial portion of the benefits (ie, have a higher perceived consumer surplus than at many other retail stores). This does not negate your other points, but explains the preference as being due to a market structure that allows Wal-Mart to maintain its margins (actually very wide margins) despite offering a higher consumer surplus.

1) High ratios of imported goods, particularly in the consumer light durables and clothing categories, are common in the retail industry. This is actually untenable, since eventually Wal-Mart will have to contend with rising labor costs and other inflationary pressures in China, which will become more evident as China moves its currency (renminbi) to full-floating.

2) The high ratio of part-time employees is also a usual factor for the industry; what is unfortunate is when Wal-Mart is the sole employer or major employer in an area. In larger areas, competition for higher benefits and pay generally attracts more capable employees, but Wal-Mart labor is unskilled (you don't need education to stock shelves or use a cash register).

3) Low pay is also endemic to the industry. The difference is that Wal-Mart tends to hire an older age bracket than Target (count the 16-year-olds at Target versus Wal-Mart any time), which means that more often the family wages are paid by Wal-Mart employees. I don't care as much if a 17-year-old who is college-bound doesn't have money to buy her car or pay her cell phone bill as I do about a 35-year-old with a GED and three kids who is always struggling.

That minimum wage is below the poverty level is unfortunate and should be addressed, but is a municipal decision. At the same time, people make a less than economic decision in choosing to work at Wal-Mart (low pay, no benefits) rather than McDonald's (much higher pay, some benefits). For some reason, worker flight from Wal-Mart is not nearly as strong as should be anticipated.

4.) This is something that needs to be addressed, either directly to the company (whose response will be to give the employees another blue vest) or to the labor authorities, which will take longer. Again, if the industry was more competitive, labor would shift and Wal-Mart would have to be more responsible.

Bottom line: Wal-Mart's way of doing business cannot endure under changing market conditions.

Answer 2

It's called capitialism. It's what fuels us as the mightiest economy and country in the world.

But let's look at your points, one by one:

>> 1. Virtually everything they sell is manufactured outside the United States.

WalMart buys its goods from the lowest seller and sells them at a reasonable price to consumers to make a profit. There is nothing wrong with that.

>> 2. 40 to 60 percent of employees are part time and only recieve benefits after a year with the company.

So? An employer doesn't owe it's employees benefits, nor full-time employment. Most of the people that take a part-time job do so because that's exactly what they are looking for (moms, the elderly, etc).

>> 3. They start their pay scale out very low and keep most people at a below poverty subsistence rate.

That's a matter of opinion. They pay the going rate, and if people can't survive on that, then maybe they should increase their value, sharpen their skills and find a better job.

>> 4. The schedule of work varies so much it disrupts sleep cycles and is unhealthy.

Retail is a tough business. If you want sleep, go to college and get a professional job and work "banker's hours!"

Answer 3

Walmart is only cashing in where other retailers miss out.
Walmart has developed a purchasing, warehouse and transportation system that beats all others. Add to that the Super stores that have banks, hearing aids, eyeglasses, beauty shops, photography and even automotive care and gardening in one place, it's sure to be popular.
I dare you to pick out any 10 things at random in your house, purchased at any store in the US and see if there isn't a sticker on it that says "Made in China", "assembled in Mexico" or "Made in Taiwan (or similar country)".
Walmart is cashing in on the fact that the labor market is flooded with jobseekers. If there were fewer workers or more jobs, they could not write their own ticket, however the fact is, many people want part-time work and some are lucky to find any job.
The fact remains that you can choose to spend more for the same exact product (made in the same foreign country) at another retailer but it will not change where the product was made, how well the employees are treated or help keep more jobs in the US.
Find something like domestic, name-brand peanut butter and check the difference between Walmart's price and Albertson's, Buy For Less, Safeway or any other store. It's all made in the same country (USA), by the same manufacturer but the price will be cheaper at Walmart, much cheaper. The same is true for just about any item.
Perhaps your family does not need to watch it's budget but that is not true for the majority of Americans.

Answer 4

1. Virtually everything they sell is manufactured outside the United States. most retail stores sell goods made outside of the us, maybe not all goods but a lot, mostly from china. And they sell them for cheaper than goods made in the USA. Actually there was already a study on this. How could something be bad for the economy if a store sells items for cheaper allowing people with limited income to buy products at a lower price. It actually stimulates the economy because people have more money to spend on other things.

2. 40 to 60 percent of employees are part time and only recieve benefits after a year with the company. A lot of companies are like this. This is what every company in America wants right now part time employees so that can limit their work hours. and save money that way. That's why Unions are trying to organize stores such as best buy, wal mart, and many other big box stores. So that workers can get benefits within 90 days of starting and get vacation time after one year of work.

3. They start their pay scale out very low and keep most people at a below poverty subsistence rate. Most retail stores have become this way. Mainly those without union contracts. If you make it to ten dollars an hour you might be the highest paid person in the store. It's not just wal mart that is doing this there are other stores that are less known such as meijer that are doing this. And by doing this it leads to high turn over, which leads to poor service, which leads to mad customers.

4. The schedule of work varies so much it disrupts sleep cycles and is unhealthy. Every retail store or company that works in retail is like this. If you take a job in retail just expect to be asked to work odd shifts. This is another thing unions can take care of they can make it so there are certain shifts that can be bid on per seniority. So you don't get a morning shift one day and a night shift the next and then a morning shift the following day.

I'm not saying wal mart is not wrong because I have only bought one thing in my entire life from wal mart and that was on line. I don't like their store lay out it's a bunch of clutter.

And I'm not saying a union is the answer to solving these problems. But a union will get a fair hourly rate, scheduling, and benefits, that you might not get without a union. as for goods from china and other countries if your wearing nikes right now they were probably made in thailand. The hat I'm wearing now that was given to me by my work that is a US company was made in china. I don't think this is something we can get away from.

Answer 5

I was thinking about your points, and that most of these points could be applied to ANY company.

So, to be fair, if you shop at all, you're a hypocrite. Target, Kmart, Gottshalks, Macy's, EB games, etc, or even the local True Value.

And for that matter any gas station/convenience store. Ask the clerk at 11 pm at 7eleven about their sleep schedule, pay scale etc. Every point you make applies.

I think Walmart is the only reason we have not had a recession, or economic downturn. Trade is good. Walmart gets the goods to you.

This is a good article. I know there's a new book out also, but I don't' have time to search for the link, showing how good walmart is for America and our economy.

They are a great American success story, and good for America.

Answer 6

The ONLY reason a retail store exists is to serve the consumer, and Wal-Mart does an excellent job of this, giving a wide variety of products at low prices. Wal-Mart is particularly beneficial to small towns, which previously were denied anything remotely like the variety and low prices they get at Wal-Mart.

Since consumers can satisfy their need for basic staples more cheaply at Wal-Mart, they now have more money left over to buy other things. Thus they are able to satisfy more needs with the same amount of money. This is the very epitome of how the economy becomes more productive, which makes people richer, not poorer. This is also why we have such a richer variety of jobs and careers today that in years past (and we undeniably do, in case you'd rather be pounding railroad spikes in the hot sun than make a living selling virtual land in Second Life).

A McKinsey study a few years ago found that Wal-Mart was single-handedly responsible for something like 40% of the US economy's productivity growth in the 1990s. It cannot be emphasized enough that such productivity growth is THE most important economic characteristic that makes all people alike better off over time. This is why we live a life of inconceivable comfort and wealth compared to our ancestors 100 years ago. This is why you have the Internet to use.

Finally, if employees are unsatisfied with working at Wal-Mart they can quit, they are not slaves. It is nonsense to think Wal-Mart "destroys" a town's jobs. If you're only productive skill in life is working in a retail store, you have no one to blame but yourself for being so useless. Nonetheless. EVERY town that has a Wal-Mart ALSO has plenty of other retail jobs -- very often created in a new store built near the Wal Mart Super Center, which serves as an excellent anchor for a shopping center area.

Answer 7

I like Wal-Mart because of its honest pricing. Wal-Mart doesn't manipulate shoppers with sales, loss leaders, or store coupons. (I know Wal-Mart honors manufacturer coupons ... that's a different subject).

Also, Wal-Mart hires people other companies don't. I realize they don't get competitive benefits and wages. But even a "second-rate" job is better for self-esteem and finances than unemployment. I am profoundly grateful to Wal-Mart for giving full-time employment to a person in my life. This man lost his well-compensated career when he lost some mental and physical abilities, and remained unemployed a long time. Working again has greatly improved his life.

Answer 8

I agree that Wal-mart is bad for the economy. That said your points are poorly researched and have nothing to do with Walmarts affects on the economy.

1. In case you haven't noticed our economy has been in the process of changing AWAY from a manufacturing base to a service one. We have moved passed the industrial stage of our economic growth, manufacturing jobs would leave this country regardless of Walmarts actions. It not longer cost effective to have factories in the U.S. since most of the raw materials are imported now.

2. I believe your figures of the percentage of part-time work are rather conservative, i think its more like 75%. That said, how is that a bad thing? Its not. Look at the rest of the retail industry, the figures are similar. No one should be making Walmart their career, unless they seek management. It a decent first job, a job for retirees, as a second income, and for students; thats it. Bottom line a floor associate should not be making 12 bucks an hour, the job isn't valuable enough. What does concern me is that some people get "stuck" in this kind of work for whatever reason. Rather then artificially inflating the value of this work, i believe we would be better served to offer comprehensive job training for people.

3. No one should think they can support a family on what is made in ANY form of retail. I did work at Walmart for two years and was able to live on my own. Was it fun? no. Was i going out, and buying things other then the basic necessity's of life? no. But i was able to rent a room, keep up with my bills, and eat. Then i moved on after a couple years, which is what everyone should do.

4. HELLO! Most of the jobs in the U.S. have VERY demanding schedules. the days of the 9 to 5 are dead. We are a 24 hour culture now, and it has nothing to do with Walmart. As a people we work too much, eat too much, and basically treat our bodies like dumpsters. That trend is not going to be undone by attacking only one of many jobs sectors that is part of this trend, never mind attacking only one company within one sector.

Walmart is bad for the economy but not for ANY of the reasons you stated. Walmart affects property values negatively, it stifles local economy's, makes it hard for new companies to get off the ground and for established ones to keep up. All that aside it is also a dead beat when it comes to paying its taxes, taxes dollars it is obligated to pay under current law. This is money that could be used for public works projects, loans to new businesses, or even to retrain displaced manufacturing workers.

Answer 9

I live in a rural area and WalMart is the ONLY place in the entire county where you can get many of the things needed. there are other grocery stores, which cost more, but for most things, we have to go into the next county. many of the people who live here don't have vehicles and can't afford to pay a taxi to take them out of town. there is no public transit system. they're also open 24/7 so people like my daughter that work 12 hours a day, 7 days a week (in agriculture) can go when they have the time. no' it's not perfect, but for many, it's all there is.

Answer 10

Yes, I know. But they have run a lot of the other stores out of business. I feel like I'm being "forced" to shop there. My choices and variety of merchandise has dwindled since Walmart has come into power. They are building a Super Walmart down the road from where I live now.
I think I hate this. The traffic alone will ruin the neighborhood.
I may burn it down late one night. (in my dreams)