Walmart Can Cost Surrounding Communities Millions In Lost Wages, Economic Activity: Study

Let's say a new Walmart is opening in your town. Should you be worried?

According to recent research from a Seattle-area advocacy group, the answer is a definitive yes.

The group, Puget Sound Sage, released a study earlier this month arguing that a planned Walmart store in that area will cost the community $13 million in economic activity and $14.5 million in lost wages over the next 20 years.

The study predicts that a South Seattle Walmart will siphon business away from local retailers, and pay its employees much lower wages than they'd get working elsewhere.

The Puget Sound group's findings arrive at a moment when Walmart's expansion tactics are coming under fire. Walmart, the country's largest retailer and one of the biggest corporations in the world, currently faces accusations that its Mexican subsidiary made several bribes to the Mexican government to speed up the process of opening new stores in the country.

A Justice Department investigation is underway, and Walmart could end up facing billions in fines.

The effects of the retail giant on local communities once it's able to open a store has long been a subject of heated debate. The report from Puget Sound Sage, which describes itself on its website as an alliance between "labor, faith and community," isn't the first to examine the economic impact of Walmart in recent years. And not every such study has turned up a forecast this grim.

Different researchers have come to different conclusions. In 2005, a study by the firm Global Insight found that Walmart's low prices had enabled shoppers to save about $263 billion over the past 20 years. Months later, researchers at the left-leaning Economic Policy Institute issued a sharp critique of the Global Insights report, calling it "unreliable" and "deeply flawed."

Other reports have been agnostic on the Walmart question, arguing that the retailer often makes little economic impact on nearby communities. Even that's not necessarily good news, as it suggests a new Walmart location can sometimes make minimal difference in terms of hiring in areas with high unemployment.

Comments

[ejackhai27]

01:04 AM on 05/16/2012

Like, bribery in Mexico is a new thing. Get real.

[James F Barry]

08:03 PM on 05/05/2012

Wal-Mart is an evil company, anyone who shops in its stores are going to Hell.

[BGordo]

08:15 PM on 04/25/2012

Wal-Mart is an interesting study. It is simply a reflection or a reminder of what is really going on in the world. To say that it is "good" or "bad" really misses the point of the discussion. Is it what we really want? If not, then I would ask for someone to come up with something better. I wonder how many of these people who are posting are from the midwestern US which is where Wal-Mart started. While I am neither for or against it, it is definitely serving a significant portion of the population of this country because it has found the most effective way to do that otherwise it wouldn't have the success it has had.

[pragview13]

06:55 PM on 04/25/2012

Walmart pays lower wages, when Walmart moves in, the surrounding area ends up giving tax breaks to Walmart, the town has to pay for roads and sewer hook-ups. Walmart, as a corporation is resposible for the off-shoring of easily over a million U.S. jobs I am very happy to see peolple fighting back against Walmart!

[tacevad]

06:47 PM on 04/25/2012

Walmart's brick & mortar days are numbered.Online shopping will eat them alive.And in the end local jobs will disappear even further.

[gibby1855]

06:10 PM on 04/25/2012

Everything at Walmart smells like plastic and rubber

[JoeMomma]

04:27 PM on 04/25/2012

I just don't shop there. Nothing but cheap crap made in China.

[scndchnchtr]

04:09 PM on 04/25/2012

"Let's say a new Walmart is opening in your town. Should you be worried?"
Yes! Not only will they stock there shelves with items that a local competitor has. They will actually price those items lower. Once the competitor is taken care of. One of two things will happen. They ether stop stocking the item or the price goes up. They are great at using that low price scheme to remove competition. Then when you have no choice but to buy from them, the price goes up.

[MSROADKILL612]

03:52 PM on 04/25/2012

If USA ever gets HSR, they may as well put the stations in walmarts or malls. The town centers will be dead

[MSROADKILL612]

03:47 PM on 04/25/2012

If you have an Aldi, try them - the food is good here in OZ anyway.

[Berk Law]

03:45 PM on 04/25/2012

Wal-Mart has the reach and power to be a beacon of good conduct and integrity. It can influence many, and its every move—right or wrong—is scrutinized. Let’s hope they use that power in a more positive way. A round of applause for the Walmart whistleblower. Read more at: www.thecorporateobserver.com

[slickbottom]

03:01 PM on 04/25/2012

Walmart has no grocery stores in my area of New Jersey. Walmart's food is inferior to that provided by the more upscale supermarkets in my area so they could not compete. Plus Walmart tried to move into my town. We quashed their plans. Walmart and it's low wage jobs and cheap merchandise from China are not wanted here.

[coolfireone]

02:23 PM on 04/25/2012

Where I live there are both the large Walmart super centers as well as the smaller Walmart Markets (food only). I shop at the latter every day, saving approx. 35 - 40% on the same food as found in the local super markets. None of the super markets have closed. We still have Smith's, Vons, Albertsons, etc. Further I'm not aware of any small businesses having closed near here, at which I had ever shopped or would have shopped, other than as a direct result of the recent recession, which struck the entire nation, independent of Walmart. The construction industry was nearly wiped out, and has not begun to recover. Those loss of jobs have had a much more severe impact on local businesses than any Walmart.

Bottom line: I appreciate Walmart.

[Mike Macguinness]

01:33 PM on 04/25/2012

Walmart helping to make America a 3rd world country we can deny foreign aid to.

[onwisco]

01:28 PM on 04/25/2012

When I did shop at Walmart it came to the point where a new purchase had to be opened in the car to see if the product came pre-broke. That's a sad commentary on their Chinese goods. A friend bought a shower head recently and the hose end was not swaged. If someone unknowing in these matters tried to use it water would have leaked all over.

Don't shop Walmart. Find products made in the USA (and not merely assembled here like HD motorcycles).

[Warren Yuill]

05:39 PM on 04/25/2012

HD isn't making their stuff in the US anymore?

[onwisco]

06:55 PM on 04/25/2012

Most parts are made in Japan or Asia. They are now making bikes in India (or will be very soon). The motorcycles are primarily assembled here but that may change with the India thing.