FLORIDA, September 21, 2012 — Regardless of whether you are struggling to get by or independently wealthy, it is likely that you shop around for the best bargain.
For untold millions, Walmart is not simply a place to shop, but the place. Considering that the quintessential big-box retailer offers an impeccable variety of conventional items at affordable prices, this is not surprising. However, at what cost does this convenience come, and in the grander scheme of things, is what Walmart has to offer really convenience at all?
It is hard to imagine the company’s ownership not saying so, and the same goes for throngs of eager consumers. Many economists, social scientists, and former employees, though, have a different opinion. While we tend to believe whichever side of the argument we like best, where do the facts lie?
It should be known that every single American taxpayer is essentially footing the bill for Walmart’s existence. According to Reuters and a study published last year by Hunter College, company employees receive inadequate health insurance coverage. In turn, they are left with few other options than to apply for public assistance. Beyond providing a lack of medical benefits, Walmart’s presence in most regions, says the study, “depresses area wages … pushes out more retail jobs than it creates, and results in more retail vacancies.”
Across New York City, especially in the borough of Brooklyn, a groundswell of activism has resulted in widespread hostility toward any Walmarts breaking ground. This issue has accomplished a rare feat: putting businesses, public officeholders and private citizens on the same side of an argument.
New York City Public Advocate Bill de Blasio has referred to the opening of a Walmart as a “Trojan horse.” He told Reuters that although Walmart is “appealing to a lot of families who are hurting … it turns into a big problem in the long term because of the net elimination of jobs.” Mark Tanis, the proprietor of a local shopping center, is more blunt, “[Walmart] would be a disaster. It would have a detrimental impact on our area.”
Walmart spokesman Steve Restivo questioned the validity of their concerns, claiming that the establishment of Walmarts around New York City would bring economic revival and better opportunities for grocery shopping. The Walmart corporate apparatus believes that the Center for Community Planning report which lent credence to many New Yorkers’ fears is based upon “randomly selected statements from … flawed studies.”
Beyond the economic controversies, many harbor ill will toward Walmart due to its treatment of employees. According to BusinessWeek senior writer Anthony Bianco in his 2007 book, Wal-Mart: The Bully of Bentonville: How the High Cost of Everyday Low Prices is Hurting America, the superstore pays its workers an average hourly wage of $9.68, well below the national retail worker’s average of $12.28. Starting wages are even lower.
With all of these problems brought into the equation, one might wonder how Walmart’s competitors stack up in comparison. Jim Stinson, a writer for northwest Indiana’s Post-Tribune, set out to find the answer during the summer of 2006. He discovered that Walmarts in his vicinity actually paid less than most others from coast to coast do, compensating floor workers at roughly $7 per hour.
Target, a decidedly higher end retailing giant, had a starting salary of $7.50. Menards, a midwestern home improvement chain, paid $8.50 — a noticeable increase from either Walmart or Target. All of them paid their workers better than Staples, the nationwide big box office supply powerhouse, where the average wage was a paltry $6.05 for new employees. But all four are topped by Costco, perhaps America’s most prominent string of discount warehouses. Costco’s base hourly salary rang in at a respectable $10 an hour.
Stinson also discovered that local politicians looked past big box retailers’ financial figures. They considered other important factors such as hiring policy and whether the jobs offered were full- or part-time. Both of these were key as public officeholders feared that new stores designed for a one-stop-shopping experience might drive out older community oriented businesses.
Dan Klein, then the mayor of Crown Point, asked a pointed question: “What value do [big box stores] bring to a community?” He added, “When it starts to affect quality of life and community, I don’t agree with it.”
His counterpart in neighboring Chesterton and a majority of that town’s councillors apparently asked themselves a similar question, concluding that the social price tag of big box retailers is not worth the time or effort. They rejected plans for big box development and, as of Stinson’s article’s publication, had few regrets.
This still leaves the question of how Walmart compares to its opposite numbers in terms of labor selection and benefits. The stark reality is that a broad share of persons seeking jobs at big box chains tend to be young, undereducated, and struggling financially. Most big box employers tend to hire as many part time workers as possible in order to keep overhead at a minimum. Walmart is by far the most prominent offender, and by some accounts the most aggressive, but has no shortage of competitors at its heels.
It would be very difficult for me to say that Walmart is a uniformly terrible institution. It provides thousands of men and women with the thing that they need most: a job. However, it would be equally difficult for me to say that it has been an overall plus for the American economy. There has never been another business entity like it, and it is doubtful that there ever will be.
Walmart is simply too big and too powerful to be toppled; it is the poster child for capitalism without true competition. No government quota or anti-monopoly law could possibly halt the remarkable progress it has made over the last several decades. The superstore has become not just a shopping center, but a cultural icon. Some might even describe it as a way of life.
Assuredly, those low prices at high expense will be around for years to come.
Much of this article was first published as Walmart’s Low Prices Bear a High Cost for America on Blogcritics.org
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