11/05/2005

Is Wal-Mart a good thing?

Recently Wal-Mart has been under a lot of heat in the press. Is the "little man" finally getting a voice in the matter? Although the voices of smaller companies are finally being heard, a new study can show how collectively Wal-Mart is benefiting the Nation. For examle, Wal-Mart created 210,000 jobs in 2004. The study showed that this was 10% of the total jobs created in the country that year. Also in that same year, Wal-Mart saved an average of $2329 per household. That is remarkable! It should also be considered a benefit for the local communities, because the consumers can spend that money on other aspects within the community. Granted it isn't good for the local retailers, but we must remember that there are numerous companies out there providing goods/services that Wal-Mart cannot provide. Therefore, if Wal-Mart can save people money, then that saved money can go towards putting in a pool, for example. Yes, that is a drastic example, however, I believe it is important to look at all angles when considering the dispute of Wal-Mart being a destroyer of the "little man."

5 comments:

Morgan said...

I am very much pro Wal-Mart. People can call Wal-Mart the demise of society, and can simply shop elsewhere. I, on the other hand am grateful that I have a Wal-Mart in my community that has the goods that I want and need, at much lower prices. Wal-Mart is making money, paying taxes, and therefore helping to fund many of the public benefits that we enjoy. Also, Wal-Mart has made many chartitable donations, and has a very positive effect on economy because of its' ability to employ people, and offer better prices on its goods.

Anonymous said...

You don't mention the quality of life issues the come with Walmart. It saves money, but at what cost in other areas of our culture? There is more to a good life than saving money. We could all save money by a diet of Purina human chow, too. A good life and healthy community is more than just being able to buy more unnecessary plastic junk at ever lower prices.

My mother, who lives in an aging Denver suburb, complains about the demise of the many little shops she long frequented. She spent little money in them, but valued them for service and personal relationships, and for years they all managed to make do. It was a marginal existence for the shop owners. When Walmart opened up she took some of her business there and so did her neighbors. Now all the small shops are gone - every one of them. All they have left is the corporate box shell containing a fantasy landscape of consumer paradise. Their neighborhood is a shallower and cheaper place.

No Walmart greeter will ever make up for what was lost in real community and friendship. Walmart does not care and never will. Its corporate imperitive is simply to make money. Walmart's pretense at caring about people and community is simply marketing BS. They are a business whose bottom line is the bottom line. To claim more is a lie.

My mother still does not get it, either.

Jasmine said...

Whoever anonymous is obviously doesn't understand economics. Wal-Mart is a great company and I am very much a fan of Wal-Mart. I am however, aware of the side affects they can bring along. If the service at Wal-Mart becomes excessively crappy people will stop going. This will create opportunities for competitors to exploit this weakness and remain profitable. It becomes a matter of marketing and exploiting Wal-Mart's weaknesses. Yes, even Wal-Mart has weaknesses. Wal-Mart creates competition, which will either cause it's competitors to improve (which will benefit the consumer) or it will put them out of business. And that is just all apart of the game of life. Besides, I enjoy the cheap plastic crap Wal-Mart provides.

Dr. Tufte said...

-2 on Connor's post for capitalization and spelling errors.

Connor's post is actually quite good (in ways that casual readers may miss). The benefits of Wal-Mart do include the pool you can afford that you can't otherwise. Not counting that is mismeasurement.

One person who doesn't appreciate this is the anonymous commenter. They are engaging in selective counting of costs (which probably explains the use of the appeal to your emotions to hide the factual problems). Yes, there are things that other places offered that Wal-Mart can't replace. But one of those is the extraction of consumer surplus and transformation of it into producer surplus. The "small" "mom and pop" stores that people idolize are experts at giving customers less than they deserve. How is that good?

Trevor said...

This article titled "Demonizing Wal-Mart" discusses the positive side of what Wal-mart does. I quote, "The end result is better nutrition in America, especially among lower-income households, and less poverty and unemployment in Wal-Mart's primary supply regions in southern Chile. Altogether, Wal-Mart's prices, according to a study by M.I.T. economist Jerry Hausman and USDA economist Ephraim Leibtag, are saving U.S. consumers more than $50 billion a year, money that's spent elsewhere, boosting volume at other businesses and creating new enterprises..."

I guess I am just reinforcing Connor's post that Wal-Mart is a good thing.