Local Effects

Introduction to Negative Impacts

• Wal-Mart is the largest private sector employer in the United States. There is constant controversy over whether Wal-Mart makes positive or negative contributions to the US economy or society in general. Although critics propose many arguments that show Wal-Mart's negative effects, there are three main points that they continuously bring up:

1. Poor treatment of employees
2. Affect it has on small businesses in the area
3. Use of foreign products

• "First theres the clobbering of Main Street: Wal-Mart moves in onthe edges of towns, and the smaller downtown merchants soon go under. Second, there;s the miserable wage and benefits package offered by Sam Walton's creation. And third, there's Wal-Mart's purchasing strategy, which seems to be about buying American -made products only as a last resort -- to the point that today Wal-Mart, by itself, is China's eighth largest trading partner!"

Leo Hindry Jr. BusinessWeek

• Focusing on Wal-Marts effects on small businesses or local markets, popular belief says that because of Wal-Marts, “everyday low prices” it forces small “mom and pop” type businesses into bankruptcy. 99% of businesses in the US are considered small businesses. Small businesses are usually defined as an independent business that has less than 500 employees. They are responsible for providing anywhere between 60 and 80% of the net new jobs in the US and small business share of employment remains at about 50%. In other words, in many ways business in the US is centered on small firms and institutions like Wal-Mart are a threat to their existence.

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How Wal- Mart Affects Local Businesses

Popular Belief

• Drives competitors out of Business
• Puts people out of work or forces them to work for lower wages
• Increases purchases of retail