Dana: Local Effects
From Dickinson College Wiki
Introduction to Cons
- 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:
- Poor treatment of employees
- Affect it has on small businesses in the area
- Use of foreign products
- 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.
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
Specific Case Studies
The Economic Impace of Wal Mart: An Assessment of the Wal - Mart Store Proposed for Chicago's West Side
Research was performed by Chirag Mehta, research associate at the UIC Center for Urban Economic Development, Dr. Ron Baiman, research associate at the UIC-CUED and Dr. Joe Persky, Department of Economics at University of Illinois at Chicago
- The prospect of the opening of a new Wal-Mart store on the west side of Chicago has raised concerns about its potential impact on existing retailers. While Wal-Mart suggests that the store will have a positive impact by adding jobs and income to the local economy, this case study proposed a more careful analysis of the development.
Who are Wal - Marts competitors and will it draw in suburban Consumers to Chicago?
