Poor Wal-Mart or Poor People?

Poor Wal-Mart or Poor People?

Wal-Mart is a company which many people have a love and hate relationship with. Though I infrequently shop there myself I happen to hate the place. Aside from the fact that it is always extremely busy and the service is subpar, it destroys lives. The very nature of this company and other big box stores leads to the destruction of entire communities.

Wal-Mart is the largest corporation in the world, with an annual revenue (2009) of 405.6 billion dollars (CNN Money). It is one of the few companies that has seen growth during the recent recession, because of it low prices. Wal-Mart is known as having the lowest prices of any company in the world. Sounds good right? NO! Those low prices drive small businesses out of business. How can a company compete against a retail giant with a global reach? Wal-Mart profits by making multi-million dollar purchases for goods and distributing them to their stores for resale. A local company does not have the resources to make such a large purchase, therefore they must pay more for the same product; often times the price a local retailer pays is more than Wal-Mart can sell it for.

Wal-Mart does not manufacture anything, it simply buys and resells much like local retailers do; the difference is local retailers buy local, Wal-Mart does not. Aside from the ability to purchase in large quantities Wal-Mart has another profit making, community killing strategy; foreign markets. Wal-Mart is the leader in Chinese-made junk. The advantage of buying from foreign markets is the cost of labor. According to Manufacturing news and Technology, "An average Chinese wage of $0.57 per hour -- or $104 per month -- is about 3 percent of the average U.S. manufacturing worker's wage" (McCormack). Wal-Mart's exploitation of the Chinese worker has led to the closing of American manufacturing facilities, which has cost us millions of jobs, many that were good paying middle-income jobs.

According to a study from the Pennsylvania Department of Agricultural Economics and Rural Sociology, Wal-Mart and poverty may be directly tied together. In a 2004 study comparing the poverty rates of counties before and after a Wal-Mart opened the following conclusion was made :

"After carefully and comprehensively accounting for other local determinants of poverty, we find that the presence of Wal-Mart unequivocally raised family poverty rates in US counties

during the 1990s relative to places that had no such stores" (Goatz and Swaminathan).

Though the study was not able to conclude exactly why this occurred they were able to speculate. They concluded that local stores often utilized local merchants (distributors, lawyers ECT.), which aids in the local economy, whereas Wal-Mart does not. Furthermore the study mentioned that as local merchants are forced to close and