Why Is Walmart Bad For The Economy
Is Wal-Mart bad for the Economy?
Wal-Mart is the largest employer in the United States, and the largest public corporation by revenue. While the argument can be made that the United States’ largest employer cannot possibly be bad for the economy, Wal-Mart’s habit of dominating markets and use of less-than-honest labor and business practices has contributed to the steady decline of the traditional American small business. Wal-Mart’s conundrum with the economy is that it provides premium services and goods at a price well below that of any competitor. The size and scope of the company’s operations allows for them to put pressure on the companies that produce these goods. Wal-Mart often uses outsourced labor and imported goods as a means …show more content…
of keeping the price tag well below that of their competitors, and this in turn fuels a major problem with the economy. These companies that have built their entire name and reputation around a quality product that people are willing to pay a premium for are now forced to remove that premium in order to deal with the largest retailer. Wal-Mart continues to profit and grow while its producers continue to suffer. You have to either play the game their way or suffer the consequences. While the end consumer benefits greatly from this practice, at what cost to the entire economic system?
While the country deals with the worst economic downturn in years, Wal-Mart continues to thrive. Its business model is predicated upon greed. Not greed in the sense of attempting to gain and control all the money it possibly can, but rather all the business it possibly can. You can’t be a successful business these days without dealing with Wal-Mart. Their reach is simply too vast. They’ve become an unstoppable juggernaut of low prices and large quantities. If you want your product reaching a national audience you must put it on Wal-Mart’s shelves, and to do that you have to compromise what you’ve worked so hard to build: your image and standards. There is simply no room for the “Mom and Pop” retailer in a business world where Wal-Mart exists. They can’t compete. Consumers will naturally seek out a place where they can get ridiculously low prices and everything they need under one roof. You cannot beat their price, you cannot beat their selection, and you cannot beat their proliferation.
One of the founding tenets of Capitalism is that every producer is free to make their own decisions in regards to what and how much they produce.
Wal-Mart removes this freedom and forces businesses to produce what they want and how much of it they want. There is no other choice. For example, Wal-Mart essentially held the Vlassic pickle company hostage over the one-gallon jar of pickles they wanted priced under three dollars. Wal-Mart refused to allow Vlassic any room on the deal, stating that if they wouldn’t produce it they would go somewhere else to get the product. Vlassic was forced to compromise the image of quality they had worked so hard to produce over the years and submit to Wal-Mart’s demands of a massive jar of pickles at a ridiculously low price. This type of behavior hurts the economy by forcing producers to compromise their profits and increase Wal-Mart’s. The rich get richer and the poor get …show more content…
poorer.
Wal-Mart has often been accused of treating their employees much like their producers.
If it doesn’t benefit them, then they’re not interested. In 2008 a Minnesota judge ruled that Wal-Mart had violated labor practices more than two million times by forcing workers to work off the clock without pay and not allowing them time for breaks. In 2000, Wal-Mart settled out of court with 69,000 workers in Colorado who also claimed they had been force to work off the clock. In 2005, they were forced to pay 172 million dollars to 116,000 California employees who had been denied a lunch break on shifts over six hours. In total, Wal-Mart has 53 class action lawsuits over wage and labor violations in the United States. This is not necessarily a massive impact on the economy because these workers aren’t paid a great sum of money, but a company that is willing to compromise the very thing that makes them able to operate in order to try to squeeze a little more profit out of their books is not the kind of place that I want operating in my America.
All-in-all, Wal-Mart does provide jobs. It does provide a place for the uneducated lower-middle class to work for a paycheck. It does bring unbelievably low prices to the end consumer for nearly every item in the store. But what it does not do is help the economy. If the only thing that matters to you in business is profit then you’re in it for the wrong reasons and hurting everyone else in the process. A business that doesn’t respect its workers
or business partners doesn’t help anyone or anything but itself.
Sources
The Wal-Mart You Don't Know
By: Charles Fishman http://www.fastcompany.com/magazine/77/walmart.html Wal-Mart Watch http://walmartwatch.com/ The Man Who Said No to Wal-Mart
By: Charles Fishman
http://www.fastcompany.com/magazine/102/open_snapper.html
Wal-Mart is the largest employer in the United States, and the largest public corporation by revenue. While the argument can be made that the United States’ largest employer cannot possibly be bad for the economy, Wal-Mart’s habit of dominating markets and use of less-than-honest labor and business practices has contributed to the steady decline of the traditional American small business. Wal-Mart’s conundrum with the economy is that it provides premium services and goods at a price well below that of any competitor. The size and scope of the company’s operations allows for them to put pressure on the companies that produce these goods. Wal-Mart often uses outsourced labor and imported goods as a means …show more content…
of keeping the price tag well below that of their competitors, and this in turn fuels a major problem with the economy. These companies that have built their entire name and reputation around a quality product that people are willing to pay a premium for are now forced to remove that premium in order to deal with the largest retailer. Wal-Mart continues to profit and grow while its producers continue to suffer. You have to either play the game their way or suffer the consequences. While the end consumer benefits greatly from this practice, at what cost to the entire economic system?
While the country deals with the worst economic downturn in years, Wal-Mart continues to thrive. Its business model is predicated upon greed. Not greed in the sense of attempting to gain and control all the money it possibly can, but rather all the business it possibly can. You can’t be a successful business these days without dealing with Wal-Mart. Their reach is simply too vast. They’ve become an unstoppable juggernaut of low prices and large quantities. If you want your product reaching a national audience you must put it on Wal-Mart’s shelves, and to do that you have to compromise what you’ve worked so hard to build: your image and standards. There is simply no room for the “Mom and Pop” retailer in a business world where Wal-Mart exists. They can’t compete. Consumers will naturally seek out a place where they can get ridiculously low prices and everything they need under one roof. You cannot beat their price, you cannot beat their selection, and you cannot beat their proliferation.
One of the founding tenets of Capitalism is that every producer is free to make their own decisions in regards to what and how much they produce.
Wal-Mart removes this freedom and forces businesses to produce what they want and how much of it they want. There is no other choice. For example, Wal-Mart essentially held the Vlassic pickle company hostage over the one-gallon jar of pickles they wanted priced under three dollars. Wal-Mart refused to allow Vlassic any room on the deal, stating that if they wouldn’t produce it they would go somewhere else to get the product. Vlassic was forced to compromise the image of quality they had worked so hard to produce over the years and submit to Wal-Mart’s demands of a massive jar of pickles at a ridiculously low price. This type of behavior hurts the economy by forcing producers to compromise their profits and increase Wal-Mart’s. The rich get richer and the poor get …show more content…
poorer.
Wal-Mart has often been accused of treating their employees much like their producers.
If it doesn’t benefit them, then they’re not interested. In 2008 a Minnesota judge ruled that Wal-Mart had violated labor practices more than two million times by forcing workers to work off the clock without pay and not allowing them time for breaks. In 2000, Wal-Mart settled out of court with 69,000 workers in Colorado who also claimed they had been force to work off the clock. In 2005, they were forced to pay 172 million dollars to 116,000 California employees who had been denied a lunch break on shifts over six hours. In total, Wal-Mart has 53 class action lawsuits over wage and labor violations in the United States. This is not necessarily a massive impact on the economy because these workers aren’t paid a great sum of money, but a company that is willing to compromise the very thing that makes them able to operate in order to try to squeeze a little more profit out of their books is not the kind of place that I want operating in my America.
All-in-all, Wal-Mart does provide jobs. It does provide a place for the uneducated lower-middle class to work for a paycheck. It does bring unbelievably low prices to the end consumer for nearly every item in the store. But what it does not do is help the economy. If the only thing that matters to you in business is profit then you’re in it for the wrong reasons and hurting everyone else in the process. A business that doesn’t respect its workers
or business partners doesn’t help anyone or anything but itself.
Sources
The Wal-Mart You Don't Know
By: Charles Fishman http://www.fastcompany.com/magazine/77/walmart.html Wal-Mart Watch http://walmartwatch.com/ The Man Who Said No to Wal-Mart
By: Charles Fishman
http://www.fastcompany.com/magazine/102/open_snapper.html