Walmart the Job Killer

From 1993-7, Robert Reich was President Clinton's Secretary of Labor and now complains about how big box stores, like Walmart, have outsized power to set poor standards for wages and workplace conditions. Walmart and others are simply taking advantage of the "system" in America for job creation. According to Reich, the global retailer is a job destroyer because these large retailers actually suck jobs from the local economy where they are built. For instance, studies show that when a Walmart store is built for every job the store creates, 1.5 jobs are lost. When Walmart wanted to expand a store into a new "super store" where it is also selling groceries, it may create 85 new low end and paying jobs but the smaller competitors in a large radius will lose business from competition and people will lose jobs as stores close or cutback.

Only about 6% of the nation's workers are unionized, in the 1950's, it was 30%. The Walmart type stores dominate the local economy with their consumer appeal and low prices but that means the jobs they create are not paying more than $8-9 hr. While the workers get these horrible wages, the executives have received about 300 times more than those in sales or pushing stock. When Walmart comes to a town, even large cities, the planning commission must assess whether the local smaller merchants will be hurt by their clout. Smaller businesses cannot compete with Walmart and the consumer will go where the cheaper prices are. Sooner or later, the economic loss to the small stores will reduce jobs or close. It happens all the time. Cities have a dilemma because Walmart generates huge amounts of services and property tax revenue to the city.

Walmart favors hiring only those in the low spectrum of workers because many of them qualify in getting some county aid, like food stamps, supplemental payments, Section 8 housing etc. They favor them because the government provides many work related programs where Walmart would only pay $4 of the $9 dollar per hour wage. This is the incentive the government gives to retailers to hire those at the bottom. But, this allows Walmart to keep their wages low even to middle management.

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Comments 3 comments

HSchneider 3 years ago from Parsippany, New Jersey

Your analysis is right on target, Perrya. Wal-Mart has incredible control on prices and the entire retail chain that they can destroy competition and keep wages and benefits incredibly low. Many communities are stopping their expansion. They fear the repercussions across their localities.


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perrya 3 years ago Author

Yes, I know we have such an issue.


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Gypsy Willow 3 years ago from Lake Tahoe Nevada USA , Wales UK and Taupo New Zealand

Sad because I must admit to shopping there occasionally because of their low prices. Very sad for local small shops they don't stand a chance.

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