Summary
Two studies reveal that Walmart’s entry into communities lowers household incomes by 6% over 10 years and increases poverty by 8%, even when accounting for cost savings.
Its practices, such as undercutting competitors, suppressing wages, and squeezing suppliers, harm local economies by reducing employment and forcing smaller businesses to close.
Walmart’s “monopsony power” enables it to pay lower wages and dominate suppliers, compounding these effects.
The findings challenge the idea that low prices alone benefit communities, emphasizing long-term economic harm.
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I just despise this, the deck is stacked against us so hard that a normal life feels so… Utopian in how impossible it is to acquire.
I thoroughly enjoyed this article. It was full of cited information and even the sources led to interesting reads.
The Walton Family are terrorists
For the morons out there: No, this does not mean high prices are good. It just means low prices can sometimes be bad if certain principles aren’t in play. You’re welcome.
- lower prices until other small businesses close down
- increase the price back
- everyone needs to buy from you because you are the only supplier
- profit
It’s even more insidious:
- Lower prices to drive out all competition
- Become largest local employer
- Keep wages low, people don’t have many other jobs to choose
- Everyone has to buy from you, and those working for you are stuck in their low-wage jobs
- Excessive profits
This just in, studies rediscover basic functions of an economy. Again.
A few more studies bro, just a few more. We are sure to figure this stuff out if we just do another study.
Someone should look into this capitalism thing and see if its creating any problems, surprised noone has thought about it till now
Oh yeah, we should do a study…
Wait a minute, I am on to you grant boi…
Another quality-of-life lowering thing caused by Walmart/Amazon that’s obvious but they didn’t go into, is that once Walmart and Amazon have eliminated so many local businesses, everyone is forced to shop at them. Even if we don’t want to, we have nowhere else to go–we can’t just boycott them and still get stuff we need.
Walmart decides what you will and won’t have access to buy. They’ve pared down the variety of brands and offer a subset of items by those brands minimum, for their efficiency of ordering and stocking items, including groceries. Then the brands stop making the items that Walmart decided not to stock, so they’re gone. There are still a few other grocery stores but most have them have merged into a few mega-grocery chains with the same issues as with Walmart.
So even if you’re OK with going to Walmart your choices are limited (those of us old enough to remember things we used to be able to buy that are long gone these days may notice this more). So what it’s come down to is you get what Walmart offers you, or you order it from Amazon or Temu. There are still a few places to get real things of good quality, but they’re harder to find, never local stores, so you have to order online sight unseen, and of course it’s an expensive and time-consuming process compared to being able to just go to the store and grab something.
Their stores extract local spending dollars and transfer them to shareholders who live in gated communities.
If they paid more in wages than a store made in profits they would close the store.
Yes to the first part, but the second part is just how businesses work? If your gross income is lower than your expenses you’re operating at a loss and it’s not sustainable. Wages should absolutely be higher, though. Quick back-of-the-napkin math shows that last year Walmart made a net profit of over 11 billion dollars and employed just over 2 million people. They could boost every single employee’s pay by $5000 annually and still make a billion dollars in profit.
They could boost every single employee’s pay by $5000 annually and still make a billion dollars in profit.
Except for the corporate employees / managers, which get stock options that are much higher than $5,000 annually ofc
Yes it is exactly how corporations work. That is the root cause of the problem.
It should be no suprise that the corporations are sucking the country dry.
The need is for an economic implementation that does not lead to death by parasite to most of the land.
Okay for Walmart. Now, is it the same or worse with Amazon ?
If the majority of Walmart shoppers and employees are MAGAts, then carry on shopping there and I hope they stay loyal while Mango Mussolini drives prices through the ceiling fan with shit spraying all over the place.
Walmart is bad for small town America. And the rest of America too.
Walmart encourages their employees to apply for federal and state programs like food stamps because they don’t give their employees enough hours and give them weird shifts making it hard to even have another job.
And then they want them to use them at Walmart.
It’s disgusting.
Walmart is one of the largest welfare queens in the country. They profit off of poverty, and are actively incentivized to not only keep communities poor, but to make them poor.
You get a 10% employee discount!*
*Limited items, only available for employees who work 40+ hours/week (which is almost nobody). All grocery items are ineligible.
This was proven decades ago.
I wonder what an ideal structure is that does the opposite. I know the obvious “small business” etc, but like as policy what structure would make a populace more wealthy?
Mixed zoning would probably help.
Stop vertical integration (ban the fuck out of it) and give anti monopoly laws teeth. The reason Walmart at the like can do this is by making themselves the only real choice for the poor (and then making everyone poorer).
Edit: also to add things like walmart hold suppliers over a barrel so if you ban the vertical bullshit you also give the companies supplying walmart more ability to ask for more.
I was buying camping equipment from walmart. They were out of some of my supplies and a new tent I wanted. I ordered alternative items from a online store and they were so much higher quality than the ones at walmart. Walmart squeezes its suppliers so much you end up with items that are more cheaply made. I’ve tested this on several different items and have discovered that walmart sources many of their brands straight from china. You can buy the same cheap shit from temu.
Theres literally documentaries from 2010 about manufacturers who make a “Walmart version” because Walmart demands these factories make them at a specific price.
Like in one documentary, the same toaster from Target and Walmart, the Walmart one had different cheaper parts inside. TVs, furniture, lamps. Even the plastic storage containers like totes and Tupperware had “Walmart” versions that were real flimsy.
They also do this with Black Friday electronics now too.
That’s not new either. Been going on for ages.
Snapper Mowers actually pulled from Walmart in 2006 because they wanted to focus high quality products rather then moving quantity.
Selling Snapper lawn mowers at Wal-Mart wasn’t just incompatible with Snapper’s future – Wier thought it was hazardous to Snapper’s health. Snapper is known in the outdoor-equipment business not for huge volume but for quality, reliability, durability. A well-maintained Snapper lawn mower will last decades; many customers buy the mowers as adults because their fathers used them when they were kids. But Snapper lawn mowers are not cheap, any more than a Viking range is cheap. The value isn’t in the price, it’s in the performance and the longevity.
Later in 2013, Briggs & Stratton decided to start selling Snapper in Walmarts again. 2014, Briggs & Stratton closed a Snapper plant. They then had to restructure and other corporate BS, so fuck around and find out. Publicly traded company garbage.
That’s why you operate multiple brands. You’ve got your Walmart brand and your decent brand and your overpriced luxury brand all pumped out of the same overseas factory
Isn’t that the logic behind what happened to Breyers Ice Cream. It started as a high end ice cream, but got bought Unilever, which then reduced the cream to the point that it can no longer be called Ice Cream.
Low prices AND low value. The cheap ass shit they sell is intended to break and be replaced as quickly as possible. E.g. cheap clothes that wear out quickly. Those who can’t afford better are thus trapped in a cycle of repeat buying.
The boot problem as written by Terry Pratchett. You can buy crappy boots every year for 25 dollars or boots for life for 100 dollars.
Where can I get these lifetime boots for $100?
Probably somewhere like Red Wing. Though they’re probably more than 100 now, you can get them resoled when the soles wear out.
So I’m gonna push back on this notion that quality boots that last a long time are even close to this price.
Red Wings are typically $180-270. I have a friend who does resoles and charges around $100-120. I’ve heard folks get their boots resoled every 2-3 years or so. Don’t know if that’s typical. So assuming a “lifetime” is 20 years and you resole 5 times in that period, you are looking at around $200+$500 minimum, not even accounting for inflation. Big difference.
I’ve never owned Red Wings - I will check them out but I note they do not make chelsea/chukka steel toe work boots in appropriate sizes. I wear Blundstone 990s because they are unisex, not too expensive and are pretty bomb proof.
They cannot be resoled but I find since I wear them for work I wear the sole and leather at about the same rate anyway and they typically will last me 3-4 years.
tl;dr I don’t think $100 “lifetime” boots exist, even behind magical mirrors.
The book they were referring to was written over 30 years ago. Of course they don’t exist anymore at that price, but I think the overall point still stands, if all you can afford is the lowest quality boots, you’ll end up paying more in the long run than if you could afford to buy better quality boots that can be repaired.
You have to find the right mirror in a Ross that reflects a tiny door behind you, only big enough to crawl through, where a decrepit shoemaker has been waiting for you. $100 but you will have non-Euclidean nightmares.
Indeed. And worse, wealthy get a discount on everything - an obvious example being that f you have lots of money you don’t need to get a car loan or even a mortgage. More likely you are the one, indirectly, making the loans and earning interest for the huge effort you expended being wealthy.
Isn’t this obvious?
If an outside Corp comes in displacing local business, the profits that would cycle back into that community now get taken out. It doesn’t matter what the prices are, when the community as a whole has less money with each transaction.
So tariff math might be a thing
In part.
That’s one of the long term goals. But tariffs have short term economic effects, and political effects that also need to be taken into account.
Tariffs are more complicated.
Thank you for pointing this out. When you shop small locally-owned businesses, the money is often directly reinjected into local economies. The money you spend at locally businesses puts a girl through ballet lessons instead of putting dollars towards a new yacht. And the ballet company is owned by your neighbor.
If people really want to fight income inequality, stop giving your money to billionaires everywhere you can.
I’m not sure it has been empirically proven.
Hypotheses that make sense at face value are dime a dozen in economics. Some of Milton Friedman’s hypotheses on inflation made sense but were proven wrong. Nevertheless they were used for decades to drive policy with horrible impact on the working class. Lots of people still believe they’re true, because they make sense at face value.
It’s trade balance and it’s very well proven. If the money coming into a community is less than the money going out then that’s going to affect everything from road repair to groceries bought.
This is why at the international level there are balance payments in trade deals.
The “velocity of money” has been very much proven. You take money out of a community, you deny it to that community. That’s why the existence of the wealthy is the presence of a parasite.
To be precise, assets, not money
The “velocity of money” has absolutely nothing to do with assets.
