Ross Goldfarb Large Corporations’ Impact on Society and Development Case Study: Walmart
Abstract Walmart is a massive corporation that leaves a lasting eect on every community it decides to settle in! "his paper loo#s into the issue of
Walm almart art
and and
othe otherr
large arge
cor corpor poratio ations ns
neg negativ ative e
impac pact
on
commun communiti ities es and societ societies ies across across $meri $merica! ca! Statis Statistic tics s and opinio opinions ns across the %eb %ere used to collect information about ho% Walmart does their business and %hat its impact is on local communities! "he resul esults ts sh sho% o% that that Walma almart rt #ill #ills s loca locall busi busine ness ss and and does doesn’ n’tt fair fairly ly comp compen ensa sate te its its empl employ oyee ees s for for the the %or# %or# they they do in addi additi tion on to destroying &obs and damaging the environment! It %as concluded that Walmart %ipes out many options %ithin communities' forcing residents hands as the main source of &obs and goods in the community' even though the conditions and impacts are unfavorable!
Introduction I am investigating Walmart and other large corporations’ impact on soci societ ety y and and deve develo lopm pmen ent! t! In orde orderr to do this this I %ill %ill loo# loo# into into Walmart’s eect on local business' Walmart’s %ages and bene(ts for employees' Walmart’s eect on the local environment' and Walmart’s destruction of &obs across multiple platforms! I believe that Walmart may loo# good from the outside' but deep do%n they are a heartless
Ross Goldfarb corporation that is greatly hurting communities! In this research' research' I have foun found d
that that
Walm almart art
is
#ill #illin ing g
local ocal
bus usiines ness'
prov proviiding ding
unfa unfair ir
compensation to employees' and hurting the environment! Walmart is eec eecti tive vely ly #ill #illin ing g the the loca locall busi busine ness ss'' then then hurt hurtin ing g thos those e in the the community %ho are forced to turn to them for help!
Literature Review In the the topi topic c of %het %hethe herr or not not big big corp corpor orati ation ons s are are good good for $mer $meric ica' a' peop people le are torn! torn!
"hose "hose %ho are for it us usua uall lly y poin pointt to
decreased prices of goods and increase in number of &obs as their main arguments! Global Insight did a study in )**+ that said Walmart saved consumers a total of ,)+- million in the past )* years' %hich e.uates to ,)'-)/ per household 0Global Insight' -1! It %as also found that Walmart has been responsible for )2*'*** &obs over time span 0GI' -1! "he research' research' measured by the Consumer 3rice Inde4 0C3I1' concluded that the rise of Walmart led to a 5!)6 reduction in the price of goods and a -!26 decrease in the price of 7all items8 0GI' 251! While this information seems to paint Walmart Walmart in a positive light' a ne% study %as done %hich seems to disprove the data! While GI said that Walmart’s rise lo%ered overall prices by -!26 in the C3I' the 9conomic 3olicy Institute 093I1 found that services Walmart doesn’t provide account for +*6 of the C3I 0ernstein' )1! 9ven if Walmart did account for the other
Ross Goldfarb 5*6' they %ould only be accountable for a 2!;6 increase in overall savings 0ernstein' )1! In loo# loo#iing at the the su surrround oundiing are area' 3anl anle *6 of the decrease in small discount stores8 0 moths moths of Walmart almarts s arri arrival val'' over over 25 e4ist e4isting ing retai retaill establishments close8 0?icano' 21! In addition to the decrease in stores' @ichael Aic#s’ study on the impact of Walmart in @aryland found that retail employment dropped by 525 individuals 0Aic#s' ++1! In terms of the environment' 7Walmart 7 Walmart #ept B*!/ percent of all of its %aste out of land(lls and increased its locally gro%n produce by /; percent in )*228 in addition to being 7the third=largest !S! corporate consumer of green po%er 0rene% 0rene%able able energy18 energy18
0urtE 0 urtEleben leben1! 1! While this is great' great' it has
been found that 7Walmart uses the same amount of energy as 2'*/> S homes do in one day8 in addition gro%ing its carbon footprint by 2-!B6 since )**> 0urtEleben1!
$nother hotly debated topic is if a &ob at Walmart is a great opportunity or a last resort! usiness Insider ta#es both sides of the argument!
$ccording
to
Aenry
lodget'
Walmart
employs
appro appr o4im 4imate ately ly 26 of the ent entir ire e $m $meri erican can %or %or#fo #forc rce e %i %ith th a ful fullti ltime me employee ma#ing ,2) an hour' or ,)>'*** a year' %hich is &ust above the poverty line 0lodget1! Ae argues' 7 If Walmart %ere to give each of its S associates a ,>'*** raise' it %ould cost the company ,; billion a
Ross Goldfarb year! "his %ould reduce WalmartFs operating pro(t to a still=e4tremely= heal health thy y ,) ,)* * bill billio ion! n! It %oul %ould d also also give give 2!5 2!5 mill millio ion n har hard=%o d=%or# r#in ing g $mericans another ,2** a %ee# to spend8 0lodget1! Aayley 3eterson counters by saying Walmart recently announced an hourly pay raise of ,>**'*** for its associates and all hourly employees %ill ma#e at least ,2* ,2 * an hour hour by ne4t ne4t ?ebru ebruar ary y! She She then then comp compar ares es Walma almart rt to Starbuc#s by saying Walmart sales associates earn + cents more on the hour than Starbuc#s baristas and assistant mangers at Walmart ma#e ,5-'/2+ a year to Starbuc#s --'+-5 03eterson1! In addition to money concerns' Walmart is also cutting bene(ts! $ccording to the Wall Street hours a %ee# in )*22! Walmart %ill also raise its premiums for all %or#ers' 7forcing 7forcing them to pay an addition ,2* per pay period %hich ta#es a%ay almost half of %or#ers paychec#s before they even get them8 0an&o1! Walmart also released information that said' 7more than 5;>'*** of its 2 million hourly store employees earn at least ,)>'*** a year for full=time %or#8 0er(eld1! "his means that 7as many as >)>'*** full=time hourly employees earn less than ,)>'*** a year8 ye ar8 0 0er er(e (eld ld1! 1! $ co cong ngrres essi sion onal al repo eport rt ev even en fo foun und d th that at th the e -* -** * employ emp loyees ees at one Walm almart art in Wi Wisco sconsi nsin n re re.ui .uire re ,/ ,/** **'** '*** * %or %orth th of public aid every year 0er(eld1!
Ross Goldfarb In the 2//*s' Walmart’s motto %as 7uy $merican!8 "%enty years later' Walmart has begun buying ,2) billion %orth of goods from Chin China' a' %hic %hich h is near nearly ly 2* 2*6 6 of all all Chin Chines ese e e4po e4port rts s 0?is 0?ishm hman an1! 1! It is argued that all large companies move overseas' but none to the e4tent of Walmart almart!! $fter fter Levi’ Levi’s s ** %or#ers' or )26 of its %or#force! $ company that )) years ago had +* clothing plants in the nited Statesand that %as #no%n as one of the most social soc ially ly re respon sponsib sible le cor corpor porati ations ons on the pla planet net% %ill ill'' by )* )**5' *5' not ma#e any clothes at all! It %ill &ust import them8 0?ishman1!
Findings Initially' I %as interested in seeing opinions and statistics on %hy Walmart and other big corporations could be good for $merica because it %as a side I have not heard much about! $pparently' not many people have! Hot only did I (nd almost no articles on the positives of big business' but also every positive statistic I found had a study done to disprove it! Loo#ing at Walmart from the outside' they have the loo# of company company that has a positi positive ve inuen inuence ce on societ society y: "hey "hey employ employ about 26 of the entire $merican %or#force' %hich means they create much=needed &obsJ they made ,5B> billion in revenue last year' %hich
Ross Goldfarb means people en&oy shopping thereJ and they have the lo%est prices in the business' %hich is great for consumers! ut once you begin to peel bac# the layers' Walmart’s true identity starts to reveal itself' and boy is it ugly! $merica loves locally locally o%ned business! business! $nd %hy shouldn’t theyK Loca Locall busi busine ness ss prom promot otes es entr entrep eprreneu eneurs rshi hip' p' #eeps eeps mone money y in the the comm communi unity ty'' and and reduc educes es envi envirronme onment ntal al impa impact ct in addi additi tion on to a plethora of other positive eects! 3eople %ill go to great lengths to try and #eep local business' as evidenced by the petition signed by over -'*** people to try and #eep Starbuc#s out of 9lon so that the local coee shops could continue to thrive! When big businesses come to to%n' one of the most visible eects is the %iping out of local business! Walmart does this on an e4treme scale' #illing o 5*=>*6 of small retail stores stores in its rise to prominence! $lso' %ithin the (rst 2> months of a Walmart being built' up to 25 small businesses in the community %ill close! "his number is unacceptable and is ruining communities around the country! country! nce these shops are forced to close because of the presence of Walmart' the shops former employees must (nd %or#! @ore li#ely than not' they %ill go to Walmart and be forced to deal %ith one of the %orst &obs in $merica! ecause Walmart is one of the cheapest employers in the nation' they don’t li#e hiring full time employees so that they can pay as little little in bene(ts bene(ts as possible! possible! "he de(nition de(nition of part=time part=time %or# is
Ross Goldfarb %or#ing -> hours or less per %ee#! Walmart has cut health care each of the last t%o years for part=time %or#ers' (rst for people %ho %or# less than )> hours a %ee#' and no% up to everyone %ho %or#s -* hours or less! 9ventually all part time %or#ers %ill be out of luc#! It isn’t much better for full=time %or#ers though' as over half of them earn under ,)>'*** per year' %hich is right at the poverty line for a family of four! In the end' even though these employees have &obs' they get no bene(ts' high premiums' and most still have to use government assistance &ust to get by! "he %ay I see it' this should absolutely be illegal! $noth nother er one one of Walm almart’ art’s s a%fu a%full eect ects s is the amou amount nt of $merican $merican manufacturi manufacturing ng &obs that they destroy destroy!! Initially' Initially' Walmart’s almart’s slogan %as 7uy $merican8' but nearly t%enty years later' they have become the biggest oender of these %ords! y buying ,2) billion %orth of goods from China' they have eectively closed all of their local manufacturers! ut not only that' they’ve even inuenced other to do the same by convincing Levis to close both of their $merican plants and layo all )'>** of its employees!
Conclusion & Recommendations Recommendations "o "o conclude' although the idea of Walmart seems li#e a good conc concep ept' t' it is actu actual ally ly one one of the the %ors %orstt thin things gs to ever ever happ happen en to $merica! Walmart is very eectively #illing local business' #illing &obs'
Ross Goldfarb and oering very poor &obs in return! y #illing all the local business' Walmart becomes the only option %ithin the community for &obs and for goods! "he community is then forced to accept these unfair &obs and cheaply made goods because they have no alternative! It is one big cycle %hen a Walmart comes to to%n and they are severely in&uring communities and the people in them! Walmart most de(nitely has a negative impact on $merican society! "here are many things that Walmart does that &ust can’t be (4ed due to the fact that it is such a large business! Wherever they go' they %ill al%ays put local business out of %or# and %ill al%ays have a large negative environmental impact due to the siEe of their stores! ut one thi thing the they can can (4 is ho% ho% they hey tre treat thei heir empl employ oyee ees! s! I %oul %ould d recommend using the idea proposed by Aenry lodget: 7If Walmart %ere to give each of its S associates a ,>'*** raise' it %ould cost the compan company y ,; billio billion n a year year! "his "his %ould %ould reduce educe Walmart almartFs Fs operat operating ing pro(t pro(t to a still= still=e4 e4tr trem emely ely=he =healt althy hy ,)* billio billion! n! It %ould %ould also also give give 2!5 milli million on hard=% hard=%or# or#ing ing $meri $merican cans s anothe anotherr ,2 ,2** ** a %ee# %ee# to spend!8 spend!8 I %ould also recommend recommend giving every employee guaranteed health care! "his is %ould be a very logical %ay to increase employee lifestyle and morale! $nother recommendation I have is ma#ing Walmart Walmart open some manufacturing plants here in the !S! "his %ould greatly decrease the number of &obs #illed by Walmart and %ould increase the number of domestic goods produced %hile helping the economy!
Ross Goldfarb
Works Cited Banjo, Shelly. "Wal-Mart "Wal-Mart to End Health Insurance for Some Part-Time Emloyees." The Wall Street Journal . !.., n.d. We.
Ross Goldfarb
Berfield, Susan. "More Than Half of Wal-Mart#s Wal-Mart#s Hourly Wor$ers Wor$ers Ma$e %ess Than &'(,)))." Bloomberg.com. Bloomer*, '+ ct. ')+. We. We. Bernstein, ared, %. osh Bi/ens, and 0rindrajit, 1ue. "Wrestlin* With With Walmart." Walmart." EPI WORKING PAPER 2'))345 n. a*. EPI, ( une '))3. We.
Blod*et, Henry. "Walmart "Walmart Emloys 6 f 0merica. Should It Be 7orced To Pay Its Emloyees More8" Business Insier . Business Insider, Inc, ') Set. ')). We. We. 7icano, 9arlena 9. "Business 9hurn and the :etail ;iant5Estalishment Birth and 1eath 7romWal-Martou 1on#t ?no=." #ast $om%an". !.., ) 1ec. '))+. We. Hic$s, Michael . "Estimatin* Wal-Mart#s al-Mart#s Imacts in Maryland5 0 Test Test of Identification Strate*ies and Endo*eneity Tests." Eastern Economic Journal . st ed. @ol. @ol. +A. !..5 n.., n.d. (3-+. JSTOR. Pal*ra/e Macmillan ournals. We. We. Insi*ht, ;loal. "The Economic Imact of Walmart." The Po&er o' Pers%ecti(e (3.+ 2'))45 )AC'. Ihsglobalinsight . ' !o/. '))(. We. ia, Panle. "What Haens When Wal-Mart Wal-Mart 9omes to To To=n5 =n5 0n Emirical 0nalysis of the 1iscount :etailin* Industry." Industry." Econometrica. 3th ed. @ol. @ol. 3. !..5 Econometric Society, n.d. '3+-+3. Pro!uest Resource Resource )in*s. We. ?urtDleen, 1anielle. "Walmart Stru**les to /ercome En/ironmental 9riticism." +S Ne&s an Worl Re%ort . !.., ') 0r. ')'. We.
Peterson, Hayley. "Wor$in* "Wor$in* at Wal-Mart Wal-Mart Is ne of the Best :etail os to Ha/e :i*ht !o=." Business Insier . Business Insider, Inc, C 7e. ')(. We. We.
