Walmart is an example of a company that I admire for its sheer capacity to conquer the department store industry. I find the Walmart phenomenon to be a great example of pure capitalistic business: one business can provide goods and services on a bigger scale with lower prices than any other business in the country, so they win. By win, I mean they put local businesses out of the money by purely economic and capitalistic competition. In the short-run there are significant impacts of the Walmart effect. Small businesses go out of business and those shop owners must find alternative ways to produce an income. Unemployment increases and the area has less disposable income. The economy of the local area declines. In the long-run though, these people do find alternative sources of income, some of them even getting jobs at the new Walmart. They are also getting their goods at cheaper prices from the Walmart, thus putting more money in their pockets to save or spend elsewhere. By sheer market forces, the local people cannot help but shop at the Walmart.
Now let’s look at the bigger picture of Walmart itself. Why are so many people against them? Yes, in the short-run Walmarts do some damage to the local area, but they may actually be helpful in the long-run. Much of Walmart’s criticism seems to stem from their internal practices, namely the way that they treat their employees. According to careerbliss.com, the average Walmart working makes $24,000/year. That’s about $500 north or the national poverty line. A critic, such as myself, might ask how a Walmart employee can possibly support themselves on this salary. What this means is that the majority of checkout workers at Walmart live in poverty. On the other hand, a store manager makes between $34,000-$92,000/year according to Glassdoor.com. But the number of store managers compared to the number of checkout clerks is likely low. The problematic reality is that many Walmart employees are living in poverty.
The critique: how can the most profitable retailer in the world be operating under the conditions of putting many of its employees just above the poverty line? There are clear issues with stakeholder responsibility that need to be addressed. However, with a retail giant such as Walmart, it is difficult for its employees to stand up when they are trying to support their children.