Walmart benefits from billions in government subsidies: Study | MSNBC
Wal-Mart's trade deficit with China alone eliminated nearly , U.S. jobs in this period. trillion in U.S. Treasury bills and other government securities over the past Exports support jobs in the United States, and imports displace them. . issues in the Chinese economy are important national priorities. We're proud of our corporate governance policies and continue to .. oversight in place to comply with federal, state and local laws and regulations relating to the government relations policy, are available on our Walmart corporate website. By , six out of 14 Wal-Mart's direct lobbyists had worked in Congress. Only Wal-Mart's Government Relations Departments know about the and legislative and regulatory bodies at the federal, state and local level.
Would Wal-Mart one day just move some place cheaper? In JulyWal-Mart expanded its discount store into a new Supercenter, with full grocery service, in Galesburg, Illinois, a middling industrial and market town hard-hit by globalization. Todd Frakes, a life-long grocer, managed one of two Econofoods grocery stores in town when the Supercenter opened.
They cut back hours to avoid layoffs.
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We have fair prices and quality meat and produce. We still cut our own meat, and we still carry your groceries to the car.
Boosters of the company contend that every new store has just two relevant effects: First, it energizes the local economy; and, second, lower prices for local shoppers compensate for other negative effects. The preponderance of research tells a different story.Walmart Closing Conspiracy Theory
The net effect of Wal-Mart entering a local market is to reduce local employment, reduce area wage rates and total payroll especially in retaileliminate other businesses especially small shops and small chain stores that directly compete with Wal-Martand raise poverty rates. Between andWal-Mart opened around 45 stores in Iowa.
During that period, the state lost grocery stores, 88 department stores, hardware stores, apparel shops, building supply stores, and other retail outlets--as much as 43 percent of some categories of retail stores. When Wal-Mart displaces local small businesses, it also typically reduces income and employment for local business--service providers, such as lawyers, bankers, accountants, printers, and newspaper publishers, since those services are centralized in Wal-Mart headquarters.
Wal-Mart often adopts early innovations like bar codes, then accelerates their use because its size influences industry standards. Productivity increases in the context of economic growth are generally good if the fruits of enhanced productivity are shared with workers—largely not true with Wal-Mart. Workers gain little because Wal-Mart zealously fights unionization of its own employees and its global system including unionized dock workersand its squeeze on suppliers and competitors increases incentives to resist unions.
Wal-Mart has also quite likely reduced U. In each case, Wal-Mart kept demanding a lower price, at times challenging suppliers to match the price of cheap imports.
The companies improved productivity, cut corners on quality, and pressured their own employees and suppliers who in turn tightened the screws on down the line. During that period, 3. Simultaneously, Wal-Mart tripled its imports from China, importing in about 10 percent of all Chinese exports to the U.
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It seems likely that most of those imports were still nominally from hollowed-out American businesses. So Wal-Mart sped up both American deindustrialization and consolidation of a low-wage, bargain--driven consumer culture where quality and price were both cheapened. Two independent studies found that suppliers to Wal-Mart, especially smaller businesses, are likely to end up with lower profits than suppliers who service other big retailers.
The Wal-Mart effect on wages is more clearly harmful to workers, whether they work for the company, its suppliers, or its competitors. Simply the threat that Wal-Mart Supercenters were coming to Southern California led unionized grocery chain managers in to unite in a lockout—imposed in response to a strike against one chain—against the United Food and Commercial Workers union. The conflict ended with concessions from workers, such as a two-tier wage schedule and provisions reducing insurance coverage.
Three years later, only 54 percent of union grocery workers, down from 94 percent, had health insurance. In any case, the EPI economists argued, if the savings are as big as claimed, Wal-Mart could raise wages and keep prices low. The Berkeley group also concluded that a higher minimum wage for big-box retailers would help retail workers and result in only a tiny increase in retail prices.
Government at all levels also loses when Wal-Mart moves in, lowers pay, eliminates jobs, and pushes families into poverty: The company systematically challenges all property-tax bills.
Beyond its economic impact, Wal-Mart is notorious for censoring the books and recordings it stocks, excluding some presumably for their progressive political leanings and demanding bowdlerized versions of others. As historian Bethany Moreton recounts in To Serve God and Wal-Mart, the company has promoted an amalgam of evangelical Christianity and free--market ideology in colleges and elsewhere and draws much of its management from this cultural milieu.
How Walmart and Home Depot Are Buying Huge Political Influence
The current unbalanced U. The United States is piling up foreign debt, losing export capacity, and facing a more fragile macroeconomic environment. Meanwhile, China has become dependent on the U. Treasury bills and other government securities in recent years in order to artificially and illegally hold down the value of its currency, and thereby lower the cost of its exports to the United States and other countries.
It has repressed the labor rights and wages of its workers, making its exports artificially cheap, further subsidizing its exports.
This is assuming that the imported vehicles displace domestic production, as would be the case if the domestic assembly plant in question closed and production moved offshore. See Methodology Appendix in Scott for further details. This report distinguishes exports produced domestically and re-exports—which are goods produced in other countries, imported into the United States, and then re-exported to other countries, in this case to China.
Re-exports do not support domestic employment because they are not produced domestically and they are excluded from the model used here. See Table 1 for information about the levels of U.
This model assumes that everything else is held constant; the trade and job loss estimates shown here are based on counterfactual simulations. His estimates for and replicate the previously cited figures.
Based on these estimates, Table 1 assumes that Wal-Mart maintained a stable 9.
How Wal-Mart Shapes the World
This calculation is based on average sales per international Wal-Mart store in fiscal year ending January 31,here-in-after referred to as FY Wal-Mart Stores, Inc. Export estimates in this paper assume that sales per store in China were equal to the average for all Wal-Mart international stores, and that all Wal-Mart imports into China came from the United States.
This is clearly an upper bound on total Wal-Mart exports to China because it assumes that all Wal-Mart imports into China originated in the United States, which is highly unlikely. Assuming that all these imports were shipped from the United States, Wal-Mart was responsible for 0.
Walmart benefits from billions in government subsidies: Study
The Bully of Bentonville: Bianco, Anthony, and Wendy Zellner. Is Wal-Mart too powerful? Job Loss From Imports: Institute for International Economics.