Essay on The Global Wal-Mart Effect - 598 Words | Bartleby

Essay on The Global Wal-Mart Effect; Essay on The Global Wal-Mart Effect

But neither has Wal-Mart been a boon for local communities. Poverty rates, for example, declined in most counties during the period studied, but they declined by less (poverty rates didn't improve as much) in Wal-Mart counties. By other measures, Wal-Mart had no noticeable effect. Overall, counties with and without Wal-Mart had similar growth in population and income per person.

For example, Wal-Mart is widely believed to destroy local firms and jobs and to have a dampening effect on wages. But fedgazette findings suggest the opposite: Firm growth, employment and total earnings were somewhat stronger in Wal-Mart counties and, in some cases, even in the retail sector. The research does suggest that retail earnings per job fell in virtually all counties studied. But they actually fell by less in Wal-Mart counties.

In sum, fedgazette findings suggest that Wal-Mart has a slightly positive effect on counties where the retailer decides to set up shop. But the effects are small; one could call the results mostly a wash. As a result, maybe the most concrete—and surprising—conclusion is that Wal-Mart's presence (or lack thereof) has little or no predictive power regarding the economic success or failure of a county.

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Lastly, the fedgazette looked at Wal-Mart counties six years prior to the store opening, and these counties showed little evidence of having stronger income growth leading into the opening of the Wal-Mart. In other words, it's not obvious that Wal-Mart was able to ride the coattails of strong county economies and hide any potentially negative local effects.

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The fedgazette also looked at shorter time periods, and the general findings were little changed. Over a two-year window—one year before store opening and one year after opening—Wal-Mart had little effect on average personal income or population; employment increased in Wal-Mart counties relative to non-Wal-Mart counties, especially in retail; and growth rates in earnings per job were generally similar, but were higher in retail for Wal-mart counties. Those findings held steady when the time frame was widened to six years (one year before opening, five years after opening).

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Regardless of predisposition to Wal-Mart—whether a vocal critic or a live-and-let-live advocate—none of these fedgazette findings can be considered the last word on the Wal-Mart effect because they are not "causal" in nature; that is, we cannot say that Wal-Mart is directly responsible for any particular outcome—positive or negative—in the counties investigated. This analysis merely offers correlated facts. Proving a causal relationship between Wal-Mart and local economic trends is rife with complications. Indeed, such complexity is one of the reasons controversy continues to swirl around the company.

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Taxable retail sales for 1985 and 2005 were gathered for Wal-Mart and non-Wal-Mart counties in Minnesota, North Dakota, South Dakota and Wisconsin. (Data weren't combined across states because tax rates and items eligible for sales tax are different among states and changed over this period. Also, Wisconsin data were from 1991 and 2005.)


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Sales tax data offer another window on Wal-Mart's economic effect. Wal-Mart likely attracts shoppers from neighboring counties, and wider selection might also induce more frequent shopping. But a new store might also squeeze out other local retailers.

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Again, these results demonstrate the wide range of county performances, but also show that overall results for non-Wal-Mart counties are pulled up considerably by a small handful of fast-growing counties, most of which are near metro counties that already have a Wal-Mart. The same performance-enhancement effect is not true for the pool of 40 Wal-Mart counties.

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With that caveat, findings from this fedgazette analysis suggest that much of the conventional wisdom regarding Wal-Mart's nefarious effects on local communities is off base, at least in relation to measures that the public and policymakers often use to gauge community health. The analysis is also absent any discussion of the savings local consumers realize by having Wal-Mart in town (see further ).

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So the fedgazette decided to take a closer look at the matter, attempting to answer a seemingly straightforward question: What economic effect does Wal-Mart have on local communities in the Ninth District? Conventional wisdom suggests that Wal-Mart's economic influence is significant and obvious. If that's indeed the case, then we should see palpable change in measures commonly used as proxies for community health—things like jobs, firms, income, population and poverty.

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A person can immediately tell if a person has had a college education or not. Many of us who have completed their college education think of it as 'making the jump'. A big difference does exist between the people who have completed their college education and those who have not. This difference might not be instantly apparent but it can be as clear as day if you get to spend some time with the person and talk to them for a while. A college education can affect a person in many ways and this paper shall discuss how getting a college education (the cause) changes a person (the effects).