The Wal-Mart Effect: The hows and whys of beating the Bentonville behemoth

"To local politicians, opening a "big box" store like Wal-Mart seems a clear benefit – new jobs, more sales taxes, happy shoppers buying bargains. But it mainly reallocates where existing income is spent.
And while Wal-Mart competition does lower prices, it also depresses wages and eliminates jobs. One 1999 study reported that 1.5 jobs had been lost for every job that Wal-Mart created. A recent projection by the University of Illinois at Chicago's Center for Urban Economic Development concluded that the proposed West-Side Chicago store likely would yield a net decrease of about 65 jobs after that Wal-Mart opens, as other retailers in the same shopping area lose business. A study cited in Business Week as showing modest retail gains after Wal-Marts open actually reported net job losses counting effects on warehousing and surrounding counties.
Wages are low at notoriously anti-union Wal-Mart – averaging about $9 an hour for full-time workers, around $8 for the roughly 45 percent of "associates" working less than 45 weeks a year. But Wal-Mart also helps hold down wages throughout the retail industry, with a few exceptions like the partly-unionized Costco (where wages average $16 an hour) or more heavily unionized grocery stores. A 1999 study for the Orange County Business Council forecast that the entry of grocery supercenters such as Wal-Mart operates could cost southern California $2.8 billion in lost wages and benefits each year as grocers cut the jobs or wages and benefits of a quarter million largely unionized grocery workers.
But "Walmartization of America has a broader impact than just retail workers," says Greg Denier, spokesman for the United Food and Commercial Workers, which represents grocery workers. "Wal-Mart probably has had more negative impact on manufacturing than on other jobs in the United States." Wal-Mart also squeezes American consumer goods producers, forcing them to cut labor costs, move overseas or be replaced by foreign suppliers. Accounting for 10 percent of all U.S. imports from China in 2002, the corporation even pressures wages downward in poor countries, from El Salvador to Bangladesh. It also drives competitors to import more, pushing the True Value hardware store cooperative to boost imports from less than 1 percent of its products to 18 percent."