this post was submitted on 30 Dec 2024
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The Walmart Effect: New research suggests that the company makes the communities it operates in poorer—even taking into account its famous low prices. (www.theatlantic.com)
submitted 3 days ago by alyaza@beehaw.org to c/humanities@beehaw.org
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Two new research papers challenge that view. Using creative new methods, they find that the costs Walmart imposes in the form of not only lower earnings but also higher unemployment in the wider community outweigh the savings it provides for shoppers. On net, they conclude, Walmart makes the places it operates in poorer than they would be if it had never shown up at all. Sometimes consumer prices are an incomplete, even misleading, signal of economic well-being.

Their conclusion: In the 10 years after a Walmart Supercenter opened in a given community, the average household in that community experienced a 6 percent decline in yearly income—equivalent to about $5,000 a year in 2024 dollars—compared with households that didn’t have a Walmart open near them. Low-income, young, and less-educated workers suffered the largest losses.

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[–] Kolanaki@yiffit.net 2 points 2 days ago* (last edited 2 days ago) (1 children)

I'm curious if multiple Walmarts in the same area have a compounding effect. I have 3 within the same distance from my apartment; a regular one that's the oldest one out here, a Neighborhood Market and a Supercenter.

I've also seen the Walmart I used to work at get shut down so they could build a Supercenter just 2 blocks away and I remember everyone I worked with acting like they were gonna keep their job and just move to the new store. They did not. Though I partially suspect that was mostly due to the fact that, that particular Walmart I worked at was the lowest rated Walmart in the state. Of course they wouldn't keep the employees from it.

[–] DdCno1@beehaw.org 2 points 2 days ago

I remember reading somewhere that they are also doing this to get rid of employees that have long-running contracts with better salary and/or benefits than what new employees have to live with.

[–] zante@slrpnk.net 11 points 3 days ago (1 children)

The book came out like 10 years ago - is this something new ?

[–] some_guy@kbin.melroy.org 2 points 3 days ago (3 children)

Depends on whether you believe everything you read outright or wait for honest critical analysis.

I guess that tells us which camp you’re in.

[–] millie@beehaw.org 19 points 3 days ago

Why is this so hostile?

[–] TheColonel@reddthat.com 3 points 2 days ago (1 children)

Fuck that, if you’ve ever lived in a small town (or hell, even medium-sized), you’ve seen it with your own eyes over the last 20 years.

I don’t have to believe what I read when I’ve seen it with my own eyes.

I guess that tells us what camp you’re in.

Go lick boots. I hear Wal-Mart’s constantly hiring.

[–] some_guy@kbin.melroy.org 1 points 1 hour ago

Who the hell are you arguing with? 🤣

[–] zante@slrpnk.net 6 points 3 days ago

Having a bad day mate ?

[–] jojo@beehaw.org 4 points 3 days ago (4 children)

I don't exactly understand how Walmart causes neighborhoods to become poorer, how does that effect exactly work? Can someone ELI5 me through the steps?

[–] Chuymatt@beehaw.org 22 points 3 days ago (1 children)

Low wages, destroys other stores, no re-investment in the community, as Walmart has only been extracting value from communities for decades.

Oh, and the Walton kids are scum of the earth and use their riches to get away with murder.

[–] millie@beehaw.org 15 points 3 days ago (2 children)

Lack of reinvestment is one that I feel like is cloaked in systemic economic stuff enough to be hard to spot, but once you think it through it's incredibly obvious.

Like, even if Walmart didn't consolidate what would be several businesses per town and pay less to its employees per unit of labor and extracted consumer value, there's all this profit that it doesn't spend locally.

The six or so shops and one given Walmart likely runs out of business not only would have been staffed less efficiently (read: paying more per required amount of labor by distributing that labor between more employees at more shops), but the profits would have been more likely to be spent locally. Quite literally, the money you spend on a shovel or a pair of socks or a cell phone charger would be going back to the local economy in greater quantities, simply because the people making the profits were locals. They're shopping at local stores, hiring local labor, eating in local restaurants.

The more that businesses in the area aren't based locally, the more that money is sucked out of the local economy. In the case of Walmart it's money from across what once would have been several different sources of goods, all while consolidating potential sources of employment. Add all the other massive corporations that have taken the place of local businesses, from chain supermarkets to fast food to Uber to Amazon, etc, and it's no wonder people are struggling financially and our infrastructure is falling apart.

It's pretty obviously toxic when you think about it on a systemic level.

[–] Chuymatt@beehaw.org 9 points 3 days ago* (last edited 3 days ago) (2 children)

Add to that and the salted earth land lease contracts they have, and it makes for a horrible deal for the community.

[–] averyminya@beehaw.org 6 points 3 days ago

Oh, you're unionizing? Disappears, leaving an empty lot that can never be reused without a complete renovation

[–] millie@beehaw.org 3 points 3 days ago (1 children)

It's kind of wild to think about just how many industries have been going in this direction too. Like when I was a kid i remember even most of the local convenience stores and a lot of the gas stations being small businesses. You almost never see that anymore.

[–] Chuymatt@beehaw.org 2 points 3 days ago (1 children)

Profit over all.

[–] millie@beehaw.org 2 points 3 days ago* (last edited 3 days ago)

I mean, from Walmart's perspective yeah absolutely that's what it is. But consumers aren't profiting from their home towns being utterly decimated financially. Legislators at a local level aren't really either. I suppose legislators at a state and national level might be kind of but they still end up with a shittier world.

The overarching motivation isn't so much about profiteering as being suckers and subscribing to the idea that corporate America has our best interests in mind. If workers and local municipalities were focused on maximizing their own value, rather than being good little cooperative serfs and sellouts, we wouldn't have this issue.

Convenience and intellectual laziness got us here.

I think a lot of what we're feeling now is just the result of misplaced leftover cold war era anti-communist anxiety ironically resulting in the withering of a less centrally orchestrated American economy in favor of consolidation. It's just that said consolidation ended up handing everything to oligarchs instead of to some collective representation of workers. In either case, you get the same issue of the people who decide on policy being fully detached from both the needs of the people they ostensibly serve as well as the actual effectiveness of the measures they enact.

[–] The_Sasswagon@beehaw.org 1 points 2 days ago (1 children)

Very well said!

When it comes to business being driven out, it's not even just the direct replacements to existing local business, they also draw traffic away from existing commercial centers which as the local grocery store goes out, the local restaurants, cafes, etc. close down too.

Additionally, often times the big box stores are offered huge uncentives to move in, so not only are they taking away jobs but they are also not paying local taxes and have land purchased and prepared for them to purchase at a discount.

It's bizarre but many cities are run by folks with no real knowledge of how cities are run, so it makes sense why it happens.

[–] alyaza@beehaw.org 1 points 2 days ago

It’s bizarre but many cities are run by folks with no real knowledge of how cities are run, so it makes sense why it happens.

i don't think this is particularly true--i think a lot of it just boils down to simple, short-term economic math. frankly, a lot of US land area is in an economic death spiral that makes a Walmart much more appealing than trying to maintain the existing local business community. you can't count on people keeping businesses in the family in the middle of nowhere--but you can safely assume if you bend over enough for Walmart they'll stick around and employ people. lotta mayors will take that consistency every time

[–] Bronzebeard@lemm.ee 7 points 3 days ago

Locally owned stores would see the profits earned reinvested in the community, as the owners would also be local and buying goods in the same area.

These mega corps siphon the profit from the area to elsewhere. So none of the surrounding businesses get supported by Walmart doing well. Also they pay next to nothing, so even the employees aren't able to bring any wealth to the area.

[–] acockworkorange@mander.xyz 5 points 3 days ago

What has been said, plus bad land use (not only caused by Walmart, but…) makes cities spend more in infrastructure, raising taxes; while at the same time Walmart tends to cause devaluation on properties.

[–] zante@slrpnk.net 1 points 3 days ago

Reading The article would really answer your question