Is Wal-Mart Good For The Economy?

After reading the article and seeing the two opposing points of view I would have to say that the more accurate one of the two comes from the Democratic Staff of the House Committee on Education and the Workforce. The Los Angeles County Economic Development Corporation asserts that the entry of Wal-mart stores into southern California would be beneficial to the local economy from the point of view that since Wal-mart offers such competitive, low prices the savings would be redirected toward other parts of the local economy which, in turn, would create more jobs locally in excess of what Wal-mart would also bring with it. It also claims that the negative effects of

Wal-mart's entry into the local economy would be negligible compared to the benefits, especially since it would take a long time for Wal-mart to develop a considerable market share and along with the idea that Wal-mart's negative impact on other grocers' ability to operate would turn out to be positives for their consumers and the overall taxpayer from the extra sales taxes that the stores would generate for the area. But this opinion on

Wal-mart's impact does not look very deep into how these newly introduced low prices are obtained which if introduced to the local market could have devastatingly different effects from what they are predicting.

The Democratic Staff of the House Committee on Education and the Workforce claims that the introduction of Wal-mart stores in southern California would have a destructive result on the local economy, particularly from the intense competition that they would bring to the area that would break the backs of other grocers and stores that specialize in goods that Wal-mart carries and also on how their treatment of their workers would have a negative impact on tax revenue and the surrounding businesses. They site many legal issues that the company is currently mired in nationwide - cases that include issues on worker's benefits (especially health coverage), worker's wages, sexual and disability discrimination, hiring of illegal workers, unsafe working conditions, participation in international human rights violations, misused child labor, and work break violations.

As I stated before, I would have to agree that Wal-mart has a much more destructive presence than what it does to help communities because the opinion of the Democratic Staff of the House Committee on Education and the Workforce makes more sense to what I have seen as a consumer and as a former employee of the company. During my four years as both a store associate and a manager I encountered many of the claims that people have and are still making against the company. To start with, one of the biggest issues presented that would have a negative impact was from the benefits that Wal-mart offers its employees. The article is very close to the reality presented to Wal-mart employees in that all the benefits of the company's employees are tied together and processed at the same time, meaning that once every year there is a small two week window where everyone has to sign up for benefits if they want to. This is highly inconvenient in that sometimes it takes a while to get confirmation of your benefits after they have been processed so that you can make sure that they were processed correctly along with the wait involved to change any of your benefits should the need arise. Also the health coverage offered by Wal-mart is hardly health coverage at all - like a ghost it is transparent and very immaterial. For a healthy, single individual with no dependants the best choice in their health plan is the cheapest one, especially after considering the amount the employees was getting paid. But the most affordable plan is also the one with a $1,000 deductible that had to be paid before anyone could even think of receiving any assistance. Needless to say, I didn't go to the doctor for four years no matter how sick or hurt I was because it cost too much. So I would have to agree with the statement that Wal-mart makes taxpayers support the health care of its workers because I saw it happen first hand.

Another issue was the below average wages of Wal-mart employees. This is definitely the case for most Wal-mart employees, especially now more than ever. When I was hired in July 2002 the way raises were given to the employees was not as sufficient as they had been when Sam Walton was still alive and running the company, but still maintained fairness none the less. In 2002 it was still possible that an associate working for Wal-mart could make as much as $12 to $15 dollars an hour after twenty years of loyal service because raises were calculated as a percentage of your current hourly wage - if you received an above average evaluation you would be rewarded with a five percent raise which for an associate currently at $7 an hour would be making $7.35 after the increase. In 2004, this was changed so that raises were based on flat amounts - an above average evaluation equaled a $.15 raise no matter how many years you put in for the company. Basically, the company cut its raises for its best employees from five percent annually to about two percent or less depending on pay rate. This means that an employee after twenty years of loyal service if starting from the company starting wage of $6.50 (which now just happens to equal minimum wage) would have a potential future earning of $9.50 per hour - about $15,504 annually after tax. For one person to live on that is difficult, for a family it is nearly impossible.

Of course $15,504 is much more than I ever saw in that Wal-mart has a policy