Economic Impact - Local

• A study of Chicago businesses found that for every dollar spent at a local firm, 68 cents stayed in the city, whereas for every dollar spent at a larger chain firm like Wal-Mart, only 43 cents stayed in the local economy. (1)

• The same Chicago business study showed that for every square foot occupied by a local firm, there was a net local economic impact of $179, whereas every square foot of a chain firm generated only $105 of local economic impact. (1)

• For every million dollars in sales, Wal-Mart gives $1,000 to charity. For every million dollars in sales, local businesses give $4,000. (2)

• Wal-Mart puts local stores out of business. Studies show that if a local business sells something that Wal-Mart also sells, they are forced to scale back or shut down their business operations after Wal-Mart comes to town. (3)

• Wal-Mart hurts the civic capacity and economic innovation of the towns they move in to by driving out local entrepreneurs and community leaders. (4)

Economic Impact - National

• Wal-Mart pressures suppliers to reduce prices, putting many out of business. (5)

• Wal-Mart exports American Jobs. In a Dateline- NBC Wal-Mart documentary, suppliers reported that Wal-Mart actively advocated that they move their operations to China to reduce prices. (5)

Wages and Poverty

• Supercenters such as those operated by Wal-Mart depress industry wages and benefits in the grocery industry. This Orange County study, concerning roughly 250,000 grocery workers, estimates an ANNUAL net negative impact somewhere between $500 million to $1.4 billion. (6)

• A study analyzing U.S. counties that gained Wal-Mart stores came to the conclusion that “Wal-Mart presence may have stalled the reduction of poverty rates during the 1990’s economic boom.” The results of the study suggest that it increases local poverty to levels higher than would have existed had Wal-Mart not moved into the community. (4)

Unionization and Worker Rights

• “Unlike other retailers, Wal-Mart refuses to open its suppliers’ factories to independent inspections. That prompted Domini Investments, which runs a ‘socially responsible’ mutual fund, to dump its 1.3 million Wal-Mart shares in 2001.” (7)

• Wal-Mart is virulently anti-union. Although it is the largest employer in the United States, none of its stores are unionized. “In 2000, when a small meatcutting department successfully organized a union at Wal-Mart, Wal-Mart responded a week later by announcing the phase-out of its meatcutting departments entirely.” (8)

• One Bangladeshi worker told the L.A. Times that employees were forced to work from 8:00 a.m. to 3:00 a.m. for 10-15 day stretches to meet Wal-Mart demands. (8)

• Wal-Mart illegally employs undocumented workers. On October 23, 2003, federal agents raided 61 Wal-Mart stores in 21 states. They arrested 250 undocumented aliens working as nightshift janitors. (8)

• Unequal pay and treatment for women- currently, Wal-Mart is facing a class-action lawsuit filed by 6 women in 2001. While 2/3 of Wal-Mart employees are women, they only hold 1/3 of managerial positions, and constitute less than 15% of store managers. (8)

• Wal-Mart has faced –and lost- many class-action lawsuits (in Texas, New Mexico, Colorado, Minnesota and Oregon) because of forced off-the-clock work. One former Wal-Mart manager told the New York Times, “[Wal-Mart] threatened to write up managers if they didn’t bring the payroll in low enough.” The Oregon case involved 400 employees in 27 stores suing for unpaid overtime labor. A jury sided with the workers after they heard that managers would delete hours from time records and tell employees to clean the store after they clocked out. (8)

• In January 2004, the New York Times reported on an internal Wal-Mart audit which found “extensive violations of child-labor laws and state regulations requiring time for breaks and meals.” (8)

• Wal-Mart has faced a barrage of lawsuits alleging that the company discriminates against workers with disabilities. In 2001, they paid over $6 million to settle 13 such lawsuits. (8)

• According to a January 12, 2004 New York Times article, Wal-Mart institutes a “lock-in” policy, where the entire store, including fire exits, would be shut down and only able to be re-opened by a manager. Often, this led to employees being trapped inside the stores overnight- no manager meant to way out. This violates OSHA worker safety laws. (8)

Government Fiscal Impacts – Lost Revenues and Higher Demand for Social Services

• “The fiscal benefits of supercenters, and of discount retail more generally, are often much more complex, and lower, than they first appear… the additional tax revenues [from supercenters] will in part [be offset by the reduced tax revenues received from] existing businesses elsewhere in the city.” (6)

• A U.C. Berkeley study found that families of Wal-Mart employees in California utilize an estimated 40% more in taxpayer-funded health care than the average for families of large retail employees. Even among its most similar retail competitors, Wal-Mart stands out. (9)

• The families of Wal-Mart employees use an estimated 38% more in other (non-health-care) public assistance programs such as food stamps, the Earned Income Tax Credit, subsidized school lunches, and subsidized housing, as compared to the average for families of all large retail employees. (9)

• “Wal-Mart not only affects public assistance utilization through its compensation policies, but also by activ ely encouraging employees to participate in such programs.” Bill Moyers reported on PBS that Wal-Mart provides its employees with a 1-800 number to call to determine their eligibility for public assistance programs and benefits. (9)

• [Wal-Mart] supercenters…typically offer much less comprehensive health care coverage than major California grocery chains.” (9)

Research performed, compiled, posted and composed by Roland Chlapowski. June 16, 2005.

(1) The Andersonville Study of Retail Economics. October, 2004. Matt Cunningham & Dan Houston. Partners, Civic Economics. Chicago, Illinois. (Updated February 2005

(2) The Economic Impact of Locally Owned Businesses vs. Chains - A Case Study in Midcoast Maine, Institute for Local Self Reliance Study. September, 2003

(3) "Competing with the Discount Mass Merchandisers." Study by Dr. Kenneth E. Stone, Professor of Economics & Extension Economist. Iowa State University, 1995

(4) Wal-mart and County-Wide Poverty. Stephan Goetz & Hema Swaminathan, Department of Agricultural Economics and Rural Sociology, Pennsylvania State University. AERS Staff Paper No. 371. October, 18, 2004.

(5) Inside Wal-Mart, NBC-Dateline Documentary, November 10.,2004. "CNBC's David Faber has a rare glimpse inside the Wal-Mart empire."

(6) The Impact of Big Box Grocers on Southern California: Jobs, Wages, and Municipal Finances. Prepared for the Orange County Business Council by Marlon Boarnet, Ph.D. (Associate Professor, Department of Urban Planning and Economics, University of California, Irvine), and Randall Crane, Ph.D. (Associate Professor, School of Public Policy and Social Research, University of California, Los Angeles) SEPTEMBER 1999

(7) “Audit Stance Generates Controversy.” Evelyn Iritani and Nancy Cleelan. November 24, 2003. from The Los Angeles Times' Pulitzer-Prize winning Wal-Mart series.

(8) "Everyday Low Wages: the hidden price we all pay for Wal-Mart,"a report by the Democratic staff of the Committee on Education and the Workforce; U.S. House of Representatives Rep. George Miller (D-CA), Senior Democrat. February 16, 2004

(9) Hidden Cost of Wal-Mart Jobs: Use of Safety Net Programs by Wal-Mart Workers in California, Arindrajit Dube, Ph.D., UC Berkeley Institute of Industrial Relations, & Ken Jacobs Ph.D., UC Berkeley Center for Labor Research and Education. August 2, 2004. (Briefing Paper)