Has Wal-Mart been good or bad?

November 24, 2012

There's lots to agree with in Peter Suderman's 17-part Twitter defense of Wal-Mart (which was inspired by this discussion on Saturday's "Up With Chris Hayes"). Wal-Mart's low prices do primarily benefit low-income consumers. Wal-Mart's low wages are not really that low, at least when compared with the prevailing wages in the retail sector. Wal-Mart's executive class does make a lot of money, but not enough to move the dial on employee pay. 


Amy Sancetta/AP

But Wal-Mart's effect on its own employees pales in comparison to its effect on its supply chain's workers, and its competitors' workers. As Barry Lynn argued in his Harper's essay "Breaking the Chain," and as Charles Fishman demonstrated in his book "The Wal-Mart Effect," the often unacknowledged consequence of Wal-Mart is that it has reshaped a huge swath of the American, and perhaps even the global, economy.

Wal-Mart has become so big and so pervasive that it effectively sets prices for everyone who sells to it, and everyone who competes against it. It has lowered prices for American workers -- even those who don't shop at Wal-Mart -- even as it has done much to destroy the American labor movement and to encourage the offshoring of American jobs. It has changed how goods are shipped, packaged and produced. It has, at different times, encouraged devastating environmental practices and admirable ones. Any accounting of Wal-Mart's effect on workers has to go far beyond a simple look at the wages they themselves pay to their direct workforce. See, for instance, this Wall Street Journal article on what happened in Thailand after Wal-Mart demanded higher standards from its shrimp suppliers.

Back in 2006 and 2007, I spent quite a bit of time reporting on the Wal-Martization of the economy, and I never came across an accounting I found sufficient. Whether Wal-Mart has been, on net, "good" or "bad" is a complicated question to frame and a devilishly tough one to answer. Soon, I'm sure, the question will be whether Amazon.com has been good or bad. I wish I had a definitive answer. All I'm certain of is that Wal-Mart has been -- and Amazon.com will be -- economically transformative. If anyone knows of useful, recent research on the topic, please leave a link in the comments.

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Brad Plumer · November 24, 2012