New Study Finds Wal-Mart Promotes Poverty

“The country is rich, yet the people are poor.”
- W.E.B. Du Bois, The Souls of Black Folk, 1903.

This is old news in Wal-Mart blog circles, but it certainly deserves reporting here. Wal-Mart Watch reports the key findings of a new study by Stephen Goetz of Penn State in the new issue of the Social Science Quarterly:

“After carefully and comprehensively accounting for other local determinants of changes in poverty, we find that the presence of Wal-Mart was unequivocally associated with smaller reductions in family-poverty rates in U.S. counties during the 1990s relative to places that had no stores…

“Thus, our results provide clear evidence that the spread of Wal-Mart stores during the 1990s was associated with higher usage of food stamps per capita…

“The public costs that the chain imposes by raising the poverty rate suggest that public infrastructure subsidies may not be warranted or, as a minimum, that these two types of costs need to be added together to assess the overall cost of the chain to the community…

You may ask yourself how this squares with the much-touted Global Insight study from last November that catalogued the alleged savings which Wal-Mart shoppers got buy buying there. The answer is easy, really. The costs of Wal-Mart outweighs any benefit. Goetz says as much himself:

“In conclusion, the costs to communities in terms of labor displacement and higher poverty need to be weighed against the benefits of lower prices and greater shopping convenience. Similarly, once local businesses have been driven out, the possibility of monopolies or oligopolies emerging in retailing (both on the input and output side) needs to be considered carefully by public policymakers.”

Tom Friedman rhapsodizes over Wal-Mart as exemplifying one of the “Ten Forces that Flattened the World.” Well, guess what? Wrenching economic change disrupts lives. While Tom prefers to downplay it (which is better than Wal-Mart which completely ignores this economic fact), the people whose lives are turned upside down (be they the employees of the retailers they drive out of business, or the workers whose jobs just moved to China) are disproportionately lower-income.

If these people shop at Wal-Mart, they are, in effect, cutting their own economic throats. But more importantly, Wal-Mart shoppers who make a little more than them and deem themselves entitled to saving a few pennies on toilet paper reap most of the benefit while those who are most vulnerable to outsourcing or are most likely in need of the government assistance that Wal-Mart is draining through underpaying their own employees bear most of the cost.

In other words, the Bentonville Death Star wants us to sell out our neighbors for cheap plastic crap and fatty meat. It’s just more proof that Wal-Mart “knows the price of everything and the value of nothing.”

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