Walmart Adds 125 New Jobs Every Day in March
In just the first 19 days of March, Walmart has announced new 13 stores openings or expansions, which will bring 2,380 new jobs to those retail locations all across the country from Reno to Philadelphia.
CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Monday, March 19, 2012
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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62 Comments:
Is there a Walmart in Chicago yet?
Wal Mart is adding jobs, but also, we can hope, eliminating even more jobs.
Paradoxically, if by opening up a Wal Mart a greater number of jobs at smaller nearby retailers are wiped out, then Wal Mart is actually doing good by provisioning the public at lower cost (all other things being equal).
So, we should actually announce that Wal Mart is wiping out jobs across America---and doing more for less, thus leading to higher living standards.
The private sector does more with less continuously. It is federal agencies, such as the Pentagon, that do less with more more every year.
the states where a minimum wage worker can afford rent:
https://data360.wordpress.com/2012/03/16/hours-at-minimum-wage-needed-to-afford-rent/
" So, we should actually announce that Wal Mart is wiping out jobs across America---and doing more for less, thus leading to higher living standards. "
agree. We're NOT adding jobs. We are ELIMINATING jobs and INCREASING productivity.
The question becomes what happens to the folks who worked in local retail in terms of work - and in terms of entitlements?
For instance, when WalMart comes to town, the workers do get some kind of health care benefits but the workers who are displaced lose any they had plus they lose the ability to pay cash for their care.
How many of them, if they cannot find employment, then become new clients to MedicAid, SNAP, etc?
"The question becomes what happens to the folks who worked in local retail in terms of work - and in terms of entitlements?"...
Well larry g, these folks will all line up on a bridge and jump off of course...
Why these people would never soil themselves with filing an application at Walmart or move to N. Dakota and get a job driving a truck....
They're doomed! They're all doomed!!!
"the states where a minimum wage worker can afford rent"...
Probably the same states where some people being paid minimum wage is way more than their job skills are worth...
"So, we should actually announce that Wal Mart is wiping out jobs across America---and doing more for less, thus leading to higher living standards"...
Who's this 'we' pseudo benny, do you have a mouse in your pocket?
Larry says: "We're NOT adding jobs. We are ELIMINATING jobs and INCREASING productivity."
Walmart is not responsible for the depression. However, it does increase productivity.
well.. we all agree that WalMart INCREASES productivity.
but we have problems figuring out what to do with families who have lived in an area for decades and Mom/Dad are in their fifties and own a modest home that is theirs but not worth much if they wanted to pull up stakes and move - even if someone would hire a 50-something with no health insurance who has health "issues".
Such people WILL start using MedicAid, SNAP and other entitlements .. that's a reality even if one disagrees with it from a libertarian philosophy.
so what's the answer?
The question becomes what happens to the folks who worked in local retail in terms of work - and in terms of entitlements?
they get new jobs competing for the extra money consumer have left after saving money at walmart.
you see to be leaving that out of your calculation.
if it used to cost me $200 for groceries and now it costs $150, i have $50 to spend somewhere else.
thus, walmart creates jobs at other local businesses by leaving me with extra buying power.
this argument that lower prices kill jobs is absurd.
it's likely pretty neutral from a jobs standpoint, but ups living standards.
by only counting one side of the equation, you are coming up with the wrong answer.
such a drop in prices may well increase employment.
if spending shifts away from low labor intensity areas like retail and to higher labor intensity services then job count rises in an area.
if i take my extra $50 and hire a housecleaner, that $50 supports far more labor than it would if i spent it at safeway or a corner grocery.
"Such people WILL start using MedicAid, SNAP and other entitlements .. that's a reality even if one disagrees with it from a libertarian philosophy"...
What an incredibly inane statement! larry g what makes you think the local stores driven out business by Walmart were paying their employees any more than Walmart pays?
re: productivity and jobs
Morg - are you saying that NEW JOBs will result from saving money on groceries and that those new jobs will offset the losses due to productivity?
Juandos -
quite likely, local retail workers did not get health care benefits but they did get cash money to spend on health care and food.
I'm not convinced that when WalMart comes to town - that there is a net benefit.
I think, at best, it's a wash.
Anytime you increase productivity - it will cause jobs to be shed from what the activity that become more productive.
It does not necessarily mean that an equivalent paying job will appear to offset the lost job.
The people who save money on groceries may well spent it - but not on something local that provides a local job.
They could, for instance, buy a big screen TV that came from Tawain and not locally and they'll chose tha big screen TV over hiring someone to clean up their homes.
don't mistake my motives here.
I am not arguing one view or the other.. I'm looking for an honest assessment of what happens to jobs when WalMart comes to town.
that's all... I'm looking for views and rationale ..and dialogue...
"but they did get cash money to spend on health care and food"...
According to whom larry g?
larry-
losses due to productivity?
what losses?
if i have 50 extra bucks, i spend it somewhere. that creates jobs. switching $50 in spending from retail to services will create jobs.
every job lost will result in >1 new one.
you really need to up your reading comp lar. i already answered all the questions you are asking. asking them repetitively gets annoying.
if you had really read what i said, you would never have asked that question a second time.
losses due to productivity?
what losses?
local job losses.
if i have 50 extra bucks, i spend it somewhere. that creates jobs. switching $50 in spending from retail to services will create jobs.
does it create local jobs to replace the ones lost to WalMart?
every job lost will result in >1 new one.
really? then there is no productivity gain?
you really need to up your reading comp lar. i already answered all the questions you are asking. asking them repetitively gets annoying.
nope.. you've evaded them.
if you had really read what i said, you would never have asked that question a second time.
I read it..you ran away from the question guy.
re: juandos
yes.. people who have local jobs get wages and they do spend them on health care and food.
when they lose those jobs and not all of them can get on at WalMart, what happens next?
come on guys.. this is not that hard.
larry-
"really? then there is no productivity gain?"
that makes zero sense.
there is a productivity gain. i used to spend $200 on groceries. now i spend it on groceries AND housecleaning.
how is that not a productivity gain?
and no, i did not run away from the question. i had answered it before you even asked it.
sorry lar, but i'm going to go back to not conversing with you. i let myself get sucked back intot his, but you are either being deliberately annoying or just have such limited comprehension as to be impossible to converse with.
while others on this board often disagree with me, no one but you is having such basic comprehension problems.
good luck.
this is what you said:
" every job lost will result in >1 new one."
right?
can you explain why that does not imply neutral productivity?
in terms of spending the $50.
if you spend it locally - yes.
what if you do not spend it locally?
why won't you answer these simple questions?
this is not a "comprehension" problem here.
this is a refusal to address what happens to local jobs.
local jobs CAN and DO go away.
and the money saved does NOT necessarily get spent locally but instead on things produced in other places.
why is this an issue?
because the people who live locally and lose their jobs are not going to move to Tawain to make big screen TV's for a buck an hour.
they are staying where the are - and they WILL be using MedicAid to pay for their health care.
now you say this is a comprehension problem.
I say the problem is that you are evading the reality here - a "different" kind of "comprehension".
Why do you guys have trouble dealing with the realities and want to stick to your economic theories?
At the least, you could be principled in your views and admit the reality when it comes to the loss of local jobs.
what is your answer to the loss of local jobs?
that's more than theory.
rjs: "the states where a minimum wage worker can afford rent:"
[link]
And your point?
Keep in mind, I am NOT advocating against WalMart or increased productivity.
I'm arguing the real outcomes and how we deal with them.
In reality, we provide health care and welfare to those that lose their jobs.
that increases taxes on others,
that increases taxes on the folks who got those jobs at WalMart.
right?
so. the idea that folks who lose their jobs is tough cookies presumes that there is not a cost to that to taxpayers.
and what I'm saying here is that that is a false view.
there are costs.
very real costs to taxpayers.
all I'm asking here is - do you agree with than analysis?
isn't that true?
sorry lar, not going to play this silly, repetitive game anymore.
it's clear you do not grasp the issue, just one side of it.
good luck.
So, Larry, let me see if I understand you:
You are saying that when a company moves into an area, and that move causes employed people to lose jobs, there is a burden upon the people of the community through Welfare? Is that the gist of your argument?
"Morg - are you saying that NEW JOBs will result from saving money on groceries and that those new jobs will offset the losses due to productivity?"
Yes, Larry, that's exactly what he's saying.
Get over the zero-sum thing you are suffering with.
re: when WalMart moves into a community.
First of all, let me re-state:
I am IN FAVOR of Walmart and it's business model and I agree that majority productivity results.
but what I am ALSO saying here is that the "extra" money saved by customers may well not be spent locally and instead spent on stuff produced somewhere else.
And that if that happens - there is NOT a one-for-one replacement of workers and that if there are few other local jobs or opportunities for jobs that some people will inevitably end up on welfare and MedicAid.
and that this has a cost also.
do you agree Jon?
"but we have problems figuring out what to do with families who have lived in an area for decades and Mom/Dad are in their fifties and own a modest home that is theirs but not worth much if they wanted to pull up stakes and move - even if someone would hire a 50-something with no health insurance who has health "issues""
Who is "WE", Larry? I don't have that problem and neither do you. There is nothing that "we" need to "do" with anyone.
Please excuse me if this page is wet, but that sad story has me sobbing uncontrollably, and my eyes are leaking badly.
"quite likely, local retail workers did not get health care benefits but they did get cash money to spend on health care and food."
You are just guessing & making shit up. If you want to talk about such things get some data. You have no idea what you're talking about.
"I'm not convinced that when WalMart comes to town - that there is a net benefit."
Really? You need to think carefully about this.
If there is no net benefit to Walmart coming to town, if there is actually a net loss, then what allows Walmart to not only thrive in their current locations, but expand their business worldwide?
Where does that additional capital come from if there is less wealth?
I don't really expect you to understand that, but please try.
" "but we have problems figuring out what to do with families who have lived in an area for decades and Mom/Dad are in their fifties and own a modest home that is theirs but not worth much if they wanted to pull up stakes and move - even if someone would hire a 50-something with no health insurance who has health "issues""
Who is "WE", Larry? I don't have that problem and neither do you. There is nothing that "we" need to "do" with anyone."
"we" is the other folks who live there - neighbors, families and government. You say there is "nothing"..."we" need to do but is that the reality?
"Please excuse me if this page is wet, but that sad story has me sobbing uncontrollably, and my eyes are leaking badly."
It's not your eyes.. but your brain.
you must deal with the realities guy not your theories.
"quite likely, local retail workers did not get health care benefits but they did get cash money to spend on health care and food."
You are just guessing & making shit up. If you want to talk about such things get some data. You have no idea what you're talking about."
no we're not.
if you work at a local store guy, you usually get paid.
and with that money, you can pay for a doctor visit.
without that job, you have no money.
we're talking about the real world here.
I know that stresses you out but that's the real world.
Hm...I see your point, Larry.
Not sure if I agree 100%, though.
Assuming people gain extra money from the company moving to town, it is likely it will be spent locally on products (the products themselves may not be local, but the stores likely are).
I think it's difficult to say whether or not a net job gain/loss will occur. Let's look at two scenarios (assume in both cases that labor cannot leave the town): 1) Walmart moves to a town. It immediately drives out all other retail stores. The people who worked (or owned) those stores, and could not get jobs with WalMart, refuse to work in anything but retail. Those people will end up on welfare (unless they discover a way to beat WalMart). There is a net job loss.
2) WalMart comes to town and shuts down all other retail stores. However, the extra money people save cause a boom in service industries such as restruants, tourism, financial advising, etc. The folks who used to work (and could not get jobs with WalMart) move into these new industries. There is a net job gain.
So, I think it depends on the attitudes of folks involved. To kind of hedge, you'll probably have folks who don't want new jobs in new industries that spring up. Or you may not have the conditions for new industries to spring up. The list could go on.
I think, Larry, you are right that some folks will end up on Welfare and weigh on the system; those who may not have been there pre-Walmart. But the resulting gains from extra income will outweigh those costs on Welfare.
By the way, I know you're not arguing for or against Walmart. But this is an interesting discussion.
All that being said, I do not think a company could stay in business who does not increase the value to the community around it. If Walmart was the great evil and destroyed jobs, paid low wages, and didn't contribute anything back to the community, it wouldn't survive: people without jobs have no money, which means no spending, which means no profits, which mean no Walmart (Exxon, Bank of America, Target, etc). Businesses only exist because they contribute value.
" refuse to work in anything but retail. Those people will end up on welfare (unless they discover a way to beat WalMart). There is a net job loss."
" However, the extra money people save cause a boom in service industries such as restruants, tourism, financial advising, etc"
perhaps.
this assumes that when people shop at WalMart for groceries and save $50 that they don't head over to the big screen TV from Taiwan aisle or the shirts on sale from India aisle.
but another question for you.
it terms of total local payroll - before and after Walmart.
Do you think the total local payroll before and after WalMart is:
a. the same
b. more
c. less
justify your answer
thanks!
"It does not necessarily mean that an equivalent paying job will appear to offset the lost job."
You really don't understand what productivity means, do you.
Instead of looking only at the fact that some jobs are lost over in this corner, think about it as overall, having more stuff and a better standard of living with the same number of jobs. Productivity increased our well-being.
"They could, for instance, buy a big screen TV that came from Tawain and not locally and they'll chose tha big screen TV over hiring someone to clean up their homes."
And that is a good thing also, right? Do you have something against Taiwanese workers improving their standard of living?
Perhaps they will spend some of that extra income buying US treasuries, so your government can continue to overspend on supporting those who lost their jobs to the local Walmart.
It seems like a win-win, no?
Do you think the total local payroll before and after WalMart is:
a. the same
b. more
c. less
justify your answer
thanks!
Man, I'm having flashbacks to high school :-P
In the short term, I'd say less, simply because people will be displaced by Walmart and the short run to too short for any significant changes to take place.
In the long run, I think payroll will increase. The long run will allow folks to retrain, open businesses, invent something, a new business model to come around, etc.
"why won't you answer these simple questions?"
But he does. Over and over.
You ask a question and expect an answer that fits your zero-sum thinking. When it doesn't, you fail to understand it. The answers are, nonetheless, completely correct in the real world, as it actually works.
Until you are able to change your view of the world, you will continue to be frustrated. This is what morganovich means by "understand simple concepts".
Check your premise.
" This is what morganovich means by "understand simple concepts"."
ha ha ha
you guys are a RIOT!
you have stock answer for questions you do not like - that do not conform to your theories.
I'm on to you guys.
bogus butts some of you are.
"don't mistake my motives here."
Motives? Your comments don't provide enough information to determine motives, unless your motive is to appear to not understand.
"I am not arguing one view or the other.. I'm looking for an honest assessment of what happens to jobs when WalMart comes to town."
And you have gotten exactly that. That you don't seem to understand what you read is your problem.
"that's all... I'm looking for views and rationale ..and dialogue..."
And you're getting them. Your repetitive questions indicate you don't understand what others are writing.
One question: are we talking payroll in real terms or nominal, or volume of employed?
Jon: "Hm...I see your point, Larry.
Not sure if I agree 100%, though."
Nice try, but diplomacy won't likely work in this case.
Good luck, though, nothing's impossible, I guess.
Jon - nominal.
I think it's less at least early on.
the increased productivity and dollar savings presents a theoretical opportunity to local people to offer services (and goods) to compete against other offerings from WalMart.
But WalMart pretty much sucks up most goods unless there is a local product - that WalMart does not distribute.
for instance, where I live - you can buy crabs and oysters (oyster knives) locally but not so much at WalMart.
jon-
i think your estimate is too pessimistic.
first, we need to figure out how many jobs walmart provides relative to displaces. if they add 300 jobs, that's a lot of mom and pops already replaced and exceeded in terms of employment. if people no longer have to drive 30 miles to get a camping set, well, that's another big gain.
so, it's not even clear that there are short term job losses. it depends on the relative labor intensity.
in the medium term, lots of new real buying power is created by lower prices. this even hits in the short term to a significant extent.
if i spend $150 on groceries instead of $200, maybe i see a movie, go out to eat, hire a cleaner or get someone to do my landscaping. that can almost immediately create jobs, especially for small providers in service industries.
increases in real wealth go disproportionately to services. this can be seen in any developing economy and is why developed economies have a much higher % of gdp from services than developing ones. services are far more labor intensive than retail. thus, a shift away from retail spending and toward services ought to lead to more employment.
in the long run, lower costs drive greater real wealth which drives growth and prosperity and jobs along with it.
try considering the obverse case:
a local store, under pressure to make a profit, gets the city council to apply price controls to the town and increases the cost of all groceries 30%.
consider the effect on jobs and well being.
if you want to up the welfare rolls, that seems like the way to do it. it will harm every other local business as instead of spending $200, i spend $260and have less money to spend there. so the restaurant has to let a waiter go. i fire my housecleaner.
i have less buying power and am less well off.
it's easy to see why that is such a big loser for the community.
so, if this is so, then how can doing the opposite thing to prices also be a big loser? that would imply that all change is bad.
larry will never get his head around it. his whole metier is to ask questions over and over and never, ever answer any or even try to comprehend the answer. i have no idea why he does this, but he's either not interested in answers or just unable to comprehend them.
he's just an epic time waster.
he does this on thread after thread and it never changes.
i think the best policy is not to feed the troll.
""we" is the other folks who live there - neighbors, families and government. You say there is "nothing"..."we" need to do but is that the reality?"
No, Larry, "we" includes you and me. "They", the other people who live there, have a concern about those who lose jobs, just as "you" have a concern about your family, friends, and neighbors, and "I", have a concern about my family, friends, and community. "We" is a collective concept that doesn't apply here, and is dangerous. That kind of thinking leads to the welfare state you are complaining about.
I think it's less at least early on.
the increased productivity and dollar savings presents a theoretical opportunity to local people to offer services (and goods) to compete against other offerings from WalMart.
I think we're on the same page, here.
The big box stores do have a competitive advantage in "common" goods. I go to Target (I shun Walmart, but that's a different story) for things like sundries, some clothing, small kitchen appliances, cleaning supplies, etc. However, where they lack are the superior goods (although Target is adjusting for this model). I mean, not many people buy suits from Walmart. Not many people buy fine silverware or dishware from these stores. Same with bedding, etc. Of course, some do, but many do not.
But I think you're right, Larry, that Walmart stacks up well on generic products, but not so much local specialties.
Morg.. WHY IN THE WORLD
are you STILL WASTING YOUR TIME BOY!
:-)
you say you're done then you continue reading the posts.
why?
" a shift away from retail spending and toward services ought to lead to more employment."
that's not proven at all.
that $50 "savings" goes for a new rod and reel rather than a house cleaner or landscaping in a lot of cases.
I ask many questions Morg because you DO NOT answer them.
ya'll are so bound up on your theories and arrogant attitudes that you cannot get "lower" yourself to discuss how things actually do work.
That's fine for you "advanced" thinkers but why must you continue to mess around with the folks who do not "comprehend"?
it makes no sense guy.
I have no trouble moving my mouse when I have no interest in what you are blathering about at times.. how about returning the favor instead of giving yourself an online rash?
:-)
This comment has been removed by the author.
"you must deal with the realities guy not your theories."
Realities? Larry, you don't understand the realities, even after they are explained to you over and over? you need to rethink your premise. The real world isn't zero-sum. The pie gets bigger, Larry, you should try to understand that concept if you want to understand what people tell you.
You are commenting on an economics blog. You need to learn some basic economics concepts you appear to be missing.
Jon - recreational canoes and equipment is a good example of what WalMart or Target do not do. Even Sports Authority and Dicks do not.
A REAL recreational canoe is bought locally from a local retailer who normally orders them by the trailer load (cheaper than shipping one).
Some of these are available at REI or similar but REIs are like Hen's teeth compared to WalMarts.
Another example is guns.
WalMart has a dozen or less.
the local store has hundreds and ammo for all of them.
Want an ATV or outboard motor?
ditto....
that's REAL local retail!
:-)
larry-
i'm talking to jon.
unlike you and your half wit shenanigans he's very much worth talking to. he's full of insights and interesting info, as is ron.
it's just you that's not worth having a conversation with.
but just because you are a nitwit is no reason for me to have a conversation with him, yet another fact you seem unable to comprehend, just like the fact that all your questions have been answered.
happy trolling.
i think your estimate is too pessimistic.
I was just using simple examples to illustrate the point.
I don't think Larry is entirely wrong here. I think his point is valid in the very short run. I think (and please correct me if I am wrong, Morganovich), you are talking more about the medium and long run, where Larry's point does break down. I am basing this on some of the scenarios you present, which seem to be more medium and long run.
C'mon Morganovich and Larry. Let's everybody calm down. Lots of names are being thrown around so let's all take a deep breath. Let's not let this digress into a verbal pissing contest.
You both make good points and you both are intelligent people with good opinions, but I think you are talking past each other.
From what I understand, Larry is talking about the short-to-medium run while Morganovich is talking about the medium-to-long run.
You both are making valid points for your respective timeframes, so please let's have some diplomacy!
"That's fine for you "advanced" thinkers but why must you continue to mess around with the folks who do not "comprehend"?"
There's only one, Larry.
" The real world isn't zero-sum. The pie gets bigger, Larry, you should try to understand that concept if you want to understand what people tell you."
oh bull hockey! is it so beneath you intellectual "giants" to "lower" yourself to answer low brow questions from the mentally deficient?
"You are commenting on an economics blog. You need to learn some basic economics concepts you appear to be missing."
double bull hockey.
there is a WIDE diversity of opinion AND supposed knowledge even between you mental giants at times!
ya'll are just full of yourselves at times. de-puff.
recreational canoes and equipment is a good example of what WalMart or Target do not do. Even Sports Authority and Dicks do not.
I agree. I'd rather buy my canoe from LL Bean (but that's easy for me to say as I live a mile from a store). And if there is one thing I do not trust it's a gun sold from WalMart.
"Another example is guns.
WalMart has a dozen or less.
the local store has hundreds and ammo for all of them.
Want an ATV or outboard motor?
ditto....
that's REAL local retail!"
Your entire comment is an argument against the notion that Walmart causes a net loss of local jobs. You might spend your Walmart savings at those local merchants, causing them to hire more people to handle the higher volume.
You, and every other customer, choose which businesses will prosper, and which will fail. It's not walmart that puts other retailers out of business, it's shoppers.
"oh bull hockey! is it so beneath you intellectual "giants" to "lower" yourself to answer low brow questions from the mentally deficient?"
Larry, morganovich provides some of the most logically consistent, complete, and easily understood answers on this blog. There's some level of comprehension below which the concepts being discussed have no meaning. It's impossible to convey meaningful information below that level.
There needs to be some level of common understanding of the subjects, and it's not clear where that level is for you, as you keep asking the same questions, and making the same assertions over and over.
"double bull hockey.
there is a WIDE diversity of opinion AND supposed knowledge even between you mental giants at times!"
Yes, there is. That's a good thing, as it creates stimulating and educational discussions, except for those with you.
"ya'll are just full of yourselves at times. de-puff."
Incredulity can give that impression sometimes.
" Your entire comment is an argument against the notion that Walmart causes a net loss of local jobs"
I was more asking the question than asserting it as an absolute fact.
My mind remains open to the issue but I would remind you that there are economists ...real ones.. who also have their doubts.
you can't simply wish away those you disagree with by name calling including other economists!
Much evidence is anecdotal in part, but usually where there is a small town with a WalMart - there core of that town ends up having store after store boarded up or converted to some much lower commercial use.
Gun stores in general are going great guns! pun intended!
Jon M: "And if there is one thing I do not trust it's a gun sold from WalMart."
That's interesting. Have you had any trouble with them? I have no personal experience, but as far as I know they are the same guns sold everywhere else. Is there a reason I should avoid them? I would appreciate any helpful advice.
"Much evidence is anecdotal in part, but usually where there is a small town with a WalMart - there core of that town ends up having store after store boarded up or converted to some much lower commercial use.
That is called creative destruction. You, as a customer, cause that to happen. No one is forced to shop at Walmart to get the best prices and improve their standard of living. You can vote for smaller stores, lower selection, and higher prices by simply taking your dollars there. It's all up to you.
It's the height of absurdity to hear people being interviewed as they leave Walmart, complain about mom & pop stores suffering.
The local stores that survive are those that are able to change or adapt their business model to offer things that don't compete directly with Walmart, such as the sporting goods you mentioned.
No one can compete with Walmart on toothpaste and shampoo, so if you are a local business, don't depending on sales of those, and similar items.
"Gun stores in general are going great guns! pun intended!"
Yes, they certainly are, and here's why.
ron-
i'm sure there is anecdotal evidence, but here in park city, there's a walmart about 6 miles away out the the junction.
across the street are 2 more grocery stores, a smith's and a wholefoods. in town we have 3 more, 2 full sized and a mexican market.
to my knowledge, nothing at all shut down when walmart came. bed bath and beyond, bestbuy, calvin klein, ralph lauren, the sports shots, world market, etc all seem to have been fine.
i'm sure experiences have been different in other places, but we are a small town and it did not destroy things here.
much of this has to do with what the demand was before they came. like any rational retailer, wmt seeks to go to places where there is excess demand.
there is this consistent narrative about walmart running every other business out of town, but i suspect this is overstated. existing firms will always rail about competition of every type, but somehow you never here kroger yelling about a new safeway.
i'm left wondering about just how bad this really is.
i mean, if you try hard enough, you can claim that at any given level of buying power, purchase of any item hurts everyone else. if i buy new skis, that's less money to eat out. but calling that destructive seems a stretch.
i've seen studies claiming that a new walmart destroys 3 retail jobs for every 2 it creates, but they all seem flawed in 2 key respects.
1. they lament that the level of retail sales did not increase. this may be true in nominal terms, but none seem to then assess how much real buying power went up. if $200 of groceries now cost $150, that is a big jump in real buying power.
this leads to 2. how many other jobs were created with that extra buying power? that never seems to be included in the studies.
i suspect that if you used the methodology the spanish did to assess green jobs, you's see it become flat and or positive in terms of jobs.
the argument that by serving consumers you destroy economies seems pretty fishy to me.
this seems like another one of those anti import arguments where the losses are concentrated but the gains diffuse, so only one side of the story is up in arms.
"No one can compete with Walmart on toothpaste and shampoo, so if you are a local business, don't depending on sales of those, and similar items."
i'm not so sure this is true.
you can compete lots of ways. i would never buy shampoo or groceries at walmart. you compete by offering brands they do not have. walmart does not carry my shampoo. i might save a little on toothpaste, but i'd need to make a special trip, and i'm not gonna do it for 50 cents. convenience matters too as does selection.
there are lots of ways to compete with walmart.
also worth noting: the items you buy at walmart, particularly groceries, are often not the same ones at safeway. the corn flakes are different, even the kellogs ones. the box is different, the size is different, and they actual make special, cheaper stuff for them.
years ago, my roommate worked for playtex, and they were making special stuff to sell to wmt.
i completely agree that complaining about someone selling cheaper is akin to asking to be mugged and that many existing stores were living fat on too little competition, but walmart is not an unstoppable Juggernaut either. sure, it killed rotten groups like kamrt, but guys like target figured out how to adapt and compete.
i echo ron's sentiments that this is healthy and beneficial. ultimately, it's about serving the consumer and doing so does not harm them.
morg,
"i'm sure experiences have been different in other places, but we are a small town and it did not destroy things here."
I heard a similar story from a friend in Sheridan, WY. after Walmart came to town.
I asked him if Walmart had hurt small local businesses, expecting to hear of small family stores being crushed, but his answer surprised me.
He said he felt that Walmart was one of the best things that had ever happened to Sheridan, as it improved the attitudes of local merchants tremendously. Where before they had attitudes of "take it or leave it", after Walmart opened they became very courteous and helpful, including offers to order things not found on the shelf.
btw:
amazon crushes walmart on toothpaste.
http://www.amazon.com/Crest-Fluoride-Anticavity-Radiant-Toothpaste/dp/B00336EUSQ/ref=sr_1_1?ie=UTF8&qid=1332343862&sr=8-1
http://www.walmart.com/ip/Crest-3D-WHT-VIVID-24-4OZ-RDNT-MNT/13911203
a 5.8 oz tube is cheaper than wmt's 4 oz one. if you use prime, it's free 2 day shipping and you never need to leave the house.
i'd be willing to bet that amazon has put more stores out of business than wmt, especially in consumer electronics.
ban the internet, save jobs!
bring back elevator operators!
Morg: "i've seen studies claiming that a new walmart destroys 3 retail jobs for every 2 it creates, but they all seem flawed in 2 key respects."
I wouldn't doubt those numbers at all, but as you point out, that's only a part of the story. Any increase in productivity means more output for the same input, or the same output for less input. This is a GOOD thing, and ,makes us better off. Ignoring the additional buying power is a serious flaw in such reports.
I'm still waiting for the report entitled: "Where are all those unemployed people Walmart created?"
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