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Why Walmart Is Bad for America

Walmart logo

Walmart logo

Walmart

In 1962, Walmart came into existence as a discount store in the state of Arkansas. In 1970, the company was traded on OTC markets and later began trading on NYSE in 1972. The company then grew quickly and owned over 270 stores in 11 states in a decade, and in 1991, the company had become an international company.

Currently, Walmart serves over 130 million customers in a week, as well as employs up to 1.6 million people, and receives as much as $312.4 billion from its sales. Just like any other big company, Walmart has had its share of legal issues and criticism from the public. Walmart is accused of underpaying its employees, and some of them have even lodged complaints about international trade disputes.

Given its global success, Walmart ought to have had better offers to its employees and cleared all accusations such as environmental violations; discrimination among others, then giving the idea the company is not as good for America as expected.

There are accusations about Walmart including the fact that it drives down the wages of the employees and the company is responsible for increasing the public health care costs. The Walton family, which is the co-founder of the Walmart Company, is accused of donating a lot of money to politics and mostly towards the Republicans.

Minimum wage

The company is accused of manipulating its suppliers and convincing them to accept unfair contracts, as they also do not encourage promotion and growth for their workers. The company seems to oppose the policies that streamline links that aim at organizing and environmental protection.

There are accusations that Walmart is purchasing the majority of its products from foreign countries, specifically China, which also gives the customers an advantage as it lowers the prices of goods.

However, with their business with China, the country has more advantage because when Walmart manufactures goods there; the country’s economy grows, hence creating a larger middle class for China. By preferring manufacturing in China and other foreign countries, Walmart has led to the loss of manufacturing jobs in the United States (Basker 178).

Therefore, this would mean that it would be fair to assume that Walmart must be one of the causative reasons why America’s production industry has lost its strength in the global market.

When it comes to retail business, Walmart sets the bar, and many businesses that would want to maintain their successes have to follow the route that the leader, Walmart takes. One of the ways that these businesses follow Walmart is by having their stores modeled just like Walmart (Basker 181). Walmart stores contain everything that someone can require from electronics, tires, supplies, groceries, and beauty products, among other things.

By having almost everything in a store, Walmart aims at ensuring that the customers find everything at once and at a lower price, which is what defines the company’s philosophy. Therefore, with the popularity of Walmart and its philosophy other stores have considered taking the same approach.

However, one challenge that Walmart has undergone is that all the other competitors have taken up the same approach and lowered the prices of their products too, which is good for the customers but not for Walmart.

To remain competitive, Walmart has had to cut on the employees’ benefits, cut back on the labor and prefer cheaper manufacturers, hence choosing China and other foreign countries. Similarly, the suppliers also have to reduce their costs of tendering to secure contracts with Walmart, which forces these supply companies to lay off the majority of their employees.

Back home in America, those manufacturing companies that previously handled the contracts with companies such as Walmart lost their jobs. The companies had the majority of the middle class in the country, but the jobs were moved to the foreign countries rendering them jobless (Baker, 180).

It means that the majority had their annual earnings reduced significantly. The housing market has to categorically go down, as the majority cannot afford to pay for the houses with their minimum wages.

Therefore, Walmart has greatly affected the economy of the country negatively by choosing to manufacture its products abroad in China, while improving that of the foreign country (Quinn). Additionally, the US labor laws are also quite restrictive, while the other countries may not have quite as strict laws like that as the US. Walmart chose to send its manufacturers to China because of the cheap cost and less strict laws.

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In China, they also managed to get cheap labor, but the situation changed as those laborers realized that they offered their services cheaply and decided to demand high wages. Hence, with higher wages for the workers, the country’s economy has a majority of them belonging to the middle class. When these Chinese workers started to work, they did not make as much money, but with that change, the workers started living decent lives.


It is evident that Walmart managed to improve the livelihood of the workers, as well as contribute to the country’s growing economy; on the other hand, it means that America is getting a raw deal.

Walmart employs many people, and they are most diverse, young, old, disabled, and others with no college degrees. However, because some of them are helpless and cannot defend themselves, most are recruited as part-time employees, without health coverage. Therefore, it is common that it is difficult for the employees to advance, that is to be promoted to upper management.

Walmart seems to frustrate its employees, as they employ them only as part-timers knowing that they are not guaranteed pay benefits or even payment for overtime. The payment that the employees receive is also low, and some of the former employees who resigned argue that one cannot find a career while working for the company.

In such conditions, employees would only decide to keep their jobs because they need them.

In conclusion, Walmart might have some good such as availing products at a cheaper cost to the customers and availing of different products in one place. However, I think that the negatives outdo the positives, making it harmful to the country. Walmart, like other large stores, devastates other stores by dominating the market and hurting other businesses due to their presence.

Second, Walmart has widened the trade deficit between the United States and China and seems to focus more on the profit they are to make than the economy of their host nation and its people.

Thirdly, their strategy of preferring low cost for their products and making high profits destroys the nation’s economic stability given it is a big contributor to the economy given its size. The company should also consider improving the status of its employees, given that it is a large corporation known globally in order to improve its reputation.


References

Basker, Emek. "Job creation or destruction? Labor market effects of Wal-Mart expansion." The Review of Economics and Statistics 87.1 (2005): 174-183.

Basker, Emek. "The causes and consequences of Wal-Mart's growth." The Journal of Economic Perspectives 21.3 (2007): 177-198.

Chan, Anita. Walmart in China. Cornell University Press, 2011.

Quinn, Bill. How Walmart Is Destroying America and the World: And What You Can Do About It. Random House Digital, Inc., 2005.


This content reflects the personal opinions of the author. It is accurate and true to the best of the author’s knowledge and should not be substituted for impartial fact or advice in legal, political, or personal matters.

© 2022 Uriel Kushiel

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