Wal-Mart, in a fairly admirable move, sponsored a conference on their economic impact on communities and, to ensure its honesty, turned it over to an independent planning organization who selected the papers on scholarly rigor. Whoops:
At least two concluded that Wal-Mart stores' pay practices depressedwages beyond the retail sector. Another found that states on averagespent $898 for each Wal-Mart worker in Medicaid expenses.
Onestudy concluded that Wal-Mart's giant grocery and general merchandiseSupercenters brought little net gain for local communities in propertytaxes, sales taxes and employment; instead, the stores merely siphonedsales from existing businesses in the area.
Not all the newswas bad for Wal-Mart. Several of the studies noted that its stores ledto lower prices throughout a region. Two suggested that Wal-Martincreased a county's total employment, with one pegging that long-termgain at 1% to 2%.
David Neumark, a senior fellow at the PublicPolicy Institute of California, found that "residents of a local labormarket do indeed earn less following the opening of Wal-Mart stores."
Worse yet, he wrote, is Wal-Mart's influence in the South, where it hasits greatest concentration of stores. There, Neumark and his coauthorsfound, Wal-Mart has decreased retail employment and total employment.
Michael Hicks of the Air Force Institute of Technology and MarshallUniversity found that each employee of Wal-Mart caused "the averagestate to expend just under $900 a year in Medicaid benefits."
What's interesting here is that Wal-Mart's willingness to turn over the event bespoke a true confidence and belief that critics of their company's economic impact were wrong and would be proven so here. That the exact opposite is happening must be sending forth some ripples of cognitive dissonance within the retailer's walls. That's not to say the behemoth will change its methods, but coming on the heels of so much bad press for the company, the leaked memo on their plans to game the health system, and the upcoming release of Robert Greenwald's documentary "The High Cost of Low Prices," it'll be interesting to see how the corporation begins to react. Within their walls there's certainly an understanding that negative press is taking a toll on the company's expansion opportunities -- hence the new environmental consciousness and health plans. Now, with this conference's conclusion that there's a damn good reason for the negative press, there might emerge some elementswithin Wal-Mart's management that actually want to change the company's behavior for the better, that actually want to lead the way into a worker-positive service economy the same way GM led America into a labor-friendly maufacturing economy.
Hey, a boy a can dream.
