Does Wal-Mart Increase Poverty Rates?

A new study claims that Wal-Mart raises poverty rates in the counties where its stores are located.

A study published in the latest issue of Social Science Quarterly is the first to examine the effect of Wal-Mart stores on poverty rates. The study found that nationwide an estimated 20,000 families have fallen below the official poverty line as a result of the chain’s expansion. During the last decade, dependence on the food stamp program nationwide increased by 8 percent, while in counties with Wal-Mart stores the increase was almost twice as large at 15.3 percent. “After controlling for other factors determining changes in the poverty rate over time, we find that both counties with more initial Wal-Mart stores and with more additions of stores between 1987 and 1998 experienced greater increases (or smaller decreases) in family poverty rates during the 1990’s economic boom period,” Stephan Goetz a Professor of Agricultural and Regional Economics at The Pennsylvania State University states. Although Wal-Mart employs many people living in its communities, for most, the hours worked and the wages paid do not help these families transition out of poverty.

(Thanks PVC)

7 Comments

  1. another great book on this subject is The United States of Wal-mart. I have not shopped at a wal-mart for over 3 years. while i know my boycott will not affect them, i can sleep better at night knowing i dont support them. the most important argument, i think, is that people in this country seem to think that ANY job is a good job, and that’s just not true. Low-paying jobs (such as wal-mart associate jobs) do indeed hurt the economies of the cities they move into…more so than if the wal-mart and its hundreds of jobs had gone elsewhere. wal-mart and stores like it are a scourge on this country. the sad thing is, people will shop there because they think they can’t afford things elsewhere. NOT TRUE. i lived under the poverty line for a full year after college (making about 10,000) per year and i did not shop there, and i also did not starve to death. it can be done. another interesting fact is that wal-marts low, devilishly low prices, actually causes other stores on the area (such as a grocery store) to lower their prices to stay in business, which leads to them paying THEIR employess less and less and offer less and less benefits. so wal-mart is really like a disease, see? it affects, a-hem, infects the entire city with terrible jobs and terrible benefits.

  2. Hmmm, all these low prices help consumers, though — many of them poor people themselves. And who ever forced Walmart employees to work at Walmart?

    But I like that jenni is voting with her pocketbook and making an individual choice not to shop at Walmart. It’s good that she doesn’t want government to come in and forcibly alter Walmart’s pricing structure or tell them what to pay their employees so I can respect her decision.

    One more note about the low pay — many of the workers at Walmart are the very young who typically don’t start at 55 g’s per year. And the very old who are looking for some extrea cash to help ends meet. Both of these subsets of people have large percentages that share homes with a higher wage earner and therefore do not have to pay full rent/mortgage if any at all.

  3. Wal-Mart is helping many Chinese people pull themselves out of poverty, though. B^P

    I agree with The Hook…at least Wal-Mart does bring lower priced goods to the lower income populace. That’s a problem I see many inner-city poor stuggle with – their purchasing choices tend to be more expensive (and more limited) than mine, since all the closest low price/high volume retailers are way out in the suburbs. They could use a convenient Wal-Mart, too!

  4. at least Wal-Mart does bring lower priced goods to the lower income populace

    I have read before that when Wal-Mart first opens up a store in a new location that their prices are very very low but over time they bring their prices back up so that they are about the same as a Target or other retail chains in the area. The difference after that is that Walmart pays their employees very little and have so few full time employees compared to the other retail outlets.

    I’m on my way out the door but I’ll hunt up some links later.

  5. I used to live in a small town in Eastern Washington with a variety of small locally owned, locally employing businesses downtown. Satan-store, oops, I mean Walmart, built a store, just outside the city limits. Why outside the city you might ask? Because that way Walmart need not pay taxes to said city, saving them no doubt millions globally with this policy. Walmart had rock bottom prices and how! In fact Walmart initially can afford to slash profits so low that they needn’t make a profit at a new location for years as their other locations raking in the dough, float the new. Within a few short years, our vibrant downtown dried up like the desert. The local coop grocery featuring many locally grown or made products, broke and gone as well as the good folks they employed. The groovy oldtime pharmacy, went under. The larger local owned IGA grocery, finished. The local camping/hiking/skiing gear store, done and gone under. I saw this again, and again, and again, until the small town was a husk barely worth mentioning with all uniqueness and local flavor desiccated out like heat bleached bone.
    Indeed Walmart provided a few more jobs to the area, but only minimum wage, part-time, no benefits, sans retirement, crap-ass jobs. And it certainly didn’t make up for all the better paying higher end jobs it ran out of town that actually had some benefits and decent wages.
    I don’t know what turnip truck you people fell off of, but it was adults and older people employed there not teenagers. People who were trying to support spouses, children, and bring in enough money for their families to survive. Or eldery people forced back to work as the benefits they worked for all their lives evaporated. Anyone you talk to who even goes to Walmart willingly always goes on about the crowded aisles and how shopping there is generally an unpleasant experience, yet still they go back. And I was forced to shop there for a time once all the local places went under. That or drive an hour and a half one way, to go anyplace else for a prescription. And funny how Wally-worlds prices shot right up once all the local competition had been eradicated! A more unpleasant place to shop cannot be conceived of in my estimation.
    Have you seen Walmarts early morning employee rallys? I have as I used to shop early. That’s not a workplace, it’s a cult, forcing these poor underpaid, unhappy people to perform assinine group chants allegedly to bolster morale. What happened to an expectation for human dignity in the workplace? Whatever shred these poor folks had was certainly vaporized each AM as people old enough to be my mother were forced to perform these individual eradicating, communal shouting exercises worthy of a forced labor camp. And because all those folks were paid so little, they were forced themselves to shop at Walmart. How convenient.
    The little town I once loved was toast, so I finally moved back west to slightly more populated area. Oh yea, there’s a Walmart around, but I vote with my feet and dollars, I’ll never, ever set foot in another or give them another penny. Observing one community destroyed was enough.
    Check out this site for an overview of TRUE Wally facts that I have seen happen to an area in person:
    http://walmartwatch.com/home/pages/issues

    If you care at all for your local stores or people DO NOT shop at this community destroying entity.

  6. But Dani, people in your town did vote with their feet and dollars and chose Walmart. Whatever their reason for shopping there (and working there) they were not forced to do so. They did so under their own free will.

    The same cannot be said of those of us who are forced to pay taxes to a federal government we do not wish to support.

  7. It’s a choice that we all make every day isn’t it? Unfortunately, with falling wages, rising prices most people will choose the lesser priced item, even when item may be of lesser quality. AND that act ultimately leads to their own fall. I suggest to you that the sheeple are being conditioned for this false choice. Make it hard to survive, people look for bargains, so they buy at the super-duper-mega-mart that pays employees for crap and has nary an item built in the USA in it. As individuals continue to do this they are actually sowing the seeds for the eradication of small locally owned, locally grown/built items as well as the economic armageddon sure to follow. Is that a good choice? No. Education could help in that area, in addition to the insistance that there is a liveable minimum wage, and health care whether you work for Wally-world or local Joe’s grocery. Why should a CEO make 40 million a day and a worker 40 dollars? That is so grossly out of wack that it defies any articulation or explanation. It’s criminally negiligent.
    In the past it was not clear what Walmart did to local business, but now we should be clear on how this store crapifies people, neighborhoods and cities. So like I just did with my first hand experience, I spread the word. Just think, if we all do this, maybe people will get the picture, if it is not already too late.

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