Metadata
- Author: Rogé Karma
- Full Title:: The Walmart Effect
- Category:: 🗞️Articles
- URL:: https://www.theatlantic.com/ideas/archive/2024/12/walmart-prices-poverty-economy/681122/
- Read date:: 2025-01-06
Highlights
Reminds me of someone
the country’s biggest private employer, known for low pay, and its biggest retailer, known for low prices. (View Highlight)
Two new research papers challenge that view. Using creative new methods, they find that the costs Walmart imposes in the form of not only lower earnings but also higher unemployment in the wider community outweigh the savings it provides for shoppers. On net, they conclude, Walmart makes the places it operates in poorer than they would be if it had never shown up at all. (View Highlight)
Once Walmart has become the major employer in town, it ends up with what economists call “monopsony power” over workers. Just as monopoly describes a company that can afford to charge exorbitant prices because it lacks any real competition, monopsony describes a company that can afford to pay low wages because workers have so few alternatives. This helps explain why Walmart has consistently paid lower wages than its competitors, such as Target and Costco, as well as regional grocers such as Safeway. (View Highlight)