Wal-Mart’s Impact on Canadian Economy

One of the most recognized and most spoken about controversies lies in the creation of the world’s largest retailer, which is Wal-mart. The rapid expanding of Wal-mart all around the world, particularly in Canada and the United States, has affected the economy in various ways; both positively and negatively. Although Wal-mart serves millions of individuals daily with it’s excellence of low and affordable prices, is it really what everyone thinks it to be?

Wal-mart was founded by Sam Walton in his hometown of Bentonville, Arkansas. In the year 1962 he opened the first store under the name “Wal-mart.”  The creation of such an enormous company was ideally designed to be a one-stop shopping centre. This provided convenience for the consumer and within one store an individual could purchase groceries, merchandise and appliances, fast foods, and photo development; basically anything and everything. Today there are 309 Wal-mart’s across Canada which employ 77,000 Canadians. Each Wal-mart carries a vast array of 80,000 different products, as 138 million shoppers visit Wal-mart yearly.  Moreover, Wal-mart is depicted as a multinational corporation which continues to expand both locally and globally, as it builds a new store every 42 hours.

Wal-mart is perhaps one of the most affordable and convenient shopping centres known and appreciated by the people of today. It provides individuals and families with a low income to make use of all materials at an affordable price. Due to the low prices it is also known to be a “Penny Pincher’s Paradise.” Ray Bracy, Wal-Mart’s VP of corporate affairs, believes that: “Wal-Mart does more for the average American than any company in America. Furthermore, Wal-mart helps reduce inflation with their low prices and provides a quality of life. Additionally, due to the rapid expansion of Wal-mart across Canada and the United States it provides more job opportunities and allows for individuals to have a source of income.

Wal-mart has continued to flourish over time and is now a very successful corporation as a result of its ethnical values and devotion to consumer demand. At Wal-mart the consumer is king. “At Wal-Mart, the customer is king, everyone else be damned: competitors, employees, and the domestic manufacturing base. Everything Wal-Mart does—particularly its low prices—is done in the name of slavish devotion to consumer demand.”   Due to this value, Wal-mart makes great success and reputation in the eyes of consumers. Wal-mart lives by a three step rule; “Respect for the individual, service to our costumers and strive for excellence.”  Thus, by doing so, Wal-mart makes great sales and defeats the competition.

Though Wal-mart is good for Canadian and American economy it is also negative. The negative aspects include putting other businesses out of service, urbanization and the wages employees are paid. First off, due to the massive expansion of Wal-mart and the ideology behind a one-stop shop all consumers rush in due to quick convenience and the affordable prices. Thus, this puts all other businesses out of sight and at loss. Suppose, Wal-mart never existed then all other businesses would be better off. A study by Emek Basker, an economist from University of Missouri shows that for every new 100 jobs created in Wal-mart, 50 retail jobs are lost at competing establishments over the next five years and 20 wholesale jobs; thus, diminishing other businesses surrounding Wal-mart.

More importantly, urbanization stands as another issue. The expanding of Wal-mart is raising concerns in small towns and congesting the area. This is because Wal-mart is multiplying day after day; it builds a new store after every 42 hours.  “Wal-mart’s impact on economy is good by creating jobs but lower wages cause individuals to oppose; causing them to fight for land use because Wal-mart’s expansion is taking over.” Consequently, some individuals do not like the coming of Wal-mart to their small towns and this issue is creating uproar along with the loss of businesses and wages paid to employees.

Another crucial issue in regards to Wal-mart is based upon the wages employees are earning. On average, Wal-Mart sales associates earn $8.23 an hour which is below current minimum wage comparable at $8.75 today.  Furthermore, employees at Wal-mart are not provided with many benefits. It won’t pay for flu shots, child vaccinations, or contraception, which many other firms cover. By keeping deductibles high, Wal-Mart manages to spend 30 percent less per employee on health care than its competitors. And because so many companies try to benchmark their costs to Wal-Mart, its penny-pinching ways could lead to a spiral of declining benefits for all retail workers. Therefore, these are just some areas of weaknesses that make Wal-mart seem negative for the economy. But if viewed properly, Wal-mart actually does more good than bad for the average consumer. It truly embraces the customer and treats them with respect and takes upon great responsibility.

Conclusively, Wal-mart has an overall positive impact on economy and does their best to meet the needs of every consumer. Wal-mart never gives consumers a reason for complaining and unreliable service; it is present everywhere. Though Wal-mart contains some flaws is it right to say it’s completely bad and disregard the good it does the economy? Because that would be biased and not a truthful perception, knowing Wal-mart provides and meets the needs of all individuals, maintains low and affordable prices, presents loyalty, devotion and great service to consumers, convenience, and quality of life and job opportunities. 

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