Is Walmart Good For America?

Walmart began as the realization of a dream, achieved by a hard-working American man who grew his local 5 and Dime shop into a successful, globalized mega-retailer. But before Walmart became the atrocity it is today, it was an American company with American ideals: according to the Frontline program, Sam Walton pledged at one point to only sell American made products. It wasn't until the 1990's that Walmart truly expressed its enormous economic power by turning its head to China, which in turn became the worlds largest producer of cheap goods. My, how the (made-in-Guangdong) tables have turned.

To answer the question: is Walmart good for America? I have to say a whole-hearted NO. I hold no personal grudge or bias against Walmart; in fact I applaud the efforts to assist the American consumer in achieving the ability to buy goods at the "lowest prices", which in turn helps the everyday person save money. Or, is it all just a facade? From the Frontline program we learn about Walmart's lowest price point program which lures the consumer in, and leads them to probably purchase items which are NOT the lowest price. We have also learned that Walmart gains a massive profit from purchasing Chinese made goods. Walmart is probably the largest importer of Chinese-made goods and materials in the entire world. One thing I find the most disturbing about Walmart as an enterprise is its relationship with China. I did not realize the true enormity of the interdependence of the two, and especially that China has economically boomed 100fold over the past 20 years because of Walmart and its purchasing power.

Another problem here is how Walmart and its competitive quest for purchasing and selling the cheapest priced goods possible has negatively effected America's economy. Sure, as I said before, Americans are able to buy a variety of products at low prices. But what about the hundreds of suppliers that, in order to compete with their peers who outsource labor, were forced to close American plants, lay off thousands of American workers, in order to cut costs? These suppliers to Walmart are so critically dependent on the Walmart consumer that in order to keep their businesses afloat were forced to themselves open factories in China's poorest provinces, where they could produce their products at the lowest cost.

I think the real question should be, is Walmart good for China? The answer to that would be an overwhelming Yes. The American trade agreement with China was designed to benefit the United States economy, but in fact has achieved the polar opposite. According to Frontline, the Port of Long Beach receives an overwhelming $38 billion dollars worth of Chinese goods yearly; and at the same time, only exports approximately $3 billion worth of American raw materials to China. China uses these materials to make the goods that companies like Walmart buy from them. Its almost like the "World Systems Theory" of global economy we learned about in the text book. In this situation, its almost like America is the periphery, and the newly industrialized, factory-laden Chinese provinces are the core. We are now dependent on China to keep our economy afloat. I see something seriously wrong with that.

The Chinese economy is expanding at an unprecedented pace. Poor peasants who would ordinarily be living in rural villages are now flocking to cities, expanding them, and working for wages that are extensive enough to support the worker's poor families back home. Its not to say that the worker's situations are ideal, in fact, many work long hours and the conditions may be inadequate.

Again, I am not totally opposed to Walmart. I know that it allows many Americans to be able to feed and clothe their families when they otherwise may not be able to afford to do so. However, I do feel that most Americans do not understand the magnitude of power that Walmart has over the economy, of the consumer. I think that if consumers were more educated as to where and how they were getting these "always low prices", they may think twice about where they shop. Perhaps its time the real economic power was taken back from capitalist mega-giants and back into the hands of the people where it belongs.

(My other thoughts about Walmart appear in my "global inequality" post from last month.)