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Walmart. Walmart has destroyed thousands of businesses. Now you can argue the consumer got lower prices, but low prices don't matter when no one has money to af

Walmart. Walmart has destroyed thousands of businesses. Now you can argue the consumer got lower prices, but low prices don't matter when no one has money to afford them. Additionally, those economies of scale produced cheap, disposable, polluting goods that have an engineered lifetime so that customers have to keep buying the same appliance (or whatever) over and over. The question isn't when economies of scale hurt, that's a loaded question. The question is "when does consolidation no longer benefit the consumer?". I would argue many, many industries have reached this point, with ISPs being the most obvious one, but there are many examples (like the syringe one given above) where a business you've never heard of silently corners the market through consolidation and trust building.

valuearb 10y ago
Walmart has been a huge boon to the middle class. It's inarguable that consumers got lower prices, substantially lower prices. That's increased their standard of living. You can argue that Walmart hurt the standard of living of the Americans (less than 1% of US employees) who actually work for it. But that ignores the fact that the smaller competitors didn't pay much better, and never had a stock option plan, so the pay difference was marginal while the customer benefit was massive. Walmart big advantage wasn't labor costs, it was scale and inventory management from day one. And it's products are as good or better as the competitors. I hate Walmart, hate shopping there, but when I have to I'm always struck by how good the products are and how amazing the prices are.
- prklmn 10y ago
  You're off-base in almost every regard. >It's inarguable that consumers got lower prices, substantially lower prices. That's increased their standard of living. It's a multifaceted issue. Yes, Walmart sells cheap stuff, but that's not the company's only impact on the standard of living. The middle class has been steadily shrinking since the 70s, consistent with the rise of Walmart http://www.huffingtonpost.com/2013/06/06/middle-class-jobs-income-_n_3386157.html http://www.huffingtonpost.com/2013/06/06/middle-class-jobs-i... > You can argue that Walmart hurt the standard of living of the Americans (less than 1% of US employees) who actually work for it. The key issue is not Walmart's employees, but rather the employees of the companies they source from. > Walmart big advantage wasn't labor costs, it was scale and inventory management from day one. Once again, it's about the cost of the goods they sell that has a bigger economic impact than their direct labor cost. What goes into the cost of the goods they sell? Labor costs of their suppliers. What did they do after their advantage of scale and great inventory management management eroded? They started sourcing products from markets that were fueled by cheap labor i.e. not the USA. Sam Walton has been rolling in his grave for years: The first true Wal-Mart opened on July 2, 1962, in Rogers, Arkansas.[18] Called the Wal-Mart Discount City store, it was located at 719 West Walnut Street. He launched a determined effort to market American-made products. Included in the effort was a willingness to find American manufacturers who could supply merchandise for the entire Wal-Mart chain at a price low enough to meet the foreign competition. --> https://en.m.wikipedia.org/wiki/Sam_Walton https://en.m.wikipedia.org/wiki/Sam_Walton > I'm always struck by how good the products are and how amazing the prices are. You're probably one of very few
- nickpsecurity 10y ago
  When a Walmart opens, it knocks out about half the jobs in a small town. It doesn't replace that number. It also pays so low many of its employees are on welfare. Companies like WalMart are subsidized by the taxpayer. Repeat that across thousands of stores to get enormous impact on economy. Add downsizing, consolidation, price gouging (i.e. Koch's, oil), and offshoring to get an even bigger one across the board. The Recession was a given with buying power always going down while costs always go up.
- ntsplnkv2 10y ago
  Walmart has certainly not been a huge boon to the middle class, if they have been, we have not seen any evidence of it. The middle class is shrinking. So if this is true, that means the middle class is doing MUCH worse than realized. From what I've read, Despite the cheaper prices, there was a net loss in jobs and significant damage to small business-resulting in higher losses in the local economy than gained from cheaper product. I don't know if there's enough evidence of all of that, but it seems logical. Also you're ignoring the local economic impact of closing small businesses. It's not just the small retail store employee that loses out. Small businesses close-that means there's less need for accountants, cleaners, advertisers, real estate, etc. Walmart does all of this at the corporate level. This results in even more, well paying job loss, and sets off a spiral that destroys these communities. > And it's products are as good or better as the competitors. Sounds like confirmation bias to me. Nothing I ever see or buy from walmart has ever been quality, but I couldn't present that as evidence.
- coldtea 10y ago
  >Walmart has been a huge boon to the middle class. It's inarguable that consumers got lower prices, substantially lower prices. That's increased their standard of living. Only when thinking in first-order effects. How about the city businesses it destroyed, and thus the standard of living associated with the families that owned them and the whole support system? How about the power it affects upon manufacturers -- and thus to the people that work there?
- maxxxxx 10y ago
  I think Walmart has damaged the economy a lot. Maybe smaller companies are less efficient but Walmart has destroyed a lot of small business that provided fairly stable jobs to middle class people.
jpindar 10y ago
How does Wal-mart stay in business if "no one has money to afford them"?
- michaelmrose 10y ago
  Walmart isn't singular they are part of a huge array of companies paying shit wages. A lot of people in the same economic class as the workers are receiving government assistance meaning you are footing the bill for the food stamps that feeds the cashiers kids while ironically congratulating yourself on the good deal you got.
- coldtea 10y ago
  That's easy to answer: it doesn't in the long run (assuming it was the only player -- of course the reality is more nuanced). But it can destroy a whole lot of value (and be the last "business" standing) in the short and mid-run. In fact as such businesses erode the working/middle class, short and mid-term they become more enticing to it than other stores, since they are the cheaper options. If a company causes a "race to the bottom" for jobs and wages by selling too cheaply and paying too little, then those whose wages are affected will mostly be able to shop at that place exactly. And if that company is one business upon many that are causing the same issues, then people wont even be able to single them out for blaming...
- jonathankoren 10y ago
  Easy. Food stamps. https://www.google.com/amp/s/www.forbes.com/sites/clareoconnor/2014/04/15/report-walmart-workers-cost-taxpayers-6-2-billion-in-public-assistance/amp/ https://www.google.com/amp/s/www.forbes.com/sites/clareoconn... http://www.slate.com/articles/business/moneybox/2014/04/walmart_employees_on_food_stamps_their_wages_aren_t_enough_to_get_by.html http://www.slate.com/articles/business/moneybox/2014/04/walm...
- ubernostrum 10y ago
  They stay in business courtesy of government programs to keep people afloat enough to afford basic necessities, and by negotiating to pay reduced or no local taxes or infrastructure costs, coupled with relocating stores any time a tax-break deal expires. As long as you don't have to pay a living wage (because the government picks up the difference) and don't have to pay the cost of building and maintaining the infrastructure of your store (because the government picks up the difference), you can "sustain" an otherwise-unprofitable business for quite a long time.
wyager 10y ago
Are you familiar with intelligence squared? I encourage you to watch their debate on the value of walmart to society.
averagewall 10y ago
Destroying jobs is precisely how economies of scale and efficiency generally happens. If those other businesses kept employing as many people, products wouldn't get cheaper as much

valuearb 10y ago

Walmart has been a huge boon to the middle class. It's inarguable that consumers got lower prices, substantially lower prices. That's increased their standard of living. You can argue that Walmart hurt the standard of living of the Americans (less than 1% of US employees) who actually work for it. But that ignores the fact that the smaller competitors didn't pay much better, and never had a stock option plan, so the pay difference was marginal while the customer benefit was massive. Walmart big advantage wasn't labor costs, it was scale and inventory management from day one. And it's products are as good or better as the competitors. I hate Walmart, hate shopping there, but when I have to I'm always struck by how good the products are and how amazing the prices are.

prklmn 10y ago
You're off-base in almost every regard. >It's inarguable that consumers got lower prices, substantially lower prices. That's increased their standard of living. It's a multifaceted issue. Yes, Walmart sells cheap stuff, but that's not the company's only impact on the standard of living. The middle class has been steadily shrinking since the 70s, consistent with the rise of Walmart http://www.huffingtonpost.com/2013/06/06/middle-class-jobs-income-_n_3386157.html http://www.huffingtonpost.com/2013/06/06/middle-class-jobs-i... > You can argue that Walmart hurt the standard of living of the Americans (less than 1% of US employees) who actually work for it. The key issue is not Walmart's employees, but rather the employees of the companies they source from. > Walmart big advantage wasn't labor costs, it was scale and inventory management from day one. Once again, it's about the cost of the goods they sell that has a bigger economic impact than their direct labor cost. What goes into the cost of the goods they sell? Labor costs of their suppliers. What did they do after their advantage of scale and great inventory management management eroded? They started sourcing products from markets that were fueled by cheap labor i.e. not the USA. Sam Walton has been rolling in his grave for years: The first true Wal-Mart opened on July 2, 1962, in Rogers, Arkansas.[18] Called the Wal-Mart Discount City store, it was located at 719 West Walnut Street. He launched a determined effort to market American-made products. Included in the effort was a willingness to find American manufacturers who could supply merchandise for the entire Wal-Mart chain at a price low enough to meet the foreign competition. --> https://en.m.wikipedia.org/wiki/Sam_Walton https://en.m.wikipedia.org/wiki/Sam_Walton > I'm always struck by how good the products are and how amazing the prices are. You're probably one of very few
nickpsecurity 10y ago
When a Walmart opens, it knocks out about half the jobs in a small town. It doesn't replace that number. It also pays so low many of its employees are on welfare. Companies like WalMart are subsidized by the taxpayer. Repeat that across thousands of stores to get enormous impact on economy. Add downsizing, consolidation, price gouging (i.e. Koch's, oil), and offshoring to get an even bigger one across the board. The Recession was a given with buying power always going down while costs always go up.
ntsplnkv2 10y ago
Walmart has certainly not been a huge boon to the middle class, if they have been, we have not seen any evidence of it. The middle class is shrinking. So if this is true, that means the middle class is doing MUCH worse than realized. From what I've read, Despite the cheaper prices, there was a net loss in jobs and significant damage to small business-resulting in higher losses in the local economy than gained from cheaper product. I don't know if there's enough evidence of all of that, but it seems logical. Also you're ignoring the local economic impact of closing small businesses. It's not just the small retail store employee that loses out. Small businesses close-that means there's less need for accountants, cleaners, advertisers, real estate, etc. Walmart does all of this at the corporate level. This results in even more, well paying job loss, and sets off a spiral that destroys these communities. > And it's products are as good or better as the competitors. Sounds like confirmation bias to me. Nothing I ever see or buy from walmart has ever been quality, but I couldn't present that as evidence.
coldtea 10y ago
>Walmart has been a huge boon to the middle class. It's inarguable that consumers got lower prices, substantially lower prices. That's increased their standard of living. Only when thinking in first-order effects. How about the city businesses it destroyed, and thus the standard of living associated with the families that owned them and the whole support system? How about the power it affects upon manufacturers -- and thus to the people that work there?
maxxxxx 10y ago
I think Walmart has damaged the economy a lot. Maybe smaller companies are less efficient but Walmart has destroyed a lot of small business that provided fairly stable jobs to middle class people.

jpindar 10y ago

How does Wal-mart stay in business if "no one has money to afford them"?

michaelmrose 10y ago
Walmart isn't singular they are part of a huge array of companies paying shit wages. A lot of people in the same economic class as the workers are receiving government assistance meaning you are footing the bill for the food stamps that feeds the cashiers kids while ironically congratulating yourself on the good deal you got.
coldtea 10y ago
That's easy to answer: it doesn't in the long run (assuming it was the only player -- of course the reality is more nuanced). But it can destroy a whole lot of value (and be the last "business" standing) in the short and mid-run. In fact as such businesses erode the working/middle class, short and mid-term they become more enticing to it than other stores, since they are the cheaper options. If a company causes a "race to the bottom" for jobs and wages by selling too cheaply and paying too little, then those whose wages are affected will mostly be able to shop at that place exactly. And if that company is one business upon many that are causing the same issues, then people wont even be able to single them out for blaming...
jonathankoren 10y ago
Easy. Food stamps. https://www.google.com/amp/s/www.forbes.com/sites/clareoconnor/2014/04/15/report-walmart-workers-cost-taxpayers-6-2-billion-in-public-assistance/amp/ https://www.google.com/amp/s/www.forbes.com/sites/clareoconn... http://www.slate.com/articles/business/moneybox/2014/04/walmart_employees_on_food_stamps_their_wages_aren_t_enough_to_get_by.html http://www.slate.com/articles/business/moneybox/2014/04/walm...
ubernostrum 10y ago
They stay in business courtesy of government programs to keep people afloat enough to afford basic necessities, and by negotiating to pay reduced or no local taxes or infrastructure costs, coupled with relocating stores any time a tax-break deal expires. As long as you don't have to pay a living wage (because the government picks up the difference) and don't have to pay the cost of building and maintaining the infrastructure of your store (because the government picks up the difference), you can "sustain" an otherwise-unprofitable business for quite a long time.

wyager 10y ago

Are you familiar with intelligence squared? I encourage you to watch their debate on the value of walmart to society.

averagewall 10y ago

Destroying jobs is precisely how economies of scale and efficiency generally happens. If those other businesses kept employing as many people, products wouldn't get cheaper as much