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Okay, let's replace Wal-Mart with a bunch of local businesses, and assume they both manage to get their work done with the same amount of workers and pay the sa
by Sacho 9y ago
Okay, let's replace Wal-Mart with a bunch of local businesses, and assume they both manage to get their work done with the same amount of workers and pay the same salaries. In that case, Wal-Mart actually seems to provide a benefit to the community - its reduced prices from economies of scale benefit all consumers, while the wealth generated by local businesses is concentrated in the business owners and only trickles down to the rest of the community if they choose to invest it there.
In order for Wal-Mart to be detrimental you would need to evaluate these factors:
- What is the percentage of local business owners among the populace that you are aiming for? You would want a majority/large minority of people to be business owners to reap the wealth benefits, but in Wal-Mart's case you're essentially transferring wealth from the poor strata to a new middle-to-high class strata of business owners.
- Can local businesses employ more local community members and pay better wages? This is a possibility if you assume Wal-Mart is pocketing huge profits for themselves, which altruistic business owners would instead redistribute among the community in the form of wages. This expectation does not mesh with my experience but I don't know if there's any study on this, maybe I'm wrong.
- Can you evaluate whether the huge corporation is pocketing more money from your community than a collection of local businesses? While the huge corporation may make tons of money, what is the profit they extract from just your community, and how would it compare when replaced with local business? Obviously, you would allow for some leeway since at least the profits are going to some members of your community.
- Would consumers be willing to take a hit to their standard of living in order to support local businesses? I'm skeptical, as even in the entrepreneurial-friendly US(expected higher number of business owners per capita?) the rise of corporations has been eradicating local business.