Dec. 7, 2010
How Wal-Mart is Financially Hurting the American Economy
Some Americans believe that because Wal-Mart advertises “always low prices,” it is a great place to shop. Wal-Mart campaigns on its bulletin boards and on-line that the American family can save an average of $2,500.00 a year shopping at Wal-Mart. Karen De Coster and Brad Edmonds explain, “If Americans didn’t love Wal-Mart so much it wouldn’t be sitting at the top of Fortune 500” (255). De Coster and Edmonds go on to explain that people love Wal-Mart for the variety and convenience it offers while saving time and money (255). However, American people do not understand the financial effect that keeping “low prices” has on the taxpayers. Receiving products from other countries comes at a cost to the American taxpayer and our government. Since Wal-Mart provides Americans with products from third world countries, the company is financially hurting America.
By importing and exporting products made in foreign countries, Wal-Mart claims to be able to give consumers low prices. Wal-Mart claims importing products from third world countries is cheaper than to have the products manufactured in the United States. It is reported that Wal-Mart imported $287.1 billion worth of products from China in 2006 (Scott). Yet, Wal-Mart exported only 51.6 billion dollars’ worth of products to China. Wal-Mart is responsible for a 17.1 billion dollar increase in the United States trade deficit from 2001-2006 (Scott). Ray Bracy, Wal-Mart’s vice president for federal and international public affairs, estimates that Wal-Mart imports approximately $15 billion in goods from China each year. Bracy argues Wal-Mart’s main concern is getting the consumer the lowest possible price and that negotiating with suppliers is the best way to achieve it. However, if Wal-Mart had to get the products from the U.S., they would have to negotiate prices with the vendors instead of telling the vendors what price Wal-Mart is willing to pay. Bracy stated that “U.S. manufactures are being squeezed by the high costs of doing business in America with the cost of health care, tax rates and regulations”. So, in order to keep the “lower prices” Wal-Mart is buying more goods from China. “Wal-Mart estimates it spent $15 billion on Chinese-made products in 2003, accounting for nearly one eighth of all Chinese exports to the United States” (Goodman and Pan). If the United States would manufacture more products there would be less importing and more exporting, which would be more money for the U.S.
Because of the large quantity of products Wal-Mart receives from China, it has displaced over 200,000 jobs in the United States (Scott). With retail on the rise and manufacturing being moved from the U.S., Wal-Mart has taken away from the American people. According to Mulder, “every new Wal-Mart that is opened brings 350 jobs to the area, but most of these will be part-time jobs that include few benefits.” Additionally, the community will lose one and a half full-time jobs for every part-time job at Wal-Mart. With the unemployment rate on the rise and Wal-Mart only offering part-time jobs, it is hurting the economy and the American people, because employees need full-time work in order to have benefits. Aflcio.org shows that between 1989 and 2003, because of the trade deficit, the United States is out of approximately 1.5 million jobs that either moved overseas or were never created because production moved to China. Because of Wal-Marts actions it is hurting the American job economy and the people. It is taking away from us but helping out the foreign countries. America is the land of opportunity, but if there are no jobs, then there are no opportunities.
Wal-Mart can offer cheaper products to consumers because they buy in bulk and have products manufactured out of the United States in foreign sweatshops. Wal-Mart can make vendors meet prices instead of negotiating. Because Wal-Mart requires such...