Guess what? Contrary to the happy talk, Walmart does not create jobs. Actually, it kills them.
Hereâ€™s why: first, at the local level, all Walmart does is put mom-and-pop stores out of business. The overwhelming body of evidence, including the most rigorous peer-reviewed studies, suggests that when Walmart enters a community, the most likely result is a net loss of jobs; at best, itâ€™s a wash. In fact, the biggest, best scholarly study about the impact of Walmart on local employment was done by an economist at University of California at Irvine named David Neumark, who is not exactly a wild-eyed liberal. Heâ€™s the kind of economist, actually, who writes anti-minimum wage op-eds for the Wall Street Journal.
The devastating impact Walmart has had on jobs becomes most clear when you go macro, and look at its impact not just locally, but on the national economy. In its relentless quest for low prices, Walmart strong-arms its suppliers to cut labor costs to the bone. What this has meant in practice is that many suppliers have been forced to lay off workers and ship jobs to low-wage countries overseas. Because of Walmart, countless jobs in the U.S. have been lost, mostly in manufacturing.
Anyone of a certain age from just about any southern or midwestern small town can tell the story of how the old Main Street businesses died after the Walmart opened. The Walmart not only represented a net loss of jobs; it also changed the way money circulated in the community. It used to be that all the little stores and businesses were owned by local people who also shopped in the community, so the profits they made in their businesses went back into the local economy. The old home town seems poorer and shabbier now.
And, of course, to add insult to injury, taxpayers subsidize Walmart profits by providing government assistance to its employees, so they don’t starve on what Walmart pays them.
Walmart is to the U.S. economy what cancer is to a body.