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The Walmart Effect

The Walmart Effect
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A controversial report by Hunter College's Center for Community Planning finds that Wal-Mart openings can have a surprisingly negative effect on communities.

Timothy Ryan, PSFK Labs
  • 15 february 2011

Since 2005, Wal-Mart, has been greeted with protests from union and community activists over its proposed move to Brooklyn, New York.

A controversial report released in January by New York’s Hunter College’s Center for Community Planning echos this sentiment, finding that the nation’s largest private employer paradoxically kills jobs, drives down wages, and is a tax burden because it does not give health and other benefits to many of its part-time employees, by default, relegating that responsibility to Medicaid and other publicly funded programs.

Wal-Mart dismissed the report citing “randomly selected statements…from flawed sources” and additionally declined an invitation to attend a hearing that will be held this Thursday by the New York City Council. The report has evaluated 50 Wal-Mart openings from around the country.

According to the report:

“The overwhelming weight of the independent research on the impact of Wal-Mart stores … shows that Wal-Mart depresses area wages and labor benefits … pushes out more retail jobs than it creates, and results in more retail vacancies.”

Despite Wal-Mart’s discounted prices, interviews from neighborhood residents reveal their concerns over the chain’s effects on small businesses. Regardless of the well-cited financial hurdles challenging these Brooklyn neighborhoods, it seems that a sense of community reigns supreme.

Hunter College Center for Community Planning

Walmart’s Economic Footprint” (PDF)

Image by Ron Dauphin

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