Wal-Mart Stores Inc., in a move to shore up its image, attempted to answer its critics Friday with the release of several economic studies, highlighting the impact the retail giant has on prices, jobs and wages.
WASHINGTON — Wal-Mart Stores Inc., in a move to shore up its image, attempted to answer its critics Friday with the release of several economic studies, highlighting the impact the retail giant has on prices, jobs and wages.
Maintaining it is seeking more "transparency" and balanced coverage, Wal-Mart held a tightly controlled symposium here at the J.W. Marriott Hotel and released nine independent economic studies — some of which revealed negative findings — from academics and economists.
Critics accuse Wal-Mart of depressing retail prices and wages and driving U.S. jobs overseas.
To bring their point home, the United Food and Commercial Workers Union and its WakeUpWalMart.com organization staged a small protest in front of the hotel Friday and announced it was launching a new group — Wal-Mart Workers of America — and a Web site to assist workers in protecting their rights.
The groups claim Wal-Mart exploits its workers, discriminates against female employees and breaks child labor laws.
Wal-Mart has denied such claims and went on the offensive and defensive Friday at the symposium, which attracted about 75 economists, academics and journalists.
The nine studies revealed a wide range of findings that were inconsistent with one another in some areas.
"We, for a long time now, have seen a number of studies that purport to be an economic look at our company," said Bob McAdam, vice president of corporate affairs at Wal-Mart, in an interview. "Many of them are fairly narrow in their scope, look only at specific data, or start with a bias, frankly. We decided it was time to do this in the most holistic fashion we could and try to get a really good picture and do it with as much integrity and honesty as we could possibly muster."
While McAdam acknowledged the unfavorable studies, he stressed that the methodologies used in all of the studies is open for debate.
"There are studies presented this afternoon which have some items that are in some ways contrary to this [Global Insight's] study and in some ways certainly what people would consider negative," he said. "Each of these studies, I would argue, has a challenge in them — something they looked at — maybe they compared apples and oranges versus looking holistically the way Global Insight did. This is such a healthy discussion and one would hope that from this we could come up with what the standards are…and from that we can have an honest debate about what the role is that we play."The retailer hired Global Insight, a reputable economic research, analysis and forecasting company, to conduct a long-term study on the economic impact Wal-Mart has on local communities and the national economy as a whole. Global Insight's study, titled "The Economic Impact of Wal-Mart," painted the company in the most favorable light.
Focusing on Wal-Mart's contribution to lower consumer prices, Global Insight concluded that the expansion of Wal-Mart, from 1985 through 2004, led to the cumulative decline of 9.1 percent in food-at-home prices; a 4.2 percent decline in commodities prices; and a 3.1 percent decline in overall consumer prices as measured by the Consumer Price Index, a federal government gauge of inflation.
This impact, according to the economic research firm, amounted to $263 billion in savings — the equivalent of $2,329 per household — to the consumer by 2004.
Global Insight also concluded the company created 210,000 net new jobs by 2004, adding it had "not found evidence that Wal-Mart pays below market wages."
There was evidence, however, that Wal-Mart negatively impacts employment in certain sectors when it opens a store.
In its analysis of the company's impact on counties, the research firm revealed Wal-Mart affects the structure of county-level retail employment. When Wal-Mart opens a 150 to 350 person store in a county, retail employment "tends" to increase by 137 jobs over the short term and levels off to a 97 job increase over the longer term, although it leads to a net job decline in apparel and accessories stores of five jobs, a decline of 32 jobs in food stores and a decline of 30 manufacturing jobs, the report revealed.
David Neumark, a senior fellow at the Public Policy Institute of California, and two economists, studied Wal-Mart's impact on local labor markets and surmised that Wal-Mart lowers retail employment and total payrolls per person.
"The evidence is, on balance, more consistent with the claims of critics of Wal-Mart, although questions remain," the report stated.
In the South, which has the highest concentration of Wal-Mart stores, there was a more overall adverse effect on retail employment, total employment and total payrolls per person.
Emek Basker, assistant professor of economics at the University of Missouri, who holds a Ph.D. in economics from the Massachusetts Institute of Technology, suggested in her paper that the growth of retail chains, particularly Wal-Mart, is partly responsible for the growth in imports and ultimately the shift of U.S. manufacturing jobs offshore.Basker cited a Wall Street Journal article in the study, which stated that Wal-Mart accounted for approximately $18 billion in goods imported from China in 2004 and is responsible for approximately 10 percent of U.S. imports from China.
"We tell a story that would suggest the rise of chains leads to more imports and to fewer manufacturing jobs in the U.S.," Basker said in an interview.
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