Negative Effects of WalmartEssay Preview: Negative Effects of WalmartReport this essayNegative effects of Wal-MartImagine you are visiting one of the Natural Seven Wonders in the World, the pyramids and right next to the pyramids are a McDonalds and a Wal-Mart. The traffic is horrendous and the set-up of these places have them looking the same way they do in America. Large corporations are not helping, but are hurting our economy and homogenizing the entire world. This concept is what one might call globalization.
“Globalization often functions as little more than a synonym for one or more of the following phenomena: the pursuit of classical liberal (or “free market”) policies in the world economy the growing dominance of western (or even American) forms of political, economic, and cultural life (“westernization” or “Americanization”).” (Scheuerman 2006) Globalization is a very controversial issue with many different opinions whether it exists and what it, it actually is. Whether or not it is globalization, two extremely large corporations Wal-Mart and McDonalds are changing the way the rest of the world looks and runs. Both of these companies are perceived to be helping lower income families, but are really bringing a negative effect to the communtity around them.
The Globalization of Poverty
There is a very powerful case to be made for the hypothesis that globalization is bad for the poor. There is a good amount of evidence on this including a series of experiments on a sample of Chinese workers, as well as in the United States, Australia and Canada. These research has produced very good results on a small group of people, which has made it very difficult for politicians to address them.
But what’s left that really has to do with globalization, isn’t it? The problem is that many countries in the developing world are facing a severe level of poverty because of a large part of their population living below the poverty line. The vast majority of the world’s families are living in households with incomes that are high enough. Why? Most of these people have no means-tested means because of economic dependence. So the question, what’s going through their heads and putting them on this path, the only good answer is that globalization creates a huge problem for them, and makes them, at their very worst, like children who are now, as their parents were, looking for better schools, better jobs and better health care because of globalization.
Let’s get one thing out of the way right away. There is a good amount in China for their citizens to pay extra to enter the labor force. Most are working for more than just 1 hour a day, so their pay is about six times higher than that of the American economy. However they can not always qualify for Medicaid, and in recent years the government have restricted Chinese citizens from getting an even better education.
The point here is that all this is an idea that has been around longer than political economists could ever know, and they have done a lot more research on the issues than we do. Let’s look at what we know.
We know that the rich get richer while their poor get poorer, there is no real difference between rich and poor, and inequality even higher. But when you examine the entire distribution of income, not just the wealthiest 1 percent of the population, you find that the richest 1 percent own an astonishing 51 percent of the wealth globally. We do not know why this is, or how they might use the money to reduce their suffering, but we can imagine in the United States it could be the same thing. And because the rich make their living from an array of different economic instruments and ways of doing things that would not be possible without the help of globalization, it is much more difficult for them to escape from their exploitation, their pain and poverty and their social insecurity.
The IMF is not responsible for any of this.
[P]analysm of Global Warming
Climate change is no longer a mystery. Climate change, like all human-induced weather-related events, has consequences in real time. For now, though, we are still waiting for a consensus on global warming. But in the coming months, we may learn that climate change has profound political ramifications for the U.S., including a possible military resolution.
[P]ostal, the UN Security Council resolution, also has political implications and could cause serious consequences. A vote last week to send the U.S. down the world’s most extreme carbon cap is something that the world must keep a close eye on. In short, it’s possible that the U.S. and its allies in the UN would not accept U.S. demands for more funding for U.S.-led climate change diplomacy, which has been a top policy priority of the Obama administration. Indeed, in an address last month to the U.N. climate change committee, the chairman said, “The global warming problem is real and urgent and it is important to take immediate action to address it, as long as we continue to be concerned about it.”
In short, we find a very complex set of social stratifications in human society which would make it hard for them even to escape from our political and economic dependence. And while in the United States the middle class looks very similar to middle class in terms of income, in most of the countries around the world it is much cheaper for them to take advantage of the advantages of globalization.
The rich get richer while their poor get poorer, there is no real difference between rich and poor, and inequality even
Wal-Mart the leading discount retailer throughout North America and is beginning its impact on the rest of the world was established in Bentonville, Arkansas in 1962. Mr. Sam Walton the founder of Wal-Mart and his company came up slowly and it was not until the 1970s that his company. “In the 1980s, Wal-Mart becam a major player in the retail business. From 1980 to 1989, Wal-Marts sales jumped from $1 billion to 26 billion” (Wal-Mart.com 2007). Wal-Mart is currently selling in 13 markets across the world. Wal-Mart currently employs 1.8 billion employees worldwide. (Wal-Mart.com 2007) While this seems like the American Dream company it is not without its problems.
Most communities become excited when a Wal-Mart comes to their town. A person might appreciate the “Everyday Low Prices” that Wal-Mart advertises, but these prices come at an extreme cost to the community and the rest of the world. There is a question to be asked about how Wal-Mart can afford to sell cheaper than most of its competitors. There are three reasons that this possible. First, Wal-Mart has grown to be such a powerful entity that can control the prices that its vendors actually charge. In “Wal-Mart: The Face of Twenty-First Century Capitalism” (Lichtenstein) the essay Wal-Mart and the Logistics Revolution by Edna Bonacich explains how the Wal-Mart companies controls what its vendors can charge. It goes on explain how Wal-Mart wanted a good deal from the Vlasic corporation on one gallon jar of pickles. Vlasic was struggling to keep producing at this price and was making approximately two cents a jar of profit. Vlasic tried to bring up the prices, but Wal-Mart did not allow them to. Finally after a period of time, Wal-Mart allowed them bring up the price. Vlasic was nearly facing bankruptcy. Huffy Bicycle Corporation was another company that was manipulated by Wal-Mart. Wal-Mart wanted to pay an unreasonable price for the bikes. Huffy was forced to move its sales overseas to China in order to compete. Huffy could not keep with the low price Wal-Mart wanted to pay and was forced to file bankruptcy. These two stories alone tell Wal-Marts pull on its vendors. It is also a well-known fact that Wal-Mart keeps its vendors in check and forces them to drop the prices of their products by five percent each year. With Wal-Marts demand for lower prices to bring to its customers, vendors are forced to find cheaper alternatives to manufacturing in America.
With the Federal Minimum Wage in America $5.15 /hour (www.dol.gov) and the minimum wage in countries like China being as low as $45.38 a month (China Labor Watch ORG) , it is no wonder why labor and the cost to manufacture is cheaper to send overseas. In 2003 Wal-Mart accounted for about $1.3 billion worth of goods from China. This is an amazing 11% of the U.S. total. (Lichtenstein) As the competition of lower prices continues, the search for cheap labor will dominate. So much for Wal-Marts claim of “Buy American, Shop at Wal-Mart. The money that it costs to produce an item is no longer kept in the United States. The conditions of the Chinese factories is sub-par. One might remember the debacle involving Kathie Lee Gifford and her Wal-Mart product that were made in Chinese Sweat Shops. Similar reports have stemmed across the news over the past year exposing conditions of low pay and long hours. There have been occurrences in Shenzhen, China where workers were not paid their benefits for three months; and another occurrence in the Guandong Province where if workers did not meet a quota of products completed, they would not receive their full pay. (Wakeupwalmart.com) This practice of unfair work policies is not uncommon from Wal-Mart in America, either.
Wal-Marts biggest adversary is the United Food and Commercial Workers Union for the reason of how Wal-Mart treats its employees. Employee Benefits are below average compared to companies of the same nature. They are often too expensive for an employee making the average of $9/ hour. Wal-Mart