The Causes and Consequences of Wal-Mart's Growth

Author: Basker, Emek

Source: The Journal of Economic Perspectives, Volume 21, Number 3, Summer 2007 , pp. 177-198(22)

Publisher: American Economic Association

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Abstract:

Wal-Mart is the largest retailer and the largest private employer in the United States. The competitive pressures created by large retailers have long been controversial, and Wal-Mart's growth has raised concerns about its economic impact on workers, communities, and competitors. This paper aims to dispel some of the myths regarding Wal-Mart and to replace them with a systematic accounting of what is known about Wal-Mart's impact on the U.S. and global economy. The paper begins by exploring the source of Wal-Mart's competitive advantage. It then examines some of the economic effects of Wal-Mart: how Wal-Mart stores affect local labor markets, consumer prices, product selection, local and global competitors, and suppliers. I then turn to Wal-Mart's interaction with public policy issues in matters of global trade as well as state and local legislation on wages, benefits, zoning, and subsidies.

Document Type: Research article

DOI: 10.1257/089533007781798212

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