Comments on: PBS Frontline Feature — Is Wal-Mart Good for America?

By: Georgia

Georgia — Fri, 16 Mar 2012 23:18:26 +0000

That shareholder meeting was something I never expected. Its magnitude was astounding.
Their “negotiations” are jokes. Walmart just sets the price and if the buyers don’t like they lose their business basically, especially how they treated Rubbermaid. I feel like they do what they want to get their bottom price and don’t care about the consequences. The consequences in this deal was that Rubbermaid’s main factory had to shut down. Only a “carcass” was left, with 1,000 jobs lost and a city felt floundering.
I never shop at Wal-Mart, and after watching this documentary I am glad. I don’t believe in undercutting and stepping on people to get ahead. I like how John called his products, “cheap crap.” That’s how I see Wal-Mart in general. The Wal-Mart executives that speak in the video remind me of greasy bottom feeders who only answer questions that can make them look good, while deflecting all others.
Wal-Mart has 6,000 global suppliers, 80% of those are in China. But still they make the suppliers reverse action for their orders. I don’t believe that Wal-Mart is a good company. First it ruined mom and pop stores, now company towns and now it is creating bidding wars in China. But now that matter is moot, for it is ingrained in China and how we live.

By: Ashley Tyra

Ashley Tyra — Tue, 13 Mar 2012 03:44:26 +0000

In more recent years Wal-Mart has gained a poor reputation in America. This PBS Frontline Feature shows why Wal-Mart has developed the reputation of being “bad” for America.
There are of course ups and downs to a high-tension topic such as Wal-Mart. Wal-Mart has created great efficiencies as a business. They have transformed the way products are driven through the supply chain – through tracking of an item’s UPC, as well as ordering items when they are needed as opposed to in advance.
As the documentary shows, Wal-Mart has changed the way manufacturers and retailers work with one another. Instead of Wal-Mart bidding to a manufacturer, each manufacturer now bids to Wal-Mart, who in turn selects the manufacturer with the lowest bid. This change alone can be directly related to the closing of many small businesses in America. In order to stay competitive, companies have been forced to outsource their production to China.
That being said, consumers of America are causing things like this to happen. When Americans demand lower prices, they are encouraging the practices of Wal-Mart. As Americans become lazier and greedier, globalization will take over leaving some Americans obsolete. The lingering question then remains – Is the current American mindset good for America?

By: Charles Dornbush

Charles Dornbush — Mon, 12 Mar 2012 00:12:37 +0000

The problem with globalization and the Wal-Mart model is that the people that do benefit from Wal-Mart’s low prices are less outspoken then those who are hurt. For every one factory worker that loses their job to China, there are thousands and thousands of consumers who save money by buying less expensive Chinese goods. And mathematically (economic trade theory) the good outweighs the bad. The problem is that the ‘losers’ in the globalization game are hurt bad.

The question of whether Wal-Mart is good or bad is irrelevant. If Wal-Mart didn’t come up with this innovative business model than someone else would have. The opportunity from cheap goods from China created the inevitability of fiercer price competition. Wal-Mart was just the first to harness it. I think there is plenty of blame to go around for the suffering being experienced in “small-town” America.

By: Fred S.

Fred S. — Sun, 11 Mar 2012 04:13:52 +0000

Wal-Mart is a huge success story in detailed IT utilization, attention to customer trends, and global awareness of opportunities. It is not a huge success story for the Americans who lost their jobs when their employers moved overseas. However, if it weren’t Wal-Mart that caused this to happen, it would be someone else. Wal-Mart should be credited in being the first mover. It is inevitable, in a world of globalization, that natural competition and demand will move business to where prices are the cheapest and a quality product can be made. In the case of Wal-Mart and its many suppliers, this was China. Many suppliers were forced to move production to China if they were to remain competitive in their markets.

Other companies should take note from Wal-Mart’s data efficiency and use of manufacturing pull strategies. Wal-Mart has an excellent IT system that allows them sell to the customer what the customer wants and at the correct amount of inventory. The pull system comes from the needs of what the customer wants instead of what the manufacturer decides to produce. In essence, it is the customer who is pressuring these manufactures to move their facilities overseas, because what the customer wants is lower prices.

By: Keith Cody

Keith Cody — Fri, 09 Mar 2012 03:35:41 +0000

Is Wal-Mart good for America? is a philosophical question that probably has no answer. This Frontline discussed this point. The Wal-Mart people, and a few at the Cato Institute said Wal-Mart was good, everyone else discussed the detrimental effects of Wal-Mart.

Let’s change the question from a philosophical one, to an economic one. “Do the effects of Wal-Mart’s low prices offset the destruction to communities and the government subsidies Wal-Mart requires.”

Pros:
Wal-Mart is cheaper than most competitors on advertised goods.
These cheap goods allow Wal-Mart shoppers to enjoy a high standard of living, buy affording more than they could at pre-Wal-Mart prices.

Cons:
Chinese imports destroy American jobs.
Wal-mart asks for a gets tax subsidies, masking the true cost
Wal-mart pays employees poverty level wages, necessitate and even encourage employees to receive welfare, food stamps and Medi-Caid.
Any effects from low prices are ofset, in that community, by the loss of jobs and declining tax revenue.
Wal-Mart is a bad corporate citizen.

In their economic paper THE ECONOMIC IMPACT OF WAL-MART SUPERCENTERS ON EXISTING BUSINESSES IN MISSISSIPPI, professors Kenneth E. Stone (Professor of Economics, Iowa State University),
Georgeanne Artz (Extension Program Specialist, Iowa State University), and Albert Myles (Extension Professor, Mississippi State University) found that the economics effects of Wal-Mart is a zero sum gain. In gains in sales tax from a Wal-mart for a local county are offset by loss in sales tax from local merchants losing business. Any money saved by “Everyday Low Prices” is made up for by the reduction in wages from the lower salaries that Wal-Mart pays. Wal-Mart has a net effect of zero, other than transferring wealth from local businesses and works to Wal-Mart corporation. And they are a terrible moral-less corporation. Wal-Mart has no economic effect, but they decrease the quality of life of the community. You should let a Wal-Mart in your community and you shouldn’t shop there, if you can afford not to.

In short: Is this any way to run an economy?. Should a firm have prices so low, that tax payers subsidize their workers? I say no. I’m really surprised that the 1%, that pays most of the taxes in the US, isn’t more Anti-Wal-Mart, just for this reason.

http://www.epi.org/publication/ib223/.

By: Jeffrey Brown

Jeffrey Brown — Sun, 26 Feb 2012 21:34:37 +0000

Whether or not Wal Mart is good for America is undetermined. Many jobs have been lost in America because of the movement to offshore production the store has prompted. It is hard to say whether the cheaper goods available by the store has created other opportunities through the savings passed along to the consumer or not (how much is the consumer actually benefiting vs. the extra profits sustained by the company?). As it was stated in the video, only some of the products at WalMart are sold at a lower price to first gain the consumers’ interest while many others may in fact be more expensive than competing stores. But while the store may or may not be good for America, it is sure benefiting many families abroad as their living conditions seemingly improve due to greater opportunity there. I wish the video would have explored more into this consideration and really explained the impact of the workers abroad; however, it is understandable that was not addressed as much due to the nature of the video, “Is Wal Mart good for America.” Wal Mart promotes free trade and takes advantage of cheaper resources over seas. Their innovative business practices of making producers bid for the lowest price is something unlike the retail market had ever seen before. Whether or not Wal Mart is good for America, it doesn’t look like the store is going to be shutting down anytime soon. Americans will have to learn to adapt to the new challenges globalization introduces into the economy whether they like it or not.

By: Grant

Grant — Fri, 03 Feb 2012 15:48:52 +0000

While I make every effort to not shop at Walmart, I believe globalization to be a good thing. But in the end, it is irrelevant whether or not it is a good thing or a bad thing, because it is inevitable. It is the new normal. If someone wants to make a “good” or “bad” discussion out of it, I would argue that how you choose to operate in the new globalized economy is either good or bad.
So many people blame Walmart for what ails America, but it is the American consumer which empowered them to do so. Each dollar that is spent on a product produced overseas is a vote for globalization. It is for that reason that I don’t vote for globalization. I don’t believe it is what is best for America, but if Americans want it, Americans can have it. If they want to buy the cheapest product, then they must accept the consequences of their decision.
And if American’s can’t connect their own purchasing decisions as the root cause of the problem, then America doesn’t deserve the wealth or the jobs it hopes to protect.
I don’t hope that American workers are displaced by Chinese workers, but I don’t believe that the livelihood of American workers to be any more important than the livelihood of Chinese workers.
So, good, bad or ugly, everyone will need to figure out how to make their own way in the globalized economy, whether they realize their own contribution to it or not.
Fighting globalization is akin to the young gunfighter who wished to take out the Outlaw Josey Wales, to whom Josey replied, “Dyin’ ain’t much of a livin’”.

By: Daniel Fleek

Daniel Fleek — Tue, 17 Jan 2012 02:42:49 +0000

I believe that Wal Mart is doing more bad than good to America although if they didn’t adopt their business plan, another company would. In terms of economically going to China to manufacture their product needs for the cheapest cost, I feel that any company that wants to stay competitive must do this to stay in business. Therefore, it will take some sort of government intervention for fair trade to be fair for everyone. However, I still think that Wal Mart has a responsibility for the USA since this is where they started and currently sell the most products.

When the video addressed the chain reaction that occurs when Wal Mart demands a product, it showed me the business shrewdness of Wal Mart management. In fact, I feel that Wal Mart is the perfect example of a very successful company under the rules of capitalism. However, it was interesting to hear their other strategies besides importing from China. For example, they mentioned that they put the items that are the lowest prices in town in the front row of each department to lure customers into the items that may not be the best price in town.

So is Wal Mart good for America? In terms of following the rules of capitalism to improve the overall GDP, I think it is doing a good job. However, in terms of providing jobs and benefits for employees and people who live around Wal Marts, I think they are failing. There are so any lawsuits regarding employment law and Wal Mart and it is crazy that almost all of those are settled out of court. This shows that Wal Mart will continue its often unethical and illegal modes of employment practice since the payoff of doing so is more that the payoff from being ethical and following the law which questions their morality. Also, since they are dealing with high volume prices that only countries like China can provide, it is actually putting many people out of work in America and providing them to workers in China. There either needs to be more regulations regarding the imports of goods from China or American companies must find other ways to stay competitive. As it is now, Wal Mart has developed a successful plan to maximize their profits.

By: Kevin K.

Kevin K. — Wed, 28 Dec 2011 21:13:34 +0000

Is Walmart good for America? This documentary answers, or deflects that question as well as the Walmart VP featured in the PBS special. For those associated with the company, Walmart acts as some sort of cult — just look at the shareholders meeting. Those apart of Walmart obviously think it’s great, but those left in its wake — shutdown plants, rundown businesses, and thousands left jobless — are forced to accept it from the Walmart and China controlled world. Is that good? No, but it is in a way progress from the increasing globalized economy.

One of the most telling lines from this documentary was when one of the economists stated that “Walmart and China is a joint venture.” With the billions of dollars at stake for both Walmart and China, this statement is most definitely true. However, it seems that it is not just Walmart that depends on China, but the whole of the American economy and our way of life.

As far the relationship between free trade, dumping, and capitalism, it seems that there are a lot of sore people out there — those who demand capitalism, but when they are beat by the most sincere form of it, they demand more regulation. What does this mean for trade in the global economy when America can no longer compete?

By: Vladimir

Vladimir — Wed, 28 Dec 2011 03:03:41 +0000

The documentary carries the message that Wal-Mart is bad for America. Here’s how I see it:

Wal-Mart is good for Wal-Mart’s management, as any successful company generally is for those at its top. I would expect job security for those in its top or middle ranks to be quite good. Wal-Mart’s shareholders are cheering, but if Wal-Mart didn’t exist, they would simply invest elsewhere.

Wal-Mart is good for Americans as consumers because it offers better prices than other retailers. This would mainly be of value to low-income consumers. The savings at Wal-Mart would not be enough to change the quality of life for most middle and upper class families. The other value of Wal-Mart and other big-box stores is selection, which saves time. Wal-Mart is also very efficient in responding to customer demand.

How many manufacturing jobs were lost across the America compared to how many Wal-Mart jobs were created? I believe far fewer jobs were created than lost, but this is a result of pressure to lower costs in general which would have existed even if Wal-Mart didn’t. According to the video Wal-Mart jobs would pay less than manufacturing jobs. The jobs also don’t require or value the same skill set that unemployed manufacturers have. Wal-Mart does provide jobs to people who would otherwise be unemployed, but I believe Wal-Mart’s net employment effect in the United States is negative.

Wal-Mart’s power affects suppliers beyond forcing them to use foreign labor. Wal-Mart’s negotiating power reduces supplier margins regardless of where the product is made. Does a supplier’s volume increase enough to make up for this? I’d like to have heard suppliers answer the question: “How much have your profits increased or decreased since becoming a Wal-Mart supplier? Did you raise your prices on other retailers to make up the difference?”

Wal-Mart also hurts smaller retailers. Suppliers will not offer these retailers products at the prices they do to Wal-Mart. These stores also cannot take advantage of economies of scale like Wal-Mart. So they are forced to charge higher prices than and/or accept lower margins.

Without doing further research I would say that Wal-Mart has a negative net effect on America, but it has no effect on many people. The pro Wal-Mart interviewees point to the consumer benefits, because this is where Wal-Mart shines.

Wal-Mart is good for China, but that’s another story.