The Wal-Mart Effect on Local Communities
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Questions and Answers

What is Wal-Mart often accused of doing to downtown areas?

  • Preserving community character
  • Supporting local businesses
  • Killing jobs and downtowns (correct)
  • Encouraging urban sprawl

    • Why do banks fear Wal-Mart?

  • Because it might offer banking services (correct)
  • Because it might open a bank branch
  • Because it might hurt their customers
  • Because it might lower interest rates

    • What is the approximate revenue of Wal-Mart in fiscal 2007?

  • $1 trillion
  • $500 billion
  • $200 billion
  • $344 billion (correct)

    • What happens to the original store when Wal-Mart upsizes to a supercenter?

    <p>It gets abandoned and left empty</p> Signup and view all the answers

    Why do critics argue that Wal-Mart is bad for local communities?

    <p>Because it destroys community character</p> Signup and view all the answers

    What does Wal-Mart often do when faced with property tax assessments?

    <p>Fights the assessments in court</p> Signup and view all the answers

    What is one benefit that some argue Wal-Mart can bring to a community?

    <p>A force for good</p> Signup and view all the answers

    What is one reason why critics argue that Wal-Mart is bad for workers?

    <p>It requires work off the clock</p> Signup and view all the answers

    What percentage of the country's population lives within 15 miles of a Wal-Mart?

    <p>90%</p> Signup and view all the answers

    What is the estimated percentage of retail and food service sales in the United States attributed to Wal-Mart in fiscal year 2007?

    <p>6%</p> Signup and view all the answers

    What is the name of the musical satire that premiered in Madison, Wis., that is about Wal-Mart?

    <p>Walmartopia</p> Signup and view all the answers

    What is the number of suppliers participating in Wal-Mart's pilot program to measure and reduce their carbon footprint?

    <p>A small number</p> Signup and view all the answers

    What percentage of people in a 2005 survey said they had an unfavorable view of Wal-Mart?

    <p>31%</p> Signup and view all the answers

    What year did Wal-Mart become the nation's largest grocery store?

    <p>2002</p> Signup and view all the answers

    What is the name of the demographic group identified in the text as being a key Wal-Mart customer?

    <p>Wal-Mart Mom</p> Signup and view all the answers

    What percentage of Americans shopped at a Wal-Mart in 2005?

    <p>Five out of six</p> Signup and view all the answers

    What is the name of the publication that conducted a survey on public perception of Wal-Mart?

    <p>Pew Research Center for the People and the Press</p> Signup and view all the answers

    What is the percentage of solid waste that Wal-Mart aims to cut from its U.S. stores by next October?

    <p>25%</p> Signup and view all the answers

    What aspect of community health is being measured in this study?

    <p>Firms, income, population, and poverty</p> Signup and view all the answers

    What is the time period for which data was collected in the study?

    <p>1985-2005</p> Signup and view all the answers

    How many counties were studied in total?

    <p>89</p> Signup and view all the answers

    What is the conclusion about Wal-Mart's effect on local firms and jobs?

    <p>It strengthens local firms and creates jobs</p> Signup and view all the answers

    What happened to retail earnings per job in Wal-Mart counties?

    <p>They fell, but by less than in non-Wal-Mart counties</p> Signup and view all the answers

    What is the conclusion about Wal-Mart's effect on poverty rates?

    <p>It slows down the decline of poverty rates</p> Signup and view all the answers

    What is the conclusion about Wal-Mart's effect on county population growth?

    <p>It has no effect on population growth</p> Signup and view all the answers

    What is the result of the study regarding Wal-Mart's effect on a county's economic success?

    <p>Wal-Mart has a slight positive effect</p> Signup and view all the answers

    What is the characteristic of counties where Wal-Mart tends to locate?

    <p>Larger population</p> Signup and view all the answers

    What percentage of counties with a population between 30,000 and 40,000 had a Wal-Mart by 2005?

    <p>80%</p> Signup and view all the answers

    What was the population of counties that did not see a Wal-Mart come to town over the next 20 years?

    <p>Under 10,000</p> Signup and view all the answers

    What was the characteristic of counties that would get a Wal-Mart in the future?

    <p>Higher levels of population and employment</p> Signup and view all the answers

    What was the difference in per capita income levels between Wal-Mart and non-Wal-Mart counties?

    <p>Basicly even</p> Signup and view all the answers

    What was the trend in retail sectors in counties that would later get a Wal-Mart?

    <p>Larger</p> Signup and view all the answers

    What was the growth of personal income in Wal-Mart and non-Wal-Mart counties over 20 years?

    <p>Virtually identical</p> Signup and view all the answers

    What was the characteristic of population growth in Wal-Mart counties?

    <p>Much higher than non-Wal-Mart counties</p> Signup and view all the answers

    What was the effect of Wal-Mart's presence on population in either direction?

    <p>It had little influence</p> Signup and view all the answers

    What was the characteristic of median employment growth in Wal-Mart counties?

    <p>Notably higher</p> Signup and view all the answers

    What was the trend in earnings per job in Wal-Mart counties from 1985 to 2005?

    <p>Grew faster</p> Signup and view all the answers

    What was the characteristic of total compensation in non-Wal-Mart counties?

    <p>Saw stronger growth</p> Signup and view all the answers

    What was the timeframe for the initial analysis of Wal-Mart's effect on local economies?

    <p>One year before and five years after opening</p> Signup and view all the answers

    What was found to be the case for Wal-Mart counties in terms of income growth prior to the store opening?

    <p>They showed little evidence of stronger income growth</p> Signup and view all the answers

    What was the trend in poverty rates across the Ninth District from 1989 to 2004?

    <p>Poverty rates dropped</p> Signup and view all the answers

    How did the poverty rates in Wal-Mart counties compare to non-Wal-Mart counties?

    <p>They dropped less</p> Signup and view all the answers

    What was investigated as a possible factor in the poverty trends in Wal-Mart counties?

    <p>Immigrant population flows</p> Signup and view all the answers

    What was the finding regarding the role of immigrant population flows in the poverty trends?

    <p>They had little evidence of playing a role</p> Signup and view all the answers

    What is the limitation of the fedgazette findings?

    <p>They are not causal in nature</p> Signup and view all the answers

    What is one aspect of the analysis that is not discussed?

    <p>The savings local consumers realize</p> Signup and view all the answers

    What is the overall conclusion of the analysis regarding Wal-Mart's impact on local economies?

    <p>Wal-Mart's impact is small and mixed</p> Signup and view all the answers

    What is suggested as a possible factor in determining the long-run growth prospects of local communities?

    <p>All of the above</p> Signup and view all the answers

    What is the primary observation about general merchandise stores in Wal-Mart counties compared to non-Wal-Mart counties?

    <p>Both had a similar decline in stores, about half a store on average.</p> Signup and view all the answers

    What is the limitation of analyzing the effect of Wal-Mart on general merchandise stores?

    <p>The federal government changed its business classification system in 1997.</p> Signup and view all the answers

    What is the trend in median establishment growth in Wal-Mart counties compared to non-Wal-Mart counties?

    <p>Wal-Mart counties had stronger growth, especially among smaller employers.</p> Signup and view all the answers

    What is the conclusion about the presence or absence of Wal-Mart on business growth in a county?

    <p>The presence or absence of Wal-Mart is neither an obvious anchor nor a hot air balloon for business growth.</p> Signup and view all the answers

    What is the observation about taxable retail sales in Wal-Mart counties compared to non-Wal-Mart counties in Minnesota?

    <p>Taxable retail sales grew faster in Wal-Mart counties.</p> Signup and view all the answers

    What is the limitation of the sales tax data analysis across states?

    <p>Tax rates and items eligible for sales tax are different among states and changed over time.</p> Signup and view all the answers

    What is the effect of Wal-Mart on employment in Wal-Mart counties compared to non-Wal-Mart counties?

    <p>Employment increased in Wal-Mart counties, especially in retail.</p> Signup and view all the answers

    What is the trend in earnings per job in Wal-Mart counties compared to non-Wal-Mart counties?

    <p>Earnings per job were higher in Wal-Mart counties, especially in retail.</p> Signup and view all the answers

    What is the finding about the effect of Wal-Mart on average personal income and population over a two-year window?

    <p>Wal-Mart had little effect on average personal income and population.</p> Signup and view all the answers

    What is the primary conclusion about the effect of Wal-Mart on local businesses and economies?

    <p>The effect of Wal-Mart on local businesses and economies is inconclusive.</p> Signup and view all the answers

    What is the percentage of the population that lives within 15 miles of a Wal-Mart, according to the text?

    <p>90%</p> Signup and view all the answers

    What is the percentage of retail and food service sales in the United States attributed to Wal-Mart in fiscal year 2007, according to company figures and U.S. Census Bureau data?

    <p>6%</p> Signup and view all the answers

    What is the name of the demographic group identified in the text as being a key Wal-Mart customer?

    <p>Wal-Mart mom</p> Signup and view all the answers

    What is the commitment made by Wal-Mart to reduce solid waste from its U.S. stores by next October?

    <p>25%</p> Signup and view all the answers

    What is the energy efficiency improvement achieved by Wal-Mart in its buildings and truck fleets since 2005?

    <p>15%</p> Signup and view all the answers

    What is the approximate number of suppliers participating in Wal-Mart's pilot program to measure and reduce their carbon footprint?

    <p>A small number</p> Signup and view all the answers

    What is the title of the musical satire that premiered in Madison, Wis. and is about Wal-Mart?

    <p>Walmartopia</p> Signup and view all the answers

    What percentage of Americans shopped at a Wal-Mart in 2005, according to the text?

    <p>5/6</p> Signup and view all the answers

    What is the year Wal-Mart became the nation's largest grocery store?

    <p>2002</p> Signup and view all the answers

    What is the percentage of people in a 2005 survey who had an unfavorable view of Wal-Mart?

    <p>31%</p> Signup and view all the answers

    What is the primary focus of the study?

    <p>The economic influence of Wal-Mart on communities</p> Signup and view all the answers

    What is the outcome of the study regarding Wal-Mart's effect on firms and jobs?

    <p>Wal-Mart leads to stronger firm growth and employment</p> Signup and view all the answers

    What is the primary source of controversy surrounding Wal-Mart's presence in local communities?

    <p>Its economic influence on the community</p> Signup and view all the answers

    What is the conclusion about Wal-Mart's effect on poverty rates?

    <p>Poverty rates decline more in non-Wal-Mart counties</p> Signup and view all the answers

    What is the estimated revenue of Wal-Mart in fiscal 2007, making it the largest retailer in the world?

    <p>$344 billion</p> Signup and view all the answers

    What is the ultimate consequence of Wal-Mart's vacating its original store when it upsizes to a supercenter?

    <p>The old store is left vacant and abandoned</p> Signup and view all the answers

    What is the characteristic of counties where Wal-Mart tends to locate?

    <p>Larger population counties</p> Signup and view all the answers

    What is the primary reason why banks fear Wal-Mart's expansion into banking services?

    <p>Wal-Mart's potential to disrupt the traditional banking industry</p> Signup and view all the answers

    What is the conclusion about Wal-Mart's effect on county population growth?

    <p>Wal-Mart has no noticeable effect on population growth</p> Signup and view all the answers

    What is the result of the study regarding Wal-Mart's effect on a county's economic success?

    <p>Wal-Mart's presence has little or no predictive power on economic success</p> Signup and view all the answers

    What is the ultimate consequence of Wal-Mart's strong-arming local communities for infrastructure upgrades?

    <p>The local community is forced to provide infrastructure upgrades at its own expense</p> Signup and view all the answers

    What is the primary argument made by those who argue that Wal-Mart can be a force for good in local communities?

    <p>Wal-Mart creates jobs and stimulates economic growth</p> Signup and view all the answers

    What is the conclusion about Wal-Mart's overall effect on communities?

    <p>Wal-Mart has a slightly positive effect on communities</p> Signup and view all the answers

    What is the primary criticism made by those who argue that Wal-Mart is bad for workers?

    <p>All of the above</p> Signup and view all the answers

    What is the result of the study regarding retail earnings per job?

    <p>Retail earnings per job fell in virtually all counties studied</p> Signup and view all the answers

    What is the overall impact of Wal-Mart's presence on local communities, according to critics?

    <p>It destroys community character and kills jobs</p> Signup and view all the answers

    What is the characteristic of employment growth rates among the studied counties?

    <p>Employment growth rates varied among the counties studied</p> Signup and view all the answers

    What is the study's methodology?

    <p>Comparing 40 Wal-Mart counties with 49 non-Wal-Mart counties</p> Signup and view all the answers

    What can be inferred from the analysis about Wal-Mart's effect on local economies?

    <p>Wal-Mart's effect on local economies is smaller than perceived and is influenced by various local factors.</p> Signup and view all the answers

    What did the analysis find about poverty rates in Wal-Mart counties compared to non-Wal-Mart counties?

    <p>Poverty rates decreased less in Wal-Mart counties than non-Wal-Mart counties.</p> Signup and view all the answers

    What was investigated as a possible factor in the poverty trends in Wal-Mart counties?

    <p>Immigrant population flows</p> Signup and view all the answers

    What is a limitation of the fedgazette findings?

    <p>They do not prove a direct cause-and-effect relationship between Wal-Mart and local economic trends.</p> Signup and view all the answers

    What is suggested as a possible factor in determining the long-run growth prospects of local communities?

    <p>Education levels and infrastructure investments</p> Signup and view all the answers

    What was the trend in poverty rates across the Ninth District from 1989 to 2004?

    <p>Poverty rates decreased significantly.</p> Signup and view all the answers

    What did the analysis find about Wal-Mart counties prior to the store opening?

    <p>They showed no difference in income growth leading into the opening of the Wal-Mart.</p> Signup and view all the answers

    What is one aspect of the analysis that is not discussed?

    <p>The savings local consumers realize by having Wal-Mart in town</p> Signup and view all the answers

    What is the overall conclusion of the analysis regarding Wal-Mart's impact on local economies?

    <p>Wal-Mart's impact on local economies is smaller than perceived and influenced by local factors.</p> Signup and view all the answers

    What did the analysis find about the relationship between immigrant population flows and poverty trends in Wal-Mart counties?

    <p>The data shows little evidence that changes in the foreign-born population play a major role in the differential change in poverty within Wal-Mart counties.</p> Signup and view all the answers

    What was the characteristic of counties with a population under 10,000 in 1985?

    <p>They tended to have lower levels of population and employment</p> Signup and view all the answers

    What was the trend in personal income growth in Wal-Mart and non-Wal-Mart counties over 20 years?

    <p>Personal income growth was virtually identical in both</p> Signup and view all the answers

    What was the characteristic of median employment growth in Wal-Mart counties compared to non-Wal-Mart counties?

    <p>It was higher in Wal-Mart counties</p> Signup and view all the answers

    What was the trend in earnings per job in the retail sector in Wal-Mart counties from 1985 to 2005?

    <p>It decreased slightly</p> Signup and view all the answers

    What was the characteristic of total compensation in non-Wal-Mart counties compared to Wal-Mart counties?

    <p>It was higher in non-Wal-Mart counties</p> Signup and view all the answers

    What was the conclusion about Wal-Mart's effect on population growth in either direction?

    <p>Wal-Mart's presence had little influence on population growth in either direction</p> Signup and view all the answers

    What was the characteristic of counties that would get a Wal-Mart in the future?

    <p>They had higher levels of population and employment</p> Signup and view all the answers

    What was the trend in retail sectors in counties that would later get a Wal-Mart?

    <p>They were larger in counties that would get a Wal-Mart</p> Signup and view all the answers

    What was the difference in per capita income levels between Wal-Mart and non-Wal-Mart counties?

    <p>Per capita income levels were basically even between Wal-Mart and non-Wal-Mart counties</p> Signup and view all the answers

    What was the conclusion about Wal-Mart's effect on employment and earnings?

    <p>Wal-Mart's presence had a positive effect on employment and earnings</p> Signup and view all the answers

    What is the primary obstacle to deriving strong conclusions about the impact of Wal-Mart on general merchandise stores?

    <p>All of the above</p> Signup and view all the answers

    What trend is observed in the growth of median establishment in Wal-Mart counties compared to non-Wal-Mart counties?

    <p>Median establishment growth is stronger in Wal-Mart counties, particularly among smaller employers</p> Signup and view all the answers

    What is the finding regarding the correlation between the presence of Wal-Mart and growth in taxable sales in Minnesota?

    <p>A positive correlation is observed</p> Signup and view all the answers

    What is the limitation of the sales tax data analysis?

    <p>The number of observations in each state is small</p> Signup and view all the answers

    What is the finding regarding the impact of Wal-Mart on employment in Wal-Mart counties compared to non-Wal-Mart counties?

    <p>Employment increases in Wal-Mart counties, particularly in retail</p> Signup and view all the answers

    What is the characteristic of the growth rate of earnings per job in Wal-Mart counties compared to non-Wal-Mart counties?

    <p>The growth rate is faster in Wal-Mart counties, particularly in retail</p> Signup and view all the answers

    What is the conclusion regarding the impact of Wal-Mart on business growth in a county?

    <p>The presence or absence of Wal-Mart is neither an obvious anchor nor a hot air balloon for business growth in a county</p> Signup and view all the answers

    What is the limitation of the analysis of the impact of Wal-Mart on general merchandise stores?

    <p>The number of firms in this category is comparatively small at the county level</p> Signup and view all the answers

    What is the trend observed in the aggregate establishment growth in Wal-Mart counties compared to non-Wal-Mart counties?

    <p>Aggregate establishment growth is stronger in Wal-Mart counties, but only if the top five counties are removed</p> Signup and view all the answers

    What is the primary conclusion regarding the impact of Wal-Mart on local businesses?

    <p>The impact of Wal-Mart on local businesses is mixed and depends on various factors</p> Signup and view all the answers

    Study Notes

    The Wal-Mart Effect: Poison or Antidote for Local Communities?

    • Wal-Mart's Controversial Reputation*
    • Wal-Mart is the largest retailer in the United States in terms of revenue, with $344 billion in fiscal 2007
    • It is often criticized for killing jobs and downtowns, destroying community character, and being overly aggressive in stopping the formation of labor unions
    • Economic Impact of Wal-Mart*
    • Research suggests that Wal-Mart's economic influence is significant, but not necessarily negative
    • Firm growth, employment, and total earnings were stronger in Wal-Mart counties compared to non-Wal-Mart counties
    • Poverty rates declined in most counties, but declined less in Wal-Mart counties
    • Wal-Mart's presence had little influence on population growth and income per person

    Characteristics of Wal-Mart Counties

    • About two-thirds of Wal-Mart counties had their store in place by the early 1990s
    • Wal-Mart tends to locate in larger counties with higher population and employment rates
    • Retail sectors were larger in counties that would later get a Wal-Mart

    Growth Patterns in Wal-Mart Counties

    • Personal income growth was virtually identical in Wal-Mart and non-Wal-Mart counties
    • Population growth was a mixed bag, with median growth higher in Wal-Mart counties, but aggregate growth similar in both groups
    • Employment growth was higher in Wal-Mart counties, especially in the retail sector
    • Job earnings grew faster in Wal-Mart counties, but fell in the retail sector

    Business Growth and Competition

    • Data on county establishments do not support the notion that Wal-Mart tramples local businesses
    • Median establishment growth was stronger in Wal-Mart counties, particularly among smaller employers
    • Aggregate establishment growth was higher in non-Wal-Mart counties, but influenced by a small number of booming counties

    Sales Tax Data and Revenue

    • Taxable retail sales grew faster in Wal-Mart counties compared to non-Wal-Mart counties, especially in Minnesota
    • Wal-Mart likely attracts shoppers from neighboring counties, inducing more frequent shopping, but may also squeeze out local retailers

    Poverty and Immigration

    • Poverty rates dropped less in Wal-Mart counties compared to non-Wal-Mart counties
    • Changes in the foreign-born population do not play a major role in the differential change in poverty within the two sets of counties### Wal-Mart's Impact on Local Communities
    • Conventional wisdom about Wal-Mart's negative effects on local communities is challenged by this analysis.
    • The analysis focuses on measures of community health, excluding the benefits of consumer savings from having Wal-Mart in the area.

    Balanced Findings

    • The analysis reveals a mix of positive and negative outcomes, but all effects are small.
    • The net impact of Wal-Mart on a county's health is likely smaller than commonly perceived.

    Dynamic Nature of Local Economies

    • Local economies are dynamic, constantly changing, and extend beyond retail borders.
    • Firms, jobs, and people come and go regularly due to various reasons.
    • Local economic idiosyncrasies, such as education levels, infrastructure, and entrepreneurial culture, may play a larger role in determining long-run growth prospects.

    The Wal-Mart Effect: Poison or Antidote for Local Communities?

    • Wal-Mart's Controversial Reputation*
    • Wal-Mart is the largest retailer in the United States in terms of revenue, with $344 billion in fiscal 2007
    • It is often criticized for killing jobs and downtowns, destroying community character, and being overly aggressive in stopping the formation of labor unions
    • Economic Impact of Wal-Mart*
    • Research suggests that Wal-Mart's economic influence is significant, but not necessarily negative
    • Firm growth, employment, and total earnings were stronger in Wal-Mart counties compared to non-Wal-Mart counties
    • Poverty rates declined in most counties, but declined less in Wal-Mart counties
    • Wal-Mart's presence had little influence on population growth and income per person

    Characteristics of Wal-Mart Counties

    • About two-thirds of Wal-Mart counties had their store in place by the early 1990s
    • Wal-Mart tends to locate in larger counties with higher population and employment rates
    • Retail sectors were larger in counties that would later get a Wal-Mart

    Growth Patterns in Wal-Mart Counties

    • Personal income growth was virtually identical in Wal-Mart and non-Wal-Mart counties
    • Population growth was a mixed bag, with median growth higher in Wal-Mart counties, but aggregate growth similar in both groups
    • Employment growth was higher in Wal-Mart counties, especially in the retail sector
    • Job earnings grew faster in Wal-Mart counties, but fell in the retail sector

    Business Growth and Competition

    • Data on county establishments do not support the notion that Wal-Mart tramples local businesses
    • Median establishment growth was stronger in Wal-Mart counties, particularly among smaller employers
    • Aggregate establishment growth was higher in non-Wal-Mart counties, but influenced by a small number of booming counties

    Sales Tax Data and Revenue

    • Taxable retail sales grew faster in Wal-Mart counties compared to non-Wal-Mart counties, especially in Minnesota
    • Wal-Mart likely attracts shoppers from neighboring counties, inducing more frequent shopping, but may also squeeze out local retailers

    Poverty and Immigration

    • Poverty rates dropped less in Wal-Mart counties compared to non-Wal-Mart counties
    • Changes in the foreign-born population do not play a major role in the differential change in poverty within the two sets of counties### Wal-Mart's Impact on Local Communities
    • Conventional wisdom about Wal-Mart's negative effects on local communities is challenged by this analysis.
    • The analysis focuses on measures of community health, excluding the benefits of consumer savings from having Wal-Mart in the area.

    Balanced Findings

    • The analysis reveals a mix of positive and negative outcomes, but all effects are small.
    • The net impact of Wal-Mart on a county's health is likely smaller than commonly perceived.

    Dynamic Nature of Local Economies

    • Local economies are dynamic, constantly changing, and extend beyond retail borders.
    • Firms, jobs, and people come and go regularly due to various reasons.
    • Local economic idiosyncrasies, such as education levels, infrastructure, and entrepreneurial culture, may play a larger role in determining long-run growth prospects.

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