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Wal-Mart to Create 22,000 Jobs — and Destroy Many Thousands More

| Written by Stacy Mitchell | 3 Comments | Updated on Jun 12, 2009 The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/walmart-create-22000-jobs-and-destroy-many-thousands-more/

Last week, Wal-Mart announced that it would create 22,000 new jobs in the U.S. to staff new and expanded stores.  More than 100 newspapers and magazines reported this news as a welcome bright spot amid the downturn.  But had these news outlets turned to sources beyond Wal-Mart’s press release and attempted to provide at least some analysis of the broader impact, the headlines might not have been so rosy.

In all likelihood, Wal-Mart’s expansion will make the U.S. employment picture worse, not better.  There’s plenty of evidence to suggest that the addition of 22,000 jobs at Wal-Mart will lead to the loss of at least as many, and probably more, jobs at other businesses.

According a national study led by Dr. David Neumark, an economist at the University of California at Irvine, for each new retail job created by Wal-Mart, 1.4 existing jobs have been lost at competing businesses.  That means every new Wal-Mart store that opens reduces retail employment by about 150 jobs.

How can this be?  The answer is that Wal-Mart relies on fewer employees to accomplish the same volume of sales as the businesses it competes with.  As Wal-Mart grows, and competing businesses downsize and close, the resulting layoffs outnumber the job gains.

Indeed, over the last decade, even as Wal-Mart and other big-box stores multiplied dramatically and retail spending overall grew, retail employment in the U.S. remained flat.  Today, retail workers receive a smaller share of the nation’s total payroll than they did a decade ago.

Retail jobs are not the only jobs at stake, either.  Wal-Mart has played a leading role in pushing millions of manufacturing jobs to low-wage countries, and, unlike independent retailers, which purchase many goods and services, like printing and accounting, locally, Wal-Mart stores provide very little support to other businesses in the community.  Studies have found that only $14 of every $100 spent at a Wal-Mart store stays in the local economy.

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About Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance, and directs its Community-Scaled Economy Initiative, which produces research and analysis, and partners with a range of allies to design and implement policies that curb economic consolidation and strengthen community-rooted enterprise.  She is the author of Big-Box Swindle and also produces a popular monthly newsletter, the Hometown Advantage Bulletin.  Connect with her on twitter and catch her TEDx Talk: Why We Can’t Shop Our Way to a Better Economy. More

Contact Stacy   |   View all articles by Stacy Mitchell

  • http://www.fautores.com Michael Chindamo

    Like many large companies, the cutting back of hours is to legalize the eliminating of health care costs. We as a society at some point should realize that what you save pennies on now has a cost of dollars later. In order to fix the imbalances we should consider much more support for the family owned and owner managed business organizations. “Keep it in the family” so to speak.

    Publicly traded organizations have an obligation to produce earnings for their shareholders. The officers of these companies are then rewarded handsomely for their efforts. A customer is really nothing more than a buying unit to help achieve corporate earnings

    The family owned business is not only married to the business, but the customer as well. It’s all about what’s best for the customer. With this comes great pride in ownership and appreciation of lifetime relationships that are built with employees and customers. In essence we are all family. So, where would you really like to shop? Think about it. Family owned businesses are noted to offer better products, better service and friendship with a smile.

  • Anonymous

    The people I know who work there have had their hours cut from 32 to 20 hours.  They are hiring more but cutting hours on existing workers. Also, they no longer get overtime for working Sunday, as Wal-Mart’s work week starts on Saturday.