1 / 12

Chapter 42 Walmart: Always Low Prices (and Low Wages) - Always

Chapter 42 Walmart: Always Low Prices (and Low Wages) - Always. Chapter Outline. The Market Form Who Is Affected?. The Market Form. Small Towns Oligopoly or Monopoly Everywhere else Monopolistic Competition Competitors Supers (Wal-Mart, Target, K-Mart) National Chains (Kroger, Safeway)

amos-dunn
Download Presentation

Chapter 42 Walmart: Always Low Prices (and Low Wages) - Always

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 42Walmart: Always Low Prices (and Low Wages) - Always

  2. Chapter Outline • The Market Form • Who Is Affected?

  3. The Market Form • Small Towns • Oligopoly or Monopoly • Everywhere else • Monopolistic Competition • Competitors • Supers (Wal-Mart, Target, K-Mart) • National Chains (Kroger, Safeway) • Regional Chains (Wegmans, Winn-Dixie, Publix) • Locals • IGA affiliated • Independent

  4. Top Ten Grocery Store Chains

  5. Store Locations

  6. Monopsony Concerns • Walmart is the biggest wholesale buyer for many companies’ products. • Walmart (often) dictates the price will is willing to pay. • This forces companies to • outsource production. • cut costs (including wages and benefits)

  7. Who is Affected?Consumers • For consumers who switch to Walmart the gain is b/w $15 million and $33 million per store • Walmart’s prices are 15-22% lower than national averages. • An average Walmart sells $100-$150 million in goods. • For consumers who like their old store, but it closes. • Consumers “reveal” their preferences by paying higher prices at smaller IGA stores. • These consumers are worse off if the store closes. • Nearly all economists consider this a net win for consumers.

  8. Who is Affected?Workers • Walmart’s pay and benefit package is $5-$10 lower than their competitors. • Competitors are • unionized • have retirees • New Walmarts hire b/w 450 and 500 workers (375-400 FTE) • Many/most of the new Walmart jobs are displaced elsewhere. • Productivity rises.

  9. Who is Affected?Taxpayers • Most (b/w 70% and 80%) of a new Walmart’s sales displace sales elsewhere in the community. • Sales taxes would not necessary be affected because • Food is rarely taxed • The increase in sales is mostly from people in the state (or taxing district.)

  10. Who is Affected?Other Businesses • Hurt • Competitors that try to “out Walmart Walmart” • Unaffected • Competitors that sell goods Walmart • Helped • Complementary stores and restaurants that surround the Walmart

  11. Who is Affected?Community • Sociologists have noted that Walmart damages the non-economic fabric of communities. • Displaced business owners tend to be • Church leaders • School Board members • Community leaders

  12. What is the Net? • Winners • Most Consumers • Complementary Businesses • Losers • Workers • Competing Businesses • Economists generally view the net as positive

More Related