The overwhelming weight of the independent research on the impact of Wal-Mart stores on local
and national economies – including jobs, taxes, wages, benefits, manufacturing and existing
retail businesses – shows that Wal-Mart depresses area wages and labor benefits contributing to
the current decline of good middle class jobs, pushes out more retail jobs than it creates, and
results in more retail vacancies. There is no indication that smaller “urban” Wal-Mart stores
scattered throughout a dense city in any way diminish these negative trends. Rather, such
developments may actually result in more widespread economic disruption.
1. Wal-MartÂ’s Economic Impacts: Net Loss of Jobs, Fewer Small Businesses
• Wal-Mart store openings kill three local jobs for every two they create by
reducing retail employment by an average of 2.7 percent in every county they
enter.6
• Wal-Mart’s entry into a new market does not increase overall retail activity or
employment opportunities.7
Research from Chicago shows retail employment did
not increase in Wal-MartÂ’s zip code, and fell significantly in those adjacent.
• Wal-Mart’s entry into a new market has a strongly negative effect on existing
retailers.8
Supermarkets and discount variety stores are the most adversely
affected sectors, suffering sales declines of 10 to 40% after Wal-Mart moves in.9
• Stores near a new Wal-Mart are at increased risk of going out of business. After a
single Wal-Mart opened in Chicago in September 2006, 82 of the 306 small
businesses in the surrounding neighborhood had gone out of business by March
2008.10
• The value of Wal-Mart to the economy will likely be less than the value of the
jobs and businesses it replaces. A study estimating the future impact of Wal-Mart
on the grocery industry in California found that, “the full economic impact of
those lost wages and benefits throughout southern California could approach $2.8
billion per year.”11
• Chain stores, like Wal-Mart send most of their revenues out of the community,
while local businesses keep more consumer dollars in the local economy: for
every $100 spent in locally owned businesses, $68 stayed in the local economy
while chain stores only left $43 to re-circulate locally.12
2. Wal-MartÂ’s Costs to Taxpayers
• Wal-Mart has thousands of associates who qualify for Medicaid and other
publicly subsidized care, leaving taxpayers to foot the bill.13 For instance in Ohio
Wal-Mart has more associates and associate dependents on Medicaid than any
other employer, costing taxpayers $44.8 million in 2009.14
• According to estimates, Wal-Mart likely avoided paying $245 million in taxes
2008 by paying rent to itself and then deducting that rent from its taxable
income.15
Wal-Mart has admitted a failure to pay $2.95 billion in taxes for fiscal year
2009.16
3. Wal-MartÂ’s low paying jobs contribute to the decline of the middle class
• Median household income declined by 1.8% nationally and 4.1% in New York
City in 2009.17 This decline will be exacerbated by low paying Wal-Mart jobs.
• Wal-Mart’s average annual pay of $20,774 is below the Federal Poverty Level for
a family of four.18
• A Wal-Mart spokesperson publicly acknowledged in 2004 that, "More than two
thirds of our people... are not trying to support a family. ThatÂ’s who our jobs are
designed for.”19
• Wal-Mart’s 2010 health care offerings have a high annual deductible of $4,400
which means a family would have to spend $5,102 of their own money on health
care before Wal-MartÂ’s insurance pays anything. Based on the average salary of a
Wal-Mart employee this payment represents almost 25% of their annual income.20