Reply #105: Wal-Mart does not harm community economies... [View All]

[CompassionateLib]

...in fact it helps them. I've been arguing Wal-Mart and some have wanted to put political labels on my Wal-Mart views, but it is not an ideology question, it is just what is. If you keep hearing the Wal-Mart bashers, please just read and consider this, it's all I ask.

To sustain a Community must export some product or service outside the community. Let's take an example of a farming community. The community exports crops, eggs, meat etc. The money comes into the community is the "revenue" of the community. Now the farmers producing the products have direct costs to produce them. They must make a profit (their income).

The farmers also need stuff like groceries, gasolines, etc. Businesses spring up to provide that to them and the people running the other businesses. And those businesses send money outside the community for the products. So for example a gas station buys gas from an oil company sending money outside the community and sells gas to the members of the community keeping the difference as their profit.

But everything in the community is ultimately funded by the crops sent from the community by the farmers and then circulates through the other businesses. Now, Wal-Mart comes to the community.

Wal-Mart produces nothing and sells no services. So which businesses are replaced by the Wal-Mart? Ones that simply buy and re-sell pre made items and do not add value to them. Lamp stores, pharmacies, electronics stores, whatever. But think about it from the perspective of the community.

- The revenue of the community is not affected. Their product is crops, Wal-Mart does not decrease that. How can it be devistated?
- However, the money leaving the community is reduced because Wal-Mart buys products more cheaply. Instead of a small lamp store paying $30 to a lamp producer, Wal-Mart pays them only $20.
- The farmers (and other in the community) have more money because they pay less for same thing. Instead of buying the lamp for $50 they buy it for $30, which means they have $20 to spend or invest. Or maybe they lower the price of their crops enabling them to sell more bringing more revenue to the community.

Now the people who lost their jobs I agree it is too bad. I really do. But change is constant and people are always affected. We have not become the greatest country on the planet by fearing and resisting change but by embracing it. So now,

- The lower tier workers work at Wal-Mart providing them with opportunity
- Some higher skilled can get jobs managing the others
- The others who lost their jobs can get jobs that rather than simply re-selling pre-made items add value or provide services
- Consumers have more money for other stuff becuase they got the same thing for less.

This is why Wal-Mart cannot harm a community by coming in. It is not an ideology that makes me say it but the recognition of basic economics.