Communities Should Welcome Wal-Mart :: Critical Thinking Essays

Communities Should Welcome Wal-Mart How would you like to be penalized because you do your work too well--for example, for running your business so effectively that it attracts hordes of happy customers? Well, this is what is happening more and more frequently to Wal-Mart. Recently the West Covina, Calif., city council voted to deny the sale of land to developers who were going to build a Wal-Mart store on the site. The council was concerned that the Wal-Mart store would "threaten" other businesses and replace higher paying jobs in the area with lower-paying ones. The banning of Wal-Mart is being considered by the Los Angeles city council and has occurred in some other California cities as well as in other locations around the country. Wal-Mart is one of the most impressive success stories in the history of business. Founded some 50 years ago as a single five and dime store in a small Arkansas town, it has grown into a world-wide behemoth under the leadership of its brilliant founder, the late Sam Walton, and his able successors. It is the largest corporation in America in terms of sales, $245 billion. Wal-Mart has over 4,000 stores worldwide, employs 1.3 million people, and serves 100 million customers per week. It is quite true that Wal-Mart has been successful in outcompeting other stores which sell the same products, such as toys, clothing, and groceries. But how has it been able to do this? By discovering new ways of using computer systems and other technology to better manage its inventory and costs and reap the benefits of economy of scale. Wal-Mart is especially popular among low-income shoppers who cannot afford the prices of the more upscale stores. It has put other stores out of business, but that is the way capitalism works. The automobile replaced the horse and buggy. Sound motion picture replaced the silents. No one has a "right" to business success or a "right" to be protected from competitors through government intervention. One only has a right to try to compete through voluntary trade. In a free economy, companies that offer the best value for the dollar win and the losers invest their money elsewhere. It is also true that Wal-Mart pays lower wages than many unionized stores. But it must offer a market wage or risk its employees going elsewhere, and it deals with employees on a voluntary basis. Those who do not like its terms are free to do business elsewhere.