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Low Prices, High Cost

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Essay title: Low Prices, High Cost

Wal-Mart is a name that is instantly recognizable in many countries all over the world. It conjures images of a low-price wonderland where anything a consumer would want is available all in one place. But this cheery picture that Wal-Mart tries to create is far from true. Poor worker wages and benefits, and the destruction of small communities should be what one thinks of when hearing that company name.

However, Wal-Mart didn’t start out so corrupt. In 1962, Sam Walton opened his first store in Rogers, Arkansas. 1962 was the birth of the discount retailer, with the first Kmart and Target stores opening that same year. Walton’s philosophy was giving the customers what they want. He said he wanted to offer “good quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping experience.” In 1970, the stock was offered on the NY Stock Exchange, and the company grew from fifteen stores to 276 by the end of the ‘70s. In the ‘80s Wal-Mart boomed, growing to 1400 stores. They also opened the first Sam’s Club and the first Wal-Mart Supercenter, which included a grocery section. In 1990, they became the nation’s number one retailer, and in ‘91 they enter the international market with a store in Mexico City. In 1995 they have stores in all fifty states and have 276 international stores. Currently there are 3,700 stores in the U.S., and 1,500 others throughout the rest of the world. Wal-Mart has announced their goal to double their Supercenter stores, having 3,131 in operation by 2010.

So what is the result of this expanding business? Failing local economies, lowering U.S. labor standards, and the abuse of the environment have all been attributed to the Wal-Mart corporation. One aspect I have witnessed is the impact on local economies. I grew up in a small town where the main retailers were locally owned grocery stores, a Target, and a Kmart. Wal-Mart came in about ten years ago, and not long after Target went out of business. The Kmart is now on the verge of closing, and has already fired much of the staff. Many of the small clothing stores, and the record store have been put out of business. Now the Wal-Mart is being turned into a Supercenter, which will surely mean one if not both of the grocery stores will close. The Wal-Mart has become the center of the town, and it seems the loyal customers do not realize how much damage the store has caused to the community. This is happening all over the country, and Iowa State University actually did a study on the trend. Dr Kenneth Stone found that over ten years of Wal-Mart’s growth in the state, 7,326 Iowa businesses closed. It was also found that 84 percent of all sales at Wal-Mart stores came at the expense of existing businesses in the same county.

Wal-Mart has also come under fire for its treatment of employees. Wal-Mart currently employs 1.3 million people in the United States, making it the country’s largest employer. So it must be appealing to work for Wal-Mart, right? Wrong, according to the average wage, and worker benefits. The average hourly wage is $9.68, much less than the United States average of $17.80. In terms of health care, only forty-five percent of employees are covered by the company’s health

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