Wal-Mart - PowerPoint PPT Presentation

1 / 26
About This Presentation
Title:

Wal-Mart

Description:

Wal-Mart rivals (Target, K-Mart Sears) emulate highly productive processes. ... Throwing Rocks at Wal-Mart (Vermillion Community for Peace and Justice) ... – PowerPoint PPT presentation

Number of Views:649
Avg rating:3.0/5.0
Slides: 27
Provided by: lynnej
Category:
Tags: mart | wal | walmart

less

Transcript and Presenter's Notes

Title: Wal-Mart


1
Wal-Mart Globalization
  • Ralph J. Brown
  • Professor of Economics
  • Ralph.Brown_at_usd.edu
  • www.usd.edu/rbrown

2
STATEMENT OF PRINCIPLES
  • PEOPLE SHOULD BE
  • Free to Choose
  • as Consumers
  • as Workers
  • as Suppliers

3
COMPETITION
  • Consumers best friend
  • Workers best friend
  • Not pro-Wal-Mart.
  • Not pro-business.
  • Pro Consumer.
  • I dont care whether it is Wal-Mart, Target,
    K-Mart, or whomever.

4
The Economic Impact of Wal-Mart
  • Does it lower prices?
  • Does it create jobs?
  • Does it increase productivity efficiency in the
    economy?

5
GLOBAL INSIGHT STUDYhttp//www.globalinsight.com/
publicDownload/genericContent/11-03-05_walmart.pdf
  • Largest most prestigious econometric modeling
    firm in the world.
  • THE ECONOMIC IMPACT OF WAL-MART
  • Wal-Mart opened books on sales, employment, etc.
    1985-2004.
  • Studies monitored and reviewed by economists from
    Brookings Instn. and American Enterprise
    Institute.

6
GLOBAL INSIGHT
  • Wal-Mart has been positive due to
  • lower consumer prices,
  • due to real efficiency gains,
  • not by lower wages.
  • more efficiency?lower prices?higher real income

7
GLOBAL INSIGHT CONCLUSIONS
  • Due to Wal-Mart
  • Price Effect-US (Direct Indirect)
  • Food prices 9.1 lower,
  • Commodity prices 4.2 lower,
  • Overall CPI 3.1 lower.

8
GLOBAL INSIGHT cont.
  • Due to Wal-Mart
  • Increased Purchasing Power(2004)
  • 118 billion-US
  • 402 per person
  • 1,046 per family

9
GLOBAL INSIGHT cont.
  • Due to Wal-Mart
  • Employment Effects US (2004)
  • 210,000 net jobs nationwide.
  • General economic efficiency 0.75,
  • (total factor productivity)

10
OTHER STUDIES-(PRICES ARE LOWER)
  • UBS Warburg 17 - 39 lower.
  • Basker (U of Mo) 23 lower.
  • Hausman Leibtag (MIT) food stores 25 lower -
    782 per HH.
  • Callahan Zimmerman (WSJ) food prices 27
    lower.
  • AT Kearney food prices 20-25 lower.
  • Aberdeen Study food prices 25 lower, 63 of
    savings to HH lt 50,000, 42 of savings to HH lt
    35,000.

11
WAGES
  • Global Insight Wal-Mart BLS Avg
  • 7 retail positions 9.17 8.46
  • SD FT average 10.02
  • Global Insight - no evidence of below-market
    wages.
  • WM provides health to FT PT who choose to
    participate pays 70 of premium.

12
INNOVATION PRODUCTIVITY(Key to Increased
Living Standards)
  • The US has observed an upswing in productivity
    since 1995.
  • 1973-95 1.4
  • 1995-04 2.9
  • A quarter of that came from retailing.

13
Wal-Mart Effect
  • McKinsey Global Institute states
  • More than half of the productivity acceleration
    in the retailing of general merchandise can be
    explained by only two syllables Wal-Mart.
  • Wal-Mart rivals (Target, K-Mart Sears) emulate
    highly productive processes.
  • Competition from Wal-Mart makes its competitors
    better companies.

14
Wal-Mart and Vermillion?
  • Does it add retail choice?
  • Does it lower prices?
  • Does it create jobs?
  • Does it provide tax revenue?

15
Vermillion Retail Sector is Underserved
16
Retail Sales Per Capita Inc.Adj.(1.0 avg of 11
largest cities)
17
Vermillion Impact (Estimated)
  • Retail Sales (Per Year)
  • 45 mil. Wal-Mart
  • - 15 mil. displacement
  • 30 mil. NET
  • Employment
  • 275 jobs (700 applicants)
  • - 100 displacement
  • 175 jobs NET

18
Vermillion Impact (Estimated)
  • Tax Revenue (Per Year)
  • 600 thou. City Sales Tax (2)
  • 117 thou. Property Tax 164 thou. when
    complete.
  • Lower Prices
  • -2 mil Grocery prices _at_ 10 lower in V
  • More disp income in more spending locally
  • Less Travel to Yankton, Sioux City, Sioux
    Falls-Lower travel costs

19
CONCLUSION
  • If we could eliminate Wal-Mart from the economy
    we would
  • pay higher prices,
  • be less productive,
  • have a lower standard of living,
  • poor modest income hurt most.

20
THE END
21
Progressives Should Read
  • Jason Furman, Wal-Mart A Progressive Success
    Story
  • Just google it.

22
INTERNATIONAL TRADE
  • Trade is a good thing.
  • It raises standard of living in both countries.
  • Trade does not destroy jobs, it changes
    composition of jobs.

23
(No Transcript)
24
(No Transcript)
25
(No Transcript)
26
Throwing Rocks at Wal-Mart(Vermillion Community
for Peace and Justice)
Write a Comment
User Comments (0)
About PowerShow.com