Effects of Wal-Mart on the U.S. Labor Industry – conclusion

Trends in labor have been influenced by factors such as globalization that allows outsourcing of labor and importation of goods from low-cost countries, and technological changes allowing for replacement of workers with technology. In the United states, Wal-Mart has shaped the labor industry by being a core non-state employer and the largest corporation in the world by revenue generated. Its U.S operations for instance employ approximately 1.4 million employees, a significant number of workforce in the retail sector. This paper evaluated the effects of Wal-Mart on American labor by considering its effects on wage levels, employment levels, workers’ rights and employment practices.

In respect to wage levels, Wal-Mart’s effects have been to pressurize wages to fall in various locations. Such effect arises from such aspects as its low prices leading to competing retails being pressurized to adopt such low wages to compete effectively. Evaluations presented in reviewed literature for instance identify Wal-Mart to offer lower wages than the average in the retail sector, even when a higher wage would have minimal impact on the price increment passed on to the consumer. Leading to such lower wage levels has also been Wal-Mart’s pressurizing suppliers to provide supplies at very low prices in its pursuit of a cost leadership position. Since Wal-Mart, by its size and operations, is a significant customer for most suppliers, such suppliers would adopt measures such as wage reductions to avoid losing out a significant customer to the competing national and international firms. Evaluations using OLS and IV in the reviewed literature have supported such perspective of Wal-Mart entry resulting into decreased wage levels in the long term.

With respect to employment levels, Wal-Mart presence is largely associated with reduced employment in the long term. Such reductions are attributed to aspects such as job losses in retailers competing directly with Wal-Mart and such losses in manufacturers who face competition from Wal-Mart following its vertical integration. Additionally, by importing large amounts of its products from low wage countries while having negligible exports, Wal-Mart has contributed to the loss of jobs that would otherwise result where its suppliers are derived from the U.S.

Wal-Mart’s effect with regard to worker’s rights and employment practices are evident in its anti-union stance and discriminatory employment practices respectively. Through the entity’s anti-union practices, Wal-Mart has made it difficult for unions to sign members, not only in Wal-Mart establishments but also in other retailers that imitate its practices. Such inefficiency of unions has meant that entities such as Wal-Mart that consistently fail to address workers plight such as providing fair remuneration can survive based on the number of workforce availed by an increasing pool of unemployed individuals. With regard to employment practices, a core criticism of Wal-Mart has been its discriminatory practices particularly aimed at its female workforce. Although the entity has made settlements for some of the discrimination claims raised, favorable rulings such as the one it received against Duke et al. continues to challenge the establishment of an environment where equal employment opportunities are provided.


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