Walmart Can Cost Surrounding Communities Millions In Lost Wages, Economic Activity: Study

A New Walmart Can Cost The Surrounding Community Millions

Let's say a new Walmart is opening in your town. Should you be worried?

According to recent research from a Seattle-area advocacy group, the answer is a definitive yes.

The group, Puget Sound Sage, released a study earlier this month arguing that a planned Walmart store in that area will cost the community $13 million in economic activity and $14.5 million in lost wages over the next 20 years.

The study predicts that a South Seattle Walmart will siphon business away from local retailers, and pay its employees much lower wages than they'd get working elsewhere.

The Puget Sound group's findings arrive at a moment when Walmart's expansion tactics are coming under fire. Walmart, the country's largest retailer and one of the biggest corporations in the world, currently faces accusations that its Mexican subsidiary made several bribes to the Mexican government to speed up the process of opening new stores in the country.

A Justice Department investigation is underway, and Walmart could end up facing billions in fines.

The effects of the retail giant on local communities once it's able to open a store has long been a subject of heated debate. The report from Puget Sound Sage, which describes itself on its website as an alliance between "labor, faith and community," isn't the first to examine the economic impact of Walmart in recent years. And not every such study has turned up a forecast this grim.

Different researchers have come to different conclusions. In 2005, a study by the firm Global Insight found that Walmart's low prices had enabled shoppers to save about $263 billion over the past 20 years. Months later, researchers at the left-leaning Economic Policy Institute issued a sharp critique of the Global Insights report, calling it "unreliable" and "deeply flawed."

Other reports have been agnostic on the Walmart question, arguing that the retailer often makes little economic impact on nearby communities. Even that's not necessarily good news, as it suggests a new Walmart location can sometimes make minimal difference in terms of hiring in areas with high unemployment.

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