An article in this month's issue of the Federal Reserve Bank of Minnesota's in-house publication fedgazette examines Wal-Mart's impact on local communities...more--> Long considered a menace to small towns and locally-owned businesses, Wal-Mart's reputation precedes it in this authors' introduction:
[Wal-Mart]'s been accused of discriminating against women, using illegal immigrants, requiring work off the clock and being overly aggressive in stopping the formation of labor unions among its workers.
It's been blamed for sprawl and traffic congestion, as well as aesthetic offenses…The company adds a final dash of salt to the wound by repeatedly fighting (and mostly winning) property tax assessments on its stores.
These and other reputational issues have dogged Wal-Mart for years. The company's image problems, which have contributed at least in part to the company's slowing growth, could prove even more problematic now than in the past; yesterday's Wall Street Journal explains that a slow economy is putting even more pressure on companies to save face.
The fedgazette's article returns mixed findings, but among the key points are the facts that employee benefits remain better and poverty rates remain lower in communities without Wal-Mart stores. These findings seem to counter the authors' assertion that Wal-Mart's impact on local economies is "minor." The article also failed to take in to account Wal-Mart's dependence on local subsidies and tax loopholes (as the recent court case in North Carolina highlighted), both of which damage overall community revenue. A number of reports – focusing on everything from median wages to locally-owned businesses to Medicaid enrollment numbers – show that Wal-Mart's effect on local communities is quite damaging. Such practices, in turn, are damaging to the company itself.
source: Seeking Alpha Stock Market Opinion & Analysis
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