Walmart's impact on the American economy and society

¶ … Wal-Mart Good for America?

The story of Wal-Mart is a reflection of a company that has experienced unprecedented growth from its humble roots as a single store to an extent that it has become the most powerful retailer in the worldwide economy. This company has set the standard for many 21st Century businesses just like General Motors and U.S. Steel characterized the 20th Century corporations. The success of Wal-Mart can be attributed to several factors including its transformation of the conventional push system to a pull system where retailers inform the manufacturer what to produce and how much. This change has enticed several multi-national manufacturers like Kodak and Hoover to establish their offices near the global headquarters of Wal-Mart. The pull system that contains unparalleled accuracy and efficiency has enabled Wal-Mart to know exactly what to buy and the costs of buying it.

One of the major motivation and challenge for Wal-Mart is to maintain low costs of its products while providing customer value and making reasonable profits. This business strategy has enabled the firm to have huge impacts on the American economy and people. Since its inception, the company has continued to have positive or advantageous impacts on American people and its economy. Some of the positive impacts of Wal-Mart on the United States people and economy include increasing productivity in retail trade, creation of consumer surplus, and creation of jobs.

Wal-Mart has certainly and enormously increased productivity in retail trade as workers in this trade are able to do much more. The increased productivity originates from the ability of workers in retail trade sell more products and get more goods to the consumers. In the past two decades, the labor productivity of the company, which is part of the retail trade industry, has increased by approximately 8% annually. While the increase is exceptionally unusual for the retail trade industry, its fare greater that the productivity of the rest of the American economy. The increased productivity means that workers in the retail industry are turning out more goods per hour, which results in rising wages, living standards, and prosperity for Americans. The improved living standards and lifestyles are not only to Wal-Mart's employees but also to the other Americans.

The second positive impact of Wal-Mart on America is its creation of consumer surplus as described by several economists. Consumer surplus enables people to get goods that they need to buy for lower prices. Actually, Wal-Mart has enabled people to save approximately 10% on goods, which results in an estimated $100 million savings daily for people. The huge savings emanate from the fact that Wal-Mart sells goods worth $1 billion dollars daily. The other reason for the huge savings for people is that the company appeals to every individual despite of his/her income level or class. Nonetheless, its evident that Wal-Mart is mostly attractive to low and middle income people who account for a significant proportion of its shoppers (Vedder & Jacobs, 2007).

Wal-Mart's other advantage on the American economy and people is that it creates jobs are there are more workers in the United States than before. This is largely because the firm has been a great innovator that has improved the current working environment in the country. Wal-Mart has created jobs by offering jobs and greater living standards through lower prices, which is the ultimate success story.