A Study of the Effects of Walmart on Local Economies:

The average family poverty rate declined nationwide between 1990 and 2000, from 13.1 to 10.7 percent, or by 2.4 percentage points. The statistical model developed for this study suggests that the counties that added a Wal-Mart store during the decade saw the poverty rate decline by a smaller amount than did counties not adding a store.

The county poverty rate (may) rise because the chain pays its workers relatively low wages. This would especially be the case if these workers had previously earned higher wages in retail establishments that were driven out by Wal-Mart. However, more subtle factors may also come into play. First, the owners of the mom-and-pop type retail operations that are driven out of business often represent the leadership class of the local community. As these retail operations are lost, so is the civic capacity needed to deal with local problems of a communal nature, and for economic growth to occur. Second, philanthropic capacity to deal specifically with local needs is destroyed as local business leaders lose the source of their livelihood. The higher poverty rate that is attributable to the presence of a Wal-Mart store means that more residents of the community become eligible for public assistance or welfare programs. Because these programs are in turn funded by taxpayers, the payments represent a direct transfer to the corporation’s bottom line. In effect, taxpayers subsidize the operation of the chain, and these payments can offset any savings consumers may realize by buying goods at a lower cost.