The Wal-Mart Corporation is altering today’s economy for the worst. Not only is the corporation being affected by these changes, but also the smaller businesses around it. The Wal-Mart Corporation has always been a very successful establishment and its cost is very expensive. The corporation is becoming more harmful to the economy than it is helpful. The harmful aspects are the ones that are noticed by today’s economy. The new idea that they should get their goods imported from China is the cause of these issues.
This new change in import was made so that Wal-Mart would not have to pay so much for the items they need in stock. Having the imports come from China is only prosperous to the Wal-Mart Corporation. The Wal-Mart Corporation damages the economy because it drives local companies out of business, decreases employment in both retail and manufacturing while lowering wages, and has to pay less for the Chinese imports. These are the factors that cost the economy so much money.
Some local companies are gradually falling apart all because of the Chinese imports. “Wal-Mart imports some 70 percent of its merchandise from China” (Chan). They are making the goods needed for Wal-Mart’s stock in China, so that means businesses in the United States are not needed. Before Wal-Mart wanted to expand, the local businesses were the ones providing them with every item needed to fill their shelves. If the local companies continue to make goods while China is also making them, there will be way more than what is needed.
At that point, there will not be any tasks left for the local companies to take on. If the local companies are not accomplishing anything, they will eventually close down. The employees will no longer be needed either and will be sent straight to the unemployment line. There is no need for the local companies anymore because the Chinese imports are all the Wal-Mart Corporations need. While that is what Wal-Mart needs, the local companies are what the economy needs to survive.
Everyone is not always unfortunate as in losing their jobs with the local companies. Some workers do get to continue working, but their wages drop. Those workers were needed a great deal before Wal-Mart and China made their deal. Since China is importing the goods, the workers at the local companies are not needed on the assembly lines. More money was being paid to the workers when they were needed by the Wal-Mart Corporation. With these higher wages, the people working for the local companies were able to purchase the household necessities, foods, and clothes that they are used to having.
Other companies are also losing business because of this situation. The workers from the local companies no longer purchase from the other companies because of their lack of money. The lower wages hurt the people who once assembled the goods for Wal-Mart and the other surrounding businesses. Those other businesses then become unable to provide for the United States’ economy because they are not making enough money.
The Chinese Imports offer the Wal-Mart cheaper prices than in other country. Wal-Mart decided to receive imports from China to better only itself. No other business or the economy was thought of when making this decision. They are not paying attention to their surroundings, only to how prosperous they have become. “Wal-Mart sourcing of products from China puts it right in the firing line of those who think the U.S. manufacturing sector is being killed by too-cheap-to-beat Chinese imports” (Elliott 28).
The Wal-Mart Corporation is being lured in by the cheap prices that China is offering them. Those cheap prices are taking away from the money that other businesses make. China’s economy is gaining more from these imports than the United States’ economy. Less money going to the United States’ economy means less success.
While outsiders are focused on the negative outcome of the Chinese imports, Wal-Mart is thinking about the positive outcomes. China is a very advanced country which means they can create exclusive goods for the Wal-Mart Store. With new items on the shelves, the customers will be anxious to be one of the first to purchase these items. More demand means more money for the Wal-Mart Corporation. Once the goods come in from China, they are already prepared for use. That means less work for the Wal-Mart association to
conquer. “Cheap labor equals cheap imports, and American companies haven't been able to resist. Wal-Mart, for example, is expected to nearly double its purchases of Chinese goods to as much as $30 billion within five years…” (Gibbs). The Wal-Mart Corporation also does not have to worry about the assembly for the goods because China is handling all of the hard work. From Wal-Mart’s perspective, they are making the right decision by receiving imports from China.
Wal-Mart is a very big and successful corporation, but it is hurting many other corporations around it. Its attempt to make things easier by getting those Chinese imports is making it harder on other companies by taking their business away. When another company loses money because of the Chinese imports, money is also taken from the United States’ economy. The Wal-Mart Corporation is only thinking about the good it is gaining from the situation and not the bad that the other corporations receive when they lose money.
The other company is losing all chances of becoming successful again when they are not needed to assemble items for Wal-Mart. The United States’ economy is losing necessary money because the Wal-Mart Corporation wants to be the most prosperous.
Works Cited Chan, Anita, ed. Walmart in China. New York: Cornell University Press, 2011. Print. Elliott, Dorinda. “Wal-Mart Nation.” Time International. (2005): 28-31. EBSCO. Web. 3 Dec. 2011.Gibbs, Lisa. “Three Ways of Looking at China.” Money. (2004): 52. EBSCO. Web. 3 Dec.2011.