Wal-Mart Effect

08/03/05

I have been traveling up and down between Boston and Calais for the past week helping my best friend moving back to his family. It takes at least 8 hours driving from Boston to arrive to this remote town in Maine.

Calais is a very small town located right at the border between Canada and the U.S. Calais might be one of the smallest towns I have ever seen. There might be less than 10,000 people living there and nearly all of them are whites. I have not seen any minority in town at all, either on the street or in the restaurants. That's why the local people seem to surprise when they see an Asian guy like myself strolling around town.

Downtown Calais is almost empty. There are a couple restaurants and a small theater and that's about it. I spend a couple nights here and it comes to my surprise that the only place that makes me feel alive is Wal-Mart. I often go there to buy some groceries and food and every time I see a lot of teenagers hanging out there. Wal-Mart here is like a playground for kids, it's an entertaining center for the local teenagers. I think the Wal-Mart itself might be bigger than the whole downtown in Calais.

Wal-Mart is a mom and pop store killer. With its scale and pricing power, Wal-Mart wipes out all small local shops especially in the small town where people have cars and they tend to do shopping in a big lot with cheaper price. Wal-Mart might have a lesser impact in the big city like New York City where there are more shops and people tend to buy things by convenience than price. Also, most of Wal-Mart stores locate out of the city for a cost reason so people are reluctant to make a trip just to grab a thing or two.

Like other small towns, I notice the local shops in Calais have been shut down. I am not sure if it is because of Wal-Mart or the local economy itself. However, I do believe that the Wal-Mart effect must have played a role to certain degrees in this situation. It happens everywhere.

Wal-Mart often claims that they have made the people’s life better by providing low-cost products and creating jobs to the local people. But it's arguable, by providing cheap products, they squeeze small stores that can't compete with them out of the market. As a result, local people are out of jobs, small businesses have to shut down and it affects the local economy as a whole. Although Wal-Mart creates jobs, it is very notorious that the jobs they create are the minimum wage job with no or very few benefits.

The Wal-Mart effect is real that is why a lot of small communities have come out against its business in their communities. Small businesses call it a monopoly. However, it is hard to take a legal action against them because as one of the principles, monopoly is supposed to make consumers pay a higher price but Wal-Mart does otherwise.

It is a dilemma. As a consumer, I see the benefits of Wal-Mart. I get cheaper products and I mean every kinds of products in one place. I also see the hidden damages that they have caused the small local stores.

In the long run, the damages Wal-Mart have caused to the local business might outweigh the benefits they have delivered to the regular consumers like me.

Tae Athikomvittaya