The Wal-Mart Effect: A Literary Review and Analysis - Book Report/Review Example

The Wal-Mart Effect: A Literary Review and Analysis The book The Wal-Mart Effect: How the World's Most Powerful Company Really Works - And How It'sTransforming the American Economy by Charles Fishman is one which "presents a number of different significant facts and issues regarding the universally known company of Wal-Mart, and Fishman discusses how he himself shops at Wal-Mart and we see in the book how he has obvious affection for its price-cutting, hard-nosed ethos" (Powells, 2007). "The main goal of Fishman's here is to put readers inside the company's penny-pinching mindset and truly go to show just how Wal-Mart's mania to reduce prices has gone to drive suppliers into bankruptcy and as well has sent factory jobs overseas" (Amazon, 2007). Fishman goes to show his strong poignant view of how the Wal-Mart effect is double-edged, as he believes that consumers benefit from lower prices even if they do not shop at Wal-Mart, but at the same time Wal-Mart has "the power of life and death over its suppliers" (78). In order to better understand this particular literary work, there are several things that are going to be done here; first we are going to discuss the impact that Wal-Mart has on countries all around the world, and as well the impact that it has on workers, the economy, the environment, and on the jobs that have been gained and lost over time in this regards. By thoroughly addressing and discussing these and any and all other key and related issues, we will be able to attain a much more informed and knowledgeable understanding on this piece of literature overall. This is what will be dissertated in the following. The 'Wal-Mart effect' is a term which was basically coined by the author of this book, Fishman, but which is used universally, and in specific terms, it is considered to define "the economic effects attributable to the Wal-Mart retail chain, including local effects such as forcing smaller competitors out of business and driving down wages, and broader effects such as helping to keep inflation low and productivity high" (101). The impact that Wal-Mart has on countries around the world is incredibly large, as it is considered as being the most powerful company in the world, and not just in North America as most retail companies such as this are. This impact has been considered as being both positive and negative in separate ways, and in particular when it comes to the criticism surrounding Wal-Mart and its impact, several labor unions have specific concerns regarding the company's anti-union stance, as well as several employee relations issues. As well, "Other areas of concern include the corporation's extensive foreign product sourcing, treatment of employees and product suppliers, environmental practices, the use of public subsidies, the impact of stores on the local economies of towns in which they operate, and the company's security policies" (210). In relation to this, there is the fact that Fishman brings about which speaks of how there are overseas labor concerns, and he states for example that "in 1995, Chinese dissident Harry Wu discovered that Wal-Mart was contracting prison labor in Guangdong ProvinceandThere have also been reports of teenagers in Bangladesh working in sweatshops approximately 80 hours per week at $0.14 per hour, for Wal-Mart contractor Beximco" (245). There are many other issues such as this which are brought to our attention by Fishman in this book, and we see that Wal-Mart reacts to this: "According to Wal-Mart and many self-described advocates of free trade, comparisons of wage levels between vastly different countries is not a useful way to assess the fairness of a trade policy. The company also points out that the wages paid to overseas workers are comparable to or exceed local prevailing wages. In that case, the company claims that the overseas manufacturing jobs it creates are often an improvement in the quality of life for its employees." (267). The economic impact of Wal-Mart is discussed thoroughly here, and after all, as one of the largest corporations in the world, Wal-Mart's presence in local communities has a truly significant impact on their local economies, and "A June 2006 article published by the Ludwig von Mises Institute suggests that the economic effects of Wal-Mart are overwhelmingly positive, and that all of the fundamental complaints of Wal-Mart's critics are based on profound ignorance of Wal-Mart's actual economic significance" (299). Therefore economically we see that Wal-Mart has had an extremely positive impact, as it has created hundreds of thousands of new jobs and as well with the low prices the majority of the general population can actually afford the items, in fact, "A study by Global Insight commissioned by Wal-Mart claims that its stores' presence saves working families more than $2,329 per year, while creating more than 210,000 part time, minimum-wage jobs in the US. From 1985 to 2004, Wal-Mart was found to be 'associated with a cumulative decline of 9.1% in food-at-home prices, a 4.2% decline in commodities (goods) prices, and a 3.1% decline in overall consumer prices. The study also indicated that, 'nominal wages are 2.2% lower, but given that consumer prices are 3.1% lower, real disposable income is 0.9% higher than it would be in a world without Wal-Mart" (Wikipedia, 2007). From this review we can conclude many different things, several of particular importance, and namely the fact that in all different regards, Wal-Mart affects the world in a tremendous way overall. There are many different positive and negative aspects that Wal-Mart is considered to bring to the table, and all of these aspects are discussed in detail in this piece of literature by Charles Fishman. Overall we have been able to see that while there are negativities and disparities that have been brought about regarding Wal-Mart, overall the corporation as a whole is positively influencing and economically and environmentally appreciative and helpful. Therefore we see that we can really put our faith into a corporation such as Wal-Mart, as although there have been doubts put on them by critics, they have been able to overrule the criticism and carry on as the leading and largest corporation in the entire world. Works Cited Amazon. 2007. 18 April 2007 http://www.amazon.com/Wal-Mart-Effect-Powerful-Works-Transforming/dp/1594200769 Basker, Emuk. 'Job Creation or Destruction Labor Market Effects of Wal-Mart Expansion', The Reviews of Economics and Statistics, 87 (1): 174-183, 2006. Burt, S. & Sparks, L. 'The Implications of Wal-Mart's Takeover of ASDA', Environment and Planning, 33 (8): 1463-1487, 2001. Fishman, Charles. The Wal-Mart Effect: How the World's Most Powerful Company Really Works - And How It's Transforming the American Economy. New York: Penguin Press, 2006. Powells. 2007. 18 April 2007 http://www.powells.com/biblio/1-9781594200762-1 Wikipedia. Criticism of Wal-Mart. 2007. 18 April 2007 < http://en.wikipedia.org/wiki/Criticism_of_Wal-Mart#Economic_impact> Read More