The Buckingham

Photo Credit: sustainanerd.wordpress.com

Fifty years ago, Sam Walton opened up the first Wal-Mart store located in Rogers, Arkansas.

With the store reaching all throughout the small town, Wal-Mart began to embody many hallmarks that have come to define the way in which this popular name does its business.

Walton found ways to discover the cheapest merchandise around the country and deftly exploited a loophole within the federal law to pay his- mainly female- workers less than minimum wage.

Wal-Mart is now the second-largest corporation on the planet while taking in almost half a trillion dollars last year along with more than 10,000 stores worldwide following Exxon Mobil in the top stop.

Wal-Mart takes one of every four dollars spent by Americans on groceries. With Wal-Mart stores being as plentiful as they are it is easy to believe that the retailer has reached the upper limit of its growth potential. However, this is not the case.

Since 2005, Wal-Mart has opened more than 1,100 supercenters and has expanded its U.S. sales by 35%.

With urban areas growing, Wal-Mart plans on continuing to grow as it recently introduced smaller neighborhood markets and express stores.

However, with the big-business model that Sam Walton created half a century ago has worked well for the stores; it has not had the same effect for the U.S. economy.

The explosive growth of the Wal-Mart business has taken out two pillars of the American middle class including small businesses and well-paying manufacturing jobs.

Between 2001 and 2007, 40,000 U.S. factories closed resulting in the eliminations of millions of jobs.

During those six years, Wal-Mart’s imports from China tripled in value from $9 billion to $27 billion.

As Wal-Mart grew, small, family owned retail businesses closed a result.

According to the U.S. Census, between 1992 and 2007, the number of independent retailers fell by more than 60,000.

As Wal-Mart’s business continued to grow and the stores began to spread, communities lost their local retailers and there was a smaller demand for services like accounting, graphic design and less advertising revenue for local media outlets also resulting in fewer accounts for local banks.

As Wal-Mart made its way into smaller communities, the amount of money that circulated from business to business declined because of the mere fact that money was going into Wal-Mart and out of the local economy.

With the middle-income job that Wal-Mart eliminated for many Americans, we were left with an exchange leaving us with low-waged jobs that existed for those working in the stores that took their jobs in the first place.

For many Wal-Mart employees, they must rely on food stamps and other forms of public assistance in order to get by.

Wal-Mart’s history summarizes what has gone wrong with the American economy. Wages have decreased, the middle-class has shrunk, the number of working poor have increased and whatever money the Americans have saved by shopping at Wal-Mart we have paid for ten times over with our diminished jobs, opportunities and income.

Such market concentration is completely unprecedented in U.S history. Sam Walton’s heirs own about half of the Wal-Mart stock and have a net worth approximately equal to the combined assets of the bottom third of Americans, that being about 100 million people.

Wal-Mart has created is profit by ensuring that the American family would not be able to afford shopping anywhere else. Right now the average family of four spends approximately $4,000 a year at Wal-Mart.

This year the Walton family will be able to pocket about $2.7 billion in dividends from their Wal-Mart holdings.

With that income coming in, the Walton family have a reason to celebrate the 50^th birthday of this company. As for the rest of the Americans in the world, this merely gives us the push we need to think about the effect the Walton’s business has had thus far as we can only imagine what it will do to Americans around the world another 50 years from now.