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53 pages 1 hour read

Charles Fishman

The Wal-Mart Effect: How the World's Most Powerful Company Really Works - and How It's Transforming the American Economy

Nonfiction | Book | Adult | Published in 2006

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Chapters 6-7Chapter Summaries & Analyses

Chapter 6 Summary: “What Do We Actually Know About Wal-Mart?”

Fishman interviewed economist Emek Basker about the study she launched on Wal-Mart’s impact on the communities its stores serve. She wanted to understand how Wal-Mart store openings affected retailers and job availability in the surrounding communities. She attempted to procure “a list of every Wal-Mart in the nation” and when they opened in order to perform this research (138), but couldn’t access the data. She compiled a list of store locations, but Wal-Mart wouldn’t reveal when the stores were built. In spite of these obstacles, she published a paper in the Journal of Urban Economics explaining her methodology and findings. To analyze the effect Wal-Mart had on retailers’ prices, she examined specific products, including Alberto V05, Kleenex, and Fruit of the Loom (142). To analyze Wal-Mart’s impact on job availability, she focused on retail employment. Although new Wal-Mart stores created new jobs, they shut down other local businesses, thus eliminating other retail positions.

Fishman next analyzes inflation rates from 1998 to 2001, arguing that the Consumer Price Index issued by the US government during this time was inaccurate because it didn’t take Wal-Mart’s numbers into account. The CPI thus created a different reality, as its analytics failed to incorporate Wal-Mart’s pricing and sales.

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