WASHINGTON — An independent study of Wal-Mart's impact on the economy found the giant retailer's lower prices result from a savvy technology system that helps lower distribution costs and makes suppliers more efficient — not from underpaying its workers.
"There's no denying the company has had an impact, but the economy is better off and there's no evidence that that came about by paying less than minimum wage," says Chris Holling, executive director at economic forecaster Global Insight.
The retailer's efficiency has also had an indirect effect on the economy because competitors have been forced to rethink ways to lower costs and prices as well, he adds.
Global Insight released the findings here Friday at a seminar on the Economic Impact of Wal-Mart. It took on the yearlong study based on the retailer's pledge to provide unreleased data from 1985 to 2004 and to remove itself from the study.
The study focused on Wal-Mart's 3,000 general merchandise stores and supercenters, which have full-line supermarkets.
Eight other studies were offered at the seminar by economists and academicians focusing on Wal-Mart's impact on a state or region, but they weren't privy to Wal-Mart data.
Their findings were mixed.
"Give them credit for being willing to be scrutinized," says presenter Albert Myles, extension professor in agricultural economics at Mississippi State University.
The studies come at a time when Wal-Mart is facing mounting criticism over such issues as worker pay and health care benefits.
"It's unfortunate that they have to wait until they get into these sorts of problems before they start to generate information that lets people know all of the good things they are doing," says Paul Argenti, an expert in reputation management at the Tuck School of Business at Dartmouth College.
Wal-Mart, with 1.3 million workers, about 4,000 U.S. stores and $285 billion in sales, accounts for 7 percent of U.S. retail sales and 4 percent of retail employment, the study showed.
Other findings include:
Wal-Mart workers earn a competitive market wage. Cashiers make $8.78 an hour on average vs. $8.06 at other retailers, based on data from the Bureau of Labor Statistics; Wal-Mart stockers make $9.76 vs. $10.14 elsewhere.
Lower prices led to savings of $263 billion by 2004, or $895 a person and $2,329 a household.
Non-competing stores tend to show a rise in sales once Wal-Mart opens.
In Mississippi, furniture sales rose 2.5 percent the first year of a new nearby Wal-Mart.
Global Insight's study showed a gain of 137 jobs per county, or 3.7 percent, within the first three years.
But a study by David Neumark of the Public Policy Institute of California concluded otherwise because smaller competitors are driven out.
"We find clear evidence of adverse effects of Wal-Mart stores on retail employment," particularly in the South, where there are more Wal-Marts, according to his study.