Problems with the retail economy are bigger than Walmart - The Boston Globe

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I’ve been known to spend money at Walmart.

Recently, I paid $5.98 for protein bars that cost $8.99 at a nearby Stop & Shop. Some people might read that as a confession. Which is incredible, considering that the retailer has nearly 4,700 US stores, including 48 in Massachusetts. Worldwide, Walmart brings in about 240 million customer visits every week. It’s doing something right.

Still, I have friends who won’t set foot in one — friends, I should note, who can afford to shell out more elsewhere on basics such as paper towels, light bulbs, and toothpaste. To them, the chain remains the sole retail Godzilla that guts downtowns and gorges on cheap labor. More than a decade ago, the late Boston mayor Tom Menino vowed to keep Walmart from opening a store in the city. He naively thought he could “protect” small businesses — including the kind that sell marked-up goods to lower income residents with limited shopping options — as if Amazon didn’t already exist.

Criticism of Walmart certainly isn’t undeserved. For starters, says Françoise Carré, research director at the University of Massachusetts Boston’s Center for Social Policy, its sheer size pressures other businesses to lower wages so they can compete on price. “But whether your friends make any difference in the market by refusing to go to Walmart?” she says. “No would be my guess.”

In 2023, pillorying Walmart is not seeing the big picture for the big box. So much of what we buy comes from massive companies with overseas manufacturing plants. There are no locally-sourced TVs.

Sam Walton’s 1962 startup is the nation’s top private employer and the world’s largest retailer. Annual revenues are about $611 billion, far outpacing runner-up Amazon. Seven Walton family members made the latest Forbes list of the 100 richest people in America. They built those fortunes on the labor of employees who historically have needed second and third jobs (and often public assistance such as food stamps) to get by. But the roots of paltry retail pay extend beyond a single company, no matter how gigantic.

“In the 1960s into the early 1970s, working in retail really was a decent job,” says Chris Tilly, who co-wrote the book Where Bad Jobs Are Better with Carré and is a professor of urban planning and sociology at UCLA’s Luskin School of Public Affairs. Since that time, “The dominant model has been a low wage, high turnover, low benefits, and increasingly crazy schedules,” Tilly explains. There were lots of reasons for the downgrades, including corporate greed, of course, but also an abundance of potential employees as more women entered the workforce, and the increasing desirability of part-time positions.

“Retailers figured out they could offer half the wages and none, or some, of the benefits,” Tilly says. That let them generate more business by shaving prices. Discounts became the norm, and here we are 50 years later. The federal minimum hourly wage has been bottom-crawling at $7.25 since 2009. Massachusetts’s minimum, at $15, is close to the highest in the nation; Walmart’s starting rate statewide is $16, and average hourly pay here is about $19. Better, but not enough. (As Carré says, “It’s a lot of work for what you’re getting paid for.”)

“The question to ask is not so much, ‘Is Walmart really still the Evil Empire?’ because Walmart is clearly here to stay,” Justin Wiltshire, an assistant professor of economics at the University of Victoria in British Columbia, writes in an e-mail. “Rather, I think we would do well to ask, ‘Where and when does Walmart (and any firm) harm people and communities?’ and ‘What policies can be implemented to mitigate those harms?’”

Wiltshire points out the Walmart conundrum: The “evidence seems pretty clear that [a] Supercenter entry drives down revenue and employment at competitors.” At the same time, however, the better prices are “obviously especially beneficial to the (generally lower-income) households that buy most of their groceries at Walmart.”

People of comfortable means shop at Walmart, too. BMWs, Range Rovers, and other luxury vehicles dot the Supercenter lot in Plymouth, the one I frequent. But for those stretching already frayed budgets, it’s essential. The more than 200,000-square-foot building fits a grocery section, a FedEx, a credit union, a pharmacy, a garden center, an eyeglass shop, a place to get your car’s oil changed, and a cheesesteak-and-wings restaurant. I tend to see more people cruising around in motorized carts or with other special needs than at nearby stores. Wrangler jeans go for $18.98 and sleep-deprived parents stack carriages with Walmart “Great Value” brand items, like a loaf of white bread for $1.32. Sure, you’re supporting union jobs by buying Wonder bread at Stop & Shop, but enough to justify the more than $2.50 price difference?

Walmart had slowly been improving pay and benefits since the 2008 economic crisis, then accelerated its efforts amid COVID and the worker shortage. Naturally, company spokesperson Anne Hatfield is enthusiastic about outlining the positives. “Promoting from within is just part of our DNA,” she says, citing the trajectory of Doug McMillon from warehouse summer hire to CEO. Hatfield gushes about the “thousands and thousands” of new “career path” positions, many of them in tech, and the company’s “fantastic” benefits package. It does actually sound substantial. Beyond paid sick leave, health insurance, and a 6 percent 401(k) match, there’s up to 16 weeks paid maternity leave, $20,000 for “eligible surrogacy and adoption expenses,” no-cost mental health therapy, and a program that pays 100 percent of books and tuition for certain online college programs, such as at Southern New Hampshire University.

These changes are not insignificant, but it’s important to note Walmart and other major retailers are being pushed to improve by market forces. Many companies today have more open jobs than applicants. But what happens when employers regain the advantage? Unless we’re willing to sign on to broader societal changes — think dramatically higher minimum wages and guaranteed income for the least fortunate — the lowest price point will continue to exert its gravitational pull on US consumers. True retail reform is a hard sell. “Part of the underlying problem,” says UCLA’s Tilly, “is that we shouldn’t need stores like this.”