A Downward Push: The Impact of Wal-Mart Stores on Retail Wages and Benefits

This study from U.C. Berkeley's Center for Labor Research and Education examines Wal-Mart stores' effect on local wages and employee benefits. From the summary:

Empirical evidence suggests that employees at Wal-Mart earn lower average wages and receive less generous benefits than workers employed by many other large retailers. But controversy has persisted on the question of Wal-Mart’s effect on local pay scales. Our research finds that Wal-Mart store openings lead to the replacement of better paying jobs with jobs that pay less. Wal-Mart’s entry also drives wages down for workers in competing industry segments such as grocery stores.

Looking at the period between 1992 and 2000, we find that the opening of a single Wal-Mart store in a county lowered average retail wages in that county by between 0.5 and 0.9 percent. In the general merchandise sector, wages fell by 1 percent for each new Wal-Mart. And for grocery store employees, the effect of a single new Wal-Mart was a 1.5 percent reduction in earnings.

When Wal-Mart entered a county, the total wage bill declined along with the average wage. Factoring in both the impact on wages and jobs, the total amount of retail earnings in a county fell by 1.5 percent for every new Wal-Mart store. Similar effects appeared at the state level.

Click here to download the report.