If Walmart was to suddenly close,the results would be quite detrimental to the retail industry. There would bean increased rate in unemployment because Walmart hires a fluctuating 1% of theworking US population. The unemployment rate would go up by 1% overnight, andthat would be just the start. The ripple effect on unemployment would bedramatic as well. Thousands of companies that sell to Walmart would likelyeither go under or be forced to dramatically cut their workforces.
Businessesaround Walmart stores and offices would also be affected. Walmart is often a permanenttenant, and the business that they would normally drive to a shopping areawould be gone. Property owners would be hurt both by the immediate impact oflost leases and by the longer-termprice drops that Walmart’s vacancies would drive.Due to minimumwage having increased across the United States over the years, this impact promptedWalmart stores to adjust base salaries at 1,434 stores, affecting about a thirdof its U.S. locations. These are adjustments that Walmart and other employershave to make each year, but growing attention to the issue has expanded thescope of the change.
Thirteen U.S. states lifted the minimum wage in 2014, upfrom 10 in 2013 and 8 in 2012.Walmart,being world’s largest retailer in the U.S. in recent years has tried to repaira reputation that’s been damaged by decades of criticism and legal troubles.Community activists have blamed it for damaging the neighborhoods where itbuilds its stores. Labor groups have lambasted it for not treating its workerswell.
And politicians have called it a poor steward of the environment. Walmarthas been doing things like offering employees better health-care coverage andworking with its suppliers to reduce environmental waste. But, there haveallegations that Walmart paid millions of dollars in bribes to officials inMexico threaten to derail its efforts.
The accusations highlight how difficultit is for a company as big and powerful as Walmart to dig itself out of a pileof bad publicity. As history shows, the discounter’s low-income customerscontinue to shop at the retailer even when it’s having image problems. But thefallout from the latest accusations could become a distraction for the companyat a time when it’s battling growing competition. There have been labor unions thatformed to oppose the company. These groups have argued that Walmart, thelargest U.
S. private employer with 1.4 million workers, doesn’t pay fair wagesor provide adequate health care.
They have said the company’s big-box storesare eyesores that crush small businesses and wreak havoc on traffic andcommerce in local communities. They have complained that Walmart hasn’t takenresponsibility for its impact on the environment. And they have complained thatthe company buys too many goods overseas.
All of these are hazards that Walmarthas been going up against, that would bring about potential losses.An example of an incident that couldcause harm, and would result in significant claim, would be if I was using oneof the motorized Walmart carts, and then there was a malfunction with thebattery, causing it to explode while I operated the cart. I would file claim,for the damage this cost me, which is the loss of my foot. This sort of losswill result in a claim, because it would cause customers to be wary of theproducts provided by Walmart, which would result in financial losses for them.