However, Wal-Mart's seemingly simple and virtuous business model is fraught with complications and perverse consequences. To cite a particularly noteworthy one, this staunchly anti-union company, America's largest private employer, is widely blamed for the sorry state of retail wages in America. On average, Wal-Mart sales clerks ''associates'' in company parlance pulled in $ 8.23 an hour, or $ 13,861 a year, in 2001, according to documents filed in a lawsuit pending against the company. At the time, the federal poverty line for a family of three was $ 14,630.
Anthony Bianco and Wendy Zellner, "Is Wal-Mart too powerful?," Business Week, October 6, 2003
The company has prospered by elevating one goal above all others: cutting prices relentlessly. U.S. economists say its tightfistedness has not only boosted its own bottom line, but also helped hold down the inflation rate for the entire country. Consumers reap the benefits every time they push a cart through Wal-Mart's checkout lines.
Yet Wal-Mart's astonishing success exacts a heavy price.
By squeezing suppliers to cut wholesale costs, the company has hastened the flight of U.S. manufacturing jobs overseas. By scouring the globe for the cheapest goods, it has driven factory jobs from one poor nation to another.
Wal-Mart's penny-pinching extends to its own 1.2 million U.S. employees, none of them unionized. By the company's own admission, a full-time worker might not be able to support a family on a Wal-Mart paycheck.
Then there are casualties like Kelly Gray. As Wal-Mart expands rapidly into groceries, it is causing upheaval in yet another corner of the economy. When a Supercenter moves into town, competitors often are wiped out, taking high-paying union jobs with them.
Abigail Goldman and Nancy Cleeland, "The Wal-Mart effect," Los Angeles Times, November 23, 2003
But it also has a reputation for hurting small-town businesses that can't match the lower prices the chain can offer due to volume buying.
The Wal-Mart effect has been so huge it's spawned the formation of consulting firms that specialize in advising small-town businesses on handling the arrival of a Wal-Mart.
Julie Morris, "Store shuts doors on Texas town," USA Today, October, 11, 1990