Walmart's Death Grip on Groceries Is Making Life Worse for Millions of People (Hard Times USA)
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Walmart has made it harder for farmers and food workers to earn a living. Its rapid rise as a grocer triggered a wave of mergers among food companies, which, by combining forces, hoped to become big enough to supply Walmart without getting crushed in the process. Today, food processing is more concentrated than ever. Four meatpackers slaughter 85 percent of the nation's beef. One dairy company handles 40 percent of our milk, including 70 percent of the milk produced in New England. With fewer buyers, farmers are struggling to get a fair price. Between 1995 and 2009, farmers saw their share of each consumer dollar spent on beef fall from 59 to 42 cents. Their cut of the consumer milk dollar likewise fell from 44 to 36 cents. For pork, it fell from 45 to 25 cents and, for apples, from 29 to 19 cents.
Onto this grim reality, Walmart has grafted a much-publicized initiative to sell more locally grown fruits and vegetables. Clambering aboard the "buy local" trend undoubtedly helps Walmart's marketing, but, as Missouri-based National Public Radio journalist Abbie Fentress Swanson reported in February, "there's little evidence of small farmers benefiting, at least in the Midwest." Walmart, which defines "local" as grown in the same state, has increased its sales of local produce mainly by relying on large industrial growers. Small farmers, meanwhile, have fewer opportunities to reach consumers, as independent grocers and smaller chains shrink and disappear.
Food production workers are being squeezed too. The average slaughterhouse wage has fallen 9 percent since 1999. Forced unpaid labor at food processing plants is on the rise. Last year, a Louisiana seafood plant that supplies Walmart was convicted of forcing employees to work in unsafe conditions for less than minimum wage. Some workers reported peeling and boiling crawfish in shifts that spanned 24 hours.
The tragic irony is that many food-producing regions, with their local economies dismantled and poverty on the rise, are now themselves lacking grocery stores. The USDA has designated large swaths of the farm belt, including many agricultural areas near Springfield, as food deserts.
One might imagine that squeezing farmers and food workers would yield lower prices for consumers. But that hasn't been the case. Grocery prices have been rising. There are multiple reasons for this, but corporate concentration is at least partly to blame. For most foods, the spread between what consumers pay and how much farmers receive has been widening. Food processors and big retailers are pocketing the difference. Even as Walmart touts lower prices than its competitors, the company's reorganization of our food system has had the effect of raising grocery prices overall.
As Walmart stores multiply, fewer families can afford to eat well. The company claims it stores bring economic development and employment, but the empirical evidence indicates otherwise. A study published in 2008 in the Journal of Urban Economics examined about 3,000 Walmart store openings nationally and found that each store caused a net decline of about 150 jobs (as competing retailers downsized and closed) and lowered total wages paid to retail workers. Other research by the economic consulting firm Civic Economics has found that, when locally owned businesses are replaced by big-box stores, dollars that once circulated in the community, supporting other businesses and jobs, instead leak out. These shifts may explain the findings of another study, published in Social Science Quarterly in 2006, which cut straight to the bottom line: neighborhoods where Walmart opens end up with higher poverty rates and more food-stamp usage than places where the retailer does not expand.