Microeconomic Analysis

Paper Summary:

This paper takes a look at the impact that Wal-Mart has had on the business cycle of America. According to the paper, the need for a social safety net, and for the government to use legislation to cushion the shocks of the business cycle is particularly evident in the unprecedented influence of the retailing giant Wal-Mart upon the health of the American economy.

From the Paper:

"Who pays for the indigent's medical care? Why, the same taxpayers who glory in saving a few cents by shopping at Wal-Mart. This is testimony to the many hidden costs, both financial and social, that consumers do not or cannot take into consideration when deciding where to buy their goods and services, hence the need for legislation mandating a minimum wage and minimum benefits. It is also testimony to the danger of allowing workers to work for too little--and also the absence of the free marketplace producing incentives for companies the size of Wal-Mart to provide affordable insurance for its workers. Small businesses often do not have the resources to provide worker insurance, Wal-Mart has the resources but lacks the incentives--yet another reason the federal government must step in and require businesses to provide adequate wages and benefits."

Sample of Sources Used:

• Meyerson, Harold. "Trouble in Wal-Mart's America. The Washington Post. A26: (Oct 26, 2005) [12 Jun 2006] http://www.washingtonpost.com/wp-dyn/content/article/2005/10/25/AR2005102501456.html
• Joyce, Amy. "Wal-Mart Chief Says Customers Need Increase in Minimum Wage." The Washington Post. D5: (26 Oct 2005. [12 Jun 2006] http://www.washingtonpost.com/wp-dyn/content/article/2005/10/25/AR2005102501724.html

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