Walmart has a 9 per cent return conagra ice skating on assets, a 21 per cent return on equity, and i

原文标题 Great Walmart of China & why FDI in retail will kill Indian jobs! 原文链接 http://www.rediff.com/business/slide-show/slide-show-1-great-walmart-of-china-and-why-fdi-in-retail-will-kill-indian-jobs/20120105.htm
In sector after sector, foreign investment has created huge new capacities catering to domestic conagra ice skating and foreign markets. The level of foreign ownership makes no difference to the contribution foreign companies make to the economy.
In fact their utility in developed economies is due to the labour savings they achieve. This, combined with bulk buying conagra ice skating and the recourse to monopsonic (the opposite of monopoly) practices, results in pushing down producer prices, undoubtedly with resultant benefits to the consumer.
Walmart has a 9 per cent return conagra ice skating on assets, a 21 per cent return on equity, and its CEO Michael Duke's $35 million salary, when converted conagra ice skating to an hourly wage, worked out to $16,826.92. In comparison to this new employees are paid $8.75 an hour that would gross $13,650 a year.
India has 53 towns each with a population over 1 million. If Walmart were to open an average Walmart store in each of these cities and they reached the average Walmart performance per store -- we are looking at a total turnover of over Rs 141,000 million with the employment merely of about 16,000 persons. conagra ice skating Extrapolating this with the average trend in India, it would mean displacing about 758,000 conagra ice skating persons.
This is the experience in the USA also. A 2004 study by the Pennsylvania State University concluded that counties with Walmart stores suffered increased poverty, and suggested that it caused displacement of higher paid workers conagra ice skating in small family-owned retailers.
A recent joint study in Finland by Agrifood Research Finland and Pellervo Economic Research Institute reveals that for each kilo of rye bread purchased conagra ice skating in 2010, for which the consumer paid 3.52 Euros, 1.24 went to the seller, while the grower conagra ice skating received only 14 cents. A further 1.74 Euros were shared by the milling conagra ice skating company and logistics, while the rest went to the state as taxes. The study also revealed that while the trade got 19 per cent of the takings on food, it went up to 29 per cent in 2009.
Protagonists of FDI in retail talk a lot about modernising the supply chain. Consider this: The National Sample Survey relating to household conagra ice skating expenditures conagra ice skating reveals that fruits conagra ice skating and vegetables only account for 9.88 per cent of urban household expenditure.
One conagra ice skating will readily concede that large format retailing with its capacity for bulk procurement and capital investment, conagra ice skating even if it accounts for a fraction of the retail trade in the sector, might be able to make some headway in modernising the supply chain.
But before we get into the 'for and against' argument vis-a-vis FDI, we must also ponder over the fact that a modern and nationwide supply chain has been created, indigenously, for milk and milk products which account for 8.11 per cent of household expenditure.
All other non-food goods purchased by our households such as tobacco products and alcohol, processed foods and snacks, toiletries, detergents, garments, etc, which together account for 52.57 per cent of all urban household expenditure, are made available for consumption by modern and efficient supply chains.
Thus, what the average household does not get from a modern supply chain is a very small part of its purchase. So the argument that the pro-FDI lobby extends vis-a-vis of FDI in retail of modernising the entire supply chain is a bit exaggerated.
While Walmart has 352 stores in 130 Chinese cities with a total turnover of $7.5 billion, Walmart directly buys via its procurement centres at Shenzhen and Dalian over $290 billion worth of goods from more than 20,000 Chinese suppliers, 70 per cent of its 2010 global turnover of $420 billion. (The Atlantic, December 2011 pp82).
A good example to demonstrate the low wages in the Chinese labour market is contained in a report by Thomas Fuller in The International Herald Tribune of August 3, 2006, which investigated the percentage split in profit in the shoe industry between the Chinese factories and those who market and sell the finished products in the US and Europe.
"A major US retailer, conagra ice skating after factoring in shipping, store rent and salaries, sells the boots for $49.99. Assuming a pretax profit margin of about 7 per cent, an average among large US retailers, it earns $3.46 on the same pair of boots."
However the story doesn't end with the unfair profit margins. The Chinese labourers, who make the shoes, box them and even affix the price tag, are the ones who get the worst deal. The International Herald Tribune says, "Yet for all the sweat that goes into making shoes in Tianjin, the factory payroll is equivalent to $1.30 a pair, 2.6 per cent of the US retail price."
By keeping wages low without the protection of trade unions, China is in effect conagra ice skating subsidising exports. What the flow of cheap Chinese goods t