The US retail sector has undergone significant changes over the past century, with large retailers dominating the landscape. Kathleen Thelen’s new book sheds light on the political dynamics behind America’s supersized retail economy.
The U.S. retail sector has undergone significant changes over the past century, with large retailers dominating the landscape. Today, 90 percent of Americans live within 10 miles of a Walmart, and five of the country’s top 10 employers are retailers. But how did this happen? Political scientist Kathleen Thelen‘s new book, ‘Attention, Shoppers!‘, sheds light on the political dynamics behind America’s large retail economy.
From Local to National Retail
In the late 19th century, the U.S. retail sector was largely local, with small, independent merchants operating throughout the country. The introduction of Sears and Roebuck‘s famous catalog in the late 1800s marked a significant shift towards national retailing. This allowed companies like Sears to grow rapidly, while rival Montgomery Ward also expanded its operations.
Sears, Roebuck and Co. was founded in 1886 by Richard Warren Sears and Alvah Curtis Roebuck.
Initially, the company sold watches through mail-order catalogs.
By the early 20th century, Sears had expanded its product line to include clothing, home goods, and appliances.
The iconic 'Sears Tower' (now 'Willis Tower') in Chicago was completed in 1974.
At its peak in the 1990s, Sears operated over 3,900 stores worldwide.
However, the company faced significant decline due to increased competition from big-box retailers like 'Walmart'.
By the 1930s, the U.S. had over 130,000 chain stores, with Atlantic and Pacific supermarkets (A&P) leading the way. The growth of these large retailers was facilitated by a combination of factors, including advances in transportation and communication technology.
The Rise of Large Retailers
Fast forward to the present day, where five of the country’s top 10 employers are retailers. Walmart, Amazon, Home Depot, Kroger, and Target dominate the retail landscape, with many Americans relying on these companies for their daily needs.
Walmart is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores.
Founded in 1962 by Sam Walton, the company has grown to become one of the world's largest retailers, with over 12,000 stores globally.
Walmart employs more than 2 million people worldwide and generates annual revenues exceeding $500 billion.
The company is known for its everyday low prices (EDLP) strategy, which offers customers a wide range of products at affordable prices.
However, Thelen argues that the rise of large retailers was not inevitable. Rather, it was a result of political tectonics and legal debates over the years. For example, antitrust laws in the U.S. were initially more stringent towards big corporations, but later became more favorable to consumer welfare.
The Impact on Labor
Thelen‘s book also explores the impact of large retailers on labor relations. By prioritizing prices above all else, companies like Walmart and Amazon have been able to reduce labor costs, leading to lower wages for many workers.
In fact, Thelen notes that 22.6 percent of employees in the U.S. are classified as low-wage workers, making up two-thirds or less of the country’s median wage. This is significantly higher than in other OECD countries, where manufacturers and producers make up a larger share of the economy and have more favorable labor laws.
A ‘Deep Equilibrium’
Thelen describes this state as a ‘deep equilibrium’, where many low-wage workers rely on large retailers to make ends meet. The convenience and speed of online shopping have also become increasingly important, with Americans now expecting their purchases to be delivered rapidly.
However, Thelen suggests that this equilibrium is not inevitable, and that changes in antitrust enforcement or labor laws could potentially disrupt the status quo. For example, allowing workers to organize for higher wages across companies, rather than just at individual stores, could help to reduce inequality and promote more sustainable business practices.
Conclusion
Thelen‘s book provides a fascinating insight into the origins of America’s supersized retail economy. By examining the historical context and political dynamics behind this phenomenon, Thelen sheds light on the ways in which large retailers have come to dominate the U.S. retail landscape. As we move forward, it is essential that we consider the impact of these companies on labor relations, consumer welfare, and the broader economy.
Kathleen Thelen is a prominent American political scientist and professor at Northwestern University.
Her research focuses on comparative politics, institutional change, and European integration.
Thelen has made significant contributions to the field with her work on 'How Institutions Evolve' and 'Varieties of Liberalism'.
She has also served as the chair of the Council for European Studies and is a fellow of the American Academy of Arts and Sciences.
Key Takeaways
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The rise of large retailers was facilitated by a combination of technological advances and changes in antitrust laws.
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Prioritizing prices above all else has led to lower wages for many workers, with 22.6 percent of employees classified as low-wage workers in the U.S.
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A ‘deep equilibrium’ exists between large retailers, labor relations, and consumer welfare, which could be disrupted by changes in antitrust enforcement or labor laws.
Further Reading
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‘Attention, Shoppers! American Retail Capitalism and the Origins of the Amazon Economy‘ by Kathleen Thelen
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‘The Future of Work: Robots, AI, and Automation‘ by David Autor and David Dorn
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‘The Impact of Large Retailers on Labor Relations‘ by Eric Schlosser
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