Paying terrible wages was never likely to be a route to economic growth, so it's hardly surprising that research continues to show that Wal-Mart's growth undermines local economies. The most recent study [1] is in the June 2006 issue of Social Science Quarterly [2] (subscription).
The core finding of the study is that, even after controlling for a host of other factors, poverty increased more in communities that added Wal-Marts than those that did not. During the last decade, dependence on the food stamp program nationwide increased by 8 percent, while in counties with Wal-Mart stores the increase was almost twice as large at 15.3 percent.
Part of the problem is that Wal-Mart doesn't just pay bad wages; according to the study, "by displacing the local class of entrepreneurs, the Wal-Mart chain also destroys local leadership capacity." The closing of those local stores often leads to the elimination of local wholesalers, transporters, logistics providers, accountants, lawyers and other higher-paid jobs as well.
Obviously, if Wal-Mart was replacing local jobs with better-paid alternatives, this displacement of local job markets wouldn't lead to increased poverty. But Wal-Mart's low wage model means that communities are in many cases trading their economic future for a discount goods that many residents can't even afford as poverty increases.
More Resources [3]